Good morning, welcome. Please I have the important task but the only task giving to the Chairman in this bank is to remind people to switch of their mobiles. So if I could do that. Ross and Ewen will shortly talk you through the results for the first half and on those I will limit my own comments to the observation that they are in a word good. The Board is pleased with the progress management are making to return this Bank to sustainable profitability. There are difficult decision ahead particularly on cost but the direction is clear and progress is promising. Before the management team talk you through the details of results, I’ll just say a few words about the economic and political context in which they are set. The economy continues to grow albeit below trend, we think and we see direct evidence of caution on the parts of businesses about the future and we see some hesitancy in investment plans that is I think consistent with what we see in the surveys of business confidence. The political context is uncertain, especially in relation to Brexit. Since our business is largely domestic, we are affected much less than many other banks. But like others, we've prepared contingency plans to maintain our Western European business both corporate lending and our markets business. Our central option is to use our existing banking licenses in Amsterdam to provide continuity of service from NatWest Markets to our EU customers. And we're in active discussions with the regulators in the Netherlands, De Nederlandsche Bank on the detail planning needed. Turning to our legacy issues, we began 2017 with four main problems to resolve and on three of them we have made very significant progress. The 2008 rights issue litigation and the RMBS litigation with the Federal Housing Finance Agency have been settled. And last week, the competition Directorate of the European Commission announced that it is agreed in principle a revised scheme to satisfy the remaining state aid conditions imposed in 2009, the project formally known as Williams & Glyn. The new scheme involving a capability fund for challenger banks, and incentivize transfers to them of some of our small business customers is practical and achievable. And like the FHFA settlement is required only a small additional provision in the second quarter. Unfortunately, I have nothing to add on the last of our four issues involving the U.S. Department of Justice and our RMBs sales in the years to 2007. We continue to hope to resolve that this year for tool possible. But overall, the Board believes that so far in 2017, we've made very material progress in resolving these legacy issues, which have hung over the bank for too long and it's pleasing that our focus today is therefore on the performance of the Core Bank. And I’ll now handover to Ross McEwan, he will discuss our financial performance and the progress we're making in delivering a better bank for customers. Ross?

Thanks very much, Howard. Good morning and welcome to our first half results presentation. As Howard has mentioned, the first half progress means that today we can spend a lot less time talking about the bank that we were and obviously more time talking about the bank that we are fast becoming. I'll start with an overview of progress against our plan and then I’ll outline how we have continued at pace to build a simplest safer and even more customer focused bank. As we said in our full year results presentation in February, we've grown income, we've reduced costs and improved returns for our shareholders. We see the first six months of this year's proof of the investment case for this bank. Ewen will provide the detailed financials behind this shortly. In the first half, we delivered an attributable profit of £939 million with an adjusted return on tangible equity of 11.5%, a strong performance despite the uncertain economic outlook. We remain on track to hit all of our financial targets and continue to target a bottom line profit next year subject to final approval of the alternative remedies package for Williams & Glyn that have talked about and achieving a resolution of the Department of Justice investigation into our legacy RMBS activity. We don't have any further update on DoJ today, but we would like to resolve this matter in 20417 if possible. We have continued to support the UK economy in the first six months of the year, as we grew leading in the markets that we lack and within our risk appetite. For example, our average LTV on the Group's mortgage lending is still 58% and this being at this level for last four years. The strategy is supporting sustainable income growth in our Core Bank.…

Thanks Ross, and good morning, all. I’m encouraged by these results, second quarter in a row of bottom line profits, attributable profit of £680 million on the quarter, statutory return on equity in Q2 of 8% and we're on track to meet our 2017 and 2020 financial targets. In the Core Bank, good continued momentum relative to H1 2016, I think we delivered strong operating performance improvement. Income was up almost 9% if you strip out, NatWest Markets income growth was up 4% across PBB and CPP. Costs were down more than 4%, JAWs of 13% and our cost income ratio reduced from 62% to 54%. Adjusted return on equity was up three percentage points to 14.1% and adjusted operating profits were up 29%. On our legacy cleanup, we're getting there as Ross says since the start of the year, we've resolved the 2008 rights issue litigation. We've resolved FHFA. We are well progressed with the solution for Williams & Glyn. We’re comfortably on track to wind up our bad bank capital resolution by the end of the year. And we’re back to being investment grade rated by all three credit rating agencies, which has helped drive much lot of funding spreads for us this year. And on Core capital, we achieved a very strong core capital build in the first half. Our Core capital ratio is up 140 points to 14.8% and our fully diluted TNAV was up 4p to 298p. That's further on depend by today's disclosure on IFRS 9 with the day one impact for us expected to be modestly Core Tier 1 capital. But as we look at over the next six to 12, months, I think we’ve recognized that it is a more uncertain macro environment. And given that more subdued outlook, we believe that…

Yeah. Thanks Ewen. Thanks Ross. Well, over to you.

Thank you very much. It’s Tom Rayner from Exane. I’d like to ask the first two margin questions please. Firstly, if 8 basis points of the margin decline in the second quarter was down to a sort of temporary buildup of liquidity, should we not expect some of that to reverse out as you deploy that liquidity? And my second question is looking at the sort of guidance sort of the 4 basis points, 5 basis points of margin pressure per quarter going forward. Can you say how much of that reflects mixed sort of anticipated changes in mix, a lot of them just pure competitive pressure in each product line please? Thank you.

Yeah. So on the build off of liquidity, I think we’re going to continue to maintain relatively high LCR ratio for the remainder of the year. So I don’t think you’re going to see any significant benefit from a reversal of that during the next couple of quarters. On the – if you just aggregate, we think there’s about 4 to 5 basis points of ongoing NIM pressure that we can see and just aggregating that about two basis points you should assume just comes in this right environment for my continue role off of the structural hedge. And about 2 to 3 basis points is driven primarily by competitive pressures that we see in the mortgage market which really reflects two things, firstly, front book pricing continue to be materially below back book pricing about a 40 basis point differential. And secondly, this ongoing mix change that we’re doing of prioritizing effectively lower return – lower returning mortgages in return for trading off NIM and other parts of portfolio. But what you get in return I think is a commitment from us that we’re going to continue to draw and build market share and mortgages as you saw in Q2, a lot of the NIM pressure was offset by volume growth. And that was also the benefit of an extra day’s interest in Q2 as well.

Thanks.

Next to you left. Thanks.

Hi, morning, everybody. It’s Raul [ph] from JPMorgan. Can I have two as well, maybe the first one on the TFS perhaps for you and, Ewen, could you help us understand what the impact of the TFS is in terms of the NII line? I think as far as I understand, your draw down of 14 billion is the highest amongst the U.K. banks, I think even Lloyds is 9 billion. As that comes in, does that start to drop your cost of funds faster than where it otherwise would have been and clearly you’re obviously running quite strong in terms of loan growth. Shall we think about the TFS having a net positive impact on your NII? The second one is on just a loan growth numbers as well obviously you’re running ahead of your 3% target, maybe for Ross, what do you think about the second of the year, you're going to start to payback a little bit?

Okay, look on the TSF, I don't think there’s any real material benefit in terms of our funding costs. I mean if you look at where deposit price is funding now post the Q4 for reprising we did, I think it doesn't have any material. Actually I would argue it just sort of net negative for us, because ultimately what it's done is enable others to be more competitive in the mortgage market. So while it's provided some funding benefit for us. I think we've seen the benefit to others resulting in a more competitive mortgage market this year. I would point out that yes, we have drawn down more than most, but equally we didn't take advantage of other funding schemes of our overall funding benefit out of these schemes is much lower than some.

I think you're going to see good strong competition in the mortgage market, which will overtime bring the margin down. We're going to be think about how we plan that. I know there have been other banks saying that going to be out there competing very, very heavily. I think this is much – as much about distribution is anything else. I mean you can put an offer into the marketplace, but if you don't, the distribution to bank is somewhat useless. We will be cautionary about it. You saw us more our pricing as you trying to push the pricing up in the second – earlier part of the second quarter. It's since come down again, so we've been trying to actually be all market as opposed to be one pulling it down. But I think we will – I must to continue to grow faster than the market but they grow fast in the market, we are slower than probably has been in the past and you see that we are already coming through this year. You're seeing a much more, stronger balanced towards mortgages. Ellison in the commercial space has got some message that she is still wanted to take off the books that's why we've said I need 3% growth across PBB and CBB. I think you’ll see that book sort of grow, but not at anyway near the pace that we're seeing in personal business bank and that's for a very good reason that we've got some issues that we want to take off.

Yes, sorry Ross, on unsecured particularly, once you do know what the capital treatment if any would be prospectively, would you reconsider the approach you’ve adopted for the unsecured?

Yean, unsecured, I go back to we've got lots of scares in this organization around unsecured lending, so we've got to put our position in context with that that we do want to do unsecured lending, we've done quite strongly in the personal lending space where we've been on market growth. And you know I think we'll continue there. It's only been the credit card pace that we've been a little bit concerned about, and it's from the customer behavioral paces about how we treat customers, this is the pace that has always worried me. At least in time of the moving see some options there. We're not really to go back into that market. I think you’re going to be careful when you go, and it's been 10% growth in that market last year, I think pretty high. So we’re cautioning and we're just dealing with our customers, because we know them we got all the data.

Can we move it along next one? Yeah. Thanks.

Thanks, good morning. It’s Rohith Chandra Rajan from Barclays. I’ve got three please if that’s okay. One is just following up on the mortgage pricing question. So some of your peers are sort of suggesting that assets here first starts to – well as go close to the TFS close that might lead some improvement in mortgage pricing, wondered whether that was a view that you concurred with whether you think it's more about large banks with big distribution capability still liking the returns available in the mortgage markets? And then secondly just on again on the net interest income that sort of margin versus volume particularly in relations to liquidity, is it right to assume the drag on the margin in liquidity is offset by higher average interest earnings assets so it doesn't actually have any net interest income impact? And then the third question is just a point of clarification, central items revenue picked up £350 million in the quarter of which about £200 million was IFRS volatility, just wondering if you could through me lights about what the other £150 or so million was? Thank you.

Just on mortgage pricing, I’ll start there and you can go into the others, Ewen. We’ve always maintain that once the big banks get fully capitalized to gain and get stability that they would be competition coming back into this marketplace and that's what you're saying. So you're seeing ourselves wanting to grow in the mortgage market we would be in splits, quite weak, but you know that's been a five year strategy build for us. You’re certainly seeing Lloyds with a the very strong position, Barclays, HSBC signaling, so you're seeing the bigger banks actually wanting to be in that market, because we see it is a good proposition for customers. So I think you are going to see margin contraction continuing. But it's got to be done profitably and the day we see it not being done profitably, we won't be the – it's just got to be done profitably. And remembering that the uptick for us will come and risk weightings at the end of 2019 and into 2020. We already pricing is though that there. We also price knowing that you know payments is at a very low level today you've got to normalize that before actually said this is a sensible thing to be done. So we had been building distribution where price taker, not a price maker. And in that marketplace, we'll continue to be strong in the distribution front and deliver growth service. I’ve talked about some of the initiatives that we’re doing that will make it so much easier for customers to do business for this, that's quite important to customers, it's not just around price. But think there's going to be continue contraction in this marketplace. We are focusing on it and not focusing so much on the unsecured that means our NIM contractual would look larger than others, but then again we're using less capital to do so, which gives us a reasonably good return.

Yeah, on the net interest income, so if you backed out the extra day interest in Q2, the net interest income would have been down about £20 million rather than being up. I mean I do think if you go into Q3 and Q4 if you look at that NIM compression that I talked about, I think we will be offset that with volume growth what we saw in Q3 which for us was alluding to when we pushed pricing up a flow share drop for about 13% in Q1 to about 11% in Q2. So we've now pushed pricing down a bit and I think as a result flow shares would pick up and mortgages. I would remind you when we talked about that £20 billion of gross out of the way reduction, we talked about losing £250 million to £300 million of income, so at some point that will progressively start to roll through the numbers as well. But overall, I think you know as we've done consistently in recent quarters despite NIM compression, we've continued to sort of build net interest income through volume growth.

It also means we do have to keep the focus on our cost reduction program. We've given you the numbers there. It doesn't make up all of it, it does help you in maintaining the JAWs on the business, so there's a very strong focus continuing in this business on cost reduction. We got to get ourselves back into shape.

Yeah, on the question on central items, there's one of two things, but nothing significant and I think we sort of continue to guide to the fact that that should be zero overtime.

You move it along. Right, thanks.

Good morning. It’s Robert Noble with RBC. I’m just looking your net promoter scores, why divergence is between brands and businesses and so just looking RBS is doing very well – sorry NatWest is doing very well and Royal Bank of Scotland not so well, business not doing so well, commercial doing very well, I’m just wondering what you doing is making customers happy in NatWest and Commercial Banking, where you doing make them sad in the other ones.

So we have the happy bit from Allison. Allison, the mike is just behind you.

So, on the happy bits, in commercial we're very focused on –focusing on meeting our customer needs. So we've had a whole program of investing and training in all bankers in their capability and targeting them really on needs to meet their customers. So we're deepening our understanding of our customers in delivering better service. Lots of simplification and innovation going in. So we've redesigned a whole lending delivery, which is starting to roll out. So better service, quicker decisions, fast yes, fast no, money in their account very quickly, but that means very sustainable lending and increasing our content and knowledge to our customers. So it's simply that so doing a better job with those customers deep in their needs. We'll set to lead content which we're delivering to all commercial clients with local representation across the markets and that missing it entering. So simplification, better quality bankers, better need, better products and better delivery.

Let just actually skip to Franics, he’s part of him is happy and part of him is sad.

So, I’ll answer the question a little bit more broadly, so I mean if you look at the very positive JAWs that you have, part of that is a result of huge change that's going on in terms of distribution. So we are taking out 250 branches this year and that's on the back of doing something similar the previous year and the year before that. The same time, we’re building up our digital capability and that’s – change is not always easy for customers. And so in business banking in particular, we’re moving to a more direct model. What you’re seeing is as the branch network comes down and people have to adjust more to a direct model, not everybody is enthusiastic about that. Now the good news is the direct capability that we have is very strong. If you look at our mobile app, it’s the best rated in the Apple Store by retail customers. And it’s – there isn’t a separate rating for business but if you look at the research that we have, it is positive. So we think that it’s – to answer the question is, it’s a period of adjustment but we think that it’s the right thing and we’re confident that it will improve.

And I think I just pick up couple of other points. These does get hit with a lot of brain drag, I mean because way you see NatWest you see the net promoted scores being at a higher level. A 95% of business sits underneath the NatWest personal side which is running a positive, it’s actually quite high levels for us. On the business side that business was running a return on equity of something like 7% to 8% about three years ago which you would have seen unsatisfactory, I certainly did. That business is now getting well over the return on the cost of capital which would place with we’ve change the model and we have to get customers used to it quite a different model and how it was operating. In the Commission business, we have the opportunity of have a one-on-one relationship through Relationship Manager and leases business sits one on thousands, so you can’t get to the more and miss of change going on that business with the way we having to respond to have customers are charging not all are enjoying it. So there’s a lot of brain drag on the Royal Bank, even though we position it very strongly.

Yeah, we move it to – yeah, behind you. Thanks.

Yes, good morning. Martin Leitgeb from Goldman. I have three questions please and the first is to follow-up obviously on the mortgage comments made earlier. And I’m just trying to, if my understanding here is right that essentially RBS is trying to do is to maintain the 12% roughly 12%, 13% flow share going forward and essentially pricing at a moment is still such that your front book returns allow you to maintain that for the time being. And then the second point of the question is the earlier comment on the margin compression to continue in that space. Is that purely the timing effect of the mortgages is turning over the average duration which is two to two and a half years or is that because you also have expect front book pricing still to fall –continue to fall going forward? The second question is on capital and it’s just to come back to the discussion of French Banking, if you could share what you think the Core Tier 1 levels might be between those two entities going forward post ring fencing next year? And deferred question just a touch on the strong performance of NatWest Markets. I want to get the sense at least from the numbers, this seems to be running much better than initially told. Is that a fair assessment or a couple of items within that which might have driven the strong performance in the first half?

I’ll pick up some of those and you can pick up the ones. You choose not to answer. First half, well it’s the way should be. First half off on mortgages, our objective is to grow faster than the growth in the market. We haven’t seen their selves a 12%, 13% or any percentage growth just to be growing a little bit quicker than market and that’s because of distribution capacity that we have built over time and we just have to have big client base that we’ve never really concentrated on. So there’s no 12%, 13% the fact that we have been doing to 12% I think signifies. So we’ve got distribution in that area, but we’re happy to be growing faster than the marketplace. And that is around distribution is not around processing. As I said you look at the average pricing points we did try to make a move in the marketplace to margin didn’t work, we’re back to where we have which is following the market is it what it is. On the compression itself, it is – if you take competition in the market it’s going to be a front book that actually does get knocked around a bit more and that is certainly where we would see a bit of it. We’ve lifted about 12% of the book being on back book particularly around this. So there’s not a lot that’s moving around the least probably is the 1% movement probably wouldn’t be there out the book so. Pretty standard around there 11%, 12%, so it’s really around front book margin. On NatWest Markets, okay Chris, to make some comments about the business, but can I just take you back three years ago when we were probably sitting here and we made the determination that we were going to bring this from being one 150 billion of risk weighted assets down to 35 billion of risk weighted assets and being a very focused business on three things, that’s what we’re doing and that’s where I think the success comes. When you focus a business, you get the results because of it rather than spreading ourselves across what 28 products that you start with two, three things we’re really good at, that’s where we’re getting some good results. And I’ll leave Chris to say and make some comments on that.

Thanks, Ross. And actually the story isn’t much similar to Alison explained. I think the really powerful step for us is that we’ve now been doing it for two and a half years and we’ve got the consistency of what we are offering and we’ve got the proof of the execution. So we came out with obviously fairly big reshape of the business back in 2016. What we’ve seen since that is actually some interesting market conditions and what we done the shape the business allows us to support customers through those of market conditions and it continually tests the business, but also builds goodwill and allows us to get closer and closer to our customers. So similar to Alison we’ve made the business much more efficient. We improved all of our customer journey. We are continue to invest and transform the business so that our front and technology and the applications that they using are more and more effective and more and more relevant. We move to migrating more customers onto E-channels so actually that enables us to be quicker to respond, enables us to put more flow through our systems and it reduces risk and that enables us to manage our risk better. The dynamic that we’ve seen in the business is really just based upon the kind of clarity as Ross said the clarity of the product set and getting closer much closer to our customers and understanding what they need in all these difficult market conditions and giving them true relevant advice. There’s no sort of magic to it, it’s simply being better what we do and be very clear about what we do. So they come to us as one of their key banking partners rather than you have somewhere down the pack.

Thanks, Chris. Other the two, what we set out 150 billion to 35 billion over the last year. Chris and the team were working through how do we get that 30 billion risk rated assets, so just the fine tuning of the business that they’re operating through. I just remind you too that this business we are expensing all of the investment into this business and will continue to do so over the next three years. So you’re seeing cost reduction drop out of about 50 million a year into the big investment stop so that drops quite quickly into 2020. So remember that’s specific why we’re operating this business. So don’t expect the cost reductions in this business to be linear. There will be drops to about 50 a year until we stop the investment and expensing it all. Is there anything you need to correct, Ewen?

No, no, just a couple of points. Just on Williams & Glyn, when we reconsolidate that back and it has about a percent of mortgage of market share and about a percent of flow share. A flow share we think is not particularly overlapping. For example we gave Williams & Glyn three brokers that we didn’t use a lot and we’ve basically applied broker distribution model to those brokers and they have done a very, very good job and they talking about a 1% flow share. On the point on capital, it is a really good question Martin. I mean I think our intention is to come back in Q3 and talk about a bit more about reinventing and the impact of capital across the group but broadly remember that we’ve got two non-ring fence banks, NatWest Markets where the leverage reasons we may run a slightly higher capital ratio than the 13% growth ratio for RBS side, potentially a bit lower than the 13%, you then get into questions of how much double leverage you can have and a bunch of other questions. It’s a good but not straightforward question and will be back in Q3.

.:

Hi there it’s, sorry it’s Claire Kane from Credit Suisse. So I have three, but the first two are just really clarification points. So only the NIM compression in the front book, back book, could you perhaps talk about then in respect to U.K. PBB NIM you had a very sharp quarter-on-quarter drop much more than you’re indicating for the group overall. What is the front book NIM on that business and should we expect that 40 pips from compression to come based on stable rates today overall at the great level? So that’s the first question. The second one is on the PVA adjustment you’ve made. So I think you said £500 million should we expect that to unwind as you book £700 million losses in the second half, so it’s more or less CET1 neutral? And then third point just Williams & Glyn, as you fold that backing, could you give us some indication of what those restructuring costs will be? Thanks.

Simon, good one for you actually.

I think both of those.

So on the NIM question it’s obviously that where more than most parts of our business we're seeing compression because of the mortgage phenomena we talk about, so not quite, I mean the 40 basis points point front broken back, I think should fully applied to UK PBB. The PVA question it was actually £400 million, so you should expect we think that way about an incremental £700 million of capital resolution losses in the second half that £400 million that we've taken into the PVA adjustment is effectively front end loading £400 million of the £700 million. And then on Williams & Glyn, I don’t think we're yet able to talk about sort of reintegration plan and we've got sort of final approval out of the European Commission, so there will be incremental costs of consolidating in and but what one thing I would say is if you think about it in MN&A in terms it sort of classic in market major overtime, but all the systems, all the products, all the processes the same as ours. So if you map the branch network across our branch network in the UK you’ll see very close proximity of many of the branches as well. So they should be significant cost opportunity there in due course.

Yes, next to you. That’s it, fine.

Thank you, it’s Michael Helsby from Bank of America Merrill Lynch. Two questions actually, first one on costs you mentioned the cost of progress would be linear, but the first half cost number if it we kind of double it, and out the levy you're clearly running below your what you’re targeting for the year, so I was just wondering what are the bits pumping in the back off to offset the actually the actual cost savings that you still flagging for the second half? And then obviously there's been a lot of questions on the margin, the front book, back book thank you very much for that, it does feel like that's more of a more than a second half phenomenon and so the pressure that you have seen in the margin in that area particularly elect stand beyond the second half. So I was just wondering if I could invite you to give some comments on that the outlook for the margin for next year as well? Thank you.

No to both of those. First of all deal with the one on costs because we've got the Chairman here, I don't want him doubling up on us having to double what we've done in the first part of the year that will not happen. We've done 494 out of 750 odd hold you on through the guidance of the 750 plus. In the front end remembering we had cap rates coming off, so big costs coming at a capital resolution, which by kept some of the front end, we won't get as much of that in the second half of the year low to be some reduction, but it's becoming more and more into the Core Bank that we have into whether we're talking the cost side. So those one off the operations that we had we’re bringing down becoming less and less and it starting to swing the other way and that's why guidance just keep your guidance back on to the 750 of cost even though we do, I think a very good job on the front end.

Yeah there was also some one-off benefits and that £500 million reduction in the first half and reverse in the second half, so but we have been add those for three and half years so assume that we understand how to do the forecasting is the one we guide you no to double please don't.

Please and don’t tell much Chairman.

Yeah on the NIM for 2018 we're not going to forecast, but I mean look at some point interest rates will go back up and as you know we've got a deposit book that is geared probably more than most of the banks to arising in positive yield environment, so we look forward to that in due course.

Hi thank you. It’s Joseph Dickerson from Jefferies. Quick question on the liquidity book, I mean it was £160 billion at the end of Q1 is now £178 billion, I guess did you really need that kind of incremental liquidity in light of the FHFA charge because that seems to be what you – what you’ve referenced. And then following on from the last bit of the answer to Mike's question, I haven't got to the page up, but could you disclose what your rate since your presumably the rate sensitivity to rising rates must have gone up I would have thought in the second quarter and on the on the same liquidity point if the if the TFS was going to be negative for you why did you draw down £14 billion of it. And then the second area of questioning would be on the repurposing the Dutch banking license does that create any hurdles to streamlining the capital structure on RBS? Thanks.

Ewen I think…

160 to 170, yeah so the repurposing no shouldn't do, I didn't say that TFS was negative for us, I said it was a net negative, I mean it's broadly in line with our existing funding costs, where it's negative is, because is enabled more competition in the mortgage market. On the liquidity book FHFA is not the only come back cost we’re facing at some point.

And the rate sensitivity?

Rate sensitivity is in the back, yeah you’re right. What's the price for – it is in the appendix, but we have become more rate sensitive obviously because we reprise the deposit base down, we can't reprocess that further in negative rights and we are more rate sensitive on a rising rate environment, but the disclosures.

Hi it’s David Lock from Deutsche Bank. I’ve got two please. First ones in on the DoJ and appreciate there's no updates this no one picking up the phone, it's going to be frustrating for you will be clearly you are taking at least some liquidity provision for it. I was wondering if we all sitting in the same place in five months’ time and six months’ time, do you feel you could be able to take at least a small provision before that conversation really starts in 2018 if it does end up being 2018 just want to get a sense of the flexibility around what you can do in this financial year. And I've got a second one on margin?

So did an accounting question, we would need to be engaged in some form of discussion that allowed us to take a different view on the appropriate measures of additional provisions, we would hope to be able to be in discussion in to have that fact set by the end of the year, but we constantly revisit it, but at the moment we've got my investors to revisit their provision.

Is that one is a broader question really on how you approach in mortgage in particular, this strikes me that you've had a lot mortgage growth in recent years, you've been particularly focused on the first time by segment, which means that I would think that a large portion of your mortgage, but actually it's a lot of first time buyers and borrowers frankly have never seen a rate case.

And I just wondering how you think about that in terms of a risk both behaviorally in terms of when they come to it doing but also obviously if rates do go up, how those customers will actually behave.

First off we don't price them today when we do the assessment on the current right or wrong, so it’s going on to a 2.5% or 3% process of 6.75% or 7% on their ability to pay and we've maintained that right throughout at the cycle. On the percentage of first time buyers we did participate in the government scheme where the guarantee was put in place. We have a sense that since that's come off, we had I think doing a little bit less, but we have stayed in that market, but have been quite clear about what we're looking for on first time buyers, unless you might like to make some comments just around that is the percentage of book and the approach we take to the income.

Yeah I mean actually we've been slightly underweight in terms of first time buyers over the last two or three years, we had more like about 18% of our book there. Over the last – over this part of the year what we've seen is by to let coming down a lot obviously as you will have seen on the market for first time buyers has increased somewhat and we're taking about our share of that, but the bulk of our mortgages in either re-mortgaging or in new purchase rather than first time buyers.

Hi good morning, it’s [indiscernible]. Two please, the first is on your 30 basis points from IFRS 9. Can you just confirm please that you don’t expect any offsetting increase on that? And then the second is on London mortgages, so last year I think you grew the London mortgage book 15%, but this time you seem to drop the disclosures which I wondering if you tell us the number please?

I think our exposure to London mortgage about 18% of the total book.

Yeah. That’s true in terms of forward flows about.

Yeah it hasn’t changed dramatically it’s been around that 18% of their total book.

Which is less than the market average in terms of London, so we’re slightly disproportional we have a lower share in London, which you might expect from a bank that has predominantly been Scotland, North of England, Midland, so we are underway to in London and we continue to be underweight in terms of our forward flow.

Thanks.

On that offer is non-benefit and it shouldn’t have a quality way impact on us, I mean just in terms of the portfolio with £1 billion, mark-to-market gain and that there was another UK banks had a similar portfolio with the embedded derivative attached, but they restructured that while we go on to capital benefit. We always knew that we were going to get an IFRS 9 benefit and what have involved as crystallizing some fairly material losses in order to restructure those lines. So we’ve just been waiting for IFRS 9 to okay.

Thank you. Can I say any more – yeah. Two in front, thanks.

Good morning. It’s Chris Cant from Autonomous. If I could just follow up a response to the earlier question in terms of the NatWest Markets investment being put through the P&L when I look back at your historical investment in intangible assets as being pretty limited on a net basis in the last few years you’ve written-off quite a lot of the old investment in GPM systems and obviously if you built up quite a large excess capital position. I’m just wondering whether there’s going to be a headwind about it all from renewed investment in intangible assets over the next few years should we be expecting a sort of a pickup in investment. I think about your net promoter score as being quite static best slightly down quarter-over-quarter in terms of retail do you need to be investing in better systems in retail banking? Thanks.

It just on NatWest Markets so it see any change there so we were expensing today all of the investment that business loss to this year get £210 million I think Chris next year would have made about £200 million. The year after I think it drops down a wee bit all things about £160 million, from £150 million to £160 million and then there after we think the normal spend for that business is probably going to be more at £50 million to £60 million. So you can see the drop off or more we see the expenses of your expensing the completely today, in three years’ time going to have a lot less, but we don’t see a buildup intangible was missed you got something on that?

No, I am just in terms of investment spend way we’ve been spending well sort of comeback quite strong at what was said, but we been spending over a £1 pounds a year in investment spend for several years now. And actually the cost of digital distribution is actually quite low in terms of those investments. But I got back to what Les said earlier if you look at bank the MPS for us is in the 50’s it’s actually got the highest net promoter score of any of our channels grew about 20% in the first half, it’s the only retail channel that’s actually seeing growth now, online itself is even in decline. So you’re seeing effectively 20% compound growth going through the digital and 20% reduction going through in the branch network. So there’s a very deliberate and substantial investment program going into digitally transforming the bank at one.

I suppose the implication that is that you’ve been expensing most of the investment as well rather than capitalizing it.

Yes. A larger portion of it has been and just sort of the numbers I gave you we’re talking about 700 systems and applications in the first six months of this year. We are reworking the stack of technology for this bank and making sure it’s appropriate for this business going forward and make it simpler same point time. And we will continue to do that over the next year or two, three years.

Yeah. Making that back to the cost program one of the reasons we’re so confident in our continued delivery against the £6.4 billion all in cost program of 2020 years. Yeah the more that we get into the cost program the more that we can see really quite significant opportunity in process reengineering and automation.

We don’t have any questions. So are there any others before we wind up. Thank you to need to say anything else in conclusion.

No process that we’re pleased with the results we know we’ve got a lot of work still to do in this bank, it’s good first six months. We have started up three of the major legacy issues, yes we’re still going to get a final approval of the Williams & Glyn, that is it’s a big issue for the this bank. We do look forward to tiding up the DoJ as a last very big one, but it’s more now that we can focus on the go forward bank as opposed to the bank that we once were. So thank you very much for joining us.

Thanks for coming.