Welcome, ladies and gentlemen, to the Analyst and Investor Webinar on the 2024 first quarter results for HSBC Holdings plc. For your information, this webinar is being recorded. We are now ready to start the webinar, so I will hand over to Mark Tucker, Group Chairman. Good morning to those of you in London, and good afternoon to those of you in Hong Kong. I'm joining you today from London and have alongside me, Noel and George. I'll be making some short opening remarks before handing over to Noel. As you may have already seen, we've announced today that Noel has informed the board of his intention to retire from the bank after nearly five years in the role. The board and I would like to pay tribute to Noel's exceptional leadership during that time. As Group Chief Executive, he drove both our transformation strategy, as well as creating a simpler and more focused business through the disposal of assets in the US, France, and Canada. This has enabled us to deliver an improved performance, achieving record profits last year, and create a platform for future growth and development. Noel, who you'll hear from in a second, has decided it's the right time to step back and find a better balance between his personal and business commitments. As you would expect, the board keeps succession planning under constant review. We already have started a robust and rigorous process to find our next Group Chief Executive. This process will look at both internal and external candidates. I'm very pleased that Noel has agreed to remain in his role while this process takes place, ensuring a smooth and orderly transition. On a personal note, I'd like to thank Noel for his unwavering commitment and dedication to HSBC, which he joined 37 years ago. Noel, it's been a pleasure and privilege to work with and alongside you. Thank you, Mark. Thank you. I'm very grateful for your support, guidance, friendship, and partnership. I'm proud of what my HSBC colleagues and I have achieved together over the past 5 years. Over that period, we have hit some significant milestones: record profits last year, the strongest returns in a decade, and the highest dividend since 2008. As Mark mentioned, we have created a more focused business, and I believe we have built a strong platform for the bank's next phase of development and growth. That's why I feel this is the right time to step back, to find a better balance between my personal and business commitments, with the intention going forward, after a break, of pursuing a portfolio career. When I reflect back on the last 37 years, I have held intensive leadership roles, particularly since I took over the UK Commercial Bank in October 2008. After 16 years of intensive leadership, I'm ready for a change. But it's also a natural inflection point for the bank as it comes to the end of the current transformation phase. It's an ideal time to bring in new leadership. The board has now started a process to find my successor, and I'm very happy to continue in my role as that process takes place. Rest assured, I will be working hard to ensure a smooth and orderly transition for my successor and to keep the momentum going in this business, as you have seen in Q1. Until then, it's business as usual. So let's now turn to our Q1 results, which have showed continued progress. We had a good first quarter. Reported profit before tax was $12.7 billion. Excluding notable items, profit before tax was $9 billion. Our return on tangible equity was 16.4%, excluding notable items. I'm also pleased with the further capital distributions of $8.8 billion, which brings the total amount of distributed capital by way of dividends and buybacks over the last 15 months to almost $28 billion. And we are on track to meet all of our previously communicated guidance for 2024. I will now hand over to George to take you through the numbers, numbers. Thank you, Noel. I'd like to open by paying tribute to the enormous contribution Noel has made to the bank. I've greatly enjoyed working alongside him, and I know everyone at the bank has appreciated his strong and effective leadership. I'm also grateful for the support he has shown me personally since my appointment as CFO 15 months ago. The board has announced a process to find a successor, and I know Noel and I will continue to remain very focused on the job at hand until that process has been completed. Turning now to the numbers. Reported profit before tax of $12.7 billion was down $0.3 billion on the first quarter of 2023 on a constant currency basis. Excluding notable items, profit before tax was $9 billion, down $0.4 billion on last year's first quarter. On an annualized basis, we delivered a return on tangible equity of 26.1% or 16.4%, excluding notable items. We completed the $2 billion share buyback announced in February in two months. This means that since the end of 2022, we have bought back 6% of our outstanding shares, and the trend of strong shareholder distributions continues this quarter. We have announced, as Noel said, a further $8.8 billion of distributions, consisting of first interim dividend for 2024 of $0.10 per share, the special dividend of $0.21 per share from the Canada sale proceeds, and a new share buyback of up to $3 billion, which we plan to begin right after the AGM and complete within three months. Finally, we are reconfirming all of our 2024 guidance, including mid-teens return on tangible equity, excluding notable items, and our commitment to limit cost growth to around 5% on a target basis. So on the next slide, reported profit before tax of $12.7 billion included a $4.8 billion gain on the sale of Canada, partly offset by the $1.1 billion impairment on the classification of Argentina as held for sale. Excluding the notable items, profit before tax was $9 billion, with revenue growth offset primarily by higher costs and ECLs. Revenue of $20.8 billion was up $0.5 billion on the first quarter of last year. Excluding notable items, revenue was $17 billion, which was up $0.5 billion on the first quarter of last year, with growth in Banking NII, partly offset by lower fee and other income. Within that, we saw high single-digit growth in multi-jurisdictional revenue in the first quarter, which underlines the value of our global network. Banking NII of $11.3 billion was up $0.6 billion on the fourth quarter on a reported FX basis, mainly driven by Argentina Banking NII, as well as the non-recurrence of the cash flow hedge reclassification in the last quarter. Looking ahead to the rest of the year, a few things to keep in mind. First, our Q1 Banking NII included $0.3 billion from Canada, which will not repeat in future quarters due to the completion of the sale in March this year. Second, first quarter Banking NII also included $0.5 billion from Argentina. This contribution will continue to be highly volatile until the sale is completed, which we expect to be within the next 12 months. Please, therefore, do not extrapolate the $0.5 billion dollar run rate for the remainder of the year. Our Banking NII guidance assumes a contribution of around $1 billion in full year 2024 for Argentina, which is in line with full year 2023. Third, the Banking NII outlook has improved in several respects since we announced our full-year results in February. The Hong Kong time deposit mix remained stable as a percentage of customer deposits in the quarter, and markets are now pricing in more modest cuts to interest rates. However, it is still early in the year and these things can change, so we are maintaining our 2024 Banking NII guidance of at least $41 billion. Turning to fee and other income, wholesale transaction banking was down by 9%, primarily due to the normalization of FX revenues compared to a very strong foreign exchange performance in the first quarter of last year, which benefited from higher market volatility. Fees from Global Payment Solutions had another good quarter, up by 6%. Wealth is another growth area that had a very good quarter, up by 14% on the same period last year as our investment continued to drive improved results. Private banking was a standout performer, mainly driven by increased customer activity in brokerage and trading in Asia, but growth in wealth has been broad-based. To illustrate this, we acquired around 135,000 new-to-bank retail wealth customers in Hong Kong in the quarter. Approximately 60% of these were non-residents, attracted by our service and product capabilities in Hong Kong. Building on previous quarters, we attracted $27 billion of net new invested assets, of which $19 billion were in Asia. And our insurance new business CSM was $0.8 billion, up from $0.4 billion in the first quarter of last year. On credit, expected credit losses were $0.7 billion in the quarter, equivalent to 30 basis points of average loans. These were primarily Stage Three charges across retail and wholesale. There was a $54 million charge related to our Mainland China commercial real estate portfolio. While challenges remain within the sector, we expect a more benign ECL contribution from it than last year. We remain comfortable with our current level of provisions and continue monitoring developments closely. We are reconfirming our 2024 ECL guidance of around 40 basis points of average loans, recognizing the overall uncertainty from the flow-through effect of high rates on the economy. Next, we're on track to meet our target of limiting 2024 cost growth to around 5% on a target basis. This quarter's year-on-year cost growth was impacted by three items. First, we chose to pace the accrual of our performance-related pay more evenly this year than we did last year. This accounted for two percentage points of cost growth this quarter. We do not currently expect the total amount of performance-related pay for 2024 to be significantly different to 2023, so the accrual will be lower over the next three quarters than it was in the same period last year. Second, HSBC Innovation Banking contributed to one percentage point of cost growth this quarter, as we only acquired SVB UK in the middle of March last year. We intend to provide you with a fuller update on that business at the half year, but I'm pleased that it has good momentum. In the UK, we onboarded 183 new-to-bank innovation banking client groups in the quarter, the best quarter since acquisition. Finally, another percentage point of the cost growth in the quarter was due to the Bank of England Levy and the incremental FDIC special assessment. We remain committed to cost discipline, and we are reconfirming our guidance of limiting 2024 cost growth to circa 5% on a target basis, inclusive of all the above items. On lending and deposits, there was good loan growth in the UK, the Middle East, Mexico, and Asia, excluding Hong Kong. Loan demand in Hong Kong remained subdued, largely due to the high interest rate differential with Mainland China. Overall, we continue to expect mid-single-digit loan growth over the medium to long term, but we expect demand to remain subdued in the near term. Deposits were down 2%. This was due to a range of factors, including seasonality, the switch from time deposits to wealth products in Hong Kong, and our deliberate choice to forsake some highly price-sensitive deposits. Next, our CET1 ratio was 15.2%, up 40 basis points on the fourth quarter. Organic capital generation and the gain from the sale of the Canadian business enabled us to announce $8.8 billion of capital distributions this quarter. This includes a share buyback of up to $3 billion, which is expected to have an impact of around 40 basis points on our CET1 ratio in the second quarter. For modeling purposes, please note that the $5.8 billion of dividends announced today, as well as the $5.9 billion in respect of the ordinary dividend announced at the full year results in February, will both be reflected in TNAV in the second quarter. At closing of the sale of HSBC Argentina, which is expected within 12 months, we will also recognize $4.9 billion of foreign exchange reserve recycling losses, subject to any movement in this reserve up until completion. These losses have already been accumulated in capital over the previous years. Therefore, recognition in the P&L will have no impact on CET1 nor on TNAV. Finally, looking forward to the rest of the year, our good first quarter puts us on track, and we are reconfirming all of our 2024 guidance. A mid-teens return on tangible equity, excluding notable items, a Banking NII of at least $41 billion, ECLs of around 40 basis points, cost growth limited to around 5% on a target basis, and a 50% dividend payout ratio. With that, Louise, can we please go to Q&A? Thank you, Georges. If you would like to ask a question today, please use the Raise Hand function in Zoom. Please also ensure your camera is turned on. If you're invited to ask a question, please accept the prompt to unmute your line. If you find your question has been answered, you may remove yourself from the queue by lowering your hand in Zoom. Our first question today comes from Joseph Dickerson at Jefferies. Please accept the prompt to unmute your line. Hi. Good morning. Thank you for taking my questions, and congrats, Noel, on a great tenure at the bank. And well done for the ROE and the capital return. I guess just in terms of my question, the TD migration in Hong Kong, if you go back to the way you were computing it previously, actually looks like it improved quarter-over-quarter, and certainly under the new definition has stabilized. I think it's slide 17, if I'm not mistaken, in the presentation. Is that a little bit better than where your expectations were a few months ago? I know when I was in Hong Kong recently, it sounded like things were starting to stabilize. So is that better than where you were thinking a few months ago? And then secondly, on the buybacks, is the $3 billion number due more to the calendar effect, or is that kind of Are you looking to kind of boost the run rate there from the $2 billion a quarter? Thank you. Thank you, Joseph. So first, on the time deposit reclassification, we have actually reclassified some Private Bank term deposits to time deposits. This is due to the observation of their behavior and the recognition that they're better classified as time deposits. This rebases the number, but as you could see from the two charts we have, it does not affect the trend. So therefore, the trend that we've seen under both classifications is the same, and we've seen the first quarter stable quarter-on-quarter. It's too early to call it a peak, but we've always expected migration this year to be slower than what we've seen last year, and this just confirms the trend change from what we've seen in full year 2023. As regards your buyback question, so the short answer is yes, this is indeed due to calendar effects. We just completed two-month buyback in... Sorry, a $2 billion buyback in two months. That's about $1 billion a month. That is the fastest run rate we've done in terms of share buybacks ever. We are now announcing a $3 billion buyback, which we intend to do over the next three months, starting after AGM. We will see how the run rate goes, with the-- You know, it will remain at a $1 billion run rate. We will see how it will go. As regards any future amount of buyback or whether we're doing a buyback, one, it remains our intention to re-return the excess capital to our shareholders through a rolling series of share buyback. Second, we will decide on a quarter-by-quarter basis, based on our capital outlook, the loan growth outlook, and other, you know, other parameters, as and when every quarter. As a reminder- Thank you, Joseph. Next question, please. As a reminder, if you would like to ask a question, please use the Raise Hand function in Zoom. Our next question today comes from Raul Sinha at J.P. Morgan. Please accept the prompt to unmute your line. Hi. Morning, everybody. Thanks very much for taking my questions. Maybe two from me as well. Just staying, George, on, on this point on distributions and, and looking at the sort of moving parts for capital, one of the interesting things in this quarter was the, move up in RWAs. I was wondering if you could give us a little bit more color on the, the growth in RWAs. There's a $7 billion increase, driven by asset quality trends. I think you're calling out it's predominantly in Asia. You know, what should we think about the, the sort of outlook for RWA growth from here, even if loan growth is muted? Just to get a sense of, you know, the, the amount of capital that you will have in, in quantum terms for distributions. I guess the second question to Noel, just maybe a question for your broader thoughts, Noel. You know, the five years preceding have been pretty extraordinary, not just for HSBC, but I guess for a lot of people, you know, given, in your markets, given the pandemic. When we look at where HSBC is now, you know, you've exited Canada, you've announced Argentina, you're in the process of exiting quite a few smaller markets. Return on tangible equity is already in the mid-teens. You're buying back stock at $3 billion a quarter. You've got a special dividend as well. I guess what I'm really interested in is, is from here onwards, what do you think, is left to do, for, for the group to kind of progress? Thank you. Thank you, Rahul. I'll start with your first question. I will first on the RWA outlook. So of the RWA growth we called on a quote-unquote basis, $24 billion, first, about 40% of it relate to lending and other asset growth. And as you can see from our lending book, we've grown our lending book by $5 billion. There is a number of areas of growth that contributed to around 40% of it, $9 billion. Then we've had a $5 billion market risk RWA growth. This is due to a pickup in MSS activity against a subdued Q4, and it's more in line with their activity levels in Q1, you know, in the first three quarters of the year, if you want, and this is the normalization of the, you know, the market's activity. And then there is $7 billion, which we classified broadly as asset quality. Now, asset quality, first, it is a continuous exercise. We do this portfolio monitoring review on a regular basis. We have recognized across a number of geographies and a number of sectors, certain names, which we've decided to downgrade on the basis that the interest rate pressure on their cash flows has been more severe. You will not see an equivalent of that downgrade in ECL, and that's mainly because for many of these customers, their balance sheet remains strong. So we're comfortable with their balance sheet, and therefore, there's no ECL implication from this downgrade. But just closing the loop, this RWA downgrade, you will see some of it materialize in our Stage three loans, where we increased our Stage three loans by about $2 billion, and that's exactly the mapping of some of this asset quality. With regards how we look forward, we're very comfortable where we are today. Our credit metrics remain solid. As I say, the balance sheet of our customers remains strong for a number of them, for at least the exposure that is collateralized. We're very comfortable with the level of collateralization and the LTV, and therefore, we do not foresee, at this stage today, you know, any additional action we should be taking. We will obviously monitor the book on a regular basis, as we always do. Noel? Well, and thank you. It has certainly been an extraordinary five years, as you say, not just for HSBC, but for the world. And I'm really pleased and grateful, and I wanna pay tribute to the team for the way they've collectively navigated that. And during that whole process, the external environment executed on a complex but absolutely critical transformation plan over the past five years. And the outcome of that hard work is evident in the financial performance last year and the financial performance in Q1. I also wanna say thanks to Mark. You know, with such volatility in an external environment, any CEO needs the support of their chair, their advice, their guidance, and I've had that all the way through, and I've had the support from the board all the way through in navigating what has been a very complex external environment. But the team, the board, Mark, collectively, we've done a good job of navigating it. Now, if I look forward, I'm not gonna give a to-do, a to-do list to my successor, 'cause that is not the fair thing to do to anyone. But I will give you some thoughts about what we as a team are very much focused on, and I'm focused on for as long as I'm still CEO, and that is continuing the momentum. You don't work as hard as we've worked for the past five years, and then take the eye off the ball at this moment in time. I'm very focused on a smooth, orderly transition. I'm very focused on continued execution of the strategy. I wanna clarify our thinking on one element of the strategy. We have exited a lot of our businesses, a lot of our RWAs over the past five years. The one thing we've protected while doing that is the international core of HSBC. The countries we remain in, the businesses we remain in, are fundamentally now focused on the international nature and essence of HSBC, and we will continue to do that. Our key requirement is to continue to deliver good returns that are sustainable and repeatable, whilst also taking advantage of the growth opportunities as they emerge in a world that becomes more stable and that are inherent in our customer franchise. Therefore, we're very focused on continuing the development of wealth, our transaction banking capabilities, our global wholesale banking, capabilities, and then being ready for when corporate loan demand picks up, we can take advantage of that to couple good returns with sustainable growth. And I think you've seen evidence of that in these results. Hong Kong is subdued at the moment, but we understand why, with the rate differential in China. But if you look at the rest of the world, as George said, there's balance sheet growth in wholesale banking, in the rest of Asia, in the Middle East, in UK, in Europe. We're seeing good growth elsewhere. So it's about focus, momentum, continuing to couple good returns with good growth. Thank you, Noel. Next question, please. As a reminder, if you wish to ask a question, please use the Raise Hand function in Zoom. Our next question today comes from Jeremy Hou at CICC. Please accept the prompt to unmute your line. Jeremy, you're on mute. Uh- Yes, please go ahead. We can hear you. Can you hear me? Yes. Okay. So the first question is on deposits. We're glad to see that the CASA migration in Hong Kong is slowing down, but it's not stabilized at this level. But on the other hand, I think the bank has seen some deposit outflow in Q1, while your Hong Kong local peers still see some deposit growth. So I'm wondering if there is a strategic trade-off between the deposit growth and CASA for you at this stage, and how do you see that trend in the rest of the year? The second question is on the structural hedge. I'm wondering if this quarter you could share with us some breakdown of our structural hedge, and how much did we benefit from the reinvestment of the structural hedge, and if there is any run rate that we can refer to? Thank you. Thank you, Jeremy. So on your first question about deposits in Hong Kong, so if you remember at Q4, our deposits in Hong Kong have increased by about $14 billion. What we've seen in Q1 this year is a decrease of about $16 billion. Therefore, you can see seasonality playing across the two quarters, and therefore is broadly stable across the two quarters. What happened, though, is some of these deposit inflows in Q4 related to some deposit campaigns we were driving to drive some of our deposits into wealth. And when you look at Q1, while you see the deposit outflows, you also can see that $19 billion of our net new invested assets were in Asia. Therefore, a chunk of these outflows has manifested or translated into wealth inflows for us, which was the purpose of the campaign in Q4, and explains, if you want, the seasonality of this deposit. Second look, we have a powerful deposit franchise. We have a very cherished and viable franchise. We continue globally being a, you know, very attractive deposit proposition for both our retail and wholesale customers. We cherish this. We continue investing in our deposit capabilities, and throughout the last six quarters, you've seen how our deposit base has been very stable with our deposit costs being relatively benign compared to some of our peers. Therefore, I won't comment on month-to-month movements between ourselves and our peers. If I move on to your second question about the structural hedge. So, first, you would have noticed that we increased this quarter, the structural hedge, by about $10 billion, taking it to $487 billion, with the average weighted average life broadly unchanged at just shy of three years. Second, we commit, at this stage, to continue our structural hedging activity. Obviously, this will remain subject to market conditions, but, you know, you know, we will continue the trend that we put in Q1 based on current market outlook. This activity of additional structural hedging will contribute to a mild headwind toward Banking NII, and this is due to the fact that the rate curves are inverted, as you know, and you can do the math. But equally, we also are reinvesting maturing structural hedges at higher rates. And this reinvestment of maturing of structural hedges at higher rates is a tailwind into Banking NII. Between the two of those effects, the structural hedge activity for the full year 2024 would remain a net tailwind to our Banking NII. We have not yet quantified to the market that tailwind. We're looking at enhancing our disclosure in this space, but that tailwind has been factored into our guidance of at least $41 billion Banking NII, and obviously factored into our return on tangible equity mid-teens guidance. Thank you, Jeremy. Can we move to the next question, please? Thank you, Georges. The next question today comes from Jason Napier at UBS. Please accept the prompt to unmute your line. Hello, Jason. Good morning. Can you hear me? We can hear you, Jason. Good morning. Fantastic. Thank you. First of all, just to echo the best wishes, Noel, for the next chapter of your career and private life. I think a well-earned rebalancing. Thank you. Georges, I just wondered whether you'd talk a little bit within the context of higher for longer. You've referenced subdued loan demand in Hong Kong due to the differentials in interest rates. And I just wonder whether you—one of your peers has spoken at some length about looking forward to a change in asset mix as loan demand comes back, as a way to defend margins and revenue. So I wonder whether you might talk a little bit about whether that's a material part of the plan, and sort of what you think that means for revenue, sort of evolution in the next few quarters. I think I certainly was somewhat surprised that we didn't see an upgrade to Banking NII guidance this quarter. I know you don't rebalance, you know, every quarter, but I just wonder whether you might talk to the role that higher for longer has on asset mix and then on credit demand. And then secondly, wealth was phenomenal in Q1. I know there's a part of the business that's quite closely linked to what goes on with the Hang Seng Index, which is now up 20% in a short space of time. But I just wonder whether you could talk to the sustainability of those run rates. Is that the strategy delivering the sort of net new money flows, or is there an element of sort of market vol in there that we should be a little bit careful about? Thank you. Thank you, Jason. So first on Banking NII, you know, we recognize there are kind of a couple of encouraging developments. The first one is the higher for longer on the rate side, that will look like more favorable than when we discussed last in February. And the second one we just touched on, which is the balance sheet mix, specifically in Hong Kong, where we've seen term deposit remain stable for this quarter. So we recognize these tailwinds to our Banking NII, but we also recognize quite early in the year, and this, you know, there's these factors can still change. So this is why we didn't change our guidance. And as you said, Jason, I don't think you should expect us to update our guidance every quarter. We will, you know, we will reconsider this every quarter, but for this quarter, we're just sticking with our at least $41 billion. In terms of your the wealth performance, so recognizing, you know, mid-teens percentage growth in wealth, 34% for our private bank, I would say a couple of things. The first one is, yes, this is an area that we've already said we're, you know, is a focused strategic area. We are investing in this area. Big part of our investments goes towards this area, and we're very pleased to see the results of our investments, you know, generate revenue fairly quickly. You can see that through net new invested assets growth. You can see that through our CSM, the new business CSM growth and insurance, you know, as well as in the actual, you know, revenue performance. This being said, I would I would just caution you not to annualize the numbers you're seeing, because Q1 2023 had somewhat a, a subdued January in it, when China and Hong Kong were still closed. So therefore, you've seen more pickup in activity in the Q1 2023 at the back end of it, whereas we had a full proper Q1 2024. So there is an element of not annualizing the performance, but expecting that performance to continue growing. I just realized I didn't touch on your asset mix question of the first quarter of the first question. Look, we do not foresee a material change in our asset mix. We had seen for the last few quarters of last year, the main growth take place in mortgages, and recognizing mortgages have seen very competitive levels, both in the UK and Hong Kong, and the margins have been quite tight. As we start seeing pickup in wholesale demand, as we start seeing pickup in unsecured lending, you know, we are more, you know, hopeful that those will drive higher margins than if you want what we've seen in mortgages. And our numbers in Q1 did show that this pickup definitely is there in areas of Asia, Southeast Asia, India, the Middle East, the UK, et cetera. You know, the next in line for that pickup will be Hong Kong, which we expect at some stage later in the year as we, you know, as we see dollar rates ease. Thanks, Jason. As a reminder, if you wish to ask a question, please use the Raise Hand function in Zoom. Our next question comes from Perlie Mong at KBW. Please accept the prompt to unmute your line. Thank you for taking my question. Can I just dig a little bit further into Jason's question just now on higher for longer? So, I know you probably don't like to comment on longer term NII, but I guess in a higher for longer rate environment, just how are you thinking about the trajectory going from here? Because it sounds to me that deposit migration is probably well stabilized a lot and I would have thought any loan repricing that hasn't already come through will come through, you know, in the next few months. And I guess, as you know, in a higher for longer rate environment, you know, you can probably build more hedges at better rates as well, et cetera. There's obviously a tailwind, as you mentioned, in this year already. So, you know, what does that inform your thinking on your medium-term ROTI? So I guess that's the first question. And the second question, again, on broader activity level, maybe not just on credit, so, note, again, I guess just noting, your point that, you know, Hong Kong might be the next in line to pick up. But, but I guess overall, the emerging market is probably not benefiting in terms of activity level and in terms of capital inflows from the higher U.S. rates. So how does that impact, I guess, you know, trading activities, capital flows, et cetera? Just how are you thinking about the flip side of higher for longer? Thank you. Thank you, Perlie. So first, look, yes, we recognize higher for longer is definitely a tailwind or a, or a reduction of a headwind we've forecast in our Banking NII. And as I said, there has been a number of, you know, manifestation of tailwinds now compared to when we last spoke in February, but equally, it is early in the year, and as you've seen, these things do change, and we therefore want to bake in some sense of uncertainty due to the changing parameters. We are, you know, we will update, you know, some, you know, longer, longer than what we are updating, but not at this quarter, Perlie. So, you know, do expect us coming in the future quarters and give you further outlook for the future. I would say the one parameter, just to keep in mind as you start planning for 2025, is take Argentina out, because obviously, subject to the sale completing, which we expect to complete in the next 12 months, that potential $1 billion contribution from Argentina will go away from our Banking NII. That's the most, you know, most kind of predictable parameter where we stand today, as you look into 2025. In terms of the broader activity level, I mean, first, if you look at the wealth performance, just demonstrates how wealth remains very resilient, and that's particularly true in Hong Kong, but very much so across Asia. Second, when you look at our transaction banking activities, you know, apart from foreign exchange, which has an idiosyncrasy related to Q1 2023, with a very high volatility, has performed across the, you know, various areas of its fee-earning activities. And then our activity is very much benefiting from cross-border trends. If you look at some of the investments, or foreign direct investments or trade flows taking place intra-region in Asia, between China and ASEAN, between, you know, India and ASEAN, between, you know, India and the West, et cetera, all of those trends are growing. I mean, the numbers are staggering in some cases, and these are the activities that our business is, you know, operating on. So therefore, we, you know, while recognizing that there will be some interest rate challenges for borrowers at these levels, there is still a very strong underlying network activity, which is benefiting our overall businesses, particularly in wholesale transaction banking and wealth. Thank you, Perlie. On that, it's just I've also noticed that China exports volume's been going up, but value's been coming down, and that is in part because of various things. FX has been part of it, but also government subsidies. How does that affect your profitability in the region? Your volume's going up, but value is going down? Well, if I can just give you an indication, what we are seeing at the moment is a very strong level of activity of China corporates expanding across the rest of Asia. So our outbound activity from Mainland China to the rest of the world is seeing a significant increase in activity over the past 12 months. We're seeing that trend continue in the first quarter of this year. So a lot of people talk about inward investment into China slowing down, but what I would say is outward investment from China to the rest of the world is actually picking up at quite a pace, a very significant pace. We're very well placed to capture that outflow, and we are capturing that outflow. And our business in Mainland China performed well last year. It's performing well again in the first quarter of this year, and its outbound activity is performing extremely well. So, we'll give more updates on that at the half year, but we are capturing that. And that is why, actually, I think the rest of Asia is performing well on balance sheet, because a lot of it is being fed by good intra-Asia activity and outbound from Mainland China. Our next question- Thank you ... today comes from Katherine Lei at JP Morgan. Please accept the prompt to unmute your line. Okay, thanks. I have three questions, three small questions, actually. The first one is on non-interest income. I look at the breakdown on non-interest income, it seems like wealth is doing quite well, but on transaction banking, there is some weakness. I think it's down 9% YoY. Can we know what is the reason, and should we triangulate this to the full year? You know, what are the drivers to that? So this is the first one. The second one is on Hong Kong. With Hong Kong relaxing the LTV ratios, I think basically they... not only the LTV, but they relaxed the purchase requirements and the stamp duty requirements on residential properties. So I think that there is a significant jump in transactions. So I was thinking that this should be positive to mortgage at least, and we are big mortgage providers in Hong Kong. So, would that have any impact on our outlook in terms of growth, particularly related to Hong Kong? Second one. And then the last one, I think is on cost. If I look at the first quarter, I think cost is up 8%, including levy. How should I look at this, and then are we on track to the 5% cost growth this year? Thank you. Thank you, Catherine. I'll take question one and three, and I'll hand over to Noel to address your second question about the outlook for Hong Kong. So first on non-NII, wealth has performed well. Transaction banking weakness is specifically due to foreign exchange. That's driving the whole weakness, and the reason, as I called it out earlier, the reason is that foreign exchange had a very strong and a record strong Q1 2023 on the back of a heightened, you know, market anxiety and volatility back then due to the banking crisis. So therefore, we're doing a comparison to a record quarter, and it will show that drop. But if you look at the number itself, at the revenue itself for, you know, foreign exchange, it is back to normalized levels. So there is nothing to worry about here. It's on the contrary, back to normalized levels and, you know, we continue to expect some cyclicality in that space, while we continue expecting growth in the other areas of transaction banking. So, I wouldn't read more than that into it, and we remain very confident that the investment we're putting both in wealth and in transaction banking and in the technology supporting our transaction banking activities do remain strategic focus and, you know, as we look into future quarters and years. On your third question about cost, so first, I just want to reiterate, it is a clear priority for us to maintain cost discipline. Okay? And we are very confident we will limit cost growth to circa 5%. Excuse me. Sorry. Oh, bless you. It's all right. We'll limit cost growth to circa 5% on a target basis. We're confident about it, and we're actually on track to do so. And the reason why we're kind of on track to do so, yet we show the 7%, Q1 growth on a target basis, is because of a few idiosyncratic items related to the quarter, which are not repeated in future quarters, or some of them will reverse in future quarters. I'll just call the three of them out that matter. First, there was a 2% accrual of the performance-related pay, where we decided to phase that accrual more evenly throughout the year than we did last year. This will manifest in a higher performance-related pay accrual in Q1, hence the 2% contribution towards the 7%. But it will contribute to lower accrual in future quarters, because on a full year basis, we are not accruing to a significantly different number than the full year 2023, performance-related pay. Second, there was 1% contribution from HSBC Innovation Banking this quarter, because last year's first quarter, we only acquired SVB in the middle of March, which means we only-- we practically didn't have it in the first quarter last year, and that's a base effect.... And then third, we had the one-offs or the nonrec, well, expected nonrecurrence of the FDIC special assessment additional charge this quarter, as well as the Bank of England levy. Bank of England levy is a new charge, which used to be an interest expense, as an NII, and now it's moved to operational as expense as in cost. And those, between the two of them, they contributed to 1%. So if you adjust for those, and, you know, you bake them in, we're still, you know, and remain confident to meet our 5% cost target on a full year or circa 5% on the full year basis. On your second question, I'll hand over to Noel about Hong Kong. Yeah. Katherine, I was in Hong Kong recently and spoke to a number of the market participants there and the developers, and I think firstly, I think the change to the stamp duty arrangements in Hong Kong in March, in the budget, was very well received, and it's had a positive impact on the activity levels of sales in the Hong Kong market, residential sales. It was an extremely significant inflow of activity in the first month. That will be very beneficial to the liquidity positions of many of those developers. We have to wait and see how that stabilizes, 'cause undoubtedly there was an element of catch-up in that first month because people were anticipating some change, therefore, there was low activity in the preceding months. And then, we've got to see how that stabilizes. I think that is a very positive move. It will enhance liquidity within the market. It will enhance activity in the mortgage market, but I think it's too early to call a trend at the moment. I think we need to see how Q2 stabilizes following those changes. A very helpful intervention. Thank you. We have time for one last question today, and that comes from Andrew Coombs at Citigroup. Please accept the prompt to unmute your line. Thank you. Firstly, just to commend Noel as well in his five years as CEO, but also acknowledge your long stint at HSBC beforehand, too. Thanks, Andrew. Two questions, please. Firstly, on the UK NIM, you've seen an improvement second consecutive quarter, another six basis points, so outperforming some of the domestic peers. I can see your loans and deposit balances looking fairly flat in that entity. Perhaps you could just comment on what you're seeing in terms of deposit migration, mortgage refi, and what's driving that NIM improvement, and how sustainable you think that improvement is going forward as well. And then the second one, just clarification on Argentina. Booked $0.5 in Q1, guiding to $1 billion for the full year based on last year's experience. Presumably, what you're therefore saying is a step down to $0.2 billion per quarter the remainder of the year, given that you don't expect the transaction to necessarily close until 12 months' time. Thank you. Thank you, Andrew. So the UK NIM was up six basis points indeed, essentially benefited from some idiosyncrasies of structural hedges and timing of structural hedge maturities and reinvestments. So if you consider broadly flat to be broadly a range of ±10 basis points, I would say UK NIM has been broadly flat for the last couple of quarters, and we foresee it to remain broadly flat in the next quarter. And you will therefore add to that broadly flat some structural hedge idiosyncrasies, which will drive you within this ±10 basis point range. We are, you know, as regards our loans and deposits have been stable. Again, you know, the UK economy has been resilient. We're very optimistic about the outlook for the UK, specifically around inflation and employment. It remains a very important customer franchise for us. It remains a very important market for us, and we continue gaining market share. I mean, you know, we are continue gaining market share in mortgages with a 10% new business market share. When our back book now, market share has moved from... or our kind of overall portfolio market share has moved from 7%-8%. You know, we are at 25% market share in SME lending, and obviously, you know, we continue investing in this business. You can look at the ring-fenced bank cost growth and how much we can support cost and investment growth for the ring-fenced bank within our, you know, overall circa 5% cost growth. So all this demonstrates the, you know, the confidence we have in our business in the UK, our clients' activity in the UK, and the outlook for the UK. If I move to Argentina, you know, I wish I could give you a trend for Argentina. The way it works is, the numbers balloon with hyperinflation, and then they kind of shrink with devaluation, and it depends how they manifest themselves over month, you know, month-over-month. Q4 last year has seen hyperinflation to some level, but they've seen a massive devaluation. If you recall, in December, we've seen more than, you know, 50% currency devaluation. That's contributed to a disinflation of the amount that banking in Argentina brought to Q4. And then, this quarter is exactly the opposite. We've seen 6% devaluation only, but we've seen 54% inflation, and that will just inflate the numbers. So it will be volatile quarter-on-quarter, and our best estimate for the full year is that it may average out to what it averaged out over last year, which is around $1 billion. Now, if just looking at the overall Argentina, if you take in the non-bank NII, and you take in the cost base, et cetera, last year's Argentina contribution to our PBT was $0.2 billion. Just to put it in perspective, this is about $0.01 earnings per share or $0.005 dividend per share. Therefore, I think as you look at the full year 2024, that's the quantum that Argentina's volatility will create. So it should not distract you from the way you're, you know, you're forecasting the bank's out outcomes. I guess just to follow up on this. In a scenario whereby you didn't have any devaluation of peso, inflation was a more moderate, normal amount, what would the NII contribution be under that more kind of BAU scenario a quarter for Argentina? Look, again, it's a relative... It's a difficult one to say, but, you know, if you just do the arithmetic of our $1 billion expected for the full year, of which already $500 million has manifested in the first quarter, a smoothed-out outcome would be the other $500 million phased out or, you know, evenly over three quarters. But that's, you know, a highly volatile number, so I wouldn't use it as a, you know, a forecast. Okay. Understood. Yeah. Thank you, both. Thank you, Andrew. Thank you, ladies and gentlemen. That ends today's webinar. You may now disconnect your line and enjoy the rest of your day.