The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Benjamin Toms - RBC Capital Markets, Research Division - Analyst
: There's two, please. The first is that there's a headline on Reuters which has come out whilst this presentation has been ongoing from Sam Woods
saying that the Bank of England next month will propose simpler rules for small banks in the U.K. I appreciate that you haven't seen this, but have
you had any discussions with the regulator on this topic? Do you expect that the main thrust will be the relaxation in the MREL threshold?
And secondly, in your CET1 ratio of 14.1%, is there any benefit in there from the changes in the rules on software intangibles? Or is that still to
come?
Question: Benjamin Toms - RBC Capital Markets, Research Division - Analyst
: Is there any way of quantifying what you could expect the software intangibles benefit could be? Or is it still too early in terms of the rules?
Question: Robert Ian Sage - Peel Hunt LLP, Research Division - Analyst
: I was intrigued by your comment that there's positive news in terms of customers emerging from forbearance, the majority, I think, of which you
said have restarted repayments. And I was wondering if you could give at least a qualitative feel in terms of how many of those who have restarted
repayments are on their original terms? And how many of those might be on a sort of bespoke amended repayment schedules?
And I guess, related to that, I would be interested to know whether you think that these sort of loan modification losses could have a significant
impact on the net interest margin in 2021?
And finally, just on CBILS, I think you said that you're authorized to lend up to GBP 750 million. And I was wondering how much of that you might
have lent to date?
Question: Raul Sinha - JPMorgan Chase & Co, Research Division - Analyst
: A couple of areas, please, for me. The first one is just on the loan book growth and inflection point. Obviously, the growth in the book was much
stronger than at the 11-month phase that you had indicated. And historically, Close Brothers has grown this loan book quite materially in recessionary
period. So I guess my question is, do you think that we are likely at that point of inflection again where we're likely to see very strong loan growth
relative to the rest of the sector driven by your own sort of appetite to increase market share.
And I guess linked to that, the Motor Finance book has had a very strong increase, I think, in July in terms of loan book growth. So I'm wondering
if you can comment on whether that was driven by the market or whether that was driven by your investments and your appetite for growth. That's
the first question.
The second one is on the deposit platform and the investments you've made. I was wondering where you think the sort of medium-term contribution
from that deposit platform might be to your funding base? And if you could comment on the cost of the deposits, apologies if I missed that, the
GBP 600 million. How does that compare to your sort of blended funding cost overall?
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SEPTEMBER 22, 2020 / 8:30AM, CBRO.L - Full Year 2020 Close Brothers Group PLC Earnings Call
Question: Raul Sinha - JPMorgan Chase & Co, Research Division - Analyst
: Yes. If I could just follow-up on the deposit question on the platform. What proportion of your medium-term funding base do you think this deposit
platform -- originated deposits will be? Perhaps, I don't know if you have a sense of maybe a 3-year view. And then if you could -- I don't know if --
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SEPTEMBER 22, 2020 / 8:30AM, CBRO.L - Full Year 2020 Close Brothers Group PLC Earnings Call
given the number on, what is the blended cost of funding coming through the deposits originated in the platform versus your overall cost of
funding?
Question: Raul Sinha - JPMorgan Chase & Co, Research Division - Analyst
: Exactly, yes.
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