Good afternoon, everyone. I'm here today with Marguerite Bérard, the Chief Executive Officer of ABN AMRO. Marguerite, thank you for being with us.
Yes.
This afternoon. You know the drill by now, let's start with a polling question. Right. What do you think will be the biggest driver of ABN share price performance in 2026? NII beating estimates, costs coming down faster than expected, capital distribution, further capital distribution, or new M&A announcement. Let's see. We will get to the capital question, but Marguerite, I'll start with the strategic question.
Yeah.
You've been CEO of ABN for almost a year now.
Mm.
What is the achievement that you are most proud of over the past 12 months and the, you know, biggest strategic priority for the next 12 months?
Yeah. What was very important in this first year for me at ABN AMRO was, I would say, you know, to put together a strategic plan, create the momentum, and I would say now in 2026, it's all about, you know, delivering with discipline methodically quarter after quarter. We have actually started. You know, every quarter walks the talk.
Perfect. Very clear. Since the Capital Markets Day, there's a lot has happened on AI, even though the Capital Markets Day.
Yeah.
Was only a couple of months back. What is your view on how ABN can benefit
Mm.
From artificial intelligence, and how are you adapting the bank?
Yeah. AI is probably, you know, in our lifetime, the most important revolution we are all going to experience. I'm not only talking about what's happening in our companies, I'm also talking about, you know, in our societies at large. When I look at how we approach it, in ABN AMRO, I think there are a few principles that you need to apply, again, very methodically. One is you need to have, I call it your plumbing right, your foundations right. You need to have, you know, a strong IT infrastructure. You need to have your data in order. You need to make sure that you have set, I would say, the right guardrails. No handcuffs, but guardrails. What am I saying that is that we, you know, we've collectively hated shadow IT.
We are not going to like shadow AI. You don't want to be surprised one day realizing that, you know, AI is being used in your risk model without you being aware of it, for instance. These are, you know, a number of principles. Another important principle is that you want to, I would say, keep your options open as far as certain technological choices are concerned. For instance, you know, it's not necessarily going to be all about large language models. In certain cases, small language models are going to be more efficient for us. World language models tomorrow may also be the right choice. You don't necessarily want to, you know, lock yourself only with one partner.
Speed of adoption is going to be crucial as well, and that very much depends, first, I would say, on the DNA of the company. There, you know, I'm very happy because maybe it's a Dutch thing or maybe it's also ABN AMRO, but this is a company that is tech savvy, that enjoys it-
Mm-hmm.
That has a genuine curiosity. I mean, we are, you know, already serving, you know, 5 million retail clients with only 26 branches. This is, I would say, the mindset of the company. But nevertheless, we also all experience that, you know, AI comes with, I would say, a lot of curiosity, but creates also a lot of anxiety because everyone is reading the same bedtime stories. So, you know, if you go and talk to, you know, colleagues in our customer care centers, just like probably you are asking yourself, people are like, "Oh, am I going to be replaced tomorrow?" Myself, I'm asking, you know, when is it gonna be the moment when, you know, my supervisory board will have, you know, an AI agent dummy CEO against which I will have to justify my choices.
You have to take this into account when you look at how you want adoption to happen in your company. There, I'm going to give you just one example of something we did that I thought was actually quite smart.
We'd like you some.
I'll give you just one. A lot of colleagues were asking for, you know, Copilot licenses, and I said, "Well, you know, okay, but these licenses are expensive. So, you know, are you gonna use them and so on?" I said, "If you want a Copilot license, you will, you know, pay for it from your development and training budget." This is company money, but this is a budget on which colleagues have, you know, a say in how they use it. That was great because not only from a cost perspective, but also in a matter of weeks, we had, you know, 10,000 requests for Copilot licenses.
Because people had actually decided they wanted it because this was, you know, their choice because they had put a value on it.
Mm.
Because, you know, they're spending the money on this and not something else. They're actually using it massively. I like that a lot because had I gone through the company saying, hey, AI literacy, it's really important that you all have a Copilot license, and I want you all to use it, and this is gonna be part of your yearly appraisal, whether or not you're using AI in your job, I would have got pushback. This is also the way you know help the company embrace the change. What I also sorry, because I'm long, but I think it's an important topic.
No, no. This is an important topic, so take your time.
What I think is also important is, you know, we make sure we build the right building blocks. For instance, intelligent document processing, conversational agents, data intelligence. These are all foundations that, for instance, you know, in terms of document processing, we first used it in our lending journey in the corporate bank, reducing, you know, the time we needed to produce a credit memo by 30%. Now we can deploy it elsewhere in the bank. A conversational agent or, you know, an AI agent, Anna handles right now 150,000, you know, client interactions per month. What is really good is that not only you gain productivity, but you also see, for instance, improvements in client satisfaction. I'll give you an example.
Now, conversations we have with clients, when our colleagues have a conversation on the phone with clients, well, the summary is done, you know, automatically by AI. That means that our colleagues are actually fully engaged in the conversation. They're not multitasking, also typing, you know, the summary as they talk to the client. That makes not only for, you know, better data because our summaries are in the same format with the same data we need and more reliable, but we also measure client satisfaction improvements. It comes with, you know, many different advantages, I think.
Thank you very much for that. We like the examples, definitely. Now I'm gonna ask you about capital, given-
Yeah.
Also the
Apparently, it definitely creates a lot of interest, yeah.
Yes, it certainly does. You have about 100 basis points of excess capital pro forma for NIBC. How should we think about the capital path from here, in particular, in light of the statement of, you know, distribution around 100%? How can it not be higher than 100%? Should we be thinking about M&A or how should we think about capital distribution?
You know, what I also like in your question and the expectations I see here is that it means that, you know, we start a strategic plan from a strong capital position, which I view as a plus, i.e., you know, that makes me all the more confident that, you know, the distribution policy we shared at a Capital Markets Day of up to 100% of the profit we generate between 2026 and 2028 is actually, you know, ambitious and achievable because your question is, "Hey, why don't you go even beyond?
Yeah.
Something to consider. Well, I'd rather have you ask me this question than, you know, aren't you reaching too far. This is the first part. This is also probably linked to the fact that at Q4, indeed, we, you know, we made, I would say, significant progress in our RWA steering. This is also part of a strategic plan. We reduced our RWA by EUR 7.7 billion. This was also, you know, something important. You're right, NIBC will kick in probably at Q3. We are between signing and closing right now. Closing is expected at Q3, and that's, you know, between 70 and 80 basis points. You're right to take this into account.
Right now, I'm very comfortable with you know the situation we're in. As you also know in the SSM, you know, no bank can commit to any form of extraordinary distribution without prior approval from the ECB, or you will find. I have really no reason to go into that territory at the moment. You know, we're comfortable in the situation that we're in right now at the beginning of our plan.
Hopefully, we go into.
Up to 100%.
Yeah. Hopefully we
At Q4, we do the assessment at Q4.
About RWA efficiencies, which you already alluded to.
Yeah.
You have a target of EUR 10 billion optimization measures, and you already delivered EUR 4 billion in Q4. Could you actually exceed the optimization measures, given that you are already, you know, quite well advanced?
Yeah.
After just one quarter?
The EUR 10 billion you're referring to is especially the target we have for corporate banks.
Corporate, yes.
Indeed, in that area, we're moving at pace. If you look, you know, at Q4, we mobilized several important levers.
Mm-hmm.
One is, in terms of how we, you know, steer on our portfolio. We accelerated the wind down of asset-based finance outside of the Netherlands. That's, you know, in Germany, in France, and the U.K.. That represented, you know, EUR 2 billion.
Mm-hmm.
Of RWA relief, EUR 500 million more to come, but I would say the most important part has been achieved. We also keep improving the quality of our data. If you look at, for instance, the SME support factor, we got at Q4, you know, EUR 1 billion RWA relief on the back of that. There is probably EUR 1.5 billion-EUR 2 billion, you know, more to come. Again, we're moving, you know, at pace.
Mm-hmm.
You know, we keep the end target we shared only four months ago at CMD, which is by the end of, you know, 2028, total RWA including an NIBC of EUR 145 billion for the whole bank. We are happy-
Mm-hmm.
with the progress we are making quarter after quarter.
Perfect. If we talk now about M&A.
Yeah.
Following the announcement of the NIBC acquisition, how has the strategy on M&A evolved? Shall we expect from here maybe just a small bolt-ons in wealth management, or is there scope for other targets?
Yeah. You know, I should start by saying that we don't have an M&A buffer, if that relates also to your question on capital. We don't have an M&A buffer. We've recently done two moves. One is the acquisition of HAL in Germany.
Yeah.
We are there in the process of now integrating. Legal merger should happen in the summer, IT merger at, you know, in the fall. This is going according to plan in terms of, you know, planning and the synergies we expect. This is an important moment for us because there we are creating, I would say, a strong number three position in the German market for wealth management. If I look at NIBC now, we are between signing and closing. You know, as I mentioned, closing to happen at Q3 most likely. Basically, we are right now fully focused on, you know, making this happen and making these acquisitions a success. This is our primary focus.
We're not looking at, you know, additional M&A. We also shared when we presented our strategy last November, what would be the criteria were we to look at M&A. First, it would have to be, you know, a perfect fit in our, you know, five long-term ambitions that we shared, you know, keep growing in the Dutch retail market. That's what we did, for instance, with NIBC, build a strong, you know, top five position in Europe, in wealth and so on. It would have to be coherent with our strategy. If it's not coherent, there's no reason to do it.
Mm-hmm. Yeah.
It's quite evident, but nevertheless, that's, you know, that's what I call discipline as well. Second, it would have to be accretive. If you look, for instance, at the acquisition of HAL, that was a return on invested capital of 15%. If you look at, you know, NIBC return on invested capital of 18%, this is what I call, you know, accretive, also for shareholders. We also take into consideration the execution risk, low execution risk. This is typically a characteristic you have with the HAL acquisition as well as with NIBC. This is also something we like when we look at.
Very clear.
right now it's not on the table.
Okay, good to hear. If we move on then to another hot topic for ABN AMRO.
Yeah.
which is costs, and in particular, FTE reductions.
Mm-hmm.
Which have come down by another almost 600 in Q4. Are you able to replace them effectively via digitalization, automation, AI? Maybe if you can give us some color. Sometimes I get questions from investors, you know, 20% of the workforce, that's massive. How do you really achieve that?
Yeah. Absolutely. We shared, you know, when we presented our strategy, and I think we are the only European bank who did that, we shared three cost targets, cost/income, absolute cost target, and FTE reduction target. Why is this FTE reduction target important is that it, you know, 80% of the EUR 900 million cost savings we announced depend on achieving this FTE reduction. This is why I think it is also an important KPI to monitor. That's one. Again, here we are moving at pace. We, you know, in 2025, and that was only between Q2 and Q4, we reduced our workforce by 1,500.
If you take into account the 5,200 that we've announced by the end of 2028, it represents 30%.
Mm-hmm.
of the trajectory we shared. We are absolutely moving at pace. How are we proceeding? Everything we shared in terms of cost savings is grounded in a business case, a business case that was, you know, fully, you know, grounded with, you know, the businesses or the functions that we're presenting it, discussed with HR, discussed with finance, but also we even had internal audits go through the figures. I can tell you that it is grounded. Second, we also make sure that we are doing it in a smart way. We didn't, for instance, go for a voluntary departure plan in the bank where, you know, you may lose key people in certain departments or certain profiles you don't want to lose.
The way we proceed is that we do it in a more targeted manner. We call that an RFA, request for advice, with a works council.
Mm-hmm.
Such procedure you have in the Netherlands. One by one, we have, you know, 25 RFAs going on in the bank right now. We do it in a very partnering way, I don't know if it's the right word in English, but you see what I mean with our works council. I'm very impressed by, you know, the maturity of the conversations we have and how well we do that. We do it also by supporting the colleagues who leave the bank. We have a very robust social plan that covers the entire, you know, time period of our strategic plan. It will expire in 2029.
Basically it means that colleagues have you know full visibility on the financial support they get when they leave the bank, but also they get support in finding new opportunities outside of the bank. Bearing in mind also that you know the Netherlands is a full employment and tight labor market. But we support colleagues finding these opportunities. The cost of a social plan is fully embedded in our you know financial trajectory as well. You have you know EUR 400 million restructuring charge in our financial trajectory.
Mm-hmm.
Through the plan, we already booked, you know, EUR 100 million in 2025 out of this EUR 400 million.
Yeah.
This is again very, I would say, very documented happening, you know, quarter after quarter. We're quite, I mean, quite is too much. We are absolutely confident that we are reaching this target and moving at pace.
Perfect. If I stay then on the cost side of things, and if I start from Q4 reported, and I remove the regulatory levies, the EUR 40 million of non-recurring seasonal, let's call it in Q4, and I annualize with some upside pressure.
Mm-hmm
Call it from CLA coming by the summer, we still get a touch below the EUR 5.6 billion guidance for the full year. There seems to be some upside here.
You know, again, I feel we set ambitious and achievable targets. The EUR 5.6 billion cost target you mentioned for 2026, I'm confident we are going to reach it. Bear in mind, and you also mentioned it, so this is why you say, well, there is upside. Yes. At the same time, you mentioned that we will have our CLA negotiations as well.
Mm-hmm
You know, we are still, you know, the inflation context is still, you know, to be determined.
Mm-hmm
In the Netherlands based on also, you know, current geopolitical developments and so on. There are still also uncertainties on these factors, which is why I would say I'm comfortable we start from a good position and again, not changing the guidance we gave only four months ago.
Yeah. I appreciate the point of not changing the guidance that quickly, but still it is my job, I guess.
No.
to highlight it. Yeah.
At the same time, you know, the good thing in the way you're asking me a question that I remember, I think the first time, you know, you met were telling me, "Well, ABN AMRO is sometimes, you know, surprising us, setting targets and not necessarily reaching them." I like better that you tell me, "Well, you set target, we're confident you can reach them. Can you do more?" It's, you know, it's change of tone, I would say, in the way we.
That's it.
Look at the bank. I think this is a good one as well.
Right. I'll keep on with this tone.
That's okay.
I'll ask about NII then.
Okay.
So, so-
I'm too conservative on NII as well.
Thank you. Yes. Especially, you know, the curve has also changed.
Okay
since you gave the guidance. Can you walk us through?
Okay
the impact that potentially the higher short-term part of the curve could have on your replicating portfolio?
Yeah.
What are you seeing in terms of deposit mix shift?
Mm-hmm.
Because if you look at the Netherlands, actually.
Yeah
Beginning of the year, the current account has come down somewhat. I'm wondering how all these things impact your NII?
Yeah. The guidance for commercial NII for 2026 is EUR 6.4 billion. Again, I'm not changing it. At the same time, if you had asked me the question last week, you would have told me that, you know, the forward curve was, you know.
Mm
more of a headwind than a tailwind. Something I've given up on doing right now is recalculating my replicating portfolio on the back of the forward curve every morning because I don't, you know, it's just changing too much. Let's
Fair enough.
Do it this way.
Yeah.
You know, the 6.4 is a guidance we are comfortable with. In terms of mix, if you look at our replicating portfolio, I would say, you know, 35% are, you know, current accounts, 47% are, you know, demand deposits and the remaining part term deposits. We do not see a change in the mix right now.
Uh
... in our replicating portfolio, which is, yeah, we keep the assumption for the moment.
Perfect. In terms of loan growth, is there any area where you are seeing, you know, a pickup in demand or perhaps the opposite after what's happening in Iran?
You know, I would say first that, you know, the Dutch economy is in Europe, a strong, resilient economy.
Mm.
If you benchmark it, you know, compare it since you know, since COVID, the Netherlands has consistently had GDP growth, you know, above
Yeah
the EU average. As I mentioned, very good employment market, strong, you know, fiscal position. Debt to GDP ratio of, you know, 43.7%, which is, you know.
Remarkable. Remarkable in European context, yes.
Yes. I think it's an asset for the country. All these are, I would say, strong foundations. When I look at the mortgage market because, you know, structurally there is housing shortage in the Netherlands, we still see it as a dynamic market in terms of, you know, house prices, but also on the demand side, less dynamic than 2025, in 2025, but nevertheless dynamic. There we have again a strong position or market share in new production in Q4 was 21%.
Mm-hmm.
That's a strong, you know, number two position. You could say that, you know, we have a slight margin compression. Bear in mind, however, that this is also linked to the fact that we see a growing share in the mortgages we finance on mortgages that benefit from the state guarantee scheme, NHG.
NHG, yeah.
There the margins are a bit thinner, but at the same time, it's also lighter on capital RWA.
Mm-hmm.
In terms of profitability, I think this is good. I would say, you know, a strong mortgage market, you know, 5%-7% growth. If I look at on the corporate side, say, you know, definitely above GDP growth, but, you know, not as dynamic as the mortgage market, you know.
Well, already above GDP growth is.
Yeah.
Something in the corporate market. Okay. Thank you. Wealth management.
Yeah.
You mentioned earlier the consolidation of HAL. How is that progressing, and how do you see the ABN positioning here? Because you have an ambition to get to a top five-
Yeah.
position in Europe. Yeah, both the short-term integration and also the strategic positioning.
Yeah. You know, as I said, in terms of planning, we are, you know, this is going absolutely according to plan right now, very much focused on, you know, legal merger in the summer and IT merger in the fall. We're very focused on that because I think these are always, you know, sensitive moments, so you want to, you know, time box these integration moments so that they don't, you know, don't take too long. There you will primarily see the, you know, the synergy benefits after the IT merger. More in 2027.
What is important for me as well is that this is a period where we remain, you know, commercially active, focused on you know, serving our clients and so on. This is crucial, and this is also something I'm happy with because this can be sensitive moments where we are more inward-looking.
Mm.
-than focusing on the clients. This is, you know, the name of the game is make sure that we are, you know, fully focused on our clients during this period. This is, you know, going to be a good integration.
Right. Let me pause here for a second.
Yeah.
I want to see if we have questions from the room. Okay, I'll come back to the room in five minutes, and in the meantime, I'll ask you a couple more. On the corporate bank.
Yes.
We discussed briefly the portfolio optimization by 2028, but also a shift in business towards more profitable areas.
Mm-hmm.
How is this going?
This was really, you know, the main focus for corporate bank. We shared, you know, very clear target in terms of, you know, the RWA allocated to our corporate bank with big cap at, you know, 50% of the total RWA.
Mm-hmm.
of the bank moving to more profitable growth. That may, you know, that implied also clear choices in certain things that we would stop doing. I mentioned, you know, asset-based finance, for instance.
Yeah.
I think this is important. A lot of the data optimization we are doing to alleviate our RWA are also done by our corporate bank. This is a positive as well, and it is, you know, it is again, methodically step by step, for instance, you know, we have corporate clients that do not have yet external ratings. We know that when we have these ratings, it alleviates the RWA. You know, we do it very methodically, and that's positive. We also, I would say implement a more selective approach to, you know, our client portfolio. What we do is, for each client, when you're in a credit committee, you look at, hey, you know, how...
What is the whole lack of the relation, I mean, of this operation, of the relationship? We take always a single client view. We take into account the cross-sell we have within the corporate bank. You know, for instance, you could do it the RCF here, but at the same time, we can also do, you know, additional business with global markets. We can do additional business on advisory and so on. We of course take that into account, single client, including also what we are doing with our wealth business. This is really the sweet spot of ABN AMRO. Something you have to bear in mind is that in the Netherlands, seven out of ten companies are family-owned.
Mm-hmm.
We are really good at serving our clients on the corporate side and on the wealth side. We take that into account also in a credit committee because sometimes you say, hey, you know, maybe this is, you know, this specific loan is not as profitable as we would like to do, but at the same time, if this is also, you know, a client on the wealth side.
Mm-hmm.
If we take the risk of losing, you know, the client asset, this would really not be a smart move.
Mm-hmm.
We take the single client view into account in all the decisions we make. By the way, what I'm saying about, you know, dual clients, i.e. clients we serve on the wealth part and the corporate part, this is true in the Netherlands, but this is also, I would say, the backbone of the economy throughout Northwestern Europe.
Mm-hmm.
This is the same in the German Mittelstand, this is the same in Belgium and so on. This is really something we do well. When I talk about this, I would say client selection approach, it happens more, you know, all the time through the course of the plan and it happens as, you know, loans are maturing, and we have the question of, "Hey, are we refinancing this loan with this client or not?" We, you know, we do it when the loan is maturing basically. This is more spread out across the plan.
Mm-hmm.
Whereas, you know, the data quality optimization I was sharing with you may happen more, you know, at the beginning of the plan.
Quickly.
Yeah.
Absolutely. You know, we spent 30 minutes chatting. I haven't asked yet about cost of risk.
Mm.
Because it was only one basis point in 2025. It has not been a topic at all for ABN recently, but the market is worried about several things. We have private credit, we have higher price of oil. Of course, you lend to corporate, which could be disrupted by AI. How are you know, going through your loan book, making sure that cost of risk doesn't go up materially?
Yes. You know, we gave you know a guidance for the cost of risk throughout the course of our plan and through the cycle of 10-15 basis points.
Yeah.
Guiding more to the low end of this range, i.e. 10 basis points. We're actually comfortable with that. You asked me, or you maybe didn't ask me, but you mentioned private credit as being a concern.
Yeah.
If I look at ABN AMRO whole total exposure to private credit EUR 200 million. This is probably one of the, you know, lowest so far. We do have a very, you know, a very strong balance sheet. It's been a long time that, you know, our non-core CIB has been fully, you know, wind down.
Yeah.
Of course, like, you know, all banks, we are right now, you know, stressing our loan portfolio with all. With very different kind of scenarios, you know, conflict in the Middle East, ending in the short term, ending in two months, prolonged in the second half of the year. We've taken all this into account. As far as Stage 3 provisioning are concerned, we do not see any concerns right now. As far as taking more, I would say a broader approach in terms of geopolitical risk overlay and so on, this will be depending on how the situation evolves.
Mm-hmm.
Something we'll take into consideration. Again, reiterating that we do not see cost of risk moving away from the guidance we gave of 10-15 basis points through the cycle. A very strong balance sheet.
Yes. The EUR 200 million is particularly low.
Yeah, I know. I know.
Good to hear.
It's a bit boring, but it's where we are.
This is fund financing. Overcollateralized by a pool of loans.
Yeah. It is, yeah.
Okay.
It is total exposure, yeah.
Can I check back with the room if we have any questions? No, I will happily continue then. We have gone through the P&L.
Yeah.
The short term, shorter term targets, let's say, so 2026 and 2028. You have an ambitious plan, and cost/income was at 62% underlying in 2025, going down to below 55%. Yet the sector in our numbers is at 44% cost/income by 2028.
Mm-hmm.
You mentioned that ABN AMRO is a very digital bank actually with only 26 branches. I guess the cost/income ought to be lower than that. What are your thoughts about the longer term gains?
You know, indeed, and we do have figures for, you know, 2029 and 2030, in terms of, you know, where we want to be, in terms of, you know, cost income, top line, cost base and so on. Are these figures better than the ones we have for 2028? Absolutely.
Mm-hmm.
Are we sharing them right now? No, because we are again very much focused on executing what we committed to. Yes, you know, going forward, there are, you know, absolutely no reasons for us not converging even more on our cost/income target. Right now I'm just very focused on, you know, on executing what we shared already. Because, you know, I remember when we first shared that, you know, we would be, for instance, reducing, you know, rightsizing our FTEs by 20%, people said, "Hey, that's very ambitious." Right now-
It is. Yeah.
We are doing it, you know, step by step. Forward-looking, is there, you know, beyond 2028 additional upside? Yes. I mean, one factor, for instance, is that the full synergy of NIBC will only kick in 2029, huh?
Yeah.
Just to give you an example. This is not the only factor I have in mind.
Great. Okay. No, very clear. I have a couple more questions. One is on the clearing business.
Mm-hmm.
We talked about the capital as in you have a lot, well above, but we don't necessarily need to talk about disposals, but clearing seems a bit less core than the rest of your business perimeter. How are you thinking about this business? Why is it core for ABN?
Yeah, it is true, you know, and that's the good thing when you, I would say, come from the outside, which was my case when I joined ABN AMRO, is that you have absolutely no taboo. You know, I looked at the bank, you know, from a purely, I would say, neutral perspective, looking at each business thinking, "Hey, what is it bringing to our business model? What is core? What is non-core?" You know, nothing personal. Let's just be-
Mm-hmm
Systematic. Several things I like very much about clearing. One, it is a business we're really good at. I mean, maybe this is linked to, you know, our Dutch DNA, you know, our strong Dutch roots and the fact that, you know, the Dutch have, you know, are traders.
Mm-hmm
Merchants in the global. Our trading bank, I mean, our clearing bank has grown with our clearing, you know, with our clients throughout the world. It's interesting, you know, when you come to visit us in
Mm-hmm
in, you know, in Amsterdam, I mean, they literally, our clients are really next door to the bank. This is an ecosystem that grew together. This is a business we're good at. Second, it is also for us very complementary to our business model. First, it's fairly countercyclical. When there is volatility, our clearing business, just like, you know, our global market activities actually thrive. Another element is that this is a very short-term. It's a fee business, which I like to
Mm-hmm
... implementing our NII business. It's a short-term balance sheet, so you can, you know, you can fold it, you know, quite easily, whenever you want.
Mm-hmm.
These are, you know, short-term engagements. All in all, we find it quite a complementary mix to our business model, and we also have, you know, synergies we can build, you know, within the bank, for instance, using the technical capacities of clearing with our global market activities, but also serving of, you know, our wealth business. These are all things that we think are good fits. Very importantly, we can also sustain the growth of clearing because of course you always need to ask yourself, "Hey, are we the right owner? Can we sustain the growth? This is a top three player in the world.
Can we sustain its growth over time?" This is what we clearly also shared in our strategic plan, both in terms of liquidity, but also in terms of capital. We shared that we would be willing to allocate, you know, an additional 3 billion RWA to clearing. It's not permanent. As I say, clearing can fold in, but it's up to an additional 3 billion and so this is something that can absolutely fit our business model.
Very clear. Thank you. I will then close with a question on European competitiveness.
Mm-hmm.
Not about ABN, but there is a lot happening in Europe, so I'm keen to hear your thoughts when you speak with regulators. What would be your, you know, shopping list? Or what are you asking them for?
I think it's a question that I would say goes even, you know, beyond the banking sector. I often think that Europe's main impediment is its risk aversion.
Mm-hmm.
Because, you know, I would say very often when we, for instance, have, you know, stability as the main goal for the financial sector, and I fully, you know, I was working at the Élysée at the time of the financial crisis. I vividly remember, you know, what it is to. Don't get me wrong, I fully understand this goal. There is something that we do not always factor in the equation, you know, the cost of not moving, the cost of not. I call it the silent tax of Europe, the silent tariff of Europe, not taking enough risk, and it just has sort of a cumulative impact year after year of lagging behind.
Mm.
If you look, for instance, you know, in the banking sector, you take the top 15 banks in Europe, we made the calculation between 2020 and 2024, 90% of the capital that was created by these banks has been sterilized in additional capital requirements. Maybe that makes us more stable, but at the same time, this is money that's not flowing in the economy.
Mm-hmm.
Right now, I think it is because, you know, you know, we have the Draghi report in Europe. In the Netherlands, we have the Wennink report. This is a cousin of the Draghi report, basically looking at, I would say, you know, what are the structural transitions of Europe, be it on energy, defense, digital tech, mobility. You know, this requires financing, and we know that European economy is today intermediated to almost 80% by banking financing.
Right. Mm-hmm.
When you sterilize capital, then, you know, it has its toll on the economy. It's just a fact. What I like is that I also feel there is a growing awareness, which is important. We certainly don't call it, you know, deregulation in Europe because we don't like the word, but let's call it simplification, so on. I think there is this awareness and, you know, I can only welcome the fact that we're more willing on focusing on, I would say, the risks that matter.
Mm-hmm.
Proportionality, and also making sure that I mean, we manage to have more, a more perfect banking union because in fairness it's still an imperfect banking union. Many rules are still, you know, country dependent. I mean, if you look at the Netherlands for instance, we have the Dutch mortgage rule.
The Dutch mortgage rule.
We have, you know, the countercyclical buffer of 2%. I mean, you have many rules that are country-specific.
Yeah.
That takes also their toll on the economy. I think the awareness that if we want, you know, a strong Europe, we also need a strong financial sector and what it implies, I think is very welcome. Let's see what comes out of it.
Thank you very much, Marguerite.
Thank you very much. Thanks.