Mr. Jeremy Masding:

Good morning Deputy. On the financial health of the bank I will start with the balance sheet. On the liability side of the balance sheet we are growing customer current accounts and our deposit base remains stable. Our equity base, as members are aware, was strengthened through the initial public offering, IPO that we delivered in 2015 and we also have some other capital instruments. In terms of funding, the balance sheet is much stronger than it was. Perhaps the best example of that is when this team started the bank's funding gap - into which we had to borrow money from the European Central Bank - was more than 40% of the balance sheet. It is now pretty much down to zero. I believe this is an indicator of strength.

I shall now turn to the asset side of the balance sheet. On new mortgages, we have picked ourselves up off the floor, dusted ourselves down and now our mortgage share is far into double digits. When one considers that it was 2% a few years ago, I believe we are putting compelling propositions into the market. As I said in my opening remarks, our desire is to continue to challenge the pillar banks and to provide choice for customers, which I believe we are doing.

With regard to the stock of assets, the Deputy is correct that our non-performing loan, NPL, ratio is elevated at 28%. I will make two points in this regard. Members will be aware the bank has a restructuring plan under which we were obliged to deleverage a significant amount of assets. Many of the cohorts of those assets were actually performing assets. If we do the maths on that the denominator has actually fallen but the numerators have stayed the same. By definition the 28% has increased. I do not think that is necessarily fair on the team because we had to deleverage some assets. Members may recall that last year we had just completed the sale of our UK business, which essentially was a performing business.

Then we get to the NPL ratio, which therefore exists and the 28% is split into two halves. Some 15% of the 28% is actually treated but because of the nature of the treatments they stay in NPLs. It is our job to work those through over time. On the 13%, I would argue that ten years after the crisis, as per my previous remarks - and certainly it is five years since we as a team attempted to solve the NPL crisis at the bank - the team needs to move to resolution. Mr. O'Sullivan has given some examples whether it be buy-to-let deleveraging, assisted voluntary sale or mortgage-to-rent. These are the schemes we need to get to.

I will move on to the profit and loss account. Our net interest margin, which is a key indicator, was 70 basis points when this team started. It is now more than 180 basis points. This gives us the cash to fund growth. In respect of our operating expenditure our cost-to-income ratio is too high. It is more than 70%. That is why we must continue to grow the business in asset growth and in managing the costs. The cost of risk is coming down but it is still high. The bank still has a stock of assets from the crisis in which there still are some defaults. We must manage that flow of defaults.

When everything is taken together, we are operationally profitable, which we have not been for a decade. We are growing market share. We know that the NPL challenge is probably the last big hurdle that we need to try to overcome before, I hope, we give something back to Ireland; a small, well-governed retail bank that competes against the pillar banks. I am pretty clear on the vision. I suggest to the committee that the financial health of the bank is much better but there is still more work to do. I hope this answers the Deputy's question.