Good morning, everyone. Thanks for joining this 9 month Grupo Santander conference call, a live webcast. As we normally our group CEO, Mr. Alvarez, will address the group performance, followed by the group Chief Financial Officer, Mr. Garcia Cantera, who will address in more detail the different business areas performance.
And obviously, we will have, after the concluding remarks, plenty of time for your questions here, Lively. Obviously, if there is some opening questions, We'll go the IR team right after the call get back to you. So with no further delays, Jose Antonio, please.
The digital transformation and the potential in digital customers is also progressing well. The results in the quarter were around EUR 2,000,000,000 affected by the hyperinflation accounting in Argentina. That impact was €169,000,000 in the quarter. It goes through all the lines. If you wish, we can elaborate later on this.
But excluding this impact, Q3 profit will have been the highest in many, many years. Year on year profit grew double digit rates. We continue to generate capital. The quarter was particularly good on this. I will elaborate later on on this, and we maintain high profitability.
In regard with the integration of Banco Popular is progressing according to our plans. Some of them we anticipate Portugal integration operational integration was executed in Mid October, it went well. Legal integration was also executed in Spain at the end of September, and we have a plan to execute the operational integration start by November with the according to a plan that is going to last for 6, 7 months. Finally, that as a summary, I will say that we are well, well on track to meet our 2018 group targets that we established 3 years ago. Going through the main developments, you have here the numbers, How the commercial transformation is progressing, I already mentioned the numbers.
We are adding 500,000 customers, digital loyal customers and 1,500,000 digital customers in the quarter. So and we are or above our target in loyal customers or very close to our target in digital customers. We are progressing in improving our digital capabilities and providing new services and new more access to our customers to our to the bank. At the same time, we are investing in the back office things that are not seen From our side, investing in the back office to try to reengineer operate all the operations of the bank and improving the IT capabilities to serve better our customers. When it comes to the P and L, the P and L evolution was has some positives, as you know, impacted by the perimeter, and the Popular Asset Management and negatively by exchange rates and inflation in Argentina.
Going through the P and L, we see good developments in both net interest income and fee income, although the fee income was affected by some weakness in the CIB area and some seasonality in the quarter, but particularly Clearly, the most important was CIB fee income generation in the quarter was weak due to the situation in the markets. We continue to have to show consistent seasonal effects plus CIB. Wignex is producing decrease in fee income in the quarter, but nothing that is structural. It's more like I would qualify this as a blip or than that something that is recurring. But cost control in the quarter, going down 1%.
And loan loss provisions, there is a seasonal effect. The change from the previous quarter is a seasonal effect in SCUSA, Well, the Q2 is the lower quarter, the lowest quarter in terms of loan loss provisions due to the fiscal events. And the 3rd quarter comes In line with the previous year. If you compare the cost of risk in SCUSA this year and the previous year, this year is lower than the previous one. So good developments also Using cost and euros developments, the quarterly capacity generated results quarter on quarter, you see a consistent upward trend that shows that the results are fairly are recurring, consistent and growing results quarter on after quarter.
When it comes to the net interest income, we have both growing in mature markets and in In developing markets, I'll do with different patterns. In mature markets, we are growing volumes. We have seen NIM compression, minus 8 basis points, while in developing markets, we see the 2 Both volumes and NIM improvement across the basically, across the board. We include developments and good capacity to innovate Net interest income in both markets for out of both different regions. In fee income, the levels of activity remained strong, Pretty strong, I would say.
And you see the figures there about the number of customers activity with those customers. It's not just the number of customers. The activity of those customers is growing nicely, mutual fund balances, current turnover, insurance is growing pretty well. And you see the income growth by market. We are showing pretty consistent results across the board.
Mature markets growing 6% and developing markets 14%. When it comes to the segments, you will see there what I already comment, CIB is the segment that is quicker. While in the retail banking and in wealth management, we are growing in a strong way, I will say. So for that reason, I was telling you before that we don't see any I deem this more or less blip than a consistent trend that you can stop going into the future quarters. When it comes to costs, decrease in the quarter, we are seeing the results of the integrations we are doing both in Spain and Portugal.
In the U. S, we are after the years in which we invest significantly to tackle the regulatory issues. We are showing the Decreasing costs and in the other markets in which we are growing cost like in Brazil and Mexico, we are growing much faster in the volumes and the activity trend. We are growing the cost so the cost income in both markets in those markets is pretty low and still lower. Overall, at the group level, we are slightly below 47%.
As you know, our target is between 45% 47%, pretty popular. With popular, there is a couple of percentage points that push the cost income higher, but we are on track to meet our target. At At the same time, the customer satisfaction is progressing well. We are top 3 in 6 countries, so and we are progressing well. In the main countries, we are top 3.
So we are satisfied with the results on this bet. Credit quality, a few comments here. While you have on the right side, the first time we published Under the IFRS recovery ratio, the Stage 1, 2 and 3, you have numbers there. You have the comparison between January September. While it's we're going to continue to publish these numbers, so it's the first time we publish, but it's the way to follow this.
But overall, the trends are pretty good. So it's fairly benign credit environment. In almost every market, you have one offs probably in the quarter in some areas, Mexico and in Spain, if I remember well. But overall, the clay quality remains well on track, and the trends are pretty good. And the environment is, as I said, in line.
Well, on capital, strong capital generation in the quarter, We generated in the quarter 31 basis points at the end of this year. The ratios, good progress here, both in [SPEAKER JEAN FRANCOIS VAN BOXMEER:] It is growing. You have the numbers on underlying and total basis. EPS growing already 5%. By the end of the year, we will be in double digit as we have been guiding you.
And the tangible net asset value per share grew in the quarter 1.5%. The main effect here has been to share ratios. And this is going to be still the main uncertainty on this. Other than this, we are Generating net asset value per share due to the capital retention we do as we grow the business in the markets. Now I will hand it to Jose that is going to operate into the business areas and the countries.
And finally, I will come back to make some final comments.
Thank you, Jose Antonio. Good morning, everyone. And I will focus on the main areas and briefly review the others. Compared with previous quarters, in terms of underlying profits, Europe's weighting was up 2 percentage points. Spain was up more or less 2 percentage points at the expense of Argentina, which decreased by the same amount.
The underlying profit increased in 8 out of the 10 core markets. And the only ones where it dropped were the U. K. And Argentina. In this case, as I will explain later, due to inflation accounting.
Starting with Brazil in a fairly volatile environment, we had a very good set of numbers in the country in terms of balance sheet and results with a very strong growth of our customer base. Loans or funds grew at double digits, notably retail loans. On the liability side, we kept growing profitable market share. The return on tangible equity increased over 300 basis points over the period, reaching 20% in the 1st 9 months of the year. We saw double digit rise in net interest income and fee income.
Quarter on quarter fee income was impacted by higher volatility, which led to lower activity in the Corporate Investment Bank and the replacement of mutual funds by savings accounts, what is called locally POKANSA. The efficiency ratio reached its best level in the last 5 years. And credit quality improved with the cost of credit down to 4.17%. We are quite optimistic about performance of Brazil in the coming quarters. We see good trends in revenues, cost rising in line with inflation and a stable cost of credit.
In Spain, the goals set for the integration of Banco Popular are being met. Successfully, the legal integration was concluded in September. We had good business dynamics in the 1st 9 months of the year in terms Volumes with record July in terms of new loans driven by SMEs, up almost 20% And consumer credit also 20% higher than in the previous in July of the previous year. Positive loan book evolution in SME and Private Banking was this was offset by a force in mortgage lending and CIB portfolio. Mortgages Production is up very it's a healthy growth, but it's insufficient to compensate the amortization of existing the existing portfolio.
In deposits, we saw increase in retail banking balances. The 1,000,000,000 to 3,000,000,000 account balances are up EUR 4,000,000,000 year on year year to date. Underlying profits increased 18% year on year with a strong revenue growth, which was boosted by a lower cost of deposits, down 6 basis points in the quarter. Costs declined 2%, thanks to the optimization measures following the integration of Banco Popular. We're starting to see the synergies that we already announced, and loan loss provisions remained basically unchanged.
In the U. K, we see an Economy that remains fairly stable with some, obviously, uncertainties associated with Brexit. The ring fence structure is close to completion ahead of the deadline January 1, 20 Sustainable growth in profits and return on tangible equity at 17%. New lending grew 8% from December 2017, well above the market and profits were up 7%. Quarter on quarter, we saw a good evolution in net Interest income and lower costs, down 6%, mainly due to seasonal effects and the first synergies that we are getting in Germany, where the commercial network integration is advancing as planned.
We will continue to focus on improving our auto finance business as well as growing the consumer credit segment due to improved digitalization. Going into the other units very quickly. In Mexico, the focus is commercial network Transformation, digitalization and retail customer attraction with a strong increase in digital customers were up 40%. Strong growth in loans, mainly payroll, companies and SMEs. Growth in funds driven by deposits from individuals, SME and mutual funds.
Profits increased 13%, driven by higher net interest income at 12%, fee income up 9%, loan loss provisions down 7%. Cost of credit was very significantly lower than a year ago. Higher profits, return on intangible equity reached 20%. We see similar trends in the future. In Chile, we are working on regaining leadership in the mass consumer market, And we will launch new products before the end of the year to continue pushing into this direction.
In volumes, loan growth accelerated. The economy is doing better. We have seen that in terms of credit demand. And the profits in the 1st 9 months were up 8%, underpinned by good performance on of customer revenues. In the U.
S, the Federal Reserve terminated the 2015 written agreement demonstrated the continued improvement on regulatory issues. Volume dynamics are improving, with loans growing for the 2nd straight quarter, both at the bank and at the Santander Consumer. In this case, it's mostly leasing. Higher profits, year on year growth of 47%, with a strong growth in both units Santander and Consumer. Quarter on quarter, profits were affected by higher provisions.
As Jose Antonio said, there is seasonality in the provision calendar at Santander Consumer, and that affects the quarter on quarter comparison. On the other hand, we saw very good news in terms of net interest income and costs at the bank and the first increase and the first decline in both in several quarters. In Portugal, the integration of Banco Popular was concluded in October. Total is now the largest privately owned bank by domestic assets and loans in the country. Underlying profits were up 9% year on year, driven by improved efficiency.
Revenue growth was higher than costs growth and lower cost of credit. In Poland. The economy is doing very, very well, growing between 4% 5%, and we're seeing that in terms of growth in loans and funds, both quarter on quarter year on year. We had quarter on quarter very good performance in all recurring items of the P and L. This is not necessarily reflected in the profits in the bottom line.
Due to the seasonal collection of dividends in the Q2. In Argentina, let me go a bit In a bit more detail about the accounting changes, we had to apply This excluding this, year on year performance was really good. Customer revenue was up due to very good Spread management fee income also up due to the use of cash and FX. Higher provisions and costs were partially offset by the peso depreciation and the automatic review of the collective salary agreement. In general, we see positive evolution of future profits in Argentina, a country that will stabilize gradually with the agreement between the government and the IMF.
Finally, turning to the Corporate Center. The underlying loss was 11% lower than a year ago. This better result was mainly due to lower costs associated with FX hedging. Net interest income reflected also the higher cost Financial costs associated with the issuances made to comply with TLAC and NREL requirements. Operating costs were basically stable.
And other income and provisions include charges for provisions, intangibles, state guarantees, Costs on DTAs, pensions, litigation, deterioration of stakes, obviously, lots of different things which explain the increase that we see year on year. And with this, I'll turn it back to Jose Antonio for his concluding remarks. Thank you.
Thank you, Jose. To conclude, I would like to make some comments in relation with the KPIs we have for the end of the year and the progress we've been making in the last year. So you have here the main KPIs we established for the group. We are, as I mentioned, well on track in the sight of customers, more customers, more satisfied and greater loyalty. That was the center of our commercial study.
Continue to grow volumes and fee income. So although the quarter was, as I mentioned, weaker we are growing 10% compared with the previous year. So a significant growth that is very much in line with the loyalty and the number of digital customers we are getting with the commercial transformation. The cost of risk is relatively below 1%, while our target was a bit higher, as I also comment. Cost income in the upper side of our range, but inside our range that given the particularly the Similarly low rates, negative rates in Europe is a good achievement at the group level.
The EPS double digit growth target, we are Now on track to meet this target, taking into account the developments in the results quarter on quarter in 20172018. The dividend per share, we've been increasing the dividend per share year after year, in line with our commitment. The full No, the core equity Tier 1, our target of higher than 11% seems to be achievable at the end of the year, and we are making good Progress on this regard, the quarter was particularly good. And also, I mentioned before that our current capacity is more in the line of 10 basis points per quarter return, and you will likely already above our targets. So we think that we are well on track to meet our target by the end of the year.
Nonetheless, because on business as usual, we expect to deliver Solid results in Q4. We don't have any reason to think that there is going to be any change in such a short period of time. So That's the end of the presentation. And now we remain at your disposal for the questions you may have on the results on the Renaissance output that may be of your interest. Thanks,
Webcast. The first question comes from Francisco Rekel from Alantra Equities. Please go ahead.
Yes. Good morning. Thank you for taking my questions. And 2 for me. First on capital, which has surprised positively this quarter.
I wonder if you can give us more color on the capital optimization measures that you have taken in the during this quarter. And if there is any P and L related dilution from these measures, you have mentioned And securitizations, well, I don't know if you can comment more on this or not. Then Other peers are also reporting headwinds related to TRIM. So if you can please update on where are you in this process? And the second question is on Spain NII, the 5.5% quarterly growth NII is remarkable given that Q3 is typically a seasonally weak quarter.
If you can please help us understand the drivers of this growth and give any guidance for the coming quarters, if you are changing the bond portfolio or not and in particular the benefits from the repricing of the 123 account and how much is still to come the next repricing that you announced recently? Thank you.
So thank you, Paco, I'm going to go with the questions. The first one, the 3 components you asked about capital, more color. While the generation in the quarter was Half of roughly speaking, half of generation, I will say, profits minus dividends and 91s and all the usual stuff. We've done some securitization, not as much in the quarter. And the optimization, well, As you know, our the density of our risk weighted assets compared with assets is one of the highest in the sector.
And we in Some models, internal rating based model, we are still refining those models as a result of this quarter came in this way. So well, I wouldn't say there's more to come, but we're going to have headwinds here 1 quarter, maybe in one side and another. What I want to Stressed to you, and I told you that the capital generation When you look at the loan book, we split the loan book in 3 components, let's say, the mortgage component, the institutional lending and
Ms. Sophie, you have the floor. Please go ahead.
Yes. Hi. Here is Sophie from JPMorgan. Just one more question on capital. So you have next quarter, you will get 9 basis points from Vistink.
How much will the Deutsche Bank Polska acquisition have of an impact on your core Equity Tier 1? And are there any other adjustments we should take into consideration going into the Q4? And my second question would be on Brazil. If you could just elaborate a little bit more on your outlook on Brazil, those elections we had Over the weekend and how we should think about net interest income growth, fee growth, cost growth and asset quality going forward. And my third question would be anything you can comment on your new CEO that starts next year?
Thank you.
Okay. So capital, you asked specifically for the 4th quarter. On top of the 9 basis points we anticipate from, we think the Deutsche Bank Polska Assets are meaningless in terms of the impact on capital. So it's neutral. Basically, it's a neutral in terms of capital, so I don't expect this.
So the only thing that we anticipate as of today, the [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] In terms of capital, it's the ordinary capital generation and the 9 basis points from, we think. Other than that, it's business as usual, I will say, yes? So Probably the main impact comes from exchange rates, it's the most volatile component and available for sale portfolios. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] You have something to add to this, Jose? No.
Okay. So those are the main components. Brazil, you make a paper question about the the number of products we sell and the cost associated with this growth. So overall, I will expect in local currency Brazil to keep going at double digits, yes? So probably well in double digit going forward.
And finally, on the new CEO, well, you know him, the only thing I want to stress, we said clearly, some of you elaborate about the given The person that is going to be the next CEO and his previous experience, Some people went immediately to a kind of M and A increasing activity on M and A. The strategy is not going to change. So our focus continue to be organic growth, and we will look for opportunities in our existing markets as we've been doing in the previous years. It's the only thing I want to add to avoid any kind of confusion that is this is going to change the strategy of the bank.
Thanks, Sophie. Next question?
The next question comes from Alvaro Serrano from Morgan Stanley. Please go ahead.
Hi, good morning. Two questions for me and another one on So first, you mentioned the 10 basis points run rate. So we can think you'll be close to And the question is, Can you give us any update on the negotiations of the Chrysler? How is that going? Because if
have an option. They explore the possibility about to buy The assets we currently are running in Scusa, I do not see this nothing happening this year, yes? So So probably the negotiations we continue with the negotiations, although it's more on credit and FCA side to intervest on closing these negotiations or not. At this stage, I don't see this being closed before the year end. I may be wrong, but I don't see this being closed before the year end.
So the U. K. Costs well, it's true that we started the year with a significant growth in costs in the U. K. We were running at a running rate of 8% or something like that.
I will expect, as you rightly said, at the end of the year to be at the 5%. And we expect to continue to have a well, not continue to have having a better cost control going forward in the U. K. With the business being more focused in the niches, in the areas in which we can make the difference. And we've been Sign in, we're starting to focus in specific areas with better cost control, the one we had at the beginning of this year.
At the same time, we are making significant digital investments. That is what is the main cause of this increasing
foreign subsidiaries, which they agreed on bringing this down from 100 to 95. So whether you have any information, any details on this? In particular, what will be taxable this year? Whether it will be only the dividends or all the Roughly generated by subsidiary, Sapura. Thank you very much.
So the first question about Santander Consumer Finance [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] So for this growing, well, this is we haven't seen any development there. So we know that the cost of risk is significantly below expected cost of credit through the cycle, but we haven't seen any development there. And there, the difference between this quarter and the previous quarter is the previous quarter, we disposed some portfolios, Nonperforming portfolios in this quarter, we didn't. And for that reason, you see the difference quarter on quarter. But on the ground, we are not seeing any difference.
And as I said, the cost of risk remain low for when you look in historical standards. The second question was about the size of IFPH portfolio. I think that I'm speaking by memory, around €2,000,000,000 in Popular, another €2,000,000,000 in Santander is relatively small because we were not that active in the with this kind of index in the past. And finally, the tax, the information I have is the same you have. So this is an intention, and it's going to be discussed in the Parliament.
If it's passed, we will need to assess. I don't have any specific number to or further clarification than the information you got and you gave in your question.
Thanks, Jose. Next question, please.
The next question comes from Carlos Cobo from Sociede Generale. Please go ahead. Hello.
Thank you for the presentation. Couple of questions.
Yes, 1, if you could add a little bit of color on the performance Popular and divided the 2 networks, Popular and Santander Spain, just to see How revenues are performing and whether one of them are underperforming or outperforming the other, same for fees, After funding and all that. And second, on capital. Sorry to insist there, just to see if there are any potential upside in Q4. Could you provide us a pro form a impact on capital coming out of the appreciation of the Brazilian Sovereign Exposures?
Okay. A bank and the organization is Even the region, our organization, the local organization, the head of the region, the head of the areas are just one head for the 2 networks. So I we are not following this orientation. But I'm particularly happy with developments in SMEs where it was the critical sector when we decide to make an offer for Popular. On capital, I don't know if you have something.
Yes. We remember that we hedge the capital adequacy. So the ratio is hedged against changes in exchange rates. So from the equity investor in Brazil, The exchange rates do not affect capital, the capital adequacy. We also, as we said in previous quarters have hedged the profits coming from Brazil this year.
The profitability that we are seeing in Brazil is higher of what we expected at the beginning of the year. So yes, there will be a slight positive impact in the Q4, but it will very much depend on the profitability of the quarter, the tax in the quarter, the capacity to amortize DTAs. So I think it's very premature to assess at this point, at the end of October, what the impact on capital will be.
So for sure, what is affected is the TINAP, yes? The TINAP is affected in a positive way, yes, because we hedge, as Jose said, the capital range, but not the full capital invested there. So as long as the real appreciates, the capital invested there gives a positive uplift to the team up.
Thanks, Carlos. Next question, please.
The next question comes from Mario Ropero from Fidentiis. Please go ahead.
Hello. Good morning, everybody. My first question is, if you could please update the amount of synergies that have been achieved so far on Popular and the amount pending?
And then
the second question is a follow-up on a previous one, is if you could give us the exposure to foreign currency denominated mortgages and provisions attached to them.
Well, since this is unpopular, we are well on track with our plan. We're guiding you onethree per year at the end of this year. We're on track to be I'm probably to sit a little bit this target this year. So I feel comfortable we're going to achieve the synergies announced for Popular. And In the Investor Day next year, we will update you, particularly on this topic, our views going forward.
In foreign currency mortgages, As far as I remember, the other significant one was in Poland, yes? So I don't know if you referred to the Spanish where our Spanish Multidivis. Yes, the Spanish Muti is a minor portfolio. It's a very minor ratio, yes. So it's negligible, yes.
So it's I think it's €500,000,000 or something like that. So it's the notional amount, so it's negligible. And the other topic on this is the in Poland, where as you know, before 2010, there was a significant portfolio of Swiss franc mortgages that is getting reduced over time, and we don't see any particular development there.
So it's been amortized very quickly?
Very quickly, yes. So
From Credit Suisse. Please go ahead.
Hi, good morning. I just wanted to follow-up on Brazil's NII,
We have seen a significant expansion in the NIM due to the mix. We were shifting the mix from corporate, large corporate into more consumer SME kind of lending. How do we expect it will continue to grow faster probably in consumer lending and SMEs? Probably the gap is not going to be as large as it was in the past. For that reason, the NIM probably the expansion of the NIM is not going to be as strong as it was in the past, other things equal.
Out of the competition, potentially, regulatory issues or regulatory pressure on Some products may also produce a more pressure on NIM. But overall, we continue to be constructive on expectations about the NIM going forward.
Thanks, Andrea. Next question, please.
The next question comes from Stefan Nedialkov from Citigroup. Please go ahead.
Hi, guys. Good morning. It's Stefan from Citi. I just recently joined the call, so excuse me if any of These two questions have been asked partially or fully before. On Mexico, could you provide us with what you see as the outlook at the macro level as well as on your loan growth into 2019 margins and provisions given the new presidency of AMLO from the 1st December?
And secondly, on the RWA optimization.
Credit cards, where the cost of risk is north of 10%, and we reduced the cost of risk in credit cards being less having less activity in open market, and we've been reducing the cost of risk there. So we think that this is sustainable. The growth there is going to be significant. This year, we expect to finish with probably around 600,000, 700,000 new payrolls. So we are expanding in a big way our customer base.
So and this means that we're going to have more capacity to learn to assisting customers unless need to go to the open market. That makes me relatively optimistic about the outlook, other things equal, with the current economic environment that we have in mind in terms of the provisions and the cost of risk.
The second question is about risk weighted attrition. It's a combination of many things. There is No single element, not single factor or variable that is worth mentioning that explains The movement, so it's a combination of different variables in the internal rating based models in several countries, but none is really meaningful. Thank you. Last question please.
The last question comes from Carlos Peixoto from Caixabank BPI. Please go ahead.
Hello, good morning. A couple of questions. The first one will be, if you could share some light on how you see
customer of the digital customers. So, Guateco, we see this year, the fee income has been, as I mentioned, Our CIB business, Ismail, is particularly strong in Spain and in Brazil, and the fee generation both in Spain and in Brazil has been affected by the weakness in the CIB fee income. In retail, probably the weakest area has been Mutual funds that, well, due to the behavior of the market, the growth has been so far limited on the negative side. On the positive side, we are growing at Very good pace, very good rate in insurance. And insurance fees coming from insurance are growing nicely.
So Going forward, probably the developments depends on the market behavior and this both in CIB and mutual funds that the lower performance in this year. So this is the developments in Spain. In Brazil, Well, overall, we are growing, I think, at 14% or 15% the fee income, so a Very healthy number. When you look when you dig inside the fee income generation, as I said, weak in CIB, particularly strong in all related of the business related with volumes. We grew the volumes significantly both in lending, the volumes of insurance.
There is competition is increasing in acquiring business. As you know, acquiring business was Fee income generation was strong in Brazil, and we are seeing more competition. It's the only area in which I see more competition as a result of this competition. Probably the operators in the country, including ourselves, where our market share is approaching to 15% and probably keep growing, We are seeing some competition there that it reduces the fee income. Other than that, I continue to see good developments in Brazil.
The mortgage stamp duty, well, wait till next Monday. The risk The range is potentially so wide that I'm giving you numbers or I don't have the numbers, but the range is so wide that, elaborating on this, that's not at any particular EIS, because the range is potentially extremely wide. What I do think is that going retroactively is I do think that is not the probability is low, yes. So given the fact that we are talking about tax, Where a change in the reductability is, in legal terms, really difficult because This is not something that was in our contracts, was in the law or in the by law. And we were following the by law.
It was not due to our contracts like Other claims, this was we were following the law since, if I remember, it was 1995 or something like that. And the discussion is different in this regard, yes.
Okay. Thanks, everyone, for joining the call. And obviously, the IR team will need to hear this at your disposal for any follow-up you might have. Thank you.