Hector Grisi: Thank you, Francisco. Okay. Let me give you the details, okay? In the – let’s talk about first about the UK. NII, it was up double-digit in the first half of ‘23, okay? It was driven mainly by higher rates on the strong focus on managing the spreads and profitability. Although the UK tends to be more competitive than other Europeans markets as you know, okay? So we’re putting profitability ahead of market share, okay? And we have a lower risk appetite, but we’re expecting good performance to continue leading to and NIM expansion, okay? So, we expect it to stabilize towards the second half. Okay, 2023 with a high-single-digit growth on higher rates. And despite the lower volumes that we have because of what I just explained about profitability, okay?
In the second quarter, NII was flattish. Okay? Higher yields on loans did not offset the higher cost of retail funding and the slowdown in new originations, okay? In terms of the betas, Jose will tell you afterwards that I tell you about what’s going on in the U.S. In terms of the U.S., overall, as you have seen has one better than expected given the change of mix towards prime, okay as I explained in detail, lower yield, but also better risk profile and the lower grade provisioning is helping us, okay? NII is flattish in the quarter and year-on-year on funding pressures on the wholesale and retail as you know, a lot of this is funded by wholesale, as well and a common trend across the sector which has been partially offset by higher yields that we have.
Santander, U.S. betas are above the what we expected but lower than the average of our peers. Just to give you exactly what’s going on. And we expect NII to be down mid-single-digit on lower originations and also the higher funding pressure again in line with the peers. However, given the strong behavior that we have on the labor market and seeing the performance on the first half, the US NII could do better than we expect, okay? U.S. NII is not the only one that has a cost of risk and profitability, are also better than expected in the country, okay? So Jose, I don’t know, if you can comment on the betas please.
Jose Garcia-Cantera : Yes, betas in the UK, when we look at the cost of deposits today relative to the level of rates today, that’s around slightly below 30% is increasing slightly in the quarter three percentage points. We still think that that will continue. So the UK is a market with less excess liquidity than Spain for instance. So we would expect as Hector said, margins probably – they were stable in the second quarter relative to the first and we would expect them to remain more or less flattish in the third and probably slightly going down from there. In the US, as Hector said, we kept our deposits flat, paying less than our regional bank competitors. The beta in the U.S. is 36.8%, up two percentage points quarter-on-quarter. So after the spike that we saw in February, March, the betas in the US have remained very stable. And we are actually increasing deposit market share at a lower cost than our competitors.
Begona Morenes: Thank you, Paco. Can we have the next question, please?
Operator: Next question from Ignacio Ulargui from BNP Paribas Exane. Please go ahead.
Ignacio Ulargui: Thanks very much for taking my questions. I have two questions. One is on the Spanish loan book. You could update a bit on the trends that we have seen in the quarter. Year-on-year rate you see an 8% decline. If you could elaborate a bit on, what are the dynamics there and what we should expect going forward? And the second question is a bit at a Group level? If I just look to the first half cost of case, 100 around 106 basis points, you are speaking to the guidance below 120. And is there any region besides the US whether we could see some deterioration in the second half that makes you to keep that conservative guidance, which would imply around – a rate of around 135 basis points, 140 basis points in the second half to make the 120? Thank you.
