If you wanted some sense of kind of math, you could argue if we’ve taken 600 million losses, it’s about 100 million loss additional NII every year for the next six years or so, which kind of gives you a sense of how we’re looking at it. And it’s indeed as part of our restructure hedging, which means part of how we’re protecting the balance sheet, mitigating risks of a rate downfall in the future. On your second question, Jason, about the mainland China. So first, I can comment on BoCom Q2 performance, because as you know in our numbers, we have one quarter delay. So the exercise relates to Q2. Our value in use as of Q3 has room of about $0.4 billion compared to our carrying value. So as you — look, impairment is not a management discretionary decision, right?
There’s a rigorous accounting process and we just follow the process. And based on their Q3 results, we will evaluate those as we go into Q4and that will be part of our end of year assessment. I think the important thing I want to share about BoCom is because it sits in significant investments and because we hold capital deductions — regulatory capital deductions against it, as you can see from this slide on $16 billion capital deduction, it effectively means that any impairment on our holding of BoCom should it happen will have virtually nil CET1 ratio impact and that’s because any impairment will be compensated like-for-like by a release of the deductions of a similar amount. So therefore no implication on CET1. We will also — it will have an implication reported profits, accounting reported profits, but we’ll treat it as a material notable item and it will have no implications either on the way we calculate our dividend or our dividend payout ratio.
So this is why at this stage, this is not a concern. We’ll just follow the accounting rules as we do [indiscernible] assessment.
Noel Quinn: Jason, just for clarity, based on the impairment test we did at Q3, we have headroom against our carrying value. There is no impairment to our Q3 and we’ll reassess it at Q4. Based on the Q3 results that BoCom issued a couple of days ago, those results at a headline level first side did not cause us any concern on our impairment test at Q3, but we’ll reassess that at Q4.
Georges Elhedery: Thanks, Noel. You will have the details in the AR&A [ph] in how we do the impairment testing for the value and use with BoCom, Jason, in case you need it. Thank you, Jason. Can we move to the next question?
Operator: Our next question today comes from Gurpreet Singh Sahi from Goldman Sachs. Please accept the prompt to unmute your line and ask your question.
Gurpreet Singh Sahi: Thank you very much for letting me ask the question. Good morning, Georges. So first one on loan growth. How do we see the areas of loan growth going into next year? We’ve done a good growth around mortgages, but they have been offset by shrinkage in the commercial book. So that’s the first one. So in terms of medium term, of course, we are highlighting mid single digit, but specifically as interest rates remain high, how is the borrowing appetite into next year? And then the second one with respect to the special dividend timing, the $0.21, will it be paid by June or will it be announced towards the second quarter and paid later on? Thank you.
Georges Elhedery: Thank you, Gurpreet. So in terms of loan growth, look, what we’ve observed so far is strong growth and continued growth in mortgages. We said 11 billion year-to-date, essentially in Hong Kong and the UK, that continued even this quarter despite softness in the housing market, but we remain competitive and we continue to support this business for our customers. So that is definitely there. We’re also seeing some loan growth in the unsecured space in our retail business. It will be smaller proportions. In terms of commercial, the reality is the main softness in loan growth in commercial is in Hong Kong and this is what’s driving the commercial overall number. The softness is Hong Kong has two parameters; one, the rate differential with mainland China and as long as we have saturated differential, it is expected to have mainland Chinese borrowers continue borrowing onshore mainland China rather than borrowing offshore because of the rate differential, and that probably will not reverse in the next couple of years.
