Good morning, thank you all for joining us here in Dublin, also for those who are joining us via the webcast. I'm going to make a presentation first. Mark, our CFO, will then come in, and then we'll open it up for Q&A, and we'll take people in the room first, then we'll take some of the people online who may have some queries. Sorry, I have to leave this up for a minute. Overall, when we look at 2018, profit before tax, similar to last year, EUR 0.8 billion in continuing sustainable underlying profitability, loan book growth and significant improvements in asset quality.
Strong capital ratios, Core Equity Tier 1 on a fully loaded basis of 17.6%, continuing capital generation and capacity for attractive returns, and continuing progress on NPE normalization at EUR 7.5 billion or 12% now on an overall basis, 27% down in the period, the six months. Market-leading franchise with a customer-first strategy and investment in digital and leading to quite a bit of commercial success. We think pretty well-positioned and evolving for the future challenges and opportunities of growing economy.
We were kind of having this conversation last night, and so we go, "It's not that exciting, is it?" Somebody sort of pointed out that, well, if you're only interested in investing in a bank that has the largest Irish banking franchise, is the fastest growing economy in Europe, has best-in-class cost income ratios, it's very strong capital levels already, generates very significant amounts of capital on an underlying basis, has a rapidly normalizing NPE profile, and has a proven track record of delivery. Well, if you're not interested in that's okay, but that's basically what we have.
There's less excitement here than you might want, and there's less stretch to where we need to get to because we've actually delivered quite a bit of where those medium-term targets are, which is why we've a lot of confidence that we're going to hit those targets, and really, the rest of the deck is hopefully going to try and demonstrate to you why we have that confidence and where we are. There are plenty of challenges there, but there's plenty of opportunities as well. Maybe the first thing is obviously to do with the economy, because fundamentally, the vast majority of our balance sheet is in the Irish market, and the vast majority of our business in the Irish market. On the top left-hand side, you can see that's not a bad place to be.
On a six-month on six-month basis or 12 months on 12-month basis, the projections for Irish economic growth are constantly being revised upwards. Many of you in the room are responsible for some of those upward revisions, so I need to talk to you about it. In general, what we're talking about is a very strong performance from the economy, that creates a really strong basis for us as a bank. On the right-hand side, you can see one of the clear manifestations of that plays across our forward book and also in terms of how we deal with the issues of legacy, strong employment growth, and a very significant reduction in unemployment. Our ability to deal with the arrears is enhanced significantly, also that consumer side very strongly supported.
That plays into the bottom left-hand side, which is what you see happening on the housing market. Again, loads of different debate as what the most accurate number is, some of that debate again takes place in this room. Actually the reality we all know is that every statistic that exists, whichever one you use, is growing. We still haven't hit what anyone would call sort of the normalized level of demand in terms of supply in the marketplace. There's still a gap between supply and demand in the market that's obviously manifesting in some of the negative things that are out there in terms of where rents are at and where property price inflation is.
Fundamentally, you're seeing significant growth year on year in construction, feeding through to new properties, which is feeding through in terms of mortgage demand, we're continuing to see growth in the mortgage market. On the right-hand side, you see where sentiment is at pretty much everything is in expansionary mode. The consumer is feeling confident, SMEs are feeling pretty confident, the business community in general is confident, Europe is also feeling confident. That's a backdrop which is a good position to have if you have a strong franchise. We think we have a very strong franchise, you can see in the period what's happened six months on six months. The drawdowns have grown from EUR 4.8 billion to EUR 5.2 billion.
Growth in the core franchises in terms of what we do from a wholesale institutional side, what we do on a retail, commercial, and corporate banking side. Growth happening in both of those. The U.K., a modest downtick, we've already said, and we've said it before, that we don't have a particular growth aspiration for the U.K. at this point in time. We have a wait and see attitude in terms of where the U.K. economy is. We're not driving balance sheet growth in the U.K., it's pretty much stable during the period, we're very comfortable with that. If you break out on the right-hand side, you can see a little bit more of where the Irish market is at. Some mortgage lending delivering 11% growth in the period. We'll come on talk about market shares in a minute.
Personal lending pretty much flat in terms of the new business flow, but our market share actually growing during the period. Corporate SME, the entire business community doing well. Quite a bit of that is actually supporting what's happening on the residential side. You can see an improvement in terms of our corporate lending into the residential side. Very well supported in terms of debt equity positions on that, so we're very comfortable with it, but it's a sign of what's happening in terms of that continued opportunity to grow the balance sheet, both in terms of supporting residential development and in terms of the mortgage market. On the very right-hand side, you see where our stock positions are. Personal current accounts, 36%. Really no change in terms of these positions.
Overall, the mortgage flow piece is 32%, the mortgage stock is 32%, very comfortable where that is. On the business side, our position is obviously slightly stronger, effectively the main market share is in the 40s. Overall, it's a very strong franchise, and it's maintaining its stability in the marketplace. When you look at it in a little bit more detail, mortgages, and this is a conversation that happens a lot, and I'm sure we'll talk about it later on. Overall, what we've said is we want to invest heavily behind things, not just price, but also the overall experience from a customer point of view. We've spent a lot of time improving our digital capacity and capability in this marketplace. Convenience is key for the customer as well here.
We have effectively put in place a new platform and a new system, and as we're trialing that in two of our nine regions at this stage, we're effectively targeting to get to seven out of 10 customers with a one-hour approval. At the moment, we're at five out of 10 with a one-hour approval. We have a digital center of expertise, which is set up at this stage, and the whole mortgage journey is going very well. There are things other than price which are really important in terms of how the customer perceives it. Obviously, price is important. We've committed huge amounts in terms of our standard variable rate proposition. We think it's the right proposition, over the long term for customers.
Certainly, a large cohort of customers, effectively one in three customers take an AIB mortgage from the group, can see the logic of what we have. We've invested about EUR 190 million, if you like, on a per annum basis into those standard variable rate price reductions, gives us a very stable back book, and also gives the customer a lot of comfort about where they're going to be. First-time buyer share, you can see at 36%, switcher market growing quite well. It's still a very small marketplace. Our target is not the switcher market. We are there available for the switcher market. We're focused on our core customer base, our current account share, and making sure we provide the best opportunity and experience for them. The market is competitive.
Undoubtedly, you can see a lot of issues in front book pricing and in terms of fixed rate pricing. I'll probably leave it for Q&A, because even if I try and answer it all now, we'll undoubtedly get to it in Q&A, let's hold the point. I think our position in mortgage we're very comfortable with, and we're happy with the growth we're getting out of that. If you look at the personal customer side, again, good experience there in terms of how our investment is playing out, in terms of the customer experience side, and also in terms of what's happening from a growth side. We've added 52,000 accounts in the first six months. 57% of those are new to bank, and two-thirds of those that are new to bank are in the 25 to 34 age category.
Strategy to continue to play out well, continue to attract youth, and continue to build that franchise that we think will deliver into longer term. On the business side, we maintain our positions across the board. 44% stock and basically flow in a similar position. We would say, though, that the SME market is continuing to very minorly decline. If you look at the total stock, we had thought that it probably had hit an inflection point, it would grow. It didn't. While our overall balance sheet has nudged forward slightly because of our strong market shares, you're not seeing a lot of growth coming out of the smaller SMEs. What we have in general on the other side is really talking about the activity levels that happen in terms of customers. I think there's better slides later on to talk about it.
There is an important one maybe at the bottom, which is, the U.K. was the first bank, and our CMA platform, which was the open banking. We were the first bank in the U.K. to actually able to do that. It speaks to the technology we have and our ability to actually be quite flexible in terms of implementing that, which I think is a support for our overall investment profile. Some of the touch points, busy slide with plenty of stats, I think we'll try and unpick it. Overall, this is about our strategy, our strategy is based on our purpose, which is effectively to be there for our customers, to back them to achieve their dreams and ambitions. We think that delivers a sustainable position for all of our stakeholders and crucially for investors. We think it gives a very enduring franchise with attractive characteristics.
We have 4 pillars to our strategy is put the customer first, operate the business simply and efficiently, make sure you're very good at risk and capital management, and have the right people and the right culture in the organization. Some of these outcomes that you see there on the left-hand side, personal relationship NPS at +21, our homes NPS at +46, a key area for us. Our SME NPS at +47, the underlying profitability and capital we've talked about, and asset quality down 27%. The business outcomes coming from what we're doing are pretty strong. In the middle, you can see the touch points and how they're changing. Customers continue to migrate into digital and online channels, mobile continuing its dominance and growing in terms of an overall engagement platform for our customers.
You can see just the change over that sort of five-year period, a massive change in how customers are interacting. The investment is supporting that, and it's also yielding a lot of benefits from it, and some of those come out on the right-hand side. We have 1.3 million active online users at this stage. 96% of customer transactions are automated. 63% of key products are purchased online. 78% of personal loans are applied for online or on mobile. 83% reduction in branch paper processing took place as a result of a very significant program to move paper out of the branches. 67% of transactional customers are active on digital channels. These are market leading statistics that show that the bank is perceived very well from its customer base, and they engage and activate across the channels with us.
This is a busy slide, which I suspect I'll only ever use when people really ask me a question. It's obviously one that people talk about in terms of the underlying architecture and where are we. The piece on the left is one that you've seen before, which was really talking about how we invest in the architecture. Basically, anything that's purple was invested in, and anything that's yellow was industry standard, such as SAP systems. To break it out and explain the question that people have about core sometimes, on the right-hand side, we've unpacked it, and basically, these are the five ways we think about it. If people think about a core system, they sometimes say, "Well, it's all one. You have to replace it all." It is not. You do not.
Effectively, when we think about it, we think about how the customers engage with us, and we've invested heavily to have leading modular formats in terms of how the customer engage on mobile, in branch, client view, all of those engagement technologies. You have an integration layer which allows those engagement platforms to effectively deal with your database, which has been separated from your records. If people have it all bundled together, it's really hard to dismantle it. What we've been after the last six years is dismantling it, so your core is actually quite small. That is the fundamental architectural principle that allows you to invest across each of those stacks, all of which are built on a brand new IT infrastructure, which is very, very new because it has to be. There is no old kit. There's none.
Everything is based on that foundation, that mainframe foundation, and built up from there. We can go into it in more detail, but basically that's the basis in which we're going to continue to invest to support each of these layers. Better customer engagement, better ability to use the data and to get insight from it, and simplification of the core. The business model is going to continue to evolve as well. It never stops. Fundamentally, it's about taking the operation model and aligning it better and better with the strategy we have, being clearer on the structure we have and how we deliver for the customer. We still think there's more we can do in respect of that and making delivery to the customer simpler across our organization and for the customer.
One of the things we've taken on, and you'll see it coming through in terms of some of the one-off charges, is the property portfolio. We've obviously gone from an organization that in 2009, 2010, had close to 25,000 employees. We now have an organization that has 9,000 employees. It's very different. Customers engage with us very differently. We've been at an active strategy for the last number of years in the property portfolio. Some of that is manifesting quite obviously at this point in time. In terms of Central Park out in Sandyford, we're actually migrating people at this point in time, creating centers of expertise as the customer sees the business, not as we see the business. Molesworth Street, in terms of the corporate head office, has been talked about. The property portfolio is progressing well to effectively align in the new business model.
That's facilitated by the flexibility we've been able to build into our work systems to allow people to be more agile in how they work from home, work different hours, communicate in better ways. All the underlying technology is there to allow that, which is working very well from a staff engagement point of view and from a staff flexibility point of view. We have to be flexible in the environment we're in order to allow us to deal with some of the economic pressures that low unemployment are going to bring. We have to be very flexible and modern in terms of how we allow our employees to work with us. The technology that I talked about earlier is allowing the customer to do what they want, which simplifies our life.
Customers dealing with their own requests rather than having to do through call centers and online simplifies us. That enabling technology will continue to evolve. Ultimately, the board and the business are very focused on the sustainability of the business model. We're much more vocal on the sustainability agenda at this stage. We had a sustainability conference last year. Fundamentally, this is about the long-term sustainability of the business for all the key stakeholders, for the investors, for the government, for the regulators, for staff, and for customers. How do we make sure that that sustainability is embedded in everything we do and build a business forward? Which means you have to keep evolving your business model. Overall, we think we're delivering against the medium-term targets, and Mark will talk more about this. We will continue to invest to support the customer-first agenda.
All the key targets are NIM, cost-to-income ratio below 50%, strong capital base, 13%, and target returns on tangible equity of +10%. They're all there. We think we've made meaningful progress. We are definitely on track to deliver against them. We're going to come back at the end for a Q&A. Over to Mark now. Thanks.
Thanks, Bernard. I think the messages that you can see from the financial performance section of this is that the underlying business continues to emerge. When you look at the health of that underlying business, it's a very solid message because we've increasing volumes, we are maintaining our margins, we are controlling the costs, and all the while there's an improving asset quality. In terms of the individual highlights then, sustainable profitability underpinned by stable net interest income and margin. That NIM story of doubling over five years, being driven essentially by the things that you want, which are a solid loan yield and that continued liability repricing, has continued, and it is now stable and well into our target area of 240-plus. Continued cost discipline.
In a world where we're almost at full employment, we have clearly the associated costs which come from our continued investment, we have maintained very tight focus and considerable discipline. Slight increase half on half, you can see it's also flat on half to last year. Inflection point past the third point there in terms of net loans. It's a small growth, when you disaggregate it and you look at actually what the increase in the performing book is, I think that's a very positive story underpinned by very strong new lending. Significant progress on NPE. 2.7, down from 10.22 to 7.5 from the start of the year. That clearly puts us within sight of our end 2019 target, which is the key to the capital release to investors, and strong capital generation.
A very strong capital position, underpinning that, 130 basis points of capital generated in the half, I'll kind of unpick a number of those as we go through the presentation. P&L, again, this is the, as I say, the emergence of the underlying business. Looking at net interest income, when you strip out the impact or a decrease in suspense interest, which relates to restructurings, that is a stable number. Other income, again, underpinned by fees and commissions, which have been remarkably robust throughout the periods. The decrease is, again, just due to the fact that our upside sharing on restructurings is actually a figure that has gone down. Basically, you can see the underlying structure of the income, very, very stable. I mentioned already operating expenses. You can clearly see discipline there, given an inflationary background in both terms of depreciation and wage inflation.
There is a positive in the net provision write-back, which largely is as we move through the final stage of NPE reduction, that is underpinned by a very strong economy, and therefore very strong security value. All of it contributing to an ROTE at 15.2%, which points us to being able to sustain a double-digit ROTE, even with a very heavy tangible equity number, which has a big deferred tax asset in it. As I always say, probably the ugliest slide visually in the presentation, it does tell the prettiest story. Loans to customers, as I said, the spread between loans to customers and customer accounts not only been maintained, but even continuing. We have been saying now for some time that the liability repricing curve has sort of reached a trough point, therefore stability in that, we've actually continued to widen that gap.
That is, on the asset side, you're seeing loans to customers maintaining our yield. Once you take out that suspense interest, and that's reflective of very strong pricing on all our books, being that allowing us to absorb the repricing actions or the pricing actions we took last year, which obviously fed into the whole six months in our mortgage book, and it is supported by the roll-off of our tracker book as well. On the asset side also, NAMA senior bonds structural issue no longer there, and we are playing through and being able to absorb the well-signposted 60 basis points headwind on the AFS book. The only thing that is a little bit new is a heightened level of other assets, which I'll come to on from the liability side in a second.
On customer accounts, we have said that we expected probably high single digits decreases, and we've had a little bit more. On our term deposits, and demand deposits, we've outperformed a little bit on that. We're probably low 11, 12 in terms of decrease in liability pricing. We have successfully started our MREL program. Two issuances, one below plan, one above plan in terms of coupon, but it's both successful and we are well into the program, 25% of the way there, after the first six months. The only point I would make on this is that there is obviously an increase in non-interest earning liabilities, and that is a cost to us on the other side.
We have attracted, thanks to the exit of a competitor, a little bit more liquidity, and we will now move on non-retail deposits to more negative pricing to ensure that that doesn't weigh on the NIM. Structurally, though, this balance sheet is performing and is being driven by the things that you would want it to be. Other income, as said on the P&L line, when you disaggregate, look at net fees and commissions, pretty much flat for, well, slightly down, but all of the various contributors to it in the right place. Current accounts, obviously upper bounded, that's bang on prior year. Credit-related fees can be a bit lumpy, also in line. Customer FX income, that income stream very stable also. Cards and other fees and commissions, which include our wealth and bank assurance, slightly down, but no trend there.
That has been robust and bouncing around that level for the last three, four years. That provides us with a great platform. The other aspects or the comparison and the total number, driven a little bit by volatility on some long-term derivatives in the other business income line, which I would discount in trend terms. We can see the previously restructured loans total from EUR 146 going to EUR 40, and that's, as I say, the natural emergence of the underlying business. We no longer are getting big upside sharing on restructurings, and that is as expected and as signposted. Costs, again, a story of really, I think, demonstrating the focus and also demonstrating our continued harvesting of the investments that we have been making. On the pushing upside, we have inflation of 2.75, as I say, in total.
In a world approaching total employment, that probably is 2.75 to 3 when you consider out of course increases. Depreciation flowing through, also from the 870 program. Continued investment in our restructuring so that we can maintain that pace and get to normalized levels. All being countervailed by continuing focus on efficiency, and you can see that in the FTE, the full-time equivalent numbers. I think that 51%, 53% when you strip out the kind of enhancements, still gives us a clear line of sight to being able to get to less than 50% on an enduring basis by the end of 2019. As we get closer to it, maybe as Bernard says, it's a bit dull, but it's clear to us that we are actually back on target to make those targets. The last line is exceptionals, which is EUR 14 million.
Which is pretty much nothing or immaterial, but it is a mixed bag of pluses and minuses. We have gain on portfolio sales, of which there was one significant one. That's a really good signal in terms of the levels of provisioning, the fact that we have always said we believe we will continue to be capital neutral or better as we move through our NPE stock. On the other side, customer redress , the major part of that being a signposted increase of two new cohorts in our tracker mortgage review. Restitution and restructuring costs are really the cost of running the machinery and continuing to run the machinery even at an increased intensity as we seek to close out on that. Termination benefits, a small number.
Property strategy, I think that this is the last leg of, as Bernard said, moving our business to the place where it's aligned with the strategy we have. That might actually improve in the second half. IFRS 9 costs. By the end of this year, we should have IFRS 9 as a BAU structure. It's been a long 18-month program. I think those are clearly costs which you don't see on an ongoing basis going forward. Turning to the balance sheet. Really, again, the messages here are, this is a balance sheet which is really well capitalized, which is highly liquid. That liquidity is stable because we are effectively funded by, loans are funded by retail deposits, and therefore, positioned for growth in an economy which continues to normalize.
I'll take the individual bits of this on the coming slides, but the main other point are, liquidity metrics are not quite embarrassing, but they're certainly accommodative. Our capital figure of 17.6% and our capital generation shows very strong underlying business. The customer loans, just to disaggregate this, looks like net loans EUR 60 billion to EUR 59 billion, and I'm going to say it's growing. The reason for that is essentially the IFRS 9 introduction meant that our opening balance is EUR 59.7 billion, and we have grown net loans slightly. That isn't hugely impressive as a figure on its own until you start to look at the disaggregation. NPEs, particularly as we had a singular portfolio sale, and we also did, at a BAU level, EUR 1 billion of restructuring at the same time in the first half.
That means it's certainly a beat for us in terms of the progress we've made on that versus plan. That's compensated by increase in the performing book. Performing book going 53.7 to 55.3, demonstrating essentially new lending, outstripping redemptions, building quality, building asset quality. All of that being done in markets which are partially or maybe arguably only 50% of the way to normalization. Even I think our Goodbody, friends have mortgages and housing supply figures in the marketplace, and people are starting to converge around accepted numbers in terms of new house delivery, and it's still only approximately 50% of expected, of need to clear. Equally, SME is a market which is on the turn, but there's still quite a bit of deleveraging.
While that's happening, we are actually building our performing book, and as I always say, those two discs on the right-hand side, they should align the front and back book as those markets normalize. Turning to asset quality in a little bit more depth, 27% reduction or EUR 2.7 billion to EUR 7.5 billion, which is now a 12% number, and I'll take you through it. Our new post-IFRS 9 NPE walk, but you, again, take the provisioning level away, and we're at EUR 5.1 billion. You take away what's in probation, and you're down to EUR 3.6 billion. These are numbers that were certainly a long way away when we were at EUR 30 billion, three or four years ago, at EUR 30 billion. IFRS 9, there is an impact.
I'll walk through that in a minute, and the adoption of definition of default, which is the regulatory definition, which is not actually going to be mandatory until early 2020s. We have a net credit impairment. Again, right back, we're seeing, again, that as we work through, we are better than capital neutral, and we had a very successful portfolio disposal, which it may be forgotten now, but that was into a very choppy market in terms of politics, in terms of potential legislation. What we saw were the buyers stayed at the table and there was considerable competitive tension, and therefore, a very significant result in terms of profit over our provided level. This is a slide redesign, which we spent, I'd say with every investor, quite a bit of time on over the last 18 months.
This is now the IFRS 9 version of that. It's taking from the left-hand side, our IAS 39, EUR 10.2 billion year-end number. We basically have a harmonization which is a plus and minus. We had an increase as our definition of default actually widens the net in terms of the universe of NPE. We also, on the flip side, were able to release some of the loans that were in extended probation or trapped potentially for a longer period. That gives us an opening number of EUR 9.6 billion in terms of unlikely to pay, which is a bit of a combination now of what was impaired and what used to be not impaired because it was over-collateralized. All of that walks you through EUR 1 billion of BAU activity, redemptions and restructures as FSG work our clients through, portfolio sale of EUR 1.1 billion and down to EUR 7.5 billion.
As I say, at June, 7.5 NPE number, 0.9 and 0.7 of that in old money or in IAS money, essentially being pure probationary or probationary subject to collateral disposal, so would have been sort of post-treatment. You take the provided amount away from that and you're at a 5.1 level of NPEs. That would be three and a half untreated or unstructured. That is our new way of looking at this, you can see from all of that we have the momentum, and you can see how we get to a normalized balance sheet. I'll speed up from there. This is again, a little bit of a conversion, old money to new money. We used to have a satisfactory, watch vulnerable, criticized. We now have strong, criticized NPE in terms of our definitional.
On the right-hand side, you just see we expect, obviously, out of probation, a flow through BAU restructures and likelihoods portfolio sale, a level of portfolio sales or other activities to get us down to that 5.7. This slide I'll get through quickly, it does have a couple of really important messages. First one is that as you look at each of these portfolios, we are making progress. Residential mortgages, which is considered to be intractable in an Irish context, 4.8 to 4.2. That's a 12.5% reduction in the half. Very few other economies would have that in any portfolio, or you would see that. Other personal, down by 33%. The property and the business lending lines from EUR 2.9 billion to EUR 1.7 billion and EUR 1.9 billion to EUR 1.2 billion, clearly benefiting from both BAU and portfolio sales.
All of that means we're getting through all of the aspects, there aren't ones that are set to one side, and the coverage is actually increasing. Our coverage should, by simple arithmetic, go down. Our coverage should go down by virtue of the fact that we're restructuring the more of the higher coverage portfolios, and yet we have increased the quality of coverage from 27% to 32%. Funding structure, main story here, we've talked about liquidity metrics, is really MREL. We've had two issuances. We have a EUR 4 billion expectation or need by 1 January 2021. We've had two issuances, both successful, one of a five-year, one of a seven-year, one slightly ahead of plan, one slightly behind plan when you go back to what we said in terms of 150 over mid-swaps.
Also, we're able to do those in the latter into pretty choppy markets. We now have an upgrade. We have effectively two of the rating agencies giving Holdco IG status. That opens up the universe of potential of funds with mandates to take us. The MREL program, both in terms of achievement to date and what's open to us now in U.S. and European markets over the next two years to achieve leaves us in very good position. Capital ratios, already mentioned, 17.6%, 130 basis points of production. There are a couple of things just to note about that. Obviously, we have the signposted IFRS 9 impact of 50 basis points. We thought it was 70. It was a little bit less than that when we actually finally finished the analysis.
We do have now in our AFS portfolio, which used to be held to maturity but is now mark-to-market in a post-IFRS 9 world, that gave us a 40 basis point impact, negative impact. That is probably why some of the numbers are a little bit higher in terms of expectation on 17.6. Our RWA line pretty much stable with new lending been offset by IFRS 9 and redemptions. We are not getting and have not got the RWA impact of the portfolio sale come through in the first half. That, again, will I can see Eamonn looking at the numbers here wondering why it didn't add up in his head. Last, to sort of recontextualize this in terms of medium-term targets. 253 NIM, and it's been in that region, 250. It's been 250 for two periods, stable and well into target territory.
Cost income ratio, good line of sight, and clear focus on cost to get to a sustainable less than 50%. Fully loaded, we're clearly building capital, and we still believe 13% is the right percentage. We're clearly building capital so that it can be released, and we have a line of sight on that release because we have line of sight on the normalization of NPEs. Our return on tangible equity. Again, obviously getting into the double digits on an ongoing basis is certainly a target that we believe we can consistently achieve. Dividends, we're still in the same place, trajectory to normalize payout of between 50% and 60%, and ultimately, by way of special or buyback, the ability to give the excess capital to shareholders upon normalization. That is it from me. I think we'll go to Q&A.
Okay. Thank you. I think we have a couple of mics in the room. Who's for the first question? Eamonn.
Eamonn Hughes in Goodbody. Thanks, Bernard. Maybe just one or two maybe on lending, and maybe one or two on capital, if that's possible. Just in relation to lending, you kind of half invited the question in your conversation around the mortgage market share. Maybe if I can kind of open with that in terms of thoughts. Clearly there has been many price moves over the last quarter, the last few months. Maybe kind of get our first formal chance to get your views on that in terms of the competitive dynamic. I suppose your mortgage market was up 11% on new lending in H1. Ireland was up too. Does that mean that SME lending was down maybe early teens? Is that a Brexit impact? How should we be thinking about that? Maybe that's just new lending.
Maybe just in terms of capital, we had the move from the Central Bank over the summer on the countercyclical buffer. Maybe again, first chance to maybe chat about that in terms of Mark, you just touched there on we're very happy with 13, maybe elaborate on that a little bit more. Also, we've had the cultural review, conduct issues. We talked about NPEs, Mark, in the meeting there, or in the presentation around we can see line of sight of getting down to a level where the excess capital is available. Maybe does the cultural review or issues like that kind of cloud that a little bit? I'll leave it at that.
Okay. I'll take the first pieces. I'll make some comment on the culture piece, then hand over to Mark for the capital and any longer term impacts. The issue on pricing from our point of view is, we've had this debate many times, I suppose this at various points in time, there's always been some pricing action in the market, there's no doubt that there's competition in the marketplace, people are out there fighting for market share. I think what we've said fairly consistently is we're not going to be driven quarter and quarter by market share statistics. We're not going to be driven by a desire to hit a certain market share at any point in time.
We think we've a long enduring strategy that's going to make sense in this marketplace, which is going to deliver growth for quite a long period of time. What we've done has been obviously to invest in the back book, in terms of our standard variable rate offer, we think we've got a very stable back book, we have priced that already to a level where it gives us a lot of comfort on the consistency of that back book, the statistics support that position. We think that's fair to customers, we think that a large group of customers understand that and can get that. We also understand there's other ways in which customers are looking for value, sometimes that's a fixed rate offering, sometimes that's a cashback offering.
We use the EBS brand as the challenger brand that we have in the marketplace, particularly around the fixed rate piece in terms of the cashback offer associated with that. We think EBS will play that role, from time to time, its market share will change, we get to learn quite a bit in terms of the dynamic around that as we can look at that. We've effectively sort of a living experiment in terms of how that positions. We're very comfortable with how the core market for AIB plays.
I think what our customers are clearly demonstrating is that if you can give a really good experience, if you can constantly improve that experience and make it market leading, and you have a very consistent position on price and customers kind of can understand how you're valuing that and valuing them, then actually you can deliver very strong market share. The core franchise for AIB has been very stable through all of this. The position around some of the issues on front book pricing from time to time, that'll happen. The switcher market per se, is up quite a bit. What a lot, and this is experienced from other marketplaces, and you'll have seen it. You can create a competitive dynamic around a switcher marketplace, which isn't necessarily the highest quality business.
In fact, a lot of the competition that's taking place at the moment, and certainly headline terms, is very short rate fixed. It's not really fixes. 2 years is not a fix. It doesn't take you out of an interest rate cycle. It just locks you in at a first point, and then given the cycle that we may be heading towards, it may cause you a challenge later on. That is absolutely the dynamic that plays out in other marketplaces, and you can see that. Most people ended up switching within their own institution. Two thirds of people who switch in the U.K. switch to themselves. You can create a lot of momentum, you can create a lot of noise, but I'm not sure you create the quality of the underlying book.
Our focus has always been quality, volume, price, get that dynamic right, short, medium, and long term. Not driven by market share. We are the largest lender to the mortgage market. Our stock is 32%, our flow is 32%. We will look at it from time to time in terms of things we need to do to change, to react to the market, but we're not going to be reactionary. Oh, sorry. That was one point. Yeah, in general, what I've said about the SME, I think I made the comment earlier, is the SME market has definitely been a bit more sluggish than we thought. Our new lending side has maintained the position, and you can see that from the charts in terms of the new lending piece into that marketplace. There will have been some redemptions and some acceleration of redemptions.
I don't think it's quite as high as you said. I don't have the exact stat in terms of, but I'd say single-digit positions on small SME. If you take the overall SME market and you take business, sort of larger SMEs into account, that isn't the case. They've counteracted what's happened on the small SME side. There could be some Brexit effects associated with in terms of people thinking about their business. There could be some de-leveraging. Overall, the market for SMEs has definitely just declined a little bit. It's very small. I think it's EUR 0.1 billion over the period, but it didn't grow, which was probably the piece we were expecting.
The conduct and culture piece, I think we all have to accept the fact that not just banking, all industries face a completely different conduct agenda than existed three or four years ago, and you can see it playing out in technology. You can see it playing out across every industry. I think what we're saying generally around this is we accept that's a feature of where we're at. You have to get your culture right. We welcome the Central Bank review because I think it creates a baseline. Now, while there was some excited commentary in the media on it, when you actually read the reports, they're not saying exactly what the headlines are. They're much more balanced in terms of their position. We obviously have our own report, which is on ourselves.
We're in agreement with the actions that exist in terms of what we're trying to do, because we think we're focusing on the customer and trying to deliver against it. There's no big news story there from our point of view. We need to do more, we need to keep going on it, but there isn't anything brand new in that direction. However, we think that everyone needs to accept the fact that this conduct agenda and the standards in which we're all held to, which is a good thing, will rise and continue to rise. We don't want anyone to think it'll never ever be an issue that we talk about again. I think all industries will face this issue and need to invest heavily to get it right over time. It's an enduring piece from that point of view.
Just on the capital side, I think the first question is the countercyclical buffer, and the arithmetic effect is clearly given our levels. It'd be 0.71%, I think, in terms of increase. That's not hugely relevant. It's more in terms of our 13% number, our target fully loaded, that we consider it. The analysis for us is that we can absorb that countercyclical buffer, and we did put out an RNS at the time saying we are comfortable with the 13% in light of that.
Yeah.
That's not necessarily relying on any reductions or any impact in terms of changes in NPE over time. It is ultimately a transitional based number that is relevant. We think we can. We know we can absorb. The point I would make is, though, that is not a limitless discussion. If there are other buffers, which are added, then we would have to come back to renew that. However, that would be an industry-wide issue.
On page 38, where you actually set out the portfolios for the property and non-property portfolios, you can see the business is growing. The NPE issue does have an impact on the balances, but otherwise it's growth.
Your second part of the question was, does any of this change our view in terms of capital return? From the very outset, this has been a story which is as we normalize the balance sheet, as we are capable of evidencing that that is so, in other words, we have reached the point rather than are on the road to the point, then we will be able to return the excess capital over the 13%, so at 17.6 today with 130 basis point kind of run rate of generation. That still is what we believe is the case.
Right. Stephen.
Thanks. Good morning. Stephen Lyons from Davy. Just a couple of questions from me, please. Just firstly, on the capital outlook, I'm just curious as to whether you got any update on the ECB review of risk weight models and any thoughts as to where the RWA balance might evolve from here. Secondly, just on the WIB business, very strong lending growth in the period there, up 50% year-on-year. Just if we get a bit of greater detail, I know you called out syndicated lending and real estate finance, but a bit of greater detail on maybe other activities there and sectors and the sustainability of that growth rate. Presumably, it'll taper off not quite 50% thereafter, but some sort of likelihood of where that might go to. Thanks.
Mark, do you want to take the capital piece? Yeah.
Yeah. I'll take the simple one. It is reasonably simple because what we have basically said is our understanding and our expectation on RWA would be point to point, 2017 to 2019, that we wouldn't have much increase, that it would be reasonably flat, and the balance sheet would have slowly expanded. That, we believe, is still the case. We have effectively no feedback on TRIM to us at this point, so it is an inexorable process, but it is glacial. That is effectively the world of Frankfurt. We have to follow in with the next model, and that will again, if the timelines are anything like this, it will be well into 2019. Remember, we're only getting an evaluation of what our redeveloped current IRB model.
Anything in terms of efficiency is very much at the back end of any process, which is even more slow than we would originally have thought. All of the experience of TRIM is at best neutral. We have said we didn't expect any great increase. We certainly don't expect any improvement. It will not be a positive factor. Thereafter, I think you're still looking for efficiency in the long run as we go from standardized for a number of our books. It's the same story, it just looks like taking a longer period of time. That means that as we get outside our original 2017 to 2019 period, then you should probably see both the volume and net loans and the RWAs move in reasonable sync.
If you look at the question on what's happening on the corporate wholesale institutional side, I'd say overall, the economy is strong, so there's good activity in the corporate markets generally. What we see coming out of the more mainstream corporate, and what we see as I said, structured or buyout-type markets, decent level of activity, so you're seeing some growth there. The main growth is, as you say, probably coming in terms of the growth piece, and the change year-on-year from real estate finance. I think we're going to be facing into two time periods. We're still in a growth phase.
For the reasons we talk about in terms of the new builds for quite a period of time, there's still going to be more new builds coming on, there's going to be more finance available, both in terms of working capital finance to support that, and in terms of the assistance that exists, albeit at lower debt levels for actual property transactions per se. I think we're still in a growth phase there. Probably, while not at the same sort of level, I wouldn't guide you into that sort of growth phase, but you're not going to see a big retraction in respect to the residential side there. On the commercial real estate side, I think that's kind of normalized at this stage here. I don't think you're going to see big growth coming out of the commercial.
We will then get to a point where I think, I'm assuming, supply and demand works well, which of course it never works perfectly. When supply and demand are closer to matching, then you would expect the level of real estate finance that we would provide as somebody who targets 30%-40% market share to normalize over the period. I think for the next year to two years, maybe three years, because this part will be leading, you would expect to see bit of growth coming out of that. It should normalize as the market normalizes. That is going to be dependent on where the marketplace gets to. Hopefully that's helpful.
Thanks. Owen Callan from Investec. Just two quick questions. First one on dividends and capital. Obviously, you're adding significantly to the excess capital on an underlying basis as well as some of the one-off items helping out as well in terms of disposal of NPEs. I'm just wondering why you chose not to have an interim dividend, for instance, to help with that normalization process on the ordinary dividends before we even start to get to the stage where the special dividends or buybacks or something further down the line. Just how should investors and the market think about that process? Do we need to do the full normalization of the ordinary dividend before we can really start to look at the specials, or could they cross over to a certain extent? The second question around tracker mortgages.
Obviously, I think six months ago, we probably had hoped that the tracker mortgage issue might be closed off, whether formally or informally, by the middle of the year. That clearly hasn't happened for a few of the banks involved. I'm just wondering how much longer does that process have to go. Could it start to move into 2019, given where we are today?
Mark, do you want to take that?
Yeah, I'll take the dividend one first. This is a pure reiteration in the sense that we are exactly on the trajectory we originally set out, which we started at 25% of underlying profitability paid out, growing to 50% or 60%. We haven't yet had any conversations about interims. It's possible that we would start to look at that in 2019. That would be a kind of normalization of dividend flow. Equally, we have been clear that the excess capital we would expect to be available effectively, having reached normalization, having that gone through an audit cycle, therefore, you're into the first quarter of 2020 before we can look at the serious lump of capital coming back to shareholders. That being by way of special buyback or effectively a negotiation with investors as to what is the best form for it to come back.
It's really, Owen, it's an absolute no change.
On the tracker question, we don't control the timing of that because ultimately the Central Bank of Ireland is the determinant of whether that program is finished or not. What we can say is that, and we said it in this results set, that we think we're entering the very final stages of that in terms of what we know. In terms of any of the groupings and discussions with the Central Bank of Ireland, we've agreed and aligned on all of those. Obviously they have to complete their industry piece, and there can be tos and fros associated with that. The main reason that we would say that we're always open to and available to deal with this issue is that there's an appeals process. We don't control the appeals process. Obviously, people can appeal. If they don't like the outcome and appeal, they can go to an ombudsman.
If they don't like the outcome of the ombudsman, they can go to court. We can't say that this program is finished until quite a lot of time. What we can say is all of the work that we've done and all of the work that the Central Bank have done in discussion with us is effectively in the final stages, and anything we know is done and dealt with. We're not expecting anything from that point of view. What we can't say because of those issues is that this is a closed program at that point in time. Obviously payments to people, we know 96% done at this stage, within the next six weeks, 100% done. There are other pieces that we don't control. I want to just ask if there are any calls in from Okay, two calls.
We might take a call from the U.K. We might get one. To there.
We have five calls on the line at the moment. We'll take our first question from Alastair Ryan of Bank of America.
Thanks very much. Good morning. Just so as I understand it, the TRIM is now basically wrapped up with the review of moving standardizers onto internal models. The whole thing's just drifted off into the distance. Is that correct? First, second, what's the RWA relief, please, from the loan portfolio sale that took place? Is that coming through in the second half? Presumably, that's an increment to capital. Third, the current account inflow, very strong in the quarter, as you say. Was there actually a cost then in effect because you've got the current accounts in and you've just held them in cash. As you rebalance the funding, there's actually a bit of income to come from that new high-quality funding, but that actually cost you. Lastly, on wealth, are there any signs that there's going to be momentum building in that?
One would imagine your customers would be looking for more investment products as their current accounts and their savings aren't paying them anything. As you say, that hasn't happened yet, is there any reason it's about to, or that's more medium term? Thank you.
Okay. That was a short question, Alastair. First of all, I have to go back to remember the TRIM suggestion was the mix from standardized and IRB. It has always been the case that TRIM and review essentially will work in tandem. It's our redeveloped IRB, which has been the submitted model. All of the sequence of this, in terms of TRIM and submission, will be all IRB first, all standardized, coming later. That has been our understanding. My point on the timing is just because it is glacially slow, it is definitely, it seems to us, an elongating timetable. The benefits, to the extent that there are, will come later for us. On RWA, I think you were asking on the impact, capital impact. We're sort of straddling two periods in terms of capital impact.
We have a P&L impact on the disposal, you're only seeing a fraction of the RWA impact come through. There's probably another 20 basis points to come through in terms of capital impact on that. Already the profit had been booked in June. The third point was current accounts. Yes, we are the beneficiary of a considerable inflow of liquidity that is clearly a net cost, as you see it in the other asset side, as we essentially pay the price for that liquidity. Our response to that has to be graded. Specifically in the non-retail area, as in excess probably EUR 5 million, we would very carefully calibrate negative interest rates and increase those so that we do not attract more liquidity in the shorter term. The last question was wealth, I'm not sure what the actual question was.
Okay. I think, Alastair, your overall question is at what point in time do you think we might see some income characteristics or discussion coming into that? I think we've always said this is a slow burn issue in terms of how we look at this. The Irish market definitely has, for the next quite a long period of time, the opportunity to deliver, given our franchise and our customer base. At this stage, we wouldn't be guiding anything, Alastair, in terms of starting to factor that into the model.
Very clear. Thanks very much, gents.
Thanks. We might move on to another call from the line.
Next question comes from Chamsol Gyun from UBS. Please go ahead.
Hello, Chamsol from UBS. Thanks for taking my questions. First one is on your investment spend, the guidance of EUR 200 million to EUR 225 million per annum. Can you please tell us how much you have spent in the first half, and if possible, how much was included in P&L and how much was capitalized, please? Second question, sorry to come back to the mortgage strategy, but I see that some of your peers are competing intensively on fixed-term mortgages, and I think they offer even five-year fixed mortgages lower than your variable term mortgages. I just wanted to ask your view whether it could be an option for you to focus on fixed-term mortgages, at the same time, still providing competitive rates to your customers on variable mortgages.
One minor question related to this, I think your disclosure of first-time buyer share of 36% is really helpful, and may I ask what is your share in switches, and what was your shares in these two products a year ago, please? Thank you.
Okay. Well, I'll take the latter part of the question, then Mark might see what details we have disclosed in respect to the first piece. I think broadly we have addressed the issue on the mortgage strategy in terms of how we're positioning. To add something to that, I would say, obviously, in terms of a net interest margin impact, anything you do on the front book pricing around fixed-rate is effectively negligible because you're not dealing into the back book. It's an easy strategy to turn on at a flick if you wish. What we've said is it's not part of our strategy in overall terms at this stage. We have a longer-term strategy. We have priced down some of the fixed-rate offerings, and we have offered longer-term fixed-rate across both brands.
It's not that we're not doing it, we're doing it in a measured way. If we need to do it, we can, and as I say, because it's front book pricing, in effect, it has very little impact. It's an easy mechanism if you're trying to get a bit of market share on a flow basis, we don't have it as a long-term strategy in terms of building that recurring income on the back book. That's really our position in respect of it. Mark,
Yeah. Our disclosures are limited in relation to the investment spend, the investment spend, as you say, is EUR 200, EUR 225. It is well progressed, probably over 60% of that already spent. You won't see it hitting as a lot of it is assets under construction. I think that they were the main points that we still expect that to be the level of spend over the year.
Sorry, can I follow up on the share, please?
Sorry. The only statistic we did disclose at this stage was in terms of first time buyer piece, that was because people had an interest and inquiry around that before. We haven't disclosed comparability and that, I'm not going to do that on a fresh basis at this stage. I would say that switcher is not a key market for us in terms of our activity. We have a position that obviously we facilitate switchers, and we will pay the legal costs associated with it, which on average is a EUR 2,000 piece. We cover the cost of that. Our core proposition is around the AIB customer base, 36% market share. We're targeting that core customer base. It is not something that we will target in terms of switcher activity.
Basically, people who are targeting switcher activity tend to use teaser rate pricing around short-term fixed rate pricing as an attraction, which is inconsistent with where our strategy is.
Very clear. Thank you.
Okay. Take one last one on the phone and then just check back in the room. Next question comes from Rahul Sinha from JP Morgan. Please go ahead.
Hi. Morning. Maybe if I can have two broad questions, please. Just the first one, going back to Project Redwood. I was just interested in whether there was any impact, I think you referenced market volatility at the time, whether you thought that there was any impact of this volatility on the size of the disposal, as well as maybe the pricing. Maybe can you comment a little bit on the general pricing outlook for NPEs in Ireland, if that's changed in any way? The second one is just on some of the comments that Bernard has made in the press around pricing and clearly the impact of the countercyclical buffer. I was wondering if you might have any thoughts about the link between pricing and capital buffers.
I was just wondering if repricing is a viable response for the industry, if there was a further increase in capital buffers, and if there is scope, what are the areas in which the industry could look to reprice? Thanks.
Okay. Just on the first, on Redwood and its impact and the impact of, I think, the politics on pricing. At the time that Redwood was really coming to the market, there was a significant amount of political noise. At the time, we would have said that there were two possibilities. One, that the buyers would essentially leave the market, or two, that the potential for legislation which would limit their ability to realize their investment would actually mean that there was price chipping. The experience actually was, and particularly, was very much counter to that. All of the buyers stayed at the table, and there remained a considerable level of competitive tension, thus resulting in what we thought was a very good result in relation to that portfolio.
We can't assume that that remains the case, but it certainly is a good data point that in a pretty volatile market with a bad backdrop, there was a very successful execution. The second question.
I think the second question around pricing, and you've asked specifically in the context of capital and if there's any change in pricing that would take place as a result of growing capital requirements. Well, obviously, overall, when we look at pricing, we factor in the capital associated with it, the risk weights, market behavior, there's a whole series of things we factor in. For now, and given that we've already issued the commentary on no impact in terms of our guidance on capital because of the countercyclical buffer, it's unlikely to see how those two would play at this stage. Were capital levels overall to continue to increase, well, there clearly will be an impact that must be factored in terms of the cost associated with each individual product. That plays a little bit back into your RWA conversation.
We haven't locked anything down. It's very flexible. For now, there is nothing new that's come in that'll cause us to think about it.
Thanks very much.
Okay. Switching back to the room now. Is there any other questions in the room? We probably are in our last sort of 10 minutes. Thank you.
Keep it short.
We might try and keep our answers short as well.
Ryan McGrath, Cantor Fitzgerald. Just on MREL issuance. You've given good guidance there on the timeline of it. Just wondering if the recent rating upgrades may cause you to front-load any further issuance, and if you'd give color on kind of what you were looking at in terms of non-senior issuance, maybe even non-EUR issuance going forward.
I think there are two competing things. One of them is liquidity is hardly something we need more of. It would be our sort of general approach to markets and general approach to things that we have to execute by a certain time that when the market's open and you're ready, you go. Given that, we would have a timetable anyway, which is probably pretty much front-loaded to start with. The fact that we have now got IG ratings, and that gives us a considerable ability, one, in terms of the U.S., but also a much bigger universe in both U.S. and Europe, facilitates making sure that we at least hit those timelines. In general, we will probably go earlier rather than later if markets are good.
I think it was already expected that we should get there early. All because you don't know how many other people, or you do know how many other people are out there, and that there is a big queue in relation to this.
We're going to take one last in the room and then one last on the phone. Thank you. It's working its way over.
Thank you. Diarmaid Sheridan from Davy. Two quick questions, please. Just obviously on the exceptions, Mark, you called out a lot of positives and minuses in there. How should we think about that for the second half of the year and maybe into 2019 if there's anything we should in particular think about? Secondly, clearly a very strong result on the impairment with the write-back in the first half of the year. If we look at the economic outlook as you alluded to, Bernard, it's still strong in the next year. Beyond that, should we still see a level of write-back coming through from your provisioning on the stock, or should that begin to normalize within the next 12-18 months, I guess? Thank you.
Yeah. Answer to the second one is, yes, it should begin to normalize. It's been a bit better than we actually expected, so it probably is a little better in the second half. We continue to stick to the fact that the level of provisions we have should be appropriate. We also take a prudent approach to it. We have obviously done more than we might have expected, so you're going to see a smaller level of flow, therefore a smaller absolute nominal as we go into the second half in relation to provision write-backs. Your first question was-
On exceptions
On exceptions, yeah. As you tick down through them, clearly, the portfolio sale, we'll have them when we have them. The property, I would say, we have really finalized in terms of how we optimize and how we reposition ourselves and therefore have our owners lease provisions. Again, not something you'd expect to see an increase in. IFRS 9, yes, there's probably some element of it in the second half, but we are and should be BAU by the end of the year. There's still a fair bit of kind of redevelopment of models, et cetera, as we bed those down.
In terms of the other areas of restitution and the machinery around restitution, that should start to tail off as we get into Q3, Q4 of this year, subject to, as Bernard said, the expectation or the hope that CBI closes out and we're back to the normalized levels.
Okay. On the phone.
Next question comes from David Locke in Deutsche Bank. Please go ahead.
Morning, Bernard and Mark. Thank you for taking my question. three quick ones, I hope. First one is on other income. I appreciate that net fee and commission income has been very stable. We should kind of continue to think it will be stable. In terms of the other elements within the other income line, I just wondered if you could give a bit of color on where you see these landing, particularly kind of out to 2019. Conscious that the dividend income is, of course, going to be coming out the further out we go in 2020. Also just in terms of the gains on disposals, the restructured loans income, how should we be thinking about forecasting this out to sort of 2019? Second question, just clarification on costs. Could you just remind us what the future wage inflation you've agreed with staff is?
Finally on EBS, I know you cut the mortgage pricing there in May. Just wondered if you could give any color on the kind of flows you're getting between brands and if you'd seen any change, any kind of significant change perhaps, since that pricing change. Thank you.
I'll take the first two. Yeah, stability of other income, the other elements. If you ticked down through them on the page, the main part to do with kind of volatility of derivatives, that sort of bounces around a little bit, and it bounces around in the +EUR 15, -EUR 15 over the years you see it come through. The big move in the half-on-half was that EUR 146 down to EUR 40 on Bs and Cs. The Bs and Cs are upside sharing. We would expect that to be de minimis as you go through 2019 and 2020, because we should have, at that stage, worked through all of those. They were largely speaking upside sharing on significant restructurings, and those restructurings being property and business related.
I would see all of those tailing off on a reasonably linear basis as you go out through the next two years. The other question you had was costs and wage inflation. Wage inflation, we had actually agreed at 2.75%, and that was a 2017 and 2018 agreement. As I said, we do not have an agreed position, but we are in full employment, kind of, or running towards full employment. I think it would be the right kind of thing to expect a continuation of those kind of levels. Wage inflation certainly won't be going down in that period.
Although we don't want to negotiate over the airwaves here.
Of course.
The other aspect to look at is obviously where the brands and the mortgage brands are positioning. If I take the sort of time period for your question as sort of the last 12 to 18 months, in terms of the pricing behaviors that we see. On the AIB brand, what I'd say is we've seen a very stable position, some growth coming in. As we've taken the actions to improve the customer experience and to improve our ability to interface, we've seen a very stable to growing position in terms of that core brand offering. In terms of the broker and the EBS positions, those do move around a little bit more in terms of some pricing positions. At this stage, it's still quite early because the flow through in terms of application sanctions to drawdowns can vary quite a lot.
Particularly, in what I might call the more transient nature of the switcher market, you will find people have multiple applications, so it's harder to call how they flow through. I always find it easier to see a prediction of how an AIB sanction will play through versus something that comes from the other brands. It's too early for me to give you anything useful or to call at this stage, but we've certainly said that I think the pricing action will cause more activity, yes. How it plays through, we will see over the sort of Q3, Q4, because that's when these things play out. Okay. We're going to call it at that stage. Thank you very much for the time. I know there'll be other questions and queries. You all know the team. Thank you for your time this morning.