Fahed Kunwar: Thanks for taking the questions. Just a couple of questions. Firstly, on the 2024 costs, I know you’re not drawn into it, but obviously the report out today about kind of what was the phrase, serious failings and regarding the dealing of the de-banking issues. Are you confident that isn’t going to result in more kind of controls and compliance-related costs to improve those processes? Or do you think what you’ve done to-date is enough to kind of abate or kind of make regulators happy with where you are at the moment given the findings in that report? And I asked the question because I think your 2024 costs are only up 1% or 2% in consensus. There’s big wage inflation, there’s that potential cost line coming through and it kind of gets to the cost income point that a lot of people have been raising.
And then my second question was just on that 80 basis point and the fact that the front book is probably a lot lower than that right now. I mean listening to other banks, my understanding is a mix issue, that new business spreads are higher, remortgaging spreads are lower and a lot more remortgaging is happening right now. So is that a fair understanding of why the front book is lower than 80 bps right now? And if it is, why do you think that mix is going to adjust away from remortgaging back to new business purchasing given the kind of environment right now, which is quite difficult. Thank you.
Paul Thwaite: Thanks, Fahed. I’ll take the systems, cost, and controls and maybe Katie the mortgages. So the simple answer Fahed is a number of the processes, systems, and controls referenced in today’s report. We’ve already implemented changes. There are additional changes to policies and procedures that we will put in place as a consequence of fully accepting the recommendations. But I would say that as you know, we already spend a significant amount on risk and compliance and we’d expect that to be within our normal budgets and cost plans.
Katie Murray: As I look to mortgages point, you can see at the moment that mortgage pricing is very competitive just now. You can observe that when you look at all the kind of the best buy tables and where we are and then you compare that to and obviously the various funding rates from different source of fundings. So we are pricing below that level. We do expect this number I mean it moves around a lot. That’s why we talk about over time; this is what we aim to do. I mean one of the — I think the last time I kind of talked about it in Q1 2022, we were below that and then you’ve seen us kind of come up and down. So I think it’s something that that’s our kind of gold star that we try to manage through and there will movements there around the time.
What we have seen is that we have now substantially re-priced out the higher margin work with numbers, which is why we’re now seeing us for the book kind of revering, we’re coming down to 86 this quarter and we expect a little bit move further fall in the next couple of quarters.
Fahed Kunwar: Thanks, Katie. Can I just clarify it’s not a remortgage new business thing for you. It’s just general competition.
Katie Murray: I mean, there’s a bit of that. I think it’s much more general competition that kind of flows through. And this market is very interesting. If I look at it quarter-to-quarter, it moves enormously in terms of the volumes. So it is a market that does change over time. So I guess for me that’s what gives me confidence on it is that it will change again in the next — the next six — the next six, seven months and we’ll see that as it flows through.
Fahed Kunwar: Great. Thank you, both.
Katie Murray: Lovely. Thanks a lot. Thank you, Fahed.
Paul Thwaite: Thank you, Fahed.
Operator: Thank you. I would now like to hand back to Paul for any closing comments.
Paul Thwaite: Okay. Thank you, everybody. We appreciate you joining in your questions and we look forward to seeing most of you, if not all of you over the next few weeks. Thanks.
Operator: That concludes today’s presentation. Thank you for your participation. You may now disconnect.
