Good morning, everyone, and welcome once again to Saladel Results Webcast. My name is Tetilia Romero. I'm Head of Investor Relations, and today, we will be presenting our Q1 results. As usual, we are here today with our management team. Are Consejero delgado, Mr.
Young Ma Guardiola and our CFO, Mr. Tomas Varela. Good morning, Mr. Guardiola. The floor is yours.
Good morning, everybody, and thank you for joining our results webcast. Our Okay. Our presentation today will follow a similar structure to other quarters. I will And by going through the key highlights of the our financial results and providing details of our profitability and commercial activity as well as our commercial transformation progress. Tomas will then discuss our asset quality and solvency results and TSB platform migration.
You will then be able to ask us any questions you may have. Before I begin with our result highlights, Please let me remind that you remind you that unless I say otherwise, I will refer to comparisons on a like for like basis, which means in constant FX and excluding the contribution of Sabadell United Bank, Mediterano Vida and TSB Mortgage Enhancement Portfolio. Now let me start with the highlights for the quarter. Our core banking business performance, which refers to net interest income plus Fees and commission revenues continue to showcase our good commercial momentum across all regions, Growing 3.8 percent for both the group and ex TSB in a yearly basis. Performing loans grew by 3.6% year on year, excluding the impact of the APS runoff and 2.1% ex TSB, Driven by a robust performance in the SME segment and strong new mortgage lending.
Customer funds increased by 4.9% year on year, 5.4% ex TSB As a result of strong growth in site accounts and mutual funds of 10% 17.4%, respectively. Regarding asset quality, our progress continued with the net NPA ratio falling to 3.1% and our NPA coverage Increasing to 55.2 percent in the quarter. Our cost of risk fell to 64 basis points on track With our year end target, while real estate assets on average continue to be sold at a premium. And our capital position remains solid and comfortably in excess of requirements With a fully loaded CET1 ratio of 12%. Also, Standard and Poor's raised Our long term credit rating to BBB from BBB- with a stable outlook, Which validates the overall improvement in the operating environment for Spanish banks, together with the positive evolution of our business performance.
Moreover, Moody's also raised Sabadell's mortgage and public covered bonds credit rating to AA1 from AA2. And finally, I would like to highlight that last weekend, TSB moved its 5,000,000 customers and their 1,300,000,000 records to its new banking platform. The migration has been a success in terms of ensuring operational continuity and data integrity. However, There has been service problems in some of the TSB digital channels, which unfortunately have affected a number of customers and have Had an ample media coverage. TSB has been working hard on solving these issues during the week, And we are confident that the service levels of TSB Digital Channels will be completely normalized very soon.
Now we'll start reviewing our quarterly profitability and efficiency highlights. The key drivers of our profitability in the quarter Included the positive evolution of performing loans, which grew 0.4% quarter on quarter at the group level and 1% ex TSB. In Spain, performing loans grew by 0.8 percent quarter on quarter. Year on year, volumes were up 3.6% And 2.1 percent for the group and ex TV, respectively, as we continue to outperform The market in the SME segment was generating double digit growth in the new mortgage lending. Net interest income performed remarkably well Year on year with growth rates of 2.8% and 1.9% for the group and ex TSB.
Quarter on quarter, NII decreased slightly by 1.5% and 1.3% for the group and ex CSB Due to a lower number of calendar days in the quarter, further euro view repricing and an increase in wholesale funding costs. Customer spread remained robust at 2.8%, driven by our ability to defend pricing. Also, net interest margins remained stable quarter on quarter despite liquidity inflows. Fees and commissions grew by 8.2% and 6.7% year on year ex TSB and for the group, respectively, Supported by a strong performance in service and asset management fees. In the quarter, they were down by 1.4% and 1.2% For the group and ex TSB, respectively, mostly due to seasonality in the Asset Management segment and also due to a lower number of calendar days in the Q1 as well as the Easter holidays.
In addition, it is also worth noting that most of the trading income For the year, approximately €226,000,000 materialized during the quarter. This income was partially offset by €69,000,000 of nonrecurring expenses for the design of the new TSB IT platform, which has been included in the Q1 ahead migration. It's important to note that most of these nonrecurring expenses were already included in our cost year end guidance And that we continue to be on track to achieve our net profit targets for the year. Excluding nonrecurring items, staff and administrative expenses Increased by 1.5% quarter on quarter due to increasing costs in our Mexican business as we continue to grow in the region And also due to seasonality in staff expenses ex TSB. And lastly, cost of risk was Reduced to 64 basis points in the quarter, showing good progress towards achieving our year end target of 60 basis points.
Overall, looking at the latest income statement. Net profit for the group increased by 32.8 percent in the year, 58 percent 58.4 percent ex TSB And pre provisions income, excluding trading income and nonrecurring costs, grew by 6.2% year on year And 5.7 percent ex TSB. We will now look at our P and L in more detail. As usual, We will provide you with an individual breakdown of Sabadex TSB and TSB results so that you can follow both sets of results separately. Thirdly, net interest income ex TSB fell slightly quarter on quarter by 1.3%, Mainly impacted by further negative interest rate repricing as well as a lower number of calendar days in the quarter.
In addition, TSB contribution to NII decreased as we slowed the pace of growth as anticipated in preparation for the migration event And also due to greater competitive pressure in the U. K. Market. Overall, group NII decreased by 1.5% in the quarter and was up 2.8% in the year. Group and ex TSB customer spread remained robust And stable at 2.8% despite an increasingly challenging interest rate environment, And this was possible thanks to our ability to defend pricing.
At TSB, spreads were slightly down by 1 basis point, Mainly due to an increasingly competitive environment in the U. K. Mortgage market. Group Net interest margin fell slightly by 1 basis point due to the increase in our liquidity position, resulting from higher cash balances And an increase of approximately GBP 850,000,000 in the TFS funding of TSB over the quarter. NIM decreased by 5 basis points at TSB, whilst it remained stable ex TSB.
In addition, it's also worth mentioning that we have now achieved the TLTR-two net lending requirement. That means that we have ensured that we now have the lowest possible funding cost of negative 40 basis points. Overall, as has been shown before, our customer profitability remains strong. Customer yield increased by 4 basis points, thanks to a positive volume mix evolution and with a stronger growth in the high yield in Geographies and Customer segments. This positive performance of our customer yield was possible in spite of the negative effect Of Eurivor repricing downwards by 9 basis points over the previous 12 months.
On the cost side, The cost of customer funds increased by 4 basis points quarter on quarter due to the increased cost of foreign currency deposits. Furthermore, it's also worth mentioning that our wholesale funding costs recovered to its normalized level in the quarter. Remember that the last quarter included a positive extraordinary result of €8,000,000 from the early redemption of securitization transactions. Well, now moving to fees and commissions, recorded which recorded a Strong performance, growing by 6.7% year on year and by 8.2% for the group and ex TSB, respectively. In the quarter, commissions were down by 1.4% and to 1.2% for the group and ex TSB.
The decline was driven by the impact of seasonality in asset management fees. For TSB, The quarter on quarter decrease was mainly due to lower overdraft excess fees that was driven by regulatory changes. Overall, fees and commissions in the quarter have been in line with our budget and are in the path to progressively achieve our objective of double digit Growth for the year. Regarding expenses, as I mentioned earlier, this quarter, our operating cost line Was been impacted by €69,000,000 of nonrecurring expenses corresponding to the migration to the new IT platform for TSB. From the Q2 onwards, we should see synergies began to materialize as cost saving.
Excluding nonrecurring items, staff and administrative expenses increased by 1.5% And 1.9% quarter on quarter for the group and ex TSB, respectively. And this was due to increasing cost in our Mexican, as I said earlier, in our Mexican business As we continue to grow our business in the region and also due to seasonality in staff expenses, ex TSB. TSB recurring costs were relatively stable quarter on quarter. We will now move On to commercial activity and transformation. Performing loans ex APS runoff grew 3.6% year on year to 2.1% ex TSB And 0.4 percent quarter on quarter, 1% ex TSB, driven by a positive performance on the SME segment And strong new mortgage lending.
Group customer funds increased by 1% in the quarter, 1.1 percent ex TSB. On balance sheet, customer funds grew by 0.5% due to an increase of 3.4 Percent inside accounts and of balance sheet funds increased by 2.3% quarter on quarter, mainly driven By a high net inflow of mutual and insurance funds, which grew by 2.8% and 3.5%, respectively. Our strong commercial performance was coupled with the highest quality of service and customer experience standards. In Spain, we continue to increase our market shares and ranked top in service quality. In the U.
K, expected TSB grew at a slower pace The main focus was on migration. And in Mexico, we continue to grow our lending and customers' fund exponentially. On this slide, you can see in more detail the evolution of customer loans and funds that I just highlighted. It's also worth noting that this quarter, we have received the annual APS cash payment from the Deposit Guarantee Fund For €1,400,000,000 And in aggregate, we have already received 3 payments for a total value of €3,200,000,000 Looking at performing loans by region, including the impact of FX. In this slide, you can see that there was a positive performance Across geographies, in the quarter, Spain grew by 0.8%, 1.4% in the year TSB by 0.5%, 4.9% in the year, and Mexico grew by 13.5% quarter on quarter And 37.5 percent year on year.
Overall, excluding the impact of the APS NPL portfolio, which is, as you know, in runoff, Good performing loans show a robust performance with 0.9% growth in the quarter and 3% in the year. Performing loans ex TSB, including the impact of the FX and ex APS runoff, Grew by 1% quarter on quarter, driven by the good performance of the SME segment across all products, which was 1.4% in the quarter. Also, the negative net mortgage lending gap closed even further this quarter. This was offset by a weaker performance of corporate segment. Regarding pricing, lowered front book in mortgages and consumer loans and the effects of negative rates And customer yield were offset by a positive evolution in the lending mix and the spread increases in the SME segment.
The decrease in front book spreads for mortgages was due to increased competition, while lower consumer lending spreads were a result of higher amount of consumers' loans given to expansion account holders. It's also important to note that front book yields continue to stand above back book's levels Across most products, which will continue to support the evolution of our top line profitability. Looking at commercial activity in Spain, our performance has been very positive. I would like to highlight our double digit growth In new lending, both in companies and individuals. We also been able we have been also been able To generate double digit gold rates in other relevant commercial areas, such as cargo turnover and new insurance contracts.
The positive performance reflected is reflected once again in our market share growth across products for both companies and individuals. [SPEAKER IGNACIO CUENCA ARAMBARRI:] In the company's segment, I would like to highlight the year on year increase in the market share of export, documentary credit and point of sale Turnover. And in the individual segment, year on year life insurance contracts and mutual funds market share performed Very well. Regarding customer experience and service quality, Once again, we hold the top position in the Accenture Net Promoter Score ranking for both large enterprises and SMEs. And in Retail Banking, we were ranked 2nd improving from the previous quarter when we were ranked 4th.
We also continue to surpass the industry average in terms of quality of service, widening the gap between ourselves and the sector. And in fact, we when looking at the Service Quality score in the quarter, Sabade reached 8.19, TIN, which is the best score among our peers and the highest score achieved today by Banco Sabade. In the U. K, as I mentioned earlier, it's important to note that TSB intentionally slowed down its volumes in the quarter to fully focus On the migration of its new IT platform. As a consequence, net customer lending in pounds decreased by 0.2% in the quarter.
Yearly on yearly, positive balance sheet trends continued with net customer lending in pounds up 5.8%, driven By franchise mortgage lending, which grew 7.9% in the year. On the liability side, customer deposits grew 0.2% quarter on quarter and 3% year on year, driven primarily by strong current account performance as the bank continued to acquire more than 6% of the total current account flow in the U. K. Moving on to Mexico. Our customer loans grew by 60%, and customer funds grew exponentially as a result of our focus on deposits growth.
We also continue to open new business centers in the main cities of the country with 3 new openings in the Q1. Furthermore, the new 100 percent digital affluent banking has started to operate in Mexico following our growth plans for this region. We will now move to commercial and digital transformation, and we will first look at the key performance indicators. Sabadell has increased the number of its digital and mobile customers by 11% 19%, respectively, year on year. Digital sales remain at high levels, and I would like to highlight the increase in sales through digital channels of Anseagrid loans in Spain, Which increased by 57% year on year.
Lastly, the number of individuals under remote management in Spain grew to 771,000 customers. And to end this section of the presentation, let me explain briefly Some of the new initiatives during the quarter related to our progress in commercial transformation. Continuing with the development of our distribution model, we have launched a new branch format in order to gain efficiency and provide self serving to our customers, Especially in cash management operations. In terms of the digital offering, we have reached an agreement with Apple Pay To be able to provide to our customers in Spain this mobile payment solution, which we already offer to our customers in the U. K.
We also have implemented several digital capabilities that have improved our user experience in digital payments, pension plans Management and direct assistance for companies with an online chat service. And finally, we have continued our strategic Investments through Innocels, our digital hub, which has led an investment round on Biometric Vox, A Spanish startup that offers authentication solutions and advanced electronics signature through voice biometrics. And now I will hand over to Tomas, who will discuss solvency, asset quality and TSB platform migration.
Thank you, Joao. Let's turn now to Solvency and Asset Quality. The highlights of the quarter are that we've continued progressing in asset quality. The group NPL ratio fell to 5.14%. NPA decreased by €251,000,000 ex TSB, And the net NPA to the total assets ratio fell to 3.1% at group level.
The coverage also continued to increase slightly to 55.2 percent in the quarter, and cost of risk has been reduced to 64 basis points, which shows good progress towards achieving our year end Target of 60 basis points. Foreclosed assets continue to be sold at a premium on average, And our capital position remains strong with a fully loaded CET1 ratio of 12%. In the quarter, Standard and Poor raised our long term credit rating to BBB and stable outlook, whilst Moody's Raise our rating for covered bonds. Capital. As I said, we continue to have a very solid capital position.
The phasing CET1 stands at 12.9%. The Drivers in the quarter for the variance and the change And the ratio are related to the already anticipated impact of IFRS 9, which was 78 basis points on the fully loaded. And also, higher RWAs Coming from the evolution of the quarter and an increase in deductions due to lower transitional adjustments given that Our calendar year has elapsed. The fully loaded, as I said, stood at 12%, And it's we need to take into account that for the phase in, everything is phase in, including All the other concepts as well as the phasing of the IFRS 9. And for the fully loaded, everything is taken out.
There is no phase in, in the fully loaded. So All the previous things are included. And also, IFRS 9 is not phased in here but Fully loaded. Here, we can see the evolution of the ratio, the NPL ratio and the coverage. You represent the evolution in comparison with the pro form a figures at the end of 2017.
So we can see that both the NPL ratio and the coverage have improved, the coverage slightly, And the ratio has fell from 5.3 sorry, 5.32 Pro form a with IFRS 9 at the end of 2017 to 5.14 at group level, whilst The coverage has kept flattish with a slight increase of 10 basis points. In terms of the evolution and decrease of the NPA portfolio, it's been €251,000,000 in the quarter. This is less that what we've seen in a number of quarters in a row up until now, But it doesn't mean that we change our outlook and guidance for the year. So We it remains at above €2,000,000,000 in the year. The reason for this is Probably, we are considering a number of options in terms of the management of the reduction Of the portfolio, and this may have implied, potentially, in the quarter, this slower pace, But doesn't change anything for the whole year.
We've continued to sell at Approximately the same pace per quarter that we sold for closed assets. This quarter, it's been €283,000,000 slightly before Below the average of some €300,000,000 per quarter. And Still, as we've done over the last quarters, we've been selling at Premium that, in this case, has been about 5%. Here, we see the evolution of the coverage Ratios as well as the evolution of the net problematic assets that at the end of the quarter stood, as we can see in the lower right hindsight at €6,900,000,000 which represents 3.1% ratio. And again, the composition of the our NPL portfolio Keeps improving.
Again, the percentage of past due NPLs has been reduced as As well as having reduced the stock itself. And at the same time, we still can see that the Composition by collateral keeps being biased towards finished product, Residential product, commercial, real estate and only a smaller percentage of land. And at the same time, in the lower Part of the slide, we see how the rotation of land keeps Behaving like in the last quarters, where the proportion of sales is Much higher than the proportion of inflows of new entries in the portfolio. And as a consequence, the The percentage of land in the resulting stock keeps decreasing. In terms of TSB risk profile, as already known, TSB holds a low risk profile.
The secured lending represents more than 92% of total net lending, And the portfolio is of very good asset quality and low risk. Some of the ratios That characterize the portfolio are buy to let represents only 15% of the portfolio. Mortgage lending, In average, represents an LTV of in the stock, An LTV of 44% and interest only concentration in the portfolio is circa 28%. And at the same time, the capital position of TSB is one of the strongest in the U. K.
Banks with a CET1 ratio of 19.9 percent and a leverage ratio of 4.4 percent. And in terms of diversification of funding sources, PCAs represents 34% of funding. And now to finalize The numbers of the migration project. The migration project has entailed development of a new IT The platform, Proteo4 U. K, the installation and deployment from scratch of the entire IT infrastructure, This the investment in this has amounted to the equivalent of 253 £1,000,000 in intangible assets.
And the cost of the migration itself Has totaled £546,000,000 of which £450,000,000 have been absorbed by the Dougherty of LVG that was agreed from inception for TSB. And therefore, the remaining €96,000,000 is being Accounted for, it's been born in the TSB and Group's P and L. And across The last 2 years and finally, the amount that we've reported that It's accounted for in the Q1 of 2018. So €96,000,000 of cost incurred in the P and L of the group, of which one part was in Corto already in 2016, another part in 2017, And the final amount of €69,000,000 in 2018 in the Q1. And that's all.
And now I hand over to Cecilia. Thank you.
Thank you very much, Thomas. Now we're going to open the floor for a round of questions. And the first question goes to Mr. Guardiola. Mr.
Guardiola, please, Could you comment on the evolution of NPAs this quarter? Also, please, could you comment on the news regarding the potential sale of large books of NPAs. And would you be ready to do this at a loss?
Well, We announced in our plan 2 months ago that our Target was to sell 2,000 minimum sale of 2,000 NPs per year, the 3 years of the plan. But at the same time, we told that due to The fact that we have a high coverage ratio, we have flexibility to do Operations of a great scale. We are now analyzing the market Appetite, we are also watching which are the circumstances. And we would consider selling a big portfolio. But obviously, in the case that It was neutral for capital.
So it's not included in our plan. But as we said, We are open to do this kind of operation because we have Due to the high ratio of coverage, we have flexibility to do.
Thank you. And the next question goes to Mr. Varela. After the large IFRS 9 adjustment, do you now consider the NPA coverage adequate? What is your expected cost of risk going forward?
Yes. This is behaving as we expected. We are comfortable with the coverage. Actually, the cost of risk in the quarter has been 64 basis points, And we see this in line to achieve the guidance of 60 basis points in the whole year.
Thank you very much, Joao. Sabadell's capital stands strong at 12%. Would you be ready to make extraordinary distributions of capital At a level above this ratio of 2%.
Well, as we announced in our Investors Day, Our plan is to continue with a payout ratio of 50%.
Thank you very much. And the next question goes to Tomas. Do you confirm the 850,000,000 at EURO's profit target for 2018.
Yes. Nothing has happened that Makes us change the guidance that was already given. No, yes.
Thank you very much. And the next question goes to Mr. Guardiola and is regarding the TSB migration. Have you resolved the TSB IT migration issues? And How much longer do you think we will have until 100% until it is 100% resolved?
As I said we said in the presentation last week, we did the migration of TSB to the new platform, Proteo 4. And it was a very significant And complex program. We move, as I said, 5,000,000 customers and 1,300,000,000 records. The in terms of operational integrity, in terms of data integrity, in terms of operational Operation continuity in terms of all the issues related to security. The Platform has run very well.
But as I said, the when we opened on Monday, the Service of the access to our online channels, web and mobile Appear some problems to access. During Monday or the day, it was very difficult For the customers that try to access to our channels, it obliges us to close the access On Thursday, in order to analyze why that's what's happening And to fix the problem takes took more time than expected, And we were not able to reopen the access until Wednesday, yesterday. Yesterday was a day where the improvement was very clear. But because of the excess of traffic, that is logical because we had the excess Close during the weekend because of the migration, and we have been we had to talk to our customers that is going to what is going to happen. But Monday, with problems, Tuesday closed.
It generates very excess of traffic, and this excess of traffic obliged us to regulate this traffic. And so yesterday was a day of great improvement, but not enough. We expect today that things improve more, And we are optimistic in terms of recover the normality in the next days. It's a question of a lot of customers that were that this flow of customers that is, I don't know, but 8x more to the normal flow of a normal day will reduce At the same time that these customers were able to close the transactions that they were doing. So I think that we are clearly in the process of stabilize and improving.
And I'm Obviously, we are very sorry about the expectation to customers. Customers is the most important thing that the bank has. And so and I'm optimistic. I think that in the during this week, today and tomorrow, There will be good news in terms of improvement, and I expect next week, we can we'll reach Something very clear to very close to normality.
Thank you very much, Mr. Guardiola. And the next question goes to Tomas. Please, could you comment on the revenue evolution of TSB now that the integration is over? And can we still expect a further slowdown given the problems that TSB IT is suffering?
Well, the plan for TSB in terms of business, so far, we don't I have reasons to assume that have changed. It, of course, It will depend on the market margins evolution and also the interest rates. What it's been announced is that if customers have suffered Impacts, they will be so fees and commissions of specific things For them, in April, will be waived. And also, probably, there can be some impact So on the remuneration of PCAs, and this could have some impact, but nothing that makes us Now change the outlook for the contribution of DSV significantly.
Thank you, Tomas. And Chioma, could you please elaborate on the implications from the IT issues in TSB? In terms of potential additional costs, regulatory expenses and reputational risk.
Well, our first Priority now is to put things right for our customers and reestablish the normality of the service levels. The service levels that the customers of TSB deserve and that TSB, in fact, has delivered in the last 4 years. So that is our first and absolute priority. We will ensure also that no customer is left out Pocket, and we are asking customers to file a complaint that are starting to process. I think that Our CEO in TSB, Paul Pasek, has been very clear in saying that.
And at the same time, we are keeping the regulators and stakeholders thoroughly updated of the developments and the path To recover the full normality of our services, I remark that we are speaking about the Online Services, the web and the mobile. Because the majority of our customers and transactions Has run normal. Our customers have had access to our services, cards, direct debits, standing orders, The ATMs and all these elements of our activity are operated normally. So at this moment, the only priority of Banco of the group and TSB It's to recover the normality. I insist the large scale of this Transaction that was really a movement from a platform share with another bank to an absolutely new platform It's an operation of a great scale, And the main elements of this of the new of the platform and the migration has run well.
But obviously, there has been an affection to customers Through the online services, and our first priority is to fix the situation And to recover normality.
Thank you very much. And the next question goes to Mr. Varela. Regarding TLTRO2, will this mean that from Q2 onwards, You will accrue the 40 basis point bonus of what's your TLTRO to exposure?
We achieved the net lending the TLTR to net lending requirement, Ensuring that we will accrue the negative cost of 40 basis points for the remaining period as we did in the past. So the total Posture today is €20,500,000,000
Thank you very much. And the next one is also for you, Tomas. What are the issuance plans? Can you remind us how would you manage the TLTRO2 and TFS maturities in 2021 2022. And can you discuss your NREL requirements?
Yes. We currently have an excess liquidity position, and we don't have significant upcoming maturities For 2018. And on the other hand, we haven't received yet any official communication regarding MREL In terms of the final amount or the eligible securities. In any case, we expect the final requirements wouldn't be won't be different or maybe Could be even better than what we have embedded in our plan. And as we don't have, As I said, neither clarity on the eligible instruments.
We don't have Plans in the immediate future for MREL issuance. Regarding TLTR II and TFS, The funding plan related to the profile of the maturities of those It's already embedded in the plan that we provided, and therefore, it's there is no change about this. So if any change, it would be more related to the fact that in MREL, things are still moving. And therefore, this could mean that until we don't have all the clarity, we probably won't issue Since we are not today in a hurry for this. Other funds of other sources of funding Of course, the positive funding gap of over these periods, The APS payments that we received, NPA reduction.
And at some point In the period of the plan of the business plan, of course, we will issue MREL, but only when we have clarity About the effectiveness of anything that we could do.
Thank you, Tomas. The next questions are also for you. Regarding your ALCO portfolio, have you mark to market portfolios that were in hold to maturity this quarter?
Yes. We've reclassified this quarter €2,100,000,000 from the held to maturity to the Avaya Alfaresh portfolio.
Thank you very much. And regarding IFRS 9 provisions, you did more than announce. Is this due to a worse performance of the portfolio than expected?
We included €100,000,000 more provisions in the final IFRS 9 number As a result of the review on the models, we added some add on With more conservative assumptions for segments that have a longer residual life, And we will keep this at home until we have longer experience in backtesting of the models. For the moment, this will keep, but will be balanced throughout the backtesting, As I said, the backtesting exercise of the models in the future.
Thank you very much. And the next question goes to Mr. Guardiola. Some of the other Spanish banks are talking about competitive pressure on lending margins in some of the segments. Are you also seeing this?
Yes. I think that the in this moment of Better performance in terms of volumes. There could be more competence in terms of pricing, But I think that is now very much different than what has happened in the last year. So I think that We are very well prepared to compete. I think that we have managed The pricing went very well, so I think that the mix of volumes and pricing is going to be very positive in the next time.
Okay. Mr. Guardiola, the next one is also for you. Fee income progression in 2018, when do you think it will be visible, the improvement in banking fees?
Well, I think that we are doing very well in terms of fees. We are We presented in our plan average growth for the of 6.5%, 43 years of the plan, but We are especially committed to have a very good performance this year. It's basically due to the good performance of volumes, But also the we have improved pricings in terms we had Some roof to improve pricing compared with our peers, and we are doing so. As I said, we have done a very good performance in the Q1, but obviously, we are committed to Progressively reach our target of double digit for the year in terms of fees and commissions.
Thank you very much. And regarding the mobile app of TSB, it seems that has been One of the main problems on the events that have unfolded. When do you expect the service to perform well?
Well, as I said before, we are optimistic in terms of the improvement of the service These days, yesterday was a clear day of improvement. We are the first sign ups that we have of today is that Things are running clearly better than yesterday. So I think that today It's a good day for reduce the gap of service that we had, and that's what we are very optimistic of During the rest of the week and so to reach normality, if it's possible, next week.
Thank you very much. So it appears as there are no more questions, and this brings our webcast to an end. At Investor Relations department. We would like to remind you that we are still available to respond to any questions that you may have. Have a great day.