Here we're going to look at interest and similar income on the income statement and interest and similar expense on the income statement. In order to calculate them, we're going to need two interest rates, one interest income, one interest expense rate, and we're going to need to calculate the interest bearing assets and interest bearing liabilities. We've got them all the way up at the top of our model in the income statement assumptions section. So we start off with the return on average bearing assets and we've also got the cost of average interest bearing liabilities. Well, I can see that the net of those is going to be 2% and I can see the cost of average interest bearing liabilities is 0.8. That means that my return must be 2.8.

So 2.8 return less the 0.8 cost gives us 2% overall. What I now need is to work out what my interest bearing assets are. So I'll start a sum function and let's go down to our balance sheet see if we can decide which items to include. Well, first of all, do I want to include cash and balances at central banks? Well, no, that's going to earn negligible amounts of interest. So instead we go for loans and advances to banks, customers, available for sale financial assets, and held maturity investment securities, giving me interest-bearing assets of 8,594.6. Next up, we need interest costing liabilities. So again, let's start that sum function. Let's go down to our balance sheet.

And in our liability section deposits from banks, yes, we are going to include them that we're going to earn interest from that. Customer deposits and repo agreements.

So there are my figures so far. I'm going to copy them to the right into column J and they're the figures we've.