Earnings Call: Q2 2018

Aug 8, 2018

Thank you for holding, and welcome to the Abi and Amro Second Quarter 20 8 Analyst and Investor Call. At this moment, all participants are in a listen only mode. Following the presentation, there will be a question and answer session. I would now like to hand the call over to Mr. Kees van Dijkhuis, CEO. Go ahead please, sir. Thank you very much, operator. Good morning, and welcome to the analyst and investor call for ABN AMRO's Q2 results. I'm joined by Clifford Abrams, our CFO and Tanja Kuppen, our CRO. Today, I will run through the Q2 results and also update you on the corporate banking as promised. Turning to Slide 2, I will highlight the main points. I'm pleased with our financial results for the 2nd quarter, with solid net profit of CHF 688,000,000 Our operating income remains strong and impairments have reduced significantly compared to the previous quarter. Our capital ratio has improved strongly to 18.3%, reflecting balance sheet management and is now well placed within our target range. We have declared an interim dividend of €0.65 a share, in line with last year. We're also progressing with our strategic agenda and are well on track to achieve our 2020 financial targets. We are taking action on CIB, our corporate bank. I will go through the details later, but will summarize here. We will refocus the global sector of CIB and reduce RWAs by €5,000,000,000 by 2020. Together with cost reductions of €80,000,000 we will deliver an ROE of 10% by 2021. Last week, we announced the acquisition of a private bank in Belgium. This adds €6,000,000,000 of assets under management, strengthening our position in this attractive market. I would also like to take this opportunity to announce an Investor Day on November 16 to be held in London. I will now highlight our sustainability activities and then update you further on CIB. Within Private Banking, sustainable investments are now the default option for our clients in the Netherlands, and I'm delighted that over 80% of new Dutch clients are happy with this default. We will introduce this approach in Germany and France shortly. We're targeting a doubling of sustainable assets under management to €16,000,000,000 by 2020 and making good progress. On the corporate side, we are involved in many interesting projects. We launched a €200,000,000 energy transition plant, which will focus on sustainable energy and carbon reduction. And during Q2, we financed a 110 megawatt solar project in Shil, shown on this slide. We are committed to building out further our franchise around sustainability. Now turning to our plans for CIB. I want to be clear with you that we have some very good client franchises. Our corporate franchise holds a top 3 position in Netherlands. We also leveraged our strong sector knowledge and domestic platform to serve selected corporate clients in Northwest Europe. Clearing is a top 3 global player predominantly in derivatives contracts. The global sectors, which we often refer to as ECT, have a strong client base, including many industry leaders. And finally, we have a number of product units, which support the client franchises. We have leading capability here as evidenced by our top XTEL ratings in the Benelux. However, CIB's financial performance has not been good enough. We have steadily grown CIB over the years. I'm on Slide 5 now. However, costs have followed top line growth, which means that we achieved only limited benefits of scale. RWAs have also increased but to a lesser extent. Consequently, ROE has been disappointing over the years, remaining structurally below our group target of 10% to 13%. This conclusion doesn't change if we look through the recent elevated impairments and the costs for SME derivatives. We have Basel IV coming, so we will also be faced with high capital requirements in the future. All this means we need to look hard at where and how we compete in CIB. Turning to the next slide, I want to go into more detail on the individual sectors. Over recent months, we've done that in-depth analysis. You see here on the left our sector spotted against the key drivers of cost efficiency and margins. This allows us to view the sector's ROE in relation to these metrics. And as you can see, generally, our sectors deliver a return above 10% through the cycle. The 2 exceptions are TCF, Trader Commodity Finance and Global Markets. Global Markets will focus on a limited product offering tailored to our core domestic clients, further reducing its cost and RWAs. We announced this with the Q1 results. We've taken a careful look at our global sectors. Within TCF, we will address low return clients, derisk Diamond's portfolio further and downsize the organization reflecting these changes. Natural Resources and Transport and Logistics sectors meet the return target. Nevertheless, want to reduce our exposure to highly cyclical sectors as well. This will mainly impact energy offshore and shipping. We will continue to develop the business where we have both strong franchises and good returns, which is the Corpus Netherlands, clearing and private equity. Now turning to the financial impact of these plans. We will improve the return on CIB through 3 main levers: reducing capital, lowering cost and transforming the business model. We plan to refocus global sectors and global markets and reduce RWAs by €5,000,000,000 to €34,000,000,000 by year end 2020. This will benefit the group quarter 1 ratio by 90 basis points. We estimate revenues will be impacted by around €100,000,000 by 2021. We will rightsize the organization to reflect that we will be servicing fewer clients. We will reduce costs by €80,000,000 through a reduction of CRB staff of 2 50 FT feet feet feet feet feet feet feet feet feet feet feet feet feet feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Feet Restionization and scaling down our international presence. CRB will take a restructuring charge of around €50,000,000 during the second half of the year. Reducing RWAs and costs are important, but we also need to transform the business model to stay competitive as we transition to Basel IV. We will further optimize capital usage, putting more emphasis on distribution. Our focus will be on core clients spanning multiple products, and sustainability franchise will be further expanded. So to recap, CIB is core to ABN AMRO, serving an international active client base. Most sectors meet the group return target, but CIB overall does not. We will reduce capital, lower cost and embark on transforming the business model. Within global sectors, we will reduce capital in TCF in highly cyclical sectors, leading to a net reduction of RWAs of €5,000,000,000 We will bring costs down by €80,000,000 reflecting a more focused CRB. You can see here, I'm on Slide 8, these measures will deliver an acceptable ROE of 10% by 2021 and better position us for Basel IV. Furthermore, the group as a whole, these plans are also capital accretive, benefiting CIT ratio by 90 bps. Now I'd like to hand over to Clifford to take us through our Q2 results. Thank you. As Kees mentioned, we are pleased with the 2nd quarter results of a net profit of EUR688,000,000 Last year, we booked the sale of Private Banking Asia, which explains the movement you see here in operating income. Expenses have trended down on the back of our cost saving programs and impairments were down significantly compared to the Q1 of this year. Tanja will discuss these in more detail later. I will describe the individual line items on the next slides, but first I show the trends in our client lending on Slide 10. You see here mortgage volumes remained fairly stable over the quarter. We see house prices continuing to rise, however, transaction volumes are lower. Competition remains strong, especially in longer dated mortgages, and we remain price disciplined and have allowed that market share to decline slightly to 19%. Commercial Banking is growing well at attractive margins. We see growth across most sectors reflecting the strong Dutch economy. Our outlook remains positive for the Dutch SME sector. Kees set out our plans to refocus CIB, and we've already started to reduce the loan book during the Q2. The rise in loan volumes measured in euros within CIB that we've delivered during Q2, you see the CIB is in fact wholly driven by dollar appreciation. Turning now to net interest income on the next Slide 11. NII was up compared to Q2 last year, mainly due to higher mortgage penalty fees. Corporate loans showed both volume and margin growth. Mortgage volume and margins remained broadly stable. This was offset partly by headwinds from the low interest rate environment. Our income related to our equity duration declined as a result. In addition, we have lowered our equity duration to position ourselves for future rate increases. This feeds into our NII outlook for the full year. We expect NII to increase compared to 2017 supported by mortgage penalties, but partly offset by the effects of continuing low rates. Moving now to fee income on the next Slide 12. I mentioned last quarter that the Q1 2018 fee income is a fair reflection of our current underlying run rate. This quarter's fees are pretty much at the same level as last quarter. While other income remained above trend, this quarter Private Banking had a gain on a disposal related to an earlier divestment. This quarter, that is Q2, accounting effects were also modest and private equity showed a decent result of €29,000,000 following the very large gain in Q1 this year. Now moving to costs on Slide 13. As you can see from the left hand chart, personnel expenses continue to trend down. FTEs have decreased by over 1500 since Q2 last year and 400 since Q1 this year. During the Q2, we closed another 28 branches, bringing the total down to 151 branches right hand chart shows how operating costs are declining reflecting our cost savings program and divestments. The divested activities had an annual cost base of around €100,000,000 So in this bridge, around only €25,000,000 is due to the lower run rate and that's because we took €56,000,000 of transaction costs in Private Banking last year in relation to the disposal of Private Banking Asia. So underlying cost savings improved by €44,000,000 compared to Q2 last year and cumulative savings now stand at €570,000,000 versus our target of €900,000,000 which we announced at the end of 2016. So I'm pleased with our cost performance so far, but we have more to do. I now want to say a few words on costincome ratio going forward. Turning to the next Slide 14. I'm pleased with the decline in costincome ratio on the left hand chart. Our cost reduction programs are delivering, as I said earlier, and our run rate for the first half of the year is already in line with our €5,200,000,000 cost guidance for 2020. Since we announced this guidance, we have divested our private bank in Asia and today we have announced the CIB refocus. Reflecting these developments, the cost guidance can be resharpened to around €5,000,000,000 So despite the impact on revenues from the CIB refocus, we are on track to achieve our target cost income ratio of 56% to 58% by 2020. I'll now hand over to Tanja to update on impairments. Thank you, Clifford. I'm now on Slide 15. 2nd quarter impairments were significantly lower than previous quarter, in line with our guidance. Impairments taken this quarter are in the same industry sectors as Q1. On a number of clients in the onshore and upstream energy sectors, we booked some additional provisions. Healthcare related impairments were concentrated on new files. We see these impairments as sector and file specific and not as indicative of a broader trend. For drilling, offshore service vessels and crude tankers, the market is challenging, but seems to have bottomed out. I don't expect substantial impairments for Healthcare for the remainder of the year. The indicators for the Dutch economy remain strong and the outlook here remains positive. As a result, we expect the overall defaulted portfolio to decline further. The outlook for full year impairments continued to be below the through the cycle cost of risk of 25 to 30 basis points. Of course, we can never exclude sizable impairments on individual clients. I will now hand back to Clifford. Thank you, Tanja. We're pleased with the strong increase in our CET1 ratio over the quarter. We've actively managed our RWAs including the first effects of the CIB refocus. RWAs reduced by $3,000,000,000 during the quarter, reflecting credit quality improvements, reduced risk in our investment portfolios and lower volatility in global markets reducing market risk. KACE set out our ambition to reduce CIB's RWAs by €5,000,000,000 or 90 basis points to group CET1 ratio. We've already achieved around €1,500,000,000 and so expect further benefits of around 65 basis points for CET1 ratio. These will materialize over time more gradually through 2021. The leverage ratio improved to 4.1% as we carefully manage our exposures here. As you are aware, CRR2 will boost the leverage ratio once implemented. I will now hand back to Kees. Thank you, Clifford. Looking at our targets, I'm pleased with our ROE. I'm on Slide 17. We are committed to all our business units delivering on group target. We are announcing action on CIB today in line with this commitment. We've worked hard to lower our cost income ratio, but have more work to do to bring it structurally within the target range, as Geva said. CIB refocus impacts our top line, so we will work even harder on reducing expenses. Our Core Tier 1 ratio is 18.3%, well placed within the 2018 capital target range. We expect capital formation to continue. CIB update strengthens capital generations further in the coming years. We are clearly more comfortable on the prospects of additional distributions this financial year. We maintained our interim dividend of €0.65 a share, reflecting an increase in our interim payment to 50%. Our final decision on additional distribution will be made towards the end of the year. Following any potential additional distributions, we want to remain within our quarter 1 target range. We are well on track to deliver what we set out to achieve since the IPO and have made a number of adjustments to our initial plans as there's a new team at helm. Coming November is therefore a good moment for senior management to present ourselves and run through our plans in more detail. I hope to see you all there. And before we go into Q and A, I would just like briefly recap the highlights on Slide 18. We delivered a strong quarter with a solid net profit of 688,000,000 euros Impairments increased significantly from Q1. We've shown good progress in bringing down the cost base, and I've updated you on CIB in how this will benefit the capital position of the group. Now I'd like to ask the operator to open the call for questions. Thank you. Thank you, sir. Ladies and gentlemen, we're starting the question and answer session now. Our first question is from Mr. Stefan Nedakov, Citi. Go ahead sir, your line is open. Yes. Hi, good morning. Two questions on my side. In terms of the EUR 5,000,000,000 of overall CIB reduction, could you let us know what is the associated Basel IV inflation that would have been there you had not gotten rid of those EUR 5,000,000,000 of RWAs? And the second question is, in terms of potential capital return, how would you think in terms of buybacks versus dividends? And on what time frame would those be determined, end of year or half year going forward? Thank you very much, Stefan. I think it's a bit too early to say exactly where what the effect on the €5,000,000,000 would be. We have given a general update on that, but it's kind of stripped, of course. With respect to capital return, I would say, as mentioned before, it can be can, of course, be a pay ratio increase, can also be buybacks. Although, of course, for well, for both, presumably, we need regulatory approval, but we keep all those options open actually. Can you say something on the Basel IV impact? Yes. So as you know, Stefan, we have a Basel III target this year, the 17.5% to 18.5%. We announced in February that we thought Basel IV impact was 35% in terms of RW inflation at year end 2017. That's clear that CIB has a higher RW inflation than average. And so by targeting €5,000,000,000 RWA reduction on CIB, we should see the benefit of that coming through our numbers for Basel IV. We are managing the business for Basel III, but clearly ensuring a good transition through Basel IV as we set out in February this year. Okay. Thank you very much. Our next question is from Mr. Farquhar Murray, Autonomous. Go ahead sir. Your line is open. Good morning, gentlemen. Just two questions from me, if I may. Firstly, on the CIB restructuring, you flagged obviously €50,000,000 of restructuring costs rated to cost cutting. But should we expect any upfront losses from the EUR 5,000,000,000 RWA reduction? I'm just wondering if there's kind of element to that. And indeed, obviously, was that part of that in the first well, in the second quarter, given you've made some progress there? Secondly, a little bit of kind of a follow on from Stephane's question actually. Given the CIB and the EUR 5,000,000,000 probably has more than average Basel IV inflation. But equally, you've done this kind of balance sheet kind of clear up and we've obviously seen a reduction in Basel III RWA in the quarter. Should we are we still comfortably able to take the 17.5% to 18.5% indication as a under Basel III as a good indication of where you want to be ultimately under Basel IV? What should we think of that if you're wanting to drift up within that target range? Or can we just take the 17.5% to 18.5% pretty cleanly for the end of the year? Thanks. Thanks very much for your question. No, we don't expect actually, aside the restructuring cost, any losses on portfolios when we take action on the €5,000,000,000? With respect With respect to the €5,000,000,000 I think the question there is we would like, I would say, to stay in that bandwidth. And I think it's important perhaps there to stress that in the past, we guided actually a we guided on all the portfolio differently, yes? We said our mortgage is flat. On the Dutch corporates, we said more or less Dutch GDP. Well, that's higher these days, by the way, 7% in the first half of the year, 5% last year. And we guided around, well, world trade, which is a bit 5% plus on this ECT portfolio actually. And it's important to notice that the €5,000,000,000 is a reduction a nominal reduction actually from the figure we are right now, Q1, €39,000,000 to €34,000,000,000 end of 2020. And presumably, you have taken all in your models an increase of, say, the 5%, what have you, I don't know, €2,000,000,000 a year. So the decrease presumably is in your models a bit bigger, but we do it as a nominal decrease. With respect to the margin, I think we have said that we wanted to update that every year, and I think we will do that accordingly at the end of next year, the end of this year. Yes. Maybe just chipping in a little bit on Basel IV and how we think about it. As Kees said, look, we've got a Basel III target for this year, 17 to 18.5. We think the right way to manage capital this year is Basel III and we've set that by reference to our Basel IV views. And so clearly, the difference between Basel IV and Basel III is going to vary over time. So for example, where we see credit improvements in the mortgage portfolio, we get the benefit in Basel III. We don't see the benefit in Basel IV because of the very rigid approach there. So you'll see some sort of pluses and minuses around Basel IV. But we want to give confidence to the market that we have clear metrics. We're still in the Basel III world, and that's why we have a Basel III target. We're well placed in that range, and Kees indicated our appetite, the distributions around that. And at the end of the year, we'll have another look at that Basel III target to reflect developments. They could be developments around the regulatory world, the prospects for the systemic risk buffer and so on, how we're thinking about mitigation. So there are a number of factors there that will factor into that target range. But we want to give clarity that we are focused on the Basel III target range, which underpins the statements we've made this morning. Okay. Thanks, Raj. Indeed. Next question is from Mr. Bruce Hamilton, Morgan Stanley. Go ahead, please. Thanks. Good morning guys. In terms of the phasing of the RWA reduction, I'll see you're off to quite a fast start in Q2. So I mean, do you think it's possible you deliver the RWA reduction quite a lot earlier than 2021? Or because of the because you want to try and avoid any sort of losses on route, that's why it's kind of quite a slow phase. And then I guess what you're saying is all capital above 18.5% should come back to shareholders and you'll determine that on an annual basis. And I guess any other constraint would be leverage ratio. I presume you always want to be above 4%, but if you just sort of clarify on that. And then so second question, on the new guidance for 2020, I guess costs are €200,000,000 lower, revenues because of CIB are EUR 100,000,000 lower. So it feels like an embedded upgrade, though your costincome guidance implies revenues sort of EUR 8,600,000,000 to EUR 8,900,000,000. So it looks as though in there you're sort of is that just a bit of caution around NIM? Or am I being too am I trying to read too much into that? Because it looks like it should be a slight earnings upgrade, but then your cost income is implying a slight revenue downgrade. So just understanding of the dynamics there. Okay. Thanks, Bruce. I will take your first two questions and then Clifford will take your third question. RWAs, as indeed mentioned by Clifford, dollars 1,500,000,000 in Q2. And as already mentioned, it's focused our RWA reduction in TCF and global markets, which, of course, are, on average relatively shorter term transactions that we have there. So that's the reason why we started already and have a good reaction already. It could affect already in the Q2. So yes, we might deliver earlier than it's 2020 actually with respect to RWAs end of 2020. We will, of course, look into that what's possible. Leverage ratio, indeed, I think we want to stay above 4%. That's correct. Can you say something, Clifford, on the last question? Yes. I think I broadly agree with you, Bruce. I mean, I think in terms of upgrades, you're referring to your and your peers' views. I mean, we remain committed to 56% to 58%. I'd note consensus had a slightly outside that range ahead of this call. And we thought it was helpful to clarify that we are committed to 5.2% that we sold Asia. And if you factor in the today's announcement, we're very much targeting around EUR 5,000,000,000. I think that there probably is a little bit more caution around the income than recent quarters, partly reflecting sustained low interest rates, and you're seeing that in the comments I made regarding NII. But also, look, we're taking capital out of CIB. We have been growing that strongly recently. And so don't expect income to power ahead in CIB as we take capital out. But we do expect sustained increase in ROE, which we think is in the interest of the business. Great, helpful. Thank you. Our next question is from Mr. Bernard Petrarque, Kepler Cheuvreux. Go ahead please. Yes, good morning. Bernard Petrarque from Kepler Cheuvreux. Two questions from my side. So first one will be on asset quality. You seem to be a little bit more positive than you were last quarter. So just wanted to confirm this view. We know you've commented that Healthcare will not be an issue in H2 potentially. Offshore services have been turning the cycle and I don't see any big impairment on shipping, which was also problematic last quarter. So I just wanted to understand better what changed your view? Are you happy now with the cleanup process you have actually done in the past two quarters? And what is specifically the outlook for H2? So I think you are guiding for less than 25%, 30% for full year. But specifically for H2, how do you see the loan loss provisions moving? 2nd one will be on the CIB. I just wanted to understand how you will actually address the lack of scale benefits you have been seeing at the CIB operation over the past years Because you want to reduce costs by €80,000,000 but top line will also shrink by €100,000,000 So there's limited effect on cost income ratio for the CIB operation. So excluding the €80,000,000 cost reduction, how do you see costs moving at CIB going forward? And just to come back on your growth outlook, is your 5% rebased from the EUR 5,000,000,000 still a kind of good proxy for future loan growth for the CIB operation? Thank you very much. Okay. Tanja, can you take the first one, Clifford the second? Okay. Well, thank you for your question. And indeed, well, as indicated in the Q1, we were cautious on the several sectors. I will talk you through the different sectors. You've seen indeed that our impairments in Q1 are significantly lower than in Q1 in Q2 versus Q1. If I look at the sectors then on energy upstream, we have seen some impaired clients that where we had to add some provisioning. But if we look at the outlook, we are, well, more optimistic. We still stay cautious on the offshore segments where we see, well, investments not fully coming back. In terms of shipping, I do expect that we stick to the same provisioning levels as we've seen in the first half of this year. And especially, we stay also there cautious with respect to the segment related to offshore. I think TCF is quite stable. Of course, within TCF, we have the diamond sector, and that is a segment that we monitor very closely, well, given the developments in that segment, but also given our decision that we close our Dubai portfolio. So all in all, we our outlook is quite stable for the rest of the year. We do expect that we will continue to be below the 25 to 30 basis points cost to the cycle. And I forgot to mention the Healthcare sector where we did a review of our portfolio, and we don't expect any new substantial impairments in the second half of this year. And if I understand correctly, you are now putting a 22 bps cost of risk in Q2, but with quite a substantial amount coming from Healthcare. Can we expect something lower than 20 bps for H2? Yes. So if you listen carefully to my guidance and to the math, for the second half, we do expect indeed a lower cost of risk than the first half. Okay. So I'll pick up outlook for CIB. I think it's important to emphasize that we've kind of reset the outlook for CIB. So I think the 5% growth that we've seen historically, we don't expect that going forward. So we've seen income growing, but we've also seen RWAs growing quite strongly in CIB. So the statements that Kees made are in respect of sort of the current position. So we're looking to take €5,000,000,000 of RWAs out sort of in absolute terms from Q1 to the end of 2020, that will have a reduction of income of EUR 100,000,000. So not a change in growth per se, but we're guiding to EUR 100,000,000 impact of that. And we're being realistic, right? If we're reducing the capital base, we need to recognize that we'll have an adverse income impact on income. Now clearly, the teams are going to work hard on that to see if we can mitigate that. But fundamentally, we're planning for a decline in income in CIB, which is why we need to work hard on costs. And the EUR 80,000,000 was cost savings, and those expressed in the same way as our original EUR 900,000,000. So we'll take those costs out and there may be some residual inflation in terms of wages and so on. And that so we're not expecting a dramatic reduction in the cost income ratio in CIB. This is really about refocus and redeployment of capital rather than, if you like, transformation as a cost income ratio. We're not looking for that. And I think it reflects a realistic plan and one that's focused on derisking, rightsizing and positioning in Basel IV rather than a step change in earnings? Thanks. Thanks. If you just strip out the kind of €5,000,000,000 AWA reduction and also the cost reduction you are planning, what would be the underlying growth of the CIB business going forward? Just stripping out all the restructuring you are planning to do in the next 3 years, What would be the underlying growth of the division going forward? Yes. I think we're guiding well, I think that's not the way we're thinking about it. So Kees has indicated that we're targeting EUR 5,000,000,000 RWA reduction from EUR 39,000,000,000 to around EUR 34,000,000,000 and that's what we expect, €34,000,000 So and the same as in costs. Now costs, you do have some underlying inflation around that, but we're not going to come back and say, look, we've delivered on our restructuring, but the business has changed in the interim and it's a different business. That's not what we mean. We're being clear. We're looking for the business to change trajectory and that will release the capital we've indicated. Okay, clear. Thank you. Our next question is from Mr. Benjamin Goy, Deutsche Bank. Go ahead. Your line is open. Yes. Hi, good morning. Two questions from my side, please, as well. First, on Dutch mortgages. So you mentioned you slipped below the 20% market share. So any thoughts on this going forward appreciated or whether you see more potential for off balance sheet measures in case competition remains intense? And then secondly, on the SME derivatives provision, there was another charge in Q2. You only said you have 600 clients that have received compensation, so much more to come still. But I assume some of the provisions you already booked are also for the files under review. So any thoughts about potential H2 charges and whether that's something we can basically close this chapter by the end of 2018? Thank you. Benjamin. We what we said around Dutch mortgages, indeed, we have been disciplined and have accepted a bit lower market share to keep margins in place, as you can also as reflected, by the way, in our NIM. So we will continue to do that. And I think, yes, off balance sheet is not something where we think sometimes about it when perhaps in the 20 years domain, but it's not a main focus point at this moment in time. But as I said, we will stay disciplined on ROEs margins and the likes and market share is a secondary one. With respect to derivatives, no, we don't expect in the second quarter an extra amount to be taken. Indeed, we have sent to 600 clients or I think it's now 800 sent letters. We are in the process of sending a lot of letters now of letters that we actually have sent already to our auditor. And we have been able now with the AFM, the conduct regulator in and out that we are able to send these also already to our clients. That's over 1500 letters. So hopefully, we can do that in the coming weeks so that we are able to also send much more debt to clients. But we have provisioned actually for all the 7,000 derivatives we have in our files. Okay, great. Thank you. Next question is from Mr. Kiri Vijayarajan of HSBC. Go ahead please. Yes. Good morning everyone. A couple of questions going back on the CIB refocusing. So I was wondering if you could give us the loan losses associated with the EUR 5,000,000,000 RWAs to be exited, either the normalized number or the 1H number, because you've given us the revenue and the cost for the loan loss number there will be helpful. And then going back to the bubble chart on Slide 6 and the impact of Basel IV, I'm just curious why there's no action or shrinkage planned for corporates and out because that's right on the cusp of your curve for 10% ROE and presumably it slipped kind of downwards under Basel IV. So really your thought process there, why there's no sort of action on that quite sizable bubble for corporate SNL, please? Angelica, you take the first one and Clifford the second. Yes. So the loan losses related to the CIB refocusing, so we assume going forward in our projections to the cycle cost of risk of 40 basis points for CIB. Well, you've seen it has been elevated over the past period, that's what we assume. We don't assume additional provisioning because of the reduction as we take, well, a gradual approach here to minimize losses. So just picking up your second question, Kiri. Just looking at the chart, we've plotted the various businesses in respect of Basel III. Basel III remains the current regulatory basis for the next few years, and it's important that all our businesses are delivering on Basel III, which is why we're taking particular action. I think the third element of our strategy is we call it sort of transform the business model. But we recognize that for those businesses that are delivering under Basel III, they will need to do better under Basel IV. We have time to transition those franchises. And the sorts of things we're working through, as you'd expect, is working looking very closely at the rules, particularly as they crystallize. So for example, shifting our higher franchise to more rated issuers and away from collateralized lending if the rules are stated land. So there's working within the strictures of the new regulation to mitigate the direct impact. But also, as we said, we really need to do more distribution of risks rather than just us warehousing those risks. So I think we are a fairly traditional corporate bank, where we maintain very large on our balance sheet the loans we originate and we need to work the franchise harder both here in the Netherlands and overseas to distribute more of those risks while serving our client franchise as well. And I think we can make that transition over time as we see some of our peers further along in that journey. Okay, great. Thanks. The next question is from Mr. Paul Czegic of Goldman Sachs. Go ahead please. Hi. Thanks for the presentation. So I wanted to ask you if you can give us a little bit more clarity on the timing of the reduction in risk weighted assets and associated loss in income and then reduction in costs. Because we know the endpoint, but how should we think about getting there? So for instance, you managed to upfront quite sizable cut in your risk weighted assets already in Q2. Should we expect anything similar for Q3? And should we expect any income loss in Q3 on the back of cut in Urozco Eta last in Q2 and so on? So any details around that would be very helpful. And then maybe a follow-up on cost of risk as well. You mentioned that overall you expect lower impairments in the second half of the year. And obviously, they came down in this quarter, but also on the back of the releases in retail segment. Should we expect more of that going forward as well? Thank you. Thank you, Paul. No, we don't expect a similar decline in the 2nd in the 3rd quarter as in the second because, of course, EUR 1,500,000,000 was a very significant one, 30% of the EUR 5,000,000,000. We have mentioned the 2020 end of 2020. So that's when we want to have the result anyhow. We will see if we can do things quicker, but that's too early to say. And of course, income losses are related to that time frame. With respect to your second question, Tanja? Yes. With respect to cost of risk, indeed, we have seen some releases in retail in the first half of this year. Well, the outlook is good. So we do expect that to continue, but well, this will be more and more to a lesser extent given the low levels of provisions that we see. We are reaching the top of the cycle. And so well, implicitly, my message is as well as that we do expect lower additions in the other segments. Okay. That's clear. Thank you. And can I come back to this risk weighted assets evolution? So you expect some growth and the €5,000,000,000 number that you give us is net of growth, if I understand correctly. So should we think about risk weighted assets reduction as a gradual process from now to 2020? Or is there a possibility that risk weighted asset reduction related to CAV will be somewhat front loaded, which means that your risk weighted assets will dip below EUR 34,000,000,000 and then grow subsequently? Yes. Just picking it up, I can see this is an area of focus. So the EUR 5,000,000,000 is net, right? So we are withdrawing capital from those particular sectors we've identified, but we are looking to see growth elsewhere. We RWA can be volatile, and we were pleased with progress in Q2. And RWAs can be volatile, and we were pleased with progress in Q2. But we definitely don't expect to see that repeated in Q3 and Q4. And to some extent, we've managed to act on some of the short term business. I think we're mindful of the impact on the quality of the book through an accelerated reduction. So we want to manage that sensibly over time. I think if you run the numbers, if the RWAs come out by the end of 2020, then the full income benefit you won't see until 2021 as you get the full run rate benefit of that. And on costs, we're looking to deliver that through 2021, but very largely by 2020. So hopefully, that gives you the guidance you're looking for. Okay. That's very helpful. And maybe just one small clarification. So on your EUR 3,000,000,000 risk weighted assets move just this quarter, we know what's related to CIB. But can you comment, for instance, on group function? What drove the change there? And do you expect any volatility in the second half of the year? Yes. I think in group functions, we've done some derisking. So we've exited certain low rated sovereign positions as we were it had jumped up in Q1, and we wanted to bring that down as we're focused on capital as we should be. I think there's 1 or 2 other things going on in Global Functions. So we wrote down the value of an investment, which hits your it hits your capital, but benefits RWAs. So there's a few things. I would emphasize that we are very focused on capital and RWAs, Basel III and increasingly Basel IV. But we do see volatility quarter on quarter, which can hardly underline trends. And we'll be keeping a close eye, as you will, on RWAs through the period through 2020. Okay. That's very clear. Thank you. Following question is from Mr. John Ekblom, UBS. Go ahead please. Thank you very much. Can we just talk a little bit about the NII on a divisional basis? Because I guess I'm trying to understand the trends. I mean, we saw quite a meaningful reduction still in Retail Banking. I was wondering, is this the kind of pace of NIM decline we should be expecting there given where savings rates are and the competitive position you talked about in the mortgage space? And then maybe if we look, I guess, both in CIB and in the commercial, we saw a very relatively good performance in terms of both NII and quarter on quarter. Are there any timing difference, for example, in the CIB in terms of running off some of these risk weighted assets? Because it looks like quite a large sequential improvement in margins. And then finally, on sticking with the NII, if we look at the underlying NII in group functions, I think it's at a sort of multiyear low this quarter. Can you say anything about what we should expect there going forward? Yes. So I think there are a few things going on quarter on quarter. So in retail, we've taken a well, a hit, if you like, in relation to our credit card business, ICS that runs through the NII line. So you'd need to strip that out. And if you do that, to me, it looks pretty flat in retail, in NII. We do see sort of headwinds over time in retail. And you can look if you look at margins, they're still pretty strong. You can see we're defending margins by taking market share loss. So I think you should not expect margin expansion from here in Retail Banking. I think in terms of the Corporate Bank, we have grown that over recent quarters prior to the refocus we've just announced. And that's had the benefit of that's benefited NII. In terms of NIM, we've lightened up on some of our sort of leverage ratio heavy areas and that would have benefited NIM. And then finally on group functions, as you rightly say, looking through some of the incidentals, you see some negatives coming through. And that reflects a couple of things, which I mentioned on the presentation, which is the effect of low interest rates on the earnings that we make. We call our equity duration, but it's effectively the earnings on our capital position. So we have a duration, so we benefit from an upward sloping yield curve on the €20,000,000,000 of our equity. Now that yield curve has flattened, so earnings are going down. We've also reduced the duration of our equity because we think we want to be better positioned for higher rates when they come through. So that will have reduced it. And so we've also it's cost us money to maintain our liquidity buffer and the cost of that are material and they come through the group functions line and get hit by low rates. So there's it was those factors that I was thinking when I said sort of headwinds of low rates. And now I've talked it through, you see where it appears in our segment exposure. Yes. So I guess, if I understand it correctly, then we shouldn't be expecting any immediate improvement in the group functions. But maybe if I can come back to both the sort of CIB and the retail. On the CIB, when you start to run off more of these risk weighted assets, should we expect not only that NII will go down because of volumes, but also because of NIM contraction from the Q2 level? And then I guess on the retail, I mean, you had exactly the same credit card provision in Q1. So I guess the reduction of EUR 14,000,000 in NII Q1Q is predominantly margin driven. The volumes are essentially flat, right? Am I missing something there? Yes. I'm just looking at the so on CIB, the we've announced the EUR 5,000,000,000 RWAs and EUR 100,000,000 income, and that largely reflects net interest income. The loan impact is of that order of magnitude. So you get a feel for, if you like, the revenue margins. And we are focusing the contraction in some of the low revenue margin product areas as Kees talked through. So that should give you a feel. We're hoping to improve the quality of our book on a sort of risk adjusted basis by downsizing in areas of low revenue margins, but also downsizing in areas of high volatility, some of which actually have quite good revenue margins. So overall, you need to do that to deliver on the cost of risk improvement that Tanja talked about. I think in terms of NII, I think I'm going to refer you to offline to the IR team to talk through the incidentals because I can't see the ICS that you referred to. And there's a bunch of other things going on quarter on quarter. But overall, what we're seeing in retail is sort of quarter on quarter through incidentals kind of flattish. But over time, headwinds relating to the things that we discussed earlier, the continuing low rates. Perfect. Thank you. Next question is from Mr. Tarek El Mejjad, Bank of America Merrill Lynch. Go ahead please. Hi, good morning everybody. Just a couple of questions please. First of all, on your deleveraging or restructuring of CAB, I think it's a very good initiative to get rid or deleverage some of the low profitability businesses. But I was a bit surprised that you couldn't actually point to any area where you could reallocate some of this capital or RWAs that delivers high returns. So lots of discussion today about shrinking, but not really perspective for growth. I mean, that gives 2 roots, either for M and A. So maybe you can actually discuss a bit what's your idea there and what is the private banking, which area you could expand non organically? And then the dividend. So I understand from the big focus on RWAs, deleveraging pattern, it will be more progressive because I guess you had all the low hanging fruits done already in Q2. So would that mean that any capital return increase or higher payout or share buyback will be more towards 2020 beyond or progressively growing? Or that's be like a more radical change in dividend policy once you get to 18.5% or so by end of the year? Thank you. Thank you, Tarek. Thank you. Yes, we did talk mostly about indeed the decline because that I think is centerpiece in our approach at this moment in time. Of course, there are some areas like well, especially the ones I would say that are on the left side of the in the chart where we feel comfortable to grow. So we definitely are going to grow also in part because it's a net figure at 5%, that's clear. And we will see where we can do deals, where we can make good returns and do that. But now I think for us, it's important not to focus on the decline of €5,000,000,000 That's our main target at this moment in time. But indeed, also, by the way, your private bank remark as well, of course, as you have seen now in with Sochen in Belgium, the €6,000,000,000 estimate management, we have already since IPO mentioned that, that could be a possibility in Belgium, France or Germany. So definitely, if we see areas of growth, we will definitely or also inorganically in private banking. As I said before, we will do that. I mentioned already the commercial banking in the Netherlands doing better than the guidance before, 7% in the first half of the year. So there's some growth there. With respect to dividends, I think we have always said, I would say, a gradual approach in the sense that in the end of this year, a yearly approach for us. But at the end of the year, we will look at this year what can we do with respect to 2018 asset payouts higher than 50 or and or So it will be a gradual approach and not a back loaded 2020 approach. Yes, yes, yes. Okay. So the guidance will be like in a year by year basis. Just one follow-up on question on costs, if I may. So I'm a bit surprised by the Private Banking Asia and new guidance on EUR 100 million lower costs from that. I mean, the deal was done a year ago. And why is this coming now? I just want to understand basically the rationale for that. Kevin? Yes. I think well, we've always frankly, we've always been clear on the 5.2 percent. And we've noted consensus. I don't know what you had penciled in for us. And I think we've got more comfortable that we can manage down costs, and we think it's important to come up with a new target and new clarity around the 5. Our primary target has always been costincome ratio. And we think it's helpful to give you guys a sense of how we're going to get there. And given the, call it, the revisions to income that we've talked about, particularly respect to CIB, we thought it was helpful to be clear on the €5,000,000,000 Okay. Thank you very much. Next question is from Ms. Alicia Chung, miscellaneous. Go ahead please. Good morning everyone. Just a couple of very quick questions from me. Firstly, of the EUR 5,000,000,000 RWA reduction, can you break down what proportion comes from each of the CIB subsectors? And then for the remainder where you aren't reducing, what is your outlook in terms of loan growth by subsectors even if it's just very high level? Then on costs, looking at 2018 specifically, what can we expect in terms of investments and cost savings this year? And can you give any guidance on cost growth? Obviously, you've talked about the restructuring costs, but that aside. Thank you. Can you take those? Yes. So I think I'll try and be helpful. I'm not going to give numbers in respect of the segments. But the €5,000,000,000 is net, as Caisse has said. We expect most of that from TCF, which includes diamonds. We do expect some further reduction on the global market side. So they were the bubbles on the right side. And Kees indicated, we're looking to derisk sort of pockets of energy in shipping where we see the risk adjusted returns is sort of not what we're looking for. I think in terms of growth within that net figure, we're comfortable with the franchises in the top left. So we'll continue to grow in Northwest Europe. So we're pleased with the progress that we're making in Belgium, UK and Germany in particular, and you'll see incremental growth there. And we've set out our appetite to grow in sort of new energy, so that would be within natural resources. So we do see some areas of growth, but I think it's net we're committed to the net €5,000,000,000 and the gross reductions will clearly be bigger than that €5,000,000,000 together with some incremental growth takes us down to a net EUR 5,000,000,000. So hopefully, that gives you some color. I think in terms of costs, just reflecting on your questions, I think we're pleased with the costincome ratio for the half year at a little over 56. I think there will be some incremental restructuring in the second half of the year. We've announced something in respect to CIB, but there may be further restructuring in respect to the work that other parts of the business are doing. We saw levies up a little bit in Q1. So there's a few things going on, but we're feeling comfortable around our progress on costs and are fully on track to meet our 56% to 58% costincome ratio target with the new income outlook set out on this call. Okay. Thank you. Our next question is from Mr. Marcel Hugen, Credit Suisse. Go ahead. Your line is open. Good morning. Thank you for taking my questions. I have 2 left. On the Investor Day, can you just tell us a little bit about the expectation what to expect just because the hard financial targets are already set? Just to get your expectations there. And the second one is the there was some press coverage on the financial vehicles, some potential benefits from lower funding costs. Is this already in the CIB update? Or is it incrementally? Thank you, Marcel. No, let's manage expectations here upfront. With respect to Investor Day, it's to after 3 years, after IPO, to show you the new team so that we're able to present ourselves, tell you about all the stuff we have done in the last one and a half year. So I think that is actually what we're aiming for and not all kind of expectation about new targets and the likes. With respect to the press coverage indeed yesterday, that's those are vehicles we're looking into, as also mentioned. And we don't expect material effects of them on our figures. All right. Thank you. Next question is from Mr. Timat Locuvelo, Do Timat, Jefferies International. Go ahead please. Good morning. Maxime Seguello, Jefferies. I have a question for you regarding the Investment Banking on the revenues on RWA. If we look on 2017, you have the margin of 4.85%. Taking into account the adjustment that you have announced this morning in terms of RWA reduction and the €100,000,000 of revenue loss, we are moving to €5,100,000,000 And this quarter, you have achieved €5,300,000,000 So what is your goal in terms of revenues on RWAs going forward? As you mentioned that you are going to optimize portfolio, get rid of some clients that are not really profitable? Any kind of color would be much appreciated. Thank you. Yes. Look, we do we are looking for making better use of our capital, so improving our income over RWAs. I think you've seen some mixed benefits that you referred to, and we expect to see those continue. I mentioned on the previous question that we'll this is a bit of a barbell approach. So we're looking to reduce in areas of low income to RWA where we're just not getting the returns we're looking for. But we're also looking to lighten up on what are quite high income to RWAs where we don't like the risk profile. So you see the 2 effects going on. Those should net out actually as a sort of improving income over RWA or further improvements, modest improvements. I think the challenge for the business and the sector is to build more fee income. So we're not it's not just about mix and moving to high income, which can often be higher risk as well. It's sharing more of the risk we originate so that we are leveraging our own capital. And that's what I'd like to see the business doing over time. And I think we frankly, we have the time ahead of Basel IV to deliver on that. But that's the 3rd part of our strategy, the transform the business model, and that will help those income margins. Okay. So you want to accelerate in terms of originate to distribute. You are not the first one to think about it. The question on those elements in terms of strategy is distribution capacity. Have you some pre agreement with some asset manager or life insurance who are going to give you some abilities to accelerate on that part or not yet? No, I think you're right. We're not the first to talk about it. But we are I would say I think the good news is we're behind in that area. So is peers that are doing perhaps further ahead so that we can learn from and adopt best practice. So there are market templates out there. I think we have a very strong financial institutions franchise in Europe and the Netherlands in particular. So we feel we have all the elements to make that transformation. And we need to do that over the next few years and that will help the economics of that business. And frankly, that's the way Corporate Banking in Europe needs to go, which is a little bit more of a U. S. Model. But under Basel IV, we clearly believe that's the right business model to succeed and be relevant to our clients going forward. Yes, exactly what Natixis did 5 years ago. They moved from revenues on RWS below 5% to well above 6%. Is it for you something reachable? Well, I'm not going to comment on the numbers. But I think, yes, I mean, I'm familiar with Natixis. And we really do have stronger client franchises, both with corporates and financial institutions. So we think we have the elements to really succeed in this space if we focus on it. Okay. I think we can take a few questions. And then operator, you have some questions still? Yes, sir. We have some more questions. The next question is from Mr. Rajesh Kumar, Societe Generale. Go ahead. Your line is open. Hi. Thanks for taking my question. Rajesh from SocGen Clear Research. Two questions for me please as well. Firstly, on MREL, you mentioned that your MREL target is of 29.3% based on own funds and subordinated instruments. I'm just curious that why you have not included preferred seniors as well out there? Are you expecting any changes in service stance and you might have to fill the whole MREL bucket using own funds and sub debt only? And next on issuance, I believe no plan for NPS in H2. What about 81? Any plans out there? Thank you. Jafar, can you take it? Yes. I think, look, we've adopted a prudent approach, as you say. We have the prospect of RWA inflation, RWA inflation around Basel IV. So we think this is the right way to prudently manage the transition. I think we've got no current plans in respect of a Tier 1 this year. Okay. Fair enough. Just to be very clear on Ambrell. So I mean, going forward, are you going to include preferred senior or not? Mean, that's my question basically because you very clearly said that you intend to fill $900,000,000 just by own funds and sub debt only. So what's your stance on there? Yes, I haven't got a lot to add. I mean, we're aware of the rules and we're very comfortable. I mean, the fact that we've hit our ambition pretty much already relying on more junior instruments, I think, demonstrates the strength of our balance sheet. Okay. Fair enough. Thank you. Next question from Mr. Nick Davy, Redburn. Go ahead please. Good morning everyone. Two questions please. The first one, sorry, back on the CIB plan, but it's a simple question, which is, is it enough really? Looking at the 10% ROE plus in 2021, it struck off 13.5% CET1 allocated. I mean, if you're going to have to run the group at 18%, 18.5%, that's really a plan to get the divisional returns to maybe EUR 7,000,000, EUR 7.5 billion a few years away. You're taking EUR 5,000,000,000 of RWA out, but EUR 4 probably puts them back again. So I guess the question is why not more? I mean is EUR 80,000,000 of cost reduction really getting you down to the bone? And do you not see this business still being a drag on valuation 3, 4 years from now? Sorry for the direct question, but it's just not evident to me. The second one would be on rate sensitivity. And thanks for the earlier discussion about the EUR 20,000,000,000 of equity and shortening the duration. But could you just help us with a few more bits of information so we understand which sort of point on the yield curve we're watching, at what point things stop becoming being a drag and become a positive? So if you can give us any more disclosure on the overall swap position at what duration, just some ingredient parts so we know what we're watching for? Thank you. Thanks, Nick, for the candid question. First one, rather the question is so good answer than people might think only about it. Is it enough? No, it's not enough. I think we clearly stated that this is what we should do and said here as well, we want to repair the roof when the sun is shining. So that's what we're doing with respect to getting a schedule control above 10% in the Basel environment, which these days European banks, if you look around corporate banks, CIB banks, other banks, it's already a serious challenge in Europe. But indeed, we as mentioned by Clifford and I'd say to mention as well, indeed we to take further action as well. The distribution model, as mentioned, think about the rating, have rated loans or not. So there is much more to do, which we will do. We have some time for that, but it's definitely not the case. It's for the 2 years when I'm not going to do anything else than what we said today. So that's going to be clear. Rate sensitive? Yes. Just I think we gave a little bit more color of that on Page 30 4 of our quarterly report. So where we quote the duration of our equity in years of 1.6 percent, down from 2.2 percent in December. So that's the movement I referred to earlier. So if you sort of double it to think about the maturity, so it's low single digits. So those are the areas of the yield curve to look at. Now there's obviously more going on in those lines, but that should give you a feel for the income opportunity related to our equity duration. Duration. Sorry, Nick. My mic was not okay. I heard from people. So what is that? Thanks for the candid question. It's not enough, are we? So indeed, we have to do more as we will do, as I said already, do more originate to distribute and look for rated loans instead of unrated. So we're definitely going to do more in the coming years than what we just mentioned only here with respect to yes. Thanks. Thanks. Can I ask just a quick question on the rate sensitivity? So, if I understand well, 1.6 years, so you're saying you're using basically 3 year swaps, is that right, on average? And as soon as the Yes. The next 3 year swaps above the back book, it's On that element of income, yes. But I also mentioned sort of cost of liquidity. So there's other things going on that are impacted by our by the low interest rate environment. And you'll recognize the way we manage our risk. We lock in rates over time. But as those swaps roll off, we then move into the current low interest rate environment and that headwind sort of grinds through our P and L. So where do you think the net of all of that is in terms of at what point is that can we stop worrying about the low interest rate environment? Do you think you're positively geared to rising rates? Is that a full number? Yes. We think I've given an indication earlier in our NII guidance. We are looking for rates to start moving up in these sorts of durations at the end of next year. And to the extent that gets further out, we'll have an adverse impact on our margins. That's how we think about it. Okay. Thanks guys for the answers, yes. Next question is from Mr. Alex Kawana, ODDO BHF. Go ahead please. Your line is open. Yes. Hi. Two follow-up questions from my side. The first one is on your common equity ratio. I'm sorry if I missed the answer, but assuming you hit the 18.5% by the end of the year, should I consider that everything above that number should be written to order or used for the acquisition, meaning that you are not intent you don't want to build capital above the 18.5%. The second question is on the other revenue line. I mean, you're able to hit your to beat your target on a quarterly basis. Why don't you update this target going forward? And the third question is on the distribution in the CIB. The FDA reduction, is that a net number or you need to hire people to build your distribution platform? Thank you very much. You very much, Alex. Definitely, we will give quarter 1 above 8.5% back to investors With respect to other revenues, and I would say the distribution is well, it's a figure we attached to the operation we are now doing. Of course, if we need other people if you would need other people for distribution, I think we can do it as we are. But if necessary, of course, we will do that. Other revenues? Yes. Look, I think that's a fair comment. I mean, we like to be prudent here. I you've probably got that message throughout the call. And there are quite some volatile items. So I think we're comfortable with that current guidance, but we'll reflect on that going forward. I think just one comment, just to build on Casey's comments. Our current target is 17.5% to 18.5%. And when we're in that range, we will consider additional distributions. So we're not waiting until it's above 18.5 in order to consider that. And obviously, we're well placed in the range. So you've seen we're being we're more comfortable with the prospect of additional distributions. So that should give you a feel for our decision making towards the end of the year. Yes. But at the same time, I can say that whenever you hit the 18.5%, you could be in the position where 100% of your net profit could be written to the shareholder. Is that something that you may consider? Yes. I mean, well, as the case is very clear, I mean, maybe so as a CFO, I'd say we'd certainly consider it. But if there's a credit crisis looming, we need to be looking out to the windscreen, not through the rearview mirror. Sure. Thank you very much. That's why I'm happy with my CFO now. We have another question from Mr. Bernard Petrarque, Kepler. Go ahead please. Your line is open. Yes. Just a final question on the could you disclose the growth risk weighted assets reduction from CIB? I just want to get a feel about the underlying growth embedded in the figure? For the growth I'm looking for the gross risk weighted assets reduction? Yes. Look, we've not disclosed that. So yes, I think that's it's somewhat the gross is somewhat bigger than the 5, but we've not disclosed it. I mean, we also need to recognize the business needs to trade through. So market conditions, opportunities will change between now 2020. So the business needs flexibility to trade through that. What we're committed to is a net reduction of EUR 5,000,000,000. Okay, great. Thanks. Thanks, Benoit. Operator, any further questions? No, sir. There are no questions. Please continue. Okay. Thank you very much. And I would like to thank you all very much for your questions. This concludes then our Q2 results update. And hope to talk to you again next quarter and definitely with some of you already earlier occasion. And thank you very much and goodbye. Ladies and gentlemen, this concludes this conference. On behalf of ABN AMRO, thank you for attending. You can disconnect your line now.