The second question was around the mix of net interest income and fees. So, I think your guidance is pointing to a shift towards a bit more fee income than what consensus has. But I think taking your guidance at face value, you’re still set to generate around 77% of revenues from net interest income. I think that compares to kind of mid 60s in 2019. I’m just interested in your assessment, probably one for Alison around whether that mix might evolve going forward. What do you see as your kind of steady state fee income contribution? And the thing that I guess I’m interested in is, whether you think you can achieve that kind of in-house by virtue of some of the investment that you’ve announced today, or actually inorganic — ongoing inorganic acquisitions, potentially part of that path.
Thank you very much.
Alison Rose: Okay. Let me talk about deposits. So, the starting point deposits are still up around 80 billion even without flows this year. And, as you can see, we have offer competitive rates across our balances, we will look at deposits very much as through a number of lenses. Firstly, we have a strong funding and liquidity position, which is underpinned by our leading customer deposit franchises. And so that up 80 billion gives us a competitive advantage. That advantage has allowed us in recent quarters, as rates have risen to be very disciplined, and manage our deposits for long-term value. And that’s a combination of relationship margin and liquidity value. We have a very disciplined approach in terms of how we’re looking at it, we’ll defend the deposits we need to, and we won’t chase volumes at the expense of our back book or detriment of existing relationships.
We’ve lost no customer relationships, and the liquidity value of outflows that we’ve seen, have been relatively modest reflecting the nature of customers and balances. So what I would say is, it’s something that we manage very well. It aligns with our strategy to help customers save, and we’ve got competitive products that we have out there. So I think that’s really how we’re thinking about it. And when you look at the deposit outflows the way I would think about it is, we’re managing volume and value and being very disciplined about it. The strength of our funding, and liquidity is a good point. And we’re a net to gainer of new customer relationships across our franchises as the result of our strategy there. So I think about it, we’re managing them for value, and we’re being competitive, and we’re able to retain them.
Clearly customer behavior is changing, there is an excess of deposits from pre-COVID level. But I think we’re managing that sensibly. Katie, you want to pick up the —
Katie Murray: Revenue guidance. So in terms of — as we look to the impact of deposits Alison’s absolutely right, I use that sensitivity that will give you some guidance. We’ve got the 4% base rates assumption and we’re not modeling any further increases in that that obviously has an impact on the NIM. And then the other place that I would suggest that you have a think about, the guidance I’ve given you on the head. So if we assume no further changes to volume and mix of deposits, at the end of 2022, we would expect that product hedged to reduce gently over the year by about 5 billion bear in mind, it’s averaged. So it comes through relatively slowly. But given the reduction balances in the second half of the year, that will have a little bit of an impact.
It’s obviously offset by the fact of reinvestment and yield that we’re getting on that which is sort of 3.7 as we kind of sit here today. There’s a few kind of moving parts, but those are the bits I would — we’d be thinking of if I were you.
Aman Rakkar: And then on the mix between NII and fees, kind of how do you think about the structural balance between those two? And do you think you can achieve it by virtue of your investment spending?
