Jul 30, 2026 earnings call — New Accelerate 2030 strategy and capital step-up
Announced Accelerate 2030 strategy and a 30% interim dividend increase plus GBP 1 billion buyback; H1 net income was GBP 9.7 billion.
Revenue $6.7B (est $6.9B) · EPS $0.13 (est $0.14)
Analyst Q&A 10
cost targets and AI role
Q (Benjamin Caven-Roberts · Goldman Sachs): Is organic investment more attractive than buying businesses? Also, what assumptions and risks do you have for AI (revenue, deposit loss, cyber, costs)?
A: They said the cost/income target below 45% reflects what they think they can deliver today and cited GBP 2 billion of gross cost saves already delivered and committed. They view Agentic AI as both a revenue and productivity lever and will invest about half of AI spend on productivity. If they can out-deliver, they will reconsider capital allocation and shareholder returns.
AI contribution to growth and costs
Q (Andrew Coombs · Citi): How will Agentic AI drive revenue and cost? What are adoption and regulatory risks? How much value is already delivered?
A: They said Agentic AI is a key differentiator for services, relationships and productivity, and they have already seen in-year returns using a narrow definition (generative and agentic AI). They included AI in the mid-single-digit net interest income growth and the GBP 2 billion gross cost saves, but customer adoption and regulatory approval remain uncertainties.
investment timing and cost saves
Q (Amit Goel): How will investment spend and the GBP 2 billion cost saves be phased across years and businesses? Is it concentrated in retail?
A: They expect investment to step up into 2027 then plateau and slightly decline later; that gives a small OpEx tick in 2027. The GBP 2 billion gross cost saves come from customer-facing propositions and infrastructure improvements that mature progressively, and savings are largely transferable across the group rather than concentrated in one division.
branches and international plans
Q (James Frederick Invine · Rothschild & Co Redburn): With Halifax moving brands, will you close branches? And can your UK digital capabilities be used abroad?
A: They follow customer usage and do not give a branch number; today they are physically present in about 1,000 communities with around 550 branches plus hubs, community bankers and many pay points. Internationally, corporate & institutional expansion is about deep product and on-the-ground coverage, while European retail is a digital, mortgage-focused, high-return business with synergy potential.
deposit margins and hedge reserve
Q (Christopher Cant · Autonomous): Where will deposit margins go by 2030 and how will the cash flow hedge reserve evolve?
A: They said liability margins include the structural hedge which moves from about 2.8% toward a 3.7% refinancing rate by 2030 and fixed-term product margins are expected flat to modestly down; some hedge benefit will be used to keep competitiveness. The cash flow hedge reserve should come down meaningfully over the plan but is not expected to hit zero.
"The cash flow hedge reserve effectively works its way through over the course of this plan." — William Leon Chalmers
competitive pressure on NII and other products
Q (Pui Mong · BofA): How do competitive dynamics and a different yield curve affect NII and what other products will see pressure? Also, how to treat operating lease depreciation in OOI growth?
A: They said two main uncontrollables are the yield curve shape and competitor actions, and they will not chase markets quarter-to-quarter. Competitive pressure mainly shows up in balance-sheet products like deposits; they expect slightly slower deposit growth than the strong 2021-22 period and will manage competitiveness while focusing on relationship growth.
quantifying AI impact and CET1 view
Q (Nicolas Payen · Kepler Cheuvreux): Can you quantify AI's contribution to revenue and gross cost saves? Also, what regulatory assumptions underlie the 13% CET1 target?
A: They said they will stick to showing the GBP 100 million in-year benefit for a narrow definition (generative and agentic AI) and will not yet give a long-term AI number to 2030 because customer adoption and regulation are uncertain. On capital, they reiterated the group is highly capital generative and gave reasoning for guidance but did not quantify AI's long-run share of net income or cost saves now.
homes and transport ecosystems
Q (Alvaro de Tejada · Morgan Stanley): How will the homes and transport ecosystems drive engagement, and will AI help bancassurance cross-sell and timing of tech like account scanning for renewals?
A: They are building homes and transport ecosystems to deepen relationships and help customers (e.g., EV to home chargers and retrofit); these platforms are increasing engagement and lead to more financing and cross-sell opportunities rather than big incremental platform profits. They are seeing early traction and will continue to report engagement metrics.
legacy systems and modernization
Q (Edward Hugo Firth · KBW): Do you plan to replace mainframes and other legacy systems, and will that be for cost savings or revenue/innovation?
A: They have retired about 30% of legacy applications in the last phase and still have some mainframes; core banking modernisation is planned and will complete by 2030 using modern platforms like Thought Machine. Modernisation is driven more by faster product change and revenue/innovation potential than pure run-rate cost savings.
customer view and multi-brand in AI era
Q (Sheel Shah): Do you have a single customer view across products and divisions? And does a single brand help AI-driven cross-sell, or is multi-brand valuable?
A: They said some legacy platforms give lower running costs and data improvements have been a big part of cost saves; modernisation is ongoing and aims to enable faster product change. They emphasised being ambitious in this phase and noted progress by CIO and COO teams, but did not give a definitive yes/no on a single full customer view or quantify cross-brand AI effects.