Jonathan Pierce: I got two questions. I’m sorry, back on this short and medium-term RoTE guidance of 14% to 16%. I’m still struggling a bit with it. I mean, the NIM has obviously got this circa 7 basis points a quarter tailwind coming from the hedge for the foreseeable future. I mean, even if the hedge is reduced in size, the overnight rate is now ahead of the five-year swap rate anyway. So I’m not sure that’s particularly relevant, except in the near term mortgage headwinds are bigger than they might be moving forward because of the two year fixes from two years ago coming off. You got the deposit migration. But again, those latter dynamics should recede, I would think later this year and into next year. But you’ve still got that powerful hedge tailwind.
But you’re telling us into 2024 that RoTE is still going to be 14% to 16%. You’re also telling us, of course, that the income this year at 14.8 billion was a very specific number six weeks into the year. My question getting to the point, it feels to me that you’ve almost decided that a 14% to 16% RoTE is the maximum acceptable return in the medium-term, and you’ll do whatever you need to do on pricing, particularly deposits to prevent it going above that. That’s not necessarily a bad thing, because of course, it’s going to make the RoTE more defendable when rates start coming back down again. But is there anything in that? That would be my first question. And then I got a question on some accounting movements in the TNAV, if that’s, okay?
Alison Rose: Okay, I’ll let Katie take. T now when you get to it. So let me let me try and get you comfortable on RoTE. And the answer very simply is, what we want to give you is a very clear view on the sustainable return on tangible equity of this business. There are a number of economic scenarios that we have given you and the assumptions that we have there. We’re actively managing the business to deliver sustainable RoTE uncertainty for you. I think what I would say is, on your point that the hedge is a positive tailwinds. There are some economic uncertainties which we’re taking into account. We’re very well placed with strong capital, good risk, discipline and capacity to grow. And so what you can expect to see is us continuing to deliver a strong position.
I’m not actively managing the business only to deliver a 14% to 16%, which was, I guess, the opening part of your comment. I think that is a good performance of our business in pretty turbulent markets. And obviously, there are headwinds and tailwinds but we’re very comfortable with the guidance that we’ve given to you. What I would say is, when we think about some of the ups and downs, EBITDA is no longer going to be a material drag once we get through the end of this year. Interest rates, we would expect to decline as we go forward. We’ve got customer behavior and competition and the procyclicality and regulation coming in as well. So I think you should feel comfortable that we’re managing the business well for growth at 14% to 16% is sustainable, without huge peaks and troughs within that.
Why don’t you ask your TNAV question to Katie?
Jonathan Pierce: That’s really useful. But sorry, just a quick follow up on that, this point on sustainability, I think it’s really important. And to the question before me, sustainable RoTE, the word sustainable, I think is used about 30 times in the slides today. That the message coming out is regardless of the income guidance, and all the rest of it this year, that looks perhaps a little softer than consensus. Your very clear message is you’re going to do 14% to 16% and that is going to be sustainable for the next several years, not just this year and next year.
