Jose Garcia-Cantera: Yes. Thank you. So, morning, Carlos. You are right. Loan growth was zero, but risk-weighted assets grew more or less than 2%. Half of that growth is due to FX as we consolidate the Latin America, basically, the peso and the Brazilian based assets in to the Group. Of the other half, half of the other half, so a substantial amount corresponds to a stock finance. And this is due to the recovery of the new auto business in Europe. This will eventually translate into auto loans. So, this is obviously short term that will eventually lead a higher profitability going forward. When we look at the outlook, as Hector said, we don’t expect any significant regulatory or supervisory capital impacts in the second half of the year.
We see no inorganic charges in the second half of the year. Obviously, it looks like the available for sale portfolio valuation also will stay relatively stable. We see improving profitability, as we have mentioned, particularly driven by higher NII in the second half. An increased weighted assets should be probably under control. So net-net, we see a stronger capital – organic capital generation in the next couple of quarters again, leading to a capital that will remain well above 12% every quarter and building up sufficient capital to be above 12%, post BASEL III.
Begona Morenes : Thank you Hector, and Jose can I have the next question, please?
Operator: Next question from Alvaro Serrano from Morgan Stanley. Please go ahead.
Alvaro Serrano: Hi, good morning. Thanks for taking my questions. A couple of questions please from my side on US and Spain. US has obviously done much better in provisions. I know you’ve touched on it a little bit, maybe you can give a bit more detail as to why the provision was so low in the quarter? Is its collateral? Is it default rates? And when you think about the rest of the year maybe you can update us about the guidance. Would you expect in costs of risk for the full year. I think you gave us some color in Q1, maybe an updated view on the moving parts there. And second question on Spain. Deposit is much more stable this quarter, previous quarter. I wonder if you can give – again a bit more color on the deposit migration and remuneration and, and when do you, what would you expect NII to peak in Spain, I am extrapolating, Spain, Portugal, which I assume it’s the same dynamics. Thank you.
Hector Grisi: Thank you, Alvaro. Okay, let me give you our outlook in the US, okay? And I explained it – it’s basically the same dynamic I explained in the first quarter, okay? Credit provision, as you know decreased as credit quality is remaining robust and credit net charge-offs actually, what we called realized losses show better than anticipated performance. And this is basically on the back, use prices continue to be strong, okay, as I explained and declining at slower pace that we previously anticipated. The changing out to loan portfolio mixed of our subprime, do you remember that I told you that before 2018, we had a lot more subprime than Prime and the change on the mix has helped. Also, we have robust and better than expected labor market in the US, okay, which is sustaining that, okay?
And out of customers that are delinquent exactly as I was explaining in the first quarter for more than 90 days are rolling into charge of status at historical low levels, okay? Normally, they were above 90%, 95%. Last quarter they were around 59%, this quarter around 67% percent, okay? So it’s still much better than we expect and much better than it was actually happening pre-COVID, okay? And in 2023, we expect cost or risk to continue on the normalization at around 2%. And after two years of artificially low figures given COVID et cetera, as I was saying, normalized levels should be below pre-pandemic, cost, or risk at around – you remember, pre-pandemic was around, 285, it’s never going to get there, okay? Because of the change of mix and what I was explaining, okay?
