Ms Catherine Moroney:

I will engage in a broadly like-for-like comparison. The current German bank lending rate to customers, in Deutsche Bank, is 2.5% for one to five years, and 2.8% for one to three years. It is just under 3%. I will say at the outset that European banks, in their bank lending rates, do not include all of their charges. European banks have a tendency to charge arrangement fees and administration fees on top of the margin. That is certainly not a practice in AIB, except for very large numbers, for example if somebody was financing a bridge and €200 million was involved. We do not charge arrangement fees for the general customer. That is quite a significant difference when APRs are compared as opposed to interest rates, which is the all-in cost. Taking it from there and taking it that German rates for customers are just under 3%, we have a series of published rates and negotiated rates for bigger ticket loans. That will reintegrate in a moment. This is a sensitive area because it is competitive and, therefore, I will stick to the average banded rate. The average banded rate on our book - the factually correct one, checked by our finance unit - is 4.75%. It is more expensive than the European market. I will come back to the reasons for that in a moment. That is the average. There are higher rates. The negotiated rate is lower than that. By negotiated, I mean that when numbers move from €30,000 to €50,000 and to over €300,000, there will be a higher rate.

Before I move on from Germany and to our own book, German businesses tend to be larger than ours. Europe defines a small to medium-sized enterprise and we use this in some of our reports. A company with a turnover of less than €50 million and an asset base of €43 million would be considered very large here. A good parameter in the SME code in 2015 went as low as €10 million. That was done to ensure that as many businesses as possible had the protection of the code. That net was, understandably, cast wide. That moves to the issue that the cost of doing business in countries such as Germany, in reality, can be spread over bigger ticket deals and they get the negotiated blended price more often than we do. I am trying to ensure that I cover all the Senator's questions. I have covered deposits and lending, and I think that grading and risk analysis was his other question. I should say, on the costs, before I finish, that other European countries are bigger so their operational costs are spread out. Those margins are from before the cost of credit risk is taken, which is unfortunately higher here, and the cost of running the business.

We grade our book and it is an obligation with regard to capital rules to make sure that we grade our book. That leaves both the regulator here and elsewhere on the prudential side in a position to be able to see the quality of the book. That was a big lesson from the crisis. While this is competitively sensitive, each bank would grade their books within set parameters. There are scorecards which are constantly monitored in order to do that.

InnovFin recently looked at that for us across our book and benchmarked it against Standard & Poor's. It is quite a robust grading. That is used for a number of purposes, including the good management and functioning of the bank. Secondly, it is used in pricing. We try to use it in a way that is as fair as possible to the overall book. For example, in that guaranteed position I mentioned of 48 hours for under €60,000, we have both variable rates and a fixed rate of 6.95% because it is for very small loans. The smaller the ticket, the more expensive the loans since they are higher risk. We try to blend the grading and give a simplified price point. If businesses are looking for funds for 12 months or longer for that same size and moving up the size curve, we have a variable rate of 5.5%. The customer can have a fixed rate if he or she wants certainty of payment or can stay on a variable rate. Customers can come out of the fixed rate without experiencing great costs. I hope that answers all the questions.