Andrew Coombs: Good morning. I have two questions on mortgage rate. Firstly, looking at the improvement in the mortgage book. Perhaps if you could just comment on what you’re seeing both in terms of before we paying down on SVR, but also those taking advantage of the [inaudible] fixed business, are you seeing greater prepayments and how does that then feed through into your EIR assumption for the mortgage on our line? And then second question, previously, you’ve given some color on the gilt product transfer and new business margins within that 50 basis points, anything you can say on that, that would also be interesting? Thank you.
William Chalmers: Andrew, sorry, the second question was on product…
Charlie Nunn: Product transfer…
William Chalmers: …transfer, exactly, fine. Yeah. Sorry. Right. Thank you, Andrew. I’ll make a couple of comments, Charlie, you may want to add. On the SVR book, the SVR book, as noted in my comments, is now down to about GBP39 billion. That has seen as a proportion of the book, some relatively high repayments. So I think we quoted a number of around 30% in the course of Q2. But actually, if you look at the absolute number of repayments, that is much more stable. So what you’re seeing is the absolute number is staying relatively stable, in fact, maybe even coming down a touch. But because it’s got a — it’s against a smaller denominator as a percentage, it’s accordingly a bit more. So what that means is that the — in absolute terms, Andrew, the pace of the SVR runoff, if you like, is reducing over time.
As I think customers value in the SVR product, the ability to repay whatever it is a quant to repay at any point in time and in the context of the SVR book, which by the way, has pretty low average balances of less than GBP50,000. The incremental interest cost to them is not necessarily that much when you compare it to the convenience that they derive from being on an SVR that allows them to pay back again, whatever it is they want to pay back whenever they want to pay back. We do keep in regular touch with our customers on the SVR book and make sure that they are aware of all of the opportunities to refinance or indeed pay back at any given moment. And we — there is no concept, if you like, of mortgage prisons or anything like that in the SVR book and customers are free to do what they want.
Hopefully, that gives you a bit of a sense as to what’s going on there. You asked about EIR. I’m not quite sure whether I caught the question or not. But if it’s relevant to what went on recently in the EIR market, when we look at our EIR, first of all, the asset is less than GBP200 million. Second, as we account for EIR, we do not take account of or accrue for any benefits that we might see off the back of the customer staying on SVR after they come off the fixed rate deal. So all of our EIR is accounted for up to and only up to the point at which the fixed rate deal stops. That means in turn that we are unlikely to see, in fact, I think, it’s conceptually impossible for us to see the type of issue that came up in the market most recently.
