As investment decisions are made over a medium-term horizon, it is important to consider real lending rates in a medium-term perspective. Borrowers tend to view the nominal lending rate in terms of a desired real rate of return and expected inflation.
Progress in the disposal of non-core assets has been impressive, with most banks hitting or exceeding their targets and doing so at a lower cost to capital, by achieving better prices, than had been budgeted in our stress test exercise.