Q1 2025 Banco Comercial Portugues SA Earnings Call

May 22, 2025

Okay.

Operator: Good day and thank you for standing by.

Operator: Good day, thank you for standing by. Welcome to the Millennium bcp Q1 2025 Earnings Conference Call and Webcast. At this time, all participants will be on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Miguel Maya, CEO. Please go ahead.

Good day, and thank you for standing by.

Operator: Welcome to the Millennium BCP first quarter 2025 earnings conference call and webcast. At this time all participants will be on a listen-only mode. After the speaker's presentation there will be a question and answer session.

Speaker Change: When it comes to the Millennium B C. P first quarter 'twenty to 'twenty five earnings conference call and webcast. At this time, all participants will be on a listen only mode. After the speaker's presentation. There will be a question answer session to ask a question. During the session you need to press star one and one on your telephone you. We then hand it to me.

Operator: To ask a question during the session you need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 and 1 again.

That message advising you hadn't raised to withdraw your question. Please press star one and one again.

Operator: Please note that today's conference is being recorded.

Speaker Change: Please note that today's conference is being recorded.

Operator: I would now like to turn the conference over to your speaker, Mr. Migo Maya, CEO. Please go ahead.

Mr. Amiga: I would now like turn the conference over to your Speaker Mr. Amiga My House CEO. Please go ahead.

Miguel Maia: Good morning, Miguel Maia speaking. Welcome to BCP Earnings Conference call. As usually, I will mention the highlights of our performance and then Miguel Vargas and Bernard Kulas will follow, providing additional details. The economic activity in the first quarter continued to be significantly marked and conditioned by an unstable and adverse environment to the confidence of economic agents. Despite that environment, our net income in the first quarter went up 3.9 year on year to 243.5 million, confirming once again the quality of Millennium's franchise in our core markets. In Portugal, the net income was 280.9 million, an increase of 7.6%, demonstrating the robustness of the balance sheet and the profitability of the bank's business model, despite the slowdown in the economic activity and the downward trajectory of interest rates, which conditioned the evolution of the financial market.

Miguel Maya: Good morning, Miguel Maia speaking. Welcome to bcp earnings conference call. As usually, I will mention the highlights of our performance, then Miguel Bragança and Bernardo Collaço will follow, providing additional detail. The economic activity in Q1 continued to be significantly marked and conditioned by an unstable and adverse environment to the confidence of economic agents. Despite that environment, our net income in Q1 went up 3.9% year-on-year to EUR 243.5 million, confirming once again the quality of Millennium's franchise in our core markets.

Speaker Change: Good morning, All my speaking welcome to <unk> earnings Conference call as usual I will mention the highlights of our performance and then we go over again some of them have class will follow providing additional detail.

Speaker Change: Economic activity in the first quarter continued to be seen if you came to the market condition is by Aetna stable in this environment to the confidence of economic Asians, Despite that environment. Our net income in the first quarter went up three nine year on year to $143 5 million confirming once again.

Again, the quality of millennials franchise in our core markets in Portugal. The net income was 210 $8 million to $9 million, an increase of seven 6%.

Miguel Maya: In Portugal, the net income was EUR 280.9 million, an increase of 7.6%, demonstrating the robustness of the balance sheet and the profitability of the bank's business model despite the slowdown in the economic activity and the downward trajectory of interest rates, which conditioned the evolution of the financial margin. This performance in Portugal was largely contributed by the consistent work carried out over several years in improving the quality of the balance sheet, confirmed by year-on-year decrease of 14 basis points in the cost of risk. A healthy balance sheet, combined with intense commercial activity, allows us to continue the necessary investments to ensure the future of in strengthening talent and operational capacity while preserving a solid capital position and without compromising profitability.

<unk>, the robustness of the balance sheet and the profitability of the bank's business model. Despite the slowdown in the economic activity and the downward trajectory of interest rates, which condition in the evolution of the Finnish all margin.

Miguel Maia: This performance in Portugal was largely contributed by the consistent work carried out over several years in improving the quality of the balance sheet, confirmed by year-on-year decrease of 14 basis points in the cost-of-life ratio. A healthy balance sheet combined with intense commercial activity allows us to continue the necessary investments to ensure the future of strengthening talent and operational capacity while preserving a solid capital position and without compromising profitability. Therefore, operating costs in Portugal increased above 9%, significantly influenced by the inflationary context over the last years, with BCP remaining a reference in terms of operational efficiency with a cost-to-income ratio of 34%.

Speaker Change: This performance in Portugal was largely contributed by the consistent work carries out over several years in improving the quality of the balance sheet confirmed by year on year decrease of 14 basis points in the cost of risk.

Speaker Change: Healthy balance sheet combined with intense commercial activity allows us to continue the necessary investments to ensure the future of in strength and talent and operational capacity, while preserving a solid capital position and without compromising profitability. Therefore operating cost in Portugal increase above 9%.

Miguel Maya: Therefore, operating costs in Portugal increased above 9%, significantly influenced by the inflationary context over the last years, with bcp remaining a reference in terms of operational efficiency with a cost-to-income ratio of 34%. In Poland, Bank Millennium achieved a net income of almost EUR 43 million, an increase of nearly 40% year-on-year, despite still being affected by relevant charge related to FX legal risks, which had a negative impact of EUR 131 million, out of which EUR 98 million in provisions, and by the payment this quarter of banking tax, which was not applicable on the Q1 last year since the bank was implementing the recovery plan, which was successfully completed in June 2024.

Speaker Change: <unk> significantly influenced by the inflationary context over the last years with BCP remaining referenced in terms of personnel efficiency with a cost to income ratio of 74%.

Miguel Maia: In Poland, Bank Millennium achieved a net income of almost 43 million, an increase of nearly 40% year-on-year, despite still being affected by relevant charges related to FX legal risks, which had a negative impact of 131 million, out of which 98 million in provisions, and by the payment this quarter of banking tax, which was not applicable on the first quarter last year, since the bank was implementing the recovery plan, which was successfully completed in June 2024. The adjusted net profit in Poland, excluding extraordinary items, increased 7%, supported in a positive evolution of the business volumes and growing customer acquisition that once again confirms the capacity of Bank Millennium to grow and generate profitability and capital.

Speaker Change: In Poland Midland you achieve a net income of almost $43 million, an increase of nearly 40% year on year, despite still being affected by a relevant charters related to FX risks, which has a negative impact of $171 million out of which 98 million in provisions and.

Speaker Change: The payment this quarter of banking tax, which was not applicable on the first quarter last year. Since the bank was implementing difficult re plan, which was successfully completed in June 2024.

Miguel Maya: The adjusted net profit in Poland, excluding extraordinary items, increased 7%, supported in a positive evolution of the business volumes and growing customer acquisition that once again confirms the capacity of Bank Millennium to grow and generate profitability and capital. In Mozambique, the net profit was strongly affected by the impacts arising from the country's context in Q4 2024 and Q1 this year, namely the downgrades of the sovereign debt rating that resulted from the instability following the elections in October and until the inauguration in January this year of President Daniel Chapo. Net income in Mozambique decreased 84% due to impairments and provisions that have increased almost EUR 22 million, mainly due to the impacts of the downgrade of the sovereign debt ratings.

Speaker Change: The adjusted net profit in Poland, excluding extraordinary items increased 7%.

Speaker Change: Supported in a positive evolution of the business volumes and growing customer acquisition debt. Once again confirms that capacity of bank millennium to grow and generate profitability and capital.

Miguel Maia: In Mozambique, the net profit was strongly affected by the impacts arising from the country's context in the last quarter 2024 and first quarter this year, namely the downgrades of the sovereign debt rating that resulted from the instability following the elections in October and until the inauguration in January this year of President Daniel Chávez. Net income in Mozambique decreased 84% due to impairments and provisions that have increased almost 22 million, mainly due to the impacts of the downgrade of the sovereign debt rate. It should be noted that the commercial activity of millennial BIM before impairments and provisions showed a positive year-on-year evolution of around 10 percent.

Speaker Change: <unk> net profit was strongly affected by the impacts arising from the country's context in the last quarter 2024, and first quarter. This year, namely the downgrades of the sovereign debt rating that resulted from the stability. Following the elections in October until the inauguration in January this year of precision Danielle Chuck.

Speaker Change: Net income in Mozambique decreased 84% due to impairments and provisions that they have increased almost 22.

Speaker Change: 32 million mainly due.

Speaker Change: Due to the impacts of the downgrade of the sovereign debt ratings. It should be noted that the commercial activity of <unk> been before impairments and provisions showed positive year on year evolution of around 10%. We continue to operate with a very robust capital ratios with the CE tier one.

Miguel Maya: It should be noted that the commercial activity of Millennium bim before impairment and provisions showed a positive year-on-year evolution of around 10%. We continue to operate with very robust capital ratios, with CET1 at 15.9% and total capital at 20%, which already consider the estimated impact of CRR3 around 50 basis points and only includes 25% of the profit generated in the quarter in accordance with the shareholders remuneration policy that we presented to the market. The quality of our retail banking business model, supported by strong relationships with our customers, is driving the growth in business volumes. At the consolidated level, customer funds went up more than 6% and loans to customers increased 2.2%.

Miguel Maia: We continue to operate with a very robust capital ratios with C tier 1 at 15.9 percent, a total capital at 20 percent, which already considers the estimated impact of CRR3 around 50 by this point, and only includes 25 percent of the profit generated in the quarter in accordance with the shareholder remuneration policy that we presented to the market. The quality of our retail banking business model, supported by strong relationships with our customers, is driving the growth in business volumes. At the consolidated level, customer funds went up more than 6% and loans to customers increased 2.3%.

Speaker Change: 115.9% of total capital.

Speaker Change: 20%, which already considers the estimated impact of <unk> three around 50 basis points and only included 25% of the profit generated in the quarter in accordance with the shareholders' remuneration policy that we presented to the market.

Speaker Change: The quality of our retail banking business model supported by a strong relationships with our customers use is driving the growth in business volumes at the consolidated level customer funds went up more than 6% and loans to customers increased two 2%.

Miguel Maia: This quarter, the performing loans to companies in Portugal already showed an inversion from last year down the trajectory, with an increase of 1.1% quarter-on-quarter. We kept the trajectory of improvement of the quality of the balance sheet, having managed to cut non-productive assets by an additional $340 million over the last 12 months. The rigorous management of the balance sheet risks enable us to keep a controlled cost of risk. At group level, the cost of risk also decreased 14 basis points since March 24, reaching 38 basis points. At a group level, our customer base expanded almost 4% in the last 12 months, surpassing the 7 million customer mark, out of which nearly 2.8 million in Portuguese.

Miguel Maya: This quarter, the performing loans to companies in Portugal already showed an inversion from last year down, downward trajectory with an increase of 1.1% quarter-on-quarter. We kept the trajectory of improvement of the quality of the balance sheet, having managed to cut non-productive assets by an additional EUR 340 million over the last 12 months. The rigorous management of the balance sheet risks enable us to keep a control to the cost of risk. At group level, the cost of risk also decreased 14 basis points since March 2024, reaching 38 basis points. At group level, our customer base expanded almost 4% in the last 12 months, surpassing the 7 million customer mark, out of which nearly 2.8 million in Portugal.

Speaker Change: This quarter.

Speaker Change: Performing loans to companies in Portugal already showed an infection from last year done downward trajectory with an increase of one 1% quarter on quarter.

Speaker Change: We kept the trajectory of.

Speaker Change: Movement of the quality of the balance sheet, having managed to get <unk> by an additional $340 million over the last 12 months.

Speaker Change: The rigorous management of the balance sheet risks enable us to keep a control cost of risk.

Speaker Change: At group level the cost of risk also decreased 14 basis points since March 24, reaching 38 basis points.

Speaker Change: At a group level, our customer base expanded almost 4% in the last 12 months, surpassing 7 million customer mark out of which nearly two 8 million in parkville.

Miguel Maia: Most notably, mobile customers continue to grow at around 10% per year, accounting for 72% of the group's customer base and 64% in port. Individual and corporate clients continue to choose Millennium as their preferred bank and our services were again awarded this year with several relevant distinctions. Customer recognition of our digital capabilities continues to be reflected in the use they make of the app, which leads to the NPS among the largest banks in Portugal. This quarter, customers carried out 15% more transactions through the app than in the same period last year, with a significant growth in the number of transfers and payments.

Miguel Maya: Most notably, mobile customers continue to grow at around 10% per year, accounting for 72% of the group's customer base and 64% in Portugal. Individual and corporate clients continue to choose Millennium as their preferred bank. Our service were again awarded this year with several relevant distinctions. Customer recognition of our digital capabilities continues to be reflected in the use they make of the app, which leads the NPS among the largest banks in Portugal. This quarter, customers carried out 15% more transactions through the app than in the same period last year, with a significant growth in the number of transfers and payments.

Speaker Change: Notably mobile customers continue to grow at around 10% per year accounting for 72% of the group's customer base and 64% in Portugal.

Speaker Change: Individual and corporate clients continue to choose <unk> as their preferred bank and our services, where again awarded this year with several river relevant distinctions.

Speaker Change: Customer recognition of our these capabilities continues to be reflected in the us they make of the App, which leads NPS among the largest banks in port growth this quarter customers carry about 15% more transactions through the app than in the same period last year with a significant risk.

Speaker Change: And the number of transfers and payments the number of sales through the mobile app.

Miguel Maia: The number of sales through the mobile app has increased 13% in the same period, with emphasis to the sale of personal loans, which increased 34%, and to the sale of investment funds, which increased 75%.

Miguel Maya: The number of sales through the mobile app has increased 13% in the same period, with emphasis to the sale of personal loans, which increased 34%, and to the sale of investment funds, which increased 75%. The investment and priorities we give to mobile solutions with a clear focus on customer-centric innovation means that our app continues to lead the rankings and reserve top reviews on the most relevant platforms. The results achieved and the progress of the bank in Q1, despite the challenging context for economic activity, allow us to remain very confident in our ability to implement the strategic plan presented to the market as we have always done. Miguel, the floor is yours.

Speaker Change: <unk>, 17% in the same period with emphasis to the sale of personal loans, which increased 34%.

Speaker Change: Two the sale of investments.

Speaker Change: Which increased 75%.

Miguel Maia: The investment and priorities we give to mobile solutions with a clear focus on customer-centric innovation means that our app continues to lead the rankings and deserves top reviews on the most relevant platforms. The results achieved and the progress of the bank in the first quarter, despite the challenging context for economic activity, allow us to remain very confident in our ability to implement the strategic plan presented to the market, as we have always done.

Speaker Change: Investments and priorities, we give to mobile solutions with a clear focus on customer centric innovation means that our app continues to lead the thinking and deserve top reviews on the most relevant.

Speaker Change: The results achieved and the progress of the bank in the first quarter. Despite the challenging context for economic activity allow us to remain very confident in our ability to implement a strategic plan presented to the market as we have always done.

Speaker Change: The floor is yours.

Bernard Kulas: Good morning, ladies and gentlemen. Going now to page 8, as you see in our income statement, in spite of the reduction of interest rates, a very resilient core income, growing 3.6% in terms of NII and 2.1% in terms of commissions, costs also growing to a large extent influenced by the salary inflation in Poland and to the normalization of variable remuneration across the group as we hit our profitability targets and other income also with a positive evolution vis-a-vis last year. In terms of loan impairment, we are seeing a positive evolution in several markets in which we are present, with a reduction of 24% in terms of loan impairment, which shows some convergence in terms of cost of risk with one of our competitors, and in terms of legal risk in Poland, a further reduction.

Miguel Bragança: Good morning, ladies and gentlemen. Going now to page eight. As you see in our income statement, in spite of the reduction of interest rates, a very resilient core income growing 3.6% in terms of NII and 2.1% in terms of commissions. Costs also growing to a large extent influenced by the salary inflation in Poland and to the normalization of variable remuneration across the group as we hit our profitability targets. Other income also with a positive evolution vis-à-vis last year.

Speaker Change: Good morning, ladies and gentlemen.

Speaker Change: Going now to page eight as you see in our income statement.

Speaker Change: Despite the reduction of interest rates.

Speaker Change: Core income growing 363.

Speaker Change: 6% in terms of NII and two 1% in terms of of commissions.

Speaker Change: <unk>.

Speaker Change: Costs costs also also growing to a large extent influenced by the salary inflation in Poland.

Speaker Change: The normalization of variable remuneration across the group as we hit our profitability targets.

Speaker Change: Other income also with a positive evolution vis vis last year.

Miguel Bragança: In terms of loan impairment, we are seeing a positive evolution in the several markets in which we are present, with a reduction of 24% in terms of loan impairment, which shows some convergence in terms of cost of risk with the one of our competitors. In terms of legal risk, in Poland, a further reduction. I would like here to highlight that the guidance that we gave already many quarters ago was that 2023 would be our the year with the highest value of legal risk provisions, with a strong reduction for 2024, which happened around 30% reduction in 2024. What we are expecting is another very strong reduction now in 2025.

Speaker Change: In terms of loan impairment.

Speaker Change: We are seeing is a positive evolution in several markets each year.

Speaker Change: We are present.

Speaker Change: With the reduction of <unk>.

Speaker Change: 74% in terms of when you pay impairments, which shows simple versions in terms of cost of risk with the one of our competitors and in terms of legal risk in Poland further reduction I would like to highlight.

Bernard Kulas: I would like here to highlight that the guidance that we gave already many quarters ago was that 2023 would be the year with the highest value of legal risk provisions, with a strong reduction for 2024, which happened, around 30% reduction in 2024. And what we are expecting is another very strong reduction now in 2025, and then I would say a much more normalized path from 2025 onwards. In terms of profit before tax, the minority is here a growth of 13%. We have in the first quarter of last year some extraordinary tax elements in our income statement related to the Swiss franc mortgage.

Speaker Change: The guidance that we gave is already as many quarters ago was that 23 will be our hour.

Speaker Change: For the year with the highest value of legal provisions.

Speaker Change: A strong reduction.

Speaker Change: For 24, which happened around 30% reduction in 'twenty four and what we're expecting is another based on production now in 'twenty five and then.

Miguel Bragança: I would say a very more a much more normalized path from 2025 onwards. In terms of profit before tax and minorities here, a growth of 13%. We have in Q1 of last year some extraordinary tax elements in our income statement related to the Swiss franc mortgages, which we don't have as much this year. The net income grows 3.9% in spite of the more challenging interest rate environment. Here, I would like here to highlight the focus that we have in terms of remuneration, in terms of shareholder value creation, clearly above our cost of equity with a NarrE of 13.9.

Speaker Change: I would say very more much more normalized path.

Speaker Change: From 55 onwards.

Speaker Change: And in terms of profit before tax.

Speaker Change: Minorities here a growth of 13%.

Speaker Change: We have in the first quarter of last year.

Speaker Change: Extraordinary tax.

Speaker Change: The elements in our income statement related to the Swiss franc mortgages, which.

Bernard Kulas: We don't have as much this year, so the net income grows 3.9% in spite of the more challenging industry environment. I would like here to highlight the focus that we have in terms of remuneration, in terms of shareholder value creation, clearly above our cost of equity, with an ROE of 13.9, ROE of 14.5, but very importantly, with growth in terms of book value per share plus dividend per share, which at the end of the day is a very important benchmark for the value creation for shareholders, of 15.8. The dividend yield year on year, i.e. making the calculation with the price of 12 years ago and only considering the dividend that was distributed until March of this year, i.e.

Speaker Change: We don't have as much this year so.

Speaker Change: The net income grows.

Speaker Change: Three 9% in spite of the more challenging interest rate environment.

Speaker Change: I would like to highlight the focus that we have in terms of.

Speaker Change: Remuneration in terms of shareholder value creation, clearly above our cost of equity.

Speaker Change: With a narrowing of $13 nine.

Miguel Bragança: A ROTE of 14.5%. Very importantly, with growth in terms of book value per share plus dividend per share, which at the end of the day, is a very important benchmark for the value creation for shareholders of 15.8%. The dividend yields year-over-year, i.e., making the calculation with the price of 12 years ago and only considering the dividend that was distributed until March of this year, i.e., the dividend of the year before, not considering the dividend that will be approved, of course, in the AGM, was 5.4%.

Speaker Change: LTE.

Speaker Change: <unk> 14 in the half, but very importantly.

Speaker Change: Growth in terms of book value per share plus dividends per share, which at the end of the day.

Speaker Change: A very important benchmark for the value creation for shareholders for shareholders or 15.

Speaker Change: Eight the dividend yields year on year, I E, making the calculation with the price of 12 years ago in only considering the dividend it was distributed.

Speaker Change: Much of this year I E. The dividend off of the year before.

Bernard Kulas: the dividend of the year before, not considering the dividend that will be approved of course in the AGM, was 5.4%. in terms of group profitability. a very, very resilient margin, as we see here, with in Portugal the margin decreasing 3.9%, but I would like to highlight that in Portugal. There was a decrease in the margin of less than 2%, which is less than the impact of the day count. So that adjusted for the day count, what you have is a constant margin already in the last three quarters, which clearly confirms our guidance that due to our hedging of the NII, we will be able to deliver a very resilient and stable margin.

Speaker Change: Not considering the dividend it will be approved of course.

Speaker Change: In the AGM was five 4%.

Miguel Bragança: In terms of group profitability, very, very resilient margin as we see here, with, in Portugal, the margin decreasing 3.9%, but I would like to highlight that in Portugal, there was a decrease in the margin of less than 2%, which is less than the impact of the day count. That adjusted for the day count, what you have is a constant margin already in the last three quarters. Which should clearly confirms our guidance that due to our hedging of the NII, we will be able to deliver a very resilient and stable margin in Portugal.

Speaker Change: In terms of group profitability.

Speaker Change: Very very resilient margin as we see here.

Speaker Change: With.

Speaker Change: In Portugal the margin.

Speaker Change: Decreasing three 9%, but I would like to highlight that in Portugal.

Speaker Change: And there was a decrease in the margin of less than 2%, which is less than the impact of the day count So that adjusted for the day Count what you have is a constant margin already.

Speaker Change: In the last three quarters, so which.

Speaker Change: Sure.

Speaker Change: Clearly confirms our guidance that due to our hedging of the NIH.

Speaker Change: NII, we will be able to deliver a resilient and stable margin in Portugal in the international operations, both in the Mozambique due to lower.

Bernard Kulas: In the international operations, both in Mozambique due to lower reserve deposit requirements, but also in Poland due to the high level of interest, due to still high level of interest rates and to the volume growth in SMEs, we are here also showing a NIM above 4.5%. that also translated in the growth of two digits in terms of NIH. Fees and commissions are very resilient. I would here like to highlight that in Portugal there is sometimes some seasonality and some hydro fees, sometimes that in one year may come more in one quarter, in another year more in another quarter, but still we are quite confident in terms of the goals of this line mainly, when and if the market stabilizes and customers show more interest, more investments and in asset management products.

Miguel Bragança: In the international operations, both in Mozambique, due to lower the reserve deposit requirements, but also in Poland, due to the still high level of interest rates and to the volume growth in SMEs, we are here also showing a NIM above 1.5%, and that also translated in the growth of 2 digits in terms of NII. Fees and commissions are very resilient. I would here like to highlight that in Portugal, there is sometimes some seasonality and some ad hoc fees, sometimes that in 1 year may come more in 1 quarter in the year, more in another quarter.

Speaker Change: Yes.

Speaker Change: Deposits required reserve deposit requirements, but also in Poland due to the high level of interest.

Speaker Change: Still high level of interest rates and to the.

Speaker Change: Volume growth in.

Speaker Change: In Smes we.

Speaker Change: We are also showing a bit.

Speaker Change: Four 5%.

Speaker Change: That also translated in a growth of two digits in terms of NII.

Speaker Change: Fees and commissions are very resilient I would like to highlight that in Portugal, there is sometimes some seasonality and some.

Speaker Change: Fees sometimes.

Speaker Change: And when you make it more even when in one part in the year more than the quarter, but still.

Miguel Bragança: Still, we are quite confident in terms of the growth of this line, mainly as the market start, or when and if the market stabilize and customers show more interest, more investments and in asset management products. Up until now, as you know, we are having a strong contribution from bank insurance products, which is an area that is also strategic for us. Other net operating income, positive evolution in Portugal, which explained to some extent by the some rotation, some of the adjustment of our hedges.

Speaker Change: We're quite confident in terms of the growth of this line mainly as the markets are.

Speaker Change: When and if the markets stabilize and customers show more interest more investments in.

Speaker Change: Asset management products Apple till now as you as you know we had said we are having a strong contribution from bancassurance products, which is an area that is also strategic for us.

Bernard Kulas: Up until now, as you know, we are having a strong contribution from bank assurance products which is an area that is also... at the Net Operating Income, positive evolution in Portugal explained to some extent by some rotation, some adjustment of our hedges and in terms of the mandatory contributions, what we see here is the normalization of our bank in Poland, of course made us have to pay when compared with the first quarter of last year, the bank tax, which we did not in the in the last in the last year, in the first In terms of operating costs, normalization of the level, I would like here to highlight the cost to income.

Speaker Change: Net operating income positive evolution.

Speaker Change: In Portugal.

Speaker Change: It explains to some extent.

Speaker Change: Some rotation in some of the adjustment of our of our hedges.

Miguel Bragança: In terms of the mandatory contributions, what we see here is a normalization of our Bank Millennium, of course, made us have to pay when we compare with Q1 of last year, the bank tax, which we did not in the last year, in Q1. In terms of operating costs, normalization of the level, I would like here to highlight the cost-to-income. Of course, as time goes by, and with such high profitability and the good cost-to-income, then we have to balance this also with the cost growth of several stakeholders. Their remuneration is here an important element.

Speaker Change: And in terms of the mandatory contributions what we see is a normalization of our banking Poland.

Speaker Change: Of course.

Speaker Change: <unk> have to pay when compared with the first quarter of last year, the bank tax, which we did not.

Speaker Change: In the last in the last year in the first quarter.

Speaker Change: In terms of operating costs, a normalization of the level.

Speaker Change: I would like to highlight the cost to income of course as time goes by and with such a high profitability. The group cost to income then.

Bernard Kulas: Of course, as time goes by, and with such high profitability and a good cost to income, we have to balance this also with the cost growth of several stakeholders, where remuneration is here an important element. So we have to look in terms of IT and systems, some of the investments that we, are committed to in terms of development of the bank. More and more flow into the income statements through the OPEX lines, and not through the CAPEX lines, the business model of several of them, of the large international IT companies more and more is directed towards having a yearly, licensed fees.

Speaker Change: We have to balance this also with the with the cost growth of several stakeholders. The ratio you see an important.

Miguel Bragança: In terms of IT and systems, some of the investment that we are committed to in terms of development of the bank, more and more flow into the income statement through the OpEx line and not through the CapEx line. The business model of several of the large international IT companies, more and more is directed towards having yearly licensing fees and ad hoc purchases of licenses. This is a crucial part of the bank transformation. Still, I would like here to highlight a cost-to-income clearly below 40% in Portugal and slightly above 40% in the international operations in which we are investing. Cost of risk. Cost of risk already below 40 basis points.

Speaker Change: Element.

Speaker Change: <unk>.

Speaker Change: In terms of our IP and systems some of the investments that we did that.

Speaker Change: That we committed to in terms of development of the bank more and more flow into the income statement to the Opex line and not through the Capex line that the business model of several of them.

Speaker Change: Of the large international companies more and more is directed towards having yearly.

Speaker Change: Yearly licensing fees then.

Bernard Kulas: Ad Hoc Purchases of Licenses, so this is a crucial part of the bank transformation. Still, I would like you to highlight a cost to income clearly below 40% in Portugal and slightly above 40% in the international operation. Cost of risk, cost of risk. already below 40 basis points. We are seeing a very strong resilience of our cost of risk at low levels in Portugal. This is the other side of the coin of the prudence that we have shown in terms of the growth of our credit portfolio. As you've seen in the last quarters, we have been quite selective in terms of growth of the credit.

Speaker Change: <unk>.

Speaker Change: As of.

Speaker Change: Licensing. So these crucial part of the bank transformation, Phil I would like to highlight a cost to income clearly below 40%.

Speaker Change: In Portugal.

Speaker Change: Slightly above 40% in the international operations and maturing.

Speaker Change: Cost of risk cost of risk.

Speaker Change: Already below 40 basis points.

Miguel Bragança: We are seeing a very strong resilience of our cost of risk at low levels in Portugal. This is the other side of the coin of the prudence that we have shown in terms of the growth of our credit portfolio. As you've seen, in the last quarters, we have been quite selective in terms of growth of the credit. The other side of the coin is of course a much more normalized and low cost of risk when you compare with our competitors. Still, loan loss reserves in Portugal that almost achieve EUR 800 million. We are quite comfortable in this area.

Speaker Change: We are seeing.

Speaker Change: Strong resilience of our overall cost of risk.

Speaker Change: At low levels in Portugal. This is the other side of the coin of the.

Speaker Change: The prudence that we have shown in terms of the growth of our credit portfolio as you've seen.

Speaker Change: In the last quarters, we have been quite selective.

Speaker Change: In terms of growth of the credit the other side of the coin.

Bernard Kulas: The other side of the coin is of course a much more normalized and low cost of risk when we compare with our competitors. Still, loan loss reserves in Portugal that almost achieve 800 million, so we are quite comfortable in this area. In the international operation, contrary to what was usual in the past, a higher cost of risk in Portugal, but this is to a large extent explained by the different business mix. Mainly in Poland, because Mozambique has a much lower credit portfolio, there is nothing for us to worry about. much. But in terms of Poland, as you know, our bank, in terms of credit, has a much higher percentage in terms of cash loans, which is a much, a very, I would say, a very interesting business in Poland, but of course, has a higher cost of risk, of course, with a much higher spread.

Speaker Change: There is of course.

Speaker Change: Much more normalized.

Speaker Change: Low cost of risk, maybe when you compare with our with our competitors still loan loss reserves in Portugal that almost achieve.

Speaker Change: $800 million. So we are quite comfortable in this area.

Miguel Bragança: In the international operations, contrary to what was usual in the past, a higher cost of risk than in Portugal. This is to a large extent explained by the different business mix. Mainly in Poland, because Mozambique has much lower, I mean, much lower credit portfolio, does not influence this too much. In terms of Poland, as you know, our bank, in terms of credit, has a much higher percentage in terms of cash loans, which is a much, a very, I would say, a very interesting business in Poland. Of course, has a higher cost of risk, of course, with a much higher spread. Continuous decrease of NPEs. I think this is very, very important.

Speaker Change: In the international operations, contrary to what was.

Speaker Change: Usually in the past the higher cost of risk in Portugal with these large extent explained by the different business mix, so mainly in Poland, because Mozambique has much lower I mean, mislocate portfolios, they're not influenced this too much but.

Speaker Change: In terms of Poland as you know our bank in terms of credit is a much higher percentage in terms of cash loans, which is a much.

Speaker Change: Very I would say a very interesting business in Poland, but of course, he has a higher cost of risk of course with a much higher spreads.

Bernard Kulas: Continuous decrease of NPEs, I think this is very, very important. So we are already in Portugal, which used to be, I would say, the bank with the most challenges in this area, already with an NPE loans ratio of 2.2%. So, very much aligned with the banks in Europe, so this is not, I would say, an issue today anymore. So, at 2.2%, we generally believe this is not an issue. And if we include off-balance sheet and securities, we are already below 2% at the moment. In the international operations the value is higher but also to some extent also linked to the business of cash loans in Poland which I would like here to also to stress is a very interesting business because the the margin much more than compensates for the additional cost of risk.

Speaker Change: Continuous decrease of NPS I think this is very very important.

Miguel Bragança: We are already in Portugal, which used to be, I would say, the bank with the most challenges in this area, already with an NPE loans ratio of 2.2% and decreasing. Very much aligned with the banks in Europe. This is not, I would say, an issue today anymore. At 2.2%, we generally believe this is not an issue. If we include off-balance sheet and securities, we are already below 2% at 1.5%.

Speaker Change: So we are already in Portugal, which used to be I would say the bank with the most challenges in this area already with an E&P loans ratio of two 2%.

Speaker Change: And decreasing so very much aligned with the banks in Europe. So this is not I would say an issue today.

Speaker Change: Today anymore. So it's two 2%.

Speaker Change: Generally this is not an issue and if we include off balance sheet.

Speaker Change: And securities we are already below 2% at 1%.

Miguel Bragança: In the international operations, the value is higher, but also to some extent, also linked to the business of cash loans in Poland, which I would like here to also to stress is a very interesting business because the margin much more than compensates for the additional cost of risk that this business implies. We have been able to do this maintaining a coverage both with collaterals and without considering collaterals. That is very comfortable with a level of above 80% without considering collateral and significantly above 100% considering collateral. In terms of main volumes of the group, very resilient business as you see here.

Speaker Change: In the international operations the value is higher.

Speaker Change: But also to some extent also linked to.

Speaker Change: The business of cash loans in the in Poland, which I would like here also to stress is a very interesting business because the.

Speaker Change: The margin much more than compensates for the.

Speaker Change: The additional cost of risk that the business in place.

Bernard Kulas: We have been able to do this, maintaining coverage. both with collaterals and without considering collaterals, that is very comfortable with a level above 80% without considering collaterals and significantly above 100% considering collaterals. in terms of main volumes of the group. Very resilient business, as you see here. In terms of customer funds, we have been able to grow and this is very important, profitably, very profitably, in terms of customer funds, at 6% at group level, which is balanced by a 4% growth in Portugal and a 10% growth in our international operations. The loan portfolio, the loan portfolio.

Speaker Change: We have been able to do these maintaining.

Speaker Change: Average both with with collateral.

Speaker Change: Without considering collaterals that is very comfortable with the level of above 80%.

Speaker Change: Without considering collapsing significantly above 100% considering collateral.

Speaker Change: In terms of.

Speaker Change: The main.

Speaker Change: The volumes of the group very resilient business.

Miguel Bragança: In terms of customer funds, we have been able to grow, and this is very important, profitably, very profitably in terms of customer funds at 6% at group level, which is balanced by a 4% growth in Portugal and a 10% growth in our international operations. The loan portfolio showing here an inflection. I think this is very important. In Portugal, already growing 1.3% when year-on-year, which to a large extent is also explained by the growth that we already had in this Q1, which clearly is a leading indicator in terms of the what we have to deliver according to our business plan.

Speaker Change: You see here in terms of customer funds, we have been able to grow and this is very important profitably very profitable in terms of customer funds at 6% at group level, which is.

Speaker Change: Balanced by 4% growth in Portugal.

Speaker Change: A 10% growth in our international operations.

Speaker Change: International operations.

Speaker Change: The loan the loan portfolio the loan portfolio.

Speaker Change: And showing here an inflection I think this is very important in Portugal already growing one 3% year on year, which to a large extent, which to a large extent.

Speaker Change: <unk> is also explained by the growth that we already had in this first quarter, which clearly is a leading indicator in terms of the.

Speaker Change: What we have to deliver in terms of what we have to deliver.

Speaker Change: Adding to our business by around 1% growth quarter on quarter as you see as you as we have shown to you our business plan and the right here to highlight is.

Miguel Bragança: Around 1% growth quarter-on-quarter, as you see. As we have showed to you our business plan, and I would like here to highlight is a business plan over 4-year periods. Of course, we are in the beginning, but it's a business plan based on growth. So, and this growth is a growth in terms of customers, a growth in terms of customer funds, but also a growth in terms of loan portfolio as time goes by. In the international operations, of course, also growth of 4.2%. As we all know, Poland is a market still with a loan-to-GDP ratio that is significantly below the loan-to-GDP ratio in Europe. Strategically, we view this as an important opportunity.

Bernard Kulas: As we have shown to you, our business plan, and I would like here to highlight, is a business plan over four year periods. Of course, we are in the beginning, but a business plan based on growth. And this growth is a growth in terms of customers, a growth in terms of customer fans, but also a growth in terms of loan portfolio as time goes by. in the international operations. Of course, also growth of 4.2%, as we all know, Poland is a market still with a loan to GDP ratio that is significantly below the loan to GDP ratio in Europe, so strategically we view this as an important.

Speaker Change: Business plan over for your peers of course, writing them.

Speaker Change: Business than based on growth. So it is so and this growth is a growth in terms of customers the growth in terms of customer fence, but also a growth in terms of the loan portfolio as time goes by.

Speaker Change: In the international operations of course also a growth of four 2% as we all know.

Speaker Change: Poland.

Speaker Change: Is the market still with <unk>.

Speaker Change: Loan to GDP ratio that is significantly below the <unk> ratio in Europe. So strategically we view these as.

Speaker Change: An important opportunity in terms of capital.

Bernard Kulas: in terms of capital. As we have commented to you in our last presentations, we would have here an impact in terms of fully loading of around 50 basis points linked to CRR3, basically explained by operational risk. And this is an impact that will fade away as the provisions over the next years. as a provision. For operational risk, what is relevant is the last three years, so it's like a moving average of the last three years. So as we provide less and less, this impact also will gradually fade. But still, a ratio of 15.9, which shows very clearly that we have generated capital in spite of these 50 basis points impact of the CRR3.

Miguel Bragança: In terms of capital, as we have commented to you in our last presentation, we would have here an impact in terms of fully loaded of around 50 basis points linked to CRR3. Basically explained by operational risk. This is an impact that will fade away as the provisions over the next years. As the provisions for CHF fade in Poland. As you know, for operational risk, what is relevant is the last three years. As the moving average of the last three years. As we provide less and less, this impact also will gradually fade.

Speaker Change: As we have.

Speaker Change: The comment is to you in our <unk>.

Speaker Change: <unk> presentations.

Speaker Change: We would have an impact in terms of fully loaded of around 50 basis points linked to CRC basically basically explained by operational risk and this is Jeff.

Speaker Change: And in fact, it will fade away as the provisions over the next few years.

Speaker Change: As the provisions.

Speaker Change: For CHF.

Speaker Change: CHF phase E in Poland as you know.

Speaker Change: For operational risk what is relevant is the last three years. So is there like a.

Speaker Change: Moving average over the last three years, so as we.

Speaker Change: Provide less and less these impact also will gradually.

Miguel Bragança: Still a ratio of 15.9, which shows very clearly that we have generated capital in spite of this 50 basis points impact of the CRR3. Very comfortably above the minimum. As you know, we have here a four-year plan, whereby we expect as time goes by to grow RWAs and credit somewhat faster due to credit growth and due to the change in the business mix with more investment in corporate loans, both in Poland and in Portugal. Leverage ratio, very high leverage ratio, which shows also the resilience of our models.

Speaker Change: Let's see.

Speaker Change: Our ratio of 15, 59, which shows very clearly that we have generated.

Speaker Change: Capital.

Speaker Change: In spite of these 50 basis points.

Speaker Change: The impact of the CRT very comfortably above the minimum but as you know we have here.

Bernard Kulas: Very comfortably above the minimum, but as you know, we have here a plan of a four-year plan whereby we expect, as time goes by, to grow RWAs and credit. somewhat faster due to great growth and due to the change in the business mix, with more investment in corporate loans, both in Poland and Europe. Leverage ratio, very high leverage ratio, which shows also the resilience of our models. And the other side of it is also, or the contribution of it is also to our quite conservative RWA density that also shows in the fact that the impact of the CRR3 was quite limited in the credit area.

Speaker Change: <unk>.

Speaker Change: For your plans, whereby we expect as time goes by to grow out of ways and.

Speaker Change: Great.

Speaker Change: What faster due to create growth and due to the change in the business mix with more investment in the corporate loans both in.

Speaker Change: In Poland and Portugal.

Speaker Change: Leverage ratio.

Speaker Change: Very very high leverage ratio, which shows also the resilience of our of our models and the other side of it is also or the contribution of it is also to a quite conservative as of late entity that also shows in the fact that the impact of the <unk> III was quite limited.

Miguel Bragança: The other side of it is also the contribution of it is also to our quite conservative RWA identity that also shows in the fact that the impact of CRR3 was quite limited in the credit area. The main impact was on the operational use case, we always said. MREL requirements, clearly, also above the MREL requirements. We are executing our funding plan. As you know, in March of this year, we launched a Tier 2 notes. I'm sorry. We have recalled the Tier 2 notes, and we have also issued in March of this year, EUR 500 million.

Speaker Change: In the in the credit area. So the main impact was.

Bernard Kulas: So the main impact was on the operational risk, as we always said. NREL requirements clearly above the MRO requirements. We are executing our funding plan. As you know, in March of this year, we launched the Tier 2 notes, and we also issued in March 20, with a maturity of 20 years, I'm sorry, we have recalled the Tier 2 notes, and we have also issued in March of this year 500 million, so a plain vanilla Tier 2 notes, with a maturity of 12 years and a call after. a very robust liquidity position, as you know, as you see, with a part of it also committed.

Speaker Change: On the operational lease gives real always Seth.

Speaker Change: Rail requirements.

Speaker Change: Clearly also above the <unk> requirements.

Speaker Change: We are executing on our.

Speaker Change: Funding plan.

Speaker Change: As you know.

Speaker Change: In March of this year, we launched the tier two.

Speaker Change: Tier two notes.

Speaker Change: Which.

Speaker Change: And we also have.

Speaker Change: <unk>.

Speaker Change: Issues.

Speaker Change: In March 'twenty.

Speaker Change: With the maturity of 20 years I'm sorry.

Speaker Change: We have.

Speaker Change: Recalled.

Speaker Change: The tier two notes and we have also issued in March of this year 500 million. So were plain plain vanilla tier two notes.

Miguel Bragança: A plain vanilla Tier 2 notes, with a maturity of 12 years and a call after year 7. A very robust liquidity position, as you know, as you see, with a part of it also committed to investing in the LM portfolio. That really assures, so to say, the hedge of our NII. A net loan-to-deposit ratio that is also, I would say, almost too comfortable, and that we expect gradually to normalize over the year. I'll pass now the floor here to Bernard.

Speaker Change: With the maturity of 12 years and the call after yourself.

Speaker Change: They're very robust.

Speaker Change: The liquidity position as you know as you see.

Speaker Change: Part of it also committed.

Bernard Kulas: to investing in the LMF portfolio that really assures, so to say, the hedge of our NII and then a net loan to deposit ratio that is also, I would say, almost too comfortable and that we expect gradually to normalize over the year.

Speaker Change: Two investing in <unk> and.

Speaker Change: <unk> portfolio that really assure so to say that the hedge of our NII and net loan to deposit ratio that is also let's say almost too comfortable.

Bernard: And that we expect gradually to normalize over the past now the floor to Bernard.

Bernard Kulas: I'll pass now the floor here to Bernardo.

Bernard Kulas: Okay, thank you Miguel, and good afternoon, good morning ladies and gentlemen. I will start on page 26, that's the Portuguese operation, which it should be highlighted, the net income that reached 219 million in the first quarter of 2025, that corresponds to an increase of 7.6% compared with the same period of last year, and has been the best quarter over last year. For this favorable evolution, the reduction of 39.7% of credit impairments and other provisions provided a significant contribution for NAICS. Operating revenues compared with the same period of last year went up 1%, but it should be noticed that on a quarter-on-quarter basis revenues went up 4%.

Bernardo Collaço: Okay. Thank you, Miguel, and good afternoon. Good morning, ladies and gentlemen. I will start on page 26, and that's the Portuguese operation, which should be highlighted. The net income that reached EUR 290 million in Q1 2025. That corresponds to an increase of 7.6% compared with the same period of last year and has been the best quarter over last years. For this favorable evolution, the reduction of 39.7 of credit impairments and other provisions provided a significant contribution for net income.

Bernard: Okay. Thank you Miguel and good afternoon, good morning, ladies and gentlemen.

Bernard: We'll start on page 26.

Bernard: The Portuguese operation, which.

Bernard: It should be highlighted the net income that reached $219 million in the first quarter of 2025 that corresponds to an increase of seven 6% compared with the same period of last year and has been the worst quarter over last years.

Bernard: For these favorable evolution the reduction of $39 seven of credit impairments and other provisions that provided a significant contribution for net income operating revenues compared with the same period of last year went up 1%, but it should be noticed that on a quarter over quarter basis revenues.

Bernardo Collaço: Operating revenues compared with the same period of last year went up 1%, it should be noticed that on a quarter-on-quarter basis, revenues went up 4%. Regarding operating costs, there was an increase of 9% compared with the previous year, it should also be highlighted that costs decreased 11% if we compare on a quarter-on-quarter basis. On page 27, a net interest incomes to that, EUR 325.8 million in Q1 2025. That means 3.9% below what was recorded in Q1. Let me also highlight, as Miguel clearly stated before, on a quarter-on-quarter analysis, NII decrease was just lower than 2%, and it's mainly explained by the calendar effect.

Bernard: <unk> went up 4%.

Bernard Kulas: Regarding operating costs, there was an increase of 9% compared with the previous year, but it should also be highlighted that costs decreased 11% if we compare on a quarter-on-quarter basis.

Bernard: Regarding operating cost there was an increase of 9% compared with the previous year, but it should also be highlighted that cost decrease 11%, if we compare on a quarter over quarter basis.

Bernard Kulas: On page 27, net interest income stood at $325.8 million in the first quarter of 2025. That means 3.9% below what was recorded in the first quarter. But let me also highlight, as Miguel clearly stated before, on a quarter-on-quarter analysis, NII decrease was lower than 2%, and it's mainly explained by the calendar effect. This quarterly evolution allow us to reinforce what we have in common about the resilience of NII in the Portuguese operation. But regarding the year-on-year evolution, as presented in the graph, an AI decrease reflects the lower income generated by the loan portfolio that was partially offset by the reduction in funding costs, which includes the reduction of interest paid on deposits and costs associated with the wholesale funding.

Bernard: On page 27, and net interest income stood at $325 8 million in the first quarter of 'twenty five that means $3, 9% below what was recorded in the first quarter.

Bernard: Let me also highlight as Miguel clearly stated before on a quarter on quarter analysis. NII decreased was decrease was just was lower than 2% and it's mainly explained by the calendar effect. This quarterly evolution allow us to reinforce what we have been comments about the resilience of NII in the <unk>.

Bernardo Collaço: This quarterly evolution allow us to reinforce what we have been comment about the resilience of NII in the Portuguese operation. Regarding the year-on-year evolution as presented in the graph, NII decrease reflects the lower income generated by the loan portfolio that was partially offset by the reduction in funding costs, which includes the reduction of interest paid on deposits and costs associated with the wholesale funding. NIMs to that 2.12% at the end of March 2025, that compares with 2.34% at the end of March 2024, but it's just 3 basis points below the NIM that it was registered in the Q4 of last year. Moving to page 28, commissions amounted to EUR 148 million at the end of Q1 2025, increasing almost 4% compared with the amount recorded in the Q1 of last year.

Bernard: <unk> operation.

Bernard: But regarding the year on year evolution is presented in the graph NII decrease reflects reflects the lower income generated by the loan portfolio that was partially offset by the reduction in funding costs, which includes the reduction of interest paid on deposits and costs associated with the wholesale funding.

Bernard Kulas: means to that 2.12 percent at the end of March 25 that compares with 2.34 at the end of March 24 but it's just three basis points below the name that it was registered in the fourth quarter of last year. Moving to page 28, commissions amounted to 148 million at the end of the first quarter, 2025, increasing almost 4% compared with the amounts recorded in the first quarter of last Banking fees and commissions went up 5.5%, supported by higher bank insurance fees, and market-related fees went down 4.2%, mainly reflecting the lower contribution from security. trading results evolved from minus 4.3 million to plus 13.3 million and equity accounted earnings from 9.1 to 13.3.

Bernard: NIM stood at $2, 12% at the end of March 25 that compares with $2 34 at the end of March 24, but he is just three basis points below the NIM that it was registered in the fourth quarter of last year.

Bernard: Moving to page 28 commissions amounted to $148 million at the end of the first quarter 'twenty five increasing almost 4% compared with the amounts recorded in the first quarter of last year.

Bernardo Collaço: Banking fees and commissions went up 5.5%, supported by higher bank insurance fees. Market-related fees went down 4.2%, mainly reflecting the lower contribution from securities. Trading results evolved from -EUR 4.3 million to +EUR 13.3 million. Equity accounted earnings from EUR 9.1 to EUR 13.3. Other operating income registered also an improvement year-on-year, evolving from EUR 5.8 million to EUR 12 million in Q1 2025. Going to page 29, operating costs totals EUR 168 million in Q1 2025, which is 9.3% higher than the EUR 154 million recorded in Q1 2024. Evolution of operating costs in the Portuguese activity reflect mainly the increase in staff costs and admin costs.

Bernard: Banking fees and commissions went up five 5% supported by higher bank assurance fees and market related fees went down four 2%, mainly reflecting the lower contribution from securities.

Bernard: Trading results.

Bernard: From minus four 3 million two was $13 3 million and the equity accounted earnings from nine one to $13 three.

Bernard Kulas: Other operating income registered also an improvement year-on-year, evolving from $5.8 million to $12 million in the first quarter of 2025. Going to page 29, operating costs totals $168 million in the first quarter of 2025, which is 9.3 higher than the $154 million recorded in the first quarter of 2024. Evolution of operating costs in the Portuguese activity reflect mainly the increase in staff costs and admin costs, and as Miguel clearly explained, there's already a decrease on a quarterly basis of around 11%, where staff costs went down 15% and admin costs almost 9%.

Bernard: Other operating income reduced it also an improvement year on year evolving from $5 8 million to 12 million in the first quarter of 2005.

Bernard: Going to page 29 operating costs totaled $168 million in the first quarter of 'twenty, five which is nine three higher than what had been 54 million recorded in the first quarter of 'twenty for ever.

Bernard: The evolution of operating costs in the <unk>.

Bernard: She is our activity reflect reflect mainly the increase in staff costs and admin costs and as Miguel clearly explain.

Bernardo Collaço: As Miguel clearly explained, I mean, there's already a decrease on a quarterly basis of around 11%, where staff costs went down 15% and admin costs almost 9%. Number of branches were broadly stable year-on-year. There was a small reduction of around 40 employees over last year. Moving to page 30, which refers to asset quality. As highlighted before by Miguel, there was a sizable reduction of NPEs. NPEs reduced 22.6%, meaning more than EUR 246 million. It should be referred that on the Q1 2025, there was a reduction of EUR 131 million. This clearly shows that the bank is still committed with the NPE reduction. NPEs in the Q1 2025 stood at EUR 841 million.

Bernard: There is already a decrease on a quarterly basis of around 11%, whereas staff costs went down 15% and admin costs almost 9%.

Bernard Kulas: number of branches were broadly stable year-on-year and there was a small reduction of around 40 employees over the last Moving to page 30, which refers to asset quality, and as I highlighted before by Miguel, there was a sizable reduction of NPEs. NPEs reduced 22.6%, meaning more than 246 million, and it should be referred that on the first quarter, 25, there was a reduction of 131 million, and this clearly shows that the bank is still committed with the NPE reduction. NPs in the first quarter, 25 stood at 841 million, that compares with more than 1 billion a year ago.

Bernard: Number of branches were broadly stable year on year, there was a small reduction of around 40 <unk>.

Bernard: Over over last year.

Bernard: Moving to page 30, which refers to asset quality.

Bernard: Right.

Bernard: <unk> of Amigo.

Bernard: Was a sizable reduction of NPS.

Bernard: <unk> reduced 22, 6%, meaning more than $246 million and it should be referred to on the first quarter 'twenty five there was a reduction of $131 million and this clearly shows that the bank has to compete with the NP reelection.

Bernard: NPS in the first quarter 'twenty five to 841 million that compares with more than $1 billion a year ago.

Bernardo Collaço: That compares with more than EUR 1 billion a year ago. Cost of risk below 40 basis points. The Q1 of 2025 stood at 34 basis points. That compares with 48 basis points in March 2024. Now, let's move to page 31, which looks at the NPE coverage breakdown. As you can see, total coverage of NPEs stood at 137%. NPE coverage by loan loss reserves at 92%. Total coverage for individuals which with a high level of real estate collateral stood at 100%, and for companies at a higher level. On page 32, which shows the evolution of foreclosed assets and corporate restructuring funds. Net value of foreclosed assets stood at EUR 50 million.

Bernard Kulas: Cost of risk below 40 basis points, the first quarter of 25 stood at 34 basis points, that compares with 48 basis points in March 24th.

Bernard: Cost of risk below 40 basis points, the first quarter of 25 to 34 basis points.

Bernard: That compares with 48 basis points in March 24.

Bernard Kulas: Now let's move to page 31, which looks at the NP coverage breakdown, and as you can see, total coverage of NPs stood at 137%. NP coverage by loan loss reserves at 92%. and total coverage for individuals with a high level of real estate collaterals stood at 100% and for companies at a higher level.

Bernard: Now, let's move to page 31, which looks at it E&P coverage breakdown and as you can see total coverage of Npls stood at 137%.

Bernard: MP coverage by loan loss reserves at 92%.

Bernard: And total coverage for individuals which.

Bernard: With a high level of real estate collateral.

Bernard: At.

Bernard: Stood at 100%.

Bernard: And for companies.

Bernard: A higher level.

Bernard Kulas: On page 32, which shows the evolution of foreclosed assets and corporate restructuring funds, net value of foreclosed assets stood at 50 million, that compares with 93 million one year ago, meaning a reduction of more than 46 percent or, if you want, a decrease of 43 million euros. Regarding property sales, there was an increase in the number of transactions compared with the with Q1 of 2024 and regarding corporate restructuring funds exposure at the end of March 25 to the 334 million that compares with 373 million at the end of March 24.

Bernard: On page 32, which shows the evolution of foreclosed assets and corporate restructuring funds net value of foreclosed assets. Two at 50 million that compares with 93 million one year ago, meaning a reduction of more than 46% or if you want to do.

Bernardo Collaço: That compares with EUR 93 million one year ago, meaning a reduction of more than 46%, or if you want a decrease of EUR 43 million. Regarding property sales, there was an increase in the number of transactions compared with Q1 2024. Regarding corporate restructuring funds, exposure at the end of March 2025 stood at EUR 334 million. That compares with EUR 373 million at the end of March 2024. Now moving to page 33, regarding total to customer funds and loans to customers. Total customer funds reached almost EUR 71 billion, an increase of 4.3% compared with the same period of last year. On-balance sheet funds stood at EUR 55.6 billion, reflecting the increase of savings from households and companies.

Bernard: <unk> of 43 million euros.

Bernard: Regarding property sales there was an increase in the number of transactions compare with Q1 of 2024.

Bernard: Regarding corporate restricting funds exposure at the end of March 25 to 334 million that compares with $373 million at the end of March 24.

Bernard Kulas: Now moving to page 33 regarding total customer funds and loans to customers. Total customer funds reached almost 71 billion, an increase of 4.3 percent compared with the same period of last year. On balance sheet funds stood at $55.6 billion, reflecting the increase of savings from households and companies. Off-balance sheet funds went up 7% year-on-year, meaning an increase of $1 billion compared with the same period of last year. Gross loan book stood at $38.9 billion. as of March 2025, a slight increase of 1.3% from previous year, and this increase reflects the strong performance on loans to individuals where mortgages registered an increase of 6.4% and personal loans of 2.4%.

Bernard: Now moving to page 33.

Bernard: Regarding total customer funds and loans to customers total customer funds reached almost 71 billion an increase of four 3% compared with the same period of last year.

Bernard: On balance sheet funds stood at $55 6 billion, reflecting the increase of savings from households and companies.

Bernardo Collaço: Off-balance sheet funds went up 7% year-on-year, meaning an increase of EUR 1 billion compared with the same period of last year. Gross loan book stood at EUR 38.9 billion as of March 2025, a slight increase of 1.3% from previous year. This increase reflects the strong performance on loans to individuals, where mortgages registered an increase of 6.4%, and personal loans of 2.4%. On a quarter-on-quarter basis, it is possible to see that the positive trend on loans to individuals, where mortgages increased by 2.6% and personal loans by 4% compared with December 2024. Regarding companies, there was a decrease of 5% year-on-year.

Bernard: Off balance sheet funds went up 7% year on year, mainly an increase off of <unk>.

Bernard: <unk> compared with the same period of last year.

Bernard: Gross loan book stood at 38 9 billion.

Bernard: As of March 2025, a slight increase of one 3% from previous year and this increase reflects the strong performance on loans to individuals where mortgages reduce third an increase of six four and personal loans of two 4%.

Bernard Kulas: On a quarter-on-quarter basis, it is possible to see that the positive trend on loans to individuals, where mortgages increased by 2.6% and personal loans by 4%, compared with December 24. And regarding companies, there was a decrease of 5% year-on-year. However, it is important to highlight that we are facing an inversion and the corporate loan book increase compared with the last quarter of 2020.

Bernard: On a quarter over quarter basis. It is possible to see that the positive trend on loans to individuals where mortgages increased by two 6% and personal loans by 4% compared with December 24, and regarding companies. There was a decrease of 5% year on year or wherever it is important to highlight.

Bernardo Collaço: However, it is important to highlight that we are facing an inversion and the corporate loan book increase compared with Q4 2024. Now moving to page 34, regarding the performing book in Portugal. It's possible to see that new loans origination by segment and the recognition as of BCP as the main bank for Portuguese companies. Performing loans in Portugal went up 2% compared with March 2024, and it was also registered an increase of 2% on a quarter-over-quarter basis. Loans to individuals grew 6.2% year-over-year, or 6.3%, with a relevant contribution from mortgages loans that increased 6.5%. Loans to companies, there's a, as we, as I mentioned before, a slight decrease of 3.6% year-over-year.

Bernard: That we are facing an inversion in the corporate loan book increase increase compared with the last quarter of 2024.

Bernard Kulas: Now moving to page 34 regarding the performing book in Portugal, it's possible to see that new loans origination by segment and the recognition of PCP as the main bank for Portuguese companies. Performing loans in Portugal went up 2% compared with March 24 and it was also registered an increase of 2% on a quarter-on-quarter basis. Loans to individuals grew 6.2% year on year or 6.3% with a relevant contribution from mortgages loans that increased 6.5%. Loans to companies, as I mentioned before, a slight decrease of 3.6% year-on-year, but as I said before, we are facing an inversion point and loans to companies registered already an increase of 1.3% compared with the end of the year.

Bernard: Now moving to page 34 regarding the performing book in Portugal.

Bernard: It's possible to see that new loans origination by segment and the recognition.

Bernard: BCP as the main bank for Portuguese companies.

Bernard: Performing loans in Portugal went up 2% compared with March 24, and it was also recently registered an increase of 2% on a quarter on quarter basis.

Bernard: Loans to individuals grew six 2% year on year or six 3%.

Bernard: With a relevant contribution from mortgage loans that increased six 5% loans.

Bernard: Loans to companies.

Bernard: As I mentioned before a slight decrease of three 6% year on year, but as I said before we are facing an inversion point and loans to companies resistors already an increase of one 3% compared with the end of the year.

Bernardo Collaço: As I said before, we are facing a reversion point, and loans to companies registered already an increase of 1.3% compared with the end of the year. Now moving to international operations on page 36. Net profit in Q1 2025 amounted to EUR 24.5 million. That means 20% less than Q1 of last year. This evolution reflects the reduction of the contribution from Millennium bim in Mozambique, that offset the improvements on results from Bank Millennium in Poland. Bank Millennium net profits stood at almost EUR 43 million in Q1. That means a growth of 40% from previous year, while Millennium bim in Mozambique recorded a net profit of almost EUR 4 million at the end of March 2025.

Bernard Kulas: Now moving to international operations, on page 36, net profit in the first three months of 2025 amounted to 24.5 million, that means 20% less than the first three months of last year. This evolution reflects the reduction of the contribution from Millennium Beam in Mozambique that offset the improvement on results from Bank Millennium in Poland. Bank Millennium Net Profit stood at almost 43 million euros in the first quarter. That means a growth of 40% from previous year, while Millennium Beam in Mozambique recorded a net profit of almost 4 million euros at the end of March 25.

Bernard: Now moving to international operations on page 36.

Bernard: Net profit.

Bernard: In the first three months of 2025 amounted to $24 5 million that means 20% less than the first three months of last year.

Bernard: This evolution reflects the reduction of the contribution from millennium beam in Mozambique that offsets the improve the improvement results from bank millennium in Poland Bancomer.

Bernard: Bank Millennium net profit stood at almost 43 million euros in the first quarter.

Bernard: It means a group.

Bernard: Both of 40% from previous year, while millennial beam in Mozambique recorded a net profit of almost 4 million euros at the end of March 25, and this is significantly lower than what was recorded the year before and the main reason as it was already mentioned was related to <unk>.

Bernard Kulas: And this is significantly lower than what was recorded the year before. And the main reason, as it was already mentioned, was related with the downgrade of the sovereign debt, leading to an increase on financial asset impairment.

Bernardo Collaço: This is significantly lower than what was recorded the year before. The main reason, as it was already mentioned, was related with the downgrade of the sovereign debt, leading to an increase on financial assets impairments. Moving to page 37, which refers to Bank Millennium. Net income, as I said before, increased almost 40%, and profitability continued to be impacted by costs related with CHF mortgage loans. If we exclude this specific impact, net income grew 7.5% compared with the same period of last year, and it stood above EUR 170 million. Regarding costs, if we exclude mandatory contributions, which, as Miguel said, includes the contribution for the resolution fund and this year also the deposit guarantee fund went up just 7.1%.

Bernard: We the downgrade of the sovereign depth, leading to an increase on financial asset impairments.

Bernard Kulas: Moving to page 37, which refers to Bank Millennium, net income, as I said before, increased almost 40 percent and profitability continued to be impacted by costs related with CHF mortgage loans. If we exclude most of this specific impact, net income grew 7.5% compared with the same period of last year, and it stood above €170 million. Regarding costs, if we exclude mandatory contributions, which as Miguel said, includes the contribution for the Resolution Fund, and this year also the Deposit Guarantee Fund, went up just 7.1%. CQ1 and total capital at 15.2 and 17.3 respectively and comfortable above the minimum requirements of 8.1 and 12.3.

Bernard: Moving to page 37, which refers to bank millennium net income as I said before increased almost.

Bernard: 40% and profitability continue to be impacted by costs related to CHF mortgage loans.

Bernard: We exclude this most most of these specific impacts net income grew seven 5% compared with the same period of last year.

Bernard: It's to above 170 million euros.

Bernard: Regarding costs.

Bernard: If we exclude mandatory contributions which includes the contribution for the resolution fund and this year also the deposit guarantee fund went up just seven 1%.

Bernardo Collaço: CT1 and total capital at 15.2% and 17.3% respectively, and comfortable above the minimum requirements of 8.1% and 12.2%. On page 38, additional detailed information about Bank Millennium. NII increased 5.1% to EUR 340 million. That compares with EUR 323 million one year ago. NIM stood at 4.23%. That compares with 4.36% in Q1 2024. Fees and commissions were down 8.4%. The reduction is mostly related with bank insurance commissions that are expected to recover over the year.

Bernard: Sichuan.

Bernard: And total capital at $15 to $17, three respectively and comfortable above the minimum requirements of eight one and 12 point too.

Bernard Kulas: On page 38, some additional detailed information about Macmillanium, NII increased 5.1% to $340 million, that compares with $323 million one year ago. NIMS stood at 4.23%, that compares with 4.36% in the first quarter 2020. Fees and commissions were down 8.4% and the reduction is mostly related with bank insurance commissions that are expected to recover over the year. Trading contribution for the P&L was different than what happened in the first quarter of 2024 and was influenced by the reduce on the impact related with amicable settlements in CHF mortgage loans due to the use of part of the provisions established to cover this type of agreement.

Bernard: On page 38, some details additional details or information about the millennium.

Bernard: <unk> increased five 1% to $340 million that compares with 323 million one year ago NIM.

Bernard: NIM stood at 423% that compares with $4 36 in the first quarter 'twenty four.

Bernard: Season commissions were down eight four and the reduction is mostly related with bank insurance commissions that are expected to recover over the year.

Bernardo Collaço: Trading contribution for the PNL was different than what happened in Q1 2024 and was influenced by the reduction on the impact related with amicable settlements in CHF mortgage loans due to the use of part of the provisions established to cover these type of agreements. Mandatory contributions went up EUR 31 million compared with Q1 2024, as Bank Millennium started to pay the banking tax since June 2024 and after exits the recovery plan. Moving to page 39, related with asset quality. Cost of risk stood at 45 basis points. That compares with 64 basis points in March 2024. Non-performing Loans more than 90 days past due stood at 2.2%, and coverage by loan loss reserves stood at 150%.

Bernard: Trading contribution.

Bernard: For the P&L was different than what happened in the first quarter of 2024 and was influenced by the reduced the reduction the reduce the impact related to our mutual settlements in CHF mortgage loans due to the use of part of the provisions established to cover these type of agreements.

Bernard Kulas: Mandatory contributions went up $31 million compared with the first quarter of 2024, as Bank Millennium started to pay the banking tax since June 2024 and after exit the recovery.

Bernard: Mandatory contributions went up $31 million compared with the first quarter of 'twenty four.

Bernard: <unk> started to pay the banking tax since June 24, and after.

Bernard: Exits the recovery plan.

Bernard Kulas: Moving to page 39, related with asset quality, cost of risk stood at 45 basis points. That compares with 64 basis points in March 24. Non-performing loans more than 90 days past due stood at 2.2%, and coverage by loan loss reserves stood at 150.

Bernard: Moving to page 39 related with asset quality cost of risk stood at 45 basis points that compares with 64 basis points.

Bernard: In March 24.

Bernard: Nonperforming loans more than 90 days past due stood at <unk>.

Bernard: <unk> stood at two 2% and coverage by loan loss reserves stood at 150%.

Bernard Kulas: On page 40, customer funds in Bank Millennium grew 7.6% year-on-year. Off-balance sheets grew more than 33% and total deposits by 5.5%. The evolution since December of the Portuguese public customer funds grew more than 1.3 billion and in terms of loans to customers, the gross books grew slightly above 18 billion. loans to individuals were broadly stable compared to last year and loans to companies grew more than 4%.

Bernardo Collaço: On page 40, customer funds in Bank Millennium grew 7.6% year-on-year. Optimization grew more than 33% and total deposits by 5.5%. The evolution since December 2024, customer funds grew more than EUR 1.3 billion. In terms of loans to customers, the gross books stood at slightly above EUR 18 billion. Loans to individuals were broadly stable compared to last year. Loans to companies grew more than 4%. On page 41, still on the FX topic, it's worth mentioning that the continuous reduction of the CHF mortgage portfolio, which reduced 29% since March 2024 and by 9% since the end of last year. CHF loan book at the end of March represented only 1.4% of the loan portfolio, which compares to 2.9% one year ago.

Bernard: On page 48 customer funds and bank Millennium grew seven 6% year on year also about more.

Bernard: Room for them, 33%.

Bernard: Total deposits by five 5%.

Bernard: Evolution since December.

Bernard: Customer funds grew more than $1 3 billion.

Bernard: And in terms of loans to customers the gross books do that.

Bernard: Slightly above 18 billion.

Bernard: Loans to individuals were broadly stable compared to last year and loans to companies grew more than 4%.

Bernard Kulas: On page 41, still on the FX topic, it's worth mentioning that the continuous reduction of the CHF mortgage portfolio, which reduced 29% since March 24, and by 9% since the end of last year. CHF loan book, at the end of March, represented only 1.4% of the loan portfolio, which compares to 2.9% one year ago. Cumulative provisions for legal risk amounted to $1.75 billion, representing 132% of the total mortgage, of the total mortgage loan, of the total loan portfolio. Reduction over last year was driven by natural redemptions and amicable settlements with clients. And on the first quarter of 2025, again, the number of amicable settlements were above the new court claims. And it's also important to mention that, I mean, we still continue to see a downward trend in terms of new claims flowing into court.

Bernard: On page 41.

Bernard: Still on the FX topic.

Bernard: Worth mentioning that the continued reduction of the CHF mortgage portfolio, which reduced 29% since March 24, and by 9% since the end of last year.

Bernard: Sure for loan book at the end of March represented only one 4% of the loan portfolio, which compares to two 9% one year ago.

Bernardo Collaço: Cumulative provisions for legal risk amounted to EUR 1.75 billion, representing 132% of the total mortgage loan portfolio in Poland. Reduction over last year was driven by natural reduction-redemptions and amicable settlements with clients. On Q1 2025, again, the number of amicable settlements were above the new court claims. It's also important to mention that, I mean, we still continue to see a downward trend in terms of new claims flowing into courts. Turning to page 42, which regards now to Mozambique operation. Performance in the lending BIM was this quarter impacted again by the downgrade of the sovereign debt rating, leading to additional impairments on financial assets in Q1 2025.

Bernard: Cumulative provisions for legal risk amounted to $1 75 billion, representing 132% of the total mortgage of the total.

Bernard: Mortgage loan of the total loan portfolio.

Bernard: In Poland.

Bernard: Production over last year was.

Bernard: Driven by a natural redemption redemptions and amicable settlement with.

Bernard: With clients and on the first quarter of 2025 again.

Bernard: Member of amicable settlement more above the new courts claims.

Bernard: And it's also important to mention that I mean, we still continue to see a downward trend in terms of new claims flowing into ports.

Bernard Kulas: Turning to page 42, which regards now to Mozambique operation, performance in Millennium Beam was this quarter impacted again by the downgrade of the sovereign debt rating, leading to additional impairments on financial assets in the first quarter of 2025, and as a consequence net income decreased from more than $23 million to almost $4 million in March 2025. Net operating revenues went up 8.6% and costs registered an increase of almost 11% compared with previous year. Capital, I mean, at very high levels and stood at 39.2%. Moving to page 43, NAI in Mozambique went up almost 10% and for this evolution, Bank Millennium, as Miguel said, there's a contribution from the reduction in the local requirement, Millennium BIM, sorry, there was a reduction in the local requirements in terms of cash reserves that was applied since January 25.

Bernard: Turning to page 42, with regards now to Mozambique operation performance in Millennium beam was this quarter impacted again by the downgrade of the sovereign depth rating.

Bernard: Two additional impairments on financial assets in the first quarter of 'twenty five.

Bernardo Collaço: As a consequence, net income decreased from more than EUR 23 million to almost EUR 4 million in March 2025. Net operating revenues went up 8.6%, and costs registered an increase of almost 11% compared with previous year. Capital, I mean, at very high levels, and stood at 39.2%. Moving to page 43, NII in Mozambique went up almost 10%. For this evolution, Bank Millennium, as Miguel said, there's a contribution from the reduction in the local requirements. Millennium bim, sorry. There was a reduction in the local requirements in terms of cash reserves that was applied since January 2025. NIM increased from 8.1 to 8.4.

Bernard: As a consequence net income decrease from more than $23 million to almost $4 million in March 25.

Bernard: Net operating revenues went up eight 6% and of course, we just had an increase of almost 11% compared with previous year capital I mean at very high levels and.

Bernard: And stood at 39.2%.

Bernard: Moving to page 43.

Bernard: NII in Mozambique went up almost 10% and for this evolution.

Bernard: New menu as Miguel said.

Bernard: There is a contribution from the reduction in the local requirements.

Bernard: Adobe I'm sorry, there was a reduction in the local requirements in terms of cash reserves that was applied since January 25.

Bernard Kulas: NIM increased from 8.1 to 8.4. Commissions went up 11% to more than 10 million and the operating income was broadly aligned with last year.

Bernard: <unk> increase from eight one to $8 four <unk>.

Bernardo Collaço: Commissions went up 11% to more than EUR 10 million, the other operating income was broadly aligned with last year. On page 44, regarding asset quality, non-performing loans, 90 days past due stood at 3.7%, coverage clearly above 100%. It stood at 120%. Regarding volumes on page 45, as you can see, customer funds registered an increase of almost 7%, loans to customer and customers an increase of 2%, supported by the growth on personal loans. Before we move to Q&A, I would like to thank you, I will pass to Mr. Miguel Vargas for some final remarks.

Bernard: Commissions went up 11% to more than $10 million.

Bernard: And the other operating income was broadly aligned with last year.

Bernard Kulas: On page 44 regarding asset quality, non-performing loans 90 days past due to that 3.7% and coverage clearly above 100%, it's to that 120%.

Bernard:

Bernard: Page 44 regarding asset quality.

Bernard: Nonperforming loans 90 days past due stood at three 7% and coverage clearly above 100% it stood at 120%.

Bernard: Yeah.

Bernard Kulas: Regarding volumes, on page 45, as you can see, customer funds registered an increase of almost 7% and loans to customers an increase of 2% supported by the growth on personal loans.

Bernard: Regarding volumes on page 45, as you can see customer funds registered an increase of almost 7% and loans to customers.

Bernard: Customers, an increase of 2% supported by the growth on personal loans.

Miguel Vargas: And before we move to Q&A, I'd like to thank you and I will pass to Mr. Miguel Vargas for some final remarks. Thank you very much. As we always do, we like to present to you how we are performing vis-à-vis the plan that we have presented to you. We are clearly on track with the plan. So, as you see, in terms of business volume, we have grown materially and we are already at 110 billion of business volumes in Portugal in 1963 at group level. So, clearly on track for achieving the more than 190 billion by 2028.

Bernard: And.

Speaker Change: Before we move to Q&A I would like to thank you and I will pass to Mr. Let me go over I guess for some final remarks.

Miguel Bragança: Thank you very much. As we always do, we like to really present to you how we are performing vis-à-vis the plan that we have presented to you. We are clearly on track into the plan. As you see, in terms of business volume, we have grown materially, and we are already at EUR 110 billion of business volumes in Portugal and EUR 163 at group level. Clearly on track for achieving the more than EUR 190 billion by 2028. We are already above 7 million customers, so clearly on track to achieving a value above 8 million by 2028.

Bernard: Thank you very much as we always do we like to.

Bernard: Present, how we are performing vis vis the plan that we have presented to you. We are actually on track until the plan. So as you see in terms of business, while we have grown materially and we are already at $110 million of business volumes in Portugal in the CCC at group level. So clearly on track for.

Bernard: Achieving more than 119 billion by 2028, we are already above 17 million customers. So clearly on track to achieving available above $8 million by 2028, and we are serving these clients more and more in a customer friendly.

Miguel Vargas: We are already above 7 million customers, so clearly on track to achieving a value above 8 million by 2028. And we are serving these clients more and more in a customer-friendly and simultaneously customer-friendly and efficient way, namely through mobile, where we already have more than 75% of our customer base regular mobile. The cost to income, in spite of the reduction of interest rate, has been quite resilient. And the cost of risk, I would say, is performing better than what we even had presented in the business plan. In terms of ESG commitment, we are clearly top quartile in terms of the independent S&P Global CSA.

Miguel Bragança: We are serving these clients more and more in a customer-friendly and simultaneously customer-friendly and efficient way, namely through mobile, where we already have more than 75% of our customer base, regular mobile users. The cost-to-income, in spite of the reduction of interest rate, has been quite resilient. The cost of risk, I would say, is performing better than what we even have presented in the business plan. In terms of the ESG commitment, we are clearly top quartile in terms of the independent S&P Global CSA. CET1 ratio, we are better, I would like here to recall the issue that we have a growth business plan, and as I commented at the time, the growth would be somewhat backward loaded.

Bernard: Customer friendly and efficient way, namely through.

Bernard: Mobile, where we already have more than 75% of our customer base regular mobile users.

Bernard: The cost to income in spite of the reduction of interest rate has been.

Bernard: Quite resilient.

Bernard: And the cost of risk I would say is performing better than what we even have presented in the business plan in terms of the ESG commitment.

Bernard: We are clearly top quartile in terms of the pendants S&P global CSA.

Miguel Vargas: CT1 ratio, we are better, but I would like here to recall the issue that we have a growth business plan, and as I commented at the time, the growth would be somewhat backward loaded, so the first year we would grow less than the years after, but you are already seeing that we are growing in terms of, if you analyze the growth of Q1, we are growing it already at mid-single digits, if you analyze the growth rate of Q1, so we are on track for it also. And presenting, I would say, an ROE almost of 14%, and much more important than this, a book value per share, the sum of book value per share and dividend per share, that really is clearly above all costs.

Bernard: The CET one ratio, we have better, but I would like here to to recall the issue debt.

Bernard: We have a growth business plan and as I can.

Bernard: Comment that the time the growth would be somewhat backward.

Miguel Bragança: The first year we would grow less than the years after. You are already seeing that we are growing in terms of, if you annualize the growth of Q1, we are growing at already at mid-single digits if you annualize the growth rate of Q1. We are on track for it also. Presenting, I would say, an ROE almost of 14% and much more important than this, a book value per share, the sum of book value per share and dividend per share, that really is clearly above our cost of capital.

Bernard: So the first year, we would grow less than the <unk>, but you guys you already see that we are growing in terms of if you annualize the growth of Q1, we are growing it already.

Bernard: Mid single digits, if you annualized the growth rate, though of <unk>. So we are on track for it also and presenting I would say in a row.

Bernard: Almost all of 14% and much more important in these.

Bernard: Our book value per share.

Bernard: <unk> per share and dividend per share that really is clearly above our cost of capital. We are delivering on the shareholder distributions and we expect that by delivering on these targets to continue with our plan of distributing up to 75% of the cumulative net income which will.

Miguel Vargas: We are delivering on the shareholder distribution and we expect that by delivering on these targets to continue with our plan of distributing up to 75% of the cumulative net income, which will be equivalent to a value between 4 and 4.5 billion euros to our shareholders.

Miguel Bragança: We are delivering on the shareholder distribution, we expect that by delivering on these targets to continue with our plan of distributing up to 75% of the cumulative net income, which will be equivalent to a value between EUR 4 and four and a half billion to our shareholders. Thank you very much. I'll open now the floor to Q&A.

Bernard: To be equivalent to available between four and $4 5 billion.

Miguel Vargas: Thank you very much.

Operator: I'll open now the floor to Colonel. Thank you sir.

Bernard: To our shareholders. Thank you very much open now the floor to Q&A.

Operator: Thank you, sir. As a reminder, to ask a question, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Once again, please press star one and one and wait for your name to be announced. To withdraw your question, please press star one and one again. Thank you. We are now going to proceed with our first question. The questions come from the line of Maksym Mishyn from JB Capital. Please ask your question.

Operator: As a reminder to ask a question please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 and 1 again. Once again please press star 1 and 1 and wait for your name to be announced. To withdraw your question please press star 1 and 1 again. Thank you.

Bernard: Thank you Sir.

Bernard: Remind us to ask a question. Please press star one on your telephone and wait for your name to be announced until we've got your question. Please press star one and one again once again, please press star one and one and wait for your name to be announced Kelly for your question. Please press star one and one again thank you.

Bernard: We are now going to proceed with our first question.

Max Mitchen: And the questions come from the line of Max Mitchen from JB Capital. Please ask your question. Hello, good morning. Thank you very much for the presentation and taking our questions.

Max Mitchell: And the question is come from the line of Max Mitchell from JB capital. Please ask your question.

Maksym Mishyn: Hello, good morning. Thank you very much for the presentation and taking our questions. I have 3, if I may. The first one is on the NII. Do you think that you have already reached the bottom in Q1 and shall we expect recovery in the coming quarters with the numbers you're seeing so far in Portugal? The second one is on loan book growth in Portugal. It has accelerated. As you highlighted, we even see slight growth in the non-financial corporation loans. Do you think you can grow faster than your low single-digit guidance for Portugal in 2025? What kind of trends are you observing in April and May?

Max Mitchell: Hello. Good morning, Thank you very much for the presentation and taking my questions I have three if I may the first one is on the NII and do you think that you have already reached the bottom in the first quarter until we expect to recover in the coming quarters with the numbers youre seeing so far in Portugal. The second one is on loan book growth in Portugal. It has accelerated as you highly.

Max Mitchen: I have three, if I may. The first one is on the NII. Do you think that you have already reached the bottom in the first quarter and shall we expect recovery in the coming quarters with the numbers you're seeing so far in Portugal? The second one is on loan book growth in Portugal. It has accelerated, as you highlighted. We even see slight growth in the non-financial corporation loans. Do you think you can grow faster than your low single-digit guidance for Portugal in 2025? What kind of trends are you observing in April and May? Finally, on the cost of risk in Portugal, asset quality did really well.

Max Mitchell: We even see slight growth in the non financial Corporation loans do you think you can grow faster than your low single digit guidance for Portugal in 2025, and what kind of trends are you observing in April and May and then finally on the cost of risk in Portugal asset quality did really well and I was just wondering is there any reason to not improved guidance for the 40 basis.

Maksym Mishyn: Then finally, on the cost of risk in Portugal, asset quality did really well, I was just wondering, is there any reason to not improve guidance for the 40 basis points in Portugal for 2025? Thank you.

Max Mitchen: I was just wondering, is there any reason to not improve guidance for the 40 basis points in Portugal for 2025?

Miguel Vargas: Thank you. Thank you very much for your questions. I mean, when we compute NII, we have to adjust it, of course, for the day count. And as you know, February, we all know this, February has less days than other quarters, than other months. And if you adjust for the day count, this quarter was already better than the last quarter, because the reduction was a very slight reduction. And of course, we have to adjust. The message that I would like here to give is of a resilient NII. I will not discuss because it's always hard to predict one million more or one million less.

Bernard: Plans I'm going to walk for 2025, thank you.

Miguel Bragança: Thank you very much for your questions. I mean, when we compute NII, we have to adjust it, of course, for the day count. As you know, February, we all know this, February has less days than other months. If you adjust for the day count, this quarter was already better than the last quarter because the reduction was a very slight reduction, of course we have to adjust for it. The message that I would like here to give is of a resilient NII. I will not discuss because it is always hard to predict EUR 1 million more or EUR 1 million less.

Bernard: Thank you very much for your questions.

Max Mitchell: I mean, when we compute to NII, we have to adjust its of course further they currently and as you know.

Max Mitchell: We all know these February have less days.

Max Mitchell: Other than as a quarters than is the mass and the if you adjust for the day count this quarter was already better than the last quarter because.

Max Mitchell: The reduction was a very slight reduction and of course, we have to work with just for it that the message that I would like you to give us all of them.

Max Mitchell: Resilience the NII I will not discuss because it's always hard to predict when million more or millions less and NII broadly aligned with last year, which was a year with a much.

Miguel Bragança: NII broadly aligned with last year, which was a year with a much higher level of Euribor. If I comment that the NII of this year will be broadly aligned with last year, this means that over the full year we will have to have, I would say, an average quarterly NII above the one of this quarter. Exactly midway through Q2 or Q3 or Q4, I will not enter into this because this is much more difficult to be totally accurate. I feel very comfortable that we will be have that we will close the year with an NII broadly aligned with the NII of last year.

Miguel Vargas: And an NII broadly aligned with last year, which was a year with a much higher level of year-over. If I comment that the NII of this year will be broadly aligned with last year, this means that over the full year, we will have to have, I would say, an average quarterly NII above the one of this quarter. Exactly midway through Q2 or Q3 or Q4, I will not enter into this because this is much more difficult to be totally accurate, but I feel very comfortable that we will close the year with an NII broadly aligned with the NII of last year.

Max Mitchell: Much higher level of.

Max Mitchell: You're either.

Max Mitchell: If I comment that the NII of this year will be broadly aligned with last year. This means that over the full year. We will have to have I would say an average quarterly NII above the one of these of this quarter exactly midway through Q2, or Q3 or Q4, I will not end.

Max Mitchell: <unk> into these because these are this is much more difficult to be totally accurate, but I feel very comfortable that will be that we will close the year with NII broadly aligned with the NII or last year in terms of the loan the loan in Portugal and of course.

Miguel Bragança: In terms of the loan in Portugal and of course in Poland, in spite of the reduction of the interest rates, we are seeing a still positive evolution of the NII. In terms of the loan book growth, we are seeing some green shoots. Yes, we are seeing some green shoots in terms of the corporate loan book growth. As you've seen, the total loan book growth around 1%. If you analyze it, we are already on the mid-single digits. On the corporate, we are seeing some. A large part of it is linked to investments.

Miguel Vargas: In terms of the loan, in Portugal, and of course in Poland, in spite of the reduction of the interest rates, we are seeing a still positive evolution of the NII. In terms of the loan book growth, we are seeing some green shoots, yes, we are seeing some green shoots. In terms of the corporate loan book growth, as you've seen, the total loan book growth around 1%. If you analyze it, we are already on the mid-single digits. We are seeing some, but a large part of it is linked to investments and with so much uncertainty in the world, we don't know yet whether the corporates are...

Max Mitchell: In Poland in spite of the reduction of the interest rates. We are seeing there is two positive evolution of the.

Max Mitchell: NII in terms of the loan book growth we have seen.

Max Mitchell: Seeing some green shoots yes, we are seeing some green shoots in terms of the corporate loan book growth as you've seen the total loan growth around one percentage finalize it we are already on the mid single digits on the corporate we are seeing some.

Max Mitchell: But.

Max Mitchell: A large part of it is linked to investments and with so much uncertainty.

Miguel Bragança: With so much uncertainty in the world, we don't know yet whether the corporates are, so to say, really with fixed and committed investment projects or whether they are preparing to invest, if there is more predictability in the world. Everybody is a little bit in a wait and see mode in terms of what will be the new post-tariff world before investing where before deciding where to invest. All in all, as you recall, we had, we presented the plan with a cumulative average growth rate of credit around mid-single digit, around 5%, give or take. We feel committed with this over the plan.

Max Mitchell: In the World, we we don't know yet whether the the.

Max Mitchell: The corporates are.

Max Mitchell: So to say really E with fixed and committed investment projects or whether they are prepaying to invest if there is more predictability in the in the in the in the world. It feels like everybody has a little bit in a wait and see mode in terms of what will be the new.

Max Mitchell: Both the boost there if the world before investing where.

Miguel Vargas: before deciding where to invest. But all in all, as you recall, we presented the plan with a cumulative average growth rate of credit around mid-single digit, around 5%, give or take. We feel committed with this over the plan. Of course, again, on a quarter-by-quarter, we will have some quarters that are better, some quarters that are worse, but clearly some green shoots in this area. By the same token, in terms of cost of risk, we feel comfortable with the cost of risk. We don't like to review guidance every quarter, we typically don't do it, but we feel quite comfortable that absent a major crisis in the world, these values between 30 and 40 basis points in Portugal are, I would say, a new normal, absent, I would say, a major recession in Europe.

Max Mitchell: Before I can tell you where to invest so but all in all as you recall, we had presented a plan with a cumulative average growth rate of <unk>.

Max Mitchell: Of credit around mid single digits around five 5% give or take.

Miguel Bragança: Of course, again, on a quarter by quarter, we will have some quarters that are better, some quarters that are worse, but clearly some green shoots in this area. By the same token, in terms of cost of risk, we feel comfortable with the cost of risk. We don't like to review guidance every quarter. We typically don't do it, but we feel quite comfortable that, absent a major crisis in the world, these values between 30 and 40 basis points in Portugal are, I would say, a new normal absent, I would say, a major recession in Europe. We feel very comfortable with the resilience of our book. Yes.

Max Mitchell: We feel committed it is over the over the plan of course again on a quarter by quarter. We will have some quarters that are better some quarters that award, but leaving some green shoots in this area.

Max Mitchell: By the same token in terms of cost of risk, we feel comfortable with the cost of risk.

Max Mitchell: We don't like to review the guidance every quarter, we typically don't do it but we feel quite comfortable.

Max Mitchell: Absent a major crisis in the world. These values between 30, and 40 basis points in Portugal.

Max Mitchell: I would say a new normal absent that I would say.

Max Mitchell: A major recession in a in Europe. So we feel very comfortable with those unions of our book Yes.

Miguel Vargas: So we feel very comfortable with the resilience of our borders.

Miguel Vargas: Thank you very much.

Maksym Mishyn: Thank you very much.

Miguel Bragança: Thank you.

Max Mitchell: Thank you very much thank you all.

Operator: We are now going to proceed with our next question.

Operator: We are now going to proceed with our next question. The questions come from the line of Álvaro Fernández-Garayzábal, Car Isabell from UBS. Please ask your question.

Max Mitchell: We are now going to proceed with our next question.

Alvaro Fernandez-Garizabal: And the questions come from the line of Alvaro Fernandez-Garizabal from UBS. Please ask your question. Hi, good morning and thanks for taking my questions. I have one and a follow-up on. on the guidance for Portugal. So the first one on capital, you absorbed the 50 basis points of Basel IV headwinds in the quarter, but you're still sitting on a 15.9 CT1. So what's the plan to use? that excess capital and your thoughts around the timing on this and related to that on Novo Banco. What's your stance here? Could you be interested? Is it a feasible deal for BCP given the size?

Speaker Change: And the question is come from the line of antiviral Fernandez Gareth at Bell from UBS. Please ask your question.

Álvaro Fernández-Garayzábal: Hi, good morning, and thanks for taking my questions. I have one and a follow-up on the guidance for Portugal. The first one on capital, you absorbed the 50 basis points of Basel IV headwinds in the quarter, but you're still sitting on a 15.9% CET1. What's the plan to use that excess capital and your thoughts around the timing on this? Related to that on novobanco, what's your stance here? Could you be interested? Is it a feasible deal for bcp given the size? Basically your thoughts around this. The second one is a follow-up on the guidance for Portugal.

Max Mitchell: Yes, hi, good morning, Thanks for taking my questions I have.

Max Mitchell: One on a follow up on.

Max Mitchell: On the guidance for Portugal, So the first one on capital you absorb the 50 basis points of Basel four headwinds seen in the quarter, but youre still sitting on a $15 981, so what's the plan to use.

Max Mitchell: And that excess capital on your thoughts around the timing on this unrelated to that on novel Banco.

Speaker Change: Has your stance here could you be interested in.

Speaker Change: Is it a piece of all of you for BCP given the size. So basically your your thoughts on this.

Alvaro Fernandez-Garizabal: So basically, your thoughts on this.

Alvaro Fernandez-Garizabal: And the second one is a follow-up on the guidance for Portugal. If you could give a bit more color on the different moving parts behind the flat NII guidance, so average interest rates, the evolution of deposit costs and mix, volume growth and so on. And also, you suggested in the past that also your earnings in Portugal could remain flat in 2025. I just wanted to see if you confirm that guidance or if it needs to be revised after Q1. Thanks.

Speaker Change: One is a follow up on the guidance for Portugal, if you could give a bit more color on the different moving parts behind the flat NII guidance. So average interest rates be evolution of deposit costs mix and.

Álvaro Fernández-Garayzábal: If you could give a bit more color on the different moving parts behind the flat NII guidance, so average interest rates, the evolution of deposit, costs and mix, volume growth and so on. Also you suggested in the past that also your earnings in Portugal could remain flat in 2025. I just wanted to see if you confirm that guidance or if it needs to be revised after Q1. Thanks.

Speaker Change: Volume growth on and so on and also you suggested in the past, but also your earnings in Portugal could remain flat in 2025, and just wanted to see if you comprehend that guidance or if it needs to be revised after Q1. Thanks.

Miguel Bragança: I'm sorry. Starting with the last two questions. Yes. Up until now, we think that in spite of this movement of decreased interest rates, we still feel comfortable with giving the guidance that our income statement will be resilient in Portugal and we will be flattish both at the NII level as at the earnings after tax level. We think very comfortable with this. As we are seeing in Q1 even some increase, but a part of it is in trading gains, which by its own nature are not so recurrent, so we cannot count on them for all the year, for all the quarters.

Miguel Vargas: I'm sorry, starting with the last two questions. Yes, so up until now, we think that in spite of this movement of... of low interest rates, we still feel comfortable with giving guidance, that our income statement will be resilient in Portugal and be flattish, both at the EIA level and at the earnings after tax level, so we think we are very comfortable with this. some increase, but a part of it is in trading gains, which by its own nature are not so recurrent so we not we cannot count on them for all the year for all the quarters so we feel very comfortable with With these guidance, but they're both at the NII level and at an ingraft tax So, in terms of the capital plan at Nouveau-Brunswick.

Max Mitchell: With.

Max Mitchell: I'm sorry.

Max Mitchell: Parting with with the less the two questions. Yes, so up until now we think that in spite of these.

Max Mitchell: Movement of.

Max Mitchell: Of the decrease in interest rates.

Max Mitchell: We still feel.

Max Mitchell: Comfortable with giving the guidance that our income statement will be resilient in virtual and we will be flattish both at the NII level.

Max Mitchell: The earnings after tax level. So we think we're very comfortable with it is we are seeing in Q1, even a.

Max Mitchell: Some increase but part of it is in trading gains with bites all nature.

Max Mitchell: Recurrence or not we cannot count on them.

Miguel Bragança: We feel very comfortable with this guidance, both at the NII level and at an investor tax level. In terms of the capital plan at Novo Banco. There are moments to plan and to develop a strategy. There are moments to act. We cannot be always in a planning mode, so to say, because the plans have its own governance, have to involve people, have to involve our different stakeholders, and so on. We have presented a plan that starts in 2025 and goes until 2028. This plan was a consensual plan of the different stakeholders and approved by the board of the plan. We are, I mean, in the first 3 months of the plan, we are presenting here the first 3 months of a 4-year plan.

Max Mitchell: For all deal for one quarter, so we feel very comfortable with.

Max Mitchell: These guidance both at both at the NII level.

Max Mitchell: Earnings after tax level, so in terms of.

Max Mitchell: The capital plan.

Miguel Vargas: So, There are moments to plan and to develop a strategy, there are moments to act. So we cannot be always in a planning mode, so to say, because the plans have its own governance, have to involve people, have to involve our different stakeholders and so on. So we have presented a plan that starts in 24, in 25 and goes until 28. This plan was a consensual plan of the different stakeholders and approved by the board of the plan. And we are, I mean, in the first three months of the plan, we are presenting here the first three months of a four-year plan.

Max Mitchell: All right.

Max Mitchell: So.

Max Mitchell: It.

Max Mitchell: There are moments to plan and developed a strategy that moments to act.

Max Mitchell: So that.

Max Mitchell: We cannot be always in a planning mode. So to say because the plans have its own governance after Louisville people have to evolve.

Speaker Change: With different stakeholders.

Speaker Change: And so on so we have presented a plan that starts in 'twenty four 'twenty.

Speaker Change: 25% goes until 2008. This plan was a consensual plan of the different stakeholders in the approved by the board of the plant.

Speaker Change: And we are.

Speaker Change: In the first three months of planning are presenting here. The first three months of a four year plan. So it's really too soon to review the plan.

Miguel Vargas: So it's clearly too soon to review the plan. Our plan, as I commented, was a plan that was based on growth of credit and growth of other ways and on a distribution of 75% of our earnings so as to achieve, at the end of the plan, because of the higher risk-weighted asset density of the new business, of the corporate loan book and the growth of the corporate loan book, always a CT1 ratio materially above 13.5% with the normal buffers that you would expect. So this is the plan that we have now, right now. And it's a plan of also of organic growth.

Miguel Bragança: It's clearly too soon to review the plan. Our plan, as I commented, was a plan that was based on growth, on growth of credit and of growth of other ways, and on a distribution of 75% of our earnings, so as to achieve at the end of the plan, because of the higher risk-weighted asset density of the, of the new business of the, of the corporate loan book and the growth of the corporate loan book, always a CT1 ratio materially above 13.5 with the normal buffers that you would expect that. This is the plan that we have now, right now, and it's a plan of also of organic growth, so distribution of 75% and growth of other ways.

Speaker Change: Our plan as I commented was a plan that was based on growth of Google for Freddie than of groups of other ways and on the distribution of 75% of our earnings so as to achieve at the end of the plan because of the higher risk weighted asset density of the of the new business of the of the corporate loan book.

Speaker Change: And the growth of the kind of the corporate loan book always.

Speaker Change: <unk> ratio materially above that in the half with a normal buffers that you would expect it.

Speaker Change: This is the plan that we have now right now in discipline also organic growth so distribution of 75%.

Miguel Vargas: So the solution of 75%. and growth of Ardenweald. If further down the road, of course, within two years, for whatever reason, we think that this plan is not adding value to the bank, we'll have to go back to the drawing board and see what alternative plan we'll have to develop. But up until now, we are three months down the four-year plan, so it's too soon really to re-plan and to come up with different guidelines.

Speaker Change: And growth of otherwise you further down the road of course is within three years for whatever reason, we think that this plan is not adding them to the deliberate we will have to go back to the drawing board and see what alternative plan, we will have to develop but FMT.

Miguel Bragança: If further down the road, of course, is within 2 years, for whatever reason, we think that this plan is not adding value to the bank, we'll have to go back to the drawing board and see what alternative plan we'll have to develop. Up until now, we are 3 months down a 4-year plan, so it's too soon really to replan and to, I mean, to come up with different guidelines. Regarding Novo Banco, we have several times commented. Our base plan is a plan of organic capital generation and of organic growth. That's what we are totally focused on. Okay? We don't need Novo Banco. We see the IPO of Novo Banco as a positive development in the market.

Speaker Change: Now three months on a four year plan.

Speaker Change: Really to replenish too.

Speaker Change: <unk>.

Max Mitchell: I mean to come up with different different guidelines.

Miguel Vargas: Regarding Novo Banco, we have several times commented, so our base plan... is a plan of organic capital generation and of organic growth. That's what we are totally focused on. We don't need no one. We see the IPO of Novo Banco as a positive development in the market, if not, because it allows more attention, more focus of international investors and of analysts in the Portuguese So, and we, that's, that's what we see. We are not seeing right now, I would say, a deal that would be clearly accretive for our shareholders in terms of value and in terms of EPS because of the growth that we expect in the bank.

Max Mitchell: Number one we have several times commented we saw our base plan.

Max Mitchell: And our plan of.

Max Mitchell: Organic capital generation and of our organic growth.

Max Mitchell: Growth, that's what we are totally focused on okay.

Max Mitchell: We don't need of a bundle.

Max Mitchell: We see that the IPO of Nova.

Max Mitchell: These developments in the market.

Miguel Bragança: If not, because it allows more attention, more focus of international investors and analysts in the Portuguese, in the Portuguese market. That's what we see. We are not seeing right now, I would say, a deal that would be clearly accretive for our shareholders in terms of value and in terms of EPS because of the growth that we expect in the bank. Right now, it's not on our to-do list to do everything. But as with any opportunity, if there comes a moment where we think that this clearly accrues value to our shareholders, we have to analyze and to take the appropriate measures.

Max Mitchell: Yeah.

Max Mitchell: If not.

Max Mitchell: Cause it allows more attention more focus of international vessels millennials in the in the Portuguese in the Portuguese markets. So that's.

Max Mitchell: That's what we see.

Max Mitchell: We are not seeing it.

Max Mitchell: Right now I would say.

Max Mitchell: A view that would be clearly accretive for our shareholders in terms of value in terms of EPS.

Max Mitchell: Cause of the growth that we expect in the interbank So right now it's not.

Miguel Vargas: So right now it's not on our to-do list to do everything, as with any opportunity. If there comes a moment where we think that this is clearly a cruise value to our shareholders, we will have to to the world.

Max Mitchell: It's not on our to do list too.

Max Mitchell: Everything.

Max Mitchell: With any opportunity.

Max Mitchell: If there comes a moment, where we can get these greeley accrues value to our shareholders.

Max Mitchell: We'll have to do to analyze them and take the appropriate measures, but right now we are.

Miguel Bragança: Right now we are not in this with this objective, and we are clearly focused on the plan that we have presented to the market. I mean, the moving parts of the NII in a decreasing interest rates, of course, there will be some margin compression on the term deposits because we typically have a beta of around 50%. As the interest rate goes down, we will find some negative impact on the term deposit spread. I think it's important. We will have, on the other hand, volume growth both in terms of deposits and in terms of credit, aligned with what we have been commenting until now. We are projecting, I would say, relatively stable spreads.

Max Mitchell: It's not in these in these.

Max Mitchell: His objective we are clearly focused on this on the planet represented to the market.

Max Mitchell: Okay.

Max Mitchell: Oh, yes.

Miguel Vargas: The moving parts of the NII in a decreasing interest rate, of course, there will be some margin compression on the term deposits because we typically have a beta of around 50%, so as the interest rate goes down, we will find some negative impact on the term deposit spread. We will have, on the other hand, volume growth both in terms of deposit and in terms of credit, aligned with what we have been commenting until now. And we are projecting, I would say, relatively stable spreads. We will have a positive impact in terms of the mix, because we will have, as time goes by, toward the end of the year, more corporate loans.

Max Mitchell: I mean, the moving parts of the of the NII in a decreasing interest rates of course.

Max Mitchell: There will be some margin compression on the on the time deposits because we typically have a beta of around 50%. So as the interest rate goes down we will find some.

Max Mitchell: Some negative impact on the term deposit spread so I think it's important we will have on the other hand volume growth both in terms of deposits and in terms of credit.

Max Mitchell: Aligned with what we have been commenting until now.

Max Mitchell: And we are projecting I would say relatively stable spreads.

Miguel Bragança: We will have a positive impact in terms of the mix because we will have, as time goes by, and toward the end of the year, more corporate loans, and of course, a positive contribution from our hedges. These are the different moving parts.

Max Mitchell: Have a positive impact in terms of the mix because we will have as time goes by and.

Max Mitchell: Towards the end of the year.

Max Mitchell: More corporate level more corporate loans and of course, the positive contribution from our hedges.

Miguel Vargas: And, of course, a positive contribution from our headquarters. These are the different movies.

Max Mitchell: So these are the different moving parts.

Álvaro Fernández-Garayzábal: Thanks.

Max Mitchell: Yes.

Operator: We are now going to move to our next question.

Operator: We are now going to move to our next question. The next questions come from the line of Francisco Riquel from Alantra. Please ask your question.

Max Mitchell: Thanks.

Speaker Change: We are now going to move to our next question.

Max Mitchell: Yeah.

Francisco Riquel: The next questions come from the line of Francisco Riquel from Alantra. Please ask your question. Yes, hello. Thank you for the presentation and for taking my questions. I have two on NII. The first one is on the customer spread. When I look at the NII bridge in the slide 27 for the NII in Portugal, I see that the fall in deposit costs, I translate that into basic points, is barely one-third of the fall in the loan yield. So this seems to me a worse customer spread evolution compared to some local peers which have reported to date.

Speaker Change: The next question is come from the line of Francisco Raquel from Alantra. Please ask your question.

Francisco Riquel: Yes, hello. Thank you for the presentation and for taking my questions. I have 2 on NII. The first one is on the customer spread. When I look at the NII bridge in the slide 27 for the NII in Portugal, I see that the fall in deposit costs, translate that into basic points, is barely 1/3 of the fall in the loan yield. This seems to me a worse customer spread evolution compared to some local peers, which have reported to date. The cost of deposits in particular seems to be falling by just 20 basic points year-over-year, when Euribor rates have fallen 120 basic points.

Francisco Raquel: Yes, Hello, and thank you for it.

Max Mitchell: The presentation will for taking my questions.

Max Mitchell: Two.

Max Mitchell: The first one is on the customer spread.

Max Mitchell: When I look at that.

Max Mitchell: NII bridge in the slide 27 for them and in Portugal.

Max Mitchell: You see that the fall in deposit costs.

Max Mitchell: And translate that into basis points is barely one third of default in the loan yield.

Max Mitchell: So this seems to be awash customer spread evolution compared to some local peers, which have reported.

Francisco Riquel: The cost of deposits in particular seems to be falling by just 20 basic points year on year when your IBO rates have fallen 120 basic points. So if you can explain what type of beta shall we expect on the assets and on the liabilities and what is the repricing velocity that we should expect in the coming quarters.

Max Mitchell: Today, the cost of deposits in particular, obviously seems to be falling by just 20 basis points year on year when rates have fallen 120 basis points.

Francisco Riquel: If you can explain what type of beta shall we expect on the assets and on the liabilities and what is the repricing velocity that we should expect in the coming quarters. My second question is on the NIM. I see that the deposits in Portugal are more or less stable quarter-on-quarter, but the bond portfolio is up nearly EUR 2 billion. If you can update on the ALCO strategy in terms of size and duration, and also if you can explain the NII sensitivity to the steepening of the yield curve compared to the parallel shift that you have been commenting to date. Thank you.

Max Mitchell: If you can explain what we explain what type of data shall we spent on the assets on the liability front what is the repricing velocity that we should expect.

Miguel Vargas: And then my second question is on the NIM. I see that the deposits in Portugal are more or less stable quarter on quarter, but the bond portfolio is up nearly $2 billion. So if you can update on the ALCO strategy in terms of size and duration. And also if you can explain the NII sensitivity to the steepening of the yield curve compared to the parallel shift that you have been commenting to date. Thank you. Um So the NII sensitivity, starting with the last one, to the steepening, the 12-month NII is not very material, because over the year, over the next 12 months, the steepening does not influence.

Max Mitchell: In the coming quarters.

Max Mitchell: And then my second question on the NIM I see that the deposits in Portugal are more or less stable quarter on quarter, but the bond portfolio.

Max Mitchell: Portfolio, something nearly $2 billion. So if you can update on the Alco strategy in terms of upside some duration and also if you can explain the NII sensitivity to the steepening of the yield curve compare to the parallel shift, but you have been commenting to date. Thank you.

Miguel Bragança: The NII sensitivity, starting with the last one to the steepening, the 12-month NII is not very material. Is not very material because, over the year, over the next 12 months, the steepening does not influence too much.

Max Mitchell:

Max Mitchell: So.

Max Mitchell: Then the NII sensitivity.

Max Mitchell: Starting with the last with the last one to the Steepening and the 12 months' NII is not very material.

Max Mitchell: He's not very material because over the year of over the next 12 months. The steeply does not influence too much the EV sensitivity the EV CTV I mean the available.

Miguel Vargas: The EVE sensitivity, I mean the value, the impact in terms of the NPV, so to say, of our interest rate risk, that is a standard metric, is quite positive towards the steepening of the yield curve because most of our demand deposits are assumed to have a five-year or more repricing, and a large part of our hedges have two and a half to three years, so that when the curve steepens, we tend to benefit in terms of EVE sensitivity. In terms of, I mean, the bit of the deposits, as I commented, is a bit of around 50% in our case, of the term deposits 50%, of the total deposits, because the term deposits and the demand deposits are broadly the same magnitude, and the demand deposits, we are not remunerating them, is around 25%.

Miguel Bragança: The EVE sensitivity, I mean, the value, the impact in terms of the NPV, so to say, of our entry interest rate risk, that is a standard metrics, is quite positive towards the steepening of the yield curve, because most of our demand deposits are assumed to have a five-year or more repricing and a large part of our hedges have two and a half to three years, so that when the curve steepens, we tend to benefit in terms of NII, in terms of EVE sensitivity. In terms of, I mean, the bit of the deposits, as I commented, is a beta of around 50%.

Max Mitchell: And then the impact in terms of the NPV, so to say of all of it.

Max Mitchell: Interest rate risk.

Max Mitchell: As a standout metrics is it is quite positive towards the CCP the steepening of the yield curve because most of our demand.

Max Mitchell: Demand deposits are assumed to have a five year or more repricing and a large part of our.

Max Mitchell: Of our hedges.

Max Mitchell: Yes.

Max Mitchell: After three years, so that's when the.

Max Mitchell: Steepens.

Max Mitchell: We then we tend to benefit in terms of.

Max Mitchell: And in terms of our and I are in terms of EV sensitivity.

Max Mitchell: In terms of.

Max Mitchell: The beat of the deposits as I commented.

Max Mitchell: It is a beta of around 50%.

Miguel Bragança: In our case, of the term deposits, 50%. Of the total deposits, because the term deposits and the demand deposits are broadly the same magnitude, and the demand deposits, we are not remunerating them, is around 25%. As interest rate goes down, typically we are able to reflect over, I would say, three and a half to four months, so to say, a part of this of these decrees, broadly half of these decrees in terms of the term deposit rate. That's where we are. In terms of the beta of the credit, we have a very high beta because most of our credit is floating rate.

Max Mitchell: In our case of the term deposits, 50% of the total deposits because of the time deposits and the demand deposits are broadly the same magnitude.

Max Mitchell: And the demand deposits, we are not really writing them is around 25%. So as interest rates goes down. So typically we are able.

Miguel Vargas: So as interest rate goes down, so typically we are able to reflect over, I would say, three-and-a-half to four months, so to say, a part of these, of these decrees, broadly half of these decrees in terms of the term deposit rate. So that's, that's where we are. In terms of the beta of the credit, in terms of the beta of the credit, we we have a very high beta because most of our credit is floating rate, but on the other hand, what we see is that we have hedges, so that at the end of the day, what we have been commenting to you is that we have a very, very low NIIC.

Max Mitchell: To reflect the over I would say.

Max Mitchell: Three and a half to four months total site as part of these of these degrees.

Max Mitchell: Broadly half of this decrease in terms of the deposit.

Max Mitchell: Deposit rates. So that's the that's where we are in terms of the beta of the credit in terms of the beta of the credit we.

Max Mitchell: We are we have a very high Vita because most of our credit is.

Miguel Bragança: On the other hand, what we see is that we have hedges. That at the end of the day, what we have been commenting to you is that we have a very, very low NII sensitivity. On, that's what I can tell. We are not sensitive to this NII, to NII movement, both in Portugal and in Poland. Right now, our NII sensitivity in Poland is almost zero, and our NII, and our, I'm sorry, in Portugal is around 2.5%. It's for 100 basis points movement. If you take a 25 basis points movement, you would have a minor impact in terms of NII. Okay.

Max Mitchell: Floating rate, but on but on the other hand, what we see is that we have we have hedges.

Max Mitchell: So that at the end of the day.

Max Mitchell: What we have been commenting to you is that we have a very very low NII sensitivity.

Miguel Vargas: That's what I can tell you, so we are not sensitive to this NII movement, both in Portugal and in Poland. Right now, our NII sensitivity in Poland is almost zero, and our NII in Portugal is around 2.5%. for 100 basis points movement. So if you take a 25 basis points movement, you would have a minor impact in terms of energy. Yes, sorry, just about the ALCO strategy, the bond portfolio increase versus the deposits.

Max Mitchell: On.

Max Mitchell: That's what I can tell so we are not sensitive to boot.

Max Mitchell: I do.

Max Mitchell: When I movements, both in Portugal.

Max Mitchell: Paul.

Max Mitchell: And in Poland, right now our NII sensitivity.

Max Mitchell: <unk> in Poland is almost zero in our NII.

Speaker Change: Oh I'm, sorry in Portugal is around two 5%.

Speaker Change: 100 basis points movement. So if you take a 35 basis points of movement you would have.

Speaker Change: Minor impact in terms of NII.

Speaker Change: Okay.

Speaker Change: Yeah.

Francisco Riquel: Yes. Sorry. Just about the ALCO strategy, the bond portfolio increase versus the deposits.

Speaker Change: Yes, sorry, just about.

Speaker Change: About the Alco strategy, the bond portfolio and could easily shift of deposits.

Miguel Bragança: Actually, the ALCO strategy. Well, let me comment here a little bit. We have here, the ALCO strategy is a strategy to with a means or with two means, I would say. One is to invest the liquidity of the bank, and the other is to hedge the interest rate risk. Whether we do it with more swaps or with more government debt is something that we evaluate at each moment, what makes more sense at each moment. It is not an independent strategy. It's not as if we want to position suddenly in terms of interest rate risk. Is the objective, so to say, is to hedge the interest rate risk.

Miguel Vargas: The ALCO strategy, let me comment here a little bit. We have here, the ALCO strategy is a strategy that is a strategy with two means, I would say. One is to invest the liquidity of the banks and the other is to hedge the interest rates. Whether we do it with more swaps or with more government debt, is something that we evaluate at each moment what makes more sense. So it is not an independent strategy. It's not as if we want to position suddenly in terms of interest rate risk. It's the objective, so to say, is to hedge the interest rate risk.

Speaker Change: Our strategy well, let me comment here a little bit.

Speaker Change: We.

Speaker Change: We are we have here.

Speaker Change: Alco strategy is a strategy that is a strategy too.

Speaker Change: With it means.

Speaker Change: Are these two niche I would say one is to invest the liquidity of the rack.

Speaker Change: The other is to hedge the interest rate risk, whether we do it with more with more.

Speaker Change: Swaps or with more government. There is sometimes that is something that we evaluate as each moment what makes more sense at each moment. So it is not an independent strategy. It's not as if we want to position suddenly in terms of interest rate risk is the objective.

Speaker Change: So to say, yes to that.

Miguel Vargas: And right now, what we want to have is a quite close balance sheet, of course, with some positive exposure to increasing interest rates, because this is what the market expects from a commercial bank. But with a value that is at minimum, as I commented right now, in terms of in the country. of the VITA of the term deposit, so just to give you an order of magnitude, so this is the type of portfolio that we have that is allowing us, in spite of the reduction of interest rates, this 40 billion. In 40 billion I'm adding the government debt portfolio, the interest rate swaps and the fixed rate loan that we have in our balance sheet.

Miguel Bragança: Right now what we want to have is to a quite close balance sheet with, of course, with some positive exposure to increasing interest rates, because this is what the market expects. From a commercial bank, with a value that is at minimum, as I commented right now in terms of NII, we are almost at zero. In terms of EV sensitivity also. Our strategy is exactly to contribute to this. To give you just some numbers. I mean, the total outstanding amount in terms of everything that we have fixed rate by the end of the year, just because it's almost EUR 40 billion, with demand deposits of slightly below EUR 30 billion.

Speaker Change: Hedged interest rate risk and right now what we want to have is to the.

Speaker Change: <unk> closed balance sheet with of course with some positive.

Speaker Change: Some positive exposure to increasing interest rates because this is what the market expects from a commercial bank, but with a value that is at the minimum.

Speaker Change: As I commented.

Speaker Change: As I comment is right now in terms of.

Speaker Change: Of NII, we are almost at zero in terms of EV sensitivity also so our Alco strategy is exactly to contribute.

Speaker Change: To this.

Speaker Change: To give you to give you just a.

Speaker Change: Just some numbers.

Speaker Change: I mean, the total outstanding amount in terms of everything that we have fixed rates.

Speaker Change: And that will have fixed rate by the end of the year just because it's a it's almost.

Speaker Change: <unk> 40 billion with demand deposits.

Miguel Bragança: We are, we have a fixed rate well in excess, so to say, of our demand deposits. Of course, also to help the hedging of the 50% of the beta of the term deposit. Just to give you an order of magnitude. This is the type of portfolio that we have that is allowing us, in spite of the reduction of interest rates, these EUR 40 billion. In EUR 40 billion, I'm adding the government debt portfolio, the interest rate swaps and the fixed rate loans that we have in our balance sheet. This is net of fixed rate liabilities. This is really shows, I mean, where we are and that's where we want to be. Very close to zero in terms of exposure right now.

Speaker Change: Slightly below 30 billion so.

Speaker Change: We have a fixed rate.

Speaker Change: Well in excess so to say of our demand deposits.

Speaker Change: Of course also to help.

Speaker Change: To help the then the hedging of the 50%.

Speaker Change: Of the visa all of the time deposits. So just to give you an order of magnitude. So this is the type of portfolio that we have that is allowing us in spite of the reduction of interest rates. These 40 billion.

Speaker Change: I'm I'm, adding the the government debt portfolio the interest rate swaps.

Speaker Change: The fixed rate loans that we have in our balance sheet. So this is Rick.

Miguel Vargas: So this is net of fixed rate liabilities. So this clearly shows where we are and that's where we want to be, so very close to zero. in terms of exposure.

Speaker Change: Net offshore or fixed rate liabilities. So this is really shows I mean, where we are and that's what we're going to be so very close to zero.

Speaker Change: In terms of exposure right now.

Operator: Okay, thank you.

Luis Pratas: Okay, thank you.

Francisco Riquel: Okay, thank you.

Speaker Change: Okay. Thank you.

Naomi Perou: We are now going to proceed with our next question.

Operator: We are now going to proceed with our next question. The question comes from the line of Noemi Peruch from Mediobanca. Please ask your question.

Speaker Change: We are now going to proceed with our next question.

Naomi Perou: And the questions come from the line of Naomi Perou from Mediobanca. Please ask your question. Good morning. Thank you for taking my question. My first question is on DTAs. You have more than $800 million tax carry forward of balance sheet and your profitability in Portugal is set to remain high even with lower interest rates. So I would like to ask about your approach to write up DTAs and also about the tax rate you expect in the coming years, which we have seen already around 25% in Portugal already in Q1. Then my second question is on other provisions.

Speaker Change: And the question is coming from the line of Naomi <unk> from Mediobanca. Please ask your question.

Noemi Peruch: Good morning. Thank you for taking my question. My first question is on DTAs. You have more than EUR 800 million tax loss carry forward of balance sheet, and your profitability in Portugal is set to remain high even with lower interest rates. I would like to ask about your approach to write up DTAs and also about the tax rate you expect in the coming years, which we have seen already, then you're around 25% in Portugal already in Q1. My second question is on other provisions. We saw their low number in Q1, and I was just wondering what to expect for the rest of the year, if you see sea-user seasonality in Q4 or not this time around.

Naomi: Good morning. Thank you for taking my question. My first question is on that aggregate you have more than 800 million tax loss carryforward off balance sheet and your profitability in Portugal is set to remain high even with that are nowhere interest rates.

Speaker Change: I would like to ask about your approach.

Speaker Change: To write up.

Speaker Change: And also about the tax rate you expect in the coming years.

Speaker Change: Which we haven't seen that already around 25% in Portugal already.

Speaker Change: Q1.

Speaker Change: Then.

Speaker Change: My my.

Speaker Change: My second question is on other provisions.

Naomi Perou: We saw the low number in Q1 and I was just wondering what you expect for the rest of the year. If you see usual seasonality in Q4 or not this time around.

Speaker Change: We saw very low number in Q1 and I was just wondering what dress that therefore for the rest of the year.

Speaker Change: <unk>.

Speaker Change: You just seasonality into Q4 or.

Noemi Peruch: My last question is on Mozambique. Here, I would like to ask about an update on your strategy, in particular how you manage liquidity there after two downgrades and after the increase in the bond portfolio we have seen in Q4. Also, if you can comment on the level of NII we have seen in Q1, which was quite strong. Thank you.

Naomi Perou: And my last question is on Mozambique. And here I would like to ask about an update on your strategy, in particular how you manage liquidity there after two downgrades and after the increase in the bond portfolio we have seen in Q4. And also if you can comment on the level of NAI we have seen in Q1, which was quite strong.

Speaker Change: Not this time around and my last question is on <unk>.

Speaker Change: The beacon.

Speaker Change: And here I would like to ask about <unk>.

Speaker Change: Date on your strategy in particular, how you manage your liquidity there after two downgrades and after decreasing.

Speaker Change: And the bond portfolio, we have seen.

Speaker Change: In Q4 and also if you can comment on the level of NII, we have seen that.

Speaker Change: Q1, which was quite strong thank you.

Miguel Vargas: Thank you. Okay, just taking your point, so in terms of ETA, you're absolutely right, we have an important amount of... of DTAs that are off balance sheet. We also have, as you well know, also on balance sheet DTAs, and according to the Portuguese law, the on balance sheet DTAs have to be used before the... The on balance sheet guaranteed DTAs have to be used because they are pending DTAs before we use, so to say, the off balance sheet DTAs. So this means that before we really can use them from a cash standpoint, it will still take some years.

Speaker Change: Yes.

Miguel Bragança: Okay. Just taking your point. In terms of DTA, you're absolutely right. We have an important amount of DTAs that are off balance sheet. We also have, as you well know, also on balance sheet DTAs. According to the Portuguese law, the on balance sheet DTAs have to be used before the on balance sheet guaranteed DTAs have to be used because they are pending DTAs before we use, so to say, the off balance sheet DTAs. This means that before we really can use them from a cash standpoint, we will still take some years. Of course, we can write them up gradually.

Speaker Change: Okay, just just taking your point so in terms of it yes, youre absolutely right we have.

Speaker Change: We have an important amount of.

Speaker Change: Of DTA that are off balance sheet.

Speaker Change: We also have as you well know also on balance sheet Tas.

Speaker Change: And according to the Portuguese law the on balance sheet <unk> have to be used before that the on the on balance sheet guarantee EBITDA you have to be used because they are busy days before we use so to say the off balance sheet.

Speaker Change: So are.

Speaker Change: This means that before we really can't use them from a cash standpoint from a cash standpoint, we.

Speaker Change: It will still take US seven years of course, we can right we can write them up gradually.

Miguel Vargas: Of course, we can write them up gradually, but I also would like here to highlight that as we write them up gradually, this does not necessarily have a positive impact in our capital ratios, because as you all know, the tax loss carried forward are not deductible from a CQM standpoint. So all in all, we have clearly an economic value there, no doubt about it. It is an economic value that will take some time to flow into cash flow, and due exactly to this time that it will take, our approach to this is a gradual approach.

Miguel Bragança: But I also would like here to highlight that as we write them up gradually, this does not necessarily have a positive impact in our capital ratios, because as you well know, the tax loss carryforwards are not, are deductible from a CT1 standpoint. All in all, so we have clearly an economic value there, no doubt about it. It is an economic value that will take some time to flow into a cash into cash flow. You exactly to this time that it will take, our approach to this is a gradual approach.

Speaker Change: But I also would like to highlight that as we write them gradually these does not necessarily have a positive impact on capital ratios because as you all know that the tax loss carry forwards.

Speaker Change: Forwards.

Speaker Change: Or not.

Speaker Change:

Speaker Change: Deductible from our Sichuan standpoint so.

Speaker Change: So.

Speaker Change: And also we have clearly an economic value there no doubt about it. It is an economic value that will take some time to flow into our cash into into cash flow and new executive to this time.

Speaker Change: That is we will take our approach lease is a gradual approach. So our as you know the tax rate in Portugal.

Miguel Bragança: Our, as you know, the tax rate in Portugal, when you sum them, I mean the ERC, what we call with the DRAMA, that are two technical words in Portugal, but at the end of the day, both are corporate income tax. It's around 30%. We have had 25%, I would say, of course, it depends in any quarter on the specific, on the specific composition of the P&L, but I would say that going forward, we will be closer to this 25% than to the 30%. In terms of other provisions. Other provisions are a little bit like trading gains. They are hard to predict, so it's the contrary of depreciation.

Miguel Vargas: So as you know, the tax rate in Portugal, when you send them... The IRC, what we call it, with the DRAMA, that are two technical words here in Portugal, but at the end of the day, both are corporate income tax, it's around 30%, we have had 25%. I would say, of course it depends in any quarter on the specific composition of the P&L, but I would say that going forward, we'll be closer to this 25% than to the 30%. In terms of other provisions, other provisions are a little bit like trading gains, they are hard to predict, so it's the contrary of depreciation.

Speaker Change: Some of them.

Speaker Change: The the <unk>.

Speaker Change: <unk>, what you called with the government that that too technical awards in Portugal, but at the end of the day, both our corporate income tax.

Speaker Change: It's around 30% we have has a 25% I would say.

Speaker Change: Of course, it depends in any quarter on the specific and on the specific composition of the P&L, but I will say that going forward, we will be closer to the 75% than to the 70% in terms of the other provisions and the provisions are a little bit like trading gains they are hard to predict.

Miguel Bragança: The other provisions are typically provisions for contingencies that may come up for legal issues, as you've seen with the Sistrank and so on. I would say right now in Portugal, we don't have any reason to expect an increase in other provisions from this quarter. Of course, I mean, we are always subject to litigation. We are always subject to the unknown. It is always difficult to forecast the unknown. Based on the information that we have right now, we think that we can live with a level of other impairments and provisions of around EUR 10 to 20 million per quarter on an average basis, so to say, as a normal operational litigation and so on risks going forward. In Mozambique.

Miguel Vargas: So the other provisions are typically provisions for contingencies that may come up for legal issues as we've seen with the CISRAC and so on. I would say right now in Portugal we don't have any reason to expect an increase in other provisions from this quarter, but of course, I mean, we are always subject to litigation, we are always subject to the unknown, it is always difficult to forecast the unknown. But based on the information that we have right now, we think that we can live with a level of other impairments and provisions of around 10 to 20 million per quarter on an average basis, so to say, as a normal operational litigation and so on is going.

Speaker Change: The cadre of depreciation so the other provisions that typically provisions for contingencies that may come up for for legal issues as we've seen with the strength and so on.

Speaker Change: I'd say right now in Portugal, we don't have any reason to do we expect an increase in the provisions from this autumn.

Speaker Change: But of course.

Speaker Change: We are always subject to litigation are always subject to to the unknown is off is it is always difficult to forecast the unknown, but based on the information that we have right now we think that we can oh.

Speaker Change: With the level of over the impairments and provisions of around 10 to 20 million per quarter.

Speaker Change: On an average basis, so to say is the normal operational litigation and so on going forward.

Miguel Vargas: Mozambique. Mozambique, I mean, as you know, we have a business there. I think it's very important that our risk is limited to the invest of capital. So from a liquidation point, there are no lines from the from the mother company to the local company. So everything is local. I think this is the first the first point that I would like you to highlight. The second point that I would like you also to highlight. is that there is absolutely no exposure to foreign currency Mozambican debt. So all the exposure that exists in Mozambique is in local currency and the business model in Mozambique has a very low corporate credit exposure and basically everything is either deposited at the central bank or government debt in local currency.

Miguel Bragança: Mozambique, I mean, as you know, we have a business there. I think it's very important that our risk is limited to the invested capital. From a liquidity standpoint, there are no lines from the mother company to the local company. It's everything is local. I think this is the first point that I would like you to highlight. The second point that I would like you also to highlight is that there are absolutely no exposure to foreign currency Mozambican debt. All the exposure that exists in Mozambique is in local currency, and the business model in Mozambique has a very low credit, corporate credit exposure. Basically everything is either deposited at the central bank or government debt in local currency.

Speaker Change: And when Mozambique, Mozambique, I mean, as you know we have a business. There I think it's very important that our risk is limited.

Speaker Change: The vessels capital so formally Crescent point, there are no lines from them.

Speaker Change: From the mother company to the local company. So everything is local I think this is the first the first point that I would like you to highlight the second point that I would like also to highlight.

Speaker Change: Is that there are absolutely no exposure to foreign currency.

Speaker Change: C Mozambican debt. So all the exposure that exists in Mozambique is in local currency and the business model in Mozambique is a very low credit at corpus.

Speaker Change: Corporate credits.

Speaker Change: The exposure at most and basically everything is either deposits at the central bank or government debt in local currency.

Miguel Vargas: And I recall that, I mean, Mozambique is totally autonomous from a currency issue standpoint. It's not like other countries, it's not part of a monetary union, it's not part... over the country. So it's part of the business. I would say... I always. I always have some difficulty in understanding why a country would, I would say, restructure necessarily its debt in local currency when it has, so to say, the ability to issue the local currency. But, of course, this is always something that rating agencies appraise. If the Mozambican rating degradates, it is always, I mean, we have our model so we have to flow this into our models, but that's it.

Miguel Bragança: I recall that, I mean, Mozambique is totally autonomous from a currency issue standpoint. It's not like other countries, not part of a monetary union. It's not part of the country. It's part of the of the business. I would say, I always have some difficulty in understanding when why a country would, I would say, restructure necessarily its debt in local currency when it has, so to say, the ability to issue the local currency. Of course, this is always something that rating agencies appraise. If the Mozambican rating degradates, it is always. I mean, we have our model, so we have to flow this into our models. That's it.

Speaker Change: And I recall that.

Speaker Change: I mean, then.

Speaker Change: Mozambique is totally autonomous from a currency issue standpoint, it's not like other.

Speaker Change: <unk> is not part of a monetary Union stockpile.

Speaker Change: Over the counter so it's part of the of the business I would say.

Speaker Change: In.

Speaker Change: I always.

Speaker Change: I will always have some difficulty in understanding where they are why it country by country. There was a I would say.

Speaker Change: <unk>.

Speaker Change: Restructure necessarily it's a depth in local currency when.

Speaker Change: It has so to say the ability to issue for local currency, but of course, he is always something that the rating agencies appraised.

Speaker Change: Is it the Mozambican rating digital rights. It is always I mean, we have our model. So we have to flow these into our our our models, but the but that's it so what's the if there are additional downgrades of Mozambican debt we might have.

Miguel Bragança: If there are additional downgrades of Mozambican debt, we may have to have additional impairments. We are not expecting this to be material at consolidated level. It is part of the business of being in Africa, a very profitable business. Over the years, we have been having, I mean, on a sustained basis, ROEs above 20%, year after year on a capital ratio of more than 35%. A part of being in Africa is you will have some volatility, but with not very material impact in terms of consolidated level. Yes, the loan-to-deposit is so low, so low that we would not expect any type of liquidity issue there also. Okay.

Miguel Vargas: If there are additional downgrades of Mozambican debt, we may have to have additional impairment, but we are not expecting this to be material at a consolidated level, so it is part of the business of being in Africa, a very profitable business over the years. We have been having, I mean, on a sustained basis, ROE is above 20% year after year on a capital ratio of more than 35%, so a part of being in Africa is you have some volatility, but with not very much impact in terms of. Yes, the loan-to-deposit is so low, so low that you would not expect any type of liquidity issue there.

Speaker Change: We'll have additional impairments, but we are not expecting this to be material at consolidated level. So it is part of the business of being in Africa, a very profitable business over the years, we have been having I mean on a sustained basis.

Speaker Change: The ROE is above 20%.

Speaker Change: Year after year on our capital ratio of.

Speaker Change: More than 75% so a part of being in Africa is you have some volatility but not.

Speaker Change: Very material impact in terms of consolidated level.

Speaker Change: Yes, the loan to deposit is solo so low that we would not expect any type of liquidity issue they're awesome. Okay.

Luis Pratas: Thank you.

Noemi Peruch: Thank you.

Speaker Change: Thank you.

Operator: We are now going to proceed with our next question.

Operator: We are now going to proceed with our next question. The question comes from the line of Luis Manuel Grilo Pratas from Otenimas. Please ask your question.

Speaker Change: We are now going to proceed with our next question.

Luis Manuel Grillo-Pratas: And the questions come from the line of Luis Manuel Grillo-Pratas from Houtanoumas to answer your question. Good morning, thank you for taking my questions. I have two please. The first one is on cost in Portugal. So costs are up 9% compared to last year. How do you see costs evolving for the rest of the year, especially for staff? I think your 2025 guidance in Q4 was low to mid single digit cost growth. Does this still make sense? And are there any management actions that you can initiate to better control this cost?

Speaker Change: And the questions come from the line of Lisa cleanup from <unk>. Please ask your question.

Luis Pratas: Good morning. Thank you for taking my questions. I have two, please. The first one is on costs in Portugal. Costs are up 9% compared to last year. How do you see costs evolving for the rest of the year, especially for staff? I think your 2025 guidance in Q4 was low to mid-single digit cost growth. Does this still make sense? Are there any management actions that you can initiate to better control these costs? Moving to capital, could you please comment on the main moving parts of the capital this quarter? Essentially, you bid on group earnings, but the foreign impact of 50 basis points was in line with the guidance and the 75% payout accrual, I think was also expected. There was still a small miss in CET1 against consensus.

Luis Manuel Grilo Pratas: Good morning. Thank you for taking my questions. I have two, please. The first one is on costs in Portugal. Costs are up 9% compared to last year. How do you see costs evolving for the rest of the year, especially for staff? I think your 2025 guidance in Q4 was low to mid-single digit cost growth. Does this still make sense? Are there any management actions that you can initiate to better control these costs? Moving to capital, could you please comment on the main moving parts of the capital this quarter? Essentially, you bid on group earnings, but the foreign impact of 50 basis points was in line with the guidance and the 75% payout accrual, I think was also expected. There was still a small miss in CET1 against consensus.

Lisa: Good morning. Thank you for taking my questions I have two please the first one is on costs in Portugal.

Speaker Change: Costs are up 9% compared to last year or do you see costs evolving for the rest of the year, especially for staff I think your 2025 guidance in Q4 was low to mid single digit cost growth does this still makes sense.

Speaker Change: And are there any management actions that you can initiate better control these costs.

Luis Manuel Grillo-Pratas: And then, moving to capital, could you please comment on the main moving parts of the capital this quarter? So, essentially, you bet on group earnings, but the foreign impact of 50 basis points was in line with the guidance, and the 75% payout accrual, I think, was also expected, but there was still a small missing CT1 against consensus. So, I was trying to understand if there were, like, any other factors impacting capital, PR, maybe, like, the DTAs, as you just mentioned, and how do you expect capital build going forward, and if there are any additional regulatory headwinds.

Speaker Change: And then moving to capital could.

Speaker Change: Could you please comment on the main moving parts of the capital this quarter. So essentially you beat on group planning Basel point backed up 50 basis points was in line with the guidance and the 75% payout accrual I think was also expected, but that will still a small <unk> one against consensus. So I was trying to understand if there were like any other fab.

Luis Pratas: I was trying to understand if there were like any other factors impacting capital PR, maybe like the DTAs as you just mentioned. How do you expect capital build going forward and if there are any additional regulatory headings? Thank you.

Luis Manuel Grilo Pratas: I was trying to understand if there were like any other factors impacting capital PR, maybe like the DTAs as you just mentioned. How do you expect capital build going forward and if there are any additional regulatory headings? Thank you.

Speaker Change: Impacting capital PR.

Speaker Change: Maybe like the DTA that you just mentioned.

Speaker Change: Do you expect capital build going forward and if there are any additional regulatory adding thank you.

Miguel Vargas: Thank you. Okay, so in terms of... costs import. We have given the guidance of mid-single-digit, we are maintaining the guidance of mid-single-digit. I would not classify it as an issue of control, how to control the cost, because if we are clearly within the plan, it's not an issue of control. It's maybe an issue of level, but not an issue of control. I would also like to highlight that with the cost-to-income that we have, I mean, cutting more in terms of costs may imply losing some key people and not generating the return that we want to generate.

Miguel Bragança: Okay. In terms of costs in Portugal, we have given the guidance of mid-single digits. We are maintaining the guidance of mid-single digit. I would not classify it as an issue of control, how to control the costs, because if we are clearly within the plan, it's not an issue of control. It's maybe an issue of level, but not an issue of control. I would also here like to highlight that with the cost-to-income that we have, I mean, cutting more income costs may imply losing some key people and not generating the return that we want to generate.

Speaker Change: Okay. So in terms of.

Speaker Change: Costs in Portugal.

Speaker Change: We have given the guidance of mid single digits, we are maintaining the guidance of a mid single digit.

Speaker Change: I would not classify it as an issue of control how to control the cost because exactly which is the plan is not an issue of AV control, it's mainly an issue of level, but not an issue of control I would also like to highlight I would also like to highlight that with the cost week in Denver.

Speaker Change: I mean it.

Speaker Change: Getting more intense cost may imply losing some key people and not and not generating the return that we want to generate so with the cost to income get representing and I mean, it is if I can make sure that this cost to income is sustainable I mean, we should not be very.

Miguel Bragança: With the cost-to-income that we are presenting, and I mean if I can make sure that this cost-to-income is sustainable, I mean, we should not be very, I mean, concerned in terms of the costs in Portugal. I mean, tell me other banks in Europe that have cost-to-incomes of 34%. With the 34%, I would say, cost-to-income, I would say we are well served. We also have to make sure that we retain key people, that we also have the very remuneration that makes sense.

Miguel Vargas: So, with the cost-to-income that we are presenting, I mean, if I can make sure that this cost-to-income is sustainable, I mean, we should not be very concerned in terms of the costs in Portugal. Tell me other banks in Europe that have cost-to-incomes of 34%. So, with the 34%, I would say, cost-to-income, I would say we are well served. And we also have to make sure that we retain key people, that we also have the very remuneration that makes sense. And, of course, mainly when we are clearly generating value for our shareholders, it's important to keep the key people committed, mainly after many years in which this was very much constrained.

Speaker Change: Of course in terms of the costs in Portugal, I mean.

Speaker Change: On the other banks in Europe.

Speaker Change: We have.

Speaker Change: The honest is that they've got to have cost when it comes over.

Speaker Change: Of 34%, so with the 34% I would say the first week of May I would say we are well served.

Speaker Change: We also have to make sure that we retain key people that we also have the variable remuneration that makes sense and of course, mainly when we are clearly generating value for our shareholders. It's important to keep our key people committed mainly after many years in which these wars.

Miguel Bragança: Of course, mainly when we are clearly generating value for our shareholders, it's important to keep the key people committed, mainly after many years in which this was very much constrained. I think this is important. We had commented that in terms of Basel III, we would have an impact of around 50 basis points, 50 basis points of Basel III. When if you do the PNL impact, including impairments and so on, you would get here a 20 basis points here of positive impact. The remaining parts are minor adjustments, mainly to the minority interest in Poland, minority and the cap of minority interest.

Speaker Change: Very much constrained I think I think this is important.

Miguel Vargas: We had commented that in terms of Basel III, we would have an impact of around 50 basis points. 50 basis points of Basel III, if you do the P&L impact, including impairments and so on, you would get here 20 basis points of positive impact. The remaining part are minor adjustments mainly to the minority interest in Poland and the cap of minority interest, but this is a minor impact, so I would not give it too much weight. I mean, I've read most of your pieces of research in the meantime. Effectively, some of the analysts said that there was a miss in terms of capital, but the majority of analysts said that the capital was clearly in line with their projections.

Speaker Change:

Speaker Change: We had commented that in terms of Basel III.

Speaker Change: We would have an impact of around 50 basis points.

Speaker Change: 50 basis points of Basel III.

Speaker Change: Yes.

Speaker Change: When and if you do the P&L.

Speaker Change: Impacts, including the impairments and so on you.

Speaker Change: You would get a 2020 basis points a year of.

Speaker Change: <unk> of positive impact.

Speaker Change: The remaining part.

Speaker Change: Minor adjustments, mainly to the minority interest in Poland minorities and the cap of my 19th this but this is this is a minor minor impact so I would not give it too much weight.

Miguel Bragança: This is a minor impact, so I would not give it too much weight. I mean, I've read most of your pieces of research in the meantime. Effectively, some of the analysts said that there was a miss in terms of capital, but the majority of analysts said that the capital was clearly in line with the projections. I would not classify this in terms of a difference vis-a-vis what at least most of the analysts were projecting. What some of the analysts, yes, I confirm that some were projecting this. Okay.

Speaker Change: I mean, I've read I've read most of your pieces of research in the meantime.

Speaker Change: It effectively.

Speaker Change: Some of the analysts said that there was a miss in terms of capital, but the majority of analysts said that the capital was clearly in line with their projections. So I would not classify it as in terms of the difference with our view at least most of the analysts were.

Miguel Vargas: So, I would not classify this in terms of a difference vis-a-vis what at least most of the analysts were projecting. But some of the analysts, yes, I confirm that some were projecting it.

Speaker Change: We're projecting what some of the analysts yes, I confirm that some were.

Speaker Change: Projecting is okay.

Luis Pratas: Okay, thank you. Can I just do a very quick follow-up? In terms of the pension fund coverage in Portugal, could you please give us a number? I think last Q it was 105%. Thank you.

Luis Manuel Grilo Pratas: Okay, thank you. Can I just do a very quick follow-up? In terms of the pension fund coverage in Portugal, could you please give us a number? I think last Q it was 105%. Thank you.

Luis Manuel Grillo-Pratas: Thank you.

Luis Manuel Grillo-Pratas: Can I just do a very quick follow-up? In terms of the pension fund coverage in Portugal, could you please give us a number? I think last quarter it was 105%.

Speaker Change: Okay. Thank you can I just a very quick follow up in terms of the pension fund coverage in Portugal could you. Please give us a number I think last quarter. It was 105%. Thank.

Miguel Vargas: Thank you. I mean, we do not give this number on a quarter-by-quarter basis and make sure, but what I can comment to you is that it has evolved positively. So we don't have here, I mean, we continue to have a large buffer on this area, but this is a number that we only disclose on a half-year basis, actually because formally we only update the discount rate on also only on a half-year basis. But if we were to update it right now, it would have a positive evolution.

Speaker Change: Thank you.

Miguel Bragança: I mean, we do not give this number on a quarter by quarter basis and make sure. What I can comment to you is that it has evolved positively. We don't have here, I mean, we continue to have a large buffer on this area, but this is a number that we only disclose on a half year basis. Actually, because formally, we only update the discount rate also only on a half year basis. If we were to update it right now, it would have a positive evolution.

Speaker Change: I mean, we do not give the number on a quarter by quarter basis, but what I can comment to you is that it has evolved positively. So we don't have here.

Speaker Change: We continue to have a large buffer on this area, but this is a number that we only disclose on a on a half.

Speaker Change: Half year basis actually because formerly we only update the discount rate also only.

Speaker Change: On a half year basis, but if you would like it right now it would have a positive evolution.

Operator: Thank you very much.

Speaker Change: Yes.

Luis Pratas: Thank you very much. Okay.

Luis Manuel Grilo Pratas: Thank you very much. Okay.

Speaker Change: Thank you very much okay.

Sophie Petersen: We are now going to proceed with our next question.

Operator: We are now going to proceed with our next question. The next questions come from the line of Sophie Petersen from JPMorgan. Please ask your question.

Speaker Change: We are now going to proceed with our next question.

Sophie Petersen: And the next questions come from the line of Sophie Petersen from JP Morgan. Please ask your question. Yeah, thank you for taking my question and thanks for being so helpful on the net interest income in 2025.

Speaker Change: And the next questions come from the line of Stacy <unk> from J P. Morgan. Please ask your question.

Sophie Petersen: Yeah. Thank you for taking my question. Thanks for being so helpful on the Net Interest Income in 2025. Just a question on 2026 Net Interest Income. Given that margins are kind of close to troughing, and volume growth should be kind of mid-single digits, is it fair to assume that we should start to see Net Interest Income growth in Portugal in 2026? That would be my first question. Then the second question would be on Poland. Santander sold their Polish operations for a quite attractive price. What's your view on Poland? Would you consider exiting Poland? That would be my second question.

Sofie Peterzens: Yeah. Thank you for taking my question. Thanks for being so helpful on the Net Interest Income in 2025. Just a question on 2026 Net Interest Income. Given that margins are kind of close to troughing, and volume growth should be kind of mid-single digits, is it fair to assume that we should start to see Net Interest Income growth in Portugal in 2026? That would be my first question. Then the second question would be on Poland. Santander sold their Polish operations for a quite attractive price. What's your view on Poland? Would you consider exiting Poland? That would be my second question.

Stacy: Yes. Thank you for taking my question.

Speaker Change: And thanks for being so helpful on that net interest income in 2025.

Sophie Petersen: But just a question on 2026 net interest income, given that margins are kind of close to troughing and volume growth should be kind of mid-single digit, is it fair to assume that we in Portugal in 2026? That would be my first question and then the second question would be on Poland near Soldier Polish operations for a quite attractive price. What's your view on Poland and would you consider exiting Poland?

Stacy: Just a question on 2020 net interest income given that margins are cut off guys.

Stacy: A trough thing.

Stacy: On volume growth.

Stacy: Should be kind of mid single digit is it fair that theme that we should start to see a net.

Stacy: Net interest income growth in Portugal in 'twenty funny.

Stacy: <unk>.

Stacy: That would be my first question and then the second question.

Speaker Change: Oh no.

Stacy: Southern Air sole therapy Irish operation for a quite attractive time.

Stacy: What's your view on kind of a run on.

Miguel Vargas: That would be my second question and then just finally, at the beginning of the call you very helpfully gave details around the Polish-Swiss-Franc provisions that they should continue to come down, but in which year should we expect the Polish provisions to be immaterial? Is it already in 26, or 27, or further out? Okay so uh Sophie this one were were you were you I mean concerned that the NII in 26 would go down or or that it should increase more? I did not understand exactly. Sorry I was I was wondering if net interest income in Portugal in 2026 should be growing in line with the volume so if volume growth is kind of single digit is it clear to you that we can already see that kind of growth in 2026?

Stacy: Would you consider exiting <unk> and <unk>.

Sophie Petersen: Just finally, at the beginning of the call, you very helpfully kind of gave details around the Polish Swiss franc provisions that they should continue to come down. At what, in which year should we expect the Polish provision to be immaterial? Is it already in 2026 or 2027 or further out? Thank you.

Sofie Peterzens: Just finally, at the beginning of the call, you very helpfully kind of gave details around the Polish Swiss franc provisions that they should continue to come down. At what, in which year should we expect the Polish provision to be immaterial? Is it already in 2026 or 2027 or further out? Thank you.

Stacy: My second question and then just finally I.

Speaker Change: At the beginning of the call you've very helpfully.

Speaker Change: Details are wrong.

Speaker Change: The Polish Swiss franc affirmation that they should continue to come down by half.

Speaker Change: And what.

Speaker Change: In which years should we expect the Polish provision to be in material is it already in 2006 or 27 or further Alan Thank you.

Miguel Bragança: Okay. Sophie, just one. Were you, I mean, concerned that the NII in 2026 would go down or that it should increase more? I did not understand exactly.

Speaker Change: Okay. So.

Speaker Change: So this is Mike where are you where are you I mean concerned that their name 26 would go down or or that it should increase more I don't think I said exactly I'm sorry.

Sophie Petersen: Sorry. I was wondering if net interest income in Portugal in 2026 should be growing in line with the volume. If volume growth.

Sofie Peterzens: Sorry. I was wondering if net interest income in Portugal in 2026 should be growing in line with the volume. If volume growth.

Speaker Change: I was wondering if net interest income in Portugal in 2020 stake should be growing in line with volume sorry, if volume got it got it okay.

Miguel Bragança: Okay.

Sophie Petersen: is kind of mid-single digits.

Miguel Bragança: Okay.

Sofie Peterzens: is kind of mid-single digits.

Miguel Bragança: Okay. Yeah, yeah.

Sophie Petersen: Is it fair to assume that we could already see that kind of NII growth in 2026?

Sofie Peterzens: Is it fair to assume that we could already see that kind of NII growth in 2026?

Speaker Change: Alright, guys. Thank you guys kind of yes.

Miguel Bragança: Yes. I mean, as you know, we don't have a monopoly, so we live in a competitive market, so to say. Of course, net interest income is very much influenced by the competitiveness and the rivalry in terms of the pricing, mainly of the deposits, because this is what, this is what, I mean, influences more directly and more immediately the PNL. What I can tell you is that our base case is exactly what you are saying. Our base case is that the NII will grow in 26, low to mid-single digits, growing, i.e., growing in line with volumes. In terms of the Polish operations, starting with the, starting with the Swiss franc mortgage provisions.

Miguel Vargas: Yes um I mean as you know we don't have a monopoly so we live in a competitive market so to say and of course net interest income is very much influenced by the competitiveness and the by rivalry in terms of the pricing mainly of the of the deposits because this is what this is what um I mean influences more directly and more immediately the P&L but what I can tell you is that our base case is exactly what what you are saying so our base case is that the NII will grow in 26 uh low to mid single digits uh growing or i.e.

Speaker Change: Yes.

Speaker Change: I mean as you know we don't have them.

Speaker Change: A monopoly so we live in a competitive.

Speaker Change: Market, so to say and of course net interest income is very much influenced by the competitiveness in the Bay area in terms of the pricing mainly of the of the deposits because this is what.

Speaker Change: This is what our and influences more directly and more immediately the P&L, but what I can tell you is that our base case is exactly what you are saying so our base case is that the NII will grow in 2006.

Speaker Change: The low to mid single digits.

Miguel Vargas: growing in line with uh with volumes.

Speaker Change: Oh I E growing in line with with with volumes.

Miguel Vargas: In terms of the Polish operations starting with the starting with the the Swiss franc mortgage provisions. We have been very consistent in terms of what we are saying. We said that 23 would be the highest number, that would show a large drop from 23 to 24 and we are also expecting to see a material drop from 24 to 25. In 26 it will be much, much lower than what we have in 25, whether it will be material or not. I think it's too early to say, but what we expect is a much, much lower value.

Speaker Change: In terms of the Polish operation starting with the.

Speaker Change: Starting with them.

Speaker Change: The Swiss franc.

Speaker Change: Mortgage.

Miguel Bragança: We have been very consistent in terms of what we are saying. We would say that 23 would be the highest number. We would show a large drop from 23 to 24. And we were also seeing, expecting to see a material drop from 24 to 25. I mean, in 26, it will be much, much lower than what we have in 25, whether it will be material or not, I think it's too, it's too early to say. What we expect is that a much, much lower value. It depends a lot on the methodology, but and in what happens next. I mean, right now, what our model Just why is it a little bit more complex to say?

Speaker Change: The provisions we have been very consistent dividends over time.

Speaker Change: What we are saying we will sell their 23 would be the <unk> the highest number that.

Speaker Change: We will show a large drop from 23 to 24.

Speaker Change: And we were also expecting to see a material drop from 24 to 25.

Speaker Change: So.

Speaker Change: And I mean in 2006, it will be much much lower than what we have in 'twenty, five whether judy, but TCE or not I think it's too it's too early to say, but what's your space at a much much lower value it depends a lot on the on the methodology.

Miguel Vargas: It depends a lot on the methodology and what happens next. I mean, right now, our model... Why is it a little bit more complex to say? Because our model is basically a three-year forward-looking model. And our expectation, this started in 2019. So this means that the flow of cases that we have right now on 25. in our model will be the four cases that we will expect until 28. The full of cases that we'll have in 26. will be the fourth cases until 29, the beginning of 26 or the end of 26, until the end of 29.

Speaker Change: And we will in what happens in the next one right now.

Speaker Change: What are our model our model just why why is it a little bit more complex to say because of our model.

Miguel Bragança: Because our model is basically a 3-year forward-looking model. Okay? This started in 2019. This means that the flow of cases that we have right now on 25 in our model will be the flow of cases that we will expect until 28. The flow of cases that we'll have in 26 will be the flow of cases until 29, the beginning of 26 or at the end of 26, until the end of 29. We would expect, so to say that most of the cases will already have, I mean, are already projected there because it started 10 years ago.

Speaker Change: It is basically a three year forward looking model.

Speaker Change: And our expectation they started in 2019.

Speaker Change: So this means that the the flow of cases that we have right now on 25.

Speaker Change: Our model will be the false cases that we would expect until 'twenty eight.

Speaker Change: The flow of cases, it will have in 2006 will be the Wolff cases appeal.

Speaker Change: 29 at the beginning of 'twenty six.

Speaker Change: End of <unk> 56, and until the end of 2009.

Miguel Vargas: We would expect, so to say, that most of the cases... will already have, I mean, are already projected there because it started 10 years ago. But of course if there is a sudden new, totally unexpected I would say, source of new flow of cases. You may change a little bit, but in any case. This is the message that I would like to give right now, a large drop this year, and next year I would say, I will not call it immaterial, but much, much lower, I would say on the normal course of business. an impairment in the very normal course of business without major impact on the P&L.

Speaker Change: We would expect so to say that most of the cases.

Speaker Change: We already have.

Speaker Change:

Speaker Change: I mean, I always projected there because it started 10 years ago, but of course, if there is a sudden new totally unexpected I would say a source of new flow of cases may change a little bit but in any case.

Miguel Bragança: Of course, if there is a sudden new, totally unexpected, I would say, source of new flow of cases, this may change a little bit. In any case, this is the message that I would like to give right now. A large drop this year, and next year, I would say, I would not call it immaterial, but much, much lower. I would say on the normal course of business. You know, I would say, an impairment in the very normal course of business without major impact on the PNL. In terms of the Polish operation. I mean, we, as I comment very often, we don't separate strategy from value creation. This is a very important point.

Speaker Change: This is the message that I would like to be right now.

Speaker Change: Drop this year.

Speaker Change: And our next year.

Speaker Change: I would say I would not call it immaterial, but a much much lower I would say on the normal course of business.

Speaker Change: Yeah.

Speaker Change: An impairment in the in the very normal course of business, we felt without major.

Speaker Change: Impact on that on the P&L.

Miguel Vargas: In terms of the... of the Polish operation. I mean, we, as I comment very often, we don't separate strategy from value creation. So this is a very. We, we, we think. We are managing well our Polish operation. We are generating value in our Polish operation. We are, so to say, not called the natural owners, but at least we are value-creative owners of our Polish operation. This is important. And when we see what is the. possibility or the capacity, the earnings-generating capacity of our Polish operations. x with friends We are seeing oil values in excess of 700 million.

Speaker Change: In terms of them.

Speaker Change: Of the Polish operation.

Speaker Change: I mean, we.

Speaker Change: As I comment very often we don't separate strategy from value creation. So this is a very important point.

Miguel Bragança: We think we are managing well our Polish operation. We are generating value in our Polish operation. We are, so to say, I will not call it the natural owners, but at least we are value creative owners of our Polish operation. This is important to say. When we see what is the possibility or the capacity, the earnings generating capacity of our Polish operation, X Swiss franc. We are seeing our values in excess of EUR 700 million. You can do the numbers of what is our PNL X Swiss franc. It is a very high PNL. When we look at the multiples in the market, we don't think that the valuations reflect already. I mean, this earning generation capacity of the bank that we have in Poland.

Speaker Change: We think.

Speaker Change: We are.

Speaker Change: Managing well, our Polish operation, we are generating value on a per lease operation. We are supposed to sell not called the natural owners, but at least we are value accretive owners of our Polish operation.

Speaker Change: Important to say.

Speaker Change: And when we see what is the.

Speaker Change: Possibility or the capacity the earnings generating capacity of our Polish operation.

Speaker Change: Swiss franc.

Speaker Change: We are seeing or we're losing in excess of $700 million.

Miguel Vargas: So you can do the numbers of our, what is our PNLA excess freight. So it is a very high PNLA. So when we see, when we look at the. the multiples in the market. We don't think that the valuation. reflect already. I mean this earning generation capacity of the bank that we have in Poland. So this means that we think we can do better than what is implicit in the market. So while we are generating value and if we really... feel more comfortable, that we can generate more value. As we have been doing, our bank has been a key benchmark bank in terms of quality of service, in terms of acquisition of new clients, in terms of acquisition of salary accounts.

Speaker Change: So you can do the numbers of our what is our P and L. A extra strength. So it is a very high P&L.

Speaker Change: So when we see when we look at the.

Speaker Change: At the multiples in the market.

Speaker Change: We don't think that the valuations.

Speaker Change: Reflect already.

Speaker Change: I mean these earnings generation capacity of the bank that we have in Poland.

Miguel Bragança: This means that we think we can do better than what is implicit in the market. While we are generating value, and if we really feel more comfortable that we can generate more value, as we have been doing, our bank has been a key benchmark bank in terms of quality of service, in terms of acquisition of new clients, in terms of acquisition of salary accounts. We clearly are one of the two players that have been growing in terms of current accounts, in terms of clients, and so on. We think we are the natural owners. I mean, and that the market still, I mean, has a lot of upside.

Speaker Change: So this means that we think we can do better than what is implicit in the market. So while we are generating value.

Speaker Change: If you really.

Speaker Change: Feel more comfortable that we can generate more value as we have been doing on our bank has been a key benchmark by bank in terms of quality of service in terms of our.

Speaker Change: The acquisition of new clients in terms of acquisition of or salary accounts. So we've got one of the two players that have been growing in terms of current accounts in terms of clients and so on we think we are the natural owners.

Miguel Vargas: So we clearly are one of the two players that have been growing in terms of current accounts, in terms of clients, and so on. We think we are the natural owners. And that the market still, I mean, has a lot of upside. So if somebody wants to convince us that it is an owner that generates much more value than we do, it has to prove it to us.

Speaker Change: Eh.

Speaker Change: And that the market view I mean has a lot of upside so if somebody wants to convince us that it is an owner that is generates much more available than we do it has to prove it to us.

Miguel Bragança: If somebody wants to convince us that it is an owner that is generates much more value than we do, it has to prove it to us. The asset is not for sale, so we are not proactively, I mean, putting the asset for sale because we think we can generate still a lot of value.

Miguel Vargas: But the asset is not for sale. So we are not proactively putting the asset for sale because we think we can generate still a lot of value.

Speaker Change: But the asset is not for sale, but we are not so we are not.

Speaker Change: We are proactively.

Speaker Change: Putting the assets for sale, because we think we can generate a lot of them.

Miguel Vargas: That's very clear, thank you.

Sophie Petersen: That's very clear. Thank you.

Sofie Peterzens: That's very clear. Thank you.

Speaker Change: That's very clear thank you.

Operator: We are now going to proceed with our next question.

Operator: We are now going to proceed with our next question. The question comes from the line of Hugo Cruz from KBW. Please ask your question.

Speaker Change: We are now going to proceed with our next question.

Hugo Cruz: And the questions come from the line of Hugo Cruz from KBW. Please ask your question. I thank you for the time. First, I have two clarifications. You've talked about on the loan growth in Portugal. You know, if you could just clarify what you are expecting for this year, because I understood from the previous results call that you are targeting more than no single digit this year, given the uncertainty. It sounds like you're a little bit more positive now. So, do you think we could actually see three, four percent loan growth this year in Portugal? So that's the first clarification.

Speaker Change: And the questions come from the line of Hugo Cruz from <unk>. Please ask your question.

Miguel Bragança: Hi, thank you for the time. First, I have two clarifications. You've talked about on the loan growth in Portugal, you know, if you could just clarify what you are expecting for this year, because I understood from the previous results call that you are targeting more loan, low single digits this year, given the uncertainty. It sounds like you're a little bit more positive now. Do you think we could actually see 3, 4% loan growth this year in Portugal? That's the first clarification. The second is on taxes. You've talked today about tax rate being between, I think, 25 and 30. Is that a guide just for 2025 or also for the later years? Finally, if you could talk about RWA optimization.

Hugo Cruz: Hi, thank you for the time. First, I have two clarifications. You've talked about on the loan growth in Portugal, you know, if you could just clarify what you are expecting for this year, because I understood from the previous results call that you are targeting more loan, low single digits this year, given the uncertainty. It sounds like you're a little bit more positive now. Do you think we could actually see 3, 4% loan growth this year in Portugal? That's the first clarification. The second is on taxes. You've talked today about tax rate being between, I think, 25 and 30. Is that a guide just for 2025 or also for the later years? Finally, if you could talk about RWA optimization.

Speaker Change: Alright, Thank you for the time.

Speaker Change: First I had two clarifications.

Speaker Change: Talked about on the loan growth in Portugal.

Speaker Change:

Speaker Change: If you could just clarify what you are expecting for this year because I understood from the previous results call that you are targeting more of the low low single digits. This year, given the uncertainty, but it sounds like you're a little bit more positive now. So do you think you could actually see three 4% loan growth this year in Portugal.

Hugo Cruz: The second is on taxes. You've talked today about the tax rate being between, I think, 25 and 30. Is that a guide just for 2025 or also for the later years? And then finally, if you could talk about RWA optimization. You know, a lot of banks have been doing synthetic securitizations, for example, but also other measures. So, is there anything you are planning that could improve your C2N ratio there? Thank you.

Speaker Change: So that's the first clarification the second is on taxes.

Speaker Change: Talk today about the tax rate being between I think 25 and 30 is there a guide just 4025 for also for the later years and then finally, if you could talk about arguably optimization you know a lot of banks have been doing synthetics securitization for example, but also other measures.

Miguel Bragança: You know, a lot of banks have been doing synthetic securitizations, for example, but also other measures. Is there anything you are planning that could improve your CT1 ratio there? Thank you. Okay. Starting with the last question. I mean, we are always looking at opportunities of synthetic securitization. Actually, we have several of them done. We look at this on a very practical and value-driven approach. There is an implicit cost of equity in these in these deals. If we reach the conclusion that the implicit cost of equity is clearly below the cost of equity, so that it accrues value to our shareholders, we typically may do it.

Hugo Cruz: You know, a lot of banks have been doing synthetic securitizations, for example, but also other measures. Is there anything you are planning that could improve your CT1 ratio there? Thank you.

Speaker Change: Is there anything you could youre planning that could improve your CET one ratio there. Thank you.

Miguel Bragança: Okay. Starting with the last question. I mean, we are always looking at opportunities of synthetic securitization. Actually, we have several of them done. We look at this on a very practical and value-driven approach. There is an implicit cost of equity in these in these deals. If we reach the conclusion that the implicit cost of equity is clearly below the cost of equity, so that it accrues value to our shareholders, we typically may do it.

Miguel Vargas: Okay, starting with the last question, I mean, we are always, we are always, I mean, looking at opportunities of synthetic securitization, actually we have several of them done. We look at this on a very practical and value-driven approach. So there is an implicit cost of equity in these deals. If we reach the conclusion that the implicit cost of equity is clearly below the cost of equity so that it accrues value to our shareholders, we typically may do it. If we think that not, that what the consultants or the investors want to charge us is more than the cost of equity, probably we will not do it.

Speaker Change: Okay.

Speaker Change: With the last question I mean, we are always we are always looking at opportunities of synthetics securitization actually we have several of them then.

Speaker Change: We look at these on a very.

Speaker Change: The practical and value driven approach.

Speaker Change: So there is implicit cost of equity in these in these deals.

Speaker Change: If we if we reached the conclusion that the implicit cost of equity is clearly below the cost of equity 30 cruise Val d'or shareholders. We typically may do it if we think they're not that what the consultants are then the.

Miguel Bragança: If we think that not that what the consultants or the want to charge us or the investors want to charge us is more than the cost of equity, probably we will not do it. We are continuously analyzing this up until now. What I can tell you is that we do not have anyone in the pipeline because the proposal that we have, we do not think they were necessarily in the shareholders' interest to do them. It's part of our job to continually analyze it. We have I mean, already closed, considering Portugal and Poland, more than 4 of these deals. Just to give you an idea. We are clearly on this.

Speaker Change: Once the charges. So the vessels went to charges is more than <unk> and then the cost of equity probably we will not do it.

Miguel Vargas: We are continuously analysing this. What I can tell you is that we do not have anyone in the pipeline because the proposals that we have, we do not think they were necessarily in the shareholders' interest to do them. But it's part of our job to continually analyse it. And we have already closed, considering Portugal and Poland, more than four of them. just to give you an idea. So, we are clearly on this. In terms of taxes, I mean, I would say that for the values that I gave, of course, this is very dependent on exactly the profile because there are some expenses that are not deductible.

Speaker Change: We are continuously analyzing these belgium now we've got one back into areas that we don't want to have anyone in the pipeline and because the proposal that we have we do not think they weren't necessarily in the in the shareholders' interest to do them, but it's part of it's part of our job to continually analyze it and.

Speaker Change: I mean.

Speaker Change: Randy close the casino.

Speaker Change: Actual Poland more than four of you.

Speaker Change: To give you.

Speaker Change: An idea so we are clear.

Miguel Bragança: In terms of taxes, I mean, I would say that for the values that I gave, of course, this is very dependent on exactly the profile, because there are some expenses that are not deductible. So we have, I mean, it's not a totally fixed number. It's not like a depreciation schedule. When I say broadly this interval between 25 and 30, it is, I would say for the foreseeable future, I mean, for the foreseeable future, I would say for many years to come. In terms of loan growth, there are some green shoots. I mean, it's very difficult for me to whether to say, well, it's low single digit or mid-single digit. I mean, what we are, it's only Q1.

Speaker Change: Clearly on the on this in terms of Texas.

Speaker Change: I mean, I would say that for the variables that I gave of course. This is very dependent on exactly the profile because there are some expenses that are not.

Miguel Vargas: So, we have, I mean, it's not a totally fixed number. It's not like a depreciation schedule. But when I say broadly in this interval between 25 and 30, it is, I would say, for the foreseeable future, I mean, for the foreseeable future, I would say, for many years to come. In terms of lawn growth, there are some green shoots. It's very difficult for me to say whether it's low single digit or mid single digit. at what they we are. It's only one quarter, there are green shoots and we are in a period of very high uncertainty.

Speaker Change: That are not deductible.

Speaker Change: So we have I mean, it's not a totally fixed number it's not like a depreciation schedule, but when I say.

Speaker Change: Broadly these interval between 25 and 30 and it is I would say for the foreseeable future.

Speaker Change: I mean four four in.

Speaker Change: For the foreseeable future I would say for many years to come.

Speaker Change: In terms of loan growth there are some green shoots.

Speaker Change: I mean, it's very difficult for me to I mean to whether to say, where it's low single digit or mid single digit.

Speaker Change: We are.

Miguel Bragança: There are green shoots. We are in a period of a very high uncertainty. What I can tell is the following. The relevant impact on the margin is business confidence, so to say. If business confidence grows and these uncertainties, these geo-geopolitical uncertainties and tariff uncertainties decline, we will clearly be, or decline significantly, we will clearly be on the mid-single digit. If probably these uncertainties do not decline, probably there will be less investment. We will be closer to the low single digit. Of course, we are speaking of, I mean, small values, 1% more, 1% less, that do not necessarily have a material impact on the short term, on the NIR. Okay.

Speaker Change: It's only one quarter there are green shoots and we are in them in a piece of it.

Vivien: Hi, Vivien.

Miguel Vargas: What I can tell is the following. the relevant impact on the margin. is a business call. If business confidence grows and these uncertainties, these geopolitical uncertainties and tariff uncertainties decline, we will clearly be on the mid-signal. If probably these uncertainties do not decline, probably there will be less investment, we will be closer to the low single digit. But of course we are speaking of small values, 1% more, 1% less, that do not necessarily have a material impact on the short term on the NIR. Thank you very much.

Vivien: And secondly, what I can tell is the following.

Speaker Change: Yeah.

Speaker Change: The relevant impact on the margin.

Speaker Change: As business confidence.

Speaker Change: So if business confidence.

Speaker Change: Gross and these.

Speaker Change: Uncertainties are these geopolitical uncertainties and tariff uncertainties decline, we will clearly be or decline significantly we would really be on the on the mid single digit is probably this is these are uncertainties do not decline probably there will be less invest.

Speaker Change: Since we will be closer to the low single digit but of course, we are speaking of I mean, small <unk>, 1% more 1% less that do not necessarily have a material impact on the short term on the on the NII.

Carlos Peixoto: Thank you very much.

Hugo Cruz: Thank you very much.

Speaker Change: Okay.

Miguel Vargas: You tell me what Mr. Trump will decide in the next 80 days and I will tell you how the business confidence will evolve.

Speaker Change: Thank you very much.

Miguel Bragança: You tell me what Mr. Trump will decide in the next 80 days, and I will tell you, how the business confidence will evolve.

Speaker Change: You tell me what Mr. Trump will decide in the next 30 days, so and I will tell you.

Speaker Change: How the business confidence really well.

Speaker Change: Uh huh.

Carlos Peixoto: We are now going to proceed with our next question. The next questions come from the line of Carlos Peixoto from CaixaBank BPI. Please ask your question. Hi, good morning. So a few questions from my side as well. First of all, sorry if I repeat myself. Carlos, the connection is quite poor, if you can speak up or closer to the mic. I'm sorry. Sorry, is it better now? Much better, much better. Thank you. Okay. Sorry about that. So, as I was saying, I was interrupted during the call. I had some problems with the connection, so sorry if I repeat any question that was already previously made.

Operator: We are now going to proceed with our next question. The next question comes from the line of Carlos Peixoto from CaixaBank, BPI. Please ask your question.

Speaker Change: We are now going to proceed with our next question.

Speaker Change: Yeah.

Speaker Change: The next questions come from the line of Carlos Peixoto from <unk> Bank BPI. Please ask your question.

Carlos Peixoto: Hi, good morning. A few questions from my side as well. First of all, sorry if I repeat anything because I had some problems during the connection.

Carlos Peixoto: Hi, good morning.

Speaker Change: A few question from my side as well, but first of all sorry, if I repeat anything does that have some problems.

Miguel Bragança: Carlos, the connection is quite poor. If you can speak up or closer to the mic. I'm sorry.

Speaker Change: Kevin Scott the connection is quite poor if you can speak gap or closer to the Mike I'm sorry.

Carlos Peixoto: Sorry. Is it better now?

Speaker Change: Yes.

Miguel Bragança: Much better. Much better. Thank you.

Speaker Change: Sorry is it better now.

Carlos Peixoto: Okay. Sorry about that. As I was saying, I was interrupted during the call. I had some problems with the connection, sorry if I repeat any question that was already previously made. Well, first would just be very quickly on fees outlook, how you see that evolving throughout the rest of the year. Second, bit of a follow-up on the loan growth that you were talking before or mentioning before. One of the things that we've noticed is that on the company's side, loans are still declining roughly 5% year on year.

Speaker Change: Much better much better thank you okay.

Speaker Change: Sorry about that so as I was saying I was interrupted during during the call I had some problems with the connection.

Speaker Change: Sorry, if I repeat any any any any question that was already previously made with well first the first one.

Carlos Peixoto: But first, would it just be very quickly on fees outlook, how you see that evolving throughout the rest of the year? Then a second, a bit of a follow-up on the loan growth that we were talking before or mentioning before. One of the things that we've noticed is that on the company side, loans are still declining roughly 5% year-on-year. This is a bit below what we are seeing from other competitors. And in Portugal, I was wondering whether you have any views on what could be driving this? Is it that competitors are being much more aggressive than BCP in pricing?

Speaker Change: You're very quickly on the on fees outlook, how you see that evolving for the rest of the year.

Speaker Change: Second a bit of a follow up on the on the loan growth that we are that we were talking before you were mentioning before one of the things that we've noticed.

Speaker Change: The company's site alone.

Speaker Change: Loans are still are still declining roughly 5% year on year. This is severe.

Carlos Peixoto: This is a bit below what we are seeing from other competitors in Portugal. I was wondering whether you have any views on what could be driving this. Is it that competitors are being much more aggressive than BCP in pricing or are there any trends that are worth having in mind? Just a couple of follow-ups. Sorry about that. On the costs, just to have an idea. Last year, were you accruing any variable remuneration throughout the year? Are you doing so this year? Should we expect the staff costs to be more stable throughout the year? Second follow-up on other provisions.

Speaker Change: And below what we are seeing from from other competitors and in Portugal, I was wondering whether you have any views on what could be driving this as if there is a company is that the competitors are being much more aggressive in BCP in pricing or.

Carlos Peixoto: Are there any trends that are worth having in mind? And then just a couple of follow-ups. Sorry about that. But on costs, I just have an idea. Last year, were you accruing any variable remuneration throughout the year? And are you doing so this year? So, should we expect the staff costs to be more stable throughout the year? Then a second follow-up on other provisions. I believe you mentioned that you weren't seeing any signs or any reasons for other provisions in Portugal to increase over the coming quarters. But then I think you mentioned between 10 to 15 million euros per quarter over the coming quarters.

Speaker Change: Are there any trends that are worth having.

Speaker Change: Having in mind.

Speaker Change: And then just a couple of follow ups, sorry about that but on the on costs.

Speaker Change: Have at an idea last year were you accruing any variable remuneration for the year.

Speaker Change: Doing so this year, so socially expect the staff costs will be more.

Speaker Change: Stable throughout the year then.

Speaker Change: Second follow up on other provisions I believe you mentioned that you were that you weren't seeing any any signs or any reasons for other provisions in Portugal to increase over the coming quarters, but then I think you mentioned are between 10 to 15 million euros per quarter over over the coming quarters. So should we shall we take the defense within 15 or the first Q.

Carlos Peixoto: I believe you mentioned that you were, you weren't seeing any signs or any reasons for other provisions in Portugal to increase over coming quarters. I think you mentioned between EUR 10 to 15 million per quarter over the coming quarters. Should we take the EUR 10 to 15 or the Q1 as the reference there? Finally, just a bit of a tease. Well, you mentioned that Bank Millennium current market valuations don't really reflect the value that you see for the unit and the potential in earnings that it has. My question here is, could you do the opposite rather than sell, consider buying out minorities and reinforcing your position there? Thank you very much.

Miguel Vargas: So, should we take the 10-15 or the first Q as a reference there? And then finally, just a bit of a tease. Well, you mentioned that Bank Millennium current market valuations don't really reflect the unit and the potential in earnings that it has. So, my question here is, could you do the opposite rather than sell, consider buying out minorities and reinforcing your position there? Thank you very much. So starting with your last question, we have more than 20% of our market cap. If you know it, invest it. If you know it, give it to me and I'll give it back to you.

Speaker Change: As a reference there and then finally as just a bit of a deal you mentioned that the bank millennium client.

Speaker Change: Evaluations don't really reflect the value that you see for the unit and the potential and earnings that it has.

Speaker Change: So my question here is.

Speaker Change: Could you do the opposite rather than sell consider buying out minorities and reinforcing your position there.

Speaker Change: You very much.

Miguel Bragança: Thank you very much. Starting with your last question. We have more than 20% of our market cap, so to say, invested in terms of value in Poland. The Polish market is a very interesting market. Still have some uncertainties. From a risk appetite standpoint, we are more or less where we want to be, so to say. Unless there is a strong reduction in terms of these other risks that can emerge in Poland, we are where we want to be. We are not considering any purchase of minorities for the moment in terms of Poland. I think this is an important point.

Speaker Change: Thank you very much.

Speaker Change: So starting with our with our.

Speaker Change: Your last question.

Speaker Change: We have more than 20% of our market cap.

Speaker Change: Sort to say investors, so to say in terms of value in Poland.

Miguel Vargas: The Polish market is a very interesting market, but still has some uncertainties. So from a risk appetite standpoint, we are more or less where we want to be, so to say. So unless there is a strong reduction in terms of these other risks that can emerge in Poland, we are where we want to be. So we are not considering any purchase of minorities for the moment in terms of Poland. So I think this is an important point. In terms of cost, of course we we accrue variable remuneration but we accrue based on the on the budget.

Speaker Change: The Polish the Polish market is a very interesting market.

Speaker Change: But still has a 770 so from a risk appetite standpoint, we are more or less where we want to be so to say so.

Speaker Change: So unless there is a strong reduction in terms of these other risks that can that can emerge in Poland.

Speaker Change: We are where we want to be so we are not considering any any.

Speaker Change: In the purchase of minorities.

Speaker Change: For the moment.

Speaker Change: In terms of Poland. So I think this is an important point.

Miguel Bragança: In terms of costs, of course, we accrue variable remuneration, but we accrue based on the budget. If the employees have been delivering much better than the budget, of course, we then has to be some adjustments, so to say, for the over-performance. At the end of the day, I mean, for the shareholders, this is good news because of course what we distribute as remuneration is only a small percentage of the overachievement in terms of the budget. In terms of other provisions, I have commented a little bit this already. I mean, the other provisions is a line that is for other risks typically, and almost by definition, I mean, these are the risks are always difficult to anticipate.

Speaker Change:

Speaker Change: In terms of course of course, we accrue variable remuneration, but we accrue based on the on the budget.

Miguel Vargas: If the employees are being delivered much better than the budget of course we then have to be some some adjustments so to say for the over performance but at the end of the day I mean for the shareholders this is good news because of course we what what we distribute is only a small percentage of the overachievement in terms of of the budget. In terms of other provisions, I had commented a little bit on this already. I mean, the other provisions is a line that is for other risks, typically. And almost by definition, most of, I mean, these other risks are always difficult to anticipate.

Speaker Change: If the.

Speaker Change: Our employees have been delivering much better than the budget of course with them has to be some some adjustments so to say for.

Speaker Change: The over performance, but at the end of the day I mean, so for the shareholders. This is good news because of course, the what what we distribute available measures only.

Speaker Change: A small percentage of the over achievement in terms of the budget.

Speaker Change: In terms of other provisions I had commented on this already I mean, the other provisions is aligned it is for other risks typically.

Speaker Change: Most by definition most of I mean.

Speaker Change: These are the risks are always difficult to towards dissipate.

Miguel Bragança: It's a little bit more for the, almost for the unforeseen. This around EUR 15 give or take that we may have on a quarter-by-quarter basis, I think it's something that is across the year or across the cycle. If there is, I would say, a suddenly large litigation that we are not expecting, it may be higher. If there is a large recovery of a previous litigation, we may reverse. I think, I mean, at least over the year, this is a good guidance, except if something strange happens. I mean, in terms of loan growth, I mean, we can speak for ourselves, so to say. We are very disciplined in terms of spread.

Miguel Vargas: It's a little bit more for the, almost for the unforeseen. So these around 15 give or take that we may have on a quarter by quarter basis. something that is across the year or across the cycle. I would say certainly larger litigation that we are not expecting might be high. If there is a larger coverage of pre-litigation we may reverse. Over the year this is good guidance. Except if something strange happens. I mean, in terms of loan growth, I mean, we can speak for ourselves, so to say. We are very disciplined in terms of spread in any material loan that we originate.

Speaker Change: It's a little bit more for the almost for the unforeseen. So these are around 15 give or take that you may have.

Speaker Change: On a quarter by quarter basis, I think it's something that is across across the year or across the cycle. These days I would say are suddenly largest litigation yet we are not expecting maybe I leave it there.

Speaker Change: There is a logic a large recovery off of a previous litigation, we may reverse, but I think I mean at least over the this is it was a it was the guidance except if something.

Speaker Change: Strange happens I mean in terms of loan growth I mean, we.

Speaker Change: We can speak for ourselves so to say and we are very disciplined in terms of spreads.

Miguel Bragança: In any material loan that we originate, we typically compare it with our cost of capital, with the expected loss. With our funding. We have a model that assures that when we originate a loan, that these loans pays for the cost of equity and pays for the expected loss. Effectively, as you comment, some of our competitors, because they may have a different short-term priorities, at least during some time, I mean, may have a different perspective. I mean, we have seen even some loans here and there, sometimes with a negative spread or something like that, which for us are difficult to understand. Having said it, I mean, typically, this does not last a lot of time.

Speaker Change: In any material loan that we originate we.

Miguel Vargas: We typically compare it with our cost of capital, with the expected loss, with our funding. So we have a model that assures that when we originate a loan, that these loans pays for the cost of equity and pays for the expected loss. Effectively, as you comment, some of our competitors, because they may have a different short-term priorities, at least during some time, I mean, may have a different perspective. I mean, we have seen even some loans here and there, sometimes with a negative spread or something like that, which for us are difficult to understand. but people do not.

Speaker Change: We.

Speaker Change: We typically compare it with our our postal our with our cost of capital with the expected loss, we all with our funding. So we have a model that ensures that when we originate alone that these loans.

Speaker Change: For the cost of equity in place for the expected loss effectively as you comment some of our competitors because they may have a difference.

Speaker Change: Short term priorities at the hearing sometime in.

Speaker Change: May may have a different perspective, I mean, we have seen even some some loans here and there sometimes with a negative spread or something like that which for us are difficult to understand.

Speaker Change: Having said that I mean, typically these does not lost a lot of time I mean, sometimes there is a campaign there is a moment in Egypt, a competitor that's not always the same I mean wants to make a.

Miguel Bragança: I mean, sometimes there is a campaign, there is a moment in which a competitor that's not always the same, I mean, wants to make a point in the market. What we see is that this typically does not last a lot of time because, I mean, people cannot destroy value forever. People may have a moment of affirmation in terms of market share, but people didn't. That's why we feel confident that at least over the period of the plan, because the competition on average in Portugal is very rational, we will be able to deliver on this mid-single digit growth of mid-single digit of loan growth.

Speaker Change: A point in the market, but what we see is that these typically does not last.

Speaker Change: Lot of time, because I mean people cannot destroy destroy value forever people might have.

Speaker Change: Ah Ah moment of them of affirmation in terms of market share, but people do and that's why we feel confident that at least over the period of the plan because we are the competition on average in Portugal, It's very rationale we will be able to deliver on these on these middle mid single digit growth.

Miguel Vargas: And that's why we feel confident that at least over the period of the plan, because the competition on average in Portugal is very rational, we will be able to deliver on this mid-single-digit growth of long growth. Of course, this has the assumption that the competitors that have been typically rational over time will continue to be rational. But I think this is also, I'm sorry, a rational assumption. To assume that the competitors sooner or later will be rational. Of course, if there is no rationality, I mean, this may be different. I mean, the field look. We have been quite successful in terms of bank insurance fees.

Speaker Change: Oh, maybe single digit of loan growth of course is have your assumption of the competitors that have been typical irrational overtime will continue to be rational, but I think this is also I'm sorry, irrational assumption to assume that the competitors are sooner or later will be will be rational.

Miguel Bragança: Of course, this has the assumption of that the competitors that have been typically rational over time will continue to be rational. I think this is also, I'm sorry, a rational assumption to assume that the competitors sooner or later will be rational. Of course, if there is no rationality, I mean, this may be different. This is different. I mean, the fee outlook. We have been quite successful in terms of bank assurance fees. In terms of investment fees, this will depend in terms of on our asset management performance and placement, and this also depends a lot on the markets. All in all, we feel that this mid-single digit guidance that we are giving in terms of fees is appropriate.

Speaker Change: Of course, if if there is no rationality I mean, it may be different. So this is a this is different.

Speaker Change: The fee outlook.

Speaker Change: We have been quite successful in terms of bancassurance fees and in terms of investment fees will depend on our asset management performance and placement and he's also depends a lot on the markets, but all in all we feel we.

Miguel Vargas: In terms of investment fees, this will depend on our asset management, performance and placement. And this also depends a lot on the markets. But all in all, we feel that this mid-single digit guidance that we are giving in terms of fees is appropriate. Of course, what is the critical factor here? If the market... start to underperform significantly and if the retail investors divest from equity funds and riskier investments where, as you well know, we make most of the fees, of course this may then have a different evolution. And for the same token, if there is an optimism in terms of the markets, we will overachieve.

Speaker Change: We feel there is a mid single digit guidance that we're giving you in terms of fees.

Miguel Bragança: Of course, if what is the critical factor here? If the markets start to underperform significantly, and if the retail investors divest from equity funds and riskier investments where, as you well know, we make most of the fees, of course, this might then have a different evolution. For the same token, in the, if there is an optimism in terms of the markets, we will overachieve. I think that's it.

Speaker Change: Is appropriate of course as you said.

Speaker Change: What is the critical factor here is the markets.

Speaker Change: Start to underperform significantly and if the retail investors divest from equity funds than riskier investments, where as you well know we make most of the fees first it might be somebody didn't have a difference.

Speaker Change: The evolution and for the same token in the if there is an optimism in terms of the markets we will overachieve.

Miguel Vargas: I think that's it.

Speaker Change: Hi.

Speaker Change: Okay.

Sophie Petersen: Thank you.

Carlos Peixoto: Thank you.

Speaker Change: Got it.

Speaker Change: Thank you.

Miguel Vargas: Okay, so thank you very much for your interest in following us. We are very proud that you were able to deliver on what we have been saying. We are very satisfied with the value that our share has accrued over the last quarters and we really are totally committed in continuing this path of shareholder value creation.

Miguel Bragança: Okay. Thank you very much for your interest in following us. We are very proud that we were able to deliver on what we have been saying. We are very satisfied with the value that our share has accrued over the last over the last quarters. We really are totally committed in continuing this path of shareholder value creation. Thank you very much.

Speaker Change: Okay. So thank you very much for your interest in following US we are very proud that we were able to do to deliver on what we have been saying we are very satisfied with the value that our share has it goes over the next over the last quarters.

Speaker Change: You really are totally committed in continuing this path of shareholder value creation. Thank you very much.

Miguel Vargas: Thank you very much.

Speaker Change: Yeah.

Operator: This concludes today's conference call. Thank you all for participating.

Operator: This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.

Speaker Change: This concludes today's conference call. Thank you all for participating you may now disconnect your lines. Thank you.

Operator: You may now disconnect your lines.

Operator: Thank you.

Speaker Change: Yeah.

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