Q3 2025 Banco Comercial Portugues SA Earnings Call

October 30, 2025

Miguel Bragança: SA.

Speaker #1: Good day and thank you for standing by . Welcome to the millennium BCP nine month 2025 Earnings Conference Call and Webcast . At this time , all participants are in a listen only mode .

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

Operator: Good day, thank you for standing by. Welcome to the Millennium bcp 9 Months 2025 Earnings Conference Call and Webcast. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please 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 the conference over to your speaker, Mr. Miguel Maya. Please go ahead.

Speaker #1: After the speakers presentation , there will be a question and answer session . To ask a question during the session , please press star one and one on your telephone .

Speaker #1: You will then hear no message advising your hand is raised . To withdraw your question , please press star one and one again .

Speaker #1: Please note that it is conference is being recorded . I would now like to turn the conference over to your speaker , Mr. Miguel Maia .

Speaker #1: Please go ahead .

Speaker #2: Good afternoon . And welcome to BCP Earnings Conference call . As usual , I will mention the highlights of our performance . And then Miguel and Bernard Colas will follow , providing additional detail .

Miguel Maya: Good afternoon, Miguel Maya speaking. Welcome to BCP earnings conference call. As usual, I will mention the highlights of our performance and then Miguel Bragança. Bernardo Collaço will follow providing additional detail. Recent times have been marked by high levels of volatility and instability that haven't faded away. The social and economic shockwaves in the markets where we operate, coming from geopolitical conflicts and tensions, demand increased resilience and agility from our side. Our performance in the first nine months of this year confirms the quality and capability of our business model to overcome adversities while expanding the franchise and generating increased profitability. Consolidated net income reached €776 million, a year on year increase of 8.7%, driven by a solid operational performance that supported the core operating profit of €1.8 billion and ROE of 14.6%.

Miguel Maya: Good afternoon. Miguel Maya speaking. Welcome to bcp Earnings Conference Call. As usual, I will mention the highlights of our performance and then Miguel Bragança and Bernardo Collaço will follow, providing additional detail. Recent times have been marked by high levels of volatility and instability that haven't faded away. The social and economic shockwaves in the markets where we operate, coming from geopolitical conflicts and tensions, demand increased resilience and agility from our side. Our performance in the first nine months of this year confirms the quality and capability of our business model to overcome adversities while expanding the franchise and generating increased profitability. Consolidated net income reached EUR 776 million, a year-on-year increase of 8.7%, driven by a solid operational performance that supported the core operating profit of EUR 1.8 billion and ROE of 14.6%.

Speaker #2: Recent times have been marked by high levels of volatility and instability that haven't faded away . The social and economic shockwaves in the markets where we operate .

Speaker #2: Coming from geopolitical conflicts and tensions, demand increases resilience and agility from our size. Our performance in the first nine months of this year confirms the quality and capability of our business model to overcome adversities while expanding the franchise and generating increased profitability.

Speaker #2: Consolidated net income reached 776 million a year on year increase of 8.7 , a solid operational performance that supported the core operating profit of 1.8 billion and a ROE of 14.6% .

Speaker #2: In Portugal , net income went up 8% , having reached almost 655 million , supported by a robust business model leading position in multiple business fronts , the net income of international operations increased 19.8% , driven by Poland , where , despite the costs with legal risks still being a significant burden , banks millennium's net income went up 56% to 202 million .

Miguel Maya: In Portugal, net income went up 8%, having reached almost €655 million, supported by a robust business model and a leading position in multiple business fronts. The net income of international operations increased 19.8%, driven by Poland where despite the costs with the legal risk still being a significant burden, Bank Millennium's net income went up 56% to €202 million, also confirming that it has a high quality franchise and a profitable business model. The costs in Poland associated with CHF mortgage loans portfolio amounted to €280 million, 31% below the costs over the same period last year, which give us confidence and is a good indicator that the risk is controlled, has been properly managed and will not compromise the ambitions we have set for the Polish market on the strategic plan.

Miguel Maya: In Portugal, net income went up 8%, having reached almost EUR 655 million, supported by a robust business model and a leading position in multiple business fronts. The net income of international operations increased 19.8%, driven by Poland, where despite the costs, with the legal risks still being a significant burden, Bank Millennium's net income went up 56% to EUR 202 million, also confirming that it has a high quality franchise and a profitable business model. The cost in Poland associated with FX mortgage loans portfolio amounted to EUR 290 million, 31% below the costs over the same period last year, which give us confidence and is a good indicator that the risk is controlled, has been properly managed, and will not compromise the ambitions we have set for the Polish market on the strategic plan.

Speaker #2: Also confirming that it has a high quality franchise and a profitable business model . The costs in Poland associated with FX mortgage loans , portfolio amounted to 280 million , 31% below the costs over the same period last year , which gives us confidence and is a good indicator that the risk is controlled .

Speaker #2: Has been properly managed and will not compromise the ambitions we have set for the Polish market. On the strategic plan, the economy in Mozambique has been facing a challenging situation, dealing with the effects of the slowdown in activity following the social unrest.

Miguel Maya: The economy in Mozambique has been facing a challenging situation dealing with the effects of the slowdown in activity following the social unrest. After the outcome of last year's elections, the political situation stabilized, which led to a progressive normalization of the activity and regaining of confidence from international investors. More recently, reflected in the last week announcement of the intention to redeploy important energy projects, we have had a long standing operation in Mozambique, celebrating this year 30 years of local presence in the country, during which we have developed a resilient and prudent business model, having gained in depth knowledge and expertise to successfully navigate the various stages of the economic cycle. In this challenging context, the net income in Mozambique amounted to $25.4 million, a year-on-year decrease of 59%, driven by impairments and provisions mostly related to the downgrade of sovereign debt rating.

Miguel Maya: The economy in Mozambique has been facing a challenging situation, dealing with the effects of the slowdown in activity following the social unrest after the outcome of last year's elections. The political situation stabilized, which led to a progressive normalization of the activity and regaining of confidence from international investors, more recently reflected in the last week announcement of the intention to redeploy important energy projects. We have had a long-standing operation in Mozambique, celebrating this year 30 years of local presence in the country, during which we have developed a resilient and prudent business model, having gained in-depth knowledge and expertise to successfully navigate the various stages of the economic cycle. In this challenging context, the net income in Mozambique amounted to EUR 25.4 million, a year-on-year decrease of 59%, driven by impairments and provisions mostly related to the downgrade of sovereign debt rating.

Speaker #2: After the outcome of last year's elections . The political situation stabilized , which led to a progressive normalization of the activity and regaining of confidence from international investors .

Speaker #2: More recently reflected in the last week's announcement of the intention to redeploy important energy projects . We have had a long operation in Mozambique celebrating this year , 30 years of local presence in the country during which we have developed a resilient and prudent business model .

Speaker #2: Having gained in-depth knowledge and expertise to successfully and a navigate the various stages of the cycle in this challenging context , the net income in Mozambique amounted to 25.4 million a year on year decrease of 59% , driven by impairments and provisions , mostly related to the downgrade of sovereign debt rating .

Speaker #2: Despite these additional charge of impairments , the profit before impairments and provisions was aligned with last year's level , so supported by our strong commercial franchise at the consolidated level , the ability of our business model to organically generate capital is clearly reflected in the group's strong capital position .

Miguel Maya: Despite this, additional charge of impairments, the profit before impairments and provisions was aligned with last year's level, supported by our strong commercial franchise. At the consolidated level, the ability of our business model to organically generate capital is clearly reflected in the group's strong capital position. Despite significant business growth and the fact that we are only incorporating 25% of the profit generated in line with the approved dividend policy, we have been able to maintain very loose capital ratios. We see Tier 1 of 16.9 and total capital of 19.9.

Miguel Maya: Despite this additional charge of impairments, the profit before impairments and provisions was aligned with last year's level, supported by our strong commercial franchise. At the consolidated level, the ability of our business model to organically generate capital is clearly reflected in the group's strong capital position. Despite significant business growth and the fact that we are only incorporating 25% of the profit generated in line with the approved dividend policy, we have been able to maintain very robust capital ratios. We see CET1 ratio of 15.9% and total capital of 19.9%. Operating in an increasingly competitive landscape, the quality of our retail banking business model led to an increase of almost 9% in customer funds, which stood at $109.5 billion, and to an increase of nearly 4.5% in loans to customers, which reached $61.5 billion.

Speaker #2: Despite significant business growth and the fact that we are only incorporating 25% of the profit generated in line with the approved dividend policy , we have been able to maintain very robust capital ratios with CT one of 15.9 and total capital of 19.9 , operating in increasingly competitive landscape .

Miguel Maya: Operating in an increasingly competitive landscape, the quality of our retail banking business model led to an increase of almost 9% in customer funds, which stood at EUR 109.5 billion, and to an increase of nearly 5% in loans to customers, which reached EUR 61.5 billion. This performance in customers loans was driven by our intense commercial activity in Portugal, where performing loans went up 8%, having increased significantly both in loans to individuals and to companies. We keep the trajectory of improvement of the balance sheet quality, continuing to reduce non-productive assets. Over the past 18 months, NPE decreased by EUR 332 million, recovery funds by EUR 71 million, and foreclosed assets by EUR 19 million.

Speaker #2: The quality of our retail banking business model led to an increase of almost 9% in customer funds , which stood at 109.5 billion , and to an increase of nearly 5% in loans to customers , which reached 61.5 billion .

Speaker #2: This performance in customers loans was driven by our intense commercial activity in Portugal , where performing loans went up 8% . Having increased significantly both in loans to individuals and to companies .

Miguel Maya: This performance in customer loans was driven by our intense commercial activity in Portugal, where performing loans went up 8%. Having increased significantly both in loans to individuals and to companies, we keep the trajectory of improvement of the balance sheet quality, continuing to reduce non-productive assets. Over the past 12 months, NPE decreased by $332 million, recovery funds by $71 million, and foreclosed assets by $19 million. The NPE ratio is now at 2.6% with the total cash coverage of approximately 87%, which stands at 123% when including real estate collateral. Our rigorous management of balance sheet risks enable us to further improve the cost of risk to 31 basis points, a figure well anchored below the threshold of 50 basis points that we consider reasonable for our business model over the cycle.

Speaker #2: We keep the trajectory of improvement of the balance sheet quality continuing to reduce non-productive assets over the past 12 months , NPE decreased by 332 million .

Speaker #2: Recovery funds by 71 million , and foreclosed assets by 19 million . The NPE ratio is now at 2.6% , with a total cash coverage of approximately 87% , which stands at 123% .

Miguel Maya: The NPE ratio is now at 2.6%, with a total cash coverage of approximately 87%, which stands at 123% when including real estate collateral. Our rigorous management of balance sheet risks enable us to further improve the cost of risk to 31 basis points, a figure well anchored below the threshold of 50 basis points that we consider reasonable for our business model over the cycle. At the group level, the customer base expanded more than 4% in the last twelve months, exceeding 7.2 million, of which almost 2.9 in Portugal. Most notably, mobile customers grew 9% during the same period, accounting for 74% of the group's customer base, 66 in Portugal, revealing the success of our digital transformation journey.

Speaker #2: When including real estate collateral, our rigorous management of balance sheet risks enables us to further improve the cost of risk to 31 basis points, a figure well anchored below the threshold of 50 basis points that we consider reasonable for our business model over the cycle.

Speaker #2: At the group level , the customer base expanded more than 4% in the last 12 months , exceeding 7.2 million , of which almost 2.9 .

Miguel Maya: At the group level, the customer base expanded more than 4% in the last 12 months, exceeding 7.2 million, of which almost 2.9 million in Portugal. Most notably, mobile customers grew 9% during the same period, accounting for 74% of the group's customer base, 66% in Portugal, revealing the success of our digital transformation journey. Customer recognition of our digital capabilities is also reflected in the use they make of the app. On the first nine months, the number of transactions carried out by the customers through the app increased 14%, including a significant growth in the number of accounts opened in the same period. The number of sales through the mobile app increased 15% with emphasis on sales of personal loans and investment funds.

Speaker #2: In Portugal , most notably , mobile customers grew 9% during the same same period , accounting for 74% of the group's customer base .

Speaker #2: 66 . In Portugal , revealing the success of our digital transformation journey , customers recognition of our digital capabilities is also reflected in the use they make of the app .

Miguel Maya: Customer recognition of our digital capabilities is also reflected in the use they make of the app. On the first nine months, the number of transactions carried out by the customers through the app increased 14%, including a significant growth in the number of accounts opened. In the same period, the number of sales through the mobile app increased 15%, with emphasis on sales of personal loans and investment funds. The priority we give and the investment we make to develop mobile solutions with a clear focus on customer-centric innovation and permanent improvement means that our app continues to lead the rankings and deserve top reviews on the most relevant platforms.

Speaker #2: On the first nine months , the number of transactions carried out by the customers through the app increased 14% , including a significant growth in the number of accounts opened in the same period .

Speaker #2: The number of sales through the mobile mobile app increased 15% , with emphasis on sales of personal loans and investment funds . The priority we give at investment we make and the investment we make to develop mobile solutions with a clear focus on customer centric innovation and permanent improvement means that our app continues to lead to rankings and deserved top reviews on the most relevant platforms .

Miguel Maya: The priority we give at investment we make and the investment we make to develop mobile solutions with a clear focus on customer-centric innovation and permanent improvement means that our app continues to lead the rankings and deserve top reviews on the most relevant platforms. In summary, I would say that the first nine months of the year have once again demonstrated that the strategic plan we approved enables the bank to continue evolving at a stronger pace, even in an environment that has proven more unpredictable and as challenging that we had anticipated. I would also highlight the acceleration of lending in Portugal, already in line with our expectations, both individuals and corporate segments. Our international operations present distinct challenges, but overall are converging toward the level of profitability establishing this strategic plan.

Speaker #2: In summary , I would say that the first nine months of the year have once again demonstrated that the strategic plan we approved enables the bank to continue evolving at a stronger pace , even in an environment that has proven more unpredictable and challenging than we had anticipated .

Miguel Maya: In summary, I would say that the first nine months of the year have once again demonstrated that the strategic plan we approved enables the bank to continue evolving at a stronger pace, even in an environment that has proven more unpredictable and challenging than we had anticipated. I would also highlight the acceleration of lending in Portugal, already in line with our expectations, both individuals and corporate segments. Our international operations present distinct challenges, overall are converging towards the level of profitability established in the strategic plan. Although we are investing significantly to enhance our commercial capabilities and operational resilience in digital, operational efficiency remains and will continue to be a priority for the group. We are therefore confident in our ability to continue quarter after quarter to successfully implement the strategic plan. Miguel, the floor is yours.

Speaker #2: I would also highlight the acceleration of lending in Portugal already in line with our expectations . Both individuals and corporate segments . Our international operations present distinct , present , distinct challenges , but overall , are converging towards the level of profitability .

Speaker #2: Establishing the strategic plan . Although we have , we are investing significantly to enhance our commercial capabilities and operational resilience in digital operational efficiency remains and will continue to be a priority for the Group .

Miguel Maya: Although we are investing significantly to enhance our commercial capabilities and operational resilience in digital, operational efficiency remains and will continue to be a priority for the group. We are therefore confident in our ability to continue quarter after quarter to successfully implement the strategic plan. Nigel, the floor is yours.

Speaker #2: We are therefore confident in our ability to continue , quarter after quarter to successfully implement the strategic plan , Miguel . The floor is yours .

Speaker #2: very much .

Miguel Bragança: Thank you very much. Thank you very much, ladies and gentlemen. Going now to page eight. As you see in consolidated terms, we are presenting a core income growing 3% in spite of the general re-reduction of the interest rate environments in several geographies in which we are. I would highlight here particularly the growth of commissions of 4%. In terms of operating costs, a growth of 9% to a large extent conditioned by the evolution of the salary inflation in Poland. This means that in spite of the reduction of interest rates, we were able to maintain our core operating profit relatively constant at a high level.

Speaker #3: Thank you very much , ladies and gentlemen . Going now to to page eight . As you see in consolidated terms , we are presenting a core income 3% in spite of the general reduction of the interest rate environment in several geographies in which we are .

Miguel Bragança: Thank you very much, ladies and gentlemen. Going now to page eight. As you see, in consolidated terms, we are presenting a core income growing 3% in spite of the general reduction of the interest rate environments in several geographies in which we are, and I would highlight here particularly the growth of commissions of 4%. In terms of operating costs, a growth of 9% to a large extent conditioned by the evolution of the salary inflation in Poland. This means that in spite of the reduction of interest rates, we were able to maintain our core operating profit relatively constant at a high level due to some other income, trading gains, recoveries of taxes. We are able to present a profit before impairment of position and provisions growing 3%.

Speaker #3: And I would highlight here , particularly the growth of commissions of of 4% in terms of operating costs , a growth of 9% .

Speaker #3: To a large extent , conditioned by the evolution of the salary inflation in Poland . But this means that in spite of the reduction of interest rates , we were able to maintain our core operating profit relatively constant at a at a high level , our due to some other income , the trading gains , recovery , recoveries of of of taxes .

Miguel Bragança: Our, due to some other income, trading gains, and recoveries of taxes, we have, we are able to present a profit before impairment of position and provisions growing 3%.

Miguel Bragança: Due to the improvement in the risk profile of the bank, mainly in terms of credit risk and legal risk, we were able to reduce the impairments by 14%, which means that at the end of the day we were able to present the growth of profit before income tax of 14%. As you see, in terms of some key metrics, we are able to present consequently a return on tangible equity above 15%, a growth of book value per share plus dividend per share based on the performing numbers of shares that are outstanding of 17% and a growth of Epsilon around 11.5%. This clearly shows the ability that the bank has to generate shareholder value even in a scenario of decreasing interest rates.

Miguel Bragança: Due to the improvement in the risk profile of the bank, mainly in terms of credit risk and legal risk, we were able to reduce the impairments by 14%, which means that at the end of the day, we were able to present a growth of profit before income tax of 14%. You see, in terms of some key metrics, we are able to present consequently a return on tangible equity above 15%, a growth of book value per share, plus dividend per share based on the performer numbers of shares that are outstanding of 17%, and a growth of EPS of around 11.5%. This clearly shows the ability that the bank has to generate shareholder value, even in a scenario of decreasing interest rates.

Miguel Bragança: In terms of general level of profitability in the bank, in page 11 you see that the growth of 2.6% in terms of our NII is mainly explained by the growth in the international operations of almost 6%, presenting still a very high NIM, but by a very prudent, I would say, management of the NII in Portugal that was able to remain broadly flat in spite of the reduction of interest rates. As I have guided since mid of last year, we were expecting, in spite of the reduction of interest rates, to have a broadly constant NII this year. This is exactly what is happening, as you may say, if you adjust for the account. This is already the sixth quarter in a row in which our NII is steadily improving in Portugal in spite of the reduction of interest rates.

Miguel Bragança: In terms of general level of profitability in the bank, in page 11, you see that the growth of 2.6% in terms of our NII is mainly explained by the growth in the international operations of almost 6%, presenting still a very high NIM, but also by a very prudent, I would say, management of the NII in Portugal that was able to remain broadly flat in spite of the reduction of interest rates. As I have guided since mid of last year, we were expecting, in spite of the reduction of interest rates, to have a broadly constant NII this year. This is exactly what is happening.

Miguel Bragança: As you may say, if you adjust for the account, this is already the 6th quarter in a row, in which our NII is steadily improving in Portugal, in spite of the reduction of interest rates. This broadly flat NII, together with the increase of fees and commissions of 6% in Portugal, will be able to make it possible for us to show some growth in terms of the core income in Portugal. By core income, I mean NII plus fees and commissions. These increase of 6.3% in Portugal is explained by both market fees and by more transaction related fees. In terms of the international operation, more challenges in terms of fees to a large extent also due to the situation in Mozambique.

Miguel Bragança: These broadly flat NII, together with the increase of fees and commissions of 6% in Portugal, will make it possible for us to show some growth in terms of the core income in Portugal. By core income I mean NII plus fees and commissions. This increase of 6.3% in Portugal is explained by both market fees and by more transactional related fees in terms of the international operation. More challenges in terms of fees to a large extent also due to the situation in Mozambique in terms of other operating income. Some important evolution, as you see here. There are here two different tales of the same story.

Miguel Bragança: In terms of other operating income, some important evolution, as you see here. There are here two different styles of the same story. The mandatory contributions in Portugal this year, when you compare with last year, are significantly lower because there was a recovery of a contribution declared unconstitutional, of which we have already recovered year to date, around EUR 80 million, of which EUR 12 million in Q3. This made it possible, the mandatory contributions to go down from EUR 40 million to EUR 20 million in Portugal. On the other hand, in the international operations, what you have is with the new situation of the bank in Poland that ceased to benefit from an extraordinary reduction in the bank tax.

Miguel Bragança: The mandatory contributions in Portugal this year, when you compare with last year, are significantly lower because there was a recovery of a contribution declared unconstitutional, of which we have already recovered year to date around €18 million, of which €12 million in Q3. This made it possible for the mandatory contributions to go down from €40 million to €20 million in Portugal. On the other hand, in the international operations, what you have is with the new situation of the bank in Poland that ceased to benefit from an extraordinary reduction in the bank tax. This normality has implied that the bank tax in Poland increased by around €60 million. These differences, together with a better net trading income due to some transactions that have occurred, some of them not totally recurrent, have made it possible to grow from minus €24.1 million to €29.5 million in consolidated terms.

Miguel Bragança: This normality has implied that the bank tax in Poland increased by around EUR 60 million. These differences, together with a better net trading income due to some transactions that have occurred, some of them not totally recurrent, have made it possible, really to grow from -24.1 to 29.5 in consolidated terms. In terms of operating costs, I would here like to highlight the level at which we are. In consolidated terms, we are with a cost to income of 37%, which is a very healthy cost to income in European terms, as we all know. In Portugal, our cost to income is 34%. Of course, with this type of cost to incomes, the cost pressures are higher.

Miguel Bragança: In terms of operating costs, I would here like to highlight the level at which we are. In consolidated terms, we are with a cost-to-income of 37%, which is a very healthy cost-to-income. In European terms, as we all know, in Portugal our cost-to-income is 34%. With this type of cost-to-incomes, the cost pressures are higher. We have been able still to maintain this level of cost-to-income. The level of cost has increased 7.4% in Portugal and 6.4% in terms of salaries and employee compensation. I would here like to highlight that more than 50% of this growth has to do with incentives and variable remuneration. It is flexible, but it has also to do with the sharing of the good performance of the bank with all the contributors to it, starting with less skilled workers to the most skilled workers.

Miguel Bragança: We have been able still to maintain this level of cost to income. The level of cost has increased 7.4 in Portugal and 6.4 in terms of salaries and employee compensation. I would here like to highlight that more than 50% of this growth has to do with incentives and variable remuneration. It is flexible, but it has also to do with the sharing of the good performance of the bank with all the contributors to it, starting with less skilled workers to the most skilled workers. International operations. As we know, the labor market in Poland is quite hot. This has to do with the general growth of productivity in the Polish market.

Miguel Bragança: International operations, as we know, the labor market in Poland is quite hot. This has to do with the general growth of productivity in the Polish market. As you may know, Poland has been year after year one of the countries in Europe with the strongest growth in salaries and also in productivity. This affects the whole economy. Of course, our bank, that is a challenger bank that is growing even more, as Miguel Maya has commented. Our cost of risk really proving the resilience and the acuteness of our credit concession policy. The cost of risk reducing from 38 to 31 basis points. As I had anticipated also for Portugal, we were expecting cost of risk in this new normal from between 30 and 40 basis points. In this new environment that we are now seeing, it is a more benign environment.

And 6.4, uh, in terms of salaries and, and, and, uh, employee compensation, I would here like to highlight that, uh, uh, more than 50% of these growth has, has to do with incentives and very generation. So it is flexible, but is, but it has also to do with the sharing of the, the good performance of the bank with uh, with the all the, the contributors to it starting with uh, uh, less skilled workers to the to the most skilled workers.

Miguel Bragança: You may know, Poland has been, year after year, one of the countries in Europe with the strongest growth in salaries and also in productivity. This affects the whole economy, of course, our bank, that is a challenger bank that is growing even more. As Miguel Maya has commented, our cost of risk really proving the resilience and the acuteness of our credit concession policy. The cost of risk reducing from 38 to 31 basis points. I had anticipated, also for Portugal, we were expecting costs of risk in this new normal from between 30 and 40 basis points in this new environment that we are now seeing. It is a more benign environment, up until now, closer to 30 as we are seeing than to 40.

They International operations uh as as we know the the the labor market in in in Poland is quite hot. This has to do with the general growth of productivity in the Polish market. As, as you may know, Poland has been a year after year 1 of the countries in Europe, is the strongest growth in salaries. And also, in in productivity, this affects the whole economy. Of course, our bank that is a challenger bank that is going, uh, even more as Miguel mayor. Um,

Miguel Bragança: Up until now, closer to 30 as we are seeing than to 40. In terms of the international operations, there was also a positive evolution of the cost of risk. It has also to do with some credit sales that have generated a price that was higher than the net book value of the loans. In spite of the low level of NPEs, as you see in Portugal, we are already at €800 million, which is a very low level for the size of our balance sheet and the quite low level of the NPE ratio. Considering only loans, 1.9% and 1.4%. If you consider all the exposures that contribute to the EBA ratio, we have been able to continue to reduce the stock of NPEs in Portugal. We have done so year on year by €224 million.

Miguel Bragança: In terms of the international operations, there was also a positive evolution of the cost of risk, but it has also to do with some credit sales that have generated a price that was higher than the net book value of the loans. In spite of the low level of NPEs, as you see in Portugal, we are already at EUR 800 million, which is a very low level for the size of our balance sheet and the quite low level of the NPE ratio. Considering only loans, 1.9% and 1.4%, if you consider all the exposures that contribute to the EBA ratio.

Has commented, uh, our cost of risk, really, uh, proving the resilience and the acuteness of our, uh, credit concession policy, uh, the the the cost of risk, uh, reducing from 38 to 31 basis points, as I had anticipated. Uh, um, also, for Portugal, we were expecting cost of risk in this new normal from between 30 and 40. By this point, in this new environment that we are now seeing it is a more benign environment. A now closer to 30 as we are seeing then to 40, in terms of the international uh operations there was also a positive evolution of of the cost of risk, but it has also to do with some uh, credit sales that have generated the price that was higher than the the the the network value of the loans.

Miguel Bragança: We have been able to continue to reduce the stock of NPEs in Portugal, and we have done so year on year by EUR 224 million. In the international operations also, as you see, the level of NPEs is higher to a large extent because our business in Poland has a higher concentration in cash flows, which are very profitable. When you compare the spread with the cost of risk are very profitable, but generate a stock of NPEs that is somewhat higher. In terms of business activity, I think this is really the good news, I would say. We are growing in terms of customer funds 8.6%, and this has been dispersed throughout the group.

In spite of the low level of NPS. Uh, as you see in Portugal, we are already at 800 million which is available for the size of our balance sheet and the the quite low level of the NP ratio. So considering only loans, 1.9% and 1.4%, if you consider all the, the exposures that contribute to the Eva ratio, we uh, uh, we have been able to continue to reduce the stock of NPS in Portugal, uh, and we have done so, uh, year on year.

Miguel Bragança: In the international operations also, as you see, the level of NPEs is higher to a large extent because our business in Poland has a higher concentration in cash flows, which are very profitable. When you compare the spread with the cost of risk, they are very profitable but generate a stock of NPEs that is somewhat higher in terms of business activity. I think this is really the good news. I would say we are growing in terms of customer funds 8.6%, and this has been dispersed throughout the group, with a growth of 6.3% in Portugal, with a strong contribution also of balance sheet funds and a 13.8% contribution abroad. I would like to highlight also that just in Poland the funds, so the off balance sheet funds, have grown almost 40% for all, which positions the bank particularly well for a scenario of reduced interest rates.

By 224 million in the international operations. Also, as you see, the level of NPS is higher uh to a large extent because our business in in Poland has a higher concentration in cash flows which are very profitable. So when you compare the spread with the cost of Visa very profitable, but generate a stock of NPS that is somewhat higher.

Miguel Bragança: Which a growth of 6.3% in Portugal with a strong contribution also of off-balance sheet funds and a 13.8% contribution abroad. I would here like to highlight also that just in Poland, the funds, so the off-balance sheet funds, have grown almost 40% for all, which positions the bank particularly well for a scenario of reduced interest rates. In terms of loan portfolio, the change has even been more dramatic to the positive. As we have been telling you already from some quarters, we want to inflect, so to say, a little bit or reposition the focus of the bank more towards the SME and the corporate market, both in Portugal and in Poland. This has occurred.

.3% in Portugal with a strong contribution also of of balance sheet funds and a 13.8 contribution. Uh abroad I would like to highlight also that just in Poland.

Miguel Bragança: In terms of loan portfolio, the change has even been more dramatic to the positive. As we have been telling you already from some quarters, we want to inflect, so to say, a little bit or reposition the focus of the bank more towards the SME and the corporate market, both in Portugal and in Poland. This has occurred. We are growing, we are growing 5% in terms of loan portfolio, but more than the total loan portfolio. What here I would like to highlight is that in Portugal the corporate loan growth in terms of year on year, year on year the corporate loan growth has been 6%. If you take a look at it, year to date has been 9%. The corporate loan growth in Portugal has been 9% and quarter on quarter 2.6%.

Miguel Bragança: We are growing 5% in terms of loan portfolio, but more than the total loan portfolio. What here I would like to highlight is that in Portugal, the corporate loan growth, in terms of year-on-year, has been 6%. If you take a look at it year-to-date, has been 9%. The corporate loan growth in Portugal has been 9% and quarter-on-quarter, 2.6%. This explains, so to say, the growth in terms of exposure, the growth in terms of credit. An even more impressive change here has been what has happened in Poland. In Poland, the year-on-year growth of our corporate loan portfolio has been 12%.

The fence. So the off balance sheet funds have grown almost 40% 40, which positions the bank, particularly, well, for scenario of reduced interest rates in terms of loan portfolio, the the the change has even been more dramatic to the positive as we have been. Um, telling you already from some quarters, we want to in effect. So to say a little bit there or reposition, the focus of the bank, more towards the SME and the corporate Market both in Portugal and in Poland and this has occurred. So we are growing. Uh we are growing uh uh 5% in terms of loan portfolio, but more than the total loan portfolio. What here I would like to highlight is that in Portugal, the, the corporate loan growth in terms of

Year on year.

On year the corporate loan growth has been 6%. But if you take a look at it year to date,

Miguel Bragança: This explains, so to say, the growth in terms of exposure, the growth in terms of credit. An even more impressive change here has been what has happened in Poland. In Poland, the year on year growth of our corporate loan portfolio has been 12%. Not only the year on year has been 12%, but the year to date has also been 12%. 12% year to date in terms of corporate loan growth I would say is a very positive sign of how right we were to design this strategy, mainly coupled with the low level of cost of risk that we are seeing. Of course, this then has an impact in terms of capital that I will comment then in a couple of slides. As you see here in Slide 21, our capital ratio is still very comfortable at 15.9%, clearly above what we were expecting.

Has been 9%. So the corporate loan growth in Portugal, has been 9% and the quarter on quarter 2.6%. So this explains so to say the growth in terms of exposure, the growth, in terms of of, um, of credit. But

And even more impressive. Uh, change here has been what has happened in Poland in Poland?

The year on year growth.

Miguel Bragança: Not only the year on year has been 12%, but the year to date has also been 12%. 12% year to date, in terms of corporate loan growth, I would say is very easy, is a very positive sign of how right we were to design this strategy mainly coupled with the low level of cost of risk that we are seeing. Of course, this then has an impact, so to some, in terms of capital that I will comment then in a couple of slides. As you see here in slide 21, our capital ratio is still very comfortable.

Of our carpet loan portfolio has been 12%.

but not only the year on year has been 12% but the year to date has also been 12%

So, 12% year to date, uh, in terms of corporate loan growth. Uh, I would say it's very easy is a very positive sign of how, right? We were to design to design this, uh, the, the strategy mainly coupled, with the low level of cost of risk that we are seeing. Um, of course, this then has a has an impact. So to send in terms of of capital that I will comment then in a in a couple of slides.

Miguel Bragança: It's at 15.9, clearly above what we were expecting, what is our minimum ratio, as you see here, and all the requirements of CRR3. As you know, for last year, our P2R has been 2.5%. For next year it will be 2.25%. We are clearly above the regulatory minimum. What we have seen in this quarter, the ratio has decreased around 30 basis points from 16.2 to 15.9. We have here, three very important contributors, so to say. A first contributor, so to say, is a more technical contributor of 15 basis points.

Miguel Bragança: What is our minimum ratio as you see here, and all the requirements of CRR 3. As you know, for last year our P2R has been 2.5%. For next year it will be 2.25%. We are clearly above the regulatory minimum. What we have seen in this quarter, this quarter the ratio has decreased around 30 basis points from 16.2% to 15.9%. We have here three very important contributors, so to say. A first contributor, so to say, is a more technical contributor of 15 basis points. That happens each time that our bank in Poland is able to recognize the accumulated profit as part of this common equity one. This increases the size of the non-eligible minority interests.

As you as you see here in slides to 21. Uh, our Capital, uh, ratio is still very comfortable is at 15 15.9 clearly above. Uh, what we were, uh, what we were expecting or what, to what is our minimum ratio, as you see here, uh, and all the requirements of cr3, as you know,

For last year has been 2 and a half percent for next year. It will be uh, 2 points 25%. So we are clearly above uh, the, the regulatory Minima. But what we have seen in this quarter, this quarter, uh, uh, the, the ratio

has decreased around 30 basis points from 16.2 to 15.9. And we have here, uh, 3. Very important contributors. So to say,

Miguel Bragança: That happens each time that our bank in Poland is able to recognize the accumulated profit as part as its CET1. This increases the size of the non-eligible minority interests. Each time the KNF accepts that we incorporate our ratio for capital purposes, this somehow decreases our consolidated ratio. by this automatic function of decreasing our minority, our non-eligible minority interest. This is a technical issue. It's an intra-month or an intra-year issue that we have been seeing here over the last quarter. Somehow the ratio in the Q4 has somehow benefited from this. The fact that we have this for consolidated terms, but not for local terms. The ratio in this quarter has somehow a null this effect.

Miguel Bragança: Each time the KNF accepts that we incorporate our ratio for capital purposes, this somehow decreases our consolidated ratio, so to say, by this automatical function of decreasing our minority, our non-eligible minority interest. This is a technical issue. It's an intra-month or an intra-year issue that we have been seeing over the last quarter. Somehow the ratio in the last quarter has somehow benefited from this. The fact that we had this for consolidated terms but not for local terms, the ratio in this quarter has somehow annulled this effect. This effect has been 15 basis points, which explains to a large extent the decrease. There are two very positive effects on a quarter on quarter. The growth of the corporate loan book in Poland is responsible for a 10 basis point decrease.

Uh a first contributor. So to say is a more technical contributor or 15 by these points that uh, happens each time. That our bank in Poland is able to recognize the accumulated profit as part as is common negative 1. These increases the size of the non-eligible minority interests. So, each time, the kind of accepts that we incorporate our ratio for Capital purposes. This somehow decreases our Consolidated ratio. So to say, by these automatic function of decreasing our, uh, our minority, our, uh, non-eligible minority interests. So this is a technical issue. It's a an in a month or an in year issue. Um, that we have been seeing over the last quarter. So somehow, the ratio in the last

Miguel Bragança: This effect has been 15 basis points, which explains to a large extent the decrease. There are two very positive effects. On a quarter-on-quarter, the growth of the corporate loan book in Poland is responsible for a 10 basis point decrease, so this is a healthy consumption of our capital, and by the way, totally aligned with what we had presented in terms of our strategy. The growth of our exposure, both credit and committed lines in Portugal, explains another 10 basis points. The sum of these three effects is 35 basis points. Of course, this is partly compensated by the accumulated earnings in consolidated terms, of which we are recognizing 25% because, as you know, our distribution policy is to distribute up to 75% in dividends and share buybacks.

Support has somehow benefited from here, from this. The fact that we had this for Consolidated terms, but not for local terms. The ratio in this quarter has somehow, uh, anal this effect. This effect has been 50 has been 15 by these points, uh, which explains to a large extent the decrease, but then there are 2 very positive effects.

Miguel Bragança: This is a healthy consumption of our capital and, by the way, totally aligned with what we had presented in terms of our strategy. The growth of our exposure, both credit and committed lines in Portugal, explains another 10 basis points. The sum of these three effects is 35 basis points. This is partly compensated by the accumulated earnings in consolidated terms, of which we are recognizing 25% because, as you know, our distribution policy is to distribute up to 75% in dividends and share buybacks. The leverage ratio is still very healthy in page 22. The Morale Requirements are clearly fulfilled with ample comfort. The liquidity position is also evolving very well due to the strength of our franchise and the ability to originate and to increase our deposit base. Now I will pass the floor to Bernardo, commenting Portugal and International operations.

It and committed lines in Portugal explains, another 10 basis points. So the sum of these 3 effects is uh uh 35 by these points. And then of course this is partly compensated by the accumulators earnings in Consolidated times of which we are recognizing 25%. Because as you know,

Miguel Bragança: The leverage ratio is still very healthy in page 22. The MREL requirements clearly fulfilled with an ample comfort. The liquidity position also evolving very well due to the strength of our franchise and the ability to originate and to increase our deposit base. Now I will pass the floor to Bernard commenting Portugal and international operations.

Our distribution policy is to distribute up to 75% in dividends and survive X.

The the leverage ratio is still very healthy in page 22 the Mel requirements clearly fulfilled with uh an ample comfort.

Bernardo Collaço: Okay, thank you very much and good afternoon, ladies and gentlemen. I'm starting as usual on page 26 with Portugal, where net income in the first nine months of 2025 reached €654 million, which is an 8% increase compared with the same period of the previous year. The favorable performance of net income activity in Portugal was influenced by the resilience of net operating revenues, considering the context of a significantly lower interest rate environment, and by the reduction of other impairments and provisions. On page 27, net interest income stood at €995 million in the first nine months of 2025. This is just less than 1% below what was recorded in the first nine months of the previous year. Let me also highlight that on a quarterly basis, NII in Portugal went up almost 1%.

Bernardo Collaço: Okay, thank you very much, good afternoon, ladies and gentlemen. I'm starting as usual on page 26, with Portugal, where net income in the first nine months of 2025 reached EUR 654 million, which is 8%, which is an 8% increase compared with the same period of the previous year. The favorable performance of net income in the activity in Portugal was influenced by resilience, the resilience of net operating revenues, considering the context of a significant lower interest rate environment and by the reduction of other impairments and provisions. On page 27, net interest income stood at EUR 995 million in the first nine months of 2025. This is just less than 1% below what was recorded in the first nine months of the previous year.

Uh, the liquidity position also evolving very well due to the strength of our franchise and the ability to originate and to increase our deposit base. And now I will pass the floor to Bernard, uh, commenting, uh, the Portugal and the international operations.

Okay, thank you very much and good afternoon, ladies and gentlemen. I'm starting as usual on page 26, um, with Portugal where net income in the first 9 months of 2025 reached 654 million, which is 8%, uh, which is a 90% increase compared with the same period of the previous year.

Um, the favorable performance of net income in the activity, in Portugal was influenced by resilience the resilience of net operating revenues, considering the context of a significant lower interest rate environment, and by the reduction of other impairments and Provisions.

On page 27.

Bernardo Collaço: Let me also highlight that, on a quarterly basis, NII in Portugal went up almost 1%, and this has been broadly stable. This, I mean, the stability of NII on a quarterly basis over the last six quarters. This evolution that we are seeing on NII in Portugal allow us to reinforce what we have been commenting about the resilience of our NII in Portugal. Regarding year-on-year evolution, as presented in the graph below, NII decrease reflects the lower income generated by the loan portfolio that was partially offset by the increase of the performing loan book, by the reduction of interest paid on deposits, lower wholesale costs, and the positive contribution from securities.

Net interest in comes to at 995 million in the first 9 months of 2025. This is just less than 1% below. What was recorded in the first 9 months of the previous year.

Bernardo Collaço: This has been broadly stable, I mean the stability of NII on a quarterly basis over the last six quarters. This evolution that we are seeing on NII in Portugal allows us to reinforce what we have been commenting about, the resilience of our NII in Portugal. Regarding year-on-year evolution, as presented in the graph below, NII decrease reflects the lower income generated by the loan portfolio that was partially offset by the increase of the performing loan book, by the reduction of interest paid on deposits, lower wholesale costs, and the positive contribution from securities. NIM stood at 2.10% at the end of September 2025, which is just 14 basis points lower than the level reported in September 2024, where interest rates were much higher.

Let me also highlight that on a quarterly basis and I in Portugal went up almost 1%. And this has been broadly stable. This, I mean the stability of knee on a quarterly basis over the last 6 quarters.

This Evolution, um, that we are seeing on knee in Portugal, allow us to reinforce what we have been commenting about the resilience of our knee um in Portugal.

Bernardo Collaço: NIM stood at 2.10 at the end of September 2025, which is just 14 basis points lower than the level reported in September 2024, where interest rates were much higher. Just to highlight that the average six-month Euribor until September 2024 was at 371 basis points, that compares with an average until September 2025 of just 223 basis points. Moving to page 28, commissions reached EUR 465 million in the first nine months of 2025. That's an increase of 6.3% compared with the amount recorded in the first nine months of 2024. Banking fees went up 5.6%, supported by higher bank insurance fees and by commissions related with loans and guarantees.

Regarding year-on-year revenue, as presented in the graph below, the decrease in AI reflects the lower income generated by the loan portfolio. This was partially offset by the increase in the performing loan book due to the reduction of interest paid on deposits, lower costs, and the positive contribution from securities.

Bernardo Collaço: Just to highlight that the average six-month Euribor until September 2024 was at 371 basis points, and that compares with the average until September 2025 of just 223 basis points. Moving to page 28, commissions reached €465 million in the first nine months of 2025. That's an increase of 6.3% compared with the amount recorded in the first nine months of 2024. Banking fees went up 5.6%, supported by higher bancassurance fees and by commissions related with loans and guarantees. I think here it's also important to highlight that fees from accounts are also growing as our client base is increasing. Market-related fees went up 10%, supported by the positive evolution on securities and asset management related fees. Trading results went down from slightly more than €28 million in 2024 to around €11 million.

Names to that 2.10. At the end of September 25th, basis points, lower than the level reported in September 2024, where interest rates were much higher. Just Twilight at the average, 6 months arrival, until September 2024, was at 371 by these points and that compares with the average, until September 2025 of just 223 basis points.

Moving to page 28 and commissions reached the 465 million in the first 9 months of 2025, that's an increase of 6.3% compared with the amount recorded in the first 9 months of 2024.

Bernardo Collaço: I think here it's also important to highlight that fees from accounts are also growing as our client base is increasing. Market-related fees went up 10%, supported by the positive evolution on securities and asset management-related fees. Trading results went down from more, slightly more than EUR 28 million in 2024 to around EUR 11 million. This decrease is mainly related with the reduction of some NPE sales that we have in 2024. Equity company earnings was broadly stable year-on-year at a level of around EUR 40 million. Other net operating income registered an improvement year-on-year, evolving from -EUR 27 million to just EUR 9.6 million in the first nine months of 2025. This is mainly due to lower mandatory contributions that were booked this year compared with the previous one.

Banking fees went up 5.6% supported by higher Bank Insurance fees and by commissions related with loans to guarantees it to with loans and guarantees. But I think here, it's also important to highlight that fees from accounts are also growing as our client base is increasing.

Market related fees went up 10% supported by the positive Evolution on Securities and asset management related fees.

Bernardo Collaço: This decrease is mainly related to the reduction of some NPL sales that we had in 2024. Equity counted earnings was broadly stable year on year at the level of around €40 million. Other net operating income registered an improvement year on year, evolving from -€27 million to just €9.6 million in the first nine months of 2025. This is mainly due to lower mandatory contributions that were booked this year compared with the previous one. As Miguel explained, this is related with some recoveries that we have on the additional solidarity tax that was deemed unconstitutional. Going to page 29, operating costs amounted to almost €518 million, which is a €7.4 million increase compared with the same period of last year.

Trading results went down from more slightly more than 28 million in 24, to around 11 million. And this decrease is mainly, uh, related with the reduction of some NP sales that we have in in 2024.

Equity. Counted earnings was broadly stable year on year at the level of around 40 million euros.

Bernardo Collaço: As Miguel explained, this is related with some recoveries that we have on the additional solidarity tax that was deemed unconstitutional. Going to page 29, operating costs amounted to almost EUR 580 million, which is a 7.4% increase compared with the same period of last year. This evolution, as Miguel said, in the Portuguese operations, reflects mainly an increase of 6.4% in staff costs and also an increase of 7.8% in admin costs. Despite the hiring of new employees with specific skills, mainly for digital and also for internal control areas, the number of employees in the activity in Portugal shows a small decrease year-on-year, but it has been stable quarter-on-quarter. Moving to page 30, which refers to asset quality.

Other net, operating income registered an improvement year on year, evolving from minus 27 million to just 9.6 million in the first 9 months of 25. And this is, mainly due to lower mandatory contributions, that was booked, that were booked this year compared with the previous 1 and as Miguel explained, this is relative with some recoveries that we have on the additional solidarity tax, that was deemed unconstitutional.

Bernardo Collaço: This evolution, as Miguel stated in the Portuguese operations, reflects mainly an increase of 6.4% in staff costs and also an increase of 7.8% in admin costs, despite the hiring of new employees with specific skills, namely for digital and also for internal control areas. The number of employees in the activity in Portugal shows a small decrease year on year, but it has been stable quarter on quarter. Moving to page 30, which refers to asset quality. As I highlighted before, there was a reduction of NPEs, significant reduction year on year. NPE reduction since September 2024 in Portugal was above 23%, meaning a decrease of more than €240 million since September 2024 as of September 2025. It should be also highlighted that 53% of the NPEs in Portugal are UTPs, namely unlikely to pay and not 90 days past due.

Amounted to almost 518 million. Um which is a 7.4 um increase compared with the same period of last year, and these Evolution as Mia stayed in the Portuguese. Operation reflects reflects, mainly an increase of 6.4% in staff costs, and also an increase of 7.8% in, um, admin costs.

Despite the hiring of new employees with specific skills, namely for digital and for internal control areas, the number of employees in the activity in Portugal shows a small decrease year on year, but it has been stable quarter on quarter.

Bernardo Collaço: As I highlighted before, there was a reduction of NPEs, significant reduction year-over-year. NPE reduction since September 2024 in Portugal was above 23%, meaning a decrease of more than EUR 240 million since September 2024. As of September 2025, it should be also highlighted that 53% of the NPEs in Portugal are UTPs, namely unlikely to pay, and not 90 days past due. Cost of risk stood at 33 basis points in September 2025. That compares with the same level registered in September 2024. The level is similar than one year ago. As you know, in Q2 2024, there was a significant impact in the cost of risk driven by a sizable reversal.

Moving to page 30, which refers to asset quality as highlighted before, there was a significant reduction in NPLs year on year. The NPL reduction since September 2024 in Portugal was above 23%, meaning a decrease of more than €240 million since September 2024.

Bernardo Collaço: Cost of risk stood at 33 basis points September 2025. That compares with the same level registered in September 2024. The level is similar to one year ago. In the second quarter of 2024 there was a significant impact in the cost of risk driven by a sizable reversal. Excluding this effect, cost of risk would have stood at 49 basis points in the first nine months of 2024. This is the level that should be taken for comparison purpose when you look to the cost of risk of 33 basis points in the first nine months of 2025. On page 31, which presents the NPE coverage breakdown. As you can see, the level of coverage is still quite high and it stood at 145%. The NPE coverage by loan loss reserves at 95%.

As of September 2025, it should also be highlighted that 53% of the NPS in Portugal are UTPs, namely in "likely to pay" and not 90 days past due.

Bernardo Collaço: Excluding this effect, cost of risk would have stood at 49 basis points in the first nine months of 2024. This is the level that should be taken for comparison purpose when you look to the cost of risk of 33 basis points in the first nine months of 2025. On page 31, which presents the NP coverage breakdown. As you can see, I mean, the level of coverage is still quite high. It stood at 145%. The NP coverage by loan loss reserves at 95%. Here, I think it's also important to highlight that the company's total coverage is at a very high level, so at a level of more than 140%. On page 32, which shows the evolution of foreclosed assets and corporate restructuring funds.

Cost of risk to that 33 basis points and September 2025, that compares, uh, with the same level, um, registered in September 2024. So the level is, uh, it's similar than 1 year ago. But as you know, in the second quarter of 2024, there was a significant impact in the cost of re driven by a sizable reversal, excluding this affect cost of res. Could have stolen 49 basis points in the first 9 months, 9, 9, months of 2024. And this is the level that should be taken in compare for comparison purpose. When you look to the cost of risk of 33, by these points, in the first 9 months of 2025,

Bernardo Collaço: Here I think it's also important to highlight that the company's total coverage is at a very high level, so at the level of more than 140%. On page 32, which shows the evolution of foreclosed assets and corporate restructuring funds, net value of foreclosed assets stood at €38 million. This compares with €57 million one year ago, meaning a reduction of 33% year on year. Regarding property sales, there was a decrease in the number of transactions. This is due to the fact that there are fewer properties in the portfolio. There was a significant reduction over recent years. To what regards corporate restructuring funds, the exposure at the end of September was somehow not so sizable, but it stood at €390 million. That compares with €391 million a year ago. Now moving to page 33. Total customer funds reached €74 billion.

on page 31, which presents the NP coverage breakdown. As you can see, I mean the level of coverage. It's it's still quite high and it's 2 at 145%. The NP coverage by long loss Reserves at 95% and here I think it's also important to highlight that um the companies uh total coverage is at a very high level. So at a level of more than 140%

On page 32.

Bernardo Collaço: Net value of foreclosed assets stood at EUR 38 million. This compares with EUR 57 million of one year ago, meaning a reduction of 33% year on year. Regarding property sales, there was a decrease in the number of transactions. This is due to the fact that there's less properties in the portfolio. There was a significant reduction over last years. To what regards to corporate restructuring funds, the exposure at the end of September was somehow not so sizable, but it leads to EUR 390 million. That compares with EUR 390 one year ago. Now moving to page 33. Total customer funds reached EUR 74 billion. That means an increase of 6.3% compared with September 2024.

Which shows the evolution of foreclosed assets and corporate restructuring funds.

net value of foreclosed assets to that 38 million, and this Compares with 57 million of 1 year ago, meaning a reduction of 33% year on year

Regarding property sales, there was a decrease in the number of transactions. This is due to the fact that there's less...

Properties in the portfolio and the portfolio. There was a significant reduction over the last years and to what regards to corporate risk, tracking funds. Um, the exposure at the end of September or somehow. Um, not not so sizable but it needs to to 390 million euros that compares with 3901 year ago.

Bernardo Collaço: That means an increase of 6.3% compared with September 2024. On-balance sheet funds stood at €57.6 billion, reflecting an increase of 5.1% year on year, or if you want, more than €3 billion, €2.6 billion in absolute terms. Off-balance sheet funds went up 10%, meaning an increase of €1.6 billion compared with the same period of last year. This somehow also reflects the demand from our clients for some alternatives in terms of their savings. Gross loan book stood at €42.6 billion. This is an increase, as Miguel clearly mentioned, of 7.2% from the previous year, and this increase reflects the strong performance of loans to individuals, where mortgages registered an increase of 10%. Regarding companies, I think once again it should be highlighted the strong increase in corporate lending, where the corporate gross loan book increased by 4.7% year on year.

Bernardo Collaço: On-balance sheet funds stood at EUR 57.6 billion. This reflects an increase of 5.1% year-over-year, or if you want, more than EUR 2.6 billion in absolute terms. Off-balance sheet funds went up 10%, meaning an increase of EUR 1.6 billion, compared with the same period of last year. This somehow reflects also the demand from our clients for some alternatives in terms of their savings. Gross loans books stood at EUR 42.6 billion. This is an increase, as Miguel clearly mentioned, of 7.2% from previous year. This increase reflects the strong performance of loans to individuals, where mortgages registered an increase of 10%.

Now moving to page 33. Total customer funds reached $74 billion, which means an increase of 6.3% compared with September 2024.

On balance sheet funds to that, 57.6 billion and this reflects an increase of 5.1% year on year or if you want more than 2.6 billion in absolute terms.

Off-balance sheet, funds went up, 10%, meaning an increase of 1.6 billion.

And uh compared with the same period of last year. And this somehow reflects also the demand from our clients for some Alternatives in terms of their savings.

Bernardo Collaço: Regarding companies, I think once again, it should be highlighted, the strong increase on corporate lending, where the corporate gross loans book increased by 4.7% year-over-year. If we look to the year-to-date evolution, there was a significant increase on the gross loans book of 8% since the beginning of the year. Going to page 34, where we present the evolution of the performing loan book by segment. Before going into details, I would like also to highlight, as I usually do, the, which is something important, is the recognition of BCP as a main bank for Portuguese companies. Now just looking at the performing loan book in Portugal, it went up 8% compared with 2024, meaning an increase of more than EUR 3 billion.

Gross loan books totaled $42.6 billion, which represents an increase of 7.2% from the previous year, as Miguel clearly mentioned. This increase reflects the strong performance of loans to individuals, with mortgages registering an increase of 10%.

Bernardo Collaço: If we look at the year-to-date evolution, there was a significant decrease in the gross loan book of 8% since the beginning of the year. Going to page 34, where we present the evolution of the performing loan book by segment, and before going into details, I would also like to highlight, as I usually do, which is something important, the recognition of Millennium bcp as a main bank for Portuguese companies. Just looking at the performing loan book in Portugal, it went up 8% compared with 2024, meaning an increase of more than €3 billion. Loans to individuals grew almost 10% year on year, with a relevant contribution from mortgages that increased 10%. Performing loans to companies increased 6% year on year. As I said before, we are continuing to see positive evolution on a quarterly basis.

And regarding companies. I think once again, it should be highlighted the strong increase on Corporate Landing where the corporate cross loan book, increased by 4.7% year on year. But if we look to the year to date Evolution, there was an increase. Um, a significant decrease on the gross loan book of 8% since the beginning of the year,

Um, the which is something important is the recognition of DCP has a main bank for Portuguese companies.

Bernardo Collaço: Loans to individuals grew almost 10% year-on-year, with a relevant contribution from mortgages that increased 10%. Performing loans to companies increased 6% year-on-year, and as I said before, we are continuing to see positive evolution on a quarterly basis. Once again, year-to-date, the company's performing loan book increased more than 9%. Now moving to international operations, and on page 36, the contribution from international operations over the first nine months of 2025, sorry, after deducting minorities, reached EUR 121 million. That's 12.4% more than the first nine months of last year. This evolution reflects the reduction of the contribution from Millennium bim in Mozambique that partially offset the improvement from Bank Millennium in Poland.

Now, just looking at the Performing loan book in Portugal, it went up 8% compared with 2024 meaning an increase of more than 3 billion euros.

loans, to individuals grew almost 10% year on year with the relevant contribution from mortgages that increased 10%

Bernardo Collaço: Once again, year to date, the company's performing loan book increased more than 9%. Now moving to international operations and on page 36, the contribution from international operations over the first nine months of 2025. Sorry, after deducting minorities reached €121 million, that's 12.4% more than in the first nine months of last year. This evolution reflects the reduction of the contribution from Millennium bim in Mozambique that partially offset the improvement from Bank Millennium in Poland. Bank Millennium net profit stood at €202 million in the first nine months of 2025, growing 56.4% from previous year. While Millennium bim in Mozambique recorded a net profit of €25 million at the end of September this year, which is significantly lower than the amount recorded a year before. As you know, Millennium bim performance was offset by the increase in other impairments and provisions associated with local sovereign debt.

Performing loan loans to companies increased 6% year on year. And as I said before, we are continuing to see positive Revolution on a quarterly basis. And once again, year to date the companies performing loan book increased more than 9%,

now, moving to

Operations. And on page 36, um, the contribution from international operations over the first 9 months of 2025, after deducting minorities, reached $121 million. That's 12.4% more than in the first 9 months of last year.

Bernardo Collaço: Bank Millennium net profit stood at PLN 202 million in the first 9 months of 2025, growing 56.4% from previous year, while Millennium bim in Mozambique recorded a net profit of MZN 25 million at the end of September this year, which is significantly lower than the amount recorded a year before. As you know, Millennium bim performance was offset by the increase in other impairments and provisions associated with local sovereign debt. Moving to page 37, which refers to Bank Millennium. Net income went up more than 56%. As you know, profitability continues to be impacted by costs related with CHF mortgage loans, despite the strong reduction of global costs related with this topic, as you might know, that were already above 30% if we compare year-over-year.

these Evolution reflects the reduction of the contribution from Millennium beam in Mozambique, that partially offset improvement from Bank Millennium in Poland,

Bank Millennium net profit, stood at 202 million in the first 9 months of 2025.

Growing 56.4% from previous year while beam in. Mosambik recorded a net profit of 25 million at the end of September this year, which is a significantly lower than the amount recorded a year before, as, you know, we let you be in performance was offset by the increase in other impairments and Provisions, associated with local Sovereign debts.

Bernardo Collaço: Moving to page 37, which refers to Bank Millennium, net income went up more than 56%. As you know, profitability continues to be impacted by costs related with CHF mortgage loans, despite the strong reduction of global costs related with this topic. As you might know, they were already above 30% if we compare year on year. If we exclude this effect, net income in Poland was broadly aligned with last year. Net operating revenues went up almost 8% despite the strong decrease on the reference rate over 2025. Operating costs including mandatory contributions went up 14.5%. If we exclude those contributions, total costs have increased 11%. CET1 and total capital at 14.4% and 16% respectively and well above minimum requirements of 8.3% and 11.8% respectively. In Q3, as Miguel mentioned, Bank Millennium got the authorization from the supervisor to include the first half earnings on their capital ratios.

Moving to page 37, which refers to bank Millennium? And net income went up more than 56%.

But as you know, profitability continues to be impacted by costs related with CHF mortgage loans.

Bernardo Collaço: If we exclude this effect, net income in Poland was broadly aligned with last year. Net operating revenues went up almost 8% despite the strong decrease on the reference rates over 2025. Operating costs, including mandatory contributions, went up 14.5%. If we exclude those contributions, I mean, total costs have increased 11%. CET1 and total capital at 14.4% and 16% respectively, well above minimum requirements of 8.3% and 11.8% respectively. In Q3, as Miguel mentioned, Bank Millennium got the authorization from the supervisor to include the first half earnings on their capital ratios. On page 38, some detailed information about Bank Millennium. Despite the increase on interest rates, NII went up EUR 32 million compared with the first nine months of 2024.

Despite the strong reduction of global costs related with this topic. As you might know that were already above 30%, if we compare year on year,

If we execute this effect netting, um, in Poland was broadly aligned with last year.

Net, operating revenues went up almost 8%, despite the strong decrease on the reference rates over 2025.

Operating costs, including mandatory contributions, went up 14.5%. However, if we exclude those contributions, total costs have increased by 11%.

CET1 and total capital stand at 14.4% and 16%, respectively, and are well above the minimum requirements of 8.3% and 11.8%, respectively.

In Q3 as Miguel mentioned, Bank Millennial. Got the authorization from the supervisor to include the first half earnings on their Capital ratios.

Bernardo Collaço: On page 38, some detailed information about Bank Millennium and despite the increase on interest rates, NII went up €32 million compared with the first nine months of 2024. NIM stood at 4.1%. That compares with 4.35% in September in the first nine months of 2024. Here once again it's important to highlight that the National Bank of Poland cut interest rates by 100 basis points since October last year and this month there was an additional cut of 25 basis points, bringing the reference rate from 5.75% to 4.5% in a very short period of time. Fees and commissions went down 2% and this reduction is mostly related with bancassurance commissions that, as you have seen from Bank Millennium presentation, are already recovering from previous quarters.

On page, 38 some um detailed information about Bank millennial.

Bernardo Collaço: NIMs to that 4.1%, that compares with 4.35% in September, in the first 9 months of 2024. Once again, it's important to highlight that the National Bank of Poland cut interest rates by 100 basis points since October last year. This month there was an additional cut of 25 basis points, bringing the reference rate from 5.75 to 4.5 in a very short period of time. Fees and commissions went down 2%, and this reduction is mostly related with bank insurance commissions that, as you have seen from Bank Millennium presentation, are already recovering from previous quarters. Costs went up 14% and were highly impacted by mandatory contributions that went up EUR 51.5 million compared with the first 9 months of last year.

And despite the increase on interest rates knee went up 32 million compared. Um, it went up 32 million compared with the first 9 months of 2024.

Names to that 4.1% that compares with 4.35% in the in September in the first 9 months of 2024 and year. Once again, it's important to highlight that the N National Bank of Poland get interest rates by 100 basis points since October last year. And this month, there was an additional cut of 25 by these points, bringing the reference rate to from 575 to 4.5 in a very short period of time.

Bernardo Collaço: Costs went up 14% and were highly impacted by mandatory contributions that went up €51.5 million compared with the first nine months of last year. Now moving to page 40 and related with asset quality in Poland, the quality of the loan portfolio remains solid. Cost of risk stood at 32 basis points over total loans in the first nine months of the year. This quarter there was no sales of NPLs, and as you know in the second quarter 2025, cost of risk in the Polish subsidiary was impacted by a sale of NPLs. Non performing loans more than 90 days past due stood at 2.2%, and coverage by loan loss reserves of non performing loans stood at 143%. On page 41, customer funds at Bank Millennium grew more than 14% year on year. That means more than €4 billion in this period.

Season commissions, went down 2% and these reduction um, is mostly related with bank Insurance commissions that as you have seen from Bank million presentation are already recovering um, for uh from previous quarters.

Cost went up 14% And were highly impacted by mandatory contributions that went up 51.5 million compared with the first 9 months um of of last year.

Bernardo Collaço: Now moving to page 40, related with asset quality in Poland, the loan portfolio remains solid. Cost of risk stood at 32 basis points over total loans in the 9 months of the year. This quarter, I mean, there was no sales of NPLs, and as you know, in Q2, 25, cost of risk in the Polish subsidiary was impacted by a sale of NPLs. Non-performing loans more than 90 days past due to that 2.2% and coverage by loan loss reserves of non-performing loans to that 146. On page 41, customer funds at Bank Millennium grew more than 14% year-on-year. That means more than EUR 4 billion in this period. This evolution was supported by both retail and corporate deposits that grew at double digits.

Now, moving to page 40 and the related with asset quality in Poland, the quality of the of the loan portfolio remains solid.

Cost of risk to that 32 basis points, over total loans in the first 9 months of the year.

No sales of npls. And as you know, in the second quarter, 25 cost of risk in the Polish, subsidiary was impacted by a sale of npls.

Non-performing loans, more than 90 days past due to that 2.2% and coverage by long loss, reserves of non-performing loans to that 146.

Bernardo Collaço: This evolution was supported by both retail and corporate deposits that grew at double digits. Investment products grew more than 30%, and now in terms of loans, gross book stood at €18 billion and slightly below September 2024. This evolution is due to the fast amortization or reduction of the CHF mortgage portfolio and also to some contraction of the zloty mortgage portfolio due to a lower origination from previous periods. It should also be highlighted that new origination in mortgage loans in zlotys in Q3 was higher than previous quarters, and this will support the portfolio. On companies, there was a strong evolution, and the corporate loan book grew 12% year on year and 6.5% quarter on quarter. Bank Millennium expects this trend to continue, and this will contribute to the gradual change in the mix of the loan portfolio in Poland.

On page 41, customer funds at Bank Milan grew more than 14% year on year, which means over €4 billion during this period.

Bernardo Collaço: Investment products grew more than 30%, and now in terms of loans, gross books to that EUR 18 billion, slightly below September 2024. This evolution, that is, I mean, due to the fast amortization or reduction of the CHF mortgage portfolio, and also to some contraction of the złoty mortgage portfolio due to a lower origination from previous periods. It should be also highlighted that new origination in mortgage loans in złotys in Q3 was higher than previous quarters, and this will support the portfolio. On companies, there was a strong evolution, and the corporate loan book grew 12% year-on-year and 6.5% quarter-on-quarter. Bank Millennium expects this trend to continue, and this will contribute to the gradual change in the mix of the loan portfolio in Poland.

These Evolution was supported by both retails and Retail and corporate deposits That Grew at double digit.

Investment products grew more than 30%.

and now, in terms of loans, um, gross books to that 18 billion and slightly below, September 2024,

These Evolution um, that is um due. Um, I mean to the fast and utilization for reduction of the CHF mortgage portfolio and also to some contraction of the poly of the zloty mortgage portfolio due to a lower origination from previous periods but it should be also highlighted that new origination in mortgage loans, in July is in Q3 was higher than previous quarters. And these will support the portfolio.

On companies there was a strong Evolution and the corporate 1 book grew 12% year on year and 6.5% quarter on quarter.

Bank Millennium expects this trend to continue, and this will contribute to the gradual change in the mix of the loan portfolio in Poland.

Bernardo Collaço: On page 41, regarding FX mortgage portfolio, you continue to see a fast downward trend of the outstanding portfolio. year-over-year, Bank Millennium had a decrease of 34% of the portfolio. Currently, the FX mortgage gross exposure after deduction of the allocated risk provisions, represent less than 1% of the total gross loan portfolio. Provisions against legal risks were lower in Q3 versus previous periods. It is important to highlight that global costs related with the CHF saga have decreased more than 30% compared with the same period of last year. The outstanding balance of legal risk provisions as of 25 September stood at EUR 1.6 billion and represents 150% of the outstanding CHF portfolio. In this quarter, I think it's important to highlight, there was 2 positive trends.

Bernardo Collaço: On page 41, regarding FX mortgage portfolio, you continue to see a fast downward trend of the outstanding portfolio. Year on year, Bank Millennium had a decrease of 34% of the portfolio, and currently the FX mortgage gross exposure after deduction of the allocated risk provisions represents less than 1% of the total gross loan portfolio. Provisions against legal risks were lower in the third quarter versus previous periods, and it is important to highlight that global costs related with the CHF saga have decreased more than 30% compared with the same period of last year. The outstanding balance of legal risk provisions as of September 2025 stood at €1.6 billion and represents 150% of the outstanding CHF portfolio in this quarter. I think it's important to highlight there were two positive trends.

On page 41 regarding the FX mortgage portfolio.

You continue to see a fast downward trend of the outstanding portfolio year on year Bank. Millennium had a decrease of 34% of the portfolio and currently the FX mortgage gross exposure after deduction of the allocated risk. Provisions, represent less than 1% of the total gross loan portfolio.

Provisions again, against legal risks were lower in the third quarter versus previous periods. And it is important to highlight that Global costs related with the CHF Saga, have decreased more than 30% compared with the same period of last year.

The outstanding balance of legal risk, provision Provisions, as of September 25th to that 1.6 billion euros and represents 150% of the outstanding CHF portfolio.

Bernardo Collaço: From one side, continuation of the lower inflow of new court cases, which for the first time in five years were below 1,000, and on the other side, the number of settlements that was above 1,200. Once again, it's worth mentioning that within those settlements there is a relevant number of in-court settlements. Since the beginning of this process, more or less in 2019, Bank Millennium was able to reach more than 29,000 amicable settlements with clients, and this is reflected also in the decrease of the number of outstanding individual lawsuits. Turning to page 42 regarding Millennium bim in Mozambique, net income amounted to $25.4 million at the end of the first nine months of 2025.

Bernardo Collaço: From one side, the continuation of the lower inflow of new court cases, which for the first time in five years were below 1,000, and on the other side, the number of settlements that was above 1,200. Once again, it's worth mentioning that within those settlements there is a relevant number of in-court settlements. Since the beginning of this process, more or less in 2019, Bank Millennium was able to reach more than 29,000 amicable settlements with clients, and this is reflected also in the decrease of the number of outstanding individual lawsuits. Turning to page 42, regarding Millennium bim in Mozambique now. Net income amounted to EUR 25.4 million at the end of the first nine months of 2025. This level of net income is significantly low last year.

In this quarter, I think it's important Twilight. There was 2 positive Trends from 1 side, the continuation of the lower inflow of new court cases, which for the first time in 5 years were below 1,000 and on the other side, the number of settlements that was above 1,200. And once again, it's worth mentioning that within those settlements, there is a relevant number of in court settlements.

Since the beginning of this process, more or less in 2019, Millennial has been able to reach more than 29,000 amicable settlements with clients. This is also reflected in the decrease in the number of outstanding individual lawsuits.

Turning to page 42.

Regarding Millennium Mozambique now.

Bernardo Collaço: This level of net income is significantly lower than last year, and as I already mentioned, this was influenced by the impacts associated with the sovereign debt, which resulted in an increase of provisions. Although, if we look to the pre-provision profit, it is possible to see that Millennium has been quite resilient and stood at similar levels to last year. Net operating revenues went up almost 5% in local currency, and operating costs grew 8.5%. Capital ratio stood above 40%. Moving to page 43, NII in Mozambique went up around 8%, and for this evolution Millennium bim benefited from the reduction in the local requirements for non-remunerated cash reserves that has been applied since January 2025. NIM is stable at the level of 8%, commissions registered a decrease of 6%, and other income that includes mostly the contribution from the trading line went down less than 6%.

net income amounted to, uh, 25.4 million at the end of the first 9 months of 2025,

Bernardo Collaço: As I already mentioned, this was influenced by the impacts associated with the sovereign debt, which result in an increase of provisions. Although if we look to the pre-provision profit, it is possible to see that Millennium bim has been quite resilient and stood at similar levels than last year. Net operating revenues went up almost 5% in local currency and operating costs grew 8.5%. Capital ratio stood above 40%. Moving to page 43, NII Mozambique went up around 8%, and for this evolution, Millennium bim benefited from the reduction in the local requirements for non-remunerated cash reserves that has been applied since January 25. NIM was stable at the level of 8%. Commissions registered a decrease of 6% and other income that includes mostly the contribution from the trading line went down less than 6%.

This level of net income is significantly low compared to last year. And as I already mentioned, this was influenced by the impacts associated with the sovereign debt, which resulted in an increase in provisions.

Although if we look to the pre-provision profit, it is possible to see that Millennium has been quite resilient and stood at similar levels than last year.

Net, operating revenues went up. Almost 5% in local currency and operating costs. Grew 8.5%. Capital ratios to above 40%.

Moving to page 43, Nye Mohsani went up around 8%. For these, Evolution Millennium Beam benefited from the reduction in the local requirements for non-remunerated cash reserves that has been applied since January 25.

Nemo stable at a level of 8%.

Commissions, register the decrease of 6% and the other income that includes mostly the contribution from the trading line went down less than, than 6%.

Bernardo Collaço: On page 44 regarding asset quality, non-performing loans 90 days past due stood at 3.5%, and coverage at 127%. Regarding volumes on page 45, as you can see, customer funds registered an increase of almost 6% driven by the increase in demand deposits, which grew 8.7%. Loans to customers registered a light increase of around 3%. Thank you for your attention, and before we move to Q&A, we'll return to Mr. Miguel Maya for some final remarks.

Bernardo Collaço: On page 44, regarding asset quality, non-performing loans and 90 days past due stood at 3.5% and coverage at 127%. Regarding volumes on page 45, as you can see, customer funds registered an increase of almost 6%, driven by the increase on demand deposits, which grew 8.7%. Loans to customers registered a light increase of around 3%. Let me just finish by thank you for your attention and before we move to Q&A, we'll return to Mr. Miguel Bragança for some final remarks.

On page, 44 regarding asset quality non-performing loans, and 90 days past due to the 3.5% and coverage at 127%.

Regarding volumes on page 45, as you can see, customer funds registered an increase of almost 6%, driven by the increase in team deposits, which grew by 8.7%. Loans to customers registered a lighter increase of around 3%.

Miguel Bragança: Thank you very much. This is a very important milestone. These are the first nine months of our new strategic plan. As I commented, this new strategic plan is focused on rebalancing our balance sheet in terms of the mix between individual banking and SME and corporate banking. We are showing you that we are clearly on the right path with a high level of resilience in terms of our core income that is basically stable when you compare it with last year, in spite of the reduction of interest rates in both Portugal and. I will now open the floor to questions.

Miguel Bragança: Thank you very much. This is a very important milestone. These are the first nine months of our new strategic plan. As I commented, this new strategic plan is focused on rebalancing our balance sheet in terms of the mix between in individual banking and SME and corporate banking. We are showing you that we are clearly on the right path with a high level of resilience in terms of our core income. That is basically stable when you compare it to with last year, in spite of the reduction of interest rates in both Portugal and Poland. I will now open the floor to questions.

And uh, let me just finish by thank you for your attention. And before we move to Q&A, we will return to Mr. Miga, for some final remarks,

Thank you very much. This is a very important Milestone. These are the first 9 months of our new strategic plan. As I commented, this new strategic plan is focused on rebalancing our balance sheets. Uh, in terms of the mix between in individual Banking and SE and corporate banking. We are showing you that we are clearly on the, on the right path with a high level of resilience. In terms of our core income, that is basically stable when compared with to, with last year, in spite of the reduction of interest rates in both Portugal and Poland.

Operator: Thank you, sir. 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 for any question and wait for your name to be announced. To withdraw your question, please press Star 1 and 1 again. Please stand by while we compile the Q&A roster. This will take a few moments. Once again, 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. We are now going to proceed with our first question and the questions come from the line of Maksym Mishyn from JB Capital. Please ask your question.

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 for any question and wait for your name to be announced. To withdraw your question, please press star one and one again. Please stand by while we compile the Q&A roster, this will take a few moments. Once again, 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. 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.

Um, I will now open the the floor to questions.

Thank you, sir. As a reminder, to ask a question, please press *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 for any question and wait for your name to be. Announced 2 withdrawal your question. Please press star 1 and 1 again.

Please stand by while we compare the Q&A roster. This will take a few moments.

Once again, 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.

We are now going to proceed with our first question.

Maksym Mishyn: Thanks. Good afternoon. Thank you very much for the presentation and taking our questions. I have two questions, please. The first one is on Portugal. Your loan book growth has accelerated notably in the quarter. You seem to be gaining market share. Can you please touch a bit on every key segment? What kind of demand are you seeing, and do you think it is sustainable for the next years? The second question is a consequence of this. Do you think the cost of risk in Portugal can sustainably remain close to the 35 basis points that we are seeing today, or corporate or growth in corporate loans may push it up? Thank you.

Miguel Bragança: Thanks. Good afternoon. Thank you very much for the presentation and taking our questions. I have two questions please. The first one is on Portugal. Your loan book growth has accelerated notably in the quarter. You seem to be gaining market share. Can you please touch a bit on every key segment? What kind of demand are you seeing and do you think it is sustainable for the next years? The second question is a consequence of this. Do you think the cost of risk in Portugal can sustainably remain close to the 35 basis points that we are seeing today? Or growth in corporate loans may push it up. Thank you. Okay, thank you for your questions. Max. Yes, I mean we think that the type of loan growth on mid to high single digits is possible going forward in Poland absent a major growth recession in Europe, clearly.

And the questions come from the line of Max Mission from JB Capital. Please ask your question.

Thanks, good afternoon. Thank you very much for the presentation and for taking our questions. I have two questions, please. The first one is on Portugal. Your loan growth has accelerated notably in the quarter. You seem to be gaining market share. Can you please touch a bit on every key segment? What kind of demand are you seeing, and do you think it is sustainable for the next year?

And then the second question, is a consequence of this? Do you think the cost of risk important will can sustainably remain closed to the 35 basis points that we are seeing today? Uh or corporate or growth in corporate ones? May push it up. Thank you.

Miguel Bragança: Okay. Thank you for your questions, Max. Yes. I mean, we think that the type of loan growth on mid to high single digits is possible going forward in Poland, absent a major recession in Europe, clearly. For our expectation in terms of the macroeconomic environment in Europe, so to say, we do expect our loan growth in Portugal to be around mid-single digit, and we may gain a little bit of market share in some quarters. There will be always some volatility there. In terms of the cost of risk.

Miguel Bragança: For our expectation in terms of the macroeconomic environment in Europe, we do expect our loan growth in Portugal to be around mid single digit and we may gain a little bit of market share in some quarters. There will always be some volatility there. In terms of the cost of risk, the guidance that we gave was the guidance between 30 and 40 basis points. Closer to 30 in the more benign part of the cycle, closer to 40 in a less benign part of the cycle, but still under normality conditions. As we look forward, we are not, in spite of the geopolitical risks that we all know of, seeing any trigger to concretely say that we may enter into a recession in Portugal or in Europe. There is always a lot of volatility in the markets, but our view for the next quarters is relatively benign.

Miguel Bragança: The guidance that we gave was a guidance between 30 and 40 basis points, closer to 30 in the more benign part of the cycle, closer to 40 in a less benign part of the cycle, but still under normality conditions. As we look forward, we are not in spite of the geopolitical risks that, I mean, we all know of, we are not seeing any trigger to concretely, so to say that we may enter into a recession in Portugal or in Europe. There is always a lot of volatility in the markets. But our view for the next quarters is relatively benign. I would say that 30 to 35 basis points is reasonable for the next one or two years.

Okay, uh, thank you for your questions, Max. Yes. I mean, uh, we think that, that, that the type of loan growth on me means to, to high single digits is is possible going forwards in Poland absent, a major recession in Europe, clearly. So for our, uh, expectation, in terms of the macroeconomic environment in in, in Europe, so to say, we do expect our loan growth in Portugal to be around Ms. Me, single digit and we, we may gain a little bit of market share, uh, in in some parts that there will be always some volatility there in terms of the, um, the uh, the cost of risks.

The guidance that we gave was the guidance between 30 and 40 basis points, closer to 30 in more benign, part of the cycle closer to 40 in a lesbian 9 uh uh a part of the cycle. But but still and the normality conditions, as we look forward, we are not in spite of the geopolitical risks that I mean, we all know,

Miguel Bragança: I would say that 30 to 35 basis points is reasonable for the next one or two years. Of course, if you speak about five or six years, we will have to go through the cycle view. Thank you. For the next two years, we think this makes sense.

Miguel Bragança: Of course, if you speak about 5 or 6 years, I mean, we'll have to go for through the cycle view, so to say.

Ignacio Olazabal: Thank you.

Maksym Mishyn: Thank you.

Miguel Bragança: For the next two years, we think this makes sense.

Off, we are not seeing any trigger to, uh, to concretely. So to say, say that we might enter into a, a recession in Portugal or in Europe. So there is always a lot of volatility in the markets but our view for the next quarters is relatively benign. So I would say that 30 to 35 basis points is is reasonable for the next 1 or 2 years. Of course, if you speak about about 5 or 6 years, I mean, we will have to do to go for through the cycle, uh, view. So to say,

thank you. But for the next 2 years, we think this makes sense.

Operator: Thank you. We are now going to proceed with our next question. The questions come from the line of Ignacio Lagu Lopez from BNP Paribas Exane. Please ask your question.

Operator: Thank you. We are now going to proceed with our next question. The question comes from the line of Ignacio Olazabal from BNP Paribas Exane. Please ask your question.

Thank you. We are now going to proceed with our next question.

And the questions come from the line of invasion Lopez from BNP pariba exam. Please ask your question.

Miguel Bragança: Good afternoon. Thanks very much for the presentation. I have two questions. The first one is coming back a bit on the NII in Portugal. How should we think about the growth in coming quarters once the effect of rates starts to be digested? Should we expect volume growth to be kind of the basic driver of the NII? If you could help us a bit to update on the contribution of the structural hedge that you have, how this could impact the NII in 2026. The second question is on costs. If I just look to the cost base, particularly in Poland, but looking to.

Ignacio Olazabal: Good afternoon. Thanks very much for the presentation. I have 2 questions. The first one is, coming back a bit on the NII in Portugal. How should we think about the growth in coming quarters, once the effect of rates starts to be digested? Should we expect volume growth to be kind of the basic driver of the NII? If you could help us a bit to update on the contribution of the structural hedge that you have, how this could impact the NII in 2026. The second question is on costs.

Ignacio Ulargui: Good afternoon. Thanks very much for the presentation. I have 2 questions. The first one is, coming back a bit on the NII in Portugal. How should we think about the growth in coming quarters, once the effect of rates starts to be digested? Should we expect volume growth to be kind of the basic driver of the NII? If you could help us a bit to update on the contribution of the structural hedge that you have, how this could impact the NII in 2026. The second question is on costs.

Good afternoon. Thanks very much for the presentation. I have 2 questions. Um, the first 1 is, um, coming back a bit on the knee in Portugal, how should we think about, um, the growth in coming quarters? Um, once the effect of REITs starts to be digested, so we expect volume growth to be kind of the um basic driver of the knee. And if you could help us a bit um to update on the contribution of the structural H um that you have um how this could impact the knee in 2026.

Ignacio Olazabal: If I just look to the cost base, particularly in Poland, but looking to the group as well, the bank has been not delivering positive operating jaws, which was kind of the DNA of the bank for a while. While I understand that rates effect and rates can have impacted that.

Ignacio Ulargui: If I just look to the cost base, particularly in Poland, but looking to the group as well, the bank has been not delivering positive operating jaws, which was kind of the DNA of the bank for a while. While I understand that rates effect and rates can have impacted that.

Bernardo Collaço: The group as well, the bank has.

Miguel Bragança: Been not delivering positive operating yields, which was kind of the DNA of the bank for a while. While I understand that rates effect and rates can have impacted that, should we expect the bank to come back to positive operating yields in coming years? Thanks. Okay. Two very important questions, I would say, and it's difficult to separate in terms of NII, what is the structural hedge and what is the natural hedge? Once we have some, for instance, mortgages that are fixed, right. The change in the structure of our balance sheets also contribute to some extent for the hedging of the balance sheet. We see it in an integrated way. It is a little bit artificial because we are constantly adjusting, but what I can tell you is yes, yes. The main trigger forward for our NII evolution is the volume evolution.

Miguel Bragança: Mm-hmm.

Ignacio Olazabal: Should we expect the bank to come back to positive operating years in coming years? Thanks.

Ignacio Ulargui: Should we expect the bank to come back to positive operating years in coming years? Thanks.

Miguel Bragança: Okay. Two very important questions. I would say it's difficult to separate in terms of NII, what is the structural hedge and what is the natural hedge? Once we have some, for instance, mortgages that are fixed, right? The change in the structure of our balance sheets also contribute to some extent for the, so to say, the hedging of the balance sheet, and we see it is, as an integrated way, in an integrated way. It is a little bit artificial because we are constantly adjusting it. What I can tell you is, yes. The main trigger going forward for our NII evolution is the volume evolution. As I commented previously to Max, we are expecting a volume evolution in the mid-single digit area.

The second question is on costs. Um, if I just look, um, to the course base particularly, um, in Poland, but but look into the group as well. Um, the bank has been not delivering, um, positive operating jobs, which was kind of the DNA of the bank, uh, for a, for a while, while Ireland, stand up rates affect and rates, can have impacted that. Should we expect the bank to come back to positive operating jobs in coming years? Thanks, mhm.

Okay. 2, 2 2, very important questions. I would say, it's, it's difficult to to separate in terms of knee. What is the structural hedge and what is the natural hedge? Once we have some, uh, uh, some um, for instance mortgages that are fixed, right? The the change in the structure of our balance sheets. Also contribute to some extent for the, uh, uh, so the hedging of the balance sheet and we see it, is it as an integrated way in in an integrated way. So it is a little bit artificial because we are constantly adjusting it. But what I can tell you is, yes,

Yes yes, the main trigger.

Forward for our, uh, uh, for our, uh, knee, um, evolution.

Miguel Bragança: As I commented previously to Max, we are expecting a volume evolution in the mid single digit area. Consequently, this means that we are expecting an NII evolution also in the mid single digit area going forward, perhaps even a little bit better depending on the evolution of the interest rates. We have a very small exposure to interest rate development, but of course there is some exposure in spite of it being like that. Our base case is mid single digit evolution of the NII going forward. In terms of the jaws, we are living a special moment in the banking industry, so to say. The jaws depend on the starting point as every evolution. For us, much more important than the jaws is the cost-to-income and the resilience of the business model.

Miguel Bragança: Consequently, this means that we are expecting an NII evolution also in the mid-single-digit area going forward. Perhaps even a little bit better, depending on the evolution of the interest rates. We have a very small exposure to interest rate development, but of course there is some exposure in spite of it being like that. Our base case is mid-single-digit evolution of the NII going forward. In terms of the draws. We are living a special moment in the banking industry, so to say, and the draws depend on the starting point as every evolution. For us, much more important than the draws is the cost to income and the resilience of the business model.

The volume evolution, and as I commented previously to Max, we are expecting a volume evolution in the mid-single-digit area.

So, consequently, this means that we are expecting and then I Evolution also it a bit single digit area going forward, perhaps even a little bit better, depending on the evolution of the, of the interest rates. We don't have, we have a very small exposure to Interstate development, but of course, there is some exposure. Despite of it is being like that. So I would, I would our base case is missing a digit, uh, um, evolution of

The knee going forward.

in terms of the, the, the Jaws,

Miguel Bragança: It is difficult for any industry, so to say, to maintain very abnormal relationship between cost and income. Be it because the employees demand more compensation, a fair compensation, they demand a larger part of the distribution of the value created, or the suppliers, mainly in IT, also demanded, or there may be also some price pressure when the business is very healthy. To say, when the income exceeds a lot, the costs, the motivation to compete on price is higher. I would say that we should focus much more on the cost to income, and we clearly see in Portugal the cost to income in being able to maintain this cost to income around the levels that we have today, around 37%, give or take.

We are living a special moment in the in the banking industry. So to say and the the Jaws depend on the starting point as any as a revolution. So for us, much more important than the Jaws is the cost to income and the resilience of the business model.

Miguel Bragança: It is difficult for any industry, so to say, to maintain very abnormal relationship between cost and income, be it because the employees demand more compensation, a fair compensation, they demand a larger part of the distribution of the value created, or the suppliers that mainly in IT also demanded. There may be also some price pressure when the business is very healthy, so to say, when the income exceeds a lot the costs, the motivation to compete on price is higher. I would say that we should focus much more on the cost-to-income. We clearly see in Portugal the cost-to-income in being able to maintain this cost-to-income around the levels that we have today, around 37% give or take, not going materially above this level, which we think is a very good level when we compare it with other geographies.

um,

It is difficult for any industry. So to say, uh, to maintain a very abnormal relationship between cost and income, because the employees demand, uh, uh, uh, more compensation. A fair compensation. They demand a larger part of the distribution of the value created or the suppliers, mainly in IT, also demand or there may be also.

Some price pressure when the business is very healthy. So, to say, when the income exceeds a lot, the costs, the motivation to compete on Price is is higher. So I I would say that,

we should focus much more on the, on the cost of income and we clearly see in Portugal, the cost to income, uh, in being able to, to maintain this cost to income around the levels that we have today around 37%

Miguel Bragança: Not going materially above this level, which we think is a very good level, when we compare it with other geographies. Of course, with this cost to income, there will be some years where the operating costs will grow more than the income. Please don't forget that we are having in Portugal also a NIM that is much higher than the NIM that you see in other European countries. Clearly above 2%. This, of course, creates some pressure. Also the investments here are important, so to say. When the market is very interesting and when the business opportunity is very interesting, we cannot allow the situation to depreciate our franchise.

Miguel Bragança: Of course, with this cost-to-income, there will be some years where the operating costs will grow more than the income. Please don't forget that we are having in Portugal also a NIM that is much higher than the NIM that you see in other European countries, so clearly above 2%. This, of course, creates some pressure. Also, the investments here are important, to say, when the market is very interesting and when the business opportunity is very interesting, we cannot allow the situation to depreciate our franchise. When it is interesting for all the industry, for all the competitors, we have to remain competitive, we have to remain the leading edge, and we have to make sure that we continue to increase our customer base and to increase our franchise. This has costs.

Uh, uh, give or take. So not not going uh, material. You have this level which we think is a very good level. Uh, when we, uh, when we compare it with other geographies, but of course, uh, with this cost to income there, there will be some years where the operating costs will grow more than the, uh, than the income. Please don't forget that we are having in Portugal also, aim that is much higher than the name that you see in other European countries, so clearly above 2%. So this of course, creates some pressure.

Miguel Bragança: When it is interesting for all the industry, for all the competitors, we have to remain competitive, we have to remain the leading edge, and we have to make sure that we continue to increase our customer base and to increase our franchise. This has costs. These costs are more, so to say, are more bearable when the business case is interesting than when the business case is not interesting. Now we are faced with a very interesting business case, we are making more than 2% NIM. We are increasing our customer base. We are having a very interesting ROTE, so it does not make sense to constrain ourselves too much in terms of the digitalization, in terms of the new tools of the bank.

Miguel Bragança: These costs are more bearable when the business case is interesting than when the business case is not interesting. Now we are faced with a very interesting business case. We are making more than 2% NIM. We are increasing our customer base. We are having a very interesting ROE. It does not make sense to constrain ourselves too much in terms of the digitalization, in terms of the new tools of the bank. Going forward, our focus is the cost-to-income more than the operating jobs. Thank you very much.

Miguel Bragança: Going forward, our focus is the cost to income more than the operating jaws.

The Investments here are important. So to say, when the market is very interesting and when the business opportunity is very interesting, we cannot allow the situation to depreciate our franchise. And when it is interesting for all the industry, for all the competitors, we help we have to remain competitive. We have to remain the Leading Edge. And we have to make sure that we, uh, continue to, uh, uh, increase our customer base, and to increase our franchise. This has costs, this costs are more, uh, more variable when the business cases is interesting than when the business case is not interesting. So, now, we are faced with a very interesting business case, we are making more than 2% name. We are um, increasing our customer base, we are having a very interesting row. So it does not make sense to constrain ourselves too much, in terms of the digitalization, in terms of the of the new tools of the bank.

Sofie Peterzens: Thank you very much.

Ignacio Ulargui: Thank you very much.

So going forwards, our focus is the cost to income more than the operating jobs.

Thank you very much.

Operator: Thank you. We are now going to proceed with our next question. The questions come from the line of Sophie Petersen from Goldman Sachs. Please ask a question. Hi, thanks a lot for taking my question. Here is Sophie from Goldman Sachs. My first question would be around the tax rate. You had a 24% tax rate in this quarter. I think previously you have guided for much higher tax rate and consensus is around 27% tax rate. How should we think about that tax rate going forward? Do you have any details that you can kind of utilize and if so how should we think also about the capital impact from those DTAs? The second question would be just a clarification on net interest income.

Operator: Thank you. We are now going to proceed with our next question. The question comes from the line of Sofie Peterzens from Goldman Sachs. Please ask your question.

Thank you. We are now going to proceed with our next question.

And the questions come from the line of Sophie Peterson from Goldman Sachs, please ask your question.

Sofie Peterzens: Yeah. Hi, thanks a lot for taking my question. Here is Sophie from Goldman Sachs. Yeah, my first question would be around the tax rate. You had a 24% tax rate in this quarter. I think previously you have guided for much higher tax rate and consensus is around 27% tax rate. How should we think about that tax rate going forward? Do you have any DTAs that you can kind of utilize? If so, how should we think also about the capital impact from those DTAs? The second question would be just a clarification on net interest income.

Yeah. Hi, uh, thanks a lot for taking my question. Um, here is the fee from government facts. So uh, yeah, my first question would be around the tax rate. Uh, you had a 24% tax rate in this quarter.

Uh, I think previously you have guided for much higher tax rate and consensus is around, 27% tax rate.

Sofie Peterzens: In terms of the mid-single digit net interest income growth for 2026, I assume it's fair to assume that that growth level kind of in a steady state is fair to kind of extrapolate also to 2027 and 2028. The final question would be on capital. You had some capital headwinds that this quarter, but could you just kind of outline if you expect any additional capital headwinds to come or tailwinds and how we should think about the core equity tier one evolution going forward? Thank you.

Operator: In terms of the mid single digit net interest income growth for 2026, I assume it's fair to assume that that growth level in a steady state is fair. Does that kind of extrapolate also to 2027 and 2028? The final question would be on capital. You had some capital headwinds this quarter. Could you just outline if you expect any additional capital headwinds to come or tailwinds and how we should think about the correct with the tier one evolution going forward? Thank you.

How should we think about the tax rate going forward and, and do you have any details that you can kind of, uh, utilize and and if so, how should we think also about the the capital impact, uh, from those, uh, ddas? And then the second question would be, just a clarification on it. Interesting income. So in terms of the mixing or the interesting of growth, um, uh, for 2026, I assume it's very assume that that growth level kind of steady state, uh, is fair. Did the kind of extrapolate also to 27 and 28? And then, uh, the final question would be on on Capital, you had some Capital headwinds that this quarter, but could you just kind of outline if you expect any additional, uh, Capital headwinds to come or they

Means and and how we should think about the the correct we did here. 1 Evolution going forward. Thank you.

Miguel Bragança: Starting with the last point, I would not call it capital headwinds. What we are having here is a growth in RWAs and a growth in credit. When we presented our plan, I was challenged by some of you that were constantly telling me how will you be able to go to a level that is above 13.5% through organic capital generation. I said we are going to grow in corporate and corporate is highly capital intensive. What happened in the last quarters is that we were not growing in corporate at the speed and with the other density that we were expecting in the past, so to say, or when we developed the plan. Now we are implementing the plan and having, so to say, the first more concrete results of our growth in the corporate area.

Miguel Bragança: Starting with the last point. I would not call it capital headwinds. What we are having here is a growth in RWAs and a growth in credit. When we presented our plan, I was challenged because, by some of you that were constantly telling me, how will you be able to go to a level that is above 13.5 through organic capital generation? I said, we are going to grow in corporate, and corporate is highly capital intensive. What happened in the last quarters is that we were not growing in corporate at the speed and with the RWA density that we were expecting in the past, so to say, or when we developed the plan.

Starting with the last point, I was not, uh, call it capital headwinds.

Miguel Bragança: Now we are in this, implementing the plan and having, so to say, the first more concrete results of our growth in the corporate area, and this is happening. This, I would say, at least the RWA consumption in the corporate area, we hope it's the new normal. We hope this will be the new normal in terms of RWA. Of course, in our pricing model, we reflect the capital consumption of our business model. This is the new model. There is another part, just like a seesaw effect, that is this impact that I commented on, the 15 basis points. It is a situation in which provisionally we are able to account for the P&L of Poland in our capital base without increasing the excess minorities.

Miguel Bragança: This is happening and this, I would say, at least the RWA consumption in the corporate area. We hope it's the new normal. We hope this will be the new normal in terms of RWA. Of course, in our pricing model, we reflect the capital consumption of our business model. This is the new model. There is then another part, just like a seesaw effect. That is this impact that I commented on, the 15 basis points. That is a situation in which provisionally we are able to account for the P&L of Poland in our capital base without increasing the excess minorities. When the KF authorizes the bank to recognize locally the excess minorities, this then gets deducted from our consolidated capital ratio. The seesaw effect that happens in some quarters, but then gets derecognized in other quarters, will continue to exist.

So what we are having here is a growth in rwas and a growth in credit when we presented our plan. When we presented our plan, we we, we were, I was challenged because by some of you that were constantly telling me, how will you be able to go to a level? Uh, that is above 13 and a half through organic Capital generation and I said we are going to grow in corporate and corporate is highly Capital intensive. Uh, uh, what happened in the last quarters is that we were not growing in corporate at the speed and with the other way density that we were expecting in the um, in the past. So to say, or when we develop the plan, now we we are in this, uh, implementing the plan. And having so to say the first more, uh, concrete results of our growth in the corporate area and this is happening. And this, I would say at least the rwa consumption.

Miguel Bragança: When the KNF authorizes the bank to recognize locally the excess minorities, this then gets deducted from our consolidated capital ratio. This seesaw effect that happens in some quarters but then gets derecognized in other quarters will continue to exist. There will be some quarters in which I will benefit from this, in other quarters that I will be then adjusting the ratio. This will continue to exist. This over the long term is not, is not an effect. This gets compensated in one quarter after the other in terms of capital.

In the corporate area. We hope it's the new normal. So we hope this will be the new normal uh in terms of of our of course, in our pricing model. We reflect the capital consumption uh, of our of our business model. So this is the new model, there is, then another part is just like, seesaw effect. That is this impact that I commented on the 15s, that is a situation in which, uh, um provisionally, we are able to, uh, uh, to account for the the p&l of Poland in our Capital ways without increasing the excess minorities.

Miguel Bragança: There will be some quarters in which I will benefit from this. In other quarters, I will be then adjusting the ratio. This will continue to exist, but over the long term is not an effect. This gets compensated in one quarter after the other in terms of capital. In terms of NII, if we are, as we expect, totally successful in our plan, as we have presented to you, we do expect that our NII will continue to grow in Portugal. I'm speaking about Portugal, mid single digit in 2026 and in 2027, in 2028, I would say also mid single digit, but with a bias upward. As time goes by, as it's normal in the plan, we expect it to get better and better. This is for 2027, 2028. The mid single digit area, I would keep it.

Miguel Bragança: In terms of NII, if we are, as we expect, totally successful in our plan, as we have presented to you, we do expect that our NII will continue to grow in Portugal, I'm speaking about Portugal, mid-single digit in 2026. In 2027 and 2028, I would say also mid-single digit, but with a bias upward. As time goes by, as it's normal in the plan, we expect it to get better and better. This is for 2027, 2028, so the mid-single digit area, I would keep it. Of course, if we are successful, the more time a successful plan is implemented, the better it reflects it in the P&L. In terms of the tax rate.

But then get recognized in other quarters will continue to exist. So there will there will be some quarters in which I will benefit from this in other quarters that I will be. Then adjusting the ratio we this will continue to exist but is over the long term is not is not an effect. So this gets compensated in 1 quarter after the other, uh, in terms of capital, in terms of knee,

if we are,

Totally successful in our in our plan as we have presented to you.

Miguel Bragança: Of course, if we are successful, the more time a successful plan is implemented, the better it reflects in the P&L. In terms of the tax rate, of course, we have to separate here, Portugal and Poland. In Poland, as you know, there was a separate conference on Poland. There has been a new tax rate approved in Poland for Polish banks. This is now in the process of being discussed. The tax rate in Poland will increase as it's public information. In the first year, the tax rate has increased from 19% to around 30%. This is something that is in process and is already, so to say, incorporated in the price of our banking pool. In Portugal, we are having the opposite movement.

We do expect that our and I will continue to grow in Portugal. I'm speaking about Portugal, uh, meet meet single digits in in 26 and in 27, in 28, I would say also meet single digit, but with a biased upward so as time goes by, as it's normally in the plan we expect it to get better and better but this is for 2728. So the but the meet single digit area, I would, I would keep it but of course, uh, if we are successful, the more time as successful plan is implemented the better. It uh, it reflects in the in the pnl.

in terms of the, uh, in terms of the of the tax rates,

Miguel Bragança: Of course, we have to separate here Portugal and Poland. Now, in Poland, as you know, there was a separate conference on Poland. There has been a new tax rate approved in the Polish for Polish banks. This is now in the process of being discussed. The tax rate in Poland will increase it as it's public information. In the first year, the tax rate has increased from 19% to around 30%. This is something that is in process and is already, so to say, incorporated in the price of our bank in Poland. In Portugal, we are having the opposite movement.

Uh, of course we have to separate here, Portugal and Poland. Now, in Poland, as you know, there was a separate conference on Poland. There has been a new tax rate.

approved, uh, in the, in the Polish, um,

Miguel Bragança: What we are seeing in Portugal is that the government has approved a reduction of the tax rates in Portugal in the next years to 17%, so to say, in a gradual way. We expect this decrease of the tax rate in Portugal to feed almost on a one to one basis into the effective tax rate that we also pay in Portugal every year. In terms of the DTIs, what we do is that we do an evaluation of our DTIs and we recognize or derecognize based on our view of the recoverability of the DTAs. We have done this in the past, we'll continue to do so going forward, but that's more or less the level that I would expect.

Miguel Bragança: What we are seeing in Portugal is that the government has approved a reduction of the tax rates in Portugal in the next years to 17%, so to say. The way in a gradual way. We expect this decrease of the tax rate in Portugal to feed almost on a one-to-one basis into the effective tax rate that we also pay in Portugal. Every year in terms of the DTIs, what we do is that we do an evaluation of our DTIs, and we recognize or de-recognize based on our view of the recoverability of the DTIs.

for Polish Banks, this has now in the process of being or being discussed. So the the tax rate in Poland will increase it as it's public information. So in the first year, uh, it it the tax rate has increased from 19% to around 30%. So this is something that uh, is, is in process and is already. So to say, Incorporated in the price of our of our banking Department, in in Port 12, we are having the opposite movement. So what we are seeing in Portugal, is that the the government has approved a reduction of, uh, uh, of the tax rates, uh, in in Portugal, in the next years, uh, to to 17%. So, to say, um, the way, uh, in a, in a, in a gradual, in a gradual way, we expect this decrease of the tax rate in Portugal to feed uh,

um,

Miguel Bragança: We have done this in the past, we'll continue to do so going forward, but that's more or less the level that I would expect. The type of average level that we are expecting for the next years will be closer to the 25%, 26% than the level that we had in the past in Portugal.

Almost on a 1 to 1 basis into the the effective tax rate that we that we also pay in Portugal. Uh, every year in terms of the DTI is what we do is that we do uh uh an evaluation of our DTI and we recognize or D recognized based on our view of the recoverability of the DTI. Uh,

Miguel Bragança: The type of average level that we are expecting for the next years will be closer to the 25, 26% than the level that we had in the past in Portugal.

We have done this in the past, and we continue to do so going forward. But, uh, that's more or less the level that I would expect. So, the type of average level that we are expecting for the next years will be closer to 25-26 percent than the level that we have in the past.

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

Operator: Thank you, that's very clear. Thank you. We are now going to proceed with our next question and the questions come from the line of Carlos Peixoto from CaixaBank BPI. Please ask your question.

In Portugal.

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

Thank you, so that's very clear.

Thank you. We are now going to proceed with our next question.

And the questions come from the line of Carlos pixel from kaisha Bank BPI. Please ask a question.

Miguel Maya: Yes, hi, good afternoon.

Carlos Peixoto: Yes. Hi, good afternoon. Just first question on capital, just basically in terms of, you did have some consumption this quarter, but there is a clear excess CET1 at the bank level. Do you see any possibility of looking into the distribution of this excess capital? Could some sort of announcement take place with full year earnings? Just a bit of a view on that. A second question would be basically on the outlook on the other provisions, both for Q4 and heading into 2026, both for Portugal and also for Mozambique.

Miguel Bragança: Just a first question on capital.

Miguel Maya: Just basically in terms of you did.

Miguel Bragança: Have some consumption this quarter, but there is a clear excess CET1 at a bank level. Do you see any possibility of looking into the distribution of this excess capital? Could some sort of announcement take place with full year earnings?

Yes. Hi. Um, well, the afternoon, um, just uh, first question on on Capital, just, uh, basically, uh, in terms of of you did have some, some consumption in this quarter. But, uh, there is a clear excess, uh, ct1 um, at a bank level. Uh, do you see any any possibility or of looking into the distribution of the excess Capital to, to some sort of

Miguel Maya: Just a little overview on that.

Miguel Bragança: A second question would be basically on the outlook on the other provisions.

Miguel Maya: Both for the fourth quarter indicated.

Miguel Bragança: 2026 more for Portugal and also for Mozambique, particularly Mozambique, whether you expect this level of additional charges related with the Silverine to persist over the coming quarters. Finally, if I may, just a quick question on your expectations on dilution of costs in Portugal. My doubt here is basically last year you had a bit of a hiccup in the fourth Q which relates somewhat to the variable compensation that wasn't being accrued.

Carlos Peixoto: Particularly Mozambique, whether you expect this level of additional charges related with the sovereign to persist over the coming quarters. Then finally, if I may, just a quick question on your expectations on the evolution of costs in Portugal. My doubt here is basically last year you had a bit of a hiccup in Q4, which relates somewhat to the variable compensation that wasn't being accrued. I was wondering whether this year we should expect a more flattish quarter-over-quarter evolution into Q4 and just basically the outlook for the quarter. Thank you. Hello?

Miguel Maya: I was wondering whether this year we

Miguel Bragança: Should expect a more flattish quarter on quarter evolution into the fourth quarter, just basically the outlook for the quarter. Thank you. Hello? Hello. Yes.

Water and just basically the outlook for the for the quarter. Thank you.

Miguel Bragança: Hello. Yes.

Hello.

Miguel Maya: Oh, sorry, I think I was muted.

Carlos Peixoto: Oh, sorry. I think I was muted.

Hello. Yes.

Miguel Bragança: No, no, no, no, we understood what your questions. Okay. Okay, thank you. Okay, in terms of capital, we have presented a plan. This plan was based on, to a large extent, in differential terms, on an increased growth of the corporate portfolio in both Portugal and Poland. As you've seen this year, we have been able to do it. In terms of, as it was here explained, in Poland the corporate loan growth year to date has grown 19% and in Portugal the year to date of the performing loan book has grown 9%. It has even grown more than what we were expecting. This plan has been approved and we are basically in execution mode.

Miguel Bragança: No, no, no.

Oh, sorry. Uh, I think I was muted.

Miguel Bragança: No, no, no.

Carlos Peixoto: You didn't hear me?

Miguel Bragança: We understood what your questions.

Carlos Peixoto: Okay. Okay. Thank you.

Miguel Bragança: Okay. In terms of capital, we have presented a plan. This plan was based on the, to a large extent, in differential terms, on an increased growth of the corporate portfolio in both Portugal and Poland. As you've seen this year, we have been able to do it. In terms of as it was here explained, in Poland, the corporate loan growth year to date has grown 19%. In Portugal, the year to date of the performing loan book has grown 9%. It has even grown more than what we were expecting. This plan has been approved, and it's and we are basically in execution mode.

No, no, no, no. We we we understood what your questions. Okay. Okay. Thank you. Okay, so in terms of capital so we have presented a plan. This plan was based on the to a large extent on uh in in differential terms on an increased growth or the carpet portfolio in both Portugal and Poland.

And as you see in this here, uh we have been able to to do it. So uh in terms of as as it was here explained in Poland, the corporate loan growth year to date has grown uh 19%. And in Portugal the year to date of the Performing loan book has grown 9% so it has even gone more than what we were expecting.

Um,

Miguel Bragança: Having said that, it is normal that when we present the net profit and the final year end statements to you, we will look of course at the plan and we will see whether we are generating substantially more capital than what we were envisaging in the plan and whether we should recalibrate any of the distribution decisions and possibly anything related to our distribution policy. We will look at it, of course, because the year end is a moment in which we typically make a balance of our decisions. Before the presentation of the year end results to you, that will be the next presentation. I mean there will be. I'm not expecting any type of decision one year after our plan. We look at it and see whether the plan is totally adjusted, whether it needs to be recalibrated or not.

Miguel Bragança: Having said that, it is normal that when we present the net profit and the final year-end statements to you, that we will look, of course, at the plan, and we will see whether we are generating substantial more capital than what we were envisaging in the plan and whether we should recalibrate any of the distribution decisions, and possibly, anything related to our distribution policy. We will look at it, of course, because the year-end is a moment in which we typically make a balance of our decisions. Before, the presentation of the year-end results to you, that will be the next presentation. I mean, there will be, I'm not expecting any type of decision.

this plan has been approved and it's uh as we are basically in execution mode.

Having said that?

It is normal that when we present the net profit and the final year end statements to you, that we will look of course at the plan and we will see whether we are generating substantial more Capital than what we were envisaging in the plan and whether we should recalibrate any of the of the distribution decisions and and possibly, um, anything related to our distribution policy. So we, we will look at it of course, because the year end is a moment in which we typically make a balance of our of our decisions. But before uh the the the presentation of the of the year and results to you, that will be the next presentation. I mean

Miguel Bragança: One year after our plan, we'll look at it and see whether the plan is totally adjusted, whether it needs to be recalibrated or not. Now, I cannot tell you whether it needs recalibration or not, especially considering what is happening what happened in this quarter. It depends a lot also on our credit pipeline, both in Portugal and Poland. I can assure you we have a good pipeline. Depending on the concretization of this pipeline, we may have to recalibrate some of the distribution decisions or not. The moment will be the moment of the year-end presentation. In terms of other provisions, as I have commented to you in the past, the other provisions in Portugal are by its own nature a little bit also like the trading gains.

Miguel Bragança: Now I cannot tell you whether it needs recalibration or not, especially considering what happened in this quarter. It depends a lot also on our credit pipeline, both in Portugal and Poland. I can assure you we have a good pipeline. Depending on the concretization of this pipeline, we may have to recalibrate some of the distribution decisions or not. The moment will be the moment of the year end presentation. In terms of other provisions, as I have commented to you in the past, the other provisions in Portugal are by its own nature a little bit also like the trading gains. They are particularly difficult to forecast. They have to do with mark to market of real estate assets that we may own. They have to do with litigation provisions and so on.

That there will be, uh, I'm not expecting any type of of decision 1 year after our plan. We look at it and see whether the plan is totally adjusted whether it needs to be recalibrated or not. Now, I cannot tell you whether it is, uh, it needs recalibration or not specially considering what is happening in, what happened in this quarter and it depends a lot, also on our credit pipeline, both in Portugal, and Poland, and I can assure you, we have a good pipeline. So, depending on the concretization of this pipeline, we may have to, uh, recalibrate some of the distribution decisions or not. But the moment we'll be the moment of the, uh, the, the year end presentation.

Miguel Bragança: They are particularly difficult to forecast. They have to do with mark to market of real estate assets that we may own. They have to do with litigation provisions and so on. What I, and what I've told you in the past, that we were expecting across the cycle to have EUR 10 to 15 million charge per quarter in Portugal. This year it has been much better than that. Looking forward, at least for the next 12 months, we are expecting to remain more or less at the levels of this year. Across the cycle, I mean, by its own nature, it's like trying to project trading gains, so I cannot give any assurance on this type of level.

Miguel Bragança: What I've told you in the past is that we were expecting across the cycle to have $10 million to $15 million charge per quarter in Portugal this year. It has been much better than that. Looking forward, at least for the next 12 months, we are expecting to remain more or less at the levels of this year, but across the cycle, I mean, by its own nature it's like trying to project trading gains. I cannot give any assurance on this type of level. In Mozambique we have made a provision that was linked to the local currency sovereign debt. We do not have any foreign currency sovereign debt of Mozambique. I think that's very important. Of course, when there is revaluation, when there is a rating change or so, we have to look at the credit to see whether how the PDs have changed.

Um, in terms of, uh, as provisions, as I have commented to you in the past, the provisions in Portugal are by its own nature a little bit, also, like the trading games. They are particularly difficult to forecast. They have to do with, uh, uh, mark-to-market of real estate assets that we may own. They have to do with litigation provisions, and so on. And what I've told you, uh, in the past is that we were expecting across the cycle to have $10 million to $15 million, um, charge per quarter in Portugal. This year has been much better.

Miguel Bragança: In Mozambique, we have made a provision that was linked to the local currency sovereign debt. We do not have any foreign currency sovereign debt of Mozambique. I think that's very important. Of course, when there is a revaluation, when there is a rating, a rating change or so, we have to look at the credit to see whether how the PDs have changed. What I can tell you is that in the last weeks, the rating agencies have maintained the rating of Mozambique in local currency. As of today, we are not expecting any change. Of course, this is a function of the rating of the country.

Uh, than that, looking forwards, at least for the next 12 months, we are expecting to remain more or less at the levels of this year but across the cycle. I mean, by its own nature. It's like trying to project trading gains so I cannot give any Assurance on on this type of level.

Miguel Bragança: What I can tell you is that in the last weeks the rating agencies have maintained the rating of Mozambique in local currency. As of today we are not expecting any change. Of course, this is a function of the rating of the country in terms of costs. On the continent there are some green shoots. Even in terms of Mozambique, some of the companies that had exited Mozambique, that have threatened to exit Mozambique, are now coming back mainly because of the huge gas reserves that Mozambique has that are now proving to be more crucial in this new geopolitical scenario in which Europe wants to be less dependent on the Russian gas. In terms of variable compensation, I think it is early days to comment on this, but it will be a decision of course of the full board.

Uh, in in Mozambique, uh, we have made, uh, um, provision that are, uh, that was linked to the, to the local currency that we do not have any foreign currency solving that of B. I think that's very important, but of course, when there is, uh, revaluation when there is, um, a rating, uh, a rating change or so, we have to, we have to look at the at the rate to see whether uh, how the PDS have have changed. Uh, what I can tell you, is that in the last weeks,

Miguel Bragança: In terms of costs, and on the costs, there are some green shoots, even in terms of Mozambique. Some of the companies that had exited Mozambique or that have threatened to exit Mozambique, are now coming back, mainly because of the huge gas reserves that Mozambique has that are now proving to be more crucial in this new geopolitical scenario in which Europe wants to be less dependent on the Russian gas. In terms of variable compensation, so on, I think it is early days to comment on this, but of course, this will be a decision, of course, of the full board. If we are able clearly to over-deliver substantially, there may be an adjustment in Q1. We'll have to see.

Local currency. So, as of today, we are not expecting any changes. But of course, this is a function of the rating of the country.

In terms of costs.

And, on the country, there are some green shoots, even in terms of Mosaic. Some of the companies that had exited Mozambique and threatened to exit Mozambique are now coming back, mainly because of the huge gas reserves that Mozambique has, which are now proving to be more crucial in this new geopolitical scenario in which Europe wants to be less dependent on Russian gas.

Miguel Bragança: If we are able clearly to over deliver substantially, there may be an adjustment in the fourth quarter. We have to see it. It is still too high. If there is a decision in terms of variable compensation in the fourth quarter, it will be for good reasons. It will be because the bank will have over delivered well in the year. It would be a good, a good sign, I would say. Besides that, I'm not expecting anything special in this line.

Miguel Bragança: It is still too late. If there is a decision in terms of variable compensation in Q1, it will be for good reasons. It will be because the bank will have over-delivered well in the year. It will be a good sign, I would say. Besides that, I'm not expecting anything special in this line.

In terms of variable compensation. So on, I think it is, it is early early days to to comment on this. But of this is will be a decision of course, of the of the full board. But if we are able to clearly to overdeliver substantially, uh, there may be an adjustment in the fourth quarter. So do we have to see it? It is still too high, but if there is a, a decision in terms of variable compensation, uh, in the first quarter, it will be for good reasons. It will be because the bank uh will have over-delivers well in that in the in the years. So it will be a good, a good sign. I would say besides that, I'm not expecting anything special in this line.

Operator: Thank you. We are now going to proceed with our next question. The next question comes from Francisco Riquel from Alantra. Please ask your question.

Operator: Thank you. We are now going to proceed with our next question. The next question comes from Fernando Francisco Riquel from Alantra. Please ask your question.

Thank you. We are now going to proceed with our next question.

And the next question is come from Lando Francisco from alantra. Please ask your question.

Miguel Bragança: Yes, thank you. They want to ask about corporate lending. Two questions here. First one is if you can give more color about the growth in corporate lending in Portugal, whether you have changed pricing or risk taking at all or if the growth is demand driven. What sectors are driving this growth, whether this is short term or long term funding, large, small corporates, so what? Any color. What sustainable growth do you see here going forward? You mentioned a good pipeline now. The second question is also related to this because the corporate loan growth is highly capital intensive as you mentioned. You also had some SRTs maturing in Poland this Q3. I wonder if you can update on your plans for SRTs in both Portugal and Poland. How much resort to SRTs is embedded in your strategic plan.

Francisco Riquel: Yes. Thank you. I want to ask about corporate lending. Two questions here. First one is if you can give more color about the growth in corporate lending in Portugal, whether you have changed pricing or risk-taking at all, or if the growth is demand-driven, what sectors are driving this growth, whether this is short-term or long-term funding, large, small corporates. What any color and what sustainable growth do you see here going forward? You mentioned a good pipeline now. The second question is also related to this because the corporate loan growth is highly capital intensive, as you mentioned, and you also had some SRTs maturing in Poland this Q3. I wonder if you can update on your plans for SRTs in both Portugal and Poland.

Yes, thank you.

I want to ask about, um,

Uh, 2 questions here. First 1 is if you can give more color about the growth in corporate lending in Portugal, whether you have changed pricing or risk taking at all, or if the growth is demand driven, what, sectors are driving this growth. Whether this is a shortened or long term, um, funding large small corporates. So what any any color and the what sustainable growth do you see here? Uh, going forward, you mentioned a good pipeline. Uh, now

Francisco Riquel: How much resort to SRTs is embedded in your strategic plan? I wonder if you could do more to mitigate the RWA inflation. Thank you.

Miguel Bragança: I wonder if you could do more to mitigate the RWA inflation. Thank you. Starting with your last question. What I here would like to say is that we do not have any prejudice for or against SRTs so far as what is important is that we generate shareholder value, that the SRTs cost less, so to say, than the value that they generate for shareholders. At the end of the day, we can do more or less SRTs depending on the cost of equity implicit on the SRT. If there are available SRTs with a low cost of equity, we will do more. If they are not, we will do less. It is as simple as that. We do not need SRTs because we have a good capital ratio.

And uh the second question is also related to this because the corporate long growth is highly Capital intensive as you mentioned and you also had some srts maturing in Poland this Q3. So I wonder if you can update on your plans for srts in both Portugal and Poland, how much resort to srts is embedded in your strategic plan. And I wonder if you could do more to mitigate the rwa inflation, thank you.

Miguel Bragança: Starting with your last question. What I here would like to say is that we do not have any prejudice for or against SRTs. For us, what is important is that we generate shareholder value, that the SRTs cost less, so to say, than the value that they generate for shareholders. At the end of the day, we can do more or less SRTs depending on the cost of equity implicit on the SRT. If there are available SRTs with a low cost of equity, we will do more. If there are not, we will do less. It is as simple as that.

Starting with uh, your last question. So um, What I Hear would like to say is that we do not have any Prejudice for against srts. So for us, what is important is that we generate General value and that the srts cost less

Miguel Bragança: Yeah, we do not need SRTs because we have a good capital ratio, so we will resort to it to the extent that the cost of equity is lower than the cost of equity implicit in the, in our, in our share price. At the end of the day. Of course, for negotiation purposes, I will not disclose you exactly what is our negotiation limit when I negotiate the SRTs with investors. What I can tell you is that we are involved in SRTs continuously, so we have always a lot of mechanisms to make sure that we have a good capital management and a good capital location. You're right, there are some SRTs in Poland coming to an end.

Miguel Bragança: We will resort to it to the extent that the cost of equity is lower than the cost of equity implicit in our share price and of course, for negotiation purposes, I will not disclose to you exactly what is our negotiation limit. When I negotiate the SRTs with investors, what I can tell you is that we are involved in SRTs continuously. We have always a lot of mechanisms to make sure that we have a good capital management and a good capital allocation. You're right. There are some SRTs in Poland coming to an end. We will be in the market, seeing what are the conditions, and depending on the conditions, we may resort to them or not, but we will always be prepared. We will be in the market continuously. In the market, it's not something, I would say, abnormal, something that is part of our business.

So, to say, then the value that generate for shareholders. So at the end of the day, we can do more of ssrt, depending on the cost of equity implicit on the SRT. So, if there are available srts with a low cost of equity, we will do more. If they are not will do less. So, it is as simple as that. Uh, uh, we do not need SRT because we have a good Capital ratio so we will resort to it to the extent that the cost of equity is lower than the cost of equity implicit in the in our in our share price. If you know that and of course for negotiation purposes, I will not disclose you. Exactly what is our negotiation limit when I negotiate the SRS with the with investors? What I can tell you is that we are involved in in in continuously so we have always a lot of mechanisms to uh to make sure that we have a good Capital Management and the good Capital location. You

Miguel Bragança: We will be in the market seeing what are the conditions. Depending on the conditions, we may resort to them or not, but we will always be prepared. In terms of... We will be in the market, continuously in the market. It's not something, I would say, abnormal. It's something that's part of our business. It's like quoting a credit or quoting a deposit. In terms of the credit, we are a very focused organization. We believe very much in discipline and in prioritizing.

Miguel Bragança: It is like quoting a credit or quoting a deposit. In terms of the credit we have, I would say we are a very focused organization and we believe very much in discipline and in prioritizing. We have also very good solutions for some of our clients, both in terms of user experience and in terms of the credit lines that can be used, be it government guaranteed, similar to the ECO that you have in Spain, that we here in Portugal call SGMs. Insurance products that sometimes are interesting. We have here some differentiating products that may allow the customers to finance themselves at a lower cost to some extent, because it also consumes less capital than what they otherwise would cost. Our competitive advantage in Portugal lies more on the SMEs, both the smaller sized SMEs and the larger SMEs, than in the large corporate.

You're right there. So make srts in Poland, uh, coming to an end. We will be in the market seeing what are the conditions, and depending on the conditions, we, we may resort to them or not but we will always be, uh, prepared in terms of um, and we will be in the market continuously in the market. It's not something. I would say, abnormal something that's part of our business is part is like quoting a a credit or quoting a deposit in terms of the credit.

We have a, I would say.

Miguel Bragança: We have also very good solutions for some of our clients, both in terms of user experience and in terms of the credit lines, so to say, that can be used, be it government guaranteed, similar to the ICO that you have in Spain, that we here in Portugal called SGMs. Insurance products that sometimes are interesting. We have here some differentiating products that may allow the customers to finance themselves at a lower cost to some extent, because it also consumes some less capital than what they otherwise would cost. Our competitive advantage in Portugal lies more in on the SMEs, both the smaller size SMEs and the larger SMEs than in the large corporates.

User experience. And in terms of the, of the, the credit lines. So to say that can be used bit, uh, uh, government guaranteed similar to the, to the Eco that you, you have in Spain, uh, that that we here in Portugal called sgms, uh, Insurance products that sometimes are interesting. So, we have here, some, uh, differentiating products that may allow the customers to finance themselves at a lower a lower cost to some extent, because it also consumes some less Capital than what they otherwise would would cost our competitive advantage in Portugal. Lies more in on the smes both the

Miguel Bragança: We do have relationships with the large corporate, but where we are more different, where we have more differentiating solutions, is more on this area. Our growth has been much more granular, has been diversified, and has been more concentrated on the SME sector than on the large corporates. Not any special sector, of course, we have the sectors, but the distribution of sectors of the Portuguese economy, but not any special sector, but more the SMEs, as I am commenting. Thank you.

Miguel Bragança: We do have relationships with the large corporate, but where we are more different, where we have more differentiating solutions is more on this area. Our growth has been much more granular, has been diversified, and has been more concentrated on the SME sector than on the large corporate. Not any special sector. Of course, we have the sectors, the distribution of sectors of the Portuguese economy, but not any special sector. More the SMEs, as I am commenting.

Smaller size and the larger smes then in the large corporates. So we we do have relationships with the large corporate but uh where we are more different where we have more, more differentiating solutions is more on this area. So the our growth has been much more granular has been Diversified and has been more concentrated on the SME sector then on the large corporate and not any special uh sector. Of course we have the sectors the distribution of sectors of the of the Portuguese economy but not any special sector uh but uh more the SMS as I am commenting.

Cecilia Romero: Thank you.

Francisco Riquel: Thank you.

Operator: We are now going to proceed with our next question. The questions come from the line of Luis Emmanuel Grillo Pratas from Autonomous Research. Please ask your question.

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

Thank you.

We are not going to proceed with our next question.

And the questions come from the line of Luis Manuel guilo pratas from UTSA research. Please ask your question.

Miguel Bragança: Good afternoon. Thank you for taking my questions. My first one is on the group net income in 2025. If I'm not mistaken, when the year started it was mentioned that it would be possible for the group to match the €900 million bottom line achieved in 2024. If I apply the quarterly run rate achieved already in the first nine months of this year, the bank may first hit also the record €1 billion in 2025. I wanted to ask you if this could be possible already or if you are thinking about a different number. My second question is regarding inorganic opportunities in Poland. Could you consider any opportunity to accelerate the corporate growth strategy there or could you think about maybe buying the minorities in Poland as well? Thank you.

Luis Pratas: Good afternoon. Thank you for taking my questions. My first one is on the group net income in 2025. If I'm not mistaken, when the year started, it was mentioned that it will be possible for the group to match the EUR 900 million bottom line achieved in 2024. If I apply the quarterly run rate achieved already in the first nine months of this year, you know, the bank may run ahead of the record EUR 1 billion in 2025. I wanted to ask you if this could be possible already or if you are thinking about a different number. My second question is regarding inorganic opportunities in Poland. Could you consider any opportunity to accelerate the corporate growth strategy there? Could you think about maybe buying the minorities in Poland as well? Thank you.

Luis Manuel Grillo Pratas: Good afternoon. Thank you for taking my questions. My first one is on the group net income in 2025. If I'm not mistaken, when the year started, it was mentioned that it will be possible for the group to match the EUR 900 million bottom line achieved in 2024. If I apply the quarterly run rate achieved already in the first nine months of this year, you know, the bank may run ahead of the record EUR 1 billion in 2025. I wanted to ask you if this could be possible already or if you are thinking about a different number. My second question is regarding inorganic opportunities in Poland. Could you consider any opportunity to accelerate the corporate growth strategy there? Could you think about maybe buying the minorities in Poland as well? Thank you.

Good afternoon. Thank you for taking my questions. My first 1 is on the group. Net income in 2025, if I'm not mistaken. When the year starts, it was mentioned that it will be possible for the group to match the, the 900 million. Bottom line achieved in 2024, if I apply the quarterly run rate that she's already in the first 9 months of this year.

Uh, you know, the bank, May 1, I had of the record $1 billion in 2025. So I wanted to ask you, uh, if this could be possible already or if you are thinking about a different number. And then my second question is regarding inorganic opportunities in Poland. Could you consider any opportunity to accelerate the corporate growth strategy there? Or could you think about maybe buying the minorities in Poland as well? Thank you.

Miguel Bragança: Starting with your last question. In terms of minorities in Poland, we right now, our exposure to Poland is broadly, slightly below 20% of our value, 20% of our market cap. We think Poland has a very interesting business case. We are very bullish in Poland. However, there are still some risks that probably would advise us to maintain this type of exposure of 20% of our market cap that we have right now. It is not our intention, so to say, to increase our exposure to Poland right now, or at least until these more, I would say, political slash regulatory risks decrease materially. This is our risk appetite right now. We do not have any plan to buy minorities.

um,

Miguel Bragança: Starting with your last question in terms of minority in Poland, right now our exposure to Poland is broadly slightly below 20% of our value, 20% of our market cap. We think Poland has a very interesting business case. We are very bullish in Poland. However, there are still some risks that probably would advise us to maintain this type of exposure of 20% of our market cap that we have right now. It is not our intention, so to say, to increase our exposure to Poland right now, or at least until these more, I would say, political regulatory risks decrease materially. This is our risk appetite right now. We do not have any plan to buy minorities. To make a long story short, inorganic opportunities in Poland, we could consider inorganic opportunities to accelerate our corporate growth, but there are none.

Starting starting with your last question. Uh, in terms of minority in Poland, who, who right now? Right now our exposure to Poland is broadly uh slightly below, 20% of our well, 20% of our market cap.

Uh, we think Poland has a very interesting business case. We are very bullish in in Poland. However, they are still some risks.

Uh that probably would advise us to maintain this type of exposure of 20% of our market cap that we have right now. So it is not our intention. So to say to increase our exposure to Poland right now, uh, or at least until

Miguel Bragança: To make a long story short. Inorganic opportunities in Poland, we could consider inorganic opportunities to accelerate our corporate grade growth there, but there are none. I mean, there are not any targets that I know of at least that is for sale, that would accelerate our growth in terms of corporate loan growth in Poland. It is a very theoretical question. In terms of bottom line, I mean, it is not our policy to give round numbers in terms of bottom line. We comment on the results. We explain the dynamics of the results. Of course, this is equity. It's not fixed income. Equity is by its own nature, dependent on performance and the macro issues and so on.

Miguel Bragança: I mean, there is not any target that I know of, at least, that is for sale and that would accelerate our growth in terms of corporate loan growth in Poland. It is a very theoretical question. In terms of bottom line, it is not our policy to give round numbers in terms of bottom line. We comment on the results, we explain the dynamics of the results. Of course, this is equity, it's not fixed income. Equity is by its own nature dependent on performance and the macro issues and so on. Any one of us may have its own ideas, its own vision in terms of interest rates, in terms of the macro environment, in terms of what will happen. For us it's much more important to show how we work and how we react to different assumptions than to give a round number.

Until, uh, these uh, um, more I would say political slash regulatory risks, decrease materially. Uh, um, this is our risk appetite right now. So we, we do not have any plan to buy minorities to make a, a long story short inorganic opportunities in Poland, uh, we we could consider inorganic opportunities to accelerate our corporate grade growth there. But, there are none. I mean, they are not not any Targets, uh, that I know of at least, that is for sale. And that would accelerate our, uh,

uh, growth in terms of

Uh, corporate loans in Poland or...

So it is a very theoretical question.

In terms of bottom line. I mean uh, it is not our policy to give round numbers in terms of bottom line. So we come and we comment on the, on the, on the results. We explained the Dynamics of the results.

Of course, this is equity. It's not fixed income.

Miguel Bragança: I mean, any one of us may have its own ideas, its own vision in terms of interest rates, in terms of interest rate, in terms of the macro environment, in terms of what will happen. For us, it's much more important to show how we work and how we react to different assumptions than to give a round number that would always be somewhat theoretical, because this is equity, it's not fixed income.

Miguel Bragança: That would always be somewhat theoretical because this is equity, it's not fixed income.

How we work and how we react to different assumptions then to give, uh, a round number. That has always been somewhat theoretical because this is equity; it's not fixed income.

so,

Operator: We are now going to proceed with our next question. The questions come from the line of Alvaro Fernandez-Garayzabal from UBS. Please ask your question.

Operator: We are now going to proceed with our next question. The question comes from the line of Alvaro Fernandez from EBS. Please ask the question.

We are now going to proceed with our next question.

Alvaro Fernandez: Yeah, thanks. Good afternoon, and thanks for taking my questions. I have two. First, a follow-up on capital. If you could walk us through the different moving parts for Q4. I don't know if you're expecting any regulation, either positiveCadill, you mentioned in the past that part of the Basel IV impact could be gradually reversed. You also have the DTA impact in Portugal. I don't know if you could quantify that. Depending on the quarter, you could be active on SRTs. I don't know if you have anything in the pipeline at the moment. Basically, your view on capital for Q4, and if we should expect the CT1 levels to increase in the last quarter.

. Álvaro Fernández: Yeah, thanks. Good afternoon, and thanks for taking my questions. I have two. First, a follow-up on capital. If you could walk us through the different moving parts for Q4. I don't know if you're expecting any regulation, either positiveCadill, you mentioned in the past that part of the Basel IV impact could be gradually reversed. You also have the DTA impact in Portugal. I don't know if you could quantify that. Depending on the quarter, you could be active on SRTs. I don't know if you have anything in the pipeline at the moment. Basically, your view on capital for Q4, and if we should expect the CT1 levels to increase in the last quarter.

Miguel Bragança: Thanks.

And the questions come from the line of Álvaro Fernández from EBS. Please ask a question.

Miguel Maya: Good afternoon, and thanks for taking my questions.

Bernardo Collaço: I have two. First, a follow-up on capital.

Miguel Bragança: If you could walk us through the.

Miguel Maya: Different moving parts for Q4. I don't know if you're expecting any regulation either positive. You mentioned in the past that part of the Basel IV impact could be gradually reversed. You also have the DTA impact in Portugal. I don't know if you could quantify that. Also, depending on the quarter, you could be active on SRTs. I don't know if you have anything in the pipeline at the moment.

Yeah, thanks. Good afternoon, and thanks for taking my questions. I have to first follow up on Capitol, if you could walk us through the different moving parts for Q4, I don't know if you're expecting any regulation, either positive,

Bernardo Collaço: Basically your view on capital for.

Miguel Maya: Q4, and we should expect CET1 levels to increase in the last quarter. On Mozambique, when do you expect the unit to recover normalized earnings levels of around $100 million pre-minorities per annum? Thanks.

Alvaro Fernandez: On Mozambique, when do you expect the unit to recover normalized earnings levels of around EUR 100 million pre-minorities per annum or less? Thanks.

. Álvaro Fernández: On Mozambique, when do you expect the unit to recover normalized earnings levels of around EUR 100 million pre-minorities per annum or less? Thanks.

Got it. If you mentioned in the past that part of the Basel for impact could be gradually reversed. Then you also have the DTA impact in Portugal. I don't know if you could quantify that. And also, depending on the quarter, you could be active on SRTs. I don't know if you have anything in the pipeline at the moment. So basically, your view on capital for Q4 and if you wish, should we expect a CET1 level to increase in the last quarter and then almost a big drop? When do you expect the unit to recover normalized earnings levels of around €100 million pre-minorities per annum? Thanks.

Miguel Bragança: Okay. Starting with Mozambique. Mozambique, as you know, had a political change some months ago. The transition, as it sometimes happens in young countries, was more controversial than it is in, so to say, in older democracies. This generated some turbulence in the market, some uncertainty. This had also played its toll in terms of GDP. Now the country is recovering. Exactly at what speed it will recover totally is particularly difficult to say. I would say probably that 2026 will not be a normal year yet. 2027 will already be close to normal. I would say that's basically what we are working with, 2028 totally normal. That's what we are expecting, with all the mitigants that you have to understand that we, and all the disclaimers that we have to put in such a vision.

Miguel Bragança: Okay. Starting with Mozambique. Mozambique, as you know, had a political change some months ago. The transition, as it sometimes happens in young countries, was more controversial than it is in, so to say, in older democracies. This generated some turbulence in the market, some uncertainty. This paid its toll in terms of GDP, and now the country is recovering. Exactly at what speed it will recover totally is particularly difficult to say. I would say probably that 2026 will not be a normal year yet. 2027 will already be close to normal, I would say. Not, that's basically what we are working on. The 2028, totally normal.

Okay. Um,

starting with, uh, Mozambique

Mozambique, as you know, had a political change a few months ago.

The transition as it sometimes happens in young countries uh was more controversial than it is in. So to say in in older democracies

and so this generated some, some turbulence in the markets and uncertainty this had also it this

By its tall in terms of GDP. Uh and now the country is recovering exactly at what speeds it will, it will recover. Totally is particularly difficult to say, but I, I would say probably that 26 will not be a normal year yet.

Miguel Bragança: That's what we are expecting with all the mitigants that you have to understand that we and all the disclaimers that we have to put in such a vision. It's just, so to say, an expert judgment from institution that has been for some decades in the country. In terms of capital, we do not give such precise guidance quarter-on-quarter, especially for the next quarter. What I can tell you is that we have presented a plan. Our plan is to consume our excess capital through growth. This is our plan. Over the plan, this means that our capital ratio will go down.

Miguel Bragança: It's just, so to say, an expert judgment from an institution that has been for some decades in the country. In terms of capital, we do not give such precise guidance quarter on quarter, especially for the next quarter. What I can tell you is that we have presented a plan. Our plan is to consume our excess capital through growth. This is our plan. Over the plan, this means that our capital ratio will go down, will not stay stable. When we say that we will use our capital to finance growth, this means that the capital ratio instead of growing will go down, because else, this would be a contradiction with what we are saying. This is exactly what is in the plan. You cannot have the cake and eat it.

27 will already be close to normal. I would say not, uh, that's basically what we are working. What the 28th, totally, totally normal. That's what we are expecting with, with all the meetings that you have to understand that we, and while all the disclaimers that we have to put in such a, in such a vision, it's just so to say, an expert judgment from institution that has been for, for some decades, in the, in the country.

And in terms of capital, we do not give such precise guidance quarter on quarter, and especially for the next quarter. What I can tell you is that we have presented a plan.

Our plan.

To consume our excess capital through growth. This is our plan.

uh so uh, over the over the plan,

This means.

Miguel Bragança: It will not stay stable, because, I mean, when we say that we will use our capital to finance growth, this means that the capital ratio, instead of growing, will go down, because else, I mean, this would be a contradiction with what we are saying. This is exactly what is in the plan. You cannot have the cake and eat it. If you want to grow in credit, and you believe that credit is profitable, of course, over the short term, this has negative impact on capital. Over the longer term, as we know, as the credit starts generating income, this pays for the cost of capital, and this generates value for the for the shareholders. In terms of SRTs, I have already commented the SRT.

That our Capital ratio will go down, not by stay stable. Because I mean when we say that we will use our Capital to finance growth, this means that the capital ratio instead of growing will go down because also I mean this would be a contradiction with what we are saying.

Miguel Bragança: If we want to grow in credit, and if you believe that credit is profitable, of course over the short term this has negative impact on capital. Over the longer term, as we know, as the credit starts generating income, this pays for the cost of capital and this generates value for the shareholders. In terms of SRTs, I have already commented the SRT. We do an analysis based on the cost of the SRTs versus the cost of equity. Depending on the cost of the SRT, we may resort to more and less. I don't think it makes sense to pre-commit to any SRTs right now because it depends on the price.

Uh, but this is exactly what is in the plan. So you cannot have the cake and eat it. So, uh, uh, if you want to grow in credit and you believe that credit is profitable, of course, over the short term, this has a negative impact on capital. Over the longer term, as we know, as the credit starts generating income, the space for the cost of capital increases, and this generates value for the uh, for the uh uh uh,

Miguel Bragança: We do an analysis based on the cost of the SRTs versus the cost of equity. Depending on the cost of the SRT, we may resort to more and less. I don't think it makes sense to pre-commit to any SRTs right now because it depends on the price. In terms of the tax reduction in Portugal, as I commented here, in the previous conference, we expect that the present legislation impact on our DTAs will mean an impact in terms of capital of around 15 basis points.

For the shareholders. Uh, um, in terms of asset is I have already commented the SRT, so we, we, we do, um, an analysis based on the cost of of the SRT is versus the cost of equity. So, depending on, uh, the cost of the site, you may resort resort to more unless and I don't think it makes sense to pre-commit to any srts right now because it depends on the on the price.

Miguel Bragança: In terms of the tax reduction in Portugal, as I commented here in the previous conference, we expect that the present legislation impact on our DTIs will mean an impact in terms of capital of around 15 basis points. Of course, this depends on the size of the DTAs, on the projections and so on, but this is around 15 basis points, what we are expecting, as I commented in the last conference here. Thanks.

Conference, we expect that the presence.

Miguel Bragança: Of course, it depends on the size of the DTAs, on the projections and so on, but this is around 15 basis points, what we are expecting. As I commented in the last conference here.

Uh, legislation, uh, impact on our dtas, will mean an an impact in terms of capital of around 15 basis points. Of course, this depends, uh, on the, on the size of the toss on the projections and so on. But this is around 15 basis points. Uh uh what what we are expecting

Alvaro Fernandez: Thanks.

. Álvaro Fernández: Thanks.

as I commented in the last conference here,

thanks.

Operator: Thank you. We are now going to proceed with our next question. The questions come from the line of Dimitri Kurgan from Mediobanca.

Operator: Thank you. We are now going to proceed with our next question. The question comes from the line of Dimitri Gogan from Ideabanka.

Thank you. We are now going to proceed with our next question.

and the question comes from the line of Demitri again from Edio, Banca.

Miguel Bragança: Yeah, one question on term deposits. Basically, I've noticed Q2 quarter on quarter there was an uptick in short term deposits as part of total deposits. I just want to ask, given that in euro area rates are stabilizing and we're at the end of a rate cutting cycle, do you expect current trend to continue or do you expect the demand deposits to pick up in the coming years? Yeah, I mean term deposits and demand deposits address different needs of the customers. When we speak about retail, what we have been seeing already for some time is some stabilization in terms of the mix of term and demand deposits. We are having here a stabilization in terms of term and demand deposits.

Dimitri Gogan: Yeah. One question on term deposits. Basically, I've noticed quarter-on-quarter, there was an uptick in share of term deposits as part of total deposits. I just want to ask, given that in euro area rates are stabilizing and we're at the end of a rate cutting cycle, do you expect current trend to continue, or you expect the demand deposits to pick up in the coming years or? Yeah.

Yeah, 1 question on term deposits. Uh, so basically, I've noticed you to a quarter on quarter. There was an uptick in short-term deposits as part of part of the deposit and shown to us given that in Euro area, rates was stabilizing and where at the end of the rate cutting cycle, do you expect?

Current Trend to continue or you expect the demand deposits to pick up in the coming years or yeah.

Miguel Bragança: I mean, term deposits and demand deposits address different needs of the customers, no. When we speak about retail, what we have been seeing already for some time is some stabilization in terms of the mix of term and demand deposits. We are having here a stabilization in terms of term and demand deposits. The fact that sometimes the we have more term deposits than demand deposits in any given quarter may be more linked to some special deposits that may come from large corporates than anything else. To give you an idea, in terms of individuals, our current accounts represents more or less 45% to 46% of the total on balance sheet funding from individuals.

The, I mean 10 deposit and demand, deposits.

Um, address different needs of the customers now.

When we speak about retail.

Uh, what we have been seeing already. For some time is some stabilization in terms of the mix of, uh, term and, uh, and demand deposit. So we are having here stabilization in terms of of term, and demand deposits.

uh, when we

Miguel Bragança: The fact that sometimes we have more term deposits than demand deposits in any given quarter may be more linked to some special deposits that may come from large corporates than anything else. To give you an idea, in terms of individuals, our current accounts represent more or less 45% to 46% of the total on balance sheet funding from individuals. This has been stable since September 2024. In terms of corporates, it is more or less also two thirds demand deposits and one third term deposits, also quite stable, but with some volatility in terms of large deposits of large corporates. I would not read anything special in terms of any quarter on quarter evolution because the underlying trend is quite stable. Another thing is whether we want to quote a larger deposit or not on a larger corporate or institutional investment. Thank you.

Miguel Bragança: This has been stable since September 2024. In terms of corporates, so to say, it is more or less also two-thirds demand deposits and one-third term deposits. Also quite stable, but with some volatility in terms of large deposits of large corporates. I would not read anything special in terms of any quarter-on-quarter evolution because the underlying trend is quite stable, and the thing is whether we want to quote a larger deposit or not on a larger corporate or institutional investors.

the the fact that sometimes the, we have more term deposits that demand deposits in any given quarter, maybe more linked to a specialist to some special deposits that may come from, uh, from large corporates then, then anything else to give you an idea, uh, our term in, in terms of individuals, our, Uh, current accounts, uh, uh, represents more or less, uh, 45 to 46% of the total on balance sheet funding from individuals. And this has been stable since September and 24.

Hugo Cruz: Thank you.

Dimitri Gogan: Thank you.

And in terms of uh, corporates so to say it is more or less. Also 2 thirds demand deposits and 1. Third uh, 10 deposit also, quite stable, quite stable. But uh, with some volatility in terms of large deposits of large corporates, so I would not read anything special in terms of any quarter on quarter Evolution because the underlying Trends is quite stable. And I think is whether we want to to quote a larger deposit or not on a, on a larger corporate or Institutional Investor

Thank you.

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

We are now going to proceed with our next question.

Hugo Cruz: Hi. Thank you for the time. Just two questions. One is on the bank levies in Portugal. You know, there's been some noise in the press, you know, one of the levies has been kind of declared unconstitutional. The government said, I think that they will find some other way, you know. I think the banks have been fighting the others as well. You know, what's the latest story there? Do you expect any change, material change going forward on bank levies in Portugal? Secondly, I'm trying to reconcile the, you know, your comments on the loan growth. It's been very strong on corporates and so on. You know, if you want to grow in corporates, why shouldn't we see margin expansion, you know, NIM?

Miguel Bragança: I thank you for the time.

And the question comes from that. I know if you go cruise from KBW, please ask a question.

Bernardo Collaço: Just two questions.

Miguel Bragança: One is on the bank levies in Portugal. There's been some noise in the press. One of the levies has been kind of declared unconstitutional and the government said that they will find some other way. I think the banks have been fighting the others as well. What's the latest story there? Do you expect any material change going forward on bank levies in Portugal? Second, I'm trying to reconcile your comments on the loan growth. It's been very strong on corporates and so on. If you want to grow in corporates, why shouldn't we see margin expansion? Why shouldn't the NII grow faster than loans if you basically, in theory, are taking more risk by going to corporate? How do you think about that, both in terms of what the corporate growth does for your NIM, but also how our front book and back book margins compare?

Um, I thank you for the time. I just 2 questions 1 is on the bank. Web is in Portugal, you know. There's there's been some noise in the Press, you know, 1 of the, the levies has been kind of declared. And, and, and constitutional. And the government said, I think that you will find some other way, you know, I think the banks have been fighting the, the others as well. So you know what's the latest story there? Do you, do you expect any change material, change. Going for you on Bank? Where is in Portugal?

and then, secondly, I'm trying to reconcile the

you know your comments on on the loan growth, it's been very strong on corporate and so on, but you know,

Hugo Cruz: Why shouldn't the NII grow faster than loans if you basically, in theory, are taking more risk by going to corporates? You know, how do you think about that, both in terms of what the corporate growth does for your NIM, but also, you know, how front book and back book margins compare? If you want to just talk about Portugal, that would be very helpful. Thank you.

If you want to grow in corporates uh why shouldn't? So my question is why shouldn't we see margin expansion? You know mean so why shouldn't the knee grow faster than loans? If you basically interior taking more Risk by going to corporates. So you know how do you think about that?

uh, but in terms of what the corporate growth does for your,

Miguel Bragança: If you want to talk about Portugal, that would be very helpful, thank you. First, starting with your last question, I'm not speaking about a NIM expansion. On the contrary, what I'm commenting is quite a NIM stabilization, but with the growth of the NII aligned with the volumes, so it's a little bit different. What I'm saying is that a reasonably stable NIM means that the NII grows aligned with the volumes. Nevertheless, there are multiple parts, but there is a positive part. The positive part is that as we change the structure of our balance sheet with more credit than we have right now, what we will see is that a part of our sovereign debt portfolio will mature and we will invest it in corporate credit that has a higher spread, of course, with slightly more risk, if we do it correctly, than the sovereign debt.

Name. But also, you know, our front book and back book margins compared. Um, and if you want to talk about Portugal, that to be very helpful. Thank you.

Miguel Bragança: First, I'm not speaking, starting with your last question, I'm not speaking about a NIM expansion. On the contrary, what I'm commenting is quite a NIM stabilization, but with the growth of the NII aligned with the volumes. It's a little bit different. What I'm saying is that a reasonably stable NIM, so that the NII growth grows aligned with the volumes. Nevertheless, there are here multiple parts there, but there is a positive part, so to say.

Uh, first, I I'm not speaking uh, uh, starting with your last question, I'm not speaking about a Nim expansion on on, on the country. What I'm commenting is quite a mean stabilization but with the growth of the knee aligned

With the volume, it's a little bit different. What I'm saying is that a reasonably stable name.

Both grow aligned with the volumes.

Miguel Bragança: The positive part is that as we change the structure of our balance sheet with more credit than we have right now, what we will see is that a part of our, so to say, sovereign debt portfolio will mature, and we will invest it, so to say, in corporate credit that has a higher spread, of course, with slightly more risk, if we do it correctly than the sovereign debt. One of the reasons that will contribute positively to our NIM is this rebalancing, so to say, of our balance sheet with more credit and less, so to say, institutional investment in, in sovereign debt. There are other negatives, other negative parts, so that the NIM will be broadly constant in Portugal. In terms of the bank levy, you can have...

Nevertheless, there are multiple parts here, but there is a positive part. So, to say the positive part is that as we change the structure of our balance sheet with more credit, we have right now, what we will see is that.

Miguel Bragança: One of the reasons that will contribute positively to our NIM is this rebalancing of our balance sheet with more credit and less institutional investment in sovereign debt. Then there are other negative parts so that the NIM will be broadly constant in Portugal. In terms of the bank levy, I don't want to make it too complex, but in the Portuguese legislation you can have contributions or you can have taxes. If you have contributions, in theory, for them to be legal, the sector as a whole has to somehow benefit from them because else it's not a contribution, it's a tax. If you have a tax, you don't have a special benefit to this, to the sector. It has to be, so to say, it has to be non-discriminatory by sector. The fact that basically what the previous government had designed was a tax that was discriminatory.

A part of the of our, uh, so so to say sovereign, debt portfolio will mature and we will invest it. So, to say in corporate credit that has a higher spread, of course, with slightly more risky. If we do it correctly, then the sovereign debt. So 1 of the reasons that that will contribute positively to our name is this re re rebalancing. So to say of our balance sheet with more credit and less so, to say institutional investment in in in in solving that uh then there are the negative as a negative part. So that the mean will be broadly constant in Portugal in terms of the bank Levy, uh,

Miguel Bragança: I don't want to make it too complex, but in the Portuguese legislation, you can have contributions or you can have taxes. Okay? If you have contributions, in theory, you should for them to be legal, the sector as a whole has to somehow benefit from it, because else it's not a contribution, it's a tax. If you have a tax, you don't have a special benefit to the sector, but it has to be, so to say, it has to be non-discriminatory by sector. The fact that basically what the previous government had designed was a tax that was discriminatory. According to the Portuguese constitution, there is the principle of equality, and a tax cannot be discriminatory. Okay? I think there is the principle of the equality.

You can have.

I don't want to to, to make it to to, to complex, but but in in the Portuguese legislation, you can have contributions or you can have taxes.

Okay.

If you have contributions in theory, you should the for them to be legal the sector as a whole has to somehow benefit from him. Because else it's not a contribution is a is a tax.

if you have a tax,

You don't have a special benefits to the to the sector, uh, to the sector but it has to be. Uh, so to say, it has to be non-discriminatory by sector.

And the fact that, uh, basically what the previous government had designed was a tax.

Miguel Bragança: According to the Portuguese constitution, there is the principle of equality and a tax cannot be discriminatory. I think that is the principle of equality, egalité, as the French say. This comes from the French Revolution to most of the modern constitutions. A tax cannot discriminate against a sector. I think this is in principle, I think this is very important. This levy that we had in the past was a tax that was discriminatory, so was judged unconstitutional and that's why it was declared null and void. That's why we are receiving back what we paid in the past. The situation which we have right now is that the Constitutional Court has declared it unconstitutional. The several processes that we have in court are incorporating the decision of the Constitutional Court in their final decisions as they decide.

That was discriminatory, and according to the Portuguese Constitution, there is the principle of equality, and attacks cannot be discriminatory.

Miguel Bragança: Égalité, as the French say. This comes from the French Revolution to most of the modern constitutions. A tax cannot discriminate against a sector. I think this is in principle, so I think this is very important. This levy that we had in the past was a tax that was discriminatory, so was judged unconstitutional. That's why it was declared null and void. That's why we are receiving back what we paid in the past. The situation which we have right now is that the Constitutional Tribunal has declared it unconstitutional. The several processes that we have in court are incorporating the decision of the Constitutional Tribunal in their final decisions.

okay, so I think there's a principle of the equality

Equality as a French side. So this is comes from the French Revolution until most of the modern constitutions. So, um, a text cannot discriminate against a sector, I think this is in principle. So I think this is very important.

So the the levy that we had in the past was a text that was discriminatory, so was judge in constitutional. And so that's why the it was declared null and void. That's why we are receiving back. What we paid in the past.

Miguel Bragança: As they decide, of the 5 decisions that we were expecting, we have already obtained 3, we received them, the money back, and we Regular PNL, okay? This is what happened. In terms of legal media buzzword, what the government said is that they will try to find another source of revenue. For us, first, this was not a key source of revenue. I think it's important to know this is not something that affects tremendously the Portuguese government budget. I think it's important. It's not something that is critical. Secondly, I think that if they want to define a new source of revenue, if it is a tax, it has to be in principle non-discriminatory.

Miguel Bragança: Of the five decisions that we were expecting, we have already obtained three. We receive the money back and we ran our P&L. This is what happened in terms of legal media buzzword, what the government said is that they will try to find another source of revenue for us. First, this was not a key source of revenue. I think it's important to know this is not something that affects tremendously the Portuguese government budget. I think it's important. It's not something that is critical. Secondly, I think that if they want.

So the situation which we have right now is that the, the, the question of court has declared it unconstitutional. So the several, uh, processes that we have in in court, are incorporating. These decision of the Constitutional Court in their final decisions, and as they decide and of the 5 deck that we were expecting, we are have already obtained 3, uh, we received them the money back and we, uh, and we

Read our pnl. Okay, this is what happened in terms of um, uh, of legal media. Buzzword.

What's the the the government said is that they will try to find uh uh another source of Revenue.

Uh, for us.

Uh, first, this was not a key source of revenue. I think it's important to know this is not something that affects tremendously the Portuguese, uh, the Portuguese government budget. I think it's important, so it's not something that is critical.

Bernardo Collaço: To.

Miguel Bragança: Define a new source of revenue, if it is a tax, it has to be in principle non-discriminatory. Let's see what they come up with. I mean, it would also be a little bit contradictory because they are just reducing taxes. We don't have any additional information that's not the public information. We think that the most probable scenario for us is that nothing is imminent. Of course, we will have to wait and see. Thank you.

secondly, I think that if they want to

Miguel Bragança: Let's see what they come up with. I mean, it will also be a little bit contradictory because they are just now reducing taxes. We don't have any additional information that's not the public information. We think that the most probable scenario for us is that nothing is eminent. Of course, we will have to wait and see.

To, uh, define a new source of revenue. If it is a tax, it has to be, in principle, nondiscriminatory. Let's say what they come up with. I mean, it would be a little bit contradictory because they are just now reducing taxes. So, uh, we don't have any additional information; that's not the public information. We think that, uh, the most probable scenario for us is, uh, that nothing is imminent.

But of course, we have to we we have to to wait and see.

Borja Ramirez Segura: Thank you.

Hugo Cruz: Thank you.

Operator: We are now going to proceed with our next question. The questions come from the line of Polya Ramirez from Citi. Please ask your question.

Operator: We are now going to proceed with our next question. The question's come from the line of Borja Ramirez Segura from Citi. Please ask your question.

Thank you.

We are now going to proceed with our next question.

And the questions come from the line of Polia Ramirez from City. Please ask a question.

Miguel Maya: Hello, good afternoon. Thank you very much for taking my questions. I have two questions, please.

Borja Ramirez Segura: Hello. Good afternoon. Thank you very much for taking my questions. I have two questions, please. Firstly, on Poland, if you could kindly update on the, how should we think about the NII next year? Also if you could maybe provide your views on the Polish bank tax impact. Then, secondly, I would like to ask how should we think about costs at the group level for this year, please?

Hello, good afternoon. Thank you very much for taking my questions.

I have a 2 questions, please.

Miguel Bragança: Firstly, on Poland, if you could kindly update on how should we think about the NII next year?

Miguel Maya: If you could maybe provide your views on the Polish bank tax impact. Secondly, I would like to.

On the um how should we think about the knee next year?

and also, if you could maybe

provide a, a

Your views on the Polish, fun facts.

Miguel Bragança: How should we think about costs at the group level for this year, please? I'm sorry, your last question is, if you could please provide guidance for costs at group level, please. In terms of costs, the guidance in terms of growth right now is broadly aligned with the year-on-year evolution that we are having until Q1. That's probably what I would like to say at this moment. In terms of the impact in terms of tax, as you know, they will depend on the final version of the law. It's expected to be published in November, and it will be very dependent also in terms of the time scaling of the law. We are still of our time scaling of the PBT. As you know, the tax rate will start increasing from 19% to 30% in 2026, but then will go down to 26%.

Impact, and then, secondly, I would like to ask how should we think about post at a group level for this year, at least?

Miguel Bragança: I'm sorry, your last question is?

Borja Ramirez Segura: Sorry, if you could please provide guidance for costs at group level, please?

I'm sorry. Your last question is.

So, if you could, please provide guidance for costs at the group level, please.

Miguel Bragança: In terms of costs, the guidance in terms of growth will be right now is broadly aligned with the year-on-year evolution that we are having until the Q9. That's probably what I would like to say at this moment. In terms of the impact in terms of tax, as you know, they will depend on the final version of the law. It's expected to be published in November. It will be very dependent also in terms of the time scaling of the law. We are still of our time scaling of the PBT.

Uh, in terms, of course, the guidance in terms of growth will be uh, right now is broadly aligned with the year on year uh uh Evolution that we are having uh, until the uh, the q9. So that's that's probably what I would like to say it is it is moment in terms of um, the the impact in terms of uh, uh,

Tax as you know, uh uh they will depend on on the final version of the law. It's expected to be published in November uh and it will be very dependent. Also in terms of the time scaling of the of the the law, we are still uh of our time. Scaling of the, the

Miguel Bragança: As you know, the tax rate will start increasing from 19 to 30% in 2026, but then it will go down to 26%. I'm sorry, 19 to 30% in 2026, then it will go down to 26% in 2027 and 23% in 2028. The computation of all of this is quite complex. We are waiting for the final version of the law. Before that, I think it's not correct to comment on this. Our base case in Poland is for interest rates to continue to decline until reaching 3.5% during 2026. In spite of this important decline, we expect the NII to be quite resilient. That's what we are saying right now. To be broadly, I would say broadly constant, but quite resilient.

Miguel Bragança: I'm sorry, 19% to 30% in 2026. Then it will go down to 26% in 2027 and 23% in 2028. The computation of all of this is quite complex. We are waiting for the final version of the law. Before that, I think it's not correct to comment on this. Our base case in Poland is for interest rates to continue to decline until reaching 3.5% during 2026. In spite of this important decline, we expect the NII to be quite resilient. That's what we are saying right now and to be broadly, I would say, broadly constant, quite resilient, and that's our base case. This means, as we are going in volumes, of course, that the NIM will compress somewhat. The NIM will compress somewhat, but the NII will be quite resilient.

The PBT as you know the tax rate will start increasing from 19 to 30% in 26. But then we will go down to 26 and 19 to 1326. Then it's called will go down to 26% in 27 and 23% in 28. So the computation of all of this is quite complex. We are waiting for the, uh, for the final version of the law and B. And before that, I think it's uh, not not correct to to to, to comment on this. Um, our base case in Poland is for interest rates, to continue to decline, uh, until uh reaching uh, 3 and a half percent during 26, in spite of these uh, important decline.

Miguel Bragança: That's our base case. This means, as we are going in volumes, of course, that NIM will compress somewhat. The NIM will compress somewhat, but the NII will be quite resilient. That is.

We expect the knee to be quite resilient. That's what we are saying right now. And to be broadly, I would say, broadly constant; we're quite resilient. Uh, and that's our base case. This means, as we are going in in volumes, of course, that mean will compress somewhat. So, the mean will compress and what, but yet, I will be quite resilient.

Operator: We are now going to proceed with our next question. The question's come from the line of Fernando Gil de Santivañes from Intesa Sanpaolo. Please ask your question.

Operator: We are now going to proceed with our next question. The questions come from the line of Fernando Gil de San Vicente from Intesa Sanpaolo. Please ask your question.

We are not going to proceed with our next question.

Miguel Bragança: Hello. Thank you very much. Two questions, if I may please. First one is regarding the securities portfolio. There is a nice amount of this year, and I wonder what is the strategy on the reinvestment and how far can you increase the portfolio going forward? I see it has nicely increased during the last year, especially regarding the Polish bonds. Second, related to the Mozambique question that was raised before, I wonder if you can provide us with the allocated capital you have as of today in Mozambique. This is basically it. Thank you very much. As Mozambique is a different country and has its own regulations and so on, instead of using an economic model of capital allocation, we tend to use what is the capital, the real capital, that's real in accounting terms.

And the questions come from the line of Fernando. The yields from Paulo. Please ask a question.

Fernando Gil de Santivañes: Hello. Thank you very much. Two questions if I may please. First one is regarding the securities portfolio. There is a nice amount of bonds maturing this year, and I wonder what is the strategy on the reinvestment and how far can you increase the portfolio going forward? Because I see it has nicely increased during the last year, especially regarding the Poland bonds. Second, related to the Mozambique question that was raised before. I wonder if you can provide us with the allocated capital you have as of today in Mozambique. This is basically it. Thank you very much.

Hello, thank you very much.

I have 2 questions 1 in case. Uh, first 1 is regarding the security.

Um, there is a nice amount of, uh, appointment during this year. And I wonder, um, what is the strategy on the investment? And uh, how far can you increase? The portfolio? Going forward because I see it has nicely increased during the last year, especially regarding the Poland bonds.

Uh, second related to the motion big question, um, that was raised before. I wonder if you can provide us with the allocated Capital we have as of

In modern detail.

And, um, this is basically it. Thank you very much.

Miguel Bragança: Yes, Mozambique is a different country and has its own regulations and so on. Instead of using an economic model of capital allocation, we tend to use, so what is the capital, the real capital that's real there in accounting terms. Our allocation of capital to Mozambique is EUR 329 million for two thirds of the bank. That's the capital that we have at risk. By the way, there are no intragroup funding lines. There is nothing. I mean, there are not any material additional exposures to our operation in Mozambique. In terms of securities portfolio, as you know, we are a very liquid bank.

Miguel Bragança: Our allocation of capital to Mozambique is €329 million for two thirds of the bank. That's the capital that we have at risk. By the way, there are no intergroup funding lines. There is nothing. There are not any material additional exposures to our operation in Mozambique. Securities portfolio, as you know, we are a very liquid bank. At any point in time, we evaluate what is best from a hedging strategy standpoint, whether to use swaps, whether to use government bonds, and if so, of which countries, and so on. What I can tell you is that the government bonds that we use are of a diversified portfolio. Our largest exposure is of EU bonds, the EU bonds that were used for the resilience program.

So, uh, uh, is Mo has, uh, is, is, is a different country, and, and has its own regulations. And so, one of using an economic model of, uh, of capital allocation we tend to use, uh, we tend to use. So what is the capital, the real capital? That's the real. There is a, in a, in accounting terms. So our, uh,

Miguel Bragança: At any point in time, we evaluate what is best from a hedging strategy standpoint, whether to use swaps, whether to use government bonds and if so, of which countries and so on. What I can tell you is that the government bonds that we use are of a diversified portfolio. Our largest exposure is of EU bonds. The EU bonds that were used for the resilience program. We tend to analyze these vis-à-vis the alternative that we have to hedge our balance sheet. That is basically interest rate swaps, because we look at it more as a hedging of our balance sheet than as a profit center on its own. We don't have any limitations, so to say, because of our strong liquidity position.

Uh our allocation of of capital to Mozambique uh is 329 million 427 of the bank. So that's that's the capital that we have at risk. And by the way, there are no Intergroup funding lines. There's nothing. I mean, there are not not any material additional, um, uh, exposures to our operation in, in Mozambique, in the group of security portfolio. As you know, we are a very liquid Bank.

and we,

Swaps whether to use government bonds and if so, of which countries and so on. What I can tell you is that the government bonds that we use are of a diversified portfolio.

our largest exposure is of EU bonds, uh, EU the new, uh,

Miguel Bragança: We tend to analyze these vis-à-vis the alternative that we have to hedge our balance sheet, that is basically interest rate swaps, because we look at it more as a hedging of the balance sheet than as a profit center on its own. We don't have any limitations, so to say, because of our strong liquidity position. Thank you.

Ones that were used for the resilience program. And, um, we tend to analyze these Visa video alternatives that we have to hedge our balance sheet, which is basically interest rate swaps, because we look at it more as a hedging of the balance sheet than as a profit center on its own.

Cecilia Romero: Thank you.

Fernando Gil de Santivañes: Thank you.

Uh but we don't have any limitations so to say because of our uh, strong liquidity position.

Operator: We are now going to proceed with our next question. The questions come from the line of Cecilia Romero from Barclays. Please ask a question. Hi, Miguel. Thank you very much for taking my questions. I have two. The first one is on tax again. I saw that Prime Minister Luis Montenegro had proposed a plan to gradually lower the effective tax rate by 3% points through 2028. Shouldn't we see the tax rate in Portugal go from 25% perhaps to 22% by 2028 on this basis? You were talking before about the.

Operator: We are now going to proceed with our next question. The question comes from the line of Cecilia Romero from Barclays. Please ask your question.

We are not going to proceed with our next question.

Cecilia Romero: Hi, Miguel. Thank you very much for taking my questions. I have two. The first one is on tax again. I saw that Prime Minister Luís Montenegro had proposed a plan to gradually lower the effective tax rate by 3 percentage points through 2028. Shouldn't we see the tax rate in Portugal go from 25% perhaps, to 22 by 2028 on this basis? You were talking before about the impact on the DTA of -15 basis points. I just wanted to make sure that we understood the PNL. Also you were mentioning, the bank tax in Poland. Sorry, the increase in corporate tax rate in Poland. Should we see also a reduction in bank tax if that increase in corporate tax comes through?

And the questions come from the land of Cecilia. Romero from Barklay. Please ask a question.

Hi Mia. Thank you very much for taking my questions. Um, I have to the first 1 is on on packs again. Um, I saw that prime minister Luis Montenegro had proposed a plan to gradually lower the effective tax rate by 3% points through 2028. Shouldn't we see the tax rate in Portugal for go from 25% perhaps uh to 22 by 2028.

Miguel Bragança: Impact on DTAs of -15.

Operator: BAS wanted to make sure that we understood the P&L. You were mentioning the bank tax in Poland, sorry, the increasing.

Miguel Bragança: Corporate tax rate in Poland.

Operator: Should we see also a reduction in bank tax if that increase in corporate tax comes through? My final question was on volumes, which has surprised positively on the quarter. However, we have seen an NII that has come more or less in line with consensus.

Cecilia Romero: My final question was on volumes, which have surprised positively on the quarter. However, we have seen an NII that has come more or less in line with consensus. I was just wondering, when did this increase in volumes take place? Did it happen at the end of the quarter? Should this be a tailwind into Q4, that you have NII in Q4? Thank you.

Miguel Bragança: I was just wondering when.

Operator: When did this increase in volumes take place? Did it happen at the end of the quarter? Should this be a tailwind into Q4 that you have NII in Q4? Thank you.

On these bases, and you were talking before about the impact on the DAS of minus 15 basis points. I just wanted to make sure that we understood the P&L. Also, you were mentioning the bank tax in Poland, sorry, the increasing corporate tax rate in Poland. Should we see also a reduction in the bank tax if that increase in corporate tax comes through? And then my final question was in volumes, which has also priced positively on the quarter. However, we have seen an NI that has come more or less in line with consensus. I was just wondering when this increase in volumes took place. Did it happen at the end of the quarter, and should this be a tell week into Q4 that should have knee in Q4? Thank you.

Miguel Bragança: Starting with the last point, the NII, if it were not for the volume growth, of course, with the reduction of interest rate that we have, it will be decreasing, so to say. The volume growth, together with the management of the balance sheet, is a counterweight to the decrease of the interest rate that we are seeing in the market. You cannot compare to only with the past. You have to compare it in terms of the dynamics of the future. We...

Miguel Bragança: Starting with the last point, the NII, if it were not for the volume growth, of course with the reduction of interest rate that we have, it will be decreasing, so to say. The volume growth together with the management of the balance sheet is a counterweight to the decrease of the interest rate that we are seeing in the market. You cannot compare only with the past. We have to compare it in terms of the dynamics of the future. When I say that we will have our NII stable this year, when you compare with last year, of course this was helped also by the volume growth to some extent next year. What we are expecting in Portugal is that the volume will explain the growth in terms of the NII going forward in terms of the tax rate in Portugal.

Mhm. So starting with, uh, uh, with the last point. Um,

The knee, uh, uh, if it were not for the volume growth, of course, with the reaction of interest rate that we have, it will be, uh, it will be decreasing. So to size, so we the volume growth together with the the management of the balance sheet is a, a counterweight to the decrease of, uh, the interest rate, uh, that we are seeing in the market. So, uh, you can, you cannot compare to only with the past. You have to compare the in terms of uh uh in terms of the the

Miguel Bragança: When I say that we will have our NII stable this year when you compare with last year, of course, this was helped also by the volume growth to some extent. Next year, of course, what we are expecting in Portugal is that the volume will explain the growth in terms of the NII going forward. In terms of the tax rate in Portugal. The tax rate is a little bit more complex because we effectively have a total tax rate in Portugal of around 29%. Okay?

Dynamics of the future. So, uh, we

When we, when I say that we, uh, will have our, uh, knee stable this year when you compared with last year, of course, this was helped also by the volume growth to, to some extent. Uh, uh, last next year, of course, what we are expecting in Portugal is that the, the volume will, uh, uh, uh, explain the growth in terms of, of the knee going uh, going uh uh forward uh, uh,

Miguel Bragança: The tax rate is a little bit more complex because we effectively have a total tax rate in Portugal of around 29%. When we are now having a tax rate of around an effective tax rate below this level, this means that there are already some revenues, so to say, and some issues in our P&L that are not taxed at 29%. We already have a benefit in terms of this level. It is not a pure accounting mathematical operation, just of looking at the PVT and multiplying it for the nominal tax rate. The nominal tax rate is 29%, so to say, so if it is this way, it will pay 29% and not 25%. The fact that we are already having 25% already reflects some benefit in this direction.

In terms of, um, um, the, um, the tax rate in Portugal. Uh, the tax rate is a little bit more complex because, uh, we, uh, effectively we have, uh, um,

At a total, a total tax rate in Portugal of around 29%.

Miguel Bragança: When we are now having a tax rate of around an effective tax rate below this level, this means that there are already some revenues, so to say, and some issues in our PNL that are not taxed at 29%. We already have a benefit in terms of this level. It is not a pure, a pure accounting, mathematical operation, just of looking at the PBT and multiplying it for the nominal tax rate, because the nominal tax rate is 29%, so to say. If it is this way, we pay 29% and not 25. The fact that we are already having 25% already reflects some benefit in this direction.

Okay.

So when, when we are now having a tax rate of around, uh, an effective tax rate below this level. This means, this means that there are already some, uh, some some revenues. So to say and some, uh, issues in our, in our pnl that

Miguel Bragança: When we look forward, this 29%, as you say, will decrease 3 percentage points slowly and over time, so to say. It is, so to say, early days, so to say, to pre-commit that the tax efficiency that we are able to obtain by the difference of 29% and that is the nominal tax rate and 25% that we are presenting, we'll be able to have exactly the same type of efficiency when it goes down. That's why I'm saying that this level around the 25% is a reasonable level. If you ask me, the risks are more towards a lower rate or towards a higher rate in terms of effective tax rate.

Miguel Bragança: When we look forward, these 29%, as you say, will decrease 3 percentage points slowly and over time, so to say, it is early days to pre-commit that the tax efficiency that we are able to obtain when we, by the difference of 29% and that is the nominal tax rate and 25% that we are presenting, will be able to have exactly the same type of efficiency when it goes down. That's why I'm saying that this level, around 25%, is a reasonable level. If you ask me, the risks are more towards a lower rate or towards a higher rate. In terms of effective tax rate, I think the risks are more towards a lower rate than towards a higher rate. It will then depend on the structure, so to say, of the P&L. There are some costs that are not tax deductible, like these contributions.

Tax rate because the nominals will it takes, right? Uh, is is 29% so to say, so if it is this way, it will pay 29% and not 25. So, uh, the fact that we are already having 25% already reflects some benefit in this, uh, in this direction. So when we look forward, uh, this 29%, as you, as you say uh will decrease 3 percentage points slowly and over time. So the second uh it is so to say early rise to to pre-commit that the tax efficiency that we are able to obtain when we uh uh by the difference of 29% and um 20 that is the nominal tax rate and 25% that we are presenting will be able to to to have exactly the same type of efficiency when it's it goes down. So that's why I'm saying that the

this level around. The 25% is a reasonable level. If you ask me, uh, uh, the the risks are more towards a lower rate or towards the higher rate.

Miguel Bragança: I think the risks are more towards the lower rate than towards the higher rate. It will then depend on the structure, so to say, of the P&L. There are some costs that are not tax deductible, like these contributions, so to say. There are other revenues that are not taxable, such as dividends obtained or our participation in the insurance business that is already net of taxes. Depending on the composition of our or capital gains, by the way, some capital gains are not tax, are not taxable. Depending on the composition, there is a difference between the nominal tax rate and the effective tax rate.

Miguel Bragança: There are other revenues that are not taxable, such as dividends obtained or our participation in the insurance business that is already net of taxes. Depending on the composition of our capital gains, by the way, some capital gains are not taxable. Depending on the composition, there is a difference between the nominal tax rate and the effective tax rate. You're right that the risks when the tax rate goes down. It is easier, so to say, to have a 25% tax rate when the nominal tax rate is 26% than when it is 29%.

Miguel Bragança: You're right that the risks, when the tax rate goes down, it is easier, so to say, to have a 25% tax rate when the nominal tax rate is 26% than when it is 29%.

In terms of effective tax, right? I think the risks are more towards the lower right than towards a higher rate, but it will then depend on the, on the structure. So, to say of the pnl, there are some costs that are not tax deductible like this contributions. So to say, there are as a, as a revenues that are not taxable such as dividends obtain or our participation in the insurance business. That is not is already net of taxes. So depending on the composition of our um or or or capital gains, by the way, some capital gains are not tax uh not taxable. So depending on the composition um there is a difference between the nominal tax rate and the effective tax rate.

Miguel Bragança: You're right that the risks, when the tax rate goes down, it is easier, so to say, to have a 25% tax rate when the nominal tax rate is 26% than when it is 29%.

But, but you're right that the risks, when the tax rate goes down, it is easier, so to say, to have a 25% tax rate when the nominal tax rate is 26% than when it is 29%.

Operator: We are now going to proceed with the next question. The questions come from the line of Miru Nacheria from Jefferies. Please ask your question.

Operator: We are now going to proceed with the next question. The question's come from the line of Miruna Chirea from Jefferies. Please ask your question.

We are not going to proceed with the next question.

Miruna Chirea: Hello. Thank you very much for taking my questions. I had two, please. Firstly, in Portugal, you discussed your expectations for NII growth, but could I also ask you if you can give us a sense of what you expect in terms of fee growth going forward, and what are the drivers behind that? For example, I've seen the slide that bank assurance fees are growing at around 14% year-on-year in the first nine months. Do you think this rate is sustainable going forward? Is this the level at which the market is growing or are you actually capturing share in this, in this segment? Secondly, this time last year when you presented your strategic plan, you presented a 2028 return on equity target greater than 13.5%. Obviously, things are progressing better than expected this time last year.

Miguel Bragança: Hello. Thank you very much for taking my questions. I had two, please. Firstly, in Portugal you discussed your expectations for NII growth.

And the questions come from the line of Muniria from Jeffrey's. Please ask your question.

Operator: Could I also ask you if you can give us a sense of.

Miguel Bragança: What do you expect in terms of fee growth going forward, and what are the drivers behind that? For example, I see in the slides that bancassurance fees are growing at around 14% year on year in the first nine months. Do you think this rate is sustainable going forward? Is this the level at which the market is growing, or are you actually capturing share in this segment?

Operator: Secondly, this time last year.

Miguel Bragança: When you presented your strategic plan, you presented a 2028 return on equity target greater than 13.5%. Obviously, things are progressing better than expected this time last year. When should we expect to receive an update on this long-term return?

Miruna Chirea: When should we expect to receive an update on this long-term return on equity target, that you plan on delivering? Thank you.

Operator: On equity target that you plan on delivering? Thank you.

Hello, thank you very much for taking my questions. I had to please, firstly in Portugal, you discussed your expectation for knee growth. But could I also ask you, if you can give us a sense of what you expect in terms of fig growth going forwards. And what are the drivers behind that? For example, I seen the slides that bank Assurance fees are growing at around 14% here, on year in the first 9 months. Do you think this rate is sustainable going forwards? And, um, is this the level at which the market is growing? Or are you actually capturing share in this, uh, in this segment? And then, secondly, this time last year, when you presented your strategic plan, you presented, uh, 2028 return on Equity, Target greater than 13.5%. Obviously, things are progressing better than expected this time last year. So, when should we expect to receive an update on this long-term return on Equity targets? Um, that you you plan on delivering? Thank you.

Miguel Bragança: As you may recall, when we have presented our plan, when we commented that we were having a target of an ROE above 13.5%, we also presented, in the same presentation, a target of the sum of book value per share and dividend per share around 15%. At the time, I commented that this target, one is around, the other is higher than, is more, is more, how can I say? Is more precise than just larger than. The larger than is updated. It's larger than. It's really larger than. The larger than is up, is clearly updated, and we are more or less in line with the 15% of book value per share plus dividend per share growth.

Miguel Bragança: As you may recall, when we have presented our plan, when we commented that we were having a target of an ROE above 13.5%, we also presented in the same presentation a target of the sum of book value per share and dividend per share, around 15%. At the time I commented that this target, one is around, the other is higher than, is more, is more, how can I say, is more precise than just larger than. The larger than is updated. It's larger than, it's really larger than. The larger than is clearly updated and we are more or less in line with the 15% of book value per share plus dividend per share growth. In terms of fee growth going forward, there are a lot of moving parts in this issue.

so uh as you may, as you may recall when we have presented our, our plan

Uh, when we, uh, commented that we were having, uh, a target of an RV above 13.5, we also presented it in the same presentation, uh, a target of the sum of book value per share and the EV per share around 15%. And at the time I commented that these targets, when they are around the other, are higher than, uh, is more, is more. Uh, how can I say? It's more, uh, precise than just larger than. The larger then is applied its larger than.

Miguel Bragança: In terms of fee growth, going forward, there are a lot of moving parts in this issue. In the bank assurance evolution, there is a component that has to do with some review of the division of fees between ourselves and our insurance partners. I would not see this growth as necessarily as the sustainable growth level into perpetuity. What I would here expect is the fee growth of banking fees and commissions to be aligned with this mid to high single digit growth based on our commercial systematic and based on the effectiveness of the client acquisition strategy going forward. In terms of asset management, it will depend to some extent on the markets and on the level of interest rates.

Miguel Bragança: In the bank assurance evolution, there is a component that has to do with some review of the division of fees between ourselves and our insurance partners. I would not see this growth as necessarily as the sustainable growth level into perpetuity. What I would here expect is the fee growth of banking fees and commissions to be aligned with this mid to high single digit growth, based on our commercial systematic and based on the effectiveness of the client acquisition strategy going forward. In terms of asset management, it will depend to some extent on the markets and on the level of interest rates. If the level of interest rates remains at this level, we think that this type of growth is normal.

Would not see these growth.

As, uh, necessarily as the sustainable growth level into perpetuity. What I would expect is the figure growth of banking fees and commissions.

To be aligned.

Miguel Bragança: If the level of interest rates remains at this level, we think that this type of growth is normal. If the level of interest rates decreases further and we live an even more benign market movement, probably we will have more interest from the clients in asset management products, as to have an alternative to very, very low yielding deposits, and it may grow somewhat higher. I would say mid to high single-digit growth in terms of commissions in Portugal is a good starting point.

Miguel Bragança: If the level of interest rates decreases further and we leave an even more benign market movement, then probably we will have more interest from the clients in asset management products so as to have an alternative to very low yielding deposits and it may grow somewhat higher. I would say mid to high single digit growth in terms of commissions in Portugal is a good starting point.

With this, uh, needs to high single digit growth based on our commercial, uh, systematic and based on, uh, the effectiveness of, uh, the the client acquisition strategy, uh, going forward, in terms of uh, Asset Management. It will depend to some extent on the, on the markets and on the level of interest rates. If the level of interest rates remains, that is level. We think that this type of of growth is is is normal, if the level of interest rates decreases further and we leave an even more benign, uh, market movement, uh, then probably we will have more interest from the clients in Asset Management products. So, as, uh, to have, uh, an alternative to very, very low yielding deposits and it may grow somewhat some higher. But I would say Miss to high single digit growth in terms of commissions in Portugal, is

A good starting point.

Operator: We have no further questions at this time, so I'll hand back to you for closing remarks.

We have no further questions at this time, so I'll hand back to you for closing remarks.

Miguel Bragança: Okay, thank you very much. Thank you very much for your interest in our equity story. We remain fully committed in delivering our plan in creating shareholder value as well as value for all the other constituencies. This was a very important milestone in terms of client acquisition, client growth, in terms of us being able to deliver on what we have promised in terms of ROE, in terms of book value per share plus dividend per share growth. We are really looking forward to 2026 and 2027 in a quite positive way, showing the resilience of our business model. We really think that the core income will continue to grow at mid single digit area, and this with cost control will enable us to continue to grow in terms of shareholder value generation and in terms of earnings per share. Thank you very much for your interest.

Miguel Bragança: Okay. Thank you very much. Thank you very much for your interest in our equity story. We remain fully committed in delivering our plan, in creating shareholder value as well as value for all the other constituencies. This was a very important milestone in terms of client acquisition, client growth, in terms of us being able to deliver on what we have promised in terms of ROTE, in terms of book value per share plus dividend per share growth. We are really looking forward to 26 and 27 in a quite positive way, showing the resilience of our business model.

Miguel Bragança: We do really think that the core income will continue to grow at mid-single digit area, and this will enable with cost control and with this will enable us to continue to grow in terms of shareholder value generation, in terms of earnings per share. Thank you very much for your interest.

Okay. Um, thank you very much. Thank you very much for your interest in our Equity Story. We remain fully committed in the in delivering, our plan in creating shareholder value as as well as value for all the other constituencies, this is was a very important milestone in terms of client acquisition client growth. In terms of us, being able to deliver on what we have promised in terms of rote in terms of book value per share per share growth. Um, and we are really looking forward to, to 26 and 27 in a, in a quite positive way, uh, showing the resilience of our business model. We really think that the, the, the, the, the, the core income, uh, will continue to to grow at Mid single digit area and this will enable with with, uh, cost control and with this will enable us to continue to grow in terms of shareholder value generation in terms of

Uh, and in terms of holding special, thank you very much for your interest.

Operator: This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you and have a good day.

Call, thank you all for.

Disconnect your lines. Thank you, and have a good day.

Miguel Bragança: SA.

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