Earnings Call: Q1 2021

May 25, 2021

Ladies and gentlemen, thank you for standing by. I'm Myrto, your Chorus Call operator. Welcome and thank you for joining the Bank of Cyprus conference call to present and discuss the Group Financial Results for the Quarter Ended 31st March 2021. All participants will be in a listen only mode and the conference is being recorded. The presentation will be followed by a question and answer session. At this time, I would like to turn the conference over to Mr. Panikos Nicolaou, Chief Executive Officer Ms. Elizany Bogiotou, Executive Director, Finance and Mr. Dimitris Dimitriou, CIFRS officer. Mr. Nicolaou, you may now proceed. Thank you. Good morning, everyone. Thank you for joining our call for the group financial results for the call ended 31st March 2021. As always, we welcome any queries you may have to our Investor Relations team. I'll go straight to Slide 4, which summarize the key highlights of the quarter. I will briefly go over this. The pandemic remains a very real part of our lives. Despite this, we are happy to see the cyclical economy gradually recovering, and we continue to work hard to support our colleagues and customers to recover swiftly from the crisis. Although the future economy contracted in Q1 2021 as a result of the restrictions, we expect growth to return over the remainder of the year. We have continued to support that recovery, extending €487,000,000 of new loans in the period, the strongest quarter in new lending since the pandemic struck a year ago. The vaccination rollout program in Cyprus gained momentum. Cyprus ranked 4th amongst EU members in COVID-nineteen vaccine donors administered per 100 people. Statistics are encouraging. Today, we are approaching half of the other population in Cyprus having been vaccinated with the Fed dose on track with the target of reaching 65% by the end of next month. During Q1 2021, we generated total income of €156,000,000 down 3% on the previous quarter and a positive operating result of £45,000,000 flat on the quarter. Our cost of risk improved by 33 basis points quarter on quarter to 66 basis points. We achieved a 9% reduction in total operating expenses, held of course by seasonality, leading to a costincome ratio of 50%, down 4 percentage points on the previous quarter. The underlying result from the quarter was a profit after tax from our tanker operations of 14,000,000 while after exceptional items we generated post tax profit of BRL 8,000,000. The bank's capital position remains good and comfortable in excess of our regulatory requirements. As of 31st March 2021, our capital ratios on a transitional basis were 18.3 for the total capital ratio and 14.6 for 60 millimeters ratio, both pro form a for Series 2. In April 6, 2021, we successfully refinanced our Tier 2 nodes, further optimizing the carrier fraction of the group. The issuance of 300,000,000 Tier 2 carrier nodes at a significant lower coupon rate is expected to increase the group total capital ratio as of the quarter end pro form a for NP sales by approximately 100 basis points to 19.2%. Deposits remained relatively flat in the quarter at €16,300,000,000 and we continue to operate with a significant liquidity surplus of almost €5,000,000,000 and an SCR of 2 84%. Balance ship repair has also continued in the Q1 of the year. As a reminder, despite the challenging environment, in January 2021, we reached and green up on the sale of Zevka 0.5 $1,000,000,000 of NP portfolio known as Hilli 2B, continuing to deliver on one of the group's strategic priorities of improving asset quality through the reduction of NPEs. Pro form a for NPE sales, the stock of NPE amounted to BRL 1,700,000,000 and NPE ratio stood at 16% from 7% on a net basis at corporate level. This remained stable in the prospect as of Canada's reduction was impacted by Locta. NPE coverage was maintained at 69%, reducing the residual risk for our balance sheet to €700,000,000 pro form a for Helix II. We have a clear plan to reach a single digit NP ratio by the end of 2022, including further portfolio sales. At the same time, we continue to closely monitor the performance of loans which have been granted tenant deferral. 95% of these performing loans with installment due by mid May 2021 presented no arrears. Slide 5 provides an overview of microeconomic conditions. Real GDP contrasted by 1.6 percent in the Q1 of the year, a smaller decline than the 1.8% contraction across euro area, demonstrating again the ambition of the city of economy as an optimal more flexible economy to quickly recover from economic crisis. Based on the vast projections, GDP growth in 2021 2022 is estimated to range between 3% to 3.6% and 3.6% to 3.9%, respectively. The government has successfully managed the pandemic today, 5 to drive 4th in June in the active impression of COVID-nineteen vaccine doses per 100 people. As mentioned earlier, almost half of the adult population have been vaccinated with the 1st dose, on track with the target of reaching 55% by end of June. The tourist activity in the year is expected to recover from several half onwards, held by the fact that 3 countries with well progressed vaccination plans, U. K, Brazil and Russia, account for over 50% of tumor drivers measured to our 2019 statistics. Similar to the last year, the reduction in international touring arrivals in 2021 compared to 2019 is expected to partly offset Bantomestic Touring. Slide 6, new lending. New lending continued to grow in the Q1 of 2021 and amounted to €487,000,000 up 30% cost of unforced, driven mainly by corporate. For 2021, demand for new lending is expected to increase in line with economic recovery, especially for housing loans in the context of the government interest subsidy scheme. We have already approved €113,000,000 loans under the scheme, and we continue to have a strong pipeline of over €100,000,000 as of mid May. New learning lending continues to be carefully considered against robusta friendly high variance. We have highly quality originations by our proven underwriting standards, and we make strong assessment of the returnability of our customers. Turning now to Slide 7, where we provide an update of the performance of loans that were under expired payment details. We are very pleased with the trends we have seen, which are better than we had expected. As shown on Slide, €4,200,000,000 loans represented over 80% of the performing loans under Expella Mona total have stalled due by mid May. 95% of these performing loans to Zenero Aureas, of which only €260,000,000 have been restructured, mostly concentrated in the Turing sector. Restructures have always been a very important part of how we manage credit risk. We offer targeted reflection of solution following from a softener of repairability, aiming to alleviate pandemic related short term cash flow burden. Enelab's track record is outstanding. Over recent years, over 90% of corporate restructuring loans presented no arrears, and we expect that to be the case going forward. Arrears remain stable at around 5%, and we continue to be in close contact with our customers that present area areas in order to provide support and to alleviate any short term cash flow burden. Let's now go to Slide 8 that provides an overview of the non legacy loss of private individuals. As of 31st March, non legacy loss to private individuals amounted to €4,120,000,000 of which over 80% relates to housing loans. This segment is well collateralized with 2 thirds of customers having a loan to value below 50%, and only 8% of the portfolio has a loan to value over 100%. Other loans to private individuals amounted to €690,000,000 as of the end of March, the majority of which is secured. We are very encouraged by the performance of reperforming gross loans to private individuals under expired payment journals. Around 96% of these are installments due by May 2021, and 91% presented no earlier. Moving now to the non legacy business loans on Slide 9. The non legacy business loan book as of 31st March 2021 amounted to €5,180,000,000 and is well diversified with high polyethyleneres. Following the outbreak of COVID-nineteen, the effectors most adversely affected are tourists and terrestrial extend trade, transport manufacturing and construction. The portfolio has a loan to value ratio with almost 3 customer portfolio having a loan to value of less than 80%. Almost 3 quarters of the performing business loans that were under expired more after have been stalled due by May 21. 98% presented no arrears of which €240,000,000 have been restructured, relating mainly to purring sectors. Slide 10 provides an update of our exposure to asbestos that were mostly impacted by COVID-nineteen, tourism and trade. As of the end of March, our total exposure to tourism and trade amounted to $215,000,000,000 and $900,000,000 respectively. The utilizing the credit of the tourist capital remained broadly unchanged from December 2020 and amounted to €200,000,000 at quarter end. The majority of these loans entered the crisis with significant liquidity and maintained until today. 98% of Turi's loans are secured by property, and hence, almost 95% of these loans have a loan to value ratio below 80%. €1,000,000,000 of tourist related performing loans were under the expired payment deferral scheme, of which 60% had an installment due by mid May 2021. 90 9 percent of those with installment due presented in our year, of which €190,000,000 have been a distraction. Our exposure to trade as of the end of March amounted to 890,000,000 of which €330,000,000 were performing loans under expired payment deferral. 90% of REITs have an installment due by May 2021 with 96% to the end of the year and of which $6,000,000 have been restructured, just $6,000,000 have been restructured. I will now hand over to Olivia to take you through the performance of Q1 2021. Olivia? Thank you, Vanikos. Good morning from me too. So I'll start from Slide 13 on the income statement. Net interest income amounted to 70 €6,000,000 for the quarter, down 5% on the previous quarter, mainly due to higher interest collections in the previous quarter of around €2,500,000, which were not previously recognized. The net interest margin reduced to 1.63%, negatively impacted mainly by the increase in liquid assets following the EUR 1,700,000,000 participation in PLTRO in March 2021. Noninterest income amounted to EUR 60,000,000 in the quarter, down 2% on the prior quarter, reflecting mainly lower revenue profits. Total operating expenses were reduced EUR 32,000,000 in the quarter, down 9% Q on Q, driven by seasonally lower operating expenses. Other loan credit losses, provisions and impairments amounted to $26,000,000 in Q1 compared to $14,000,000 in the 4th quarter, driven mainly by lower loan credit losses. Cost of risk improved by 30 3 basis points in the quarter to 66 basis points. The overall result was a profit after tax of €8,000,000 for the quarter. Moving now to Slide 14 on the drivers of NIM. I'll briefly go over this slide. And as I previously mentioned, our NIM in the quarter decreased by 100 and 3 basis points, negatively impacted mainly by the increase in liquid assets on the continued pressure on lending yields. Our margin dynamics are complicated with several important underlying components that I'd like to explain to you. First, performing book yields remain under pressure due to the sustained low interest rate environment, impacting our reference rates and competition pressure. The repricing of the reference rate is reaching 10, and we are aiming for higher credit spreads in the post COVID environment. 2nd, higher yielding, higher risk legacy loans are reducing as we successfully exit NPEs. And third, the cost of funding continues to decrease as we price down the cost of deposits. Going forward, our funding cost will also be positively impacted by the significantly lower coupon rate on the Tier 2 note that we issued in April and future debenture issuance of EMBL. A couple of points about the TLTRO borrowings. In March 2021, the bank borrowed a further EUR 1,700,000,000 under TLTR 3, increasing the total funding from Central Bank to EUR 2,700,000,000 and that's taking advantage of the favorable borrowing rate in combination with the relaxation of collateral terms. The bank has exceeded the benchmark net lending threshold and since we estimate the NII benefit from TLTRO borrowing for the 12 months to June 2021 at around €7,000,000 recognized over the effective period in the income statement. The potential NII benefit from a period after that, that is from June 2021 to June 2022, amounts to EUR 13,500,000 based on current ECB rates and provided that the balance meets the ending thresholds. Moving now to non interest income on Slide 15. In the Q1, non interest income decreased to EUR 60,000,000 compared to EUR 62,000,000 in the 4th quarter, driven mainly by lower end of gains. Net fee and commission income increased to EUR 39,000,000 in the quarter, accounting for 28% of total income, mainly due to the extension of liquidity fees and the introduction of a revised pricing in February 2021, partially offset by lower transactional fees due to the reintroduction of lockdown in the Q1. Net insurance income amounted to EUR 13,000,000 down 9% Q on Q, mainly due to lower premium partially offset by lower claims. I will provide more information about insurance business of the group in the following slide. Revenue net gains decreased to $2,000,000 in Q1 compared to EUR 5,000,000 in Q4, mainly due to higher net revaluation gains relating to specific properties in Greece in the Q4 of last year. Revenue sales do remain volatile. Now moving to insurance on Slide 16. Net insurance income from our life business, Euro Life, amounted to EUR 7,000,000 for the quarter compared to EUR 6,000,000 a year ago, contributing 12% to total non interest income. Despite the challenging environment, Euro Life increased its profits and premiums by 4 percent year on year. Net insurance income from our general insurance business, GIC, remained flat year on year at EUR 6,000,000 contributing 10% to total non interest income. Looking now at cost on Slide 17. Overall, total operating expenses for the quarter were down 9% on the prior quarter, EUR 22,000,000 mainly reflecting seasonality. As a result, our cost to income ratio fell by 4 percentage points to 60%. Note, however, that the cost to income ratio when we adjust for the lost income from the Helix II transaction is up 64% in the quarter. Staff costs amounted to €50,000,000 in Q1, flat on a Q on Q basis, while operating expenses amounted to €32,000,000 down 21% on the prior quarter, again due to seasonally lower marketing, consulting and professional fees. As a reminder, our cost to income ratio is expected to be in the mid-sixty percent for the year as revenues remain under pressure and operating expenses increased due to higher IT and digitization investment costs. Beyond this year, however, we then expect our cost income ratio to decline through specific initiatives, including exit solutions to lease activities and further branch rationalization. And over the medium term, our costincome ratio is expected to reduce to mid-50s. Now let's turn to Slide 21 on capital. Our CET1 ratio as of 31st March was at 14.6% on a pro form a for the E and T sales basis. During the Q3, we generated 40 basis points of organic capital through operating profits. These were offset by expected long term losses and impairments of 20 basis points and an additional 45 basis points from the phasing in of IFRS 9. The CET1 ratio on a fully loaded basis was at 13.1% as of the 31st March and 13.3% pro form a for CX2. As a reminder, the on-site inspection and review by the SSM on the stock of revenue properties was completed. The finding relates to a possible sequential charge of up to 44 basis points, the majority of which is expected to be taken in the Q2 of this year depending on the bank's progress in disposing the progresses impacted by the prudential charge. Now moving to Slide 22. In April, the bank issued €300,000,000 unsecured and subordinated Tier 2 capital notes to refinance its outstanding €250,000,000 Tier 2, which was issued in 2017 at a significantly lower coupon rate of 6 0.625. The issue was met with strong demand attracting interest from more than 114 traditional investors with the final order book almost 4 times oversubscribed. More than 65% of the orders came from new investors. The Tier 2 capital refinancing further optimizes the group's capital structure and is expected to increase the group total capital ratio pro form a for Helix 2 by around 800 basis points to 19.2% on the basis of the 1st March figures. This refinancing represents an 8 month milestone for the group and has helped to diversify the group's investor base, raise the group's pricing in the international credit market and demonstrate the group's proactive capital management. Also, the highly successful Tier 2 capital refinancing will allow the group to focus on evaluating opportunities for MREL issuance in terms of debt capital market activity. Now I will take you through the asset quality section, starting from Slide 25, which presents a short summary of the Helix II transaction. Despite the economic challenges prevailing with the ongoing pandemic, in January this year, the group announced the sale of an additional €529,000,000 of NPEs, a project known as Helix II Portfolio B. The gross consideration amounts to 44% of gross book value and 31% of the contractual balance payable in cash, of which 50% is payable at completion and the remaining 50% is deferred up to December 2025 without any of the conditions attached. The accounting loss on Portfolio B recorded in the Q4 last year amounted to EUR 27,000,000 Overall, Helix 2, up to and including legal applications, is expected to have a negative capital impact of 48 basis points on the group CET1 ratio on the basis of 31st March figure. The legal completion of the transaction is expected to increase the CET1 ratio from 14.4% to 14.6%. And upon the full payment of the deferred consideration and without taking into account any positive impact from the earnout, TLX2 is expected to have an additional positive capital impact of 64 basis points on CET1 on the basis of March numbers. Now moving to Slide 26. During the Q3, growth and peers were reduced by €59,000,000 to €3,000,000,000 and €1,100,000,000 on a net basis. So for a for Helix 2, gross and fees decreased to €1,700,000,000 and EUR 700,000,000 on a net basis. The gross and fee ratio stood at 16% pro form a or 7% on a net basis and is stable Q on Q as the pace of organic NPE reduction was impacted by the lockdown. The bank's NPE coverage ratio remained broadly flat and 59% at the corporate pro form a for Helix. When taking into account tangible collateral at fair value, NPEs are fully covered. Coverage of risk performing NPEs is relatively lower at 19%, reflecting the lower risk associated with risk stock of NPEs, where coverage of core NPEs increased to 65%. As a reminder, Slide 28 gives a longer term perspective of our NPE journey and targets. We have a clear plan to reduce our NPE ratio to single digits by 2022 and to around 5% over the medium term. Our track record year has been excellent, reducing NPEs by almost 90% over the past 6 years, the vast majority organically. We have a highly experienced and highly effective team in place and we expect NPE reductions to continue next year through both organic and inorganic actions. We expect to have a high coverage of over 50% in the medium term, excluding any collateral. Moving now to Slide 29. As shown on the left graph, pro form a for Helix 2, almost twothree of our loan book is classified in Stage 1 and 20% is in Stage 2. The coverage of these 2 stages pro form a for Helix 2 was at 1.4% and 2.3%, respectively, while coverage for Stage 3 was maintained at 50%. During the quarter, there was an overall net transfer of €53,000,000 of loans under expiry payment deferrals from Stage 2 to Stage 1, arising as follows. Firstly, the transfer of EUR 304,000,000 gross loan from Stage 1 to Stage 2, driven by management overlays and restructuring and secondly, a migration of $357,000,000 gross loans from Stage 2 to Stage 1, mainly due to the poor performance of loans to private individuals. Lastly, in this quarter, there were cash flows of $14,000,000 mainly from Page 2 to Page 3. Now moving to cost of risk on Slide 30. The annualized cost of risk for the Q1 was reduced to 66 basis points of gross loans, mainly driven by the strong performance of the loans that were under expired payment deferrals that led to a reversal of 26 basis points. We are encouraged by the trend in the Q1. And at the full year, we indicated that we expected the cost of risk for 2021 to be lower than 2020 levels. Clearly, given the Q1 performance, that firmly remains the case. Finally, as a reminder, interest on net NPEs not received in cash is fully provided for, which in Q1 represented 22 basis points out of the total 66,000,000,000 its cost of risk. On Slide 32, we are looking to build an organization with a clear strategy supported by effective corporate governance aligned with ESG priorities. We are working to further enrich our ESG strategy and further embed the ESG priorities in our business targets. On this slide, we set out some of the areas where we are already delivering. I will now hand back to Danica for his closing remarks. Thank you, Alisa. Let's go now to Slide 34. We have been through a period of considerable change, and we are now laying the foundations for delivering greater shareholder value. Today, our near term priorities include the completion of our balance sheet drilling through our growing organic NPE reduction and potential disposals as well as ensuring that our cost base remains appropriate, which further invested in our digital capabilities. Over the immediate term, our target will evolve. We'll be increasingly focused on capitalizing on our strong market position across both banking and financial service products to enhance our revenues. At the same time, we are very focused on improving our operating efficiency and driving down costs. And combined with the expected normalization of the Coso bridge, we have a clear path to generating sustainable profitability. Moving now to Slide 35. Bringing all of this together, we remain committed to our medium term financial targets that we have shared with you back in November 2020. We are committed to generating a return of tangible equity of around 10% over the medium term. This concludes our presentation. I will now open the floor for your questions. Thank you. Thank you. The first question comes from the line of Quinn Dara with KBW. Please go ahead. Hi, good morning. Thank you for the presentation. Three quick questions from you, if I may. The first, just on the outlook for loan loss provisions. Even excluding the write back in this quarter, it looks like the cost of risk is below your medium term guidance. Is that just a reflection of some seasonality in Q1 or more a reflection of your medium term target being conservative? And a second question on the real estate revenue assets, the regulatory charge that you will be booking later in the year? How active will you be in looking to dispose the specific assets that are generating that charge? And would the disposal of them imply any additional provisioning requirements? And I guess the same kind of question for Helix 3 or the potential NPE disposal that you're working on, we've seen that the previous disposals were positive from a capital perspective given the impact on risk weighted assets, but did generate negative additional provisioning requirements. Just if you have any expectations on how Helix III would be structured or the kind of magnitudes or impacts it could have on the P and L and capital? Thank you. Okay. I will start with the last question, and then I hand over to my colleagues for the first and second question. As we said, a meaningful reduction in our RFP ratio will come through current transactions. And namely, Heath III. And as you all know, we have completed a number of trades, which almost all of them have been either slightly positive or slightly negative, I will call them, at least, caballia neutral. At this point of time and based on the underlying portfolio, the perimeter that we know and the provisioning coverage. At this point of time, we don't have any reason to believe that any new trade will have a different, let's say, and conclude in terms of Kabiya and P and L. So we don't have any reason to believe that any future trade will not be at least cabi and nutra. I mean even in 2020, under the pandemic, we have achieved the entry reduction. So under, let's say, I would call them the worst market conditions, and we achieved the results that we all know. So I don't expect any material deviation from the track record we have all the previous years. So I would hand over to Rigidriz on cost of risk question, and maybe Elisa can comment later on the potential cash on the Rangi properties. Dimitrij? Yes. Thank you, Juanico. Good day from me as well. Well, let me start by saying that we're taking guidance very seriously, and we're very careful about only communicating updates when we are very confident. Having said that, the performance of the moratorium portfolio has been better than we projected back in 2020, and the trend continues and is encouraging. Up until now, areas have not been an important generator of NPEs. NPEs have been created because of our own prudent assessment of borrower viability as part of our ongoing review and assessment of the UTP criterion. Now as the year progresses and we get more evidence of the performance of the civil economy, we will have greater certainty. We continue to monitor clients and trends very closely. Now it is clear that our cost of risk this year will be meaningfully lower than the 2020 level, and that is what we will say for now. Okay. So moving to the revenue question. The first part was how active are we in selling the product is. We are very active. In fact, in the quarter, despite a number of weeks of lockdown, we managed to sell an actual direct of mine in the P and L $28,000,000 worth of properties, which is significantly higher run rate compared to last year. Now on the properties at hand, those are delayed to which the potential charge relates, they do include, as we mentioned in the past, they do include some lumpy assets. We are active in our efforts to sell them. However, they are likely to be more of interest to foreign, to international buyers. And given the current travel restrictions, marketing these assets has been more challenging. But this is an ongoing effort. We are encouraged by some earlier discussions more broadly on revenue assets with non local buyers, and we will definitely be active in trying to develop them. I think this will be for at least the largest assets, this will be a journey that will take us through a number of quarters, and I wouldn't be guiding you to expect a minimum sales. But I do need to emphasize that this 44 basis points charge now that is coming in Q2 was significantly lower at the beginning and through sales, we've managed to reduce it. That's great. Well, very clear. Thank you. And let me just also remind you that this prudential charge because you also asked, you're not on the any credit P and L hit. This is a prudential charge, so it's a capital deduction, not a P and L hit, but coming in Q2. And to your question, do we expect any more losses on the sale of the properties? Our view on the valuation on the balance sheet continues to stand. This is why because of provincial charges opposed to an impairment. So we do continue to believe that those progresses and all the progresses on the books are conservatively valued. In fact, they are valued at below 80% of open market value, actually closer to 70% of open market value in total. And some slides that show that in the deck in the appendix as well, including the analysis and including the prices at which we've been consistent with selling at a profit to book value. The next question comes from the line of Buluguri Saleksemeros with Boudentro. Please go ahead. Good morning. Thank you for the presentation. My question would be regarding the loan yields. I see on Slide 14 where the non legacy yields have fallen to about 3% from 3.14%. Overall, we have seen about 15 bps decrease every quarter for the past year or so. Do you think this will continue? And what are the trends in the next quarters? What do you see on that? And also maybe to on this point regarding new lending, You had a very good quarter. As I can see, it was close to €500,000,000 Do you think this is likely to continue? So the number we see here in the Q1 is reasonable to assume that could be extrapolated as a full year performance, so around €2,000,000,000 new lending for the full year. And maybe on that, to come to the previous question, I mean, what is the yield on the front book compared to the back book? Okay. Thank you, Alexandre. About new lending, I will say that we'll have an investment on expected performance for Q1. And if you extrapolate this for the whole year, then as you correctly say, dollars means $2,000,000,000 which was our performance pre pandemic. I would comment that it's still early. But as the economy in Cyprus is totally unlocked and usually the second half of the year, it's more active in terms of lending and economic activity. I will just comment that we will be the end result in lending will be materially higher than what we have in 2020. Whether this will close to EUR 2,000,000,000 probably by next quarter, we'll be in a better position to outline this. In terms of yield, I will say that there is a reduction in the yields because usually on the yield, the unibody cuts have been actually on the very low ton. We do believe that the majority of our yield destruction because apart from Unibor, we also have our back book linked pricing linked with the pricing of the deposits in the country. So we believe that all this distraction is coming close at one end. On the other side, as we improve the mix of front to come back to with new lending And as we are as you know, our pricing strategy is actually on the more rationalization and more aggressive stance, we do believe that in the near term, this will show an improved trend. But I will also ask a little bit to comment on the deal because it's a combination of also our NIM and other things. Yes. Just to add a couple of points. First of all, we have been suffering in this quarter, especially from reference rate accretion as the Urobor primarily Urobor, which is a reference rate for around a third of our performing book, has continued to reduce and it comes to the P and L with a timing. The second point to say is that also going through our front book, Patrick, is that our front book and you will see this from the new lending analysis as well, our front book both in Q4, but more so in Q1. It had a large a larger component than usual of retail housing loans. And as you know, they are lower priced on average. So that does distort new lending rate statistics. It is a function of the and the result of Danica's mention of the government subsidy. And we do believe that the mix will land to a more stable constitution, if you like, of new lending down the road as the subsidy impact is reviewed. Thank you. That's very clear. The next question comes from the line of Dean Spen with Goldman Sachs. Please go ahead. Hi, Stephen, and congratulations again on a nice quarter. My question is just around the loans under moratorium. So if I look at the €4,180,000,000 of loans that had a payment due, I noticed it says 89% have resumed payments as per the original schedule. Does that mean that 89% have made an Amworth payment? Or is that just referring to interest payments? No, no. I mean, they have paid they have returned back to their repayment schedule post pre moratorium, pre pandemic. So and this is usually the original same schedule fit, it has to do with payment of interest and capital. And those that have been and the small percentage of those that have been restructured, they still continue to pay. With a different repayment schedule, not the original that has been pre pandemic. That's why we believe that the bank that we say that we are very, very pleased of what we see on the performance of our clients that used to be under Maracollo. And of course, there are some expected restructurings and it was expected. But as I mentioned earlier in my comments, this is not new for us. For those that follow the bar of Cyprus and destroy the bar of Cyprus, they know that we have a strong Franco in dealing with restructuring. This will be the case going forward. So and even fair, actually, the performance of the moratorium of Panoset with some peers, I can easily say that we have the highest percentage of our clients going back to normal to the original payment, to the regular payments, capital interest and of course, very low number in restructurings and arrears. And I would say that in 20 Q1, there is no moratorium. There is a very small amount of roughly up to €20,000,000 that is under moratorium until end of June. So we consider this to be approximately visible. So is it safe to say that all of the 89% have made at least one amortization payment? Yes, yes. Maybe more. I mean usually, let me say, the parent individuals, they have mass installment capital Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Nicolao for any closing comments. Thank you. Thank you all for your time and for the questions. Myself and the team will be more than happy to take offline any more questions and, of course, arrange bilateral calls. So thank you all. And as I said, very happy to answer any questions anytime. Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a pleasant evening.