Investor update

Jun 18, 2013

Summary

FSA orders are expected to add ~DKK 100bn to RWA by year-end, lifting 2015 guidance to ~DKK 930bn; management said the DKK 81.5bn capital buffer remains unchanged. Profit guidance and the >12% 2015 ROE ambition were reaffirmed.

Welcome to the Danske Bank conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to your host, CFO Henrik Ramlau-Hansen. Sir, you may begin. Thank you very much, and thank you to everybody for listening in on this conference call, which we have set up based on the fact that yesterday we got four orders from the Danish FSA. This mainly relates to our risk-weighted assets, and we have made a presentation available on our website, which I will take through with you in a second. With me here today is my colleague on the executive board, Robert Endersby, Chief Risk Officer. Also Chief Investor Relation Officer Claus Jensen, and Simon Halbech, who is the head of our risk analytics department. Let me take you first to slide 2. Just as some background information, we have got four orders from the Danish FSA. We are in a constant dialogue with the Danish FSA about a number of issues. We have also at our previous conference calls and on investor roadshows and so on, informed you that we have also been in a dialogue with the Danish FSA about our risk-weighted assets. It has gone on for some time. Now or yesterday, the Danish FSA had decided that they wanted a decision. We were prepared to continue the discussion. We were also prepared to involve an external third-party consultant if that should be needed in order to assess the right level of our risk weights, but that could not be achieved. The Danish FSA have decided to make a decision, and they have given us those four orders that have been available. It mainly relates to our corporate and also counterparty risk exposures, where they have asked us before December 31, 2013, before the end of this year, to increase our risk weight for those corporate exposures, counterparty risk, et cetera. It is our estimate that would roughly towards the end of 2013 increase our risk weights by around 100 billion kroner. We have some Pillar 2 add-ons to cover some of these type of risks, and we will be able to reduce some of these Pillar 2 add-ons in our solvency need going forward when we increase the risk weights by roughly 100 million kroner. This first item with the corporate exposures and counterparty risk, that is the first two orders. Then there is our third order, and that is mentioned as item 2 here, that they want us to do more work on our banking model or financial institutions model. Before that is settled, we would be asked to take an add-on in the Pillar 2 system of DKK 2 billion, and we will do that already by June 30th in the second quarter. We will develop a new banking model during 2013 and into 2014. When that is finalized, probably in 2014, then that could lead to a further increase in the risk-weighted assets. That would probably be a minor increase in risk-weighted assets. Then the fourth order mentioned as item 3 here is that we have in our Pillar 2 system made a reduction to the extent that we expect our losses to be less than our allowance account and so on. There has been a reduction of DKK 2.8 billion in our Pillar 2 system, and we will not be allowed to do that going forward. The net effect of all this will roughly be towards end of 2013, an increase in the risk-weighted assets of around DKK 100 billion, as I mentioned, and a net reduction of around DKK 2 billion in the Pillar 2 add-on system. As you can understand, and also from the press release, the company announcement we sent out yesterday, we do not fully agree with the Danish FSA, and we do not especially agree on the procedure they have been using. Where they at a very high level have done what I would call benchmarking, compared the bank's risk weights with other banks, and then after back and forth, come up with a decision that we need to increase our corporate risk weights, et cetera, with around DKK 100 billion. We feel that it is a very special legal procedure using benchmark for making decisions. We have put forward the argument that decisions of this size should be based on an assessment underlying detailed analysis of the underlying risks. So we have been prepared to further discuss our PD models, ETG models, and so on. All models that over a number of years have been approved by the Danish FSA. Therefore, we are seriously considering whether we should appeal this decision to the Company Appeals Board, Appelsagnævnet in Danish. That will be a consideration that would be done over the next week or two, the 4-week period within which we can decide whether to appeal or not. If you please then turn to slide 3. We have tried on a pro forma basis to illustrate for you what the impact is. The impact of this increase of roughly DKK 100 billion is a drop in our total capital ratio of roughly 2.5 percentage points if it took place at end Q1 2013. But as I mentioned, it will not take place in Q1 2013. It will be finalized towards the end of 2013, but the net effect will be a reduction of our total capital ratio of 2.5 percentage point, and a drop in the Core Tier 1 ratio from 15.1% to 13.3%. If you then turn to page 4, that illustrates that actually our capital buffer is unchanged. Our minimum solvency need is governed by this transition rule. So in terms of our minimum solvency requirement, it is mainly a rearrangement between Pillar 1 levels and, so to say, what was left up to the transition rule that leads to a minimum solvency need in Danske Bank's case of DKK 91 billion. You can see on the left part on slide 4 that, so to say, the leftover drops from 10.2 to 3.5 because the Pillar 1 goes up by roughly the DKK 8 billion, and the Pillar 2 add-ons, as I mentioned, drops by roughly DKK 2 billion, all on a pro forma Q1 '13 figures. But again, the total effect will first be visible towards the end of 2013. But again, this is not, as such, a capital issue for Danske Bank. Our total rate drops, but our capital buffer is still DKK 81.5 billion. So there is ample capital in Danske Bank going forward also after these orders. On page 5, we have tried to, so to say, summarize the expected development in our risk-weighted assets. This DKK 100 billion increase from the Danish FSA was unexpected. On the other hand, we have, as you know, been taking a number of initiatives to reduce our risk-weighted assets. We have also sold off some non-core items until now. So our current risk-weighted assets in Q1, 797, and actually somewhat lower than what we anticipated when we had the investor capital markets day in the fall of 2012. At the capital markets day in London, we communicated to you and others that our rough guidance towards 2015 was roughly flat, risk-weighted assets ending up at around DKK 870 billion. But given the new information, including the FSA orders of DKK 100 billion, we have made for your benefit a revised version of this development in our risk-weighted assets towards 2015. Our base case or our guidance today would be that we expect risk-weighted assets, given the strategy, et cetera, that we will have risk-weighted assets of around DKK 930 billion in 2015, roughly an increase of DKK 60 billion compared with what we communicated at the capital markets day. Then finally, I would like to stress that it is still our intention to repay the state hybrid capital of DKK 24 billion that comes due, or at least can be paid back in 2014. Also as mentioned in the press release that we reconfirm our profit guidance to DKK 7.5 billion to DKK 10 billion for 2013, and also our ambition for 2015 remains unchanged. Still the goal is towards 2015 to raise the earnings of the bank considerably, and we are still working hard on that. Operator, that was my introductory remarks, and I think we should open up for questions. Thank you. We will now begin the question and answer session. If you have a question, please press star then one on your touch-tone phone. If you wish to be removed from the queue, please press the hash key or the pound sign. If you are using a speakerphone, you may need to pick up the handset first before pressing the numbers. Once again, if you have a question, please press star then one on your touch-tone phone. Omar Keenan from Nomura is online with a question. Hello, good morning. Thanks very much for taking the questions. I just had two questions, please. The first is, you mentioned the impact on 2015 targets. Essentially, if we assume increased real and equity requirement in 2015, what does that do in terms of deflating your ROE target, which is 12%, with higher rates? Do you expect that you can offset with higher earnings elsewhere, for example, corporate repricing, or do you think the potential for that is not there? Thanks. You are right that our ambition towards 2015 has been communicated to achieve a return on equity of above 12%, assuming normalized impairments, assuming short-term rates going up to around 2 percentage points in our main markets. That's actually by my statement here, reconfirmed. So we will still target above 12%, assuming interest rates go up as I indicated. It will basically be on the equity we have. So we'll have to work a little bit harder, but we will still try to achieve the 12% given improved macro environments. Okay, thank you. Just a second question. If you do decide to appeal the decision, how do you rate the chances of success there? What kind of timeline would it be before we heard back on that? Thank you. As I mentioned, we have not decided. It's also a board matter whether to appeal. But if we appeal, a case like this could take, let's say, one year. Okay. Thank you. Worth mentioning this, Robert, chief risk officer. It will not impact if we appeal the requirement to execute this at the end of the year. Highly unlikely that we would have any kind of, to use an English vernacular, stay of execution. We will have to comply with this even if we appeal while it is resolved. That is also why we are writing that we are now starting implementing that. Okay, next question, please. Andreas Håkansson from Exane BNP Paribas online with a question. Yes. I actually have two questions. First one, you said that you had an ongoing discussion with regulator about this. Could you tell us, do you also have a discussion about risk weights on the retail side? I, for example, have been a bit surprised that your LGDs and your PD models haven't really moved over the last five years, even though we've seen big movements both on the macro and the housing side. On the second question, you've allocated DKK 46 billion of your group equity into your mortgage company, which means that on a fully loaded Basel III basis, you have a Core Tier 1 ratio around 7%-8% in the bank, excluding the mortgage company. Do you have any discussion with the regulator about that, given that the capital sits in a mortgage company can't really be easily dividend back into the bank, given that it's backed up for collateral in the cover pools? Thank you. We have, as mentioned, a number of discussions ongoing with the Danish regulator. We do not have any specific discussions going on the retail side. I can kick in and say we don't have specific discussion on the retail side for sure. In Danske Bank, we primarily deploy long-term PD models, and therefore we see less fluctuations over a cycle than seen in some other banks. The same goes for the LGDs. Therefore, that's one of the reasons. But no, we don't have specific discussions. In terms of your questions on the capital, we have capital in RD, we have capital in Northern Bank, we have capital in Danica, and so on. The risk rates and the capital rates as you are seeing is done on a consolidated group-wide basis. We do not have any specific discussions with the Danish FSA that we have DKK 45 billion or DKK 46 billion in RD or also significant stakes in Danica. It is group figures you are seeing. But of course, we are aware of the issue and that is also why we have taken dividends out of RD. Okay. Then maybe last question. You said that there would be some impact next year in term of financial institutions. Could you tell us some size of the RWA impact in 2014? This is Simon 哈尔夫 Hartvig. We do not have any specific estimates, but we would consider it to be at least less than DKK 20 billion. Okay. Thank you. We should also add that before we received this order, we were already working to develop this model. This isn't a shock for us. We're just a little disappointed that the Danish FSA chose to give us an order on the topic because we were already working on it. We'd already disclosed to the Danish FSA that we were working on it. This will be something that we solve in good time. Okay. Next question, please. Ronny Rehn from KBW is online with a question. Yeah. Good morning. Thanks for taking the time. It's Ronnie here from KBW. One quick question on the dividends. Does it in any case change your thinking about returning capital to shareholders? Also a second question, and probably this kind of goes into the same direction. Now that the risk-weighted assets have gone up for essentially the same kind of assets, are you kind of thinking about lowering your internal hurdle rate in terms of Core Tier 1 level where you want to be, or is it still the 13% that you have in mind? Thank you. In terms of the dividends as you asked about, we have not paid dividend for 5 years now. It's still the intention to start if things develop as expected. It's still the intention to start paying a dividend, perhaps not so to say to the full amount for 2013. This is of course the decision of the general assembly and board of directors and so on. Basically this does not change our long-term strategy of paying dividends and also down the road when that should arise perhaps even do share buybacks. Again, given that we have not paid dividends for 5 years, the next step is to pay the dividend, and then we'll take it from there. Also it will still be our target to have a Core Tier 1 above 13%. It does not change that either. For you as the investor community, it's quite obvious that a decision like this down the road of course ties up more capital in the bank. That is a fact. Short term, it's still the goal to start paying a dividend for '13. Okay. When you look at the 13% target, on the Basel III basis, at least pro forma first quarter plus the 100 billion kroner, we're well below that. We're probably around 12% or something. So in order to get to the 13% target you have, you shouldn't really pay a dividend. That's why I'm kind of wondering. That's also why I mentioned we'll perhaps not pay a dividend to the full amount, but I think you will not be down to, what did you mention? Did you mention 11%? No, 12. About 12, I would think. But there will also be earnings for the remaining part of the year, but we will take it down the road. Okay. Thank you. Nick Davey from UBS is online with a question. Yes. Good morning, everyone. A couple of questions please from my side. The first one please, could you just talk a little bit around the capital efficiency targets that you still have outstanding for DKK 50 billion to DKK 70 billion about RWA reduction. Can you spit out a little bit where you're still hopeful that those will come from? I remember at the capital markets day you talked a bit about improving your advanced IRB framework and using more internal models for counterparty risk. It just feels like the tone of what the Danish FSA is ordering here is very much contrary to that kind of work. Could you just give us a flavor of how confident you are on that DKK 50 billion to DKK 70 billion, please? Yes. I think we are absolutely as confident as we were before we had these orders because the effect we see here is both from extending the IRB coverage in our portfolios to also include our Finnish franchise, which in no way seems to be affected from these last steps from the FSA. No matter the fact that we are changing the level of capital we should hold against these assets, it doesn't change the fact that we need to be efficient how we deploy it. The majority of the initiatives we have within this program are actually driven from a risk optimization point of view, and therefore we don't see a strong link between increasing the risk weights on the corporate exposures and then the impact we see from the capital efficiency program. Okay. Thank you. If I could have a second question, please, on the DKK 100 billion number from the risk-weighted assets increase based on the orders. If I read the report from the FSA correctly, it seems like they're making minimum suggestions and then leaving it up to you on interpretation and any particular other buffers you would like to add on top of that. Do I understand well that the DKK 100 billion is basically in line with their minimum orders and there's no sort of buffers on top of that? No, there are no buffers on top of that. They've given us an order to adjust our risk weights, or given us orders to adjust our risk weights, which is actually giving us an order to create an outcome. So we have to make some decisions internally, which we will agree with the FSA about whether or not and across which portfolios within the corporate business we adjust PDs and/or LGDs. So we have considerable amount of latitude. In fact, one of our frustrations is they have not been very specific about any particular model that they don't like. So we have a considerable amount of latitude for the way in which we deploy this. Okay. Very clear. Thank you. Then final question just on rating agency discussions. Clearly very early days, but one of the key areas you have been targeting is improved ratings and you have pegged your dividend payout target along those lines. Have you had any early discussions at all with rating agencies or any strategy to try and somewhat mitigate what might otherwise be perceived as some negative headlines from a rating agency perspective? You are quite right. This is Claus Jensen from Investor Relations. You are quite right that this is very early days. But as far as we can see of the nature of this issue, this will not impact the view from the rating agencies nor it will impact our present outlook. Have you got some confirmation of that? Because I suppose some of them will look at stated pro forma Basel III Tier 1 ratios and find you 150 basis points worse off today than where you were yesterday. But have you got some confidence that that is the outcome or that? We are quite confident that it will not affect the present status with the rating agencies. But of course, as you mentioned, this is very early days, so we have not received any formal confirmation from their side. Very clear. Thank you. Claire Kane from RBC is on the line with a question. Hi there. Just a few follow-ups really. You mentioned that the announcement hasn't really come as a surprise, and I think the release from the Danish FSA said the discussions were back in September 2012, and then you gave us the capital markets day discussion. Where has the difference really come through that you weren't expecting in that case? I guess how long in advance, or that just September 2012 was the first time you knew about the corporate risk weight discussions? I am just wondering, in six months' time, will they then start looking at retail? It hasn't started yet, but could that come in down the line? Thank you. Two points. One is that if one actually starts benchmarking our, to take the latter point first, if you benchmark our risk weights to peers, then because we have been on advanced IRB for a longer period of time, our corporate risk weights has been in some areas lower than others. Therefore that has been a natural discussion with the Danish FSA since September. However, without any specific impact into mind, that kind of impact has only come at a later point in time. Because we don't see the same differences on the retail side, as I said earlier, we don't have any specific discussion with the Danish FSA at this point in time, and I wouldn't anticipate to see those type of discussions coming up either. Okay. Could I maybe just get But of course, there are no guarantees out there. There is no guarantees obviously. Could I just phase your comparison with peers based on the new floors introduced in Sweden and potentially the higher floors in Norway or just what the current reported Pillar 1 numbers are? Depends on what kind of retail we are talking about, but most predominantly our retail corporate risk weight is 13% as of Q1 2013. Okay. In terms of mortgages? In terms of retail mortgages. Yeah, retail mortgages. Okay. Thanks. Simon Christensen from Nordea Markets is on line with a question. Yes. One question. The Danish FSA, as I read it, has required a minimum increase of 10 percentage points in your corporate risk weight. The DKK 100 billion in RWA increase, is that in the minimum 10 percentage points or could you share what your corporate risk weight is? Thanks. Our corporate, they use a reference point of Q4 2012, where they require us to increase the corporate risk weight to the minimum of 10 percentage points. It is that minimum of 10 percentage points plus the impact on counterparty risk that amounts to DKK 100 billion RWA. Okay. You also guide that there will be some parameter updates in terms of your risk-weighted asset development through 2015. What do they relate to, and could you also comment on the rather large movements there are in the effects from new regulation and capital efficiency relative to your CMD material? Yeah. On the model parameter update, that is the rest of our IRB framework. So we have seen a number of needed updates on everything from haircuts to collateral values and different other items. So that is some of the issues that is underlying the model and parameter update. You asked about the capital efficiency. A prime driver of the capital efficiency, as I also touched upon earlier, is the fact that we have applied to the foundation IRB for our Finnish franchise, for which we will foresee a significant RWA reduction. But didn't you know that you would apply for this at the Capital Markets Day? I can also see that the effect from new regulation is down by DKK 60 billion in risk-weighted assets if I take the mid-range relative to your CMD material. Yeah. What is the new information that you have received? On the new regulation, the main change is on the corporate CVA impact. Therefore, the expected impact from CVA is much lower than anticipated at that point in time. Okay, thank you. Asbjørn Nicholas Mørk from Carnegie is online with a question. Yes, good morning, Asbjørn from Carnegie here. Most of my questions have been answered, but I have a couple of other questions. First of all, you say that you still want to redeem your state hybrid DKK 24 billion. If I look at your solvency, it drops from 21.6% to 19.1%. I remember you said something about refinancing part of this with some subordinated debt, and I think you mentioned something like DKK 10 billion. Does this deduction in your solvency have any influence on how much you would need to refinance in April? It's our goal to repay the state hybrid. We have not made the final decision. That's something we're discussing currently internally. We have not made a final decision how much new capital we would need to issue in 2013 or 2014 in connection with the repayment of the state hybrid. It is still subject to internal discussion, so there's not a final figure here yet. Okay. Then second of all, on your risk-weighted assets. I think it was mentioned on one of the earlier questions as well, but it seems to be an ongoing process, this, and has been going on for at least half a year. I'm just looking at your RWA development the last year. It seems to have dropped DKK 100 billion. Is there any correlation between those DKK 100 billion and the DKK 100 billion that you just received yesterday? No. The 100 billion DKK is a result of the capital efficiency program that we already had in place, and also some asset disposals. The two things are not related. It is an unhappy coincidence that they are roughly the same. Okay. Thank you very much. Sofie Peterzens from JP Morgan is online with a question. Yeah. Hi, here is Sofie Peterzens from JP Morgan. Three very short questions. With the Danish FSA order, you were saying that it is purely that they were benchmarking you against the other banks. You would assume that there was a little bit more rationale than that, given that you have one of the most advanced risk management methods in Denmark. You would assume that it would be reasonable that you have lower risk weights compared to your competitors. Could you maybe talk a little bit more about your discussion with the regulator? Have you had any similar discussions with the regulators in the other Nordic countries? Do you think they could also introduce higher corporate risk weights for you, for example, in Norway or Finland? Then thirdly, could you talk a little bit about the asset disposal plans that you have? Which assets are you looking to sell over the next couple of years? Thank you. Okay. If I should take some of your questions. First of all, our regulator is the Danish FSA. Any decisions come through the Danish FSA, and we are not aware of that there should be, so to say, additional discussions going on behind what is included in the orders. But of course, part of the work the Danish FSA have done is that they have been in a dialogue with the other Nordic supervisors. But we are not getting, so to say, orders or directions from the other Nordic FSA. That is through the Danish FSA. That is our main and is our regulator. In terms of our discussion with the Danish FSA, I think you are right. We have been pointing to that they should adjust for differences in the portfolio compositions in terms of size. They should adjust for the fact that we have a larger part of our portfolio being on advanced IRB, whereas some of the colleagues they are comparing us with are more on foundation or standard. We honestly feel that is one of the areas where if you compare rightly for the different types of portfolios, different types of models the various banks are using, then actually the differences becomes much, much smaller. Then you asked about the assets disposal. I am not quite sure I understood the question fully. We are not in the process as such of disposing assets. We are in the process in Ireland, in our non-core unit, of reducing that and reducing that considerably in size over 2013 and 2014, and we have given some specific guidance relating to Ireland. But otherwise, we are not in a sort of position where we are disposing assets. Does that answer your question? Yes, sir. Just to clarify, the capital efficiency of DKK 50 billion to DKK 70 billion, that improvement that you mentioned previously that it could be of the asset disposals, but those asset disposals are basically relating to Ireland. No, sorry. To be clear, the question was about our previous year's capital efficiency program. Yeah. And how we reduced the risk-weighted assets over the course of 2012. And part of that was capital efficiency, and part of that was some rundown of assets in various portfolios during the course of 2012. We are not talking about specific disposals in 2013 other than, as Henrik says, that we do expect as a result of our workout program on the Irish portfolio, that we should deleverage that portfolio by a considerable amount over the course of 2013 and 2014. The asset disposals are part of the reason why our risk weight in Q1 2013 of DKK 797 is somewhat lower than previously anticipated. Okay. Thank you very much. Okay. One more question. Jacob Turst from Autonomous Research is online with a question. Hi. Thank you. Just two questions for me. First, on the ROE targets, could you talk at all about how you plan to compensate for the higher amount of capital that you hold if you have a 13% Core Tier 1 target to still hit 12% relative to your old capital markets plans? For example, is there any scope to increase the margins on the corporate lending to reflect the higher risk weights and capital charge on those loans? Secondly, would you, at this point, rule out the need to take in additional capital or the willingness to take in additional equity capital, or do you keep all options open at this point? Thank you. In terms of reaching our ROE target, it's still our plan to improve the earnings of the bank going forward and to put simply, our equity today is the same as it was yesterday, also after the orders. So we have a plan of getting up and improving our earnings, start paying dividends, and then down the road, we have to take into considerations whether we are going to pay out additional dividends, share buybacks, and so on, but that is very premature. The goal here for 2013, 2014, and 2015 is simply to get the earnings up with the equity we have and start paying dividends. Of course, you should never rule out anything going forward, but it's not part of our base case of taking in additional equity. Okay. Just on pricing on corporates, do you see any room to increase that? Pricing-wise, we are already doing a lot, both from the private side and the personal side and also the corporate side. As such, these orders should not change the short-term or intermediate-term outlook for what we are doing. We are also in a competitive environment, but we're already actually doing a lot, both on pricing margins but also on pricing fees. We have also a cost program that is starting showing its benefits. Okay. Thank you. I think we have time for a couple of more questions. Christian Hadler from Jyske Bank is online with a question. Yes. This is Christian from Jyske Bank. I was just wondering, I guess this is a bit of a political question, but since you clearly do not have a very positive dialogue with the Danish FSA, and as you say yourself, you do not fully agree with the Danish FSA on this point, how do you see this connect with the SIFI discussion going on, where in Denmark we have a lot of focus on whether things will support growth in Denmark or whether it will actually stall growth? I guess this is a step in the wrong direction in terms of supporting the growth. So how do you see this? Is this going to be part of the political discussions, and should we expect the SIFI outcome to be less severe than the original report? Thank you. I'll let Henrik cover the SIFI point, just to say your original contention that we don't have a good dialogue with the Danish FSA. Actually, for the most part, we do have a good dialogue with the Danish FSA. We consider this to be a one-off, very specific issue, a point of principle about whether or not they should use benchmarking to determine our risk weights. We disagree because we don't think that that's part of the regulation. We also don't agree with the outcome of their analysis either. This is very much a one-off specific issue, and I don't think you should read into this that we have a bad relationship with our regulator. On the contrary, most of the time we're pretty aligned with thinking. Yeah. We fully agree with Robert. We actually have usually a very constructive dialogue with the Danish FSA, but here there's been a one stumbling block. Generally speaking, we have a really good dialogue with the Danish FSA. In terms of your SIFI questions, you're right. If you take a very high level, this is one additional example of that it's becoming gradually more and more expensive being a bank. We have the CRD 4, now we will get some kind of SIFI regulation during the summer or in the fall. You're right that this does not long-term support the growth. It is as it is, and we'll have to work within the boundaries that the Danish FSA and the government sets up for banks. We take it from there. Okay. Thank you. Okay. One more question. Johan Ekblom from Bank of America, Merrill Lynch is online with a question. Thank you. I think most of my questions have been answered, but I just wanted to follow up. You say that you do not agree with benchmarking, and I think in the FSA's report they repeatedly state that even if they adjust for the fact that you are more an advanced IRB than some of your peers, et cetera, the difference is still sufficient. Not so helpfully, they blanked out all of the comparisons. You say that you have done similar benchmarking. Is that something you can share with us? Presumably that is based on publicly available information. How much of the difference actually is explained by different models as opposed to different assumptions going into that? I think that if you adjust for some of the things we have mentioned, size and type of portfolios and advanced IRB, FIRB, at least you narrow down the differences quite a bit. Then the question is should can you use that as a final decision? The point is that if you make all the adjustments, then the difference becomes, if there is a difference, it becomes very small. There we say, then based on that you cannot take such a far-reaching decision as they have done. Whether we should publish our own analysis, that is something we will think about. I guess the FSA specifically makes the point that they have taken those comments into account, and despite that, they still find that there is substantial difference in the risk weights. Clearly you do not agree with the calculation that they have done when they have adjusted that to your peers. Where do you think the FSA has gone wrong? We think that the Danish FSA has gone wrong on a number of counts. One is the difference that's created by the use of through-the-cycle models versus point-in-time models. We think that there are timing differences in the data, knowing specifically that a number of banks in their benchmark have made changes since 2011 when they first published the data or the data on which it's based. There's a difference in the impact between whether or not you're advanced and foundation IRB and the amount of your portfolios that are in there. There are differences in portfolio quality and composition. Just to come back to your point about whether or not we could provide this information to you. I think we need to think about that question simply because this is the kind of information that we might use in an appeal, and therefore is technically, in a way, sub judice at the moment. I'm not sure that we'd want to give that out until such time, at least until we've decided on the basis of our appeal. Perfect. Thank you very much. Okay, you're welcome. Okay. Thank you everybody for listening. If you have any additional questions, please feel free to call our Investor Relations department and we will be available throughout the day. Thank you very much for listening and see you in connection with our half yearly results. Thank you very much. Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.