Those decisions will be different bank by bank and institution by institution. And I wouldn’t comment further than that. In terms of the hedge, our hedge strategy has been very consistent over the last few years. So what we do is we identify rate sensitive balances, we exclude those from the hedge, and then on top of that, we maintain a buffer and we hedge the remaining balance. We monitor that hedge on a monthly basis. And what you can see year to date is that we have trimmed our corporate hedge thus far. We do that by making the decision to pause all our part of the role month by month. And those are active decisions that we take. So we’ve got ample opportunities to adjust that hedge as we see deposits behavior changing as compares our hedge strategy versus competitors.
I wouldn’t comment on it. Just to follow up then, does that imply you see rate insensitive balances within your savings accounts? There are some balances within our deposits overall that are rate insensitive. So much of our current accounts would be rate insensitive simply because they relate to operational deposits. That will be true in Buk, as it is in the corporate bank, as it is in the private bank, although you’d expect those constituents to behave differently. So that is certainly true. There is also some rate insensitivity in savings because customers, and indeed corporates, do use some of their savings balances as sort of rainy day funds simplistically. And particularly in instant access accounts, we see customers turning over their savings within the period of about a year, for example.
So we have demonstrable evidence of that insensitivity. ####, great. SPEAKER A The next question. Your line is now open. Yes. Morning everybody. Could I just ask you just trying to get the implications right for sort of 24 and 25 now, because if I look at the maths correctly, and I suppose I’m just checking my maths here, it looks like you’ve got an exit margin of somewhere around 290 into next year. And I guess we would imagine that that’s going to continue to deteriorate because a lot of these deposit trends are long term trends. If you look back to the last time, interest rates were at 5%, the structure of a deposit franchise was completely different and the margins were much smaller than you’re getting today. If that is the case, that looks to me like we’re looking at maybe 500, 600 million off consensus for next year just for net interest income.
And yet consensus is only looking at a 10% return on tangible even. Now, I assume you want 10% to be some sort of a base and you wouldn’t want to be delivering lower than that. Is it the cost? Is it the cost program? Should we be looking at the cost program to offset that? Is that where the difference comes from? Or how else can we get ourselves back to 10%? Or should we be thinking that actually that is a risk? Now. Let me take that and I’m sure will add sure. I’m not going to comment on the exit rate from Q four. What we’ve done is we’ve given you a range, ed, we’ve told you what will happen if we see similar deposit trends. No, but I’ve just taken my math, that was all. We know what three are. Okay, so it is two nights. That’s great. Thanks.
Yeah. So your math, as I would expect, I’m sure, is very robust. As we’ve said before, it may or may not deteriorate next year. I mean, we’ve got a real tailwind from the hedge, so I’m going to go back to that. Secondly, we’ve got this neutralization of the mortgages month to month, and then you have ongoing deposit behavior. So you’re right to say that we’re in a different place to where we were sort of and we’re going all the way back to 2006, 2007. I mean, I would remind you that at that point the liquidity positions of the very large banks was very different. So all of the large banks were running loan to deposit ratios well in excess of 100%, 100 and 5161 hundred and 70% in some instances. And therefore those fixed term deposits were essentially being used in lieu of wholesale funding to large part.
So it’s a different structure of market overall. So I’m not going to comment on where we end, but I would urge you to consider that we then make the jump from buk to group. So a percentage point or a bit of buk roti is 20 million. That is 0.1% of group income. So in all of these considerations, we need to consider the rest of the group. So, yes, Buk NIM is stepping back a bit, but we’re also in a position where actually the market for markets, and particularly banking, is significantly depressed. So banking is coming off a decade low. We’ve seen pretty low levels of unsecured lending in the UK, relatively muted demand for wholesale debt, both in SMEs and in corporate. And of course, if you look across into CCNP, the US cards business continues to grow and the private bank continues to so I take the math point on Buk, but it is a relatively small part of the group.
You’re right to call out efficiency. We’re very focused on that. We see that as a key part of driving our returns. And obviously we’ll come back to you with the whole picture in February. Yeah, and I’ll just add on the efficiency part of the structural cost actions. Think of it as a longer term approach to increasing the growth of this bank. That’s what the efficiency is about. It’s not about making ledger work. Can I just come back on that in terms of efficiency, though, are we talking CIB efficiency? Because your retail bank is making over a 20% return on equity. I mean, that feels like a really good number on most benchmarks. I don’t know why you would want to take costs out of that particularly. So is it like head office and CIB or where would we be seeing that?
So, look, we’ll give you the details later. I applaud you for recognizing the rote of our retail bank. It has not come up yet, but you’re absolutely right. It’s doing 20% and it’s doing well. But in every part of the bank, there are things which we can do better. Okay. And so that’s not to take away from the performance of the retail bank. ####, I wouldn’t have okay, thanks. Thanks. The next question comes from Jefferies. Please. Go ahead, ######. Your line is now open. Hi, thanks for taking my question. I guess a couple of things. Just going back to this charge that you intend to take in Q Four, could you just talk about what your hurdles are in terms of payback and timing, just to give us a sense of time frame and payback? And then secondly, on the CC and P margin, there was a 63 on my number, 63 bips pickup, quarter on quarter in the margin, which was significant.
And I guess how do you think about the trajectory of that, particularly given the growth in US receivables? And I presume that a fair amount of the growth in the US receivables is coming from the GAAP, which is a higher yielding book. So how do we think about the margin trajectory in CC and P? Okay. Thank you, I’ll take those. I’m not going to go into the Q Four charge in detail at this juncture, we’re obviously still evaluating actions. You might expect that depending on what those charges relate to, the payback might be slightly different. So you’d expect, for example, property to take longer to pay back, whereas other actions that we might take would be faster. But when we talk to you in February, ##, we will outline what we’ve done and what we expect that payback to be.
In terms of CCNP, you’re correct. The net interest margin has stepped forward in the quarter. There are two real impacts in there. The first is growth in US receivables. So the growth in the cards business, as we said, balances are up 11% year on year, and that clearly has a powerful effect. At the same time, we see deposit migration in the private bank, which is no different to what we see in either corporate or in Buk. So that has an offsetting impact. Although in the private bank, what we see is a flow into invested assets. So we retain that income. It just goes on to a different line. There is a one off in the third quarter. It’s not huge, but I would strip that out. Ongoing. So that’s why we’re saying we’d expect Q four NIM to step back towards Q two NIM.
So don’t think of this step up as permanent. Think there is momentum in the number, but this is somewhat exaggerated by that one off. Okay. And then can I just be cheeky and ask one other question, just given because I think there’s been some confusion. If it’s a small one, it’s kind of a yes or no question anyway. But do you expect to deliver in line with your 10% or greater return in 2024? We will come back to you on 2024 guidance when we talk to you at the full year. As ###### said, that’s when we plan to update the market on our expectations for returns, capital allocation, costs, distributions. But you should read that we are very focused on returns. Ongoing. Thank you. Okay, thank you. So can we go to the final question, please? Our final question today comes from from City.
