So that’s my first question is how do you as a sort of new CEO look at that? And how do you feel the balance is and whether you’ve got that right and how it might change going forward? So that’s the first question. And then my second question was about retail, which I know is not your traditional business, but now you’ve had sort of 6 months, I guess, to look at it. It’s making a mid-20s return, which is pretty punchy. And I guess that’s in an environment where you’ve got some pretty strong new competitors coming in, which chases obviously the most important one. All of whom are paying much better rates than you are on like-for-like products. And I guess they can justify that because they don’t have the hedge headwinds. And they probably have got better systems than you have.
That’s an assumption, but by all means, tell me that’s wrong. So I just my question is, as you look at that return going forward, how sustainable do you think that is at those sort of levels as an incumbent bank? And I guess, what sort of do you think there’s further costs you’re going to have to take to try and sustain that level? Or how should we think about that going forward?
Paul Thwaite: All good, broad strategic questions. On the first, around how do we — how do I think about loan growth? I guess I’d point you to ’23. We’ve grown our asset side of the balance sheet by 3%. Obviously, given our size, we are linked in some ways to the health of the economy. The way I think about it is, given the scale of our businesses, whether that’s our commercial business, whether that’s our mortgage business, we should target ourselves to grow at above market rates. I think we’ve proven over a number of years in both businesses that we’ve successfully grown the asset side of the business. There are also certain aspects of loan growth where as I’ve alluded to, we’re underweight relative to the market. We touched on unsecured earlier.
We’re still only the second mortgage — the second largest mortgage provider, so there are opportunities to grow, but ultimately we are geared to the U.K. economy there. And to your point on demand versus supply, from a supply issue, we have capital available. We’re very keen to put that to work, providing it’s at the right returns, across all of our businesses, whether that’s our private bank, obviously also lends our retail bank or our corporate bank. So that’s how I think about it. I think it’s — that’s the broad picture.
Ed Firth : But if you — sorry. Just if you take nominal GDP last year, it was probably up I think 7%, something like that, so you’re effectively growing at sub-nominal GDP. Is that how we should think — I mean, is that a sort of sense of your conservatism? Or are the two just not really related at all?
Paul Thwaite : Yes. Well, I think there’s a couple of things going on there. Obviously we’ve seen given the high interest rate environment, as you all know, we’ve seen paydown of borrowing as well, whether that’s in the retail bank, in terms of customers paying down mortgages, whether that’s in government lending schemes and in the commercial business. I think, as rates come down, the inclination to either want to pay down or have to pay down will slow. And so that’s how we think about it. So we’ve delivered growth despite there being a lot of in effect deleveraging by customers across all of our customer businesses, especially in private. On your second question, which I guess is a very broad question. We’re very happy with our retail bank.
The leadership team we have there over the last couple of years have built a very actually digitally enabled retail business. We have a market-leading mobile platform. We support that with our branch network. As you know, the returns are healthy, which is what you alluded to. And I think we’ve proven over the course of the — I guess, the last couple of years that we’ve managed — certainly over the course of the last 6, 9 months, we’ve certainly managed to react in terms of our product range, our pricing, whether it’s on — you alluded to some deposit pricing and our ability to compete. I think we have a very competitive range across different terms, different products, et cetera likewise on mortgages. So I think the retail bank is in good health.
