Hello. Good morning, and good evening to those of you who joined from Australia, and thank you for attending this call. As you are aware, we have made the decision to accelerate our digital first strategy following our observations of market trends emerging in the post-pandemic environment. We recently issued an RNS indicating that we are executing a material reduction in our brand presence. In recent days, we have completed our digital first strategy analysis and have agreed the financial outcomes with our board. Given the launch of our new strategy with updated guidance, we felt that it was appropriate to communicate these outcomes as soon as possible. My intention today is to provide an overview on our financial performance in 2021, but I will also address what the acceleration of our digital first strategy will deliver, both for our customers and also for our shareholders in terms of medium term guidance on ROTI and costs. In headline terms, accelerating our digital first strategy means that over the next three years, we will deliver a digital first bank targeting 100% digital origination across the majority of our products. This origination will be supported by memorable customer experiences and a unique Virgin Rewards offer. In addition, we will launch a range of new market competitive products and propositions to further underpin our growth ambitions. Over the same period, we will deliver double-digit ROTI, a cost income ratio of less than 50%, and a sustainable dividend. I will provide some more details on this strategy in the next few slides, but first let me address our financial performance for the full year 2021. As you can see from the slide, the bank is performing well. We have delivered a statutory ROTI of 10.2% and a statutory profit before tax of GBP 417 million. Our balance sheet mix continued to evolve, with NIM increasing to 1.62% for the full year and with an exit rate of 1.7% in Q4. Our relationship deposits have grown 19% year on year, and our cost of deposits has declined 37 basis points versus full year 2020. Our costs have also declined 2% year on year, and I will come back to this topic shortly. Very importantly, our integration and rebranding of the bank is now substantially complete. This is a major achievement given the operating environment of the past two years. We've delivered strong growth in our established digital propositions and our Virgin branded PCA sales have increased 95% compared to last year, and our new cashback proposition supported good growth in unsecured volumes. Our Virgin cards book has performed very well, growing 4% against a market which contracted 6%. Across our portfolio, our asset quality has also remained resilient, and we are all maintaining a strong provision coverage of 70 basis points. Our cost of risk for the full year was therefore a credit of 18 basis points. Finally, our CET1 ratio has improved to 14.9%, demonstrating a strong TNAV progression. I'm also pleased to announce that as a result of this strong financial performance, the board intends to recommend a dividend of 1p per share. If we turn to slide five, I will talk a little about the strategic drivers of our performance. Now, as we previously discussed, we consciously adopted a strategy of delivering growth in margin accretive areas, and the combination of this approach and our liability management strategy has delivered a sustained improvement in our overall NIM. This, in turn, has helped us to deliver a strong improvement in our underlying and statutory ROTI. I'm especially pleased to see the growth of our CET1 ratio from 13.4% in 2020- 14.9% in 2021, and this was achieved despite some significant headwinds, including the absorption of a significant close out of PPI, the cost impact of the COVID period, and increased Tier one bank regulatory costs. Our balance sheet is strong. We are well capitalized and a well-funded bank, and our momentum gives me a lot of confidence as we move to a digital growth strategy in a post-pandemic world. Let me now just turn to the economic backdrop and how we are positioned. On this slide, I've set out the latest macroeconomic indicators from our third party provider, Oxford Economics. Overall, as you're no doubt aware, the backdrop in the U.K. has continued to improve over the second half of the year. This improvement in the economy has seen GDP expectations increase further with a recovery to pre-pandemic levels now expected in the final quarter of this year. Unemployment forecasts are also supportive of a growing economy. The most significant change since we reported our half year numbers has been the recent sharp increase in inflation, which is expected to continue to rise throughout the remainder of this year and into the early part of 2022. Recent data and comments from MPC members have seen expectations increasing that a base rate rise could occur in the not too distant future. As a result, we have seen the swap curve steepen through the second half of our financial year, and this has been beneficial for our structural hedge. Clifford will take you through our rate sensitivity and gearing to an improving rate environment in more detail in his section. Let me now talk about integration, rebranding, and the implications of emerging digital trends for our digital first strategy. As I said, I am pleased with the progress that we have made on delivering integration and rebranding in the past two years. We delivered the critical FSMA Part VII and have restructured the bank, reducing staff by 20%, branches by 44%, and recently, our head office footprint by 38%. We have now retired legacy brands and migrated customers to the single Virgin Money brand and rebranded our entire store network. The vast majority of products and services are now sold under the Virgin Money brand, including the recently launched national Virgin Money Business Bank, as you saw at the start of the presentation. Initial feedback from customers has been very positive. We are now also in a position to offer innovative Virgin Money branded propositions and rewards across our entire product portfolio. As I said, I'm very proud of what we've achieved to date. As a result of our previous investment, we already have a fintech capable platform, which our new investment will build on. I'm especially pleased with this progress given the very difficult operating environment of the past two years, and we are now very well positioned for the next stage of our digital first strategy. Let me now turn to slide eight to some of the COVID digital trends that are informing our strategy. We have talked before about the fact that one of the biggest impacts of COVID was the acceleration of the use of cloud-based technology in banking and in every other aspect of our lives. It is not just the use of this technology that has changed, but also the pace at which it can be deployed. We have seen the rapid emergence of cloud-based platforms and a significant change in customer behaviors, both in our personal lives and in business. These changes are structural, and in addition, competitors are accelerating the digital nature of competition. This competition comes from existing global incumbents creating digital-only subsidiaries, as well as from payments firms and big tech firms rolling out marketplace models. We have also seen a dramatic shift in the nature of work. The post-pandemic world will require a new contract between employers and employees, and we will be at the forefront of delivering flexible remote working models supported by our technology partners. We believe that this approach that we will call A Life More Virgin will deliver a competitive advantage in terms of retention and the recruitment of a diverse resource pool. In order to effectively deliver on this accelerated ambition, we have formed key strategic partnerships which are central to our strategy. We're working with Microsoft on our operating platforms and cloud capability, and also with Global Payments and TSYS to support the delivery of a digital wallet which integrates our unique Virgin loyalty scheme. We also have an existing strategic partnership with Capita, and this will deploy our straight-through digital mortgage service. Our broader engagement with Fintechs will allow us to deliver memorable experiences across our Virgin Money Business Bank, but also across the group product profile. We believe we now have the right partnerships to support the digitization of our products and processes, and we will leverage those partnerships to accelerate our digital first strategy. The implementation of our strategy will require us to accelerate investment in key areas, and in slide 9, I will address this issue. Before I explain our cost profile in the future, I think it is important to understand the context of the past. Over the past three years, we have delivered an exit rate cost reduction of GBP 180 million. However, some of this benefit has been diluted by delayed change programs due to COVID, greater investment in regulatory requirements as we become a Tier 1 bank, and new systems investments to support the rollout of government support during the lockdown. As a result, we updated our 2021 cost guidance earlier in the year, and our cost outcome is broadly in line with our revised guidance. I had hoped that we would have achieved a higher level of net cost reduction at this point, and I therefore stepped back with the leadership team and asked ourselves four questions. How can we catch up on our plans? What does the technology shift offer in terms of additional savings? What would it cost to deliver those, and how are we positioned to compete in a digital world? We have concluded that the competitive imperative of a post-pandemic world requires us to shift the bank to a digital growth strategy and to invest much faster in digital processes for our existing and new products and services. However, at the same time, we are confident that as part of this shift in strategy, we can deliver approximately GBP 175 million in additional cost savings. We will be investing approximately 50% of these savings, either directly in the pull forward of digital initiatives or by absorbing cost inflation in the three-year period with GBP 275 million of below the line investment. In other words, we will deliver an outcome over the next three years, which we expect to deliver a significant reduction in the bank's cost base. Looking ahead, we believe we can pursue this strategy and at the same time deliver double-digit returns by 2024 with a cost income ratio of less than 50% and a statutory profit and sustainable dividend in each of the three years. Clifford will provide more details in each of these areas in his presentation. We believe that delivering the above outcomes while pivoting the bank to a more aggressive, growth-oriented digital first strategy will enable us to compete effectively in a rapidly changing digital marketplace and will enable sustainable value creation for our shareholders. Let me now turn to slide 10, where I will outline what this investment will allow us to deliver. This year, we have launched a national Virgin Money Business Bank with innovative products and propositions, and we will continue to expand the capabilities of the business bank, working with up to 20 different fintech companies. Early next year, we will launch Staircase to Credit, which is an innovative subscription-based unsecured lending model, and we will launch our straight-through digital mortgage capability with an integrated Home Buying Coach. We are also working closely with our investment JV partner, abrdn, and we plan to deliver an app-enabled product that will attract a new customer base. As you can see on the slide, we will offer a wide variety of other PCA and BCA innovations and will align these with the delivery of a digital wallet and an integrated Virgin Red loyalty scheme. These initiatives and more will allow us to achieve above market growth in the areas that we prioritize. The majority of these initiatives will be delivered in 2022. We will also begin implementing the final parts of our A Life More Virgin employee operating model when negotiations with our unions conclude later this month. This purpose-led digital colleague proposition includes full harmonization of terms and conditions for all employees, enhanced technology, and has been created to enable fully flexible remote working. Finally, as I highlighted earlier, we have signed a contract with Microsoft to support the delivery of a more cost-effective operating platform. This platform will be cloud-enabled, and all mobile technology will be refreshed every three years. We are also deploying data analytics tools to create an agile, customer-centric delivery model. Turning to slide 11, let me now briefly highlight how this investment will drive efficiency and support our growth and customer experience ambitions. The investments that we are making will allow us to deliver these digital efficiency solutions faster and will fund the cost of optimizing our operating model and physical footprint. We intend to rapidly digitize our customer interactions, whether it is in the onboarding process or as part of the service that we provide to our customers. A key element of our strategy will be to convert the majority of our non-digital customers to this digital model. We intend to support our customers with a primarily digital interface that resides in the cloud, and this will allow us to operate with fewer service centers. We will offer a similar digital experience to our staff. This will enable the rollout of our post-pandemic remote working model. This approach will allow us to continue to optimize the branch footprint and to materially reduce our property footprint, including head office centers. Our strategic partners will help us to deliver these customer and employee services through a cloud-based infrastructure, and this model will allow us to consolidate our data centers down from 6- 2. Overall, we have very specific action plans agreed with the leadership team for each of these outcomes, and we are therefore confident that we can deliver these cost, customer, and colleague benefits going forward. I will now turn to slide 12, which covers how we intend to pull forward investment in the delivery of new propositions that support our growth agenda. I am confident that the investments that we are making will deliver the returns that we are guiding to in 2024. As you can see on this slide, our initial Virgin branded propositions have demonstrated strong growth and proved that we can attract digital affluent customers through digital channels and on a national basis rather than just in our heartlands. Our PCAs and credit cards are close to a combined 100% digital sales model, and this is the ambition we have set for all of our key growth segments. If I look to the future, in the next three years, I am expecting us to grow market share in unsecured and business, and whilst margins remain compressed, we will be tactically smart in the mortgage sector. We will seek to maintain our current market share. We also see significant opportunity in our JV with abrdn, and we are expanding our ambitions here and will provide more substance later in 2022. We have delivered specific plans to roll out a large number of new and existing products and propositions going forward, and I have outlined these on slide 13. By the first half of the full year 2022, we intend to launch our debit card cashback offering and our new unsecured subscription-based lending proposition, which will help Gen Z customers build their credit score while removing the complexity of interest and charges. We will also be going live with our M-Track solution for business customers, which we've developed with our key fintech partners. This proposition uses API technology to provide businesses with a customized dashboard and educational materials, helping them to run their businesses more effectively and to save time. We've also launched the Virgin Red loyalty proposition to support the rollout of our digital wallet, and I won't cover all of these individually, but I think you can see we have a busy digital agenda going forward. You will also see from the roadmap that we have a number of propositions which will underpin our ESG goals, including further enhancements to our Greener Mortgages and sustainability-linked business loans. I have mentioned the rollout of our digital wallet, and given this is a significant launch, I think it would be worthwhile explaining what our plans are. If we turn to slide 14, I have provided some details of our strategy. We have previously announced publicly that we have formed a strategic partnership with Global Payments. They will co-invest with us to build a digital wallet that offers enhanced customer functionality, but will also offer an integrated Virgin Red loyalty scheme. We anticipate the first iteration of this wallet will be available in the second half of 2022. This scheme will offer customers the ability to earn points as they spend in the app. It will also allow customers to buy now and pay later, and it will have the ability for customers to earn points and cashback on both debit and credit cards. These points can be deployed for value across the Virgin ecosystem and beyond. Our buy now, pay later product will have a credit eligibility model built into the offer. This is an essential ingredient for this customer convenience to avoid potential conduct issues in a soon-to-be-regulated universe. It is important to note that our wallet will also be available to non-customers as well as existing customers. This is an exciting initiative for us, and it has the potential to combine innovative, relevant product capabilities with the power and capabilities of the Virgin brand and the broader Virgin Group. We will continue to provide updates on our progress in future presentations. It is now time to hand over to Clifford for his presentation. However, before I do that, I would like to make some concluding comments on our performance. Our leadership team have delivered a strong performance this year. Over the past few years, we have navigated a series of complex hurdles, including the IPO, Brexit, PPI and other legacy matters, and an acquisition with a complex integration and rebranding agenda and, of course, the pandemic. Yet we are announcing today a Virgin Money bank that is integrated, rebranded with a strong balance sheet, a clear digital growth strategy, and an underpinning of a statutory profit and the resumption of a sustainable dividend. As the CEO, I am confident that our strategy will see us entering a new phase where we can compete effectively in a post-pandemic digital world that has changed materially. I will return to this theme after you hear from Clifford. At this point, I would like to hand you over to Clifford to address some of the financial performance in detail and to get his perspective on the bank. Thanks, David. As you know, I joined Virgin Money in March, so I've had a good amount of time to get to grips with the balance sheet and also to work with David and the team on accelerating our digital first strategy. I'm very pleased with the strength of our balance sheet in the full year, our robust asset quality, strong provision coverage, and capital strength with PPI and much of COVID uncertainties now behind us. We're also benefiting from rising rates through our reintroduced structural hedge and have now restarted the dividend. As David described, we've done a good job of integration and are showing good trading momentum, particularly with our new Virgin Money branded propositions. We now have the opportunity to digitize further, delivering better cost efficiency and accelerating profitable growth into the economic recovery. A clear path to double digit returns and sustainable dividends. Now turning to the highlights of our full year 2021 financials on slide 16, which show improved pre-provision and underlying profitability. Our performance reflects improved NII, cost down year on year, an impairment release of GBP 131 million reflecting the improved economic outlook, offset by lower other income from reduced activity levels. Taken together, this delivered a substantial improvement in underlying return on tangible equity to 17.8% or 14.9% excluding tax changes. The board also intends to recommend restarting the dividend at 1p per share, reflecting our strong capital position. Moving now to statutory profit on slide 17. It's good to see a return to statutory profit in full year 2021. There's quite a bit going on here, which I'll take you through. As David described, we've been working hard to accelerate our digital strategy, resulting in an extra GBP 45 million of restructuring charges in 2021, taking total restructuring charges to GBP 146 million for the year. After GBP 88 million of acquisition accounting unwind charges in full year 2021, there are now only around GBP 50 million of charges remaining over the next three years to be taken mostly in 2022. Within legacy conduct costs, we incurred around GBP 60 million as we concluded PPI remediation, with further limited charges in the second half of the year. Within other items, we incurred around GBP 70 million relating to changes to intangible assets following a review of capitalization practices where we're taking a more prudent approach. GBP 57 million tax credit reflects a higher valuation of historical losses following corporation tax rate increases announced early in the year, more than offsetting the tax charge on current profits. Going forward, we expect the effective tax rate to remain relatively low with further loss recognition before returning to more normalized levels in the low 20s% from FY 2024. Finally, TNAV per share improved to 290p. I'll now talk you through the results in more detail. Turning to funding on slide 18, I'm pleased with the work we've done to reduce our overall funding costs. While total customer deposits were stable in the period, we improved mix and reprice, delivering a sharply reduced overall cost of deposits to 53 basis points. Our successful new current account proposition, together with customers holding high average balances, resulted in a 19% increase in relationship deposits. At the same time, we reduced more expensive term deposits by 29%. Looking ahead, we see some further scope to bring down our overall cost of deposits as we continue to improve our deposit mix. In wholesale, we managed overall balances and managed mix as maturing secured funding has not needed to be replaced. At the scheme closure in October 2021, we'd drawn GBP 7.2 billion of TFSME and repaid all our TFS drawings. Secured issuance is expected to normalize through 2022 with the closure of TFSME, and we anticipate GBP 2-3 billion of issuance in the year. Overall, we reduced the cost of both retail and wholesale funding, benefiting overall net interest margin. Moving now to lending on slide 19. We managed lending volumes prudently through the year as we navigated the pandemic with overall balances broadly stable. In mortgages, we entered the year cautious on HPI and prioritized margin amid strong market conditions. In the second half of the year, increasing competitive pressure saw us compete tactically and balances contracted marginally. Going forward, we'll continue to participate tactically, focused on maintaining strong overall returns and growing in targeted high yielding segments where we have an established specialism. Business lending balances contracted as expected during the year with weaker business as usual demand due to government lending scheme usage. In the second half of the year, government backed lending balances became eligible to make payments for the first time, resulting in balances contracting slightly to GBP 1.3 billion. For those businesses choosing to use Pay As You Grow for Bounce Back Loans, we're seeing the majority extend their loan term from 6-10 years. We're now targeting a return to growth in business lending, supported by the rollout of our M-Track proposition. Finally, I'm very pleased with the performance of our personal lending book, where balances increased by 4%. A strong performance given the subdued market backdrop. We're now seeing consumer spending above pre-pandemic levels, and are well placed to benefit from the recovery with customer propositions that now include cash back and installments. Looking ahead, we're targeting above-market growth in high-yielding segments, including personal and non-government business lending. In mortgages, we'll continue to participate tactically and look to maintain market share. Moving now to net interest margin on slide 20. I'm pleased with our net interest margin performance of 162 basis points for the year, 6 basis points up year-on-year. Throughout 2021 we showed good momentum with a strong Q4 exit rate of 170 basis points. This uplift in margin was primarily driven by our deposits performance. Our structural hedging program restarted towards the end of Q2, and it also contributed to our performance. These factors were offset somewhat by customer lending, with reductions in headline pricing, particularly in mortgages during the second half of the year. Looking ahead into full year 2022, we expect a higher full year net interest margin of around 170 basis points. That expected year-on-year improvement includes the full year effect of the structural hedge, lending growth in higher yielding sectors, and a further deposit repricing benefit. Against this, we'll absorb the impact of higher mortgage competition on overall margins, where we see new business application spreads below the level of our overall book spread, at least for now. Moving to our structural hedge on slide 21. We've now fully reinstated our structural hedge. On this slide, I'll take you through the size of our hedge position, expected increased contribution from the hedge, and our interest rate sensitivity now that we've returned to a fully hedged position. You'll recall that we reintroduced the structural hedge towards the end of the first half, having unwound the structural hedging position in 2020. At Q3, the group had reinvested with balances at GBP 25 billion, and during Q4 we increased the size of this position further to around GBP 26 billion. During October, we expanded the structural hedge further after concluding a methodology review and an updated assessment of rate sensitive balance and our overall life of deposits. This now takes the size of the total hedge to around GBP 32 billion. In terms of the financial impact, the contribution from the previously hedged position that was unwound in full year 2020 remains the same. That hedge was around GBP 24 billion of notional, and has been locked in at 80 basis points since Q3 2020, with one-sixtieth rolling off each month. The 2021 contribution was around GBP 150 million, and it'll be GBP 120 million or so in full year 2022, and is gradually reducing out to full year 2025. The new GBP 26 billion hedge, which was reinvested through the second half of 2021, was executed using swaps with an average duration of 2.5 years at an average yield of around 32 basis points, and contributed around GBP 30 million to gross NII in full year 2021. Given the shape of the yield curve and the higher hedge size of GBP 32 billion, we estimate structural hedging contributions to income will be meaningfully higher in full year 2022 relative to full year 2021 on a gross basis with the GBP 6 billion of additional capacity invested at recent higher rates. In terms of what this means for interest rate sensitivity, based on the higher hedge size of GBP 32 billion, we estimate our one-year sensitivity to a parallel shift in rates will deliver around +GBP 20 million or -GBP 10 million for a 25 basis point increase or decrease respectively. This is down relative to the year-end position since the additional value we are locking in from the upsize in the hedge is in place with a reducing ongoing exposure to rate changes. I'll now move on to non-interest income on slide 22. Our non-interest income performance reflected weak market conditions with performance relative to last year declining GBP 31 million overall. In personal, our performance was impacted by lower credit card transaction fees as spending reduced under lockdown, as well as the removal of some overdraft fees following the high cost of credit review. Business was more resilient and mortgage income was broadly stable. We saw positive signs in the second half of the year as other income, excluding one-off gains and fair value, increased by GBP 4 million relative to the first half with the lifting of restrictions. In the near term, we expect non-interest income to improve further relative to full year 2021, given the full easing of restrictions and the general increase in activity levels. Over time, we're targeting non-interest income to rise as a percentage of total income as we see growth from existing opportunities, such as our wealth joint venture, and as we capitalize on new propositions. Turning now to asset quality on slide 23. I'm pleased with the quality of our lending book, and we're well positioned as government support is fully withdrawn. Credit quality was robust through the year, with stage three loans remaining around 1%. Arrears and default levels remain low across portfolios and forbearance levels are stable. Charge loss also remain low with around GBP 100 million of write-offs net of cash recoveries, less than full year 2020. During Q4, we reflected updated economic scenarios from Oxford Economics. Relative to our Q3 assumptions, these include higher GDP growth and lower unemployment in the short term, peaking at 5.4%. We still retain prudence with HPI, though now factor in a less severe contraction in 2022 of 6%. All this led to a reduction in stage two balances, resulting in around GBP 200 million of lower modeled and individually assessed ECL provisions relative to H1. We're conscious that the outlook remains uncertain, so we've maintained around GBP 200 million of post-model adjustments. Overall, our final ECL provision of GBP 504 million represents a reduction of GBP 231 million from FY 2020, resulting in a portfolio coverage of 70 basis points and still above pre-pandemic levels. This produced an income statement release of GBP 131 million, equivalent to a cost of risk credit of 18 basis points. We expect the group's cost of risk to rise through FY 2022 towards through-the-cycle levels. I'll now turn to costs on slide 24. You heard from David that we're accelerating digital investment, which will drive cost efficiency and also unlock our digital growth potential. On this slide, I'll talk through the gross cost savings we're targeting and the impact on our cost outlook in FY 2022 before taking you through our medium-term outlook on the next slide. To support our digital strategy, we'll incur around GBP 275 million of further digital development and associated restructuring costs by FY 2024, reflecting our digital first investment program and associated severance and property closure costs. Investment will be front-loaded with around half taken in FY 2022. This investment will deliver around GBP 175 million of gross cost savings over the next three years, of which we plan to reinvest around half back into the business, inclusive of inflation, to support growth. In terms of those gross cost savings, we have set out on the left where we see these being derived from. We expect around 45% of savings as we improve end-to-end digitization, reducing the number of manual processes, and as we streamline operations. A further 35% will come from reductions to our store footprint and as we rationalize office space. The remaining savings will come from lower spend on third parties, suppliers, and key contracts. On the right-hand side, we've set out what this means for full year 2022 costs. We'll continue to see gross savings play through from our existing integration and transformation activity and as we see benefits from our new digital development restructuring program. Overall, in full year 2022, we expect to see these gross savings offset by inflation, growth, and additional digital development costs. Inflation here includes pay inflation and normalization of bonuses. Growth includes costs associated with higher transaction volumes post-COVID. Digital development costs arise from delivery of digital projects such as mortgage end-to-end digitization and business banking proposition delivery. We'll also see short-term higher cost of digital development from our adopting a more prudent capitalization approach, as I referenced earlier. Overall, broadly flat underlying cost year on year. Moving on to our medium-term outlook on slide 25. I'll talk through here our expectations for cost to decline over time, the drivers of income growth, and why we're confident we'll deliver cost income ratio of less than 50% by FY 2024. First, costs. We've set out our operating expense profile in terms of base OpEx and digital development costs since the acquisition, as well as our expectations out to FY 2024. Looking back, David explained we've seen increased investment which has had a consequence on the marginal level of net cost reduction in the business. Looking forward, we will front-load digital development costs, which alongside growth and inflation broadly offsets reductions in base OpEx in full year 2022. In terms of general inflation, we're assuming an average level of 2% per annum. In addition, as we reflect a more prudent capitalization approach, we're excluding certain costs from capitalization and also capitalizing less. We will see higher OpEx related digital development costs in the near term before seeing a decline in D&A over time. Going forward, we expect digital development to have two impacts. We'll see a lower level of base OpEx as we drive efficiencies from the deployment of digital initiatives, and we'll see a lower burden of digital investment spend as our investment reduces the cost of change. In time, we expect this combination to drive a lower level of total underlying costs. We'll also drive income growth, and David has already shared our plans. Our digitally led propositions will enable us to take further share in PCAs and BCAs, target adjacent segments in unsecured, and roll out new features in business. We expect to build out our fee income where we see great potential and expand our addressable market in mortgages. In general, we're taking a prudent view on base rate rises through FY 2024. Taking all of this together, we're targeting a progressive increase in total income over time, along with reducing costs, which together will enable our less than 50% cost income ratio target by FY 2024. I'll now say more on capital on slide 26. I'm pleased with our capital position of 14.9% at FY 2021, and this included the benefit of software intangibles of 53 basis points. We saw strong capital generation in full year 2021, reflecting primarily over 200 basis points of underlying profits, 19 basis points from lower RWAs, both offset by 23 basis points of AT1 distributions, 107 basis points of exceptional items and a further six basis points of dividend. Our MREL ratio is strong at 31.9%, comfortably in excess of end-state requirements. As such, we're not anticipating any HoldCo senior issuance in full year 2022. Looking into next year, we expect continued capital generation from ongoing statutory profit, but with a number of headwinds to net capital generation. In 2022, we expect the reversal of CRR2 software benefits will reduce CET1 by around 50 basis points. We expect RWAs to grow, reflecting volume growth, density increase changes as we target growth in higher risk weighted sectors. We also see a risk of RWA inflation with pro-cyclicality remaining. Our full year 2022 RWA expectation does not include benefits from the move to IRB from our credit card portfolio and the adoption of hybrid mortgage models. Both of these depend on regulatory approval, with the hybrid models now expected to take effect from full year 2023 and credit cards IRB transition the year after that. We're pleased that the board intends to recommend paying a dividend and remain committed to establishing a sustainable dividend going forward. Overall, we expect CET1 to reduce somewhat next year, but remain comfortable, and we'll update further on our capital and dividend framework after the results of the solvency stress test in December, and alongside our interim results in May. Finally, I want to finish on guidance and outlook on slide 27. We've given guidance on KPIs for full year 2022 throughout our presentation, and I've set this out on the left-hand side. We're making good progress on driving the key pillars of our strategy, as David described earlier, with a clear roadmap to statutory double-digit returns in full year 2024. Our assumptions are realistic. To recap, we reflect general inflation of around 2% per annum. A prudent view on base rate rises through full year 2024. We assume front book mortgage spreads, which are lower than stock in full year 2022 before building back from full year 2023. We take a prudent approach to cost of risk and capital requirements. Our double-digit statutory returns in full year 2024 will be supported by net interest margin expansion as we target above market growth and higher yielding segments. A higher contribution to total income from non-interest income. A sub-50% cost-income ratio and lower below-the-line charges, which we think have peaked in 2021. I'll now hand back to David with his concluding remarks. Thank you, Clifford. Before we take questions, let me summarize the presentation today. As I have said, we have delivered strong financial results for 2021, and I am confident that we will deliver double-digit returns with a cost income ratio of less than 50% by 2024, and that this will be underpinned each year by a statutory profit and a sustainable dividend. We have come through a complex period over the past few years, but have emerged from the pandemic with a well capitalized and well-funded balance sheet, strong asset quality across the book, and a bank that is profitable and can support a sustainable dividend. We are now an integrated and rebranded bank that has good growth momentum in our established Virgin propositions. Over the next few years, we intend to expand our products and propositions and move to a near 100% digital origination and service model for our customers and colleagues. This shift will enable us to become a more efficient and agile bank that can compete effectively in a digital future and deliver on our medium-term guidance. Thank you for all of your attention. With that, I'll now hand to the operator to host a Q&A session. Thank you. Our first question comes from Edward Firth from CLSA. Your line is now open. You may proceed with your question. Thank you for taking my questions. I've got a couple. Can we just firstly start on NIM? You called out your exit NIM of 170. There's a lot of tailwinds there running into 2022. You know, can you just run through why your guidance isn't potentially higher in 2022, but yet going forward, you think the guidance of the NIM will improve just on the back of mix. Is that implying you think business loans are gonna go backwards in 2022? Yeah. Look, thanks for the question. Look, as you say, we've guided to 170. We feel good about that guidance. We've exited the year at 170. We've got strong tailwinds that you talked about, the structural hedge. I think it's just a bit early in the year to get excessively bullish. You know, we do have a competitive mortgage market right now. We're naturally prudent in our guidance at the start of the year, but we're feeling good about our NIM momentum right now. Just in your medium-term guidance, are you assuming base rate rises? We have assumed a base rate rise actually at the tail end of that three-year timeframe. We based our planning on Oxford Economics, so you can look that up, which is quite prudent. We feel we've been prudent in our base rate assumptions. Our planning does assume the interest rate curve that we've seen in recent weeks, so we've got the benefit of that. You'll also see the role of the hedge going forward, and that'll support NIM going forward. Just one final one on NIM. Are you saying with your medium-term NIM guidance, excluding the base rate rise, you believe just mix is gonna drive an increasing NIM going forward? That's right. I mean, you see, David talked about maintaining market share in mortgages, which is our lowest spread business, but outpacing the market in unsecured and business, which is our high yielding areas. We're feeling good about both the momentum and our new propositions driving growth, so high single digit growth over that three-year period. We're already seeing good growth come through on the unsecured side, and we expect the SME side to pick up nicely as the recovery picks up and government support measures fade out. Just one more on growth, just to follow on from that. You know, I know you've said today you'll be selective on mortgages, but yet you're gonna grow at system. You know, for the last little while the book hasn't grown, system's been quite strong. You know, can we actually expect growth coming through in mortgages? And then on the business side, with the roll off of potentially some government backed loans, do you anticipate system to go backwards next year in business loans? Yeah, maybe, Ed, I'll pick that up. On the mortgages side, I think if you know us well enough, you've looked over the past number of years, we're tactically very agile in terms of the mortgage business and the different segments, and I'm quite comfortable with our positioning at maintaining market share, so I think that will occur. If you look at the rest of the growth profile, we see on the cards business, for instance, that's a very strong growth contrary to the market, and it's a super prime book, so I think that will continue. Broadly unsecured is coming back quite strongly, so I think we will see that grow. On the SME side, there are a lot of sectors in the economy as the government looks to invest in the infrastructure and leveling up that will be SME driven, that will see net growth separate from the firms that have taken the government loans. I think there will be some muted demand in various sectors who have taken on significant cashflow. The majority of those that did that with us, that took government loans, actually put it on deposit with us. We'll be able to monitor that behavior quite closely. Then thereafter, we're looking at the rest of the economy, technology, renewables, et cetera, starting to grow and coming out with a lot of requirements for capital expenditures. I think there is plenty of room to grow, in the SME business, and I'm quite comfortable with the medium term guidance that we set based on the growth assumptions in that area. Okay. Thanks. Thank you. Our next question comes from Grace Dargan from Barclays. Your line's now open. You may proceed with your question. Good morning. Thank you very much for the call. A question on costs and then on mortgages if I can. On costs, maybe we could just push you a little bit. Could you give any guidance on the phasing of the gross savings that you see coming through? Associated to that, I guess, is there a risk to your guidance from higher inflation? Maybe you could tell us what kind of assumptions you've captured in your guidance. Secondly, on mortgages, just thinking about mortgage margins, could you give any sort of detail around what your back book spread is at the moment, and kind of what you're seeing in terms of application and completion margins? I guess to. Thinking you're talking about tactically, around maintaining your mortgage market share, are there any specific areas you're looking to focus on, or is that more a general comment on pricing discipline? Thank you. Okay. I'll start. I'll tackle the cost questions and the margins. I'm sure David will continue on our focus areas. I think in terms of cost, we expect a good contribution from cost savings in each of the next three years. I think we've got good tailwinds on cost savings coming out of full year 2021, and that'll play through into 2022 and beyond. I wouldn't call out a particular back end or front end loading there. We have indicated that we expect incremental costs in full year 2022 offsetting those savings, hence broadly stable in the year. After that, we'd expect costs to come down in nominal terms. I think inflation, you know, clearly there's some uncertainty right now. Our expectations broadly in line with consensus is we expect medium term inflation of around 2% and the current uptick in inflation to be temporary. So that'll give you a sense of our inflation assumptions. We've, you know, we're much more confident around our cost income ratio target, which we've articulated the nominal costs. And we see some natural interplay. You know, if inflation persists, we'll see that benefit come through in terms of our interest rate sensitivity. On margins, you know, we've been reluctant to give specifics for margins on mortgages. I would say that our recent completions are broadly in line with our book margins, but the applications and the pipeline has been somewhat lower, hence our caution on spreads going into full year 2022. We've seen very recently some pickup in headline rates from competition, and we'll see where interest rates go in the next month or two. That'll give you a flavor. We're cautious on mortgage spreads in really going into 2022, but our medium term planning is based on normalization of spreads over time. Thanks, Clifford. Just to give you a sense of your question around the commentary's tactical or general comment. I think we're looking at two things. The evolution of the marketplace, which Clifford has referred to, seems to be that we're now seeing the withdrawal of the ultra cheap or ultra low margin type mortgages. I expect that trend to increase over a period of time in line with the interest rate curve. I think there'll be some dilution of the pressures that have occurred there. Equally, at the same time, we're being very specific about opportunities we see in some of the sectors like the Buy-to-Let, some higher LTV, some higher scale, large amount loans. We have developed specialist capability in each of those areas. We will look at those as specialist areas, but we will also look at the market we dynamically price. You'll have seen too in prior years, we come in and out of segments with quite a lot of flexibility. We'll be reactive to market dynamics, and we'll be focused on some niche areas where we see specialism, and I think the market will stabilize and begin to improve in terms of margins. I think that's the best way I can explain that comment on tactical. Perfect. Thank you very much. Thank you. Our next question comes from Guy Stebbings from Exane. Your line is now open. Please proceed with your question. Hi. Good morning, guys. Thanks for taking the questions. First, just one on cost and then one back on mortgage volume. On cost, you've given the GBP 175 million estimated run rate saving, suggested half will be reinvested, and half support the bottom line. Simple math suggests that you end up about GBP 850 million in 2024. I just wanted to check that's sort of fair, and then what you're saying on inflation. Do we read your comments that, if it's in line with the 2% figure that you gave, that that's captured in the investment component? Sort of delta around that 2% is whether we should be thinking about a higher figure than GBP 850 million. Also just to check, is the cost income guidance of less than 2%, is that a statutory cost income target? Then on mortgage volumes, I sort of refer to some previous questions. You know, it's gone backwards, in a market where it's been very healthy volumes. I appreciate there's been some pricing pressures resurfacing. You've always said you're going to pivot more of the balance sheet towards unsecured business. But I'm trying to understand why you didn't grow in the second half of this year, but plan to grow tactically going forward. It sounds like you think spreads might increase. So I'm just trying to understand, if spreads don't increase, does that mean that you won't sort of keep market share? Thanks. Maybe I'll just pick up that last point, Guy, on the mortgages as we're on that theme, and then we'll back into your cost questions. I think, if the margins don't improve, that's not the basis for which we've created our growth assumptions. We would expect there's some benefit if we see that. Right now, we expect to be able to operate tactically as we've done over the many years of price compression. If you look back at the big bank compression a few years ago, pre-COVID, that was a similar scenario. We're still able to compete in that space. Just to refer back to why we didn't grow previously in the last couple of quarters. You'll recall, as over the last couple of years, we have talked about the fact that we were significantly overweight in the mortgage book versus our other businesses, and versus our competitors. We had constantly said we would look to hold the market share. It's not a question of suddenly taking advantage and growing at uncontrolled levels. We're creating a portfolio effect where we've said we will be focused on margin accretive areas for growth with our liability management strategy that drives NIM. At the end of the day, we've been consistent on the mortgage book in terms of holding market share and then being really tactically smart in achieving that. That's. Guy, that's just a reminder, a little bit of background context on the mortgage book and why we're not particularly growing in historical terms, and why we're still confident about how we will grow regardless of the margin behavior in the going forward outlook. Maybe then on cost coverage, just to. Yeah. Look, happy to pick that up. I think mathematically that's right. We've said GBP 175 million gross savings, we'll reinvest around half. We've been reluctant to call out nominal cost targets, whether that's for full year 2022 or 2024, for a couple of reasons. One is uncertainties around inflation. The guidance I've given reflects 2% inflation. And clearly that could be different. We do see some natural hedging, if you like. If inflation is persistently higher, we'll think that will ultimately flow through in rates, and we'll see that in the top line in due course. We also frankly, we're feeling good about the growth prospects of the business. If growth is there, and we're planning for growth, but if growth outpaces even our current plans, you know, we want the ability to invest into that growth. Some of our products, we have variable costs, but we're really encouraged by some of the recent growth we've seen in unsecured, and we don't wanna constrain the business. The target we're focused on is the less than 50% cost income ratio. But we do expect costs to come down in nominal terms after full year 2022. Okay. Thank you. That's helpful. Just to confirm, is the cost income target a statutory number or? No, it's underlying. It's underlying as we quote it, currently. I'd say, and I think we've given guidance here, we're expecting those below the line charges to diminish over time. We've given guidance on the acquisition accounting unwind, and that's really gonna be quite small at the tail end of that planning period. On our exceptionals, that GBP 275 million is very much front loaded. Okay. Thank you. Thank you. Our next question comes from Christopher Cant from Autonomous. Your line is now open. Please go ahead. Good morning. Thank you for taking my questions. Sorry to flog a dead horse, but I just wanted to ask again about the loan growth assumptions and particularly around mortgages. If I take a step back, I think you said you expect high single digit growth in unsecured, and I don't know whether that applied to business as well, but those were your kind of growth areas. What kind of loan growth should we be thinking about for the book as a whole? I mean, when I hear you say mortgage growth, and you expect to maintain market share in mortgages, I interpret that to be, you know, some growth broadly in line with market, maybe a touch below. If that's the case, should we be penciling in something north of 2% loan growth over the next couple of years if you are getting that strength in unsecured lending? I don't think consensus is there at the moment, but just wanted to check your view on, you know, the overall loan book growth we should be thinking about as part of what you're trying to deliver. Then on the cost income, and the kind of the cost debate, obviously you've set a less than 50% target, assuming no rate hikes to 2023 from what you've said. If I think about, you know, consensus currently around 48% cost income ratio, I mean, is the emphasis on the less than here? Because I think, you know, the simple maths we're all gonna do is the 815 mentioned in the previous question and then gross that up. If I look at your slide for income where you've got the sort of fuzzy bars on slide 25, you know, looking at that, it implies something back around full year 2019 levels for income. That would get you to kind of 50% on the dot. Am I missing something? I mean, it feels like your income guidance, particularly on NIM, has been quite conservatively struck given the rates assumption you're making. You've said that you think the 170 for 2022 is sort of cautious or it's early in the year, so you've been prudent. I'm just trying to understand how much below 50 should we be thinking here? 'Cause it feels like it should be meaningfully, but just wanna invite you to comment on that. Yeah. Look, I'll comment on sort of top line growth, and then David will follow up on cost income ratio. I think there are a couple of things around NII. We've talked about net interest margin. We're giving guidance, you know, very early in the year at around 170, and we're feeling good about that and our momentum, right? We're seeing I call it tailwinds into the three year period on net interest margin. We're still seeing deposit costs come down. We're growing strongly or expect to in our high yielding segments, and we've got the full year effect of the structural hedge and the enlarged hedge recycling through that period. We're feeling good about net interest margin momentum through that period. In terms of loan growth, I think you mentioned 2%. I feel over that three-year period, we should be outpacing 2%. We're looking to grow market share. That would be high single digits in unsecured and SME over that period. I think our caution in the short term is that while we're seeing good pickup in unsecured, we've yet to really see that come through in the SME. It really depends on the timing of the trends that David talked about. I think around mortgages, look, we think subdued into 2022, but we expect to maintain our market share over time. I think we'd see at least some growth in mortgages during that three-year period. That should give you a feel for our confidence around, I'd call it low-ish, but decent single-digit balance sheet growth. Thanks, Clifford, and thanks, Chris. Just to your particular question on cost income ratio, is the emphasis more on below 50%? I think it is, but I'm sort of balancing that with the comments that Clifford just made around growth because that's why we said below 50%. I think we'll be very efficient in achieving cost targets. We've done a lot of work on that. The issue is if we see a really big step up in growth in the economy and we want to follow that growth trend, then that might drive more costs. We're looking at being able to deliver on the guidance we've given and be able to absorb some step up in growth as well. We're keeping that balance in mind, which is why we're not trying to drive to a specific cost number and much more focused on a cost income number. Because at this juncture, we're confident about the growth levels that we can achieve. If there's more growth than that, as I said, we may want to invest in that. It's going to be a balance, but we'll see it as we journey through the next three years, and we can talk about it in detail on that journey. Just building on that. We're committed to the 50% and less on the cost-income ratio. I think our primary metric is that ROE, that double-digit ROE, and we're feeling good about that right now. I talked in the presentation about what we think are prudent assumptions and frankly, increasingly prudent assumptions. We've been prudent on base rates. You see the strength of the structural hedge that we've put on. We're seeing the economic recovery play through. We expect exceptionals to be really materially lower in 2024. We're seeing that low-ish tax rate. We've been prudent on capital requirements. You see, we've guided, we've announced the Pillar 2A requirement coming down after the financial year. We're feeling good about our prudent targets, and we're determined to deliver on that ROE target that we've set out. That's really helpful. Thank you. If I just try to stitch together a little bit. If NIM's gonna be a little bit above 170 by the sounds of it, at least by the time we get out to 2023, if not this year. If you've got something over 2% loan growth over the plan period as a whole, and if other income is to then grow within the revenue mix, 'cause that bit feels quite important as well. Yeah. It feels like you've got decent NII growth. For other income to grow within the mix, that must be quite meaningful growth. We must be looking at something for income north of GBP 1.7, I guess, for 2023. Is that the right sort of- Yeah triangulation here? Look- I guess I can't get to the other income growth without that. No. Look, we're not gonna guide beyond full year 2022 on specific numbers, but the themes, the drivers of income, you know, I think I feel are quite right. I mean, you've picked up other income. You've seen, you know, bluntly, lockdown in the U.K. only came through in July, right? Which is at the tail end of our reporting period. We'll get a full year effect of that coming through. I mean, there are some uncertainties around COVID and the winter, but we're feeling good about the momentum, about our timing. We think now is the time to invest in the business, and we can see that visibility of growth on other income based on our current propositions in the next year or two, and that's before some of the sort of exciting propositions that David talked about that are in the pipeline. Okay. Thank you. Thank you. Our next question comes from Robert Noble from Deutsche Bank. Your line is now open. You may ask your question. Morning, all. Can I ask how much of the growth in unsecured lending do you see coming from buy now, pay later? What returns do you see on this product going forward in comparison to other types of unsecured lending? Then secondly, on your NIM guidance for 2022, you've not put in a rate rise, but are you using market pricing for swap curve, but with no base rate increase? If that's the case, what do you see a 25 basis point rate hike actually doing to earnings in one year? Thanks. Thanks, Rob, and maybe I'll just pick up the first one, which is on buy now, pay later. I think we haven't really incorporated any material assumptions from that in our planning. What we've done is planned the product rollout, and that we anticipate to be the latter half of 2022, and then momentum will gather into 2023 and 2024. We've deliberately not based our growth on any assumptions around that product area. If we launch that successfully, which I'm confident we will, and we combine it with the Virgin Red loyalty scheme, which will be a little different than most of the other buy now, pay later schemes, I think that's going to be quite attractive. We'd like to get the product rolled out and then look at the early stages of performance, and then we'll be giving some guidance once we have comfort around that. It's likely that we'll have a capital market date later in this, the summer of 2022. What we'll be looking to do is get a little bit more specific around that topic at that time. David? Yeah. Look, on guidance, as I said, we feel good about the 170. We put on the hedge, the enlarged hedge after the end of the financial year, so really quite recently. That supports, you know, our comfort around the 170. That guidance does reflect the, call it, the current yield curve, but that's moved up even in the recent week or two. It's underpinned by that structural hedge, so we're feeling good about that. I think. We give our sensitivities, interest rate sensitivities in respect of a parallel move in the yield curve, effectively the swap curve. You're quite right, we're less sensitive to base rates per se. There is some sensitivity to base rates. If base rates go up, we'll get some income benefit of that. But that will also be expected to drive some pickup in the yield curve at the front end. I think big picture, we've enlarged our structural hedge up to GBP 32 billion now, and that's effectively crystallized the benefit of recent higher rates that we've seen and over the last few period and underpinned in our comfort in our guidance. All right. Great. Thanks so much. Thank you. Our next question comes from Joseph Dickerson from Execution Limited. Your line is now open. You may proceed with your question. Hi. Good morning. A lot of questions that haven't been addressed. I guess just a high-level question on costs and, you know, in light of the higher restructuring charges announced, et cetera, and the guide for FY 2022. Do you feel that you are underinvested on the cost side in the past vis-a-vis where you wanted to take the bank digitally? Because you've been headed digital, for lack of a better word, a digital direction for a while now. How much of this is catch-up and how much of this is proactive for the future? Thanks. Thanks, Joseph. Let me just take that one. I think with regard to the past, I don't think we're underinvested. I think we've done actually quite well. We're positioned very well because of historical investment in building our platform, which is a single platform for all our products and services, which is fintech enabled, with a microservices layer. So that's good from a historical investment perspective. But at the same time, you'll see a lot of the cost is both on growth with new digital products, so rolling out the digital wallet, the subscription-based unsecured lending. So taking advantage of what we see as real market opportunity and our brand to play in new spaces with new products. I think that's the growth side of the investment. But then there is the cost of exiting our architecture in terms of the structure. Six data centers down to two, fewer contact centers, staff, you know, the two-thirds reduction more or less in the footprint of the total gross space we have with head offices and branches. I think it's the exit cost as well of that restructuring to move us much further down the curve on an accelerated basis into the digital kind of operating model. I think it's not about the past. Actually, I'm quietly happy that we invested smartly, and it allowed us The potential to make the decision to accelerate into the new products and accelerate the exit of the non-digital type of architecture that we have. I feel good about that, and I think it's going to be, once, you know, we take these steps and become much more digital in our operating capability, the future investment will really be about being smart in terms of product capability and competitiveness in the marketplace rather than restructuring as we're dealing with today. Great. Thanks. Thank you. Our next question comes from Jason Napier from UBS. Your line is now open. Please proceed with your question. Good morning. The first group of questions, I guess, are around various moving parts in net interest margins, and then I had a question on costs, if I could. As far as NIM goes, I appreciate you don't want to talk about the specifics on mortgage spreads, but given it's 80% of the book, it's naturally a really important area to understand clearly. Are you saying that in 2023 and beyond, you're expecting wider credit spreads that are in the market at the moment? And of what magnitude is that assumed recovery? And then secondly, if you could give us more specifics around deposit costs, please, the exit rate at the end of full year 2021, and what it is you're expecting going forward. To my mind, the fact that deposit costs are already rising in the system is surprisingly early in the tightening cycle, and certainly for banks that have greater reliance on the term market, I think it's really important to understand where it is you think that is going. You may not have base rates in your asset side planning, but I guess we would hope that you would have them on your deposit cost strategy planning. The first one on mortgages, second on deposits. As far as costs go, I guess quite surprising to see intangible write-offs around software that weren't included in the pre-announcement. And I just wondered to what extent that might produce a saving in 2022 in terms of PNL. Then any of the building blocks that you could give us around later cost savings. You'd mentioned that you're gonna be capitalizing less. Presumably you won't be telling us that you'll be investing less, but where can we get confidence around the declining cost later in the plan, please? I'll pick up. There's quite a few questions there. I think in terms of mortgages, I would confirm what you said. We're seeing mortgage spreads in applications, you know, somewhat below our book right now, and we expect that to continue through this year, and that's reflected in our around 170 guidance. And we do expect that to normalize over time, and the guidance we've given around double-digit ROE in 2024 reflects a normalized mortgage environment. You can play your sensitivities around on that. In terms of cost of deposits, you know, we quoted 53 basis points for the full year, and clearly we've seen a declining trend. I would say it exited the year at maybe 10 basis points less than that. We're still seeing some tailwind from reducing cost of deposits. We have over GBP 10 billion of term deposits that are rolling off and, you know, when we are repricing those, we don't keep all of those 'cause we're well placed for deposits right now. When we do, those term rates are actually less than the maturing rates. Those are the... That's my comments on deposits. As far as intangibles are concerned, yeah, I mentioned that we've written off about GBP 70 million of intangibles. Some of that reflects historical projects, but much of it reflects a more prudent approach to capitalization. You know, you can imagine it's my first full year. I've had a very careful look at that, and I think the right way to manage that portfolio is to be a more prudent practice around capitalization. What that means, you'll see in full year 2022, the first year where we're doing more IT investment, more development costs, but we're also taking a more prudent approach to capitalization. You see those costs as a headwind this year, and that's one reason why costs are broadly stable as a whole. Over time, and once we get through that bow wave of investment, you've got a mechanical reduction in our depreciation and amortization over time because we've been, you know, we've just bluntly we will have capitalized less. That should give you some comfort that we have almost a mechanical benefit of reduced D&A, depreciation and amortization, going forward. Much of our change activity, and David referred to this, is about moving to the cloud, developing, fully developing our agile change methodology, our DevOps methodology, which we've seen in our business and in other banks, including my last employer, will have a material impact in improved productivity of change, reduced cost of change, and time to market. That gives us confidence in change costs coming down over time. Alongside that, you know, you've got the GBP 175 million of cost savings that David described how we expect to deliver on those. That gives us confidence that costs will come down in normal terms after full year 2022. Can I just follow up on the normalization of credit spreads question, please? One of your larger competitors has disclosed that they think that current spreads are 60 basis points on the front book below the back book. So there are the 100 versus 160 on their numbers. I think it's really important that we understand how big a recovery we're talking about here. What you're thinking- Yeah. I think the way I think about the couple of comments, and we have seen very recently both swaps picking up, but also a number of competitors raising their headline rates. I think the way to think about it and model it is the at the outer years of the call it the planning period that we've set out, we expect to maintain market share, so not grow market share in mortgages, but also maintain our overall book margins. We don't expect new business to be accretive to margins, but we don't expect it to be dilutive, and we think we can do that by further penetrating the segments where we have specialties and trading through it, as David described earlier. Thank you. Thank you. Our next question comes from Victor German from Macquarie. Your line is now open. You may proceed with your question. Thank you. I've got similar questions actually to Jason. As I've been studying these costs, one of the things that we've observed over the years is banks looking to reduce their costs over the medium term, but consistently been sort of surprised with inflation around their digital investment, actually. I look at sort of your guidance, you're planning to spend GBP 275 million below the line, but it is an amount that you're planning to spend over the next three years, and then you increase your digital development as well. Kind of as you're looking forward, what do you think your sort of exit digital development cost looks like? And why do you think it's not gonna increase over that time period? I'm looking at slide 9, and it looks like it's pretty stable bar. Yeah. I'll pick that up. I think, you know, I joined Virgin Money in March, so I have experience elsewhere. I think the industry as a whole has struggled to digitize existing operations and develop new propositions. I mean, I think all in an environment of flattish income. I think from our perspective, we've done a really good job on integration. We still have more digital development opportunity. We've set out at the back of our presentation our kind of target, call it end state, which is page 34. That really will put us, you know, best in class in terms of simple IT infrastructure, cloud enabled, fully agile, and a much simpler, you know, operating environment. I think at the same time, I think that in itself is inherently cheaper, and we'll be putting, you know, we'll be putting more change through because we expect greater agility and higher productivity. At the same time, you see we've been unequivocal about our ambition to digitize. We've seen we've taken our branch numbers down to around half since acquisition. David's talked about end-to-end digitization, data centers, service centers, and so on. We expect to be a much more digital bank, and that will enable us to take costs down, but crucially, put more volumes through. I think one of the exciting things about what we're talking about, it's not just a cost out story, it's a growth story. We're determined to open the doors, and that's the opportunity we think for Virgin Money. Yeah. I think just to add to that, Victor, the key here is that you're taking the institution with that heavy real estate and heavy branch architecture, and moving it to a much more digital model. Now, when we get to that point, the underlying theme of your question is, you will have less to invest in total cost because you're investing in digital new product capability as opposed to transforming the organization. We see this as we've invested, we've built the platforms, we've got customers, product services, we've got microservices layer, we've got fintech integration. All of that's good. We now need to take the rest of the steps on our architecture, physical as well, and then improve the services we offer by automating them, improve the employee operating model by making it cloud-based, and then consolidating efficiencies around data centers and service centers. I think that's the journey we're on, but once you get to the end of that journey, you're in a different universe in terms of the spend that you need to make. No, that makes sense. If I look at it then, sort of taking what you've said, and look at the slide where you look at your income progression versus costs, is the income progression based on the assumption that you will achieve what you're trying to achieve, and you become far more digital, but your competitors don't necessarily get to the same point as quickly? Or is the assumption that it basically enables broadly flat or stable margin? Or are you incorporating that potentially the industry becomes more efficient as well, and margins in the industry start to come down as a result? Yeah. Maybe just one comment from me, Victor. I think we're not making assumptions that the industry will remain inefficient. We're taking the view that as we invest and become more efficient in our growth and acquisition of customers and our servicing cost, that will be margin accretive. If you look at why we're comfortable with that, if you look at the card business that we have today, that's grown. It's a super prime business at 4% growth versus the industry, which is -6%. The same with relationship deposits, the same with 95% increase in PCAs. For us, it's a combination of a few things. We believe we've become more efficient in terms of the cost of delivery, more efficient in terms of the acquisition, and that's underpinned by the brand, which has demonstrated its power over the past year in terms of those PCA sales. Combination for me of the brand is unique, the loyalty scheme we will have is unique. We've proven that over the past year in terms of value, and the digital benefits will come, and that's why we're confident as opposed to assuming anybody else is inefficient, Victor. It sounds like it's the margin mix benefit that really underpins that income growth and improving margins over time. That's right. I think if you know, if you model it out, I mean, we. In terms of market share, I mean, depending on products, we're anything from 3%-7%, right? In contrast to some of the very big, you know, banks out there, it's really tough for them to meaningfully grow market share. For us, we think we can grow market share in unsecured and SME. Why do we think that? Well, in unsecured, bluntly, we've done it, and we have a pipeline of new propositions coming through. On the SME side, you many of you are seeing and hearing, the adverts regarding the launch of our national business bank. We have the propositions there ready to go, and we think we can take market share. A couple of percentage points of market share really moves the needle in terms of our overall top line. You play that through together with the rising rate environment. The fact we've locked that in already with our structural hedge gives us confidence in the continuing momentum on the top line, which combined with the investment and opportunities on the cost gives us confidence that we can deliver that less than 50% cost income ratio and 10% ROE. Thank you very much. Thank you. Our next question comes from Kshitij Shah from JP Morgan, asking, "What drove the P2A reduction of 50 basis points with the MDA now 8.7%? Can I ask what capital target is being assumed for this plan? Yeah, look, you'll understand I'm not gonna comment on the specifics of that Pillar 2A movement, but we thought it was right to announce it today. We think we've been cautious in terms of our capital requirements. For that 10%, we've assumed 14% capital requirements. We're currently a bit above that. We've participated in the industry stress test for the first time this year. Results were out in December, and we, you know, we're committed to updating the market on capital framework, including capital requirements and dividends going forward, by our interim results next year, which is May. Thank you. Our next question comes from Rohith Chandra-Rajan from BofA. Your line is now open. Please proceed with your question. Hi. Good morning. Thank you very much. I had a couple, please. The first one, sorry, just coming back to mortgages. So in terms of that strategy to focus on the specialist segments, which you talked about before, but just could you clarify what proportion of the book those specialist segments are currently? And then I have a second one on the hedge, please. On specialist segments, I mean, we've highlighted a couple, which is the high LTV segments, new build, and Buy-to-Let. Buy-to-Let has seen tax changes recently, and there are different structures that we need to develop in order to fully address that marketplace. Our current Buy-to-Let is a little less than 30% of the book. I think your second question, I didn't quite catch that. The second question was just on the hedge. With the expansion in October, and I appreciate there's an equity element to the hedge as well as the product hedge, but the overall GBP 32 billion is now bigger than your relationship deposits. Just interested in the thinking behind the hedge expansion and if you see scope, if you grow those relationship deposits further as you anticipate, if there's scope for expansion in the hedge. And then, I think you also talked about when you reposition the hedge about it rolling off at 1/60th per month. Is that also the case for the GBP 6 billion that was added in October? Does that match that maturity profile? Yeah. I think that's broadly right. I think you're quite right. The hedge reflects the equity component. I think the run off, I think assume 1/60, so weighted average life of around 2.5 years. We've got the complexity of these different tranches that we've explained. Essentially what that means is, you know, we skipped rolling the hedge through the very low interest rate period of about a year ago, and by putting on that extra GBP 6 billion really very recently. I think we have the benefit of a quite nicely yielding hedge in place as well as an enlarged rolling opportunity. That the extension of the hedge reflects the stickier deposits that we have and, you know, which seem to remain sticky. We feel fully hedged right now. Our approach that we adopted halfway through last year, shortly after I arrived, was essentially to hedge interest rates. We're not actively managing that capacity. We're looking at, you know, we want to be fully hedged. We think that's effectively fully hedged, that GBP 32 billion. We will calibrate that as our relationship deposits and current accounts grow or potentially shrink over time. Thank you. Sorry, can I just be clear? The GBP 6 billion that you've just put on, is that also a 2.5-year- Yes. average maturity? Yes, it is. Yeah. Thank you. Thanks very much. Thank you. Our next question comes from Benjamin Toms from RBC. Your line is now open. Please go ahead. Morning. Thank you for taking my questions. Firstly, on cost of risk, can you just remind us what you think your through the cycle cost of risk is given the change in mix? Over what timeframe do you expect the GBP 200 million PMA to be unwound over? Is the majority likely to happen in full year 2022, either through use or release? Secondly, in terms of reducing the number of branches, you're currently about 131, inclusive of recently announced closures. Given the ambitions of 100% digital origination over the majority of products, is the plan to reduce the branch footprint to a basic skeleton over further time, or do you still think they have a strategic place? Thank you. Yeah. Thanks, Benjamin. Maybe I'll just pick up on the branches, and Clifford can pick up on the cost of risk and the PMA. The philosophy on the branches is that, yes, the purpose of branches has completely changed in the universe. What we're doing is looking at the model of digitization that we're doing and the market pace of digitization are going to dictate what we do. We're not pre-judging it in any way. You have to address a transition also with vulnerable customers, U.K. regulation. Our view of the world is we will deliver a service to customers in those communities so long as they want it, and we will adapt that as we see behaviors adapt. What you see from COVID is much more of a self-serve model, a big decline in use of cash, and much greater functionality being offered through the digital channels to limit the need for people to go to branches. I think the simple way to think about it is the market evolution in terms of customers' behavior will dictate what we do next. Clifford? Yeah. Through the cycle cost of risk, we've said in the past sort of towards 30 basis points. I think that's reasonable in the short period. I'd say over the next few years as we grow in unsecured and business, you may well see that ticking up as the mix of the book changes. I think in terms of PMAs. Look, it's hard to predict precisely 'cause it's all about overlays to models. If we feel the models accurately reflect what's going on, obviously we would release the PMAs. I think the way to think about this, I expect 2024 to be, call it, a more normalized year, right? Whether that's cost of risk or release of PMAs, it, you know, I'm hopeful that it's sort of out of the system, which is why we've quoted ROEs for 2024. We were, you know, careful in our kind of phrasing around cost of risk for full year 2022. We said towards through-the-cycle cost of risk. I don't expect 2022 to be our sort of normal year in that sense. You'd expect to see cost of risk somewhat lower than that through-the-cycle number I quoted. Thank you. Thank you. Our next question comes from Edward Firth from KBW. Your line is now open. Please go ahead. Yeah, thanks very much. Sorry, it's rather late asking another question. I just wanted to ask about inorganic moves. If I look back, I mean, I think post Virgin Money you were targeting costs of less than GBP 800 for next year. We're now gonna be more than GBP 900. I guess the sort of cost saving potential of synergies doesn't seem to be perhaps what we might have hoped. Does that sort of inform your thinking when you look at other opportunities that may be around the market at the moment? Thanks very much. Yeah. Thanks, Ed. I think we still believe that we'll deliver real value in the cost equation, and that's why we've given the three-year guidance. You know, you're moving to a digital growth model rather than a low growth cost out model. I think, you know, if you look at the additional savings we're planning, it's very, very significant when combined with what we've already achieved. If you look at the correlation of that and broader M&A, I can make a generic comment. I don't see value in scale acquisitions which take you into massive complexity on systems, technology, and regulation, and take you out of the competitive universe for a few years. The acquisition we did was low complexity on integration and high value in terms of brand synergy and competitive capability as a result of that. I think what we've done is sufficient, and now it's about digital growth rather than acquisition complexity. Great. Thanks so much. Thanks. Thank you. Our next question comes from James Irvine from SG. Your line is now open. Please go ahead. Hi. Good morning. I've just got a couple of short ones on the margin, please. The first question is, could you please give us the cost of your term deposits? I think there was 134 basis points at the first half. Just wondering what it was either for the full year or the second half. The second question is could you just remind us please what portion of your mortgage book is on standard variable rates? Thank you. Yeah. Look, I don't wanna get too much detail around term deposits. I mean, it's come down sharply, so I think you'll see the annual report that we'll issue as scheduled on the twenty-fourth. That's likely to give you more detail. What I would say is we're still seeing a tailwind from the, call it the churn of term deposits. You know, we expect that to persist really. I would say through towards the second half of full year 2022, and we'll pick up the SVR comment after the call. Fine. Okay, lovely. Thank you very much. Thank you. I think I'll just check here. It seems like from IR that we're coming to the end, and I also know we're coming to the end of our time allotted. So I just will say thank you to everybody for attending the call at short notice. I hope you understand from us our optimism and positivity about the future. But obviously we are available to have a lot more conversations, and we will, our IR team will make sure that happens. So if you feel there's anything else you want to get into in some more depth, please contact us and we'll make ourselves available. I'll close the call there. Thank you all very much.