Mr. Bernard Byrne:

I do not want to get into a long answer because it would take up too much time but one of the issues of which we are very cognisant because it is common to the lot is where Irish rates are relative to European rates, and how that plays out. If one looks at the overall book of Irish rates versus European rates, in all banks not just AIB, we are right on the average in terms of the European zone in total book when one takes the pricing. Some markets are higher, for example, France, Germany and the UK, and some markets are lower.

On a front book pricing basis, Irish pricing is higher than the European average, but the features of the market are very different. For example, in many European countries, the imposition of fees upfront has a significant impact. The European average is about 43 basis points. In France, it is 87 basis points if the effect of upfront fees is annualised across. Different markets operate in different ways. In the Irish market, this manifested itself in banks offering a significant upfront benefit in the form of a cashback offer. For our core AIB franchise, we felt it right to continue to offer the front and back book benefit in terms of the customers' positions. Any time we make a change to the SVR, we spread it across the customer base. This costs us about €140 million in benefit to the customers. However, the feature of the market attracting particular interest was the cashback offer, which does not come without a cost. The 2% cashback offer comes at a cost to one's position. Effectively, we differentiated the two offerings we had on the market and positioned EBS as a cashback offer for customers for whom cashback is very important and who wanted a cashback position. Interestingly, the changes about which we talked earlier may have an impact on the relative attractiveness of this product in the future. Pretty much all the competitors were offering cashback at the time. We then tried to facilitate switching, if this was important to the customer and was what he or she wished to do, from an EBS brand to AIB. It was not a perfect measure but it was our attempt to match customer choice in the two relevant offerings in the market and to facilitate switching via a benefit of €2,000. If one wanted to move from one to the other, one could.