Raul Sinha: Hi. Good morning. A couple of follow ups for me, please, if I can. I guess the first one is just around Slide 17 looking at the split of NIM across your main subsidiaries, and just trying to understand the underlying NIM trajectory for the bank in the absence of any rate changes from here on. If we look at the UK bank [indiscernible], obviously, that margin has been under pressure this quarter and a number of peers are obviously flagging the lag effect on deposit cost as well as the migration is going to have an impact in Q4. I was just wondering if you could give us a little bit color on what you think is the outlook for your business in terms of margin in the UK? And then I guess just linking it back to group margin, which is as you said broadly stable but starting to come in a little bit pressure.
The HIBOR/LIBOR gap is obviously very narrow. Seasonally I guess HIBOR tends to go up in Q4. But when we take a step back and think about the overall margin trajectory, would you say that in the absence of rate changes, the margin is stable or do you think there is a little bit more pressure sort of creeping in because of what is going on in the UK? Thank you.
Georges Elhedery: Sure. Okay. Thank you, Raul. So let me unpack. There are quite a number of considerations here. So the first one is, I would kind of as always will encourage you to look at banking NII, because that will — first, it’s a better reflection of our rate sensitive earnings. And second, it will immunize you from some of the kind of business choices we make by putting more money into the trading to support — more funding to support the trading activities whatnot and that can create noise in NII versus funding of the trading book which is emulated when you look at it from a banking NII perspective. Now talking a little bit on Q3 before I talk about the outlook. On the Q3 numbers, if you look at banking NII in Hong Kong, it was up 10%.
Now this is not reflected in NIM. NIM is up 2 basis points, essentially because a lot of that upside went into the funding of the trading book. But the full rate sensitive earnings in Asia or Asian entity has grown 10% by about $0.3 billion. So that’s the first thing to observe. If you look at HIBOR rates, Q2 to Q3 obviously were up 75 basis points. When we look at Q4 to date, there’s another something like 50 basis points baked in the average. So there is additional tailwind into Q4 from HIBOR which we will obviously need to see how the next two months fare before we evaluate. If you look at the UK, so the UK NIM was up 16 basis points Q1 to Q2, down 8 basis points Q2 to Q3. The first thing I want to say is this is definitely not the trend here to be read.
I think NIM is broadly stable from here for the next few quarters. Some of these moves are kind of idiosyncrasies in our market treasury management not necessarily drivers of trends. So we are looking at it in the role as broadly stable. Obviously, it continued facing pressure on deposit cost. But as I just said earlier, at these rates, any additional rate hikes are expected to be passed through to customers and this is what’s been happening. So we’ve benefited from 75 basis point rate hike in pounds between Q2 and Q3, most of which has gone either to customers in the form of pass throughs, some time deposits, migration in the UK minimal, but some and then obviously asset margin compression in the UK. So as you look forward, how can I kind of invite you to evaluate?
