Earnings Call: Q4 2020

Feb 10, 2021

Good morning, and welcome to the ABN AMRO 4th Quarter 2020 Analyst and Call. During this call, all participants are in listen only mode. Following the presentation, we will conduct a question and answer session. I would now like to hand the call over to Mr. Robert Swack, CEO of ABN AMRO. Please go ahead, sir. Thank you very much. Good morning and welcome to ABN AMRO's Q4 results. I'm joined by Clifford Abrahams, our CFO for his last time Antonio Kuppa, our CRO. As you've read this morning, we have nominated Lars Kramer as new CFO. I'm pleased with this nomination and look forward to work with him. He brings in extensive experience in the banking sector And I expect you will contribute greatly to the successful execution of our strategy. Now before we start, I'd like to mention that we will finish at around 11:25 as this will enable you to attend other results presentations scheduled today. I'll share our Q4 highlights. During 2020, we've made good progress on the priorities I set for this year and we have set clear goals for the future. We We have a full agenda for the coming year and I'll outline the strategic deliveries we want to achieve this coming year. Clifford will go through our Q4 results And run you through capital developments. Tanya will then update you on impairments and developments in our loan portfolio. So turning to our Q4 results on Slide 2. Starting with the financial results of the bank, We have benefited from the resilience of the Dutch economy. There are extensive government support measures in place, which have been extended into the summer. Impairments moderated in Q4, thanks to continuation of these measures, but also from the good progress we're making in winding down our non core portfolio. I'm pleased that our efforts to increase fees are paying off as fees increased across all business lines. We have achieved a milestone with the delivery of our cost saving program of $1,100,000,000 Over the full year, our return on equity for the bank excluding non core was 5% despite exceptional losses during the first half of the year. The profitability in CIB Non Core was disappointing, resulting in a loss for the bank overall. Given the dividend ban, we will not declare dividends for the first half interim dividend for the first half of twenty twenty one. And given the results, we won't declare a dividend over 2020. We are keeping the final dividend over 2019 reserved and are well placed to pay this out once the dividend ban is lifted. We expect that the rollout of the vaccination program will facilitate a significant lifting of restrictions in Q2, rapidly leading to a strong economic rebound in the second half of the year. Now turning to strategy. I'm pleased with our progress in winding down our non core portfolio and we are evaluating opportunities to accelerate further. We outlined new financial targets including a framework for capital return during our November update. We have a full agenda for the coming year in terms of strategic execution, which I'll outline later. So let me spend some time looking back on my 1st year on Slide 3. When I started as CEO in April, I set out the clear priorities you see here, And I am pleased with our progress on these. At the onset of COVID-nineteen, we took quick and decisive action. We proactively offered payment holidays to support a large number of clients. As the payment holidays ended, most of our clients are able to repay. We're making good progress in our anti money laundering remediation programs. We now have around 3,800 FT feet feet feet feet feet feet feet feet feet feet feet feet feet Es working on AML. We strengthened our risk framework in response to the large exceptional losses during the first half of the year. And together with the wind out of non core activities, these measures will greatly improve our risk profile going forward. We are well underway to be the personal bank in the digital age for our clients And our strategy lays out how we will move forward from here. Last but not least, I'm satisfied with the progress we are making on enhancing the bank's culture. So turning to slide 4, Oren will give you a look through to the core bank. On the top left, We show the financial performance of ABN AMRO excluding non core alongside non core and the total group. Notwithstanding the difficult environment we're faced with, The core bank still managed to show a decent ROE of 5.4%. In 2020, the cost of risk for the core bank was running at twice through the cycle rate, Partly due to a disappointing start of the year. The profitability of noncore has been very poor. However, I am pleased with the progress we are making with the wind down. So far, the wind down has been capital accretive. We've released more capital than losses made since announcing the wind down in Q2 despite related one off write downs. For this coming year, I expect a lower cost of risk also for non core. Alongside client redemptions, We've undertaken a small number of loan sales and we carefully evaluate opportunities for further such disposals. There's good liquidity in the market. However, we will only transact if we safeguard value and so we will be selective on disposals. Moving to Slide 5. I'd like to highlight some of our key commercial developments. I am proud of the speed and extent we helped our clients following the start of the pandemic. During the first half of twenty twenty, we offered payment holidays to clients across business lines. And during the second half of twenty twenty, we managed to show commercial momentum, mainly in areas less affected by the lockdown measures. In particular, I am pleased with the progress we're making to increase our fee income, which will make the bank less sensitive to low rates over time. Across business lines, we're adding new services and bundling these in premium service packages. We're also increasing our income on advice. In addition, we took action on low interest rates by winding down the savings business of MoneyYou And we lowered the threshold for charging negative rates to $500,000 on January 1. We entered into a strategic partnership with OTO, where we combine our equity broker services in the Benelux. Now this partnership enhances our overall capability while controlling costs And enables us to capitalize on a healthy transaction pipeline as clients seek fresh capital coming out of the lockdown. So So staying in the Netherlands for a moment, I'd like to move to slide 6 to discuss economic developments. Given the pandemic, The Dutch economy was strong, unemployment low and government debt was low and declining. Since the onset of COVID-nineteen, The Dutch government has spent around $60,000,000,000 in total to support the economy, predominantly on income support. With the announcement of more severe lockdown measures, The government has also announced extension of support programs through this summer. As a consequence, bankruptcies remain low And a significant proportion of the Dutch are still confident about the future. And this is reflected in strong house prices and transaction volumes. In the coming year, we expect unemployment to rise as support measures end, but we do expect GDP to rebound strongly in the second half. Now what does this mean for the bank? We expect impairments in 2021 to be below 2020, but in excess of the through the cycle level. Mortgage should hold up with house prices still increasing with transaction volumes coming down somewhat. We expect to see some growth in SME lending. So moving to Slide 7, I briefly want to remind you of the outcome of our strategic update. In November, I presented our strategic update and targets. We have a strong foundation with leading market positions across all customer segments, Retail, Private and Corporate Banking, a unique proposition. Our main market is the Netherlands, an attractive market in a resilient economy, as I mentioned before. The strong digital capabilities of the bank became very evident in the beginning of the COVID pandemic when the bank moved to an off premise organization within days. We have long term trusted relationships with our clients and are well known for our expertise. Let me briefly remind you of our vision we presented in November. To our clients, we want to be a personal bank in the digital age. We choose to serve those clients where we can achieve focus and scale in the Netherlands and Northwest Europe. We will continue to lead in sustainability. And thirdly, we built a future proof bank with a simplified and centralized operating model. And embedded in a culture of accountability and execution, safeguarding our license to operate, the 4th part of our vision. We set out clear financial targets, which are challenging yet achievable given the current low rate environment. And let me be very, very clear. We are committed to deliver attractive distributions for shareholders. So we've set ourselves an ambitious program and on the next slide I'll highlight our strategic agenda for the coming year. Starting with customer experience, we're looking to drive the use of digital channels up further, especially for SMEs. This year, we want to have fully digital client onboarding operational. Mortgages are our largest product, and this year, we plan to launch MoneyYou as a price competitive label targeting the intermediary market. Moving to sustainability. We aim to be the 1st choice of our clients in sustainability, addressing a clear need and attracting target clients. We will focus on 3 specific areas to support our clients' transition: climate change, circular economy and social impact. I expect to show progress in all these areas by year end. We are building a future proof bank, which is digital by design. We need to further simplify and centralize the organization, which will free up time for front office staff by removing admin and processing tasks. We aim to make a big jump in the number of end to end digitalized high volume processes from 10% now to 40% by year end. This year, we also hope to close the sale and partial leaseback agreement for our Gustav Mahler headquarters. And the pace of branch closures will remain at around $20 per year, which will take us well below 100 branches by year end 2021, reflecting the strength of our digital channels and the preferences of our clients. So we have a full strategic agenda set out for 2021. Now I'd like to discuss the cost implications on Slide 9. We successfully delivered our $1,100,000,000 cost reduction, resulting in a $5,100,000,000 cost base over 2020, Excluding restructuring provisions, these cost reductions have offset the increasing regulatory costs over the years as well as general cost inflation. We've set and will deliver on our new cost target of no higher than $4,700,000,000 by 2024 given our good track record of cost control. Underlying these new targets, this new target are $700,000,000 of new cost savings and we expect to achieve the first $100,000,000 during 2021. And we've made it clear that we need to invest before these savings come through, requiring around $100,000,000 in 2021. There are a few other factors impacting this coming year, such as higher regulatory levies and AML costs increasing further. Together, this leads to a cost base of $5,300,000,000 in 2021 and will decline thereafter. And with that, I'd like to hand over to Clifford. And as you know, this is Clifford's final results presentation for ABN AMRO. I'll say a few words later on. Over to you, Clifford. Thank you, Robert. As you mentioned, this will be my last set of results Before I head back to work in the U. K, I've hugely appreciated working for you, Robert, this past year, and I will greatly miss many other great colleagues. Clearly times are challenging. I'm convinced that ABN AMRO has the balance sheet strength, the franchise and the strategy succeed as the economy recovers strongly later this year. Now turning to Q4, where our net result was modestly profitable as impairments have moderated further. As you know, our NII is impacted by low rates. We started charging negative rates And I've lowered the threshold further on January 1, and we've wound down the savings business of MoneyYou as Robert indicated. We're also working hard to increase our fee income. Our results are starting to show through with fees up across all business lines this quarter. Clearing again had a good quarter due to the high market volatility. We delivered CHF1.1 billion of cost savings and are now working on a further CHF700 1,000,000 of cost savings by 2024. Impairments moderated in the second half of the year, reflecting the resilience of the Dutch economy and the extensive government support measures as well as progress on CIB non core wind down. Turning to slide 11, I will comment on CIB Non Core. Robert outlined the good progress we've made on the wind down of the Non Core business And you can see we have achieved good reductions in loans and risk across the various sectors. The negative relative and other income are partly due to haircuts on asset sales. And we are evaluating opportunities to accelerate further the wind down, which might further impact other income in 2021. Offsetting these haircuts is the capital release from asset sales as well as lower future impairments. We maintain our objective for the wind down to be capital accretive. And over the last two quarters, the wind down has in fact been capital accretive. Let me explain how. We've reduced Basel III RWAs by €2,500,000,000 despite significant TRIM add ons taken in Q3. So Basel IV inflation for non core reduced from around 33% in Q2 to around 10% in Q4. So that means the decline in RWAs under Basel IV is in fact around €6,000,000,000 Leading to a capital release just short of €800,000,000 in relation to our 13% capital target. And this capital release more than offsets The CAD500 million of losses over the same period that is during H2. Now moving to loan developments in ABN AMRO Core on slide 12. Our market share in mortgages improved during Q4 to 17%, Those seasonally high prepayments led to a small decline in total mortgage volume. COVID-nineteen and government support measures are impacting lending volumes market wide and CB and CIB core are feeling the impact as many clients have limited their funding needs. This is also reflected in the lower uptake of loans under government support schemes. I do expect client lending to stabilize and then show A modest increase in 2021 as the economy recovers and support measures are phased out. Now turning to interest income on slide 13. To counter the impact of negative rates, We are charging negative rates on deposits, bringing deposit volumes down and pushing hard to raise fee income. Nevertheless, NII declined during Q4 in part due to the wind down of non core activities and a one off charge relating to mortgages. Let me explain this one off charge. Given low rates, clients are refinancing mortgages and using interest averaging to spread out their prepayment penalty. However, clients don't pay a penalty if they move their house. So clients are relocating more often than reflecting our assumptions and the charge in Q4 corrects for this behavior. This correction relates to the period since 2018, and so we expect the substantial charge to be a one off. Offsetting this charge is a CHF 23,000,000 revaluation of our DSP claim. So that means overall underlying NII It's around €1,400,000,000 in the quarter and I expect this to continue into Q1 as we will start to benefit from our lowering the threshold charge in negative rates to €500,000 We've seen very little deposit outflow since January 1st as we see our competitors applying similar pricing. In the quarters after Q1, I expect NII to trend down due to ongoing low rates and CIB non core wind down before the effect of recovery coming in through the Summit. We've not booked any potential benefits from TLTRO participation and have not yet decided on our participation in future schemes. So given current loan volume developments, it remains very challenging for us to meet the requirements for the lower rate. We expect pressure on NII to ease as economic conditions improve and support measures are phased out later in 2021. Now moving to fee income on Slide 14. As Robert mentioned, our fee initiatives are paying off, and I'm pleased to see fees up across all business lines during Q4. Private Banking benefited from improved markets and clearing continued to benefit from high trading volumes a good operational result over the year. COVID-nineteen is impacting severely fees in the credit card business, Down $10,000,000 versus quarterly run rate. And together with the non core wind down, we expect total fees to remain a bit below €400,000,000 in coming quarters. I already mentioned haircuts taken on the sale of non core loans And other income was further impacted by a negative revaluation for private equity during Q4. For 2021, other income May remain lower from further asset sales in C and L B non core and I expect private equity to remain weak. On the other hand, There is the potential for gains on real estate disposals, including our very substantial head office building. Now turning to costs on slide 15. I'm pleased with our cost control, which we've demonstrated over the years. As mentioned by Robert, We delivered on our program of €1,100,000,000 of savings as planned, and progress is now well underway to reach our target of a further €700,000,000 cost savings by 2024, and I expect the first €100,000,000 such savings in 2021. Looking at the 4th quarter, personnel expenses as well as other expenses increased from Q3 due to AML costs reflecting both employee and non employee ETE increases. We expect AML costs to peak at around €425,000,000 in 2021 as we ramp up investor. The first of the large remediation programs to compete and we will start ramping down from there. I'll now hand over to Tanja. Thank you, Clifford. 4th quarter impairments amounted 220,000,000 bringing the total for the year to 2,300,000,000. This is below the lower end of our guidance of 2,500,000,000. This is mainly explained by better performance of the CIB portfolio, both core as well as non core and a faster reduction of the non core portfolio as Robert Oveci already mentioned. Looking at non core, the rising oil price improved the outlook for the sector and we saw good liquidity in the lending business, allowing clients to refinance and CIB to sell performing assets around par. This Also allowed us to successfully restructure a number of files and sell some non performing loans within provisioning levels. Turning to Commercial Banking. The actual inflow in Stage 3 and new defaults is well below what you would expect given economic circumstances. This is in line with what we see in the Netherlands. Bankruptcy rates in Q4 2020 were well below the levels of 2019. This is the effect of the large scale government support. As underlying developments are negative for economic growth, We took a management overlay of €92,000,000 to capture the effects of the current circumstances. Our outlook for 2021 has become somewhat more positive, But uncertainty remains from COVID-nineteen and CIB non core, for which we have taken around €200,000,000 of management overlays in total. Our retail book continues to perform well and we are positive on the strength of our mortgage book. The cost of risk for 2021 is expected to be lower than 2020, both for the core as well as for the core bank as well as for CIB non core. Now moving to Slide 17. Our total loan book amounts to €252,000,000,000 with 65% in retail, predominantly in mortgages in the Netherlands. Our corporate loan book accounts for 30% and is well diversified. The core bank shows predominantly exposures to Dutch clients and is well spread across different sectors and industries. Exposure to the sectors affected by the lockdown are modest. This includes non food retail, travel and leisure with high coverage ratios. Also many clients are receiving some form of government support. Within real estate, we have limited exposure to impacted sectors Such as retail and hotels, providing some resilience to the current circumstances. Turning to non core, the largest sector remaining is oil and gas, spread over reserve based lending and TCF. Stage 3 exposure is substantial, but well covered. A positive development has been the increase in oil price recently. We remain cautious around non core portfolio as some tail end risk may materialize. With that, I would like to hand over back to Clifford. Thank you, Tanja. Despite this difficult environment, we laid out our capital framework during our November investor update. Our primary capital metric is now Basel IV against which we determine room for capital distribution Once uncertainty is reduced and restrictions are lifted. We have a very strong capital position and are fully prepared for Basel IV. You see we estimate our Basel IV CET1 ratio at over 15% now. We've rounded our estimates pending further clarification of the rules, which we expect over the summer. As a consequence, we're well placed to pay the full year 2019 dividend in due course, which remains reserved and excluded from capital ratios. Turning to Basel III, the TRIM process is finalizing And has resulted so far in €21,000,000,000 of RWA add ons. And this has significantly closed the gap between Basel III and Basel IV RWAs. I expect further closure by year end 2021 as we plan to move some portfolios to Basel III foundation and standardized approach participation of Basel IV. It's currently uncertain if and when the Dutch Central Bank will impose a floor on mortgages. But rest We're well capitalized under the new metrics. And lastly, the phasing in of the MREL target has been brought forward and We're now targeting around $46,000,000,000 of senior non preferred issuance this year. With that, I'd like to hand back Board. Thank you, Clifford. So turning then to Slide 19. On this slide, I'll relate the targets we set for 2024 with our current performance on these targets and give some guidance into 2021. Starting with our return on equity. Over 2020, our return was 5.4 percent excluding CIB noncore. I consider this as a fair reflection of where we stand relative to our target As noncore will be wound down by 2024. I expect ROE to remain low in 2021 with noncore diluting overall returns again this year And improve after that as noncore winds down further, costs reduce and income stabilizes. A number of initiatives will come through in 21, which should improve our market share for mortgages and SMEs. I've outlined cost developments for the coming year, and we have a clear trajectory set out to bring cost below $4,700,000,000 by 2024. Coming here, we expect cost of risk to remain elevated below 2020. This goes for both core as well as non core. Our capital position is very strong. Basel IV is above 15% We expect this to remain strong. Due to the ECB dividend ban, we will not pay any interim dividend this year. Once uncertainties reduce And the dividend ban is lifted. We're well placed to resume dividends at 50% payout as well as pay the full year 2019 dividend. So to wrap up, our 4th quarter results showed moderating impairments. We made good progress winding down the non core portfolio. Our efforts to increase fees are starting to pay off and we're delivering on cost savings. Looking ahead, we expect an economic rebound in the second half of the year once restrictions are released. We have a full agenda for the coming year in terms of strategic execution on customer experience, sustainability and making the bank future proof, Which brings me to the end of our Q4 presentation. Before I open the line for questions though, I'd like to say a few words as this is indeed the last analyst call, Clifford and I will be hosting together. So, Clifford, I know I speak on behalf of everyone at ABN AMRO when I say that you will be missed. You've been instrumental over these last years for the bank, both as a CFO and as a much appreciated colleague. Let me also say it's been a pleasure working together. So on behalf of all of us, thank you for all that you've done, and we wish you a fantastic continuation of your career as you embark on a new chapter, this time in the UK. So now I'd like to ask the operator to open the call for business for questions, sorry. Ladies and gentlemen, we're starting the question and answer session now. Investor Relations. Go ahead please. Our first question is from Mr. Bruno Petrarque of Kepler Cheuvreux. Go ahead, sir. Yes. Good morning. And thank you, Clifford, for your time at ABN. A couple of questions on my side. I wanted to come back on the comments you made around haircuts on the loans on the non core. Could you come back a bit on the run of strategy? I mean, you've progressed quite well, obviously. How do you see the remaining part of the book, Vikan of €11,000,000,000 remaining, I mean, how much will be sales versus runoff natural runoff? And How much haircut have you seen so far on the transactions which have been executed? And then also linked to that, The EUR 11,300,000,000 risk weighted assets are non core. This is, I think, a risk rate above 100% now. So how do you expect that to be released. Will that be released in 2021? Or will that come later? The second one is on the NII. And you've seen again a volume effect. I think it's €17,000,000 negative. We've got that for a couple of quarters now, and I was wondering if you try to quantify how much is COVID related or lockdown related And if you expect actually the volume effect to really pick up around the end of the year as you expect a recovery in H2. And then maybe just a final, I mean, you have Basel IV above 15%. So does that mean that we could expect ABN to start a share buyback. I know about the dividends interim you plan to pay, but what about share buybacks? I mean, you are above the 15% and treasurer hold. I know you we have a restriction now from ECB, but I assume it will be lifted in Q4. How do you see the potential for share buyback. Thank you. So let me take the comment on the share buybacks. And Clifford, could you reflect on the wind down process. So on share buybacks, indeed we are over 50% Basel IV and we set a threshold. We will make that We'll take that decision at the end of 2021 as we have certainly around circumstances at that time. But it is indeed fair to say that we're well positioned at this point. We need to take that decision though at the time knowing full well circumstances. Maybe Clifford on the runoff side? Yes. I mean I think you cleverly got about 4 questions in there Benoit. So I think I've kept track. So we're pleased with the wind down of non core. And when we announced it in Q2 And indeed, Q3, things were very uncertain. They're still uncertain, but we're seeing good liquidity in markets, recovering commodity prices, And our clients are able to refinance elsewhere. And so as you see loan volumes down 45% during H2 to last year. We've seen most of that progress in TCF, which tends to be shorter dated. But we also it's pleasing to see how much progress we've made in Natural Resource As you see a little over €1,000,000,000 in each quarter. And so I think we are now looking at a reduction of a further 15% down to 40%. So it's a 60% total reduction by year end 2021. So that's lower than we were thinking in Q2 last year, and that reflects our ability to wind down ahead of contractual maturities. In terms of haircuts, we want to be clear this is about safeguarding value And where markets were a bit more difficult, maybe in the middle of last year, we were very cautious about invest. In selling loans, we've done a small amount actually in Q4. So it's coming through in other income, But we wanted to flag it as a tool. So we're looking to wind down at pace. So we're not looking to hang on to these assets. And where we can sell assets and release provisions, release capital, we'll take advantage of that. And the effect of that may well be more negatives in other income, but the benefit is capital is coming out And we won't get future impairments. So really loan disposals can be seen as sort of an acceleration of future impairments. So we've got the capital to deal with it. So good progress. And if markets continue, I expect to make further progress. I think in terms of you highlighted capital release. Again, we're pleased with the capital release at H2. Capital will be released Somewhat lagging to the overall portfolio. We've as you know, there are other elements of capital, which a bit more sticky operational risk as well as market risk. So we expect capital release to Broadly follow the portfolio, but somewhat lagged. So it may well be a year or 2, But we feel on track. The other comment your question you raised was around volumes. And I'll refer to Slide 13 in the pack, and I think you highlighted the €17,000,000 negative in terms of our transition. That's very largely volumes rather than margins. And if you look at the slide before that, Slide 12, You can see we've seen volumes coming down in consumer lending, which is actually quite high margin. And that reflects the fact that Everyone's at home not spending money on travel and restaurants and the like. So I would see that as recovering when the lockdowns And in the same way, I mentioned CIB core and CB core, you can see those on Page 12 ticking down, not dramatically, but ticking down given low client funding needs, government support. And again, I expect that to stabilize and pick up Through this year, so that would substantially reduce that to that minus 17 in coming quarters. I think around capital, I think so I think Robert addressed your points on capital Buybacks, consideration would be alongside the decision to pay out the full year 2019 dividend, which A little over €600,000,000 still in the balance sheet. Thank you very much and good luck. Thank you. Investor Relations. Our next question is from Mr. Benjamin Goy of Deutsche Bank. Go ahead please. Yes. Hi, good morning. Two questions, 1st on net interest income. It fell on a clean basis, 3% in the Q3 Q on Q and now 4% Q on Q in the Q4. So just wondering, thank you. You just highlighted on the probably improving loan volume outlook In 2021, but wondering after the Q1 with the deposit repricing benefit, should The lower for longer broadly stay each quarter, and I remain under pressure. And then secondly, fee income, some good initiatives In the Q4, but you reiterated your guidance of below than €400,000,000 Is there sort of saying over earning on the activity or are still some on the activity based fees? Or is there still some uncertainty around the success of repricing initiatives? So I was wondering why you are not turning a bit more cautious on that line. Thank you. Yes. Maybe I'll take the one on fees and Clifford, you can take on NII. Indeed, we were it was good to see in Q4 that across the business lines we were picking up on fees. But much Clearly, it will also depend on how the how COVID-nineteen further evolves, because it is so much directly attributable To on the one hand customer behavior, as Clifford alluded to, but on the other hand, the recovery of economic activity. We are given the so given the status of vaccinations here in the Netherlands, certainly one of our biggest home markets, Given the status of vaccinations at this point and therefore the potential for the economy To actually kick in toward the latter part of 2021, it should really position us well. But that's why you'll see a somewhat subdued, If I can call it that guidance on fees, although I would emphasize that all the measures that we have taken thus far, Early indications are indeed that fees are picking up and therefore we are making the right kind of transition. But Clifford, maybe you can Stand a bit on NAM. Yes. I think just one figure I'd throw out is on credit cards, The effect of the lockdown is about €10,000,000 in fees per quarter. So roughly €40,000,000 for full year. So you can see there's the leverage around fees. So we'll look for the lockdown to be lifted in due course, But fees are vulnerable to overall activity, hence our guidance. We're not far short €400,000,000 per quarter as it stands in Q4. On NII, looking at the figures, I mean, we break out the bridge in quite some details. We know you're interested in it. And the deposit volumes and margins minus 28%. I mean, we estimate the effective low rates to be around minus 20 Per quarter, it moves around because of the shape of the yield curve and so on. But that's, I mean, broadly speaking, the quarterly run rate, While rates stay where they are, the effect of passing on negative rates to that broader segment down to 500 1,000. Is it is of that order of magnitude? You can work out the figure. It's roughly €30,000,000,000 50 basis points. So it's roughly €30,000,000 €35,000,000 a quarter. And That only kicks in once as it were. We've identified on that slide the amount of deposits between €100,000 to €500,000 That's another €34,000,000,000 although clearly not in a position to comment on our approach to negative pricing there. We don't current price negatively on those deposits. In terms of the CIB non core wind down, in Q3, we talked about a headwind of £10,000,000 a quarter, and That's roughly the run rate because we made good progress in Q4. There was a little bit more than that. And I talked about Asset volumes in response to Benoit's question. So that should give you a feel of the dynamics around NII in the short term next quarter, which is why we're sticking to around €1,400,000,000 And then through the year, you'll see These other effects, the wind down will continue. I meant we discussed low rates, but volumes in particular, we think should benefit From lockdown measures easing and the phasing out of government support measures and overall economic recovery where we expect a strong rebound. Thank you very much and all the best, Clifford. Thank you. Next question is from Mr. Farquhar Murray, Autonomous. Go ahead please. Hi, everyone. Just one question actually from me, if I can. On the AML settlement, I presume there's nothing to say incrementally there. But with that now likely to be a full year 2021 event, could I just ask how you might We approach that with respect to the dividend policy. Specifically, would you look through a settlement charge in full year 2021 when thinking about the 50% payout ratio? And additionally, do you expect the ECB to permit that and also pay out allow you to pay out from excess capital even if profit is still around Kind of maybe challenged or around 0 for the year. Thanks. Yes. Thank you. Thanks for the question. On the AML, Look, I don't really want to get ahead of ourselves. And so I'll just continue the answer that I've given before. Really no comment as to where we stand nor on timing. We are we'll continue to cooperate As we have and will continue to do so. And in terms of any follow-up questions in how we would assess Potential outcomes under whatever circumstances. I think we'd have to take the considerations and the facts At that time as they are, including any potential conversations with regulators. So I don't want to get ahead of Okay. Thanks a lot. Cheers. Next question is from Mr. John Peace, Credit Suisse. Go ahead, please. Yes. Thank you. And also thanks to Clifford and good luck in future endeavors. Invest. So my two questions would be, firstly, when you talk about potential real estate gains, you did mention a very substantial head office I mean, how might we size those gains for next year? And then the second question would be on the cost of risk. I realize this is an impossible question, but the 2021 consensus for provisions is about 60% higher than the H2 run rate in 2020. And I just wondered how do you think about that? Do you think that's a conservative estimate from analysts So too conservative or just what's your view there? Thank you. So on the real estate gains, Clearly, I'm not going to get ahead of the transaction. There's a book value of Clifford. So it's about a $200,000,000 It's $250,000,000 book value. So you know the 5,000 square meters. Yes. So we'll leave it at that. And In terms of the cost risk question, Tanja? Yes, it's indeed a difficult question to answer, but I can say a few things here. You see in our presentation that we make a distinction between The full bank and the core bank and well, the core bank will Play a more important role in the overall numbers going forward. So in 2021, but even more so in 2022. So I think that's one data point. Well, I've talked about the mortgage portfolio. We are positive about the strength of this portfolio that will Let me play a role as well. Our outlook for house prices is still an increase of 5% in 2021 and afterwards More moderate at, I'd say, 1%, but still increasing that will be positive for our mortgage portfolio. And then I mentioned that as well on Commercial Banking, we are cautious. We do expect That we will see companies to face headwinds in 2021. So what we've seen in 2020 here, you will see again in 2021 and maybe even a bit more there. So I think that are the data points that I give you and hopefully you can Investor Relations. Following question is from Mr. Stefan Medialkov, Citi. Go ahead please. Yes. Hi, good morning. It's Stefan from Citi. I had a couple of questions. On the NII, you guys mentioned that there's been no decision on the benefit from the In PO3, nor on the potential take up later on. However, you are also saying that you are expecting investor. Modest growth into the second half of twenty twenty one. So wouldn't that make sense to take up the Additional TOTRO thinking that you might actually meet that one benchmark. And Any thoughts on the existing, TLTRO III, whether you are inching close to the 0% Eurozone loan growth. So some color on TLTR-three and some color on TLTR-three point two, I guess. The second question is on the unemployment rate. I mean, when I look at your unemployment rate assumptions For the Netherlands, they're quite meaningful. I don't know if the city economists are too bullish or you guys are too bearish, but Are you not worried given those unemployment rate assumptions on asset quality in Certainly, 2021, 2022, 2023, especially when it comes to consumer lending within the sector as well as Etame lending. Thank you. Thank you. Clifford, could I ask you to take the TLTRO? Yes. Look, we're pretty cautious about the current TLTRO III. We borrowed 32,000,000,000 investor. The benchmark threshold is March to March, March 21, and we are, I would say some way below the hurdle. That's in common with The Dutch market as a whole, I think if you look at Dutch lending versus other countries in Europe, the Netherlands is one of the few countries where lending has gone down for the reasons We talked about I think you make a good point about stabilization and growth. And with those other schemes Referencing lending out into the future, they may well be beneficial and we just haven't taken the decision So we see that as an opportunity, but we're cautious about booking the income associated with the current Tanya? Yes. And then on the impact of the economic outlook, Well, we do feel that we included in our projections, the economic outlook, especially unemployment going up in 2021 2022 and that will have an effect on our portfolio, although I'm Well, positive about the strength of our mortgage portfolio, you see, well, unemployment will play a role there. But we do expect regardless of this increase in unemployment that house prices will be resilient. So that's one aspect. Consumer credit also there, it will have an impact, but it's a relatively small portfolio. And we I have also strong lending and underwriting standards for this portfolio. And on SME, I think I mentioned that as part of commercial banking, we do expect some uptick there, especially in certain sectors that are more vulnerable to the current circumstances. And I've mentioned leisure and non food retail as examples there. And that has been included in our investor guidance that we have given. Great. Thank you so much. Next question is from Mr. Tarek El Mejak, Bank of America. Go ahead please. Hi, good morning. So thanks, Kipad, For all the help last few years and good luck. So just a couple of questions, please. First of all, on the dividend. Can you clarify How it will happen for as we work for the interim that you pay really in the summer. So that's where we skipped. So we'll be paying 2021 Dividends potentially at the final and interim depending on profitability or how this would work. And then for the Potential 2019 dividend, potentially paid in Q4 this year. What are the discussions with ECB? How does this work? Because If we think about your profitability this year, if we forecast higher cost I mean, high cost of resilient consensus, Maybe some gains from real estate, you will still be around breakeven. So if you're not allowed to pay a dividend under credit restrictions, I know that this will be lifted, but still the logic is still the same. Banks with poor profitability should save capital even if it's high level of capital. So how do you think about that? And lastly, I will try my luck again on cost of risk. I mean, through the cycle guidance is 25, 30 basis points. Constancia is at 33 basis points. So how should we think about cost of risk? Can we double the through the cycle or is that super synergies? Thank you. I'll ask Clifford to give a bit more color on dividend, certainly in terms of also how we're dealing with it for next year and then Tanja Maybe comment on cost risk. Clifford? Yes. So in thinking about the dividend, Clearly, the expiry of the dividend recommendation is an important benchmark. And we said after that, not necessarily in Q4, during Q4, but that's The Board will think about current profitability, but we highlighted in Page 4, you can see actually the underlying business non core It's really quite profitable even in a tough year like 2020 and with some exceptional losses. And the losses Very largely you're in CIB non core and you can do your own projections for 2021, but we expect ROE to remain low because you've got dilution effect of non core, which is clearly not something that's going to be there permanently. I think Farquhar talked about I'm not speculating on that, but that would be a one off of a one off nature As with that gain that the other question talked about in respect of Gustav Mahler. So So a Board will take a forward looking view around profitability. I mean, you'd be heading into another winter at that point. So the Board would need to put all that together to take a view on 3 elements, right? The 2021, including that interim that you talked about, which would be accrued until after that September date expires. The full year 2019 dividend, Which has already been reserved for and not subject to a formal ECB approval process. And then clearly any buyback, which as you know is subject to formal ECB approval. And Robert commented earlier on the Yes. Let me take the question on cost of risk. And in terms of your question in detail, the guidance of the long term to the cycle cost of risk stays the same. And what I can say is that, well, at the core bank, we'll be well, not much Closer to that number, but we also need to include the uncertainty for the non core bank in our projection for 2021. So that makes it more difficult to come up with an exact well, a more exact guidance than I have given. And as I mentioned, I'm very positive about the strength of our balance sheet of the core bank, where I think you need to take into consideration that for Commercial Banking 2021 will still be a year of, yes, of, well, headwinds for our clients and therefore, Yes, increased levels of cost of risk. Thank you. Clifford, I'm just trying really to understand here what you're saying on the investor. So if you put together all the board consideration, that means that will happen in 2022, right? I mean, there's no payment in Q4. I'm just trying to understand the sequencing of the dividends compared to the banks. So Q4 so this is more like a 2022 distribution if it happens, right? You mean during the calendar year 2022? Is that your question? Yes. Yes. I mean, well, the dividend recommendation looks like it's expiring at the end of Q3. Yes. Then I've seen what other banks have said. I mean, it'd be up to the bank to consider its timing at that point, but there'd be those 3 components that I referred to. And the bank would need to decide whether it would be appropriate during Q4 Ahead of the winter and ahead of full year financial statements, which I think take your own view on that. And then Robert, maybe you can comment further, but I We probably said enough because it's quite Yes. I was just going to say, I don't think it's very helpful to speculate on timing. There's a set of circumstances we will have to take into considerations when and if they do apply. And that's what we will then do towards the end of '21, and then we'll come to decisions. Okay. Thank you. Next question is from Mr. Kiri Vijayarajah of HSBC. Go ahead please. Yes. Good morning, everyone. A couple of questions on the fee side, if I may. So firstly, On the increase in the fee packages across the various businesses you're putting through at the moment, I was wondering how does that sit with efforts to kind of switch clients On to digital channels, is that a help or a hindrance in terms of charging more for less of a full service proposition? So how that how those sort of dynamics play out? And then on the fee run rate in the clearing business, it feels like you've had a couple of good quarters There now. But looking out to 2021, what's the risk that we could see a bit of a fallback as we progress through the rest this year having come off a couple of good quarters as seen in the clearing business? Thank you. So So, I'll take the first one and Clifford maybe you can take the second part. I think the digital capability of the bank has actually allowed us to move fairly fast around putting together packages as related to our targeted segments. And on the basis of enabling these Payment packages that we put together on the basis of our digital infrastructure, it then allows us to charge fees. And so we've seen actually the first good indications of that in this quarter and I certainly am positive about that trend continuing. So It is the digital capability of the bank that's allowing us to do this fairly fast and it's also the customer Relating to the choices we've made in that segment, that is then leading to an increase in fees. Now I'm optimistic about that process continuing, but it indeed is saying something about the infrastructure and the data digital infrastructure of the bank. Clifford, do you want to comment on fees for clearing? Yes. I think, look, we're pleased with clearing. So fees in clearing were up over 20 Year on year. So that's material to the bank as a whole. That's €50,000,000 plus. Clearly, There's quite a bit of volatility in 2020. We also saw I mean, we had an exceptional loss, as you know, Earlier in 2020. And I think the market responded generally recognizing the risks of that business. So that to some extent is helpful to the fee profile that Clearing delivered last year. So who knows what 2021 will bring, but I think we live in uncertain times, which is benefiting the clearing. And I mentioned earlier, another business that order actually had a hit of that order of magnitude, which is our ICS, our credit card business. And I do expect there to be a little bit of reverse correlation there. So as things normalize, that credit card business should recover. In fact, I think there's going to be a lot more traveling next year as everybody gets released from lockdown. So that business should do very well in 2021. Great. Thanks very much and best of luck at Virgin Money, Vivid. Thank you. Next question is from Mr. Omar Fall of Barclays. Go ahead please sir. Hi, thanks for taking my questions and best Wishes Clifford for the future. Just firstly, what's the residual maturity now on the non core loans? Then I know you mentioned that the majority of uncommitted exposures expire in 3 months. How much And then Tanya mentioned some tail risk remaining on the non core. What do you mean by that precisely? It seems like impairments on the book are mainly principally driven by the oil price, which is obviously uncertain. But Just wondering what other variables precisely you would say concern you in terms of cost of risk there, Especially because that book is pretty well seasoned and seemingly well reserved now. And then finally, just wanted to touch on expenses. I guess there was some disappointment in November on the forecast increase towards €5,300,000,000 this year. It's only been a couple of months, But could you update us on whether there's any potential for that to be worse or better than that, Especially as I wonder if you've further explored like some of the permanency of the COVID related savings, savings on real estate, for instance. Thank you. Okay. Can I ask Clifford to take on the maturity question and Tania respond to the non core and I'll take the expenses? Yes. I think in terms of maturity, I'd refer you to the presentation that we gave in Q2 Last year, it was actually Page 22, which shows the maturity extending well through to 20 24, but it's pretty de minimis then. So maturity, I would say is at this stage, It's between 2 3 years, stated maturity, and we've been in a position to Wind down within that time. I think in terms of just briefly, Just like comment on costs, Robert. I just Yes. Why don't you speak? Yes. On costs, now we're sticking to the $5,300,000,000 I I think Robert ran through the transition. And clearly, we are looking at opportunities To save money, and we're pleased with how we came in, in 2020. But we do need to put the investment into In particular, on the €700,000,000 of cost savings as well as the growth initiatives we have in place. So I would expect cost to land in line with the target of €5,300,000,000 And that's on the back Clifford, if I could add, it's on the back of the discipline that we have shown in prior years of executing against plan. Maybe Tanja? Yes. On the tail risk, well, I think as Well, Tifit mentioned that the remaining maturity is between 2 3 years for some parts of the portfolio. And there are some parts in the portfolio that are, I would say, less liquids. Clients We'll find it more difficult to refinance and that's why I point out to this risk and then you need to think especially around Well, clients in Asia and in Latin America. It's It's a smaller part of our portfolio, but still there is remaining risk in these pieces. Okay. Thank you. Thank you. Our next question is from Ms. Julia Aroura Miotto of Morgan Stanley. Go ahead please. Yes. Hi, good morning. Thank you for the presentation. A follow-up question for me on provisions. So we hear that 2021 is uncertain and we're not guiding more precisely. But I was wondering, looking forward, can we expect to be back at the cycle cost of risk By 2022 already in your estimates. Or when do you see ABN being back to through the cycle. Thank you. Yes. So it's even more difficult To guide for 2022 then for 2021. So but definitely, well, it depends also very much on How well the vaccination strategy will pan out and the economy will turn to normal, but I can say once The economy turns to normal and we have worked on winding down CIB non core successfully. We do expect that we will lend within the range that we have guided. But the exact data, That's quite difficult you can imagine. Depends very much on the success of the vaccination strategy and the economy picking up again in the course of 2021. Thanks. Next question is from Mr. Thomas Duwosnes of Goldman Sachs. Go ahead please. Yes. Thank you for the presentation and good luck Clifford for your next venture. Two questions, one on NII and the second on tax rate. The first one is just on the ability of banks and the industry to start Passing on more the negative interest rates. Would you say that the customer acceptance and thus your ability and that afford us To pass this on further from here is improving or no? And on the tax rate specifically, Because of the non core wind down and potential losses that you might incur there, could you give us an update on what Should be your tax rate from 2021 and going forward if you're not able to offset losses with new or recognition of DTAs please? Thank you very much. So I'll take your first thank you for the questions. I'll take the first one and I'll ask Clifford to comment on tax. I think generally you can say that the charging of negative rates based on outflows that we're seeing and the fact that it is carried out consistently across the market Has led to a, I'll call it, an accepted reactions on the customer base. And clearly, it is something that We continue to watch very closely any potential development on negative rates. But based on the outflows as we see them, This is something that is becoming part of the market in which we operate. Clifford, if I could ask you to Yes. On taxes, I think, I mean, you know the drivers. So Q4 tax rate is high. You've got non deductibility of bank tax that has a big impact in Q4 As well as the losses in foreign subsidiaries where there's no deferred tax asset to be recognized. I think the rather than give a tax rate, I would say, I think you should model it by looking at core, non core. So Clearly, the tax losses in non core will be, we think, substantially unrecovered Because non core is outside Europe and in particular our Dutch tax base, Whereas our taxes in Europe and the Netherlands, where we're making money, will follow usual tax rates with A few pluses and minuses. So if you model that out, that will give you the blended tax rate. But I think it's 0.5 meter forecast effective tax rate without investor. Given the uncertainty in both core and non core at this point of the cycle. All right. Thank you both. Thank you. Next question is from Ms. Anke Rijingen of IRB Day. Go ahead please. Yes. Thank you very much for taking my question and thank you to Clifford and all the best. Just two follow-up questions. First, on the NII, when you say trending down From the Q1 level, I just wanted to confirm that this is basically pre any assumption of a material benefit from volume growth, no benefit from additional deposit charging and also no TLTRO benefit. And then secondly, on the capital return, I realize there's a lot of uncertainty, but do I understand it correctly that Taking on a 2020 dividend plus the 2019 and potentially buyback, it's not unlikely that you We could be having a payout ratio above 100% versus 2020 earnings. And I was just wondering on the running basis, Is there like an upper limit in terms of the 50% plus the buyback? Thank you very much. So let me I'll take the first one and Cliff, if you could comment on the second part of that question. The answer to your first question is yes. I was just I was looking at the question again, but it's the answer is yes. But Clifford, can you comment a bit more on this? I think I'll try without getting into too much speculation. Well, I think in general, It's hard to have regulatory dialogue on dividends far off into the future, right? So actually before we announce The capital framework in November, you can expect that we would have engaged in it with regulatory dialogue, right? And at that point, we said 50% payout Plus buybacks would be considered above 15%. So even at that point, we would be contemplating payout ratios in total cash above 50% by definition, right? So I think in principle that would apply going forward not just to us but other banks. And there are no we've obviously looked through the legals, but in terms of the approach, There's no formal ECB approval on dividends, but clearly given the recommendation, the ECB has a very strong view about Dividends in certain circumstances at some point that will expire and the ECB has indicated that. And there's no sort of Payout ratio cap of buybacks plus interims plus future previously accrued dividends. There's no arbitrary cap. I mean, I think any Board of the bank and the regulator will take a sort of forward looking view of economic conditions, profitability and the capital position of the bank. We are very strong, which is why we have got the confidence to say we're well placed. And in particular, around Basel IV, You've seen our numbers. We're already above the 15%, which is well above our target of 13%. Okay. Thank you very much. Next question is from Mr. Robin van den Broek of Mediobanca. Go ahead please. Yes. Good morning, everybody. Thanks for taking my questions. The first one is again on NII. Sorry to maybe be a bit repetitive here, but just want to get some reasoning behind the potential math going forward. I mean, our consensus for 2022 is €5,500,000,000 which is not too far off, €1,400,000,000 run rate per quarter. You've already said what You said on NAI trending down after Q1 2021. But assuming the €10,000,000 and €20,000,000 of related to the replicating portfolio and the CIB noncore unwind, you're looking at €30,000,000 of headwinds. If I look at Your loan book and more than half of it is mortgages, which will be difficult to grow, I guess. So in order to offset those Pressure points. You probably need to get to close to 4%, 5% of the core book to offset that pressure. And otherwise, I guess the 2021 consensus expectation becomes quickly at risk. Any comments around the math Sure. It would be helpful. Secondly, I mean in 2020, we've seen an enormous Inflow in your deposit base, savings coming in. I was just wondering your thoughts On the DTS system, which was expected to be fully funded in 2024, if I think I think that was the timing. Has there any been talks about maybe extending that? Or are we looking for higher contributions to that system In the intermediate time. And thirdly, just a quick one. You probably can't say much about it, but can you discuss any potential M and A files, Just whether there are M and A piles on the table or not? Thank you. Yes. Let me take the last one. Clifford, if you could take First 2. So on M and A, I would just reiterate what we've said before, that we are continuing to look at M and A opportunities, but I won't comment on any investor. Individual files at this point. We'll continue to look at opportunities as they present themselves. And we've also previously guided toward A focus on Private Banking. On NII, I think the Robert answered that question very From one of the other question is that outlook excludes those three factors. I think in listening to your Summary, I think you're more cautious on mortgages than we are. So you've seen our mortgage market share tick up in Q4. We're launching a new label before the summer. We're feeling good about that. And we have a target of a 20% market share Actually, mortgages. And we talked about how resilient that is. And that's our biggest portfolio. I think it's hard to And we really are in extraordinary times, right? So given the strength of Dutch economy and the government support measures, I think maybe in contrast to everyone's expectations. Volumes have come down in our core Corporate Banking businesses in the Netherlands. And I think that reflects the good shape that the sector is in, Which means we do expect a rebound. Now when exactly it is, I think it's going to be hard to say. And I think I'd highlight some of the other factors, whether it's TLTRO or deposits on which we're not currently charging negative rates To do your math. I think on DGS, I don't think I have any special insight. I mean 2024 seems like a long way I recognize what was discussed. I mean, maybe the time we felt would be a limit To that to paying for that pot over time, but I'm not aware of any decisions to continue or stop it in fact. So your guess is as good as mine I think at this point. Okay. Thank you very much and good luck in your future job. Cheers. Thank you. We have a follow-up question from Stefan Nedialkov, Citi. Go ahead please. Yes. Hi. Thank you for taking my follow-up question. It's on capital. When it comes to comparing Basel IV to Basel III, You guys disclosed a couple of numbers. So if I look at the presentation, you say that at the end of this year, Basel 4 and BASA-three are less than 10% away from each other. So that would imply around €12,000,000,000 of IWA difference. Then in another slide, or could be actually the same slide, you talk about the dividend, The reserve 2019 dividend being 51 bps on Basel IV and 58 bps on Basel III. So if I run those numbers, I get to a difference of around $15,000,000,000 in RWAs. Could you confirm what number is the right one we should be using, $12,000,000,000 or $15,000,000,000 for Basel IV. And how is that gap closing into 2021? You do point out to the DNB mortgage for $5,000,000,000 You also point out well, I'm assuming the trend that you were guiding to for $2,000,000,000 in 4Q You ended up being $1,000,000,000 So there is a bit more from that coming plus additional TRIM. What else explains the gap $12,000,000,000 to $15,000,000,000 besides the GMV mortgage floor and the leftover trim from this quarter? 12 year standardized models, of course. Thank you. Yes. So some impressive calculating going on there, very good. I mean, we have given Basel IV to 1 decimal point to round it to avoid this sort of So we said I think the numbers have got a bit shifted in the PowerPoint, but The RWA inflation is less than 15% now, and we think it will be less than 10%. And I think just in terms of the range, We're probably at the towards the top of your range or on the bottom of your range in terms of RWA inflation. But the core point is We are now running the bank on Basel IV. That's our primary metric, already over 15% under Basel IV. I think TRIM is relevant because it also has a flow through to Basel IV constrained IRB investor. And Basel III is the current reporting metric, so we do need to report on that and give you a guide on that. But We've really made the transition in terms of how we run the bank and how we think about the capital constraints. So we're feeling good about it. In terms of 21, I think there are 2 things which we've set out in that bullet point 4 on that page. We think TRIM is very largely done. We've taken the add ons to €21,000,000,000 It's possible there tweaks as we get Final letters and we flow that through our systems, but that's very largely done. So I think further convergence will be the couple of things we Talked about the DNB mortgage floor, which is possible, but there have been no indications that will come in. That's about €5,000,000,000 And then we've got plans to put specific portfolios onto the foundational standardize, Which is really Basel IV ready. So we're taking the view that we're ready for Basel IV. We're ready to absorb the Basel III Double inflation because it means we get the whole business, get our systems set up for Basel IV, which is the new regime and it's coming in fairly Thank you. Thanks. We have a follow-up question from Buenav Patraque, Kepler Cheuvreux. Go ahead please. Yes. A very short one actually on the Private Banking. Could you clarify how much net inflows you had This quarter, I think there's a net outflow, but mainly coming from cash. I'm actually interested to understand If clients are putting more money into securities actually, especially because investor. The charging of the negative interest rate, is there any behavior change there to be expected? Thank you. Clifford, could you? Yes, that's correct. So we have seen some outflows. I'm looking at that number, which is cash. And we announced the lowering of the threshold on negative rates. We announced that months ahead to give clients the opportunity to move or to switch into securities, if they so wished. We're seeing in I think the most of the driver in Q4 was around market performance. So we saw sort of double digit market performance improvement, dollars 10,000,000,000 We get an internal market feed from the retail business of €500,000,000 So I think the underlying NII is okay. I'd say we hope for more and when sentiment broadly improves and given our increasing strategic focus on Private Banking, I mean, I would hope that would be Consistently NNA positive in the securities area, but in Q4 that negative investment. Our final question is from Ms. Daphne Tsang of Redburn Neurothlysis. Go ahead please. Hi, thank you for taking my question and best of luck, Chris Bott. I have one question on NII. Just really trying to get a better understanding on the moving parts there in your Slide 13. So if I start with the CNY28 million, can I clarify that that includes the CNY20 million from Margin, which is unchanged from your guidance and RMB8 1,000,000 is pretty much from the fact that you have lower deposit pool, which you could charge negative rates Compared to Q3? And then the RMB16 million, I suppose you run because you are running the non core book Faster than originally planned and you now are aiming for 60% reduction by the end of the year. Should we expect that RMB16 1,000,000 to be kind of the run rate for 2021? And then the RMB17 1,000,000 on volume, you commented that is pretty much driven by the volume rather than the margin. Can you add a bit more comments about the product pricing behavior through the quarter And whether you see the pricing pressure will increase from second half as you expect the economy to recover and volume to Group. Thank you. Clifford, could I ask you to build a bit more? Yes. I think The €28,000,000 is roughly €20,000,000 right? So we give a view of €20,000,000 per quarter And that €20,000,000 is a, call it, a smooth estimate based on the effects of low rates. So the €28,000,000 It's primarily low rates, really. So I wouldn't it's that €8,000,000 your split is spuriously Precise, right. So I would expect going forward that to be of the order of €20,000,000 at least in the next few quarters. The CIB rundown, you can see on page 11, that GBP 16,000,000 is really Q on Q, right? So 86% down to 70%. But you can also see loans and advances is coming really came down strongly in Q4. And I think you can figure this out yourself. We expect the wind down of non core Slow, at least based on our current plans in 2021. So we've done 45% in H2, and then we expect a further 15 in the course of 2021, which adds up to 60%. And so we expect a sort of slowing down as we saw the rapid runoff of TCF. Now we'll look to opportunities To accelerate that if we can while safeguarding value, but that will give you a feel for some of the dynamics. And if it comes down at that rate, we'll be done in 2 quarters, right, looking at page 11 and that's not going to happen, right? So I expect that GBP 16,000,000 flow. I think the in terms of I think the asset volumes and margins, Yes. I mean, it's primarily volume, that's what we said earlier. So I think The current market is rather strange. I mean, we're seeing competition for good credits as we are. We're keen to attract good credit. We're keen to support all our clients that need help, otherwise in appropriate terms, but we're also quite cautious about our risk appetite, particularly in real estate, for example. So that's not really a price driven market for us. We're just cautious right now. And so I don't expect fundamental changes in margin through 2021. I think the volume impacts will be the main effect. The volume and risk Impacts will be the main drivers of that segment in 2021. Thank you. Thank you. We have no further questions, sir. Please continue. Okay. Well, then that concludes the analyst call. I really want to thank everyone for their questions and look forward This concludes the ABN AMRO 4th quarter 2020 Analyst and Investor Call. Thank you for your time. You may now disconnect your line. The conference is no longer being recorded.