Thank you very much, Claire, and I'd like to welcome Georges Elhedery, CEO of HSBC for our first sort of fireside chat of the conference. My name is Nick Lord. I'm the coverage analyst for HSBC, and I'm based out in Singapore. So Georges, I think we're going to spend about 20, 25 minutes -- well, actually before we do that, we're going to have a polling question. So if we can have the polling question, please.
So the polling question is, what is the biggest risk to HSBC maintaining its mid-teens RoTE target? So is it, one, lower than forecast interest rates; two, slower-than-expected wealth management growth; three, a slowdown in global trade; or four, deteriorating credit quality.
If you could press your buttons on that.
Okay. Lower than forecast interest rates, still the key one, and a slowdown in global trade. So Wealth Management growth, obviously a bit lower and then credit quality, as I guess, unsurprisingly at the bottom of the list.
So maybe in the context of that, I'd like to start off and talk a little bit about the strategic announcements that you made at the time of the full year results. Obviously, you've split the group into sort of four pretty distinct units. But I just wondered if you could talk a little bit about like what you see as the key thing you're going to achieve through that. And also maybe talk about what the revenue upside might be from what you've done in terms of a restructuring?
Very good. Thank you, Nick. Thank you all. So we have announced the organization simplification 22nd of October, which is now effective from the 1st of January. And we moved away from a construct where we had 5 regions and 3 global business lines and a fully matrix, which I'm sure many of you guys know, fully matrix setup to effectively 4 business lines. There are a number of drivers for this. The first real driver is continued simplification of the group. We have been for many years now on a journey to simplify what we do, and we've taken decisions on business disposals or exits. But we have not yet addressed the how we do it. And you could not address the how you do it until you're simple enough in what you do. We reached that stage, and therefore, we were mature for simplifying how we operate. That's our internal governance, some of the duplicative roles we used to have that were needed in a complex setup that are not needed anymore. So the simplification is aimed to address that. It's aimed to make us more agile and the world is changing fast, and we need to be able to adjust fast. It's aimed to make us future-proof. If you're simple and nimble and dynamic, you can adjust to the varying trends, be it technology trends, consumer behavior trends. And therefore, that simplification is definitely timely. That's the first goal of this reorganization.
The second goal of the reorganization is to allow us to focus where we want to grow on a sustainable long-term basis. So what we did basically is we organized ourselves alongside the strategy so that it becomes much easier to understand how we allocate capital and how we drive outcomes because our organization aligns with how we talk about our business strategy. And it's allowing us to be much more purposeful on capital allocation, cost allocation, choices of investment because the organization is much more aligned to strategy, therefore, much clearer in terms of what we're driving when we spend here or there.
And obviously, the third goal from that strategy is to be more client-centric. We've always been a client relationship-driven organization. We've always delivered on client needs. We have not been -- we've never been a product sale entity. We've always looked at customers, customer relationships and what they need and then delivered the products and services they need. So therefore, client is at the heart of how we have been for 160 years. But sometimes when you're complex, you kind of end up more busy doing your internal governance than focusing on client. The simplification allow us to make faster decisions, have better focus on client needs and evolving needs and future needs and be able to, in a more agile way, adjust and adapt and address them. That's the spirit of the reorganization. Three layers of management have already been settled, and we're working through the rest of it. We did mention $1.5 billion, which is about 5% of our overall cost base, 8% of our payroll cost base, efficiencies that we will have achieved by the end of full year 2026, which we will take to the bottom line. These efficiencies do not have an impact or any material impact on our revenue generation on what we do. It's basically just simplifying what we do and doing it more efficiently.
How can this -- to your second part, Nick, your question, how can this then drive revenue? So I think in and of itself, it's giving us better control on where we invest to drive revenue. And we've called these out in our full year presentation, the areas where we're going to invest to drive additional revenue. It's also allowing us to focus, which means we called out another $1.5 billion of spend that today, we're investing in activities that are not that strategic or not that well returning or do not exhibit the growth opportunities we want. And we want to, therefore, purposefully take action on these activities, either through exits or rightsizing and then refocus this spend on areas where we know we have a stronger competitive ground, where we can grow and where we can generate better returns. All of that is supportive of overall the revenue we want to grow.
Okay. And if we can come back to that capital reallocation. I mean, in your mind -- I mean, obviously, you've got a very clear capital policy and you have had for a long time. In your mind, does this capital reallocation, is that about just moving capital within the group? Or do you think that there are actual capital releases or further capital releases that can come from that strategy?
So the -- so what we're looking at in the description of the $1.5 billion is this is spend where we will take spend away from activities we want to discontinue or rightsize and then reinvest in the core activities, which we called out, which we can talk about. In some of these situations where it involves inorganic exits, for instance, there may be capital release, but this is not the primary reason, and this is not going to be a big contributor to our capital generation. If you talk about capital generation, the biggest contributor to our capital generation today is our earnings. Our earnings have been highly capital generative. The relatively slower loan growth have added to that capital generation. And when you look at consensus and forecast, that seems to remain the case for the next few quarters. And we remain intent to distribute excess capital back through a rolling series of share buybacks.
Okay. Perfect. So let's move on to some of those individual businesses. And I think one of the -- well, there was lots of interesting things in your result pack, but one of the interesting things I found is the RoTE by division. I thought that was a useful disclosure. And I guess, you've got these global businesses, which are much lower return than the domestic businesses. And so what I want to just focus on a little bit is how you can enhance returns in those businesses, which I guess is a driver of supporting growth. And maybe if we talk a little bit about IWPB. So when we talk about flow of net new money, can you -- it was obviously strong last year, especially in Asia. Can we talk about sort of the trends that we're expecting going forward? And what are the main drivers? And can we continue to repeat last year? Is last year a one-off? Or do we continue to get these wealth flows coming in?
So last year, net new money or -- net new money, net new invested assets grew by above $80 billion, and that's now multiple years in a row. If you look at the wealth revenue, it's grown ex Canada because obviously, Canada was only partially there in '24. It's grown by more than 20%. In Asia, our wealth revenue has grown by more than 30% year-on-year in '24 compared to '23. There are a number of drivers that have supported this growth. And if I look forward, these drivers remain strong. So there is a lot of ground why this growth -- various level of growth, but in the medium term, this growth is sustainable.
Look at it from two angles. First, there's an underlying market growth. Wealth in Asia is expected to grow at high single digit into 10% CAGR for the next 5 years. So there's an underlying market growth, a rising middle class in a number of Asian economies, the rising need for diversification of financial investments, that's real. To the tune that even Hong Kong now is forecast to be -- before the end of this decade to be the largest cross-border wealth hub ahead of Switzerland and others. So there's definitely the underlying trend that's highly supportive given our footprint, Asia, Middle East, given the franchise, the quality of the brands in the space and the penetration of our brand in this space.
Second, we're also putting more investment to gain market share. So we're growing with the market, and we want to grow our market share. And there are a number of areas where we are growing market share. In particular, we've been investing in this business at a much higher rate than other investments. We've been investing in relationship management and wealth centers. We've been investing in our technology platforms. We've been investing in various wealth hubs. We do have a very mature wealth hub in Hong Kong, but we're obviously investing to grow further maturity of our wealth hubs in places such as Singapore, such as the UAE, et cetera. So that clearly is one area where we want to gain market share.
The other area we want to gain market share is, remember, we're at the heart of deposit-taking bank. At the heart, customers trust the financial strength of HSBC and place their money safely with us. And this is true in all the geographies we operate in. This is particularly true in Asia and the Middle East, which is our biggest growth area for wealth. But we have not been very proactive at converting some of these deposits into AUMs with us. Some of that deposit went into AUMs elsewhere. And by improving our proposition, we're able to capture the AUM transition from these deposits with us. We do it very successfully in Hong Kong, but we need to do it very successfully everywhere we operate, in particular, in Asia and the Middle East. So this is another angle in how we can grow market share.
The third one is we're also noticing wealth is becoming a -- well, wealth is mobile cross-border. So wealth can be originated in a given country by a given customer group, but then there are international needs that mean that the wealth is moving cross-border. We've been very strong at capturing cross-border move into Hong Kong. We've been in a poor position to capture cross-border wealth move into Hong Kong. But we haven't been as strong capturing cross-border wealth moves when it leaves Hong Kong or when it leaves other jurisdictions and -- for different forms of investment. And with better focus and better investments on our capabilities, we should be able to capture that wealth. So we have lots of self-help ingredients to grow in the wealth space and to gain market share in the wealth space.
Finally, you started with that, Nick. The business is called IWPB, which stands for International Wealth and Premier Banking. So the focus of our business outside the two home markets of the U.K. and Hong Kong is not going to be on retail or mass retail. It's going to be focused on premier. Premier is our proposition for the affluent. And it's a transition where we are good in some places and where we need to transition in other places, but it's also a sweet spot because we become quite unique as an international sophisticated player in these markets, offering an international wealth proposition domestically. Take Mainland China, we're the largest international wealth player, or India or large markets like Saudi or UAE, where we can be a real differentiator compared to domestic competition, but where we don't have international competition because international wealth competition comes at much higher AUM or net worth than the net worth we are targeting. So we're quite unique in targeting this.
Okay. Perfect. And if we think about that RoTE in IWPB of 16%, how should we be thinking about going forward? Is this a case that as you scale up, so you become more efficient in terms of usage of wealth of relationship managers, it's the switch into invested assets, as you say? Or is there a period still of investment before we see that move up? So how are you thinking -- what are you asking for from -- in returns from that business?
Yes. Look, the main -- fair enough, I mean, the main driver for the IWPB business now is investment for long-term growth. So mid-teens ROTE, 16% RoTE is a good place. What we don't want is slow down any investment for the purposes of immediate improvement in ROTE in this business. It is more important for us to carry on investing. We have a lot of catch-up to do, and we have a lot of future-proofing to do. And then we're seeing the growth come fairly fast with it. So the target is going to be grow the business, obviously, trying to maintain and protect RoTE, but not yet trying to, by all means, create efficiency in RoTE. There is a lot of opportunities in this space. It's one of the biggest growth potentials this bank has. And on a year-on-year basis, when you're starting to talk 30% in Asia like last year, we can easily aspire for double-digit percentage growth on a 5-year or medium-term CAGR, and we absolutely want to capture that growth.
Okay. Perfect. So maybe we can move on to CIB. And I guess that's the lowest return part of the business. And also, as our polling question showed, one of the most interesting parts in terms of how people are thinking about it. So I wonder if you can talk about two things. Can you sort of all, first of all, talk about how you operate in this multipolar world. And I guess the question is the slowdown in global trade a threat to you? And then maybe you can talk a little bit as you did with IWPB about how you think of the return profile in that business?
Thanks, Nick. So the first thing to notice is CIB is our wholesale multinational business. We've excluded the domestic, by and large, domestic wholesale businesses of the U.K. and Hong Kong. And we're only looking at the customers who operate in multiple jurisdictions in CIB and benefit from our network. And that business is mid-teens returns. It's a good starting position. A few things. If you want to look at the return of this business, Nick, you want to look at what are the revenue drivers, what are the cost drivers and what are the capital drivers, and we have action for each. So the revenue drivers, CIB is the largest fee earning business, fee and other income earning business. A lot of it comes from transaction banking. Some of it come from investment banking, debt capital markets, et cetera, but $10 billion or so of our earnings come from transaction banking with this business. This is an area where we've been a top 2 player practically in all these transaction banking activities, be it trade, payments, foreign exchange, securities services and Asia, Middle East, et cetera. So it's about really continued investment, continued gain of market share and continued working on the underlying trends.
The other part of the revenue is coming from NII. And remember, we have loans, but we have a 52% loan-to-deposit ratio. The CIB business is heavily reliant on corporate deposits. Corporate deposits and corporate operational deposits tend to be lucrative because these deposits are valuable for us. And the corporate like to leave their money with us first because they trust the strength of balance sheet. They trust the network of this balance sheet. Wherever they operate, we operate and we can serve them domestically and with their international payment needs. And then they trust our capabilities in transaction banking. So this is a very valuable deposit franchise with a loans capability as well as a very valuable transaction banking franchise.
Let me talk through cost and capital on returns. I'll come to trade in a second, which is part of the earlier question. On cost, we, as a bank, used to run two wholesale businesses. We used to call Global Banking and Market, the large cap/institutional wholesale business, and Commercial Banking, which is somewhat the smaller cap wholesale business. Everything was duplicated. KYC was duplicated, credit approval was duplicated, capital allocation was duplicated, onboarding and other kind of financial crime monitoring were duplicated. By bringing them together, we have a lot of efficiencies that we can drive from this business. So a big part of the $1.5 billion efficiency saves will come from the fact that we're creating a CIB merged wholesale business. So we're addressing our cost through efficiencies. We're also addressing our cost through some decisions on what we do, what we don't do. And you've seen us also take a difficult decision on our M&A and equity capital markets activities in the U.S. and U.K. and Europe, where we decided we're not strong enough to justify continue investing in it, and we would take money away from this business and scale it back and reinvest in areas of faster growth. So we're addressing cost, we're addressing revenue. And then we also called out being much more robust in the way we manage our capital in this business. We have a 50 -- low 50s percent loan-to-deposit ratio, which means we have plenty of liquidity. And as you know, we have plenty of capital to hold any loans. But the fact that we have plenty of capability or capacity to hold any loan doesn't mean we should hold every loan. And therefore, being a little bit more purposeful at managing our balance sheet, in particular, our RWAs will benefit the returns of this business. So we're addressing the returns of this business, which is already in the mid-teens place, which is not -- which is a good place. We're addressing it through revenue action, cost action and capital action.
Now if you look at the global picture, trade. So trade is a component of our transaction banking, is less than 1/4 of our transaction banking earnings, but there. So there are two scenarios really where we can look at. The first scenario is tariffs will be implemented and will be here to stay. Under that scenario, we see much more disruption of trade with the U.S., in particular, as the U.S. seeks to either raise continuous or long-term tax from these tariffs or long-term external revenue from these tariffs or manufacture. Under that scenario, we see trade between the rest of the world growing because there will be replacements. And then the trade corridors will reshape. And we've seen that reshaping take place over the last 8 years, China plus 1, China plus 2 strategy, diversification of supply chain, resilience of supply chains have meant that trade corridors have reshaped. But we will see more of that reshaping take place, including all the way to the end user and end consumer. And given our footprint, we know we can benefit from this reshaping because we're very present across all the other markets where trade will inevitably grow.
There is a second scenario, which is the tariffs are temporary, but they are here to serve as a means to improve the overall tariff environment, reciprocal tariff environment to the U.S. That scenario may mean that short term, there will be disruption, but longer term, it will inevitably become an easier trading environment because there have been probably more tariff relaxation as opposed to. And therefore, that will, in the medium, long term, improve trade patterns, but in the short term, create some disruption until these negotiations do take place. Difficult for us to say which is the scenario, but both scenarios, we are actually very well equipped to deal with given our deep local knowledge, deep footprint and broad footprint in our network and our capability to support our clients in a way like very few can nowadays to help them navigate these challenges.
Okay. And then maybe we can just touch on the last two businesses, the home businesses, Hong Kong and U.K. And I guess both of those have benefited from high interest rates which was the first point in our polling question on the threat of lower rates. Can you talk a little bit about those businesses of a peak return? What actions are you taking to mitigate pressures in both of those areas?
So both businesses exhibit more than 20% return on tangible equity. Between them, they are about half of our earnings as a group. We have a very strong leadership position in both markets. We serve all walks of life in these markets. We're a high street bank, and we're all the way from a high street mass retail bank to your largest institutional investment bank bank and cover the whole spectrum, including wealth, including the SME and business banking, mid-market, et cetera. And they're very profitable. The mission for us really is grow them fast because they're very profitable. Now in Hong Kong, we've been growing very fast. We added 800,000 retail customers from 5.4 million customers to 6.2 million customers over 2024. That's more than 15% -- actually, around 15%, let's say. This is in a whole city that has 7 million people. So the addition of customers isn't really from within. The addition of customers is demonstration of Hong Kong on track to become the world's leading cross-border wealth hub. About half to 2/3 of this addition is coming from the nonresident Mainland Chinese, but there's another 1/3 to 1/2 that's coming from the wider Asian/international who are using Hong Kong as a wealth hub and becoming our customers. So that growth there is demonstrated, and we will continue investing in it. It's growth in deposits, it's growth in wealth and it's growth in ultimately the business environment. Even though loans haven't grown yet, but whenever loans are on a growth trajectory, we can -- we're in a leadership position to capture that.
If you look at the U.K. -- first, we're very encouraged by all the measures that have been taken to support the growth in the U.K. But obviously, they will take time to feed through the economy. And there's always some short-term kind of hurdles that one has to cross before we see this growth materialize. But we do see green shoots. But importantly, in the U.K., we actually can grow market share even if the underlying market is growing slower. The reason we can grow market share in the U.K. is there is additional investment we can put in retail and acquire more customers. There is material additional investment we put in SME. It's a very profitable proposition. Just didn't -- wasn't really top of our focus because it's mostly domestic, and we were mostly focusing on international. So when we elevated U.K. as a home market, we are able to make sure that we don't neglect a part of our book that is very profitable where we have 700,000 customers in this business banking, SME space. And we can grow it much faster than we have by putting more services, more capabilities there. And we can basically outspend many of our peers because in the reallocation of our cost, we can manage our cost as a group level within an envelope that we're comfortable with, but we can channel more of it towards the U.K. in a way that many of our listed U.K. peers probably won't have capacity for. So we can continue taking market share year after year after year. So it's really -- it's a profitable business, so just grow it. That's the mantra.
And it's very important also to highlight that the strength in our home market is a justification for our overall global existence. When you look at our peers, peers with strong home markets definitely trade better, maybe statistically or maybe coincidentally, but you guys are the experts here, Nick, but they trade better than peers who are not strong in their home market or who do not have a very visible home market. What we happen to have two, and we're very strong in both. So we want to show them off.
Okay. Thank you very much. So we've had a walk through the businesses. Maybe we can open to Q&A in the audience. There's a question there right at the back.
That's very insightful. Two quick questions. One, in the past, one of your core shareholders has wanted you to shift your domicile to Asia to Hong Kong or potentially talked about wanting to split up the Asian business. If you can give us any update or color on that? And how are you engaging with that shareholder? Second one, in U.S., left and the right, pretty much don't agree on anything except they see China as a common enemy. President Trump has talked about tough actions against China. There could be different scenarios, different Chinese companies could be sanctioned, individuals could be sanctioned. There's been talk about sanctions on parts of the financial system. What are the sort of scenarios you are preparing for? How could sort of next couple of years play out? Would be great to hear from you.
Okay. Thank you for the two questions. So first question, our -- so we call U.K. and Hong Kong as home markets, but our headquarters is the U.K. That's very clear. That's not changing. In terms of the shareholders' demands, there were two sets of demands. There is demand about the breakup of the bank. There's demand about improving returns and efficiency and cost management and operating leverage. On the latter, I think we've done a great job. I mean both distributions, our share price performance, the fact that we've -- as all our shareholders would expect us to be taking measures on operating leverage and being very disciplined in the way we allocate our investment and our spending, is obviously things we are demonstrating and we have to demonstrate to all of you day after day, quarter after quarter, year after year. And I think those considerations is in the distributions in the share price and the recognition that we have delivered on those.
In terms of the breakup of the bank, we were very clear, breakup of the bank destroys a lot of value. And the setup of our current bank -- of the bank today will be able to much more easily demonstrate it. Remember, in the past, actually, we weren't helping ourselves in the way we talked about our businesses because it wasn't really evident through the fact that we had 5 regions. It wasn't evident how much interdependence between one region and the other. It did look like we're multiregional or multi-domestic as opposed to global. What we've done over the last few years is improve our reporting in multi-jurisdictional revenue, multi-jurisdictional customer business and customer returns as well as reorganize ourselves in a way that demonstrate to all our shareholders the value of that network. You take that network away, there's a material loss to shareholders. And I'm not even talking about all the capital and what have you kind of inefficiencies, just the business model defeating itself. I don't think this discussion will be ever back on the table. I don't know, but I don't think it's definitely in any of our shareholders' benefit, and it's off the table. And obviously, as you would expect me, both in my previous role as CFO and in my role as CEO, to engage with all our major shareholders in the normal course of action, and that's something we will -- I will obviously do. I have been doing, I will do and I'll continue doing as you would expect me to.
On the second part of your question, look, these situations are new. These are not new features of world trade, be it tariffs or other restrictions on global commerce and global investments. They continue morphing. They continue evolving. The way we look at it is kind of there are three segments. There is a narrow segment, which is untouchable. There are segments that neither us nor our customers, international can touch because they're highly politicized or they fall under banners of national security and what have you. This is not an area that we're dealing with. This is not an area that we will come close to, done. There's a very large segment of business as usual. We don't talk about it because it's not contentious, but there's massive trade business going on between the U.S. and China on these business as usual, both ways. And we're very big on these corridors, and we're very big on all over corridors. But these businesses don't get the headlights, but these businesses form the bulk of our earnings in this inbound, outbound kind of revenue that we drive, say, between Mainland China or China in general and the U.S.
And then there is a small segment between these two, which is, let's say, the gray zone, areas where we may see future restrictions. These are areas where maybe today is acceptable, but could be more challenged tomorrow. These are areas where we have built massive skill in being able to understand and unravel executive orders, rules, laws, sanctions, tariffs and what have you, which means we would be firsthand able to understand the dos and don'ts on a practically hourly basis. And we're quite unique at helping our customers adjust to that. So we become even more relevant to our customers to help them make sure they're always on the right side of these evolving rules. And that's a differentiating factor. So we -- and that's how we will drive, if you want, the outlook for the future, and it may be like this for whatever the rest of our careers, for all we know, but we're geared to be able to support our customers in these environments.
Okay. Any more questions?
So the idea of reallocating resources away from where you're not so good into the businesses where you have a right to win is perfectly sensible and logical. So rather than asking you about which of the businesses you're going to take the resources away from, may I ask you more which of the growth businesses that you've talked about this morning, do you have the biggest bang for your buck opportunity by giving them more resources, because you've told us all of them, but how do you think about prioritizing between those different children?
Yes. It's been -- we've purposely tried to be clear enough on where we're investing, which is exactly what you called out. We laid it out in the annual report without giving numbers, but we laid out the areas because then there could be an understanding between us and our investors that this is -- these are the areas where we think we can differentiate. For the majority of the rest that's not been called out, the message is you need to drive more efficiency in the way you operate and be more controlled, so safer and cheaper in how you operate it. And then the residual few are the ones for exit. Now within the growth areas, we then need to be truthful in making sure that we're supporting what we called out. If we start doing a preselection, then we end up having lots of priority categories. So we will support all of it and we do have a lot of capacity to support all of it. Why? Number one, because we've grown our cost -- we communicated we're growing our cost base by 3% for '25. But it's about 4% minus the 1% saves from efficiency. Within that 4%, some of it is inflationary, but some of it is investment. So we're already putting some investment there for '25.
Second, we already have a continued built-in investment pot, we call Change the Bank Funding, which is there that supports additional investments in focused areas. We don't disclose the exact quantum, but you have to assume it's a substantial amount of money where every year, we drive investment funding. And third, we're adding to it the $1.5 billion reallocation. So it's not about spreading the $1.5 billion across these areas. It's about spreading what we already have plus what we are adding this year plus the 1.5 billion, all of it into these areas. That makes us a substantial amount of funding to be able to support all of these areas.
Where will the growth come from? Well, first, growth will come very much from wealth. It will come to some extent from transaction banking, and this is important growth for us because we want the noninterest-earning component of our earnings to grow, and it's growing much faster than our banking NII part of the earnings. And second is some of that funding is not necessarily growth, but it's efficiency. So capital efficiency or cost efficiency. Some of the funding we're putting in GenAI today is focused on productivity, not on growth. Now GenAI will also help us sell better and deliver growth. But our first focus is you can have bigger bang for the buck spending -- investing in GenAI to create productivity and efficiency, and we will use it there.
Have we got any more questions? One at the back.
[ Alex Cornier, Riva Capital ]. Two questions, if I may. The first one is on your comment when it comes to the U.K. business. When you're talking about gaining market share in the retail and in SME, are you going to do that organically or you might consider some bolt-on M&A or a more structural bigger M&A? The second question is on your noncore asset. Is there any asset that you still consider that is noncore or you are not the natural owner? Can you just update us on your asset review?
So look, our focus is first to grow the U.K. organically. We're investing to grow the U.K. organically, and we have a lot of room to grow the U.K. organically, and we don't want to miss out on this opportunity. Now we will never rule out inorganic, but we have a much higher hurdle to go inorganic, one of which is that it's financially accretive, one of which is that it provides scale or scale and capabilities. So -- and one of which is that it doesn't distract us from growing organically because it's one thing to acquire, but then if it distracts you from growing organically, you may defeat it in 3 years' time because you haven't grown enough because you're worried about integration. So the inorganic is on the table, but the hurdle bar to cross it is high. Meanwhile, organic is the focus. On your second question about noncore assets. So look, there are assets that we've called out. We called out French insurance, the German private bank. We've called -- obviously, we've spoken about the investment banking in Europe and the U.S. And some of -- we've also called out Bahrain Retail. Some of these are visible and disclosed. For the others, I would say the strategy is clear. So they either fit into the new strategy, and we will give ourselves the opportunity and the challenge to see if we can fit them or we believe they can't fit in the new strategy, in which case they will be out, and then we will be communicating about those as and when, but at pace.
We have more questions, that lady over there.
Just one question. Given the many moving part of the rate outlook, is it possible to update us about your NII outlook?
So we've given a full year estimate expectation at $42 billion for banking NII. We called out also all the parts that will move adverse or as tailwinds to this number. Frankly, the rate outlook is too volatile to be able to make sense out of it. If we have to adjust the number every time the rate curve shifts, then we're on a daily basis adjusting it. I think at this stage, we are -- for the moment, our guidance is our guidance, we'll see where we stand at Q1. Volatility within a reasonable range have been factored in our guidance. Volatility outside the reasonable range would definitely be cause for reviewing it. At this stage, we have no reason to believe that we're moving out of a reasonable range. But obviously, just the fact that it's moving a lot means that one needs to kind of continue looking at it.
But remember, there are a number of parameters. We've done a lot of structural hedging, which reduced materially our sensitivity to rates, and that's going to be a tailwind as we look forward. We also have loans that have not grown for the last few years. So any loan growth, which may materialize if rates are lower, will be a tailwind. We continue being a deposit taker bank at the heart, and we want to continue earning trust for our clients, giving the deposits, and that's also another growth area. So we have various mitigating aspects to the rate outlook. But nevertheless, the rate outlook remains a parameter that we need to weigh in.
Brilliant. Okay. We've got one last question, and then we'll call it to an end.
You've been very clear about your focus on allocating to areas you see improving returns and reducing that where you don't see an attractive return. There's a difficult bit with BoCom and how you approach like whether or not you will follow that capital raise and whether or not that might end up being dilutive. Is there anything you can say there to sort of how does that potential capital raise fit in with this clear strategy you've outlined?
Yes. So, we're happy with the amount we have invested in BoCom. But it's very difficult to comment on what's coming next because we don't know. So until we have some additional clarity on how this -- what form will it take and what structure and when, it will be very difficult for us to comment. So we'll just keep tracking until we have more information, yes.
All right. Georges, thank you very much. Thank you for the discussion, and thank you for your time.
Thank you.
