Barclays PLC (NYSE:BCS) Q4 2022 Earnings Call Transcript

Anna Cross: Okay. So thanks, Rob. In terms of the hedge, you’re right, we reduced the size of the hedge. That was in corporates. We did it in a precautionary way in order to preserve the size of the buffer. So it’s not that we were going beyond the buffer. We’ve seen a bit more migration in corporate than we have in retail to date. That’s kind of what you might expect. And we’re just being cautious and making sure that, that buffer remains as it was. Obviously, in the current environment, the opportunity cost of holding that buffer is not as great as it was, and that’s why we made that trade-off. And 1/3 of the benefit of the structural hedge goes to the corporate side, and you’re going to see on the BI side, and you’re going to see that appear predominantly in transactional banking and a little bit in our Private Bank.

In terms of absolute levels of deposits, they remain pretty stable, I would say, on the wholesale side. Some seasonality in there, nothing to particularly concern us. On the BUK side, we’ve seen a slight reduction in business banking deposits. That actually relates to we can see customers either paying off part of their loans but also deploying it in their business. So we see that as pretty healthy activity. So there’s nothing really that concerns us. But this is exactly why we built it conservatively and exactly why we run buffers. And as you might imagine, we are monitoring it day by day. In terms of your question on churn, we don’t disclose that level of detail. What I would say is that clearly, there is a very low proportion of customers that remain on reversionary rates.

As rates rise, clearly, that proportion of customers remaining on reversionary rates, you’d expect to fall even further. We are capturing that, both in our NIM and in our NIM guidance, and we are conservative in the way we model our EIR. Okay. Thank you, Rob. Thank you, everyone, for your questions today and for joining me. I’m really looking forward to seeing you next week. And to other folks on the call, I’m sure we will see you in the upcoming investor meetings, too. Until then, take care.

Operator: Thank you. That concludes today’s conference call.