United Lending Corp., a depository institution regulated by the Fed, has the below segments in its loan portfolio. Its cost of funding is 1.25%. (All rates are per annum.) It has 50 billion in Tier 1 regulatory capital and must maintain an 8% Tier 1 capital ratio.

• 450 billion in high grade loans at 20% risk weight (RW), 1.65% interest, and a 0.01% expected loss (EL)
• 300 billion in A-rated quality loans at 50% RW, 2.25% interest, and a 0.05% EL
• 200 billion in BBB quality loans at 100% RW, 3.75% interest, and a 0.20% EL
• 100 billion in low credit quality loans at 150% RW, 6.75% interest, and a 2.75% EL

Assume the bank has the exact amount of required Tier 1 Capital. What would be the expected returns to regulatory capital on the low credit quality loan portfolio segment? Answer in percentage points to the nearest hundredth/basis point (e.g. 5.21% as 5.21).