Earnings Call: Q3 2019

Oct 31, 2019

Ladies and gentlemen, thank you for holding, and welcome to the ING Third Quarter 2019 Media Call. At this moment, all participants are in a listen only mode. After the presentation, there will be an opportunity to ask questions. I would like to hand over the conference to Mr. Rolf Hammers. Go ahead please, sir. Hi, good morning. Well, welcome. Thanks for joining us in this call. I'll give you an update. By now, you have the press release. You probably have the analyst deck as well. So you may have some questions that will certainly give time to answer. But I will not do that alone. I have with me here tonight, our CFO and Stephen, our CRO. Just to give you a synopsis, exactly the summary of this quarter, We performed quite well in view of the rate environment. We see a continuation of our momentum with adding another 165,000 primary customers. So focusing on our differentiating experience continues to pay off. We now have 13,100,000 primary customers, which means that over 1 in 3 of our 38,700,000 customers see it as their main bank, which for a digital bank, it's quite an achievement and kind of is a testimony to our strategy that we started more than 6 years ago. And that strategy is that we have to deliver differentiating experience by making banking easier every time and rolling out new technologies, which make, for example, also mobile payments possible. So we did with Apple launch and Android lines and Garmin devices as well. The number of customers who pay like this with their mobile phones soared 35% just the quarter and the number of these mobile card transactions almost doubled in the quarter. So also on other fronts, commercial momentum remained solid in this quarter, albeit at a bit of a smaller pace. Customers entrusted an additional €4,400,000,000 of savings. We maintained our growth in mortgages, increasing retail lending with SEK 3,600,000,000 However, if you look at the Wholesale Banking book, that decreased by SEK 4,600,000,000 that is largely related to the development of the oil prices and also the repayment of some larger term loans. If we look at the underlying operations, we maintain our focus on improving the management of non financial risk, as you can expect, including contributing to fight the financial and economic crime. So we made progress in strengthening our global KYC organization, but also the governance and the structure throughout ING globally. The number of FTEs now working with these kind of activities has increased to 3,500 or more than 3,500. At the same time, as you can expect from us that we're also looking at innovative solutions in order to help both the effectiveness of everything we do in AML as well as the efficiency of what we can do in AML. So we're also running out global tools. For example, the mid corporate customers in Poland, they are now connected to our global solutions for customer onboarding and review. You know that we can't fight this alone. You need to team up with different banks. You need to team up with authorities in order to be more and more effective in fighting financial economic crime. And therefore, we encourage working together with the governments, with law enforcement, but also with the other banks. And I think from that perspective in Holland, we took quite an important step with 4 of our colleague banks in the setup of an organization to monitor payment transactions. That's what we're looking at. And I think that would be adding to the effectiveness of AML. Now if you translate all of this now into our financial results, as I said, with the ongoing negative rate environment, we actually see that our net interest income has remained resilient. So we have been able to offset the pressure on the savings side by growing the loan book, by improving the margins across the globe and the different products that we have in the different franchises, by growing a bit outside the Eurozone as well and kind of shows the strength of our franchise. We also see an encouraging increase on the commission income side. On the expense side, as I elaborated on KYC and the activities there, we see those costs increase as well. We see also a slight uptick in our risk cost. All of that together made that our net result came in at SEK 1,344,000,000 translated into a return on equity of 10.3% on a 4 quarter rolling average basis. Our CET1 capital ratio further improved to 14.6%. However, we do expect to see effects of capital from banking regulation and reviews in the coming quarters that will influence that. So all in all, a solid quarter, certainly given the circumstances. And with that, happy to take your questions. Ladies and gentlemen, we will start the question and answer session now. First question is from Ms. Eva Reuer, Financiere Dorte. Go ahead please. Hello, good morning, and thank you for taking my questions. My first question is on the net interest margin. They're relatively stable. But how long do you think you can keep it up? And which areas of the bank are the negative interest rates hurting most? Okay. So this is the NIM. We have been able to improve the NIM, the net interest margin a little bit to 154 basis points. It's on the back of some treasury related and financial markets related income, so a little bit more than volatile part of the interest income. We had guided to be a little bit lower. It is actually better. So we're very happy with this picture. So how we go about managing NIM or actually more importantly, Eva, is how we go about managing our net interest income. So clearly, the pressure is on net interest income is on the savings side because the replicating portfolios and the return on the replicating portfolios for our savings money, they decrease. And the way to make up for that is look for growth in areas like outside of the eurozone, where you have positive rates, where you have positive yield curves, Looking at growing the business, that's a good thing of our franchise that we not only growing in line with the market, but we're growing faster than the market because we take market share generally in the digital banks by just offering a much better service and that gets more business in and that offsets some of the pressure as well. We're also looking at pricing. As you know, we have to keep more and more capital for the lending that we do as a consequence of which some of the business that we do, specifically also in the Wholesale Banking side, but also on the mortgage side, we have to be we have to ensure that the margins keep up there in order to make the right returns for the risk and the capital that we have to set aside. So that's a little bit the way we offset the pressure on the savings side. So it's not like there was one particular area where the pressure is higher than others on the savings side. It's everywhere generally within the eurozone. Outside of the eurozone, we see very healthy margins also on the savings side. Two additional questions. Can you say something about some countries you are really growing very fast at that eurozone. And on the mortgage interest margins, they're still very good. You feel you can keep that up because at least in the Netherlands, we've seen that interest rates on mortgages have gone down quite steeply last quarter. So how do you think you can maintain good margins there? Yes. Good question. So actually, we're growing in the eurozone and we're growing outside the eurozone in terms of number of customers. In the eurozone, we're growing faster than Germany and in Spain. Outside of the eurozone, we're growing fast in Australia, Poland and Romania. So that's where you see the growth coming from. Now on the mortgage margins, the good thing is that we are a diversified bank. So basically in order to make our returns we can price for margins and we don't necessarily have to cater for volumes or market share, because we have much more markets that we can play in. So if we can't make the margins in one area, we will see whether we can make it somewhere else. So that's one thing. So we have the flexibility. So we're not dependent on specifically the Dutch market, for example, to have to make up for some of the pressures that we see on the savings side. Having said that, mortgage margins are healthy and that is also because the margin is calculated not only on the price that you charge to customer, but also the funding related to that mortgage. And that's why for the moment the margins are good good return margin. The next question is from Mr. Ruben Erck, Telghas. Go ahead please. Hello. Good morning to you all. 3 months ago, we talked about ECP policies, and everybody was hoping for a sort of a solution. Now the 2 tier system will come in place or it has been in place very recently. So I assume you can't see it in these numbers. But can you give us some guidance on in what way this 2 peer system could ING benefit from in what way? Yes. Well, honestly, I think with the latest measure of the ECB, Milbank is benefiting. Because of the end. I think the both the negative rates that they charge as well as the relaunch of quantitative easing make that total yield curve has moved down and even flattened also on the longer side of the business as a consequence of which it really hurts banks' earnings. And we also don't see the positive effects of that in terms of increasing demand because and as a signal at that moment already, there was absolutely no credit demand out there that was not met. So you can't create demand by decreasing your price. I mean, if there is no demand, there is no demand. So no bank is really benefiting from this particular policy. However, what the ECB at the same moment has launched is that they have said, well, we will tier the deposits that you place with us. And for a certain amount of the deposits, you will get a 0% rather than the penalty of 50 basis points that we have to pay. And that is what they put in place. That helps alleviate some of the pressure that we have on the income, but not everything. And maybe Tanay can shed a light on more exact numbers there. Sure. Ruben, I think we deposit with Central Banks roughly EUR 50,000,000,000 and that €50,000,000,000 is now eligible for this 2 tiering. And so instead of paying minus €50,000,000,000 on the €50,000,000,000 we pay €0,000,000 on it. And it starts to become effective as of yesterday, in fact. So you will gradually see it in our financials. But as Ralf mentioned, the impact of the negative curve outweighs these benefits. Yes. So how much of the SEK 50,000,000,000 will be under the tiering for 0%? All of it. All of it. Yes. So that will if you would recalculate it to this a quarter, and how much would that save you? Approximately EUR 50,000,000 per quarter, roughly, something like that. Okay. But to be clear, we have much more than that in liquid assets, right? The other piece in 100 of billions, we still pay negative 50 basis points. Yes. Two more questions, if I may ask. You ended the presentation that you expect more clarity in the coming quarters about capital remarks. Could you tell which the ones that are? I assume it would be TRIM and Basel IV? Yes. So it's not Basel IV yet, but Stephen will give you some insight there. Thanks. So TRIM was meant to do, let's say, a horizontal review of the move of the different banks. And that review is taking place and is gradually ending. And then the impact of those TRIMs can then cause capital impacts depending on what the findings are. At the same point in time, the ECB is also has redeveloped through the EBA guidelines, new standards for developing models for new models. And so all these effects are to some extent a prelude of Basel IV. Although it's still more model specific rather than Basel IV, which is more output specific. Basel IV is more generic. TRIM and the new models are more what we call idiosyncratic, so more specific as to the institution or the business that you do. So the effects of these two things, which is TRIM, I. E, the outcome of the horizontal model review and the starting of the redevelopment of the models of the banks will likely impact us over the next number of quarters. And the outcome of that is, is that we will then gradually see that impact. Now we have a good buffer. This will have an impact on that buffer. As we said, we are steering towards an ambition level of common equity Tier 1 of around 30.5%, and we're still very comfortable with that level. Okay. Yes. And as the announcement of the ECB, the DNB from a few weeks ago about, for example, the mortgage portfolio. Is that a sort of a front driven from all these conclusions you are expecting? Yes. It is. So the national banks can put in place what they call macro prudential measures when we are at a certain point in time in the economy. That's what they're currently doing. But if you look at the type of measure they will install, that is a prelude to Basel IV. Yes. All right. Final question. You have return on equity from 10.3 percent, which is quite well in these times. DNB says 8% is more realistic in these time of days. Christian Sewing from Deutsche Bank recently told me that he is also steering for 8%, and even a higher return would force his personnel to take larger risks. How do you look at what is realistic for a return on equity for banking in these days? Well, just look at where the price to book is, so and how much sure how much shareholders appreciate these returns of banks. The return of the return on equity is related to the perceived risk that shareholders take in owning a bank. At this moment, the shareholders, they do see still an elevated risk in buying a bank. It either has to do with more regulatory scrutiny coming at you, specific roles that governments put with banks going forward. And if you talk to your shareholders, they basically say, well, we don't see a clarification of the environment that European banks currently play at. We see negative rates. We see stalling economic growth, and we see a regulator that is not very clear as to what is the real capital level that they see as an endgame. And therefore, the price to book of European banks is anywhere ranging between 0.3 and some are close to 1. And our price to book is anywhere between 0.7 and 0.8. So we were 0.8 today, with making 10% return on equity. So basically, they still think that we're not making sufficient return for the risk they assume. So that's one. Secondly, I can't kind of comment to what our owners have said. Making a return on equity does not only have to do with the risk you take. It also has to do with how efficient you run your operation. And in comparison to many other banks, we do a really good job there. But clearly, that has to do with the fact that we are a digital bank, and therefore, we have a lower cost generally, a lower cost picture in order to do the same business than our competitors. And lower cost and same income lead to better P and L. And P and L with the same equity makes you generate a higher return on equity. So saying that the only way to increase your return on equity is by making more risk. And for the moment, we're still in a world in which if you take more risk, you also have to keep more equity. So I'm not sure that really works. So if you want to improve your material equity, make sure you're an efficient bank. Okay. Thanks so much. The next question is from Ms. Eva Schmal, NRC. Go ahead please. Thank you. Hello. I have a question. Do you think there also will be a European cooperation between banks about the AML? Well, that really depends because for the moment, you see different models of cooperation coming up. So the first one is, how we cooperate on getting the client files together and putting kind of central databases so that client can deposit their information with a utility more or less that Bags then can use so that clients only have to deliver the information once and Bags will take the information from those kind of databases and then start their review process as to whether they really know the client and want to onboard the client. There is both local initiatives to collaborate on these kind of databases and on these kind of information collection areas. And there's also cross border initiatives around this, one that is very so the Nordics are working cross border on a data on a utility like that. In Holland, we are reviewing whether we can do it on a local basis for the Dutch clients. On a European basis, SWIFT is looking at a solution into that direction as well, which would be cross border. And then we have all we have as IT our own Fintech called Corporal ID that we invest heavily in that is open for other banks to participate in order to build such a player as well. So that's one of the elements. But that is about collaboration on information gathering. Collaboration on exchanging practices may only start to become effective if the if there's also a European authority around anti money laundering. And for the moment, that is not the case. So what you see is that the anti money laundering directives are issued centrally in Europe, but they are being translated into local laws and further interpreted by local regulators, which means that for the same directive, we may still have to do things in many different ways in many different countries in Europe. And therefore, to really see European collaboration on of many of these things between banks is really subject to whether we also think that we can build some kind of a European regulator around all of this. Okay. Thank you very much. And I have a second question. Do you expect that the neo banks to make the same digital promise as ING does will affect our business? Well, I mean they are doing well. If you look at how they grow their business, we are fishing in the same pond, but the same pond makes us fishing in the banking business pond, which is not that it was a separate pond for digital business and therefore they compete directly with us because we're a digital bank. So we are one of those. We are one of those fintechs out there, but we started 20 years ago with a very success model of Internet banking and now mobile banking. And basically, we are showing them that if you stay true to your promise of delivering a differentiating experience to your client, that you really make banking easy to your client, so there's not so much the technology that makes a difference, but how you use the technology that makes a difference, you can be really successful. And I'm sure we are an inspiration to them, but at the same time, they are our competitors just like the incumbents are our competitors as well. So you don't think that they will eat up a little bit of your customer base in, for example, Spain or Germany where you grow? Yes. Not more than what we are eating also from the incumbents. So I mean, we're all competitors in the same market. And whoever has the best offering, probably clients will go to. So they are one of the competitors, but the incumbents are competitors as well. The next question is from Mr. Koen Harts Boltzmann. Go ahead, please. I have a question about the corporate loan book. This month, the IMF warned against rising corporate debt. And a big share of these leveraged loans they are warning about are, of course, on the bank's balances. So what's your view on this? And did you see Eylath clearly has a global perspective. IMF clearly has a global perspective, and they see this risk. Exactly a year ago, this quarter a year ago, we already indicated that we saw that happening as well. And therefore, we took measures in those portfolios that we felt were most exposed to leverage. And Stephen can tell you more about that. Yes. So what we did is we put caps first, so absolute maximum amounts on what we call the cyclical portfolios or portfolios that are prone to impacts of cyclicality in the economic state of countries or regions. So that's included the leverage loan portfolio. Those are typically loans that are being generated by private equity players. And what we did there is we'd be kept not only on the total exposure in that sector globally, but also the maximum amount that we want to hold for any given player on a certain loan for a certain business. Also, what we said is that we do not want to underwrite, because if you start to do a loan, the amount is bigger than a a field bank will hold, but they will ask banks to first underwrite the entire loan and then only syndicate it, so sell it to other banks at a later stage. And we have said we want to we continue to do that, but not alone. There should always be another player alongside us so that you can carry the risk jointly so that in case you are unable to sell to the market, you will only be left with a smaller piece and issue within the right of the loan. Now we've had these caps in place not only for the leverage loan book, but also for the real estate finance loan book globally because also that is a more cyclical book, whereby you see currently somewhat longer tailors, lower pricing and the watering down of a number of these covenants, so loan structures. And hence, we've also put a gap there with similar elements that I just talked about on our leverage loan book. So to put things in perspective, Koen, our total loan book or lending book, as we call it, is SEK 617,000,000,000 This is what we do globally. And the leverage cap is 9 point Yes, number 6,000,000,000. It is a bit below €10,000,000,000. So if you look at the total book of €6,000,000,000, dollars 10,000,000,000 I mean as an extra size of cost big, because on a relative size you have to be small. Exactly. So And moreover, and then maybe just As on the second part of the leverage loan book, all these loans are what we call uncorrelated. So on the one hand, it's financing a cookie factory in country A and then IT company in country D and a bicycle company in country C. If one if something happens to 1, it's not necessary that something happens to the other one. So what we call it's uncorrelated risk. I see. Thank you very much. One more question about it. Does the during the past quarter, the decline of the wholesale loan the wholesale credit, does it have anything to do with this? Or is it just other causes? Yes. I mean, you cannot really look at that quarter by quarter. What we have said end of last year is that we would be more careful with Wholesale Banking loan growth. If you look at 2018, the loan growth there was approximately 5% to 6% on an annual basis. And we said, look, when we are going to get a few of these books that may have an impact on the loan growth. I mean, the loan growth is an ambition, but not a target in and of itself because we want to do it within our risk appetite and at the adequate returns so that we get the adequate returns for the risk. I want you now so that's, I think, a more generic statement and that can also have an impact in the end on the loan growth in Wholesale Banking. If you look particularly to this quarter, there are also in the Wholesale Bank, there are a couple of portfolios that are a bit volatile. And one of the and these portfolios are, for example, the shorter dated portfolios, for example, trading and multi finance, whereby we finance companies who deal with oil and gas, who transport it or who are trying to get out of the ground. And we finance those companies. And those a lot of those financings are relatively short dated in nature or in tenor. And so if the oil price goes up, then you see that because for the same amount of oil that they need to pay more and that basically means that you then borrow more. And if you for the same amount of oil and if the price goes down, then the limits go down as well. That's what we have seen happening in this quarter, especially at the end of the quarter compared to the end of the quarter in Q2. And the second effect was when we have the broader corporate loan book, I. E. Loans to larger companies in the Netherlands and Belgium and Germany and the U. S. And France and all these countries, a number of these companies are very big. They have loans outstanding or they or we have limits outstanding with them. But in some quarters, they draw down more than in other quarters. And in some quarters, they actually pay back part of these loans. So these are what we call recurring credit facilities. And if some of those very large companies do that, then it can have an effect on our total loans outstanding. And those were the two effects that led the total book in also making to decrease this quarter. But that doesn't take away the points that we have said for the past year that given where we are in this state of the cycle, we become a bit more careful. Okay. I understand. One more question about something different. Ruben, my colleague, already asked about the ECB measures. One of those measures is also that the ECB is restarting a new round of Telstra loans for very attractive rates. Does ING plan to make use of this offer? On that point, I think we are just from a pricing perspective not really in favor of the additional TLTRO scheme by the ECB because everything, it compresses blending margin overall. But having said that, we have tapped TLTRO in the second one in the past. And from the third one, we are just taking it on an opportunistic basis. We are well funded as we stand today. And so we may or may not participate going forward. I guess, Gund, we are afraid of the ECB returning to a normal environment without all these programs, because we actually don't see the additional effect of all these programs on stimulating economic growth because it's really the continued uncertainty around Brexit, trade, geopolitical uncertainties that make customers or larger clients wait before they make investments and cheap money in whichever way you try to push it to them is just not going to make them invest more because they're very uncertain about the future. So we have to make sure that the uncertainty around the future stops and then you can look at whether you should look for policy measures to stimulate something. And at this moment, these policy measures are falling on the forefront. And then you get all these strange additional plans that clearly, every bank will look opportunistically at. We don't think that will really make an effect. Thank you very much. The next question is from Mr. Ruben Erck, Delhaer. Go ahead please. Hello. A few questions more. Could you shed some more light about the EUR 40,000,000 of legal provisions in chelitary and growth markets? Is that, for example, the situation in Italy? Yes. So, Stephen, you want to answer? Yes. So they have to do with a number of provisions for different businesses in different countries. Some are AML related, some are not. So anti money laundering related, some are not. But it also includes indeed the provisional entry. Okay. Questions with the history authorities and the regulatory authorities. So how far is the situation in Italy? Because if you it's now for 8 months, ING can't onboard new customers? How serious could the problem be that you are on a lockdown for new customers for so long? No. We're in constant discussion with the Central Bank. They know our improvement plan. We will see. At this moment, honestly, we're doing a really good job in improving the whole area, also in servicing our existing customers. The business is doing quite well actually. But clearly, we'll stay tuned and keep the regulators up to date. Apart from that, we can't give you any kind of guidance as to when we feel this ban will be lifted. Okay. But are the systems in Italy I mean, Italy is operating under the Dutch license, but do they have separate systems in Italy? Can I see it like that? Well, I mean they also have separate systems in Italy. We're putting global systems in place as well, and they also have global systems. But as I just tried to explain in answering Eva's question around European collaboration, the mere fact that we have directives coming from Europe that are translated into local laws, which are everywhere a little bit different, that are then again interpreted by local regulators, again, in a more different way, makes that you have to comply with all of this in just a bit of a different way. So it doesn't mean that the same issue is here and there and there. There is a variety of requirements as per local regulations that we'll have to adhere to. Clearly, we want to standardize that as much as possible globally, but there will always be some local aspects to this. And we'll have to make sure that we comply with that and be effective as a gatekeeper there. Yes, exactly. Like you have to pay taxes in every European country, but there are in every country, thousands of different rules you have to look at. Yes. All right. Okay. Yes. And last thing, for the first time in the risk phrase, you mentioned the Article 12 procedure at the court in The Hague. I fully understand you can't get into specifics. But in one way, do you see this as a risk which is going on? Well, we see it as a risk, and that's why we've mentioned it because we just want to make sure that everybody who kind of buys our stock and buys our bonds knows that there is a procedure going on there that there is claimants that want the judge to look at our settlements. And the judge has indicated that they will look at that and see whether the claimants are making the right claims. And that's where we are, and that's what we can say. Okay. Thanks so much. The next question is from Ms. Eva Voyars, Finishela Doklat. Go ahead please. Yes. Two more questions about anti money laundering, KYC. If I listen to what you said earlier, can I conclude that you are in favor of a Central EU authority on anti money laundering? Because the FTO today, the finance ministers are in favor of that. Yes. So of course, we are, because crime does not stop with one particular bank and certainly does not stop with by the border. So it's and that's why if you really want to be effective in tackling financial economic crime, you have to ensure there is collaboration between banks possible, collaboration between banks and authorities possible, and collaboration between different countries and authorities across different borders possible. So we're absolutely in favor of tackling this on at least a European level, if not even beyond because even crime doesn't stop in Europe. And the KYC costs keep on rising. Do you expect them to come down anytime soon? And if I look at the enormous number of clients that ING new clients have every quarter. Do you have the feeling you are in control of the whole Know Your Customer situation right now? So on the risk cost, we see a bit of an uptick this quarter. That's a little bit everywhere. It's not a very there is no trend there. Clearly, when we onboard customers, new customers, we'll go through the KYC process. And yes, so if we get new customers, they have gone through that. At the same time, we're also onboarding customers because we're also reviewing existing files to also existing customers. So they have to do that on a continuous basis anyway. Okay. Then another question about Apple Pay. You were the first one in Holland to offer Apple Pay to your clients. Can you say anything about what kind of benefits that had to you in number of new clients or customer satisfaction? Anything you can say on that? No, we can't. But clearly, clients are very happy with it because you see that the mobile card payments more than doubled just in the quarter. So you see that although we had Android payments already for more than a year, Apple payments gave a little bit more emphasis into the use of your phone while paying. And you see that that is really exploding now. And we've seen similar effects when we introduced Apple Pay in Australia, in Romania, in Spain, in Poland and now recently also in Germany. So as you can expect from ING, we're at the front of all of these new developments. Whatever technology and service that we can use in order to improve the customer experience is what we will apply and offer. And that's why we offered Apple Pay here. Apart from that, I can't say you gave you more details. Okay. And two more questions. Is it correct that you had to pay Apple an amount because you were the first one to operate in Holland? And can you say anything about that amount? And European Commission is launching an investigation on the practices of Apple Pay. They are concerned about competition issues. Is it also a concern of you if you look at the Apple Pay surface? We can't give you any details as to the, well, the volumes of what we do through Apple Pay. And there's so many different payment offers out there. So that comes further. Okay. Thank you. Those were my questions. Okay. Thank you. Go ahead. The next question is from Mr. Nicolas Maga, Financial Times. There's been a couple of stories in various countries over the last couple of weeks linking you guys with potential M and A opportunities, whether it's like expansion in Poland or shareholders pressuring people in Spain. Could you give any comment on like what your appetite for anything like that would be? Well, we don't comment on any rumors. And I don't think there is shareholder pressure. There was a shareholder who remarked something on Spain who had shares in that bank, Bankia, and they made remarks. So you know that our strategy is very much an organic one. And every quarter we show that we continue to be successful with focusing on delivering a differentiating experience to our customers. And with that, we onboard more and more customers who see us as their primary bank. So from that perspective, the current strategy is really successful. So therefore, we would only kind of contemplate any M and A, if you will, in a situation in which we could onboard some skills in the lending area or in activities that we don't have the skills or consider specific companies with technology, fintechs or bigger than fintechs that we think could really help us in delivering a differentiated client experience like we acquired 75% in a company called Payvision about a year ago because we think that that really adds to our offering to our customers and really improves the customer experience. And then the last one, the last area where we would always kind of look at situations happening in a market in which consolidation is happening and in which we would be active. And we would always have to make the analysis whether a consolidation like that would affect our own position. And so clearly, we look at what is happening in the markets in which we are active. If consolidation is happening there, we'll have to kind of analyze that situation and consider our position. As we have done, for example, in India, when consolidation was forced by the regulators, at that moment, we decided to merge and sell out over time. The same what we're doing is, for example, in Thailand, where we have a large bank and we have entered into merger discussions with another colleague there in order to see whether those whether an organic moves like mergers will help us to improve our business and also to our clients. Thanks. The next question is from Mr. Ruben Munstermann, Bloomberg News. Go ahead please. Thank you very much. It seems like the banking environment in the euro area will be difficult for a long time. Do you consider entering new markets in non euro areas apart from the ones where you already are present? Yes. Sorry, Ruben. So that's exactly what we do. So but let's first start with the Eurozone itself. If you are a player that truly focuses on delivering a differentiated client experience and you do it in a digital way, also in the eurozone, you can do good business banking business. And that's what we're showing in Germany, where we're the 3rd largest bank. So we're showing in Spain, where we have grown by more than 1,000,000 customers just over the last couple of years. So even in the Eurozone markets, if you're truly focused on delivering a good service, you can gain market share and you can make real good banking business. Having said that, we have activities outside of Eurozone that are growing very fast as well. For example, in Poland, where we've already also grown by more than 1,000,000 customers over the last couple of years. And we're setting up new ventures in for example, which we mentioned to you earlier, in the Philippines where we launched a full fledged mobile bank a couple of quarters ago. We're growing that. And we are working with our partner bank in China, Bank of Beijing, to set up a 5,149 percent joint venture to launch digital banking in China. And, Haile, any other considerations of new markets? No. I think that what you what we are looking at is how do you build this digital primary bank. So when we launched the strategy 6 years ago, we were convinced that in the future, people would bank with a bank that would only be digital and that they would do all their banking business with such a bank. And I think every quarter, we are indicating that that model is really coming to fruition. And also this quarter, we're showing that we're delivering on more primary customers in these digital banks and which means that these customers do more and more different businesses with us. So from a growth perspective, we're looking at different angles. The first one is just grow in the markets in which you're active, but also look at whether you can do more business with 1 and the same client. And specifically in the digital area, it's about offering new products digitally like and that's why we have this AXA joint venture to offer more and more digital insurance products. We just launched 7 products in 1 quarter across 4 markets. We're contemplating the same with investment products, for example. So for us, it is more now as to how can we build a full fledged bank fully digitally from an opportunity perspective and seeking some opportunities like the Philippines to grow there as well. Thank you. The next question is from Mr. Koen Hagen, Volkswagen. Go ahead please. Yes. I have one more question about Facebook's cryptocurrency, the Libra. There have seen a lot of developments for the past weeks, not very good for the Libra. You have commented on that before, but I was wondering what is your this is a question for Alban, what is your the main lesson you learned from this whole history? The Libra history, you mean? Excuse me? You mean the Libra history? Yes, exactly, from the project. Sure. No, sure. So basically, what you saw happening in the Libra initiative is that they had this idea to develop a cryptocurrency to pay with, if you were, a Facebook subscriber. And they were car players as well as PayPal to see whether they could build something there. We clearly have looked at that and considered that, and we feel that if you enter into the area of cryptocurrencies, and I'm talking cryptocurrencies here, not the technology behind all of this being distributed to ledger technology, which is a tricky thing. But if you enter the area of cryptocurrencies, we feel that you should add hand in hand with regulators because it is very difficult to manage the even the stability risk of the financial system if a cryptocurrency becomes really, really successful. And so that's one. Also given the consideration of launching Libra as part of the Facebook network that would give rise to many people who are in many different countries maybe to place their deposits within the Libra system as a consequence of which it's very difficult to control cross border movements, not only from a safety perspective, but also from a money laundering perspective. So there's many considerations that you have to apply to these initiatives in cryptocurrencies before you, I think, should engage into it. And I said, therefore, we think it is very important for regulators to look at these initiatives. But in the end, I do think that a currency based on a distributed ledger technology, not to call them a cryptocurrency, may exist in the future if one way or the other we have a regulatory framework within which such a currency can be launched. That's 1. Then secondly, the technology behind currencies being distributed ledger technology, that's one that we master as ING. We're actually one of the leading firms in applying distributed ledger technology in many of the different areas in which you can improve your processes and your currently manual or not as digital processes, for example, in the area of trade and commodity finance, where we have applied this and we have been able to really gain much more efficiency in these processes, speed and also security in these processes by rebuilding existing practices, paper based practices into distributed ledger technology around soybean trades and oil trades as well, for which we have set up separate companies with industry players and they're growing. And that's really successful. Okay. Thank you. Okay. We have come to the end of this call. I once again, I'd like to thank you for all of your end users to call in. I really appreciate that. It shows the interest in clearly the financial markets, the economic developments, but hopefully also I and G. So thank you for calling in. I hope that you're happy with the answers that we gave. I'm sure that while you plow through some of the material that we have issued today, whether it's a press release or the analyst pack or whatever you may read, that may raise further questions. Our communication department is ready there in order to help you to make sure that what you read is well understood so that you can also give the comments the way you want to give your comments. So please don't hesitate to contact our department there. Now to round it off as a call, I think if you look at the circumstances in which banks are working with lower economic growth, with negative rates, quite some headwind there that if you look at this quarter, we see a good quarter. We see a quarter in which the interest income has increased even because of offsetting measures that we took in order to offset the pressure on the savings rates. We see increased a continued commercial momentum in the number of customers that elect ING as their primary bank, which is good news as well. On the other side, we've also seen an uptick on cost if it comes to KYC, but we think those are good costs because we have to ensure that we play a strong role as a gatekeeper to the financial system. And with that come these costs on the KYC side. And with that, I'd like to thank you once again for calling in. And again, if you have further questions, don't hesitate to call. Thank you. Have a nice day. Ladies and gentlemen, this concludes the ING Media call. Thank you for attending. You may now disconnect your line. Have a nice day.