Good morning everyone, welcome once again to Sabadell Results Webcast. My name is Cecilia Romero. I am Head of Investor Relations, today we will be presenting our first quarter results. As usual, we are here today with our management team, our consejero delegado, Mr. Jaume Guardiola, and our CFO, Mr. Tomás Varela. Good morning, Mr. Guardiola. The floor is yours.
Well, good morning, everybody, thank you for joining our results webcast. Our presentation today will follow a similar structure to other quarters. I will begin by going through the key highlights of our financial results and providing details of our profitability and commercial activity, as well as our commercial transformation progress. Tomás will then discuss our asset quality and services 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 you that unless I say otherwise, I will refer to comparisons on a like-for-like basis, which means in constant effects and excluding the contribution of Sabadell United Bank, Mediterráneo Vida, and TSB mortgage enhancement portfolio. 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% 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 sight accounts and mutual funds of 10% and 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% 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 continued to be sold at a premium.
Our capital position remained solid and comfortably in excess of requirements, with a fully loaded CET1 ratio of 12%. Also, Standard & 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. Finally, I would like to highlight that last weekend, TSB moved its five million customers and their 1.3 billion 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, 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% quarter-on-quarter. Year-on-year, volumes were up 3.6% and 2.1% for the group and ex-TSB respectively, as we continue to outperform the market in the SME segment while 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-TSB, due to a lower number of calendar days in the quarter, further Euro 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 first quarter, as well as the Easter holidays.
In addition, it is also worth noting that most of the trading income expected for the year, approximately EUR 226 million, materialize during the quarter. This income was partially offset by EUR 69 million of non-recurring expenses for the design of the new TSB IT platform, which had been included in the first quarter ahead migration. It's important to note that most of these non-recurring expenses were already included in our cost year end guidance, that we continue to be on track to achieve our net profit targets for the year. Excluding non-recurring 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.
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% in the year, 58.4% ex-TSB, pre-provisions income, excluding trading income and non-recurring costs, grew by 6.2% year-on-year and 5.7% ex-TSB. We will now look at our P&L in more detail, as is usual. We will provide you with an individual breakdown of Sabadell ex-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 slow the pace of growth as anticipated in preparation for the immigration event, 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. This was possible thanks to our ability to defend pricing. At TSB, spreads were slightly down by one basis point, mainly due to an increasingly competitive environment in the U.K. mortgage market. Group net interest margin fell slightly by one basis point due to the increase in our liquidity position, resulting from higher cash balances and an increase of approximately GBP 850 million in the TFS funding of TSB over the quarter.
NIM decreased by five basis points at TSB, whilst it remained stable ex-TSB. In addition, it is also worth mentioning that we have now achieved the TLTRO2 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 four basis points, thanks to a positive volume mix evolution, with a stronger growth in the higher-yielding geographies and customer segments. This positive performance of our customer yield was possible in spite of the negative effect of Euribor repricing downwards by nine basis points over the previous 12 months. On the cost side, the cost of customer funds increased by four basis points quarter-on-quarter due to the increased cost of foreign currency deposits.
Furthermore, it is 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 EUR 8 million from the early redemption of securitization transactions. Now moving to fees and commissions, 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 being impacted by EUR 69 million of non-recurring expenses corresponding to the migration to the new IT platform for TSB. From the second quarter onwards, we should see synergies begin to materialize as cost saving. Excluding non-recurring items, staff and administrative expenses increased by 1.5% and 1.9% quarter-on-quarter for the group and ex-TSB, respectively. This was due to increasing costs 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 the 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 1.1% ex-TSB, 0.4% 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% ex-TSB. On-balance sheet customer funds grew by 0.5% due to an increase of 3.4% in sight accounts, and off-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 continued to increase our market shares and ranked top in service quality. In the U.K., as expected, TSB grew at a slower pace, as the main focus was on migration. In Mexico, we continued to grow our lending and customers' funds 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 EUR 1.4 billion, and in aggregate, we have already received three payments for a total value of EUR 3.2 billion. 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. Mexico grew by 13.5% quarter-on-quarter, 37.5% 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 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 the corporate segment. Regarding pricing, lower front book in mortgages and consumer loans and the effects of negative rates on customer yield were offset by a positive evolution in the lending mix and 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 Expansión Account holders.
It's also important to note that front book yields continued to stand above back books 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 have also been able to generate double-digit growth rates in other relevant commercial areas, such as card turnover and new insurance contracts. The positive performance is reflected once again in our market shares growth across products for both companies and individuals. In the companies segment, I would like to highlight the year-on-year increase in the market share of export documentary credit and point-of-sale turnover. 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. In retail banking, we were ranked second, improving from the previous quarter when we were ranked fourth. We also continued to surpass the industry average in terms of quality of service, widening the gap between ourselves and the sector. In fact, when looking at the service quality score in the quarter, Sabadell reached 8.19, which is the best score among our peers and the highest score achieved to date by Banco de Sabadell. 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 GBP decreased by 0.2% in the quarter.
Year-on-year, positive balance sheets trends continued with net customer lending in GBP 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 three new openings in the first quarter. Furthermore, the new 100% 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. We will first look at the key performance indicators.
Sabadell has increased the number of its digital and mobile customers by 11% and 19%, respectively, year-on-year. Digital sales remain at high levels. I would like to highlight the increase in sales through digital channels of unsecured 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. 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 user experience in digital payments, pension plans management, and direct assistance for companies with an online chat service. Finally, we have continued our strategic investments through InnoCells, our digital hub, which has led an investment round on Biometric Vox, a Spanish startup that offers authentication solutions and advanced electronic signature through voice biometrics. Now, I will hand over to Tomás, who will discuss solvency and asset quality and TSB platform migration.
Thank you, Jaume. 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 EUR 251 million 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% 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 & Poor's raised our long-term credit rating to BBB and stable outlook, whilst Moody's raised our rating for covered bonds. Capital. As I said, we continue to have a very solid capital position.
The phase-in CET1 stands at 12.9%. The drivers in the quarter for the variance in the change in 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 a calendar year has elapsed. The fully loaded, as I said, stood at 12%, and we need to take into account that for the phase-in, everything is phased in, including all the other concepts as well as the phase-in of the IFRS 9. For the fully loaded, everything is taken out. There is no phase-in in the fully loaded. 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. We present the evolution in comparison with the pro forma figures at the end of 2017. We can see that both the NPL ratio and the coverage have improved. The coverage slightly, and the ratio has fell from 5.32% pro forma 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 EUR 251 million in the quarter. This is less than what we've seen in a number of quarters in a row up until now. It doesn't mean that we change our outlook and guidance for the year. It remains at above EUR 2 billion 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, this may have implied, conjunctly, in the quarter, this is lower pace, but doesn't change anything for the whole year. We've continued to sell at approximately the same pace per quarter that we've sold foreclosed assets. This quarter has been EUR 283 million, slightly below the average of some EUR 300 million per quarter. Still, as we've done over the last quarters, we've been selling at a 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-hand side, at EUR 6.9 billion, which represents 3.1% ratio.
The composition of our NPL portfolio keeps improving. The percentage of past due NPLs has been reduced, as well as having reduced the stock itself. 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. 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. As a consequence, 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 secure lending represents more than 92% of total net lending.
The portfolio is of a 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 in the stock, an LTV of 44%, and interest-only concentration in the portfolio is circa 28%. 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% and a leverage ratio of 4.4%. In terms of diversification of funding sources, PCAs represents 34% of funding. Now to finalize the numbers of the migration project. The migration project has entailed development of a new IT platform, Proteo4UK, the installation and deployment from scratch of the entire IT infrastructure.
The investment in this has amounted to the equivalent of GBP 253 million in intangible assets, the cost of the migration itself has totaled GBP 546 million, of which GBP 450 million have been absorbed by the dowry of LBG that was agreed from inception for TSB. Therefore, the remaining GBP 96 million is being accounted for. It's being borne in the TSB and group's P&L. Across the last two years, finally, the amount that we've reported that if accounted for in the first quarter of 2018, GBP 96 million of cost incurred in the P&L of the group, of which one part was incurred already in 2016, another part in 2017, and the final amount of EUR 69 million in 2018 in the first quarter. That's all. Now I hand over to Cecilia. Thank you.
Thank you very much, Tomás. We're going to open the floor for a round of questions, the first question goes to Mr. Guardiola. Mr. Guardiola, please, could you comment on the evolution of NPAs this quarter? Please, could you comment on the news regarding the potential sale of large books of NPAs, would you be ready to do this at a loss?
As we announced in our plans two months ago that our target was minimum sale of 2,000 NPAs per year, the three years of the plan. At the same time, we told that due the fact that we have a high coverage ratio, we have flexibility to do operations of a greater scale. We are now analyzing the market appetite. We are also watching which are the circumstances, we would consider selling a big portfolio, but obviously, in the case that it was neutral for capital. It's not included in our plan, but as we said, we are open to do this kind of operation because due to the high ratio of coverage, we have flexibility to do.
Thank you. 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, we see this in line to achieve the guidance of 60 basis points in the whole year.
Thank you very much. Jaume, Sabadell's capital stands strong at 12%. Would you be ready to make extraordinary distributions of capital at a level above this ratio of 12%?
Well, as we announced in our Investor Day, our plan is to continue with a payout ratio of 50%.
Thank you very much. The next question goes to Tomás. Do you confirm the EUR 850 million profit target for 2018?
Yeah. Nothing has happened that makes us change the guidance that was already given. No. Yeah.
Thank you very much. The next question goes to Mr. Guardiola, and it's regarding the TSB migration. Have you resolved the TSB IT migration issues, and how much longer do you think we will have until it is 100% resolved?
As we said in the presentation, last week, we did the migration of TSB to the new platform, Proteo4, and it was a very significant and complex program. We moved, as I said, 5 million customers and 1.3 billion records. In terms of operational integrity, in terms of data integrity, in terms of operational continuity, in terms of all the issues related to security, the platform has run very well. As I said, when we opened on Monday, the service of the access to our online channels, web, and mobile, appeared some problems to access. During Monday, all day was very difficult for customers that tried to access to our channels. It obliged us to close the access on Tuesday in order to analyze why that was happening and to fix the problem.
To fix the problem took more time than expected. 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 access closed during the weekend because of the migration, and we had to inform to our customers what is going to happen. Monday with problems, Tuesday closed, it generates a very excess of traffic, and this excess of traffic obliged us to regulate this traffic. 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 is a question of a lot of customers, this flow of customers that is, I don't know, but 8 times 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. I think that we are clearly in the process of stabilize and improving. Obviously, we are very sorry about the affectation to customers. Customers is the most important thing that a bank has. I'm optimistic. I think that during this week, today and tomorrow, there will be good news in terms of improvement, and I expect next week, we'll reach something very clear, very close to normality.
Thank you very much, Mr. Guardiola. The next question goes to Tomás. Please, can 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?
The plan for TSB, in terms of business, so far, we don't have reasons to assume that have changed. It, of course, still depend on the market margins evolution and also the interest rates. What it's been announced is that if customers have suffered impacts, so fees and commissions of specific things for them in April will be waived. Also, probably, there can be some impact on the remuneration of PCAs, and this could have some impact, but nothing that makes us now change the outlook for the contribution of TSB significantly.
Thank you, Tomás. Jaume, could you please elaborate on the implications from the IT issues in TSB in terms of potential additional costs, regulatory expenses, and reputational risk?
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 four years. That is our first and absolute priority. We will ensure also that no customer is left out of pocket, and we are asking customers to file a complaint that are starting to process. I think that our CEO in TSB, Paul Pester, has been very clear in saying that. 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. The majority of our customers and transactions have run normal.
Our customers have had access to our services, of cards, direct debits, standing orders, the ATMs, and all these elements of our activity have operated normally. At this moment, the only priority of the group and TSB is 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 a absolutely new platform is a operation of a great scale. The main elements of the platform and the migration has run well. 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. The next question goes to Mr. Varela. Regarding TLTRO2, will this mean that from Q2 onwards, you will accrue the 40 basis point bonus, or what's your TLTRO2 exposure?
We achieve the TLTRO2 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. The total exposure today is EUR 20.5 billion.
Thank you very much. The next one is also for you, Tomás. What are the issuance plans? Can you remind us how would you manage the TLTRO2 and TFS maturities in 2021 and 2022? Can you discuss your MREL requirements?
We currently have an excess liquidity position, and we don't have significant upcoming maturities for 2018. 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 won't be different or maybe could be even better than what we have embedded in our plan. 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 TLTRO2 and TFS, the funding plan related to the profile of the maturities of those is already embedded in the plan that we provided, and therefore, there is no change about this.
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 sources of funding are, of course, the positive funding gap over this period, the APS payments that we received, NPA reduction. At some point in the period 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, Tomás. The next questions are also for you. Regarding your ALCO portfolio, have you marked to market portfolios that were in held to maturity this quarter?
Yes. We've reclassified this quarter EUR 2.1 billion from the held to maturity to the available for sale portfolio.
Thank you very much. Regarding IFRS9 provisions, you did more than announce. Is this due to a worse performance of the portfolio than expected?
We included EUR 100 million more provisions in the final IFRS9 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. We will keep this add-on until we have longer experience in back-testing of the models. For the moment, this will keep. Will be balanced throughout the back-testing, as I said, the back-testing exercise of the models in the future.
Thank you very much. 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 in this moment of better performance in terms of volumes, there could be more competition in terms of pricing. I think that is now very much different than what has happened in the last year. I think that we are very well prepared to compete. I think that we have managed the pricing very well. 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 presented in our plan average growth of 6.5% for the three years of the plan. We are especially committed to have a very good performance this year. It is basically due to the good performance of volumes, but also we have improved pricings in terms we had some room to improve pricing compared with our peers, and we are doing. As I said, we have done a very good performance in the first quarter. Obviously, we are committed to progressively reach our target of double digits for the year in terms of fees and commissions.
Thank you very much. Regarding the mobile app of TSB, it seems that has been one of the main problems on the events that 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. The first signs that we have of today is that things are running clearly better than yesterday. I think that today is 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, to reach normality, if it is possible, next week.
Thank you very much. It appears as there are no more questions. This bring 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.