Charlie Nunn: Yeah. Thank you, Robin, and thank you for the question. That will be about the structural hedge actually, I should add. But nonetheless, it’s — I said in my comments earlier on, has been a source of decent performance, I would say, actually, in the first half. So what’s behind it is your question, how do we look at H2 in that respect? When we look at what’s behind it in respect of H1, it’s contributions really from all of our three main business areas. So I look at retail, for example, and that seen contributions during a half from a combination of customer activity in respect to PCAs, consumer finance business, the Motor Finance business, including not just, Lex, the business that we already own, but also the acquisition of Tusker especially in Q2.
Those businesses all contributed to a decent performance. If you look at half one last year versus half one this year, it’s up around GBP150 million. If you look at commercial, similar comparison, up around GBP125 million. What’s leading to that? It’s a combination of financial markets, i.e., flow driven business, together with a developing capital markets business, in particular bond financing business over the course of the first half of this year. To be fair, a touch stronger in Q1 than it was in Q2, but nonetheless, a really decent performance year and a half. Moving on insurance protection and investments, a number of moving pieces there. The three that I would point out in respect to the half year performance are, first of all, the unwind of the CSM.
That, as you know, has been an adjustment IFRS 17 adjustment between 22% to 23%. The CSM now stands at around GBP4 billion pretax, around GBP3 billion post-tax, that CSM in addition to a further GBP1 billion of risk adjustment unwinds over time into our earnings and that has led to a stronger contribution during the course of the first half of 2023. Alongside of that, Robin, the General Insurance business is doing better. The combined ratio is now below 90, sorry, below 100% within the General Insurance business. And that, together with the absence of weather events, has allowed us to see decent in fact, improved performance from the General Insurance business. Obviously, the weather events have previously fed into a combined ratio, which is higher than we would like to see it on a long-term basis.
Now it’s adjusting back down. And then finally, the return on free assets, Robin, is a further factor. As we moved into a higher rate environment, so the return on free assets in the insurance business has strengthened and that’s led to about a GBP90 million increase half last year versus half this year. So across each of those three elements, we’re seeing some decent progress. There are always underlying elements. Second point, there are always underlying elements, Robin, within OOI. We like to strip those out internally and take a look at what’s going on underneath the hood as it were. When we look at that on an underlying basis, half — first half this year versus first half last year, we think we’re seeing around a 7% underlying growth rate after stripping out any of the anomalies that you might see in any given quarter or any given half.
