Q1 2025 Komercní banka as Earnings Call
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Speaker Change: Oh Hello, good afternoon, good morning, ladies and gentlemen, welcome from commercial banker.
Thank you for sharing your time with us today.
Speaker Change: Just 70 as of April 2025, and we are going to discuss the results of squash tobacco for the first quarter of 2025.
Speaker Change: Please note that this call is being recorded.
Speaker Change: Recorded.
Speaker Change: Yes.
Silica: I've just started recording this meeting is being transcribed in silica chairman of the board of the extra since CEO of rescue Banca.
Speaker Change: These risks title of Chief Financial Officer, and <unk> Chief Risk Officer.
Speaker Change: Standing by Incase, you ask questions for them or eat Kalvar, Chief operating officer lateral Simpson Chief Digital Officer Mirasol. His show had a frito banking and does it feel like it.
Speaker Change: Head of corporate.
Speaker Change: I spent banking.
Speaker Change: As always we will begin with the presentation of results, which will be followed by a question Sir Sir so session.
Speaker Change: During this presentation parked all participants will be on listen only mode.
Speaker Change: We would appreciate if you could keep your microphone mutate. So during this time.
Speaker Change: Now, let me ask the CEO.
Speaker Change: To begin the presentation. Please.
Speaker Change: Yes.
Speaker Change: Alright.
Speaker Change: Ladies and gentlemen, welcome to the presentation of Q1 results local machine Banca group.
Speaker Change: Together with my colleagues, who are key to reduce through the presentation in February.
Speaker Change: February question questions afterwards.
Speaker Change: Highlights of the first quarter of the following.
Speaker Change: She has a continue fulfilling its role in our economy.
Speaker Change: We are growing.
Speaker Change: Not only the number of clients.
Speaker Change: Rose by 60000 to the current level of one seven.
Speaker Change: $1 7 million.
Speaker Change: To get there.
Speaker Change: The migration of clients from old technological stack to the new technological stack, but also we continue building the needs of our clients in the field of.
Speaker Change: Financing financing.
Speaker Change: The loans are growing by almost 3% on a year over year comparison housing loans.
Speaker Change: By almost 55% compared with the first quarter.
Speaker Change: And then.
Speaker Change: <unk>.
Speaker Change: Having also a good news on the site of deposits, where despite the fact that they were stable or slightly below.
Speaker Change: Then the.
Speaker Change: The gross will serialized undecided of current accounts, which is giving us backing up on the liquidity, but also.
Speaker Change: Also in NII, the mutual funds, but growing.
Speaker Change: By double digit growth.
Speaker Change: More or less traditionally, but we want to bring this dynamism back to the levels, which were which we are used to in the previous quarters.
Speaker Change:
Speaker Change: So no complacent no space for complacency here, whereas the other.
Speaker Change: Assets under management, such as pension schemes and life insurance is there so that's growing.
Speaker Change: We're at zero or slightly slightly negative territory.
Speaker Change: Total capital ratio I E the balance sheet.
Speaker Change: It was at the level of 18.7% core tier $117 seven a loan to deposit ratio of $81 nine books long term and short term liquidity ratios.
Speaker Change: At a more than satisfactory levels. So on that side of the balance sheet remains very very strong.
Speaker Change: Speaking about.
Speaker Change: About the P&L, so the translation into P&L.
Speaker Change: Yes.
Speaker Change: We are bringing to our shareholders.
Speaker Change: One of the strongest if not the strongest first quarter in the history of a bank.
Speaker Change: Our bank.
Speaker Change: Bringing $4 2 billion check ramps of our group net income.
Speaker Change: Which is almost 50% higher on a year over year comparison.
Speaker Change: Earnings per share are lending at a level of $22 17 kicked corona there sure.
Speaker Change: Cost of risk, which was one of the contributors into this result is in negative territory 22 bps.
Speaker Change: Thanks to the release of provisions cost to income lending slightly above 50.
Speaker Change: Send off the reported numbers.
Speaker Change: Would be 47 points to shoot if rig remains arena.
Speaker Change: Our OE 13 Metro.
Speaker Change: 10% 13, seven under the fulfillment of the same condition. So let's let me move to the next page, which is the macroeconomic chase Czech Republic remains let's.
Speaker Change: Let's say a growing country, even though in a rather mediocre intervals.
Speaker Change: Radiochromatography scope.
Speaker Change: In in Q4, the GDP was up by 0.7.
Speaker Change: <unk>.
Speaker Change: The Q on Q basis, and one 8% year over year.
Speaker Change: Mainly supported by the activities of households.
Speaker Change: And government.
Speaker Change: Consumption.
Speaker Change: Wages were up by seven seven.
Speaker Change: Seven 2%, which means also that there was a growth of real.
Speaker Change: Wages.
Speaker Change: By four 2%, hence the households, bringing to the market more.
Speaker Change: Economic activity unemployment compressed still below 20, sorry bill.
Speaker Change: Uh huh.
Speaker Change: 3% at $2 seven as of February 2025.
Speaker Change: Inflation at the same level of two 7% on a year over year basis March.
Speaker Change:
Speaker Change: And and.
Speaker Change: Czech National Bank remain.
Speaker Change: At the level of 375% with the short term short term rate short term or operate chip Corona 25.
Speaker Change: <unk> 25 per euro.
Speaker Change: Stronger by 0.9%.
Speaker Change: <unk> 23 to one be Sophie.
Speaker Change: The U S dollar the market.
Speaker Change: The market rates.
Speaker Change: Three months Drybulk seaborne 72 down by 20 bps year to date.
Dennis: Then Dennis IRS.
Speaker Change: At $3 78.
Speaker Change: <unk> down by two bps, and <unk> IRS $2 56, minus 10 bps, yet year to date.
Speaker Change: The <unk> 10 years for 29 slightly.
Speaker Change: Slightly up I think by.
Speaker Change: By 70 bps on a Sofia to date, what is pretty pretty nicely self explanatory part of this page is the.
Speaker Change: Right hand button side.
Speaker Change: Our colleagues.
Speaker Change: Display the composition of exposed by sector and composition of exports by country.
Speaker Change: Where do we see that.
Speaker Change: The logic and deliveries and contributions of our.
Speaker Change: Industries is mainly in the field of motor or a high school vehicles and having Germany.
Speaker Change: <unk> European Union as the main trading partner.
Speaker Change: For the direct data connections.
Speaker Change: Connections or direct exchange, United States being being at.
Speaker Change: Yes, it does.
Speaker Change: Level of two 9% of our foreign exports one should remain in the context of.
Speaker Change: Of hectic discussions around and decisions.
Speaker Change: <unk>.
Speaker Change: Net.
Speaker Change: There are also indirect exports to guarantee states through Germany, mainly.
Speaker Change: Yes, so we can move probably two next next patients see the business' performance.
Speaker Change: Those were gross loans to clients, who are growing by two 9% as I mentioned already driven mainly by housing loans. Both gave you mortgages.
Speaker Change: Loans from model update.
Speaker Change: Went up by 50.
Speaker Change: <unk> 54, 5% compared to the first quarter of 'twenty, four and by 6%.
Speaker Change: Compared to Q4, 2020, so which is reminding us.
Speaker Change: The old good times.
Speaker Change: The mortgage.
Speaker Change: <unk> is going at full speed.
Speaker Change: And after the.
Speaker Change: Transformation of market update Amit, who is now the only and so and sole provider of housing loans.
Speaker Change: We have our ambitions also in the commercial side of our.
Speaker Change: Of the of the origination of new mortgages group lending in general two 9% up.
Speaker Change:
Speaker Change: The parts below.
Speaker Change: The housing loans as.
Speaker Change: <unk>.
Speaker Change: Great.
Speaker Change:
Speaker Change: Let's say not not nice contribution of.
Speaker Change: Of us small business is incorporate.
Speaker Change: Whereas the.
Speaker Change: <unk>.
Speaker Change: As gas.
Speaker Change: Bringing us.
Speaker Change: Somehow.
Speaker Change: To lower levels as we used to be and we believe that the leasing financing will be growing gap as the year.
Speaker Change: We'll go.
Speaker Change: Group.
Speaker Change: Yes.
Speaker Change: So this is the.
Speaker Change: This is the.
Speaker Change:
Speaker Change: This is the peak youre sorry.
Speaker Change: I confused maybe.
Speaker Change: Maybe a little bit to 6% corporate clients, we opened seven small businesses and says guests.
Speaker Change: I stick to what I mentioned to <unk>, 1%, So we would rather see that above 5% growth and we believe that.
Speaker Change: Yes.
Speaker Change: We'll go back to these to these levels.
Speaker Change: Next page is showing our contribution to remarkable transactions.
Speaker Change: In the financing of our corporate clients. So you can see at page number nine please.
I don't see the page moving yes nine.
Speaker Change: But yes. This one we were we were active all over the place all over the segments over the sectors, including those municipalities.
Speaker Change: We have picked up one green financing to accolade, which is one of the largest clients.
Speaker Change: Clients in the real estate development next page is showing us.
Speaker Change: Deb.
Deb: The developments on deposit side, the deposits are slightly down even though as I mentioned the composition of <unk>.
Deb: And it accounts chipping in almost 5% growth is.
Deb: Let's say, bringing back the hope that the trend of growing current accounts volumes.
Deb: We'll be we'll be continuing and.
Deb: The denim and saving accounts are down by 6.3.
Deb: 3%.
Deb: Our traditional strengths which is.
Deb: Investment and investment products up by.
Deb: Eight 1% the main contributor being ammonia and private banking. The other two main contributors like insurance reserve and client assets under management in Cape Your pension company.
Deb: Slightly below slightly slightly into negative territory. So.
Speaker Change: Probably I should stop myself and hand over to EC <unk> our.
EC: Our CFO for the financial performance. Thank you.
EC: Thank you Ron.
Speaker Change: Okay.
Speaker Change: Good afternoon.
Speaker Change: Indeed financial as the group generally.
Speaker Change: Solid quarter.
Speaker Change: $4 2 billion as mentioned already by the third by young almost by sure.
Speaker Change: Almost by 50% year on year.
Speaker Change: I can confirm that.
Speaker Change: This the best first quarter in the us.
Speaker Change: At the same time it is set to add to that.
Speaker Change: It was positively influenced by it.
Speaker Change: Yes.
Speaker Change: And also by a decrease over the year ago.
Speaker Change: Charges.
Speaker Change:
Speaker Change: Absolute terms cost of risk transfer regulatory charges contributed the most year on year.
Speaker Change: It is realized on the on the.
Speaker Change: The chart waterfall chart on the left hand side.
Speaker Change: Cost of risk.
Speaker Change: Almost 1 billion check your answer on a regulatory charges almost $400 million accounts.
Speaker Change: And of course, no surprise that this task force positively also to the profitability indicators.
Speaker Change: I was mentioning so so.
Speaker Change: Okay.
Speaker Change: No Tom Pacheco accurate riches.
Speaker Change: Growing even more.
Speaker Change: For $15 five.
Speaker Change: If it's when.
Speaker Change: Our justice.
Speaker Change: Well if at all on cost growth.
Speaker Change: Dawn.
Speaker Change: Which is however, given more broad based than anything else.
Speaker Change: You are mentioning three months ago.
Speaker Change: Q4 last year or so.
Speaker Change: One of the best quarters in the history of.
Speaker Change: So I'll take it.
Speaker Change: Let's move to the balance sheet. Please.
Speaker Change: So bonds sheets.
Speaker Change: So it'd be down year on year.
Speaker Change: Bye.
Speaker Change: Minus one 1%.
Speaker Change: Percent.
Speaker Change: There is a slight recovery quarter over quarter, but less than expected to be Frank.
Speaker Change: Influenced by a slowdown in the deposit agreement.
Speaker Change: The angles.
Speaker Change: Commenting.
Speaker Change: Asset size quarter over quarter perspective.
Speaker Change: Alongs basically stayed flattish royalty reiterated to surplus.
Speaker Change: Well placed.
Mainly into April as the central Central Bank.
Kevin: Kevin You said, Gary Smiths are basically answered basically flattish.
Kevin: And this is bringing me to answer.
Kevin: Net income ex category.
Kevin: Category.
Kevin: So Craig.
Kevin: It was growing year on year by two percentage points was supported both by income from loans plus 4%.
Kevin: Because it.
Kevin: Plus 6%.
Bolsa other NII.
Kevin: NII from I, b rents or better.
Kevin: So down.
Kevin: The correction.
Kevin: The quarter over quarter perspective.
Kevin: Almost.
Kevin: Solar was influenced by a doubling of the minimal obligatory reserves.
Kevin: Let's start with <unk>.
Kevin: January the first of this year.
Kevin: As you might know noninterest bearing.
Kevin: So.
At this time, you're quantifying the impact on full year impacts.
Kevin: Quantify if any at all.
Kevin: Roughly 800 million ticket also.
Kevin: Quarterly impact for us.
Kevin: Roughly a year ago.
Kevin: And if you could answer.
Kevin: To say without this impact NII will grow slightly but still.
Kevin: It's still less than one percentage percentage points.
Of course also passports.
Kevin: NIM net interest margin.
Kevin: Got it.
Kevin: Very much competitive or both.
Kevin: Quarter over quarter and year on year or so.
Kevin: And for lending for Q1 Adobe was 117.
Kevin: Suddenly walnuts.
Kevin: Let's move to the fees and commissions.
Kevin: Okay.
Kevin: I guess my question is that remains still one of the drivers of the growth.
Year on year ago, Inc, still double digits by a very strong 11, two percentage points.
Kevin: Yes.
Kevin: Very clear drivers firstly, it is fees coming from the <unk>.
Kevin: Specialised financial services.
Kevin: I should say another super strong growth.
Kevin: Inc.
Kevin: More than half a billion to check your answer.
Kevin: Mainly due to continuing Crawford bonefish runs low.
Kevin: Loan syndication.
Kevin: Is it growth in income from the private banking.
Kevin: Okay.
Kevin: And the second driver is a very good quarter in D C.
Kevin: Fees from cross selling.
Kevin: Following the sales of the same.
Kevin: Non bank.
Kevin: Assets under management.
Kevin: Mentioned, Brian.
Kevin: And this category is growing.
Kevin: 11, 11%.
Kevin: From the total perspective there is.
Kevin: Collections are down.
Kevin: Not a big surprise.
Kevin: Here I can say that it is mainly influenced by the extraordinarily high Q4 quite as many folks know.
Kevin: You were commenting on that.
Kevin: Roughly three months six months ago.
Kevin: However, above giza to say around the run rate so good good quarter.
Kevin: Financial operations piece.
Kevin: So financial ratios are growing our income from financial operations are growing by roughly 12%.
Kevin: You don't need basis. So both components are a key compliance getaway and can contribute think dynamics.
Kevin: So it's the case, so far capital markets plus 15% also.
Kevin: FX from the spectra <unk>.
Kevin: By 9%.
Kevin: As usual I would like to add that the blue part is it's much more stable so.
Kevin: Thank you very much.
Appreciate it.
Kevin: On a quarter over quarter perspective, there is a slight drop.
Kevin: I mean for the overall financial operations.
Kevin: Rich.
Kevin: However, our first seasonal nature.
Kevin: So to answer.
Kevin: More than 900 million and chicken houses.
Kevin: Hey, buffer our Raman.
Kevin: Great.
Kevin: There is also for Q3 and.
Kevin: Q4 <unk>.
Kevin: Others were extraordinary.
Kevin: Opex please.
Kevin: Yeah.
Kevin: Opex was growing.
Kevin: It was green down by 4.4% influenced mainly by first the lower regulatory charges, but also other categories.
Kevin: On the under control.
Kevin: Globally flow through all of them. So personnel expenses are growing by plus 4% due to the increase of the base. So it is roughly one year ago.
Kevin: So.
Kevin: But at the same time.
Kevin: Yes.
Kevin: We are reporting that the number of employees.
Kevin: A slower year on year by more than 4%.
Kevin: In line with our plan.
Kevin: In terms of guidance growing.
Kevin: Significantly down by minus 4% and to hear the savings figure would basically iqos.
Kevin: The books.
Kevin: I also wanted it actually incur regulatory fronts. So here it is.
Kevin: It is right.
Kevin: $370 million a ticket answer.
Check it out it's down.
Kevin: According to our expectations.
Kevin: This is kind of a new normal in terms of resolution fund charges.
Kevin: Transform per charges, because the frontier solar data.
Kevin: Nope.
Kevin: And finally did.
Kevin: Depreciation and amortization is still growing.
Kevin: Double digits.
Kevin: It shouldnt be normal surprise, because the spill.
Kevin: In the middle of the transformation. So it is sort of kind of mirror or for activation.
Kevin: Activation of DSO.
Kevin: Mainly from mix.
Kevin: Sandeep Sandeep.
Kevin: Just want to bank.
Kevin: Probably one one currently broken right Charles.
Kevin: So bottom line charter.
Kevin: It's through that.
Kevin: Quarter over quarter costs are doing.
Kevin: With us.
Kevin: All right.
Kevin: Five 5% buffer.
Kevin: But if we adjust by regulatory charges, which have to be booked in Q1.
Kevin: Although quarter over quarter costs would grow a bit a bit down so even the trends.
Kevin: Visible zebra here. So that's all from me now and possibly for the year. Please be yeager hubs.
Angie: Thank you Angie.
Speaker Change: Good morning, good afternoon, everyone.
Angie: So.
Angie: Turning to the overview of asset quality for the first quarter.
Angie: We continue to experience.
Angie: Good level of resilience.
Angie: Notably two development one being the.
Angie: The reduction of the contraction of our 12 month default rate for the SME portfolio.
Angie: Following are some peaks we had in the last two years or so.
Angie: We are also returning too.
Angie: Our needs through the cycle.
Angie: Branch for the SME portfolio, which is good the second one is that.
Angie: We continued to witness some.
Angie: The contraction in the same indicator or 12 months default rates fall.
Angie: Our unsecured retail portfolios, namely consumer finance and small business lending.
Angie: And.
Angie: Of course at the same time the market and the last couple of portfolio continue to be at a very low level when it comes to default rate.
Angie: If you translate this into the.
Angie: <unk> nine this classification of volatile Luke.
Angie: In the Susquehanna out we've seen some.
Angie: Moderate.
Angie: Improvement.
Angie: And in particular when it comes to the.
Angie: As to category, which.
Angie: Contracted by.
Angie: A little bit over $5 billion and in fact this contraction is.
Angie: The simple reflection of a couple of.
Angie: Material.
Angie: Ron.
Angie: One off situations.
Angie: Our mortgage.
Angie: Corporate.
Angie: Sure.
Angie: Segment.
With two client situations.
Angie: Significantly improving.
Angie: In the first quarter.
Angie: And for the rest.
Angie: Maybe the point that I keep.
Angie: Remind you every quarter is that we continue to see.
Angie: Very low levels.
Angie: If all of that intensity.
Angie: When it comes to loan migration dynamics between the S. One and there is two portfolios, which is another sign of the resilience of our loan book.
Angie: Yes.
Angie: Levels of Mac migration being.
Angie: Very stable between 10, and 15 billion check wrong going both ways, so compared to the size of the loan book very low level.
Angie: Taking a quick look at the NPL exposure Q on Q.
Angie: Very stable.
Angie: And in fact, we had.
Angie: The very low level of migration.
Angie: Into.
Angie: Into the NPL part of our portfolio.
Angie: So all of this.
Angie: Give you this.
Angie: Content live all of our key metrics.
Angie: As to ratio debt.
Slightly contracted below the level of 14%.
Angie: The NPL ratio, which was stable at 2%.
Angie: <unk> coverage.
Angie: That we report for the NPL portfolio.
Angie: Also stable.
Angie: Within the 40% to 45% range, which is.
Angie: Comfortable level.
Angie: Taking into account the fact that we do not reflect here.
Angie: Value of I'll call it out.
Paul: So this is Paul.
Angie: Quality and if we go to.
Angie: The next slide we see the transition in terms of.
Angie: The evolution of our cost of risk so for the first quarter recorded at.
Angie: Half a billion check running naturally vessel.
Angie: Which is made of three main components. The first one is this.
Angie: Reversals, which we had announced to you in the last two quarters.
Angie: On a one for one.
Angie: Corporate clients generating.
Angie: $1 1 billion, Czech Crown in provision reversal. So thats. The first one the second one which is also in terms of.
Positive development is the level of net creation generated by our retail portfolio exposures, which was.
Angie: Slightly above 100 million <unk>, which is.
Angie: Materially below the quarterly average.
Angie: The last two or three years, which is more in the range of 200 million share count.
Angie: And the third point is that we booked.
Angie: Half a billion checkpoint temporary reserve.
Angie: This in anticipation of the upcoming data.
Angie: Our economic scenario.
Angie: On the first nine stand up reflecting the recent tariffs announcement.
Angie: And this half a billion.
Angie: Check wrong.
Angie: Temporary reserve inflect in fact.
Angie: Very simply estimated based on an expected 25 bps increase.
80 of default for the corporate segment.
Angie: And this result will be.
Angie: Quote unquote recycled once we have the.
Angie: Upcoming or the next version of our macroeconomic scenarios.
Angie: Which will be sometime next month.
Angie: So this is for the main component of.
Angie: Cost of risk.
Angie: Figure for the first quarter.
Angie: Brief comment on the overall reserves, which we created in 2022, so for the first quarter, we kept them stable.
Angie: At a level of $2 2 billion check wrong.
Angie: And as we communicated to you in the previous quarter.
Angie: We will start our <unk>.
Angie: Release phase, which is expected to kick in.
Angie: Quarter and continue through the second semester.
Angie: With the planned reversal of its retail component.
Angie: Which is for an amount in the range of 700 million check wrong.
And to conclude on this cost of risk of you we've decided to date are precise.
Speaker Change: Uh huh.
Year end for 2025, Costa rose cut cost of risk outlook.
Speaker Change: Which.
Speaker Change: It is now guided in the range of zero to 10 basis point.
Speaker Change: Closer to zero.
Speaker Change: E. A range that is well below our through the cycle cost of risk level.
Speaker Change: And this takes into account two or three drivers. One is obviously the one that just mentioned which is the plant reversal of our retail overlay reserve.
Speaker Change: The second one is.
Speaker Change: An assumption in terms of stable default rate across all segments and product portfolios under our central scenario macroeconomic scenario.
Speaker Change: And we've also added a bit of.
Speaker Change: I don't know reserves.
Speaker Change: Reflecting some placebo increase in.
Speaker Change: Any credit losses that we could incur.
Speaker Change: Coming from digital.
Speaker Change: So this session of the bank in two digits of risk just to be able to save side and that gives you. This.
Speaker Change: The main drivers.
Speaker Change: And this guidance again, which is.
Speaker Change: Within the range of zero to 10 basis point for 2025 year, and then again closer to the zero level and on this I'm going to hand over back to U a E.
Speaker Change: Thank you to year pretty skeptical.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: The process is still very strong at.
Speaker Change: 70 87, sorry.
Speaker Change: Quarter over quarter. It is almost the same I E.
Speaker Change: He is the author.
Speaker Change: Around 210 basis points above the minimum requirement.
Speaker Change: Even above upper management buffer, which is $50 to 200.
Speaker Change: Right.
Speaker Change: Here It is first to stop for a second.
Speaker Change: March is the first publishing data when we are reporting.
Speaker Change: Under the new methodology, when you spun director Alright, ECR fleet.
Speaker Change: Otherwise quarter like Boswell four.
Speaker Change: And from the waterfall chart, you can see that the first impacted more or less more or less neutral when the positive impacts coming from the <unk>.
Speaker Change: There is no risk weighted assets.
Speaker Change: But that's what it's.
Speaker Change: Like plus 44 basis points to keep in mind across Asia.
Speaker Change: Offset by a negative impact.
Speaker Change: On the op risk risk weighted assets sorry to buy in.
Speaker Change: Almost the same figure and Brian Fortier.
Speaker Change: Felicia basis, some basis points. So this was not.
Speaker Change: Surprise through you're expecting kind of a neutral neutral impact.
Speaker Change: We're still here.
Speaker Change: Yes.
Speaker Change: So the impacts into the market for marketplace.
Speaker Change: So switch our expertise of <unk> for next year.
Speaker Change: We are going to be Asia as indicated before.
Speaker Change: So as they are positive.
Speaker Change: Not surprisingly also MRO arbitrage faithfully above the requirements.
Speaker Change: For you.
Also in <unk>, we do.
Speaker Change: Do not plan to go for first.
Speaker Change: The sub debt.
Speaker Change: So S&P insured senior non preferred instruments.
Speaker Change: As we simply don't know.
Speaker Change: Don't need it.
Speaker Change: And the final.
Speaker Change: Slide presentation.
Speaker Change: The outlook.
Speaker Change: Yes.
Speaker Change: So.
Speaker Change: There are some some changes, but not to them and for us.
Speaker Change: In market.
Speaker Change: Alright.
Speaker Change: Starting at the beginning of this.
Speaker Change: Patient.
Speaker Change: Growth of the economy is expected.
Speaker Change: One half of a percent and funded 25.
Speaker Change: Inflation around 3%.
Speaker Change: First do you expect it to continue going down.
Speaker Change: 3%.
Speaker Change: Yes.
Speaker Change: And it's a slight change because three months ago you are seeing.
Speaker Change: Uh huh.
Speaker Change: By the mid of the year. So now we are expanding.
Speaker Change: Expanding.
Speaker Change: The time hurt by the by the end of the year. So.
Speaker Change: <unk> on a quarterly basis.
Speaker Change: <unk> is going to go down by 25 basis points.
Speaker Change: In terms of market growth there are no changes, so both lending and deposits.
Speaker Change: We are expecting to grow by mid single digit.
Speaker Change: Forgive me.
Speaker Change: And that's given the slowdown in Q1 this year.
Downgrading capital Rich.
Speaker Change: Rich.
Speaker Change: Basically it goes.
Speaker Change: It goes the book.
Speaker Change: The overall gross on the loans side is still at mid single digit buffer malware or other.
Speaker Change: For the lower edge of MIT.
Speaker Change: <unk> seen growth with Egypt.
Speaker Change: Deposits due to the same reasons.
Speaker Change: We downgrade from high single.
Speaker Change: <unk>.
Speaker Change: Hold on into in Q1 this year.
Speaker Change: We downgraded from high single digits to mid single digits digit growths.
Speaker Change: Having said that.
Speaker Change: We also adjusted financial outlook.
Speaker Change: On the revenue side.
Speaker Change: From a high single digit to mid single digits.
Speaker Change: And mainly it is on NII from Q2 deal.
Speaker Change: The lower than expected gross deposits.
Speaker Change: In Q1, and the quarters to come.
Speaker Change: And this has gone off would be followed by lower Opex.
Speaker Change: Expected and even guide three months ago.
Speaker Change: Three months ago, we are guiding to low single digit for down.
Speaker Change: Low to mid single digit down.
Speaker Change: And that's thanks to continuing.
Speaker Change: Simplification and optimization of our branch network.
Speaker Change: <unk> buffer.
Speaker Change: <unk> by approximately approximate clarified.
Speaker Change: By the end of the year.
Speaker Change: And also I hope.
Speaker Change: Switching that before for a lower contribution to the resolution fund charge.
Speaker Change: Skip.
Speaker Change: Skipping care.
Speaker Change: Yeah, <unk>, so finishing curious potential risks.
Speaker Change: They remain completely.
Speaker Change: Completely the same just.
Speaker Change: One rich.
Speaker Change: As disruption of international trade with you to protect journalism.
Speaker Change: So that.
Speaker Change: Or am I wrong for a.
Speaker Change: Turning towards to the host today. Thank you.
Speaker Change: Thank you thanks to the presenters.
Speaker Change: The next part so far today's meeting we will be happy to answer your questions.
Speaker Change: Let me remind you that this meeting is being recorded.
Speaker Change: If you have a question please click on the icon reiterates tent the upper part of your screen and then please wait to be called.
Speaker Change: If you are connected through a phone and you would like to ask a question.
Speaker Change: Please wait for a fine opportunity in later later on thank.
Speaker Change: Thank you.
Speaker Change: So our first question comes from the line of US here at CRH from.
Speaker Change: From.
Speaker Change: Hello Bank.
Speaker Change: Please go ahead.
Yes, Hello, everyone. Thank you for a quarter I just had one question on the outlook.
Speaker Change: We Miss you.
Speaker Change: Okay, sorry, sorry, sorry.
Speaker Change: I have just one question on how to confess.
Speaker Change: I think you'd previously said like growth, but now it's stable.
Speaker Change: Is it correct or I missed something maybe in the last.
Speaker Change: And the last guidance yes.
Speaker Change: Yes, I can take this wrong.
Speaker Change: You are correct.
Speaker Change: It is our current guidance.
Speaker Change: It's stable.
Speaker Change: Rafa.
Speaker Change: You can see behind mainly.
Speaker Change: Further.
Speaker Change: We are expecting a bit.
Speaker Change: Slower dynamism.
The sale of <unk>.
Speaker Change: It sounds like with the mutual funds.
Speaker Change: Due to uncertainties on the market.
Speaker Change: Very simply right so.
Speaker Change: Yes.
Speaker Change: These products are generally things are affected.
Speaker Change: Fifth.
Speaker Change: Sure.
Speaker Change: Has it been transposed into our downgrade to a slight downgrade already.
Speaker Change: Fees and commissions.
Speaker Change: Okay.
Speaker Change: Okay and do you take also the reported one because there were some one offs in Q4.
Speaker Change: On the fee side, but you take the reporting as a base for the guidance right.
Speaker Change: Yes.
Speaker Change: Okay, and maybe I have just one I'm not sure whether I get it correctly the components of the zero to 10 basis points risk cost guidance directly.
Speaker Change: Two three points.
Speaker Change: If maybe you can repeat that would be my last question. Thank you.
Speaker Change: In fact, I will give you the first ones, which are from literally point of view.
Speaker Change: Want to keep in mind.
Speaker Change: Which is.
Speaker Change: What a summarized regarding the.
Speaker Change: Adjustments of our covenants to manage although less so in the.
Speaker Change: The rest of the year, so Q2 and second semester.
Speaker Change: Provided that we continue to see.
Speaker Change: The improvement that we've seen for the retail portfolios, which is.
Speaker Change: More than likely.
Speaker Change: We will reverse.
Speaker Change: The.
Speaker Change: 2022 reserves for.
Speaker Change: It's retail component so it's small less.
Speaker Change: In the range of 700 million share count.
Speaker Change: That's number one and number two is that we.
Speaker Change: Made the assumption that default rate would be at the same level.
Speaker Change: Last year 2024.
Speaker Change: All product and segment portfolios.
Speaker Change: Which is a reasonable assumption to make.
Speaker Change: Within <unk>.
Central microeconomic scenario.
Speaker Change: Okay.
Great. Thank you.
Speaker Change: Thank you.
Speaker Change: For the question on the outskirts so let me remind you that if you'd like to ask your question. Please.
Speaker Change: Thanks to hand buttons.
Speaker Change: So our next question comes from.
Speaker Change: <unk> from Jpmorgan. Please go ahead.
Speaker Change: Yes, hi, good afternoon. Thank you for taking my questions.
Speaker Change: Actually I just have.
Speaker Change: Two quick ones.
Speaker Change: So just on first of all on the lending volume.
Speaker Change: So mid single digit and you're talking about the low end.
Speaker Change: You are assuming I guess.
Speaker Change: Our next generation of lending volumes in coming quarters.
Speaker Change: Just wanted to get your level of confidence in.
Speaker Change: Can you elaborate a bit.
Speaker Change: About that.
Speaker Change: And then the second question is on.
Speaker Change: On costs.
Speaker Change: It is very helpful to see.
Speaker Change: Mike a bigger decline this year.
Speaker Change: Just wondering sort of know what should we expect for them.
Speaker Change: Telecom once you know what kind of.
Speaker Change: Cost trends should be correct. Thank you.
Speaker Change: I will start with the answer to answer to your first question probably for my business lines colleagues.
Speaker Change: We'll compete meant.
Speaker Change: So it won't grow.
Speaker Change: We are confident.
Speaker Change: We are confident.
Speaker Change: Well, that's a perfect fracture the main products that are behind us. So we are very confident in terms of our mortgage.
Speaker Change: Mortgage loans are simply.
Speaker Change: Demand is still Super high.
Speaker Change: Sales are expected to occur in Greece increased further.
Speaker Change: The same for consumer loans.
Speaker Change: We downgraded a bit from high single digit to two meter buffer.
Speaker Change: So the demand is also.
Speaker Change: But optically commencing.
Speaker Change: So here we are.
Speaker Change: We are also.
Speaker Change: Fully confident and first of all corporate <unk>.
Speaker Change: Just for the time being.
Speaker Change: A very rich pipeline.
Speaker Change: But according to our opinion and sugar.
Speaker Change: Potential impacts of.
Speaker Change: But as a buffer.
Speaker Change: Asking for your level of confidence.
Speaker Change: Corporate <unk> for me.
Speaker Change: The lowest fare conference right. After this at this point, but alright.
Speaker Change: Alright, because simply there is a risk.
Speaker Change: Both companies are going to postpone the delay thereof about enhancements et cetera et cetera.
Speaker Change: I don't know whether some of my colleagues I would like to compete.
Speaker Change: Maybe just to say that on the retail side mortgages, we are 60% of last year's production, but it doesn't immediately translate into the outstanding volumes because it seems like extended structural production is not just refinancing all of these things that come immediately.
Speaker Change: Fourth call reconstructions constructions everything so it will come through the outstanding bonds, but it will take time as it grows will continue so I am pretty much confident on the retail side.
Speaker Change: Just to complement for the for the corporate part so what we see is now a bit.
Speaker Change: Let it be good appetite of the corporate to discuss some investment financing opportunities and also the working capital lines are being drawn more than it used to be some time ago. So this desire to.
Speaker Change: Actual element, but what's happening in this landscape.
Speaker Change: Thanks.
Speaker Change: The other question also on the cost side so.
Speaker Change: Furthermore, a complete with <unk> six so.
Speaker Change: As I was mentioning for this year, we are expecting.
Speaker Change: So low to mid single digit decline.
Speaker Change: And fourth management of six <unk>.
Speaker Change: If you are not guiding.
Yes, two or three years to come buffer buffer is expected therefore.
Speaker Change: Cost management.
Speaker Change: Six well not.
Speaker Change: It was basically flattish.
Speaker Change: So the the decrease the base.
Speaker Change: We are targeting 2025, so I don't want to I don't know.
Speaker Change: Great. Thank you very much.
Speaker Change: Thank you next question.
Speaker Change: It comes from Martin <unk> from UBS. Please.
Speaker Change: But you don't hear you.
Speaker Change: Can you hear me.
Speaker Change: Yes.
Speaker Change: Excellent.
Speaker Change: Thank you for taking my questions and thank you for your presentation.
Speaker Change: A question on the.
Speaker Change: NII outlook.
Speaker Change: Obviously slightly.
Speaker Change: Slightly revised your guidance down on that front can I just ask is that.
Speaker Change: I mean to the function of.
Speaker Change: Somewhat more confidence and corporate lending growth I wanted the volume picture or perhaps.
Speaker Change: Apps.
Speaker Change: The net interest margin maybe through deposit competition may be lower.
Speaker Change: Lower loan spreads.
Speaker Change: So play a role here and.
Speaker Change: And just just on the on the related topic, if you could talk a little bit about.
Speaker Change: Deposit competition and the pace of expected shifts from here onwards deposit mix. Thank you.
Speaker Change: Okay.
Speaker Change: I will take the first one so in our outlook.
Speaker Change: Almost so so for a reason.
Speaker Change: For the slowdown in Marlow I'm skipping.
Speaker Change: The change.
Speaker Change: Change is.
Speaker Change: Changes minimum obligate parameters.
Speaker Change: But for RFS volumes for almost nothing nothing else.
Bill: Bill you said that the volumes.
Speaker Change: Recover as part of our guidance.
Speaker Change: In terms of income from the deposits generally touching khedira beginning.
Bill: Positive piece of information that.
Speaker Change: Improved.
Speaker Change: The ratio for unpaid versus telco.
Speaker Change: Cyclists.
Speaker Change: Improved and I'm not the benchmark increase for Q4 finished.
Speaker Change: Because because thats kind of extraordinary always Q4.
Speaker Change: It would be different but if you have a look on the let's say the evolution of <unk>.
Speaker Change: This ratio on paper so services total ARPA.
Speaker Change: I remember one year ago, It also down 52%.
Speaker Change: Then, it's a bit of a bit of Panther.
Speaker Change: For the time being at the end of Q1. This year it has sort of shifted if.
Speaker Change: But the point is.
Speaker Change: Therefore, the change of the structure happened very rapidly.
Speaker Change: So.
Speaker Change: <unk> still do not see full impact of that in Q1 results, but this should.
Speaker Change: This should recover in the quarter sort of quarters to come.
Speaker Change: Thank you.
Speaker Change: Thank you let me again remind you to use the raise then button.
Speaker Change: Yeah.
Speaker Change: She has a question.
Speaker Change: Yeah.
Speaker Change: I think there is still a question about the competitive landscape in deposits.
Speaker Change: That's right, yes, sorry, sorry, okay. So yes, that's correct.
Speaker Change: You mean competition has stood the answer are you seeing there.
Speaker Change: So they may start on retail side by saying two things first one we stick to our I would say general principle approach same creep.
Speaker Change: So we don't aggressively compete on the pricing side on deposits. This is not the way going back to clients. When we definitely see some of our competitors bank on the other hand, we believe quite reasonably balanced at this moment. This is the first thing.
Speaker Change: Second one usually more volatile times play in favor of banking deposits and you can see it already a bit answered one.
Speaker Change: Those times and decreasing interest rates play in favor of current accounts outstanding balances. So this is my optimism would be probably stemming from this brief not sure answer is enough.
Speaker Change: Yes.
Speaker Change: That makes sense. Thank you.
Speaker Change: Thank you.
Speaker Change: I would like to.
Speaker Change: Ask here a question through a telephone please press star and six.
Speaker Change: Two on mute yourself and you can ask your question and of course the rigs down.
But on this one.
Shane: Our next question comes from Atlanta Metro Shane from White Oak capital metrics.
Speaker Change: Lease.
Speaker Change: Thank you. Thank you for the opportunity just to better understand the capex.
Speaker Change: Justin when we talk to claims although performance tend at this point in time.
Speaker Change: Okay.
Speaker Change: Actually that's a good mine.
Speaker Change: Can you talk about some of the mind you seen complaints, but then it's even going to forgo it.
Speaker Change: Can they get more certainty on the environment and how it's changing so I just want to better understand the Reagan County.
Speaker Change: Factions, youre seeing and whether they are being more conservative testing lineup all of that.
Speaker Change: The Atlanta.
Speaker Change: Maybe I start.
Speaker Change: To give you a kind of short comment a reflection of.
Speaker Change: From the clients. So generally speaking last year. The companies were more hesitant. Thank you know about pursuing their investment plans.
Speaker Change: And this year a day a day.
Speaker Change: More and more active despite all the geopolitical uncertainties.
Speaker Change: Maybe a favorable.
Speaker Change: Victor is all element is also decreasing interest rates and basically interest rates more or less according to the expectations hitting the I would say medium term Tam levels and the companies are just are ready to pursue some investments some of them are unnecessary from a technological or lifecycle point of view as well so.
Speaker Change: This is a this is the current situation, we do not record a kind of increased level of uncertainty because of the level of uncertainty is any very high already for some time.
Speaker Change: Got it.
Speaker Change: That's true from the agreement with <unk> for retailer.
Speaker Change: Complete answer.
Speaker Change: Hello, Yes, I just wanted to ask Glenn to comment.
Speaker Change: Okay. Okay I see okay. Thank you so.
Speaker Change: Yes, let me.
Speaker Change: Purple switch Inc. A few seconds.
Speaker Change: Another question.
Speaker Change: Probably on a if I may just field.
Speaker Change: Moment of silence.
Speaker Change: Coming back to the corporate lending.
Speaker Change: Both Martin and <unk> ask for <unk> for the same what is probably not fully.
Speaker Change: But let's say reflected on our assumptions for 2025 is the level.
Speaker Change: Of public investments, which might create additional space for private investment too and give some encore.
Speaker Change: Corporate clients, including.
Speaker Change: Large corporations, including mid sized companies are speaking, mainly about potential new investments into infrastructure be it a <unk>.
Transportation transportation type of.
Speaker Change: So on the sides. We are a strict banking association is in pretty lively discussion with with the government and there might be some.
Speaker Change: Some inputs or impulses coming coming from this side, so that might a little bit early.
Speaker Change: The bar for.
Speaker Change: Opportunities in corporate funds.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of.
Speaker Change: <unk>. Please go ahead.
Speaker Change: Hi, Thank you for the opportunity I just wanted to understand how you think about related liver cell flat CET one.
Speaker Change: And dividend payout philosophy really.
Speaker Change: How do you think about that.
Speaker Change: When to issue 81, if at all you do generally as a concept would you not like to do so the reason I'm asking is lets.
Speaker Change: Let's say over the last few years, you've been being 100% payout and that is of course I mean did you think the CET one ratio and at some point.
Speaker Change: It might reach a point, where you would say I don't want to reduce the capitalization it anymore at which point would you.
Speaker Change: You like to optimize Debbie.
Speaker Change: Capital between our common equity tier one and <unk>.
Andre: What are the long term thinking that Andre thank you.
Speaker Change: Okay.
Tom: Sure. Thank you Tom.
Okay.
Tom: Okay. Okay. So.
Tom: Well.
Tom: Question number one was already going on or are you going to.
Tom: Consider effort to long term to issue.
Tom: Sure.
Tom: It's showing up north.
Tom: Because after some consideration so it's very clear that this would not work.
Tom: Efficiently and.
Tom: This leads to the kind of double taxation booths on the <unk> side.
Tom: In the industrial side.
Tom: This first or second Youre right 2025 years first year in Iraq.
Tom: Sure.
Tom: Faith or leisure announced to the market starts to pay.
Tom: Which is the case, we're going to.
Tom: Percent of demerger or.
Tom: The typical.
Tom: At the same time, we would like to grow.
Tom: Sufficient babies trucker consume around part of the newly surgery.
Tom: And so the last point is.
Tom: For the time being as a matter of policy of the bank, we do not guide.
Tom: Gary.
Tom: Dividend so beyond the <unk>, we are operating.
Tom: At the same time I can repeat here.
Tom: At.
Tom: Uh huh.
Tom: One is there is a surplus of capital if you cannot do a safer.
Tom: On 18th of you've already turned to return to the shareholders. Yes. Thank you.
Tom: Thank you for the answer.
Speaker Change: Thank you and our next question comes from the line of <unk>. Please ask your question.
Speaker Change: Hi, Let me apologize I also know Pedro So maybe this question was I'm not sure I.
Speaker Change: Wanted to ask about them.
Speaker Change: About the dividend policy of the of the key Kb.
Speaker Change: Due to 2020 four or.
Speaker Change: <unk> 2023 wells policy I think.
Speaker Change: Yes.
Speaker Change: For the person.
Speaker Change: Holding 60% divide to shareholders.
Speaker Change: Then it was a reason to 200% and I wanted to ask how do you see the.
Speaker Change: Future.
Speaker Change: Future policy for dividends.
Speaker Change: Until maybe 2026 2027, thank you so much.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: I don't know Curt when you joined the meeting, but it was exactly the point of the previous question.
Speaker Change: So let me very briefly summarize the answer we do not guide.
Speaker Change: Uh huh.
Speaker Change: Dividend policy beyond the year to be a pretty thing.
Speaker Change: I think first we will be more concrete.
Speaker Change: During Q1.
Speaker Change: During Q4 presentation in February results.
Speaker Change: In February.
Speaker Change: Six this is one thing.
Speaker Change: Bronco Billy's a surplus.
Speaker Change: We plan to return needs to be to the shareholders.
Speaker Change: The third point is.
Speaker Change: Maybe just to explain of IV pacer.
Speaker Change: So do you consider this year, so sort of 100% books escrow, so 25 subject to avoid the issue but.
Speaker Change: It also very much about the focus on the capital management.
Speaker Change: Disciplined and sort of what you can see behind.
Speaker Change: It is.
Speaker Change: Yes.
Speaker Change: Very high level.
Speaker Change: Models are more so.
Speaker Change: Comforting therapy group is running above you are preparing.
Speaker Change: Before other components of the group, which it could be.
Speaker Change: Cabo, Slovakia, which could be used against etcetera etcetera.
Speaker Change: One point the other point of view he directive.
Speaker Change: I can go for allocation of capital into the Asia.
Speaker Change: Now the floor, therefore offered better from.
Speaker Change: But that's our typical or less.
Speaker Change: Yes.
Speaker Change: In transit.
Speaker Change: We are considering.
Speaker Change: But to go directions first more.
Speaker Change: Tomorrow.
Speaker Change: <unk>.
Speaker Change: Total to distribute.
Speaker Change: Right so.
Speaker Change: That's right for you or a benefit to pay for 100%.
Speaker Change: Phil.
Speaker Change: Kind of spun back normalized dividend for <unk>.
Speaker Change: Alex.
Speaker Change: Whatever between 60 to answer with a sudden.
Speaker Change: I respect plus thank you.
Speaker Change: Yes.
Speaker Change: Thank you for the.
Speaker Change: Question centers fully answer since we do not have.
Speaker Change: Any.
Speaker Change: Further questions in the queue. So let me hand back to.
Speaker Change: Okay.
Speaker Change: Remark.
Speaker Change: Alright, Thank you very much for being with us.
Speaker Change: We are thrilled to continue our hard work to deliver the next quarter and the main aspects of 2025.
Speaker Change: According to what we are debating here with you I wanted to thank you for the trust and work you are dedicating to covering K b shares.
Speaker Change: Also thinking to my colleagues, who presented or answered your questions and.
Speaker Change: Including the Investor installations team for preparing all of this thank you very much and.
Speaker Change: See you at latest at the occasion of the second quarter results presentation. Thank you enjoyed today.
Speaker Change: Thank you very much. This is calculated presentation you can now disconnect.
Speaker Change: Thank you bye bye bye bye.
Speaker Change: Alright.
Speaker Change: Alright.