Earnings Call: Q3 2019

Nov 26, 2019

Ladies and gentlemen, thank you for standing by. I am Gary, 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 9 months ended 30th September, 2019. All participants will be in listen only mode and the conference is being recorded. The presentation will be followed by a question and answer At this time, I would like to turn the conference over to Mr. Panikos Nicolaou, Chief Executive Officer Mr. Luis Alios Adrioto, Executive Director, Finance Mr. Dimitrios de Meteo, Acting Chief Risk Officer Mr. Panikos Mozuris, Acting Executive Director, RRD Ms. Ana Sofranil, Executive Director, Real Estate Management Unit Mr. Nick Smith, Executive Director, Corporate Finance Solutions and Ms. Anita Pablo, Manager, Investor Relations. Mr. Nicolas, you may now proceed. Thank you. Good morning, everyone. Thank you, and welcome to the 2019 Bairo Cyprus 9 months results. All results this quarter reflect continued progress against our objective of balance sheet repair and normalization of our bank. Now let's take a quick look at the highlights of the Q1 2019 before Elisa and Banikol Mounzouris take you through the figures in detail. Our capital position remains good. Pro form a from the sale of our investment in TNT and the charters related to our voluntary ex staff plan, our total capital and CET1 ratio stood at 17.9% and 13.9%, respectively, well in excess of our regulatory progress. The division of our balance sheet continues at pace. Since the peak in calendar 14, our gross NPE declined by 33% to €4,100,000,000 or €2,000,000,000 on a net basis. Our gross NPE ratio was reduced 31% and exposure of 51 covered by low and credit losses. The organic gross and fee reduction in the 3rd quarter amounted to EUR 227,000,000 bringing total return reduction for the 9 months to €644,000,000 asset of our guidance of €200,000,000 reduction per quarter. Revenue sales for the 9 months period ended 30 September 2019 amounted to 3.50 €5,000,000 We have a clear strategy for continuing the improvement in the asset quality premium of the bank. And today, there is a good momentum in our efforts to accelerate Baragie de risking through production solutions. During the quarter, our debt losses remained broadly flat at $16,500,000,000 with the cost of debt losses reduced by a 1005 basis points. Overall, the cost of debt losses has now been reduced by 57 basis points since January 2018. In September, given our comfortable liquidity position, we decided to repay early OECD funding in the form of TLTRO of €850,000,000 refusing the total liquidity position to continue. We continue to positively manage our liquidity position and we expect to shortly execute liquidity fees for specific customer groups. New lending was €491,000,000 from the same quarter and €1,600,000,000 from 9 months, up 10% versus same period of 2018. In the 3rd quarter, we generated total income of €162,000,000 and a positive operating result of €63,000,000 Following the disposal of our 49% investment in C&P, the bank generated recurring fees from the Esurance business of $12,000,000 for the quarter and $42,000,000 for the 9 months. Our total risk was at 0.09 percent for the 3rd quarter, down from 3rd quarter levels. The underlying profit for the quarter was at €18,000,000 €39,000,000 for the 9 months, which is the profit of the €19,000,000 for the quarter and 16,000,000 for the 9 months. In the current quarter, we have successfully completed a voluntary staff exit plan and carried a one off €79,000,000 facilitated by the ongoing digital transformation program. The success rates were achieved and the number of full time employees was reduced by 11%, which will result in annual gross savings impact cost of 13% or €28,000,000 We have also continued our fast food rationalization program. And by the year end, we will have achieved a 4.8% battery tax. We remain focused on further improvement in efficiency supporting the digital transformation program. Overall, 75% of transactions involving double digit, customer growth and transfers, takes place through digital channels. And since 2017, there was a 54% increase in active mobile virtual users. And with that, I hand over to Elisa to take you through the capital slide. And hi, it's from Mitu. Turning to capital on Slide 3, the bank capital position remains good. During the Q3, we generated 50 basis points of organic capital in operating profit and 20 basis points of capital from the decrease of risk weighted assets. These were partly offset by loan credit losses, impairment and other adjustments to that in 40 basis points. The disposal of TMP added 30 basis points capital, whereas the restructuring costs related to the contingent of the voluntary stop exit plan will decrease capital ratios by around 60 basis points. Pro form a for CMP and the voluntary spread equity plan, we finished the quarter with a CET1 ratio of 14.9% and total capital ratio of 17.9 percent, well above the regulatory requirements. Our risk weighted asset intensity stood at 65% following the repayment of the TLTRO. We expect that risk weighted assets will continue to decrease in the upcoming quarters in line with the reduction of NPEs. So I'll hand over now to Banikos Musouri to take you through asset quality before the Q and A. Good morning. I will start by focusing on Slide 4. In the Q3 of the year, the bank continued to deliver organic NPE reductions with NPEs refusing by €227,000,000 ahead of our guidance of around €200,000,000 per quarter. Around 2 thirds of the NPE reduction in the 3rd quarter was from cash collections. Overall, since 2015, gross NPE reduced by €3,900,000,000 of which €8,200,000,000 has been to organic actions. The gross NPE ratio reduced by 2 percentage points for the quarter net page. Slide offs amounted to BRL 364,000,000 in 9 March of 2019, representing 39% of organic gross NPE reduction. As we have previously explained, we continue to expect that the promotion of Ryros will be volatile in many given quarters. Turning to Slide 5, where we present the bank view on what we described as core and noncore entities using a particular approach in line with previous results presentation. Noncoreent fees totaled €530,000,000 as of 30th September, preserving around 12% of gross loans and 50% of total NPE stock. Coverage on these loans remains slightly below 90%, reflecting the lower risk associated with this drop off increase. Our current fees rose to 3,650,000,000 compared to last year's September, representing 27% of gross loans with 56% coverage. The contractual balance of current fees amounted to €5,350,000,000 and 71% covered by credit losses. Slide 6, clear strategy for further end continue the coming quarter in line with our guidance of around €200,000,000 per quarter. At the same time, there is good momentum in our efforts to accelerate balance sheet listing through Structural Solutions. Today, the bank's €4,080,000,000 of gross and fees falls into 3 principal targets. Thirdly, non current fees totaling €0.15 billion. As a reminder, non current fees are not that company restructuring, have no arrears and are expected to exit 20 definition. As shown on the slide, now three quarters of these are available for exit by the end of 2020, subject to criteria. Still notice September has been extended until the end of December. As of 27 November, we have received 4 87 applications, totaling around €120,000,000 Despite the lower participation that originally expected, a steer in the second quarter in allowing non eligible customers to define and address primarily through concession and nonconcessor foreclosure. In addition to a fear, we are identifying the non viable customers for which alternative restructuring solutions are currently in pursuit. Our third category relates to current fees, excluding SBI LIFO, which is €2,220,000,000 Our plans for this portfolio prioritize realizing collateral use write offs to customize digital cash or digital solutions or via foreclosures or other enforcement routes where followers are not willing to cooperate. Through the market. In addition, we continue to assess the potential to accelerate the existing NPEs through additional sales of NPEs. Currently, we are in an advanced separation phase with the U. N. D. Reduction structures, and we expect this separation phase to be finalized by the Q1 of 2020. The range of professional costs of this preparation phase is possible, including outside sales. Any potential transactions are expected to involve internal portfolio of entities in excess of €2,000,000,000 gross book value. Let's now move to Slide 7, Espia. This should be a very slight continuous process. I will not go through the details of Espia's team, As of 22nd November, we have received 4.97 applications, totaling around €160,000,000 The pace of application is accelerating in the Q4 of 2019. Slide 8, coverage. The banks and fees coverage ratio increased to 51% at the quarter end. The banks are today above the European coverage ratio of 42% and the total coverage including tangible collateral is at 120%. During the 3rd was affected by IFRS 9 quarter volatility. Moving to Slide 9, for closures. During the 3rd quarter, foreclosures was initiated on 4.56 assets, while over 3,600 properties are today agreed to reposition having strength to self adoption. Foreclosures are becoming an important tool to help these resolution and therefore having a robust legal framework around foreclosures is very important. The foreclosure law amendments that were approved in July 2018 have expedited the project and limited options to cut straight execution. On July 2019, our Pari Leman has voted through certain changes to that law, which is the most part seeks to prioritize, to provide additional checks and balances, where our franchise seeks to close small loans less than 350,000 incurred by a principal private residence and extended or closure timetable by extending certain notice periods. These amendments have not yet passed into law, as the President of the Republic has to set this to the Supreme Court Discussions are on play, including aiming to produce an administrative closure and loan restructuring framework that are acceptable for stakeholders. And with that, I hand back to Elisa. Thank you, Vanessa. So moving to revenue on Slide 10. Overall, over €1,000,000,000 worth of sales covering 1459 properties were achieved since the setup of revenue in January 2016, demonstrating that revenue strategy tackled both value and volume of assets. €195,000,000 of property sales covering 4 33 properties were achieved in the 9 months of this year, generating a profit of €26,000,000 confirming our conservative policy for onboarding assets at a 25% to 30% discount to open market value. Since the revenue was set up, over 40 6% of legacy assets and 44% of the 2016 on boarded assets were sold. The new sales are achieved across all property types. Landfill continues to be the largest component, representing 41% of total sales. Remain encouraging. Residential property prices rose by 2.7% year on year and sales contracts deposited at the land registry, excluding those that are planned for closure related, increased by 15% year on year by volume. So moving to Slide 11, the near term sales pipeline remains good. As of 30th September, STA is relating to €65,000,000 of property sales was signed awaiting execution. At the same time, €14,000,000 worth of STAs were under comparator having agreed to measure terms with the buyers. Last thing is in the previous quarters, revenue progresses are promoted to the market at open market value and for the 9 months, it would fall at a blended average of 16% above book value. Now moving to another talk on new lending on Slide 12. Our new lending for the 3rd quarter amounted to €491,000,000 and overall for the 1st 9 months of the year we lent €1,600,000,000 to customers in Sysco, 10% up versus the prior year. Corporate customers, including shipping and syndicated loans, continue to be a strong component of new lending, representing over 60% of total loan originations for the quarter. We're currently exploring ways to grow our new lending, including careful, modestly lending and shipping, syndicated loans and some other initiatives. The yields on our performing book improved by 3 basis points to 3 38 basis points, positively affected by the increased interest collection not previously recognized. However, lending rates remain under pressure due to the sustained low interest rate environment and the activity in the market. New lending continues to be carefully considered against robust assessment criteria and 98% of new exposures in Cyprus since the beginning of 2016 are performing. The bank is the single largest credit provider in the island with a market share of 40.8% as of 30th September. Moving to Slide 13. As explained previously, the continued balance sheet reaching is resulting in a smaller but lower risk loan book. Overall, net loans have reduced by 36 percent since 2015, driven by the legacy book deleveraging, the sale of the UK plan in 2018 and the completion of the Helix trade in June this year. Today, the performing book represents 82% of net loans compared to 58% in 2015. Q on Q, the performing book increased by €100,000,000 and amounted to €9,000,000,000 Interest income on loans increased quarter on quarter by €4,000,000 to €105,000,000 And within the performing book, interest income increased by €2,000,000 despite the continued low interest rate environment and the sustained competitive environment. Interest income in the legacy portfolio also increased by €2,000,000 quarter on quarter, mainly due to higher interest collections not previously recognized. Going forward, the continued derisking of the legacies will result in further pressure on interest income, but this should have little impact on the bottom line as all of this interest income is provided for. Now moving to a familiar slide number 14, starting first with our legacy loan book. As previously mentioned, you consider the interest recognized on this book was lower than unincurred credit losses and was negative to the bottom line this quarter. It's important to note that interest income on the net NPEs that is not received in cash, which amounted to €59,000,000 in the first line months, is fully provided for. The risk adjusted yield on the legacy book was actually negative compared to the risk adjusted yield on the performing book, which was 3 65 basis points. In the Q3, there was a release of EUR 15,000,000 of loan credit losses in the performing book, mainly due to loan migration from Stage 2 to Stage 1. Now turning to the annual liquidity on Slide 15. Local deposits remained broadly flat quarter on quarter at €16,500,000,000 Around 2 thirds of these deposits represent those whose ultimate beneficial owners are CPO, while only 4% are Russian. As you can see, the cost of deposits fell by 5 basis points in the quarter, And overall, the cost of deposits has been reduced by 57 basis points since January 18, plus the bank is actively fighting down deposits to respond to the intensifying pressure from low interest rates. As Panikos mentioned earlier, we do expect to shortly introduce liquidity fees for specific customer groups. We continue to operate with significant excess liquidity As part of our efforts to manage this excess liquidity, in September, we decided to repay early €830,000,000 of TLTRO funding, reducing our surplus liquidity to €3,000,000,000 These levels of liquidity continue to pressure on NIM as excess liquidity is placed with ATG at negative rates. So moving to Slide 16, where we analyze the drivers of NIM. To bring these asset and liability trends together, I think we should now turn to margins. Our NIM in the quarter improved at 199 basis points, mainly due to the increase in collections not previously recognized and the reduced cost of funding. Our margin dynamics are complicated and there are several important underlying components that are quite finalized. Firstly, liquidity builds up in a very challenging interest rate environment. Liquid assets decreased to €6,650,000,000 down 10% Q on Q, reflecting the repayment of the TLTRO. Liquid assets now account for 39% of interest bearing assets and the pickup on the effective yield of listed assets is expected to continue. Secondly, the yields on the performing book, which increased from 3.35% in the second quarter to 3.38 percent due to, as I mentioned earlier, increased interest collections. Partly, the higher yielding, higher risk legacy loans are reducing as we have the 3x penalties. And finally, the cost of funding continues to decrease and the impact is increasingly visible. We continue to aggressively price our deposit book down and the cost of our deposits in Cyprus is shrined by another 5 basis points this quarter and by 57 basis points year to date since January 18. So continuing to Slide 17, on non interest income. For the 3rd quarter, this amounted to EUR 7 2,000,000 compared to EUR 92,000,000 in the previous quarter. Recurring income was EUR 48,000,000 in the quarter, down 14% Q on Q, mainly due to higher one off insurance income in the 2nd quarter. Net sales and financial instruments amounted to €14,000,000 for the quarter compared to €24,000,000 in Q2, offset by one off revaluation gains on financial instruments in the previous quarter. Revenue net gain amounted to €10,000,000 for the Q3 compared to €12,000,000 in the 2nd quarter, but revenue profit has remained volatile. For the Graco Insurance business, we remain well positioned for growth over the medium term. Now moving to costs on Slide 18, our cost to income ratio, excluding Helix and Van Clely stood at 58% for the 1st 9 months compared to 59% for the first half of twenty nineteen on a same basis. Costs are a clear area of focus for the bank. During the Q3 of 2019, other operating expenses were reduced to €38,000,000 from €43,000,000 in the 2nd quarter due to seasonality and lower marketing costs. Staff cost for the quarter amounted to €65,000,000 broadly flat on a Q and Q basis. Going forward, the digital transformation process is beginning to clearly deliver an improved level of customer experience. This digital transformation program is a priority for the bank as it is a key lever for enabling the bank to achieve operating efficiency, cost reductions and revenue generation. Now let's turn to Slide 19, mitigating the strategy reductions for cost containment. During the Q4, we successfully completed the voluntary tax expense plan at a cost of BRL 79,000,000. Number of employees was reduced by around 11% as around 470 applicants were approved to leave the bank. Following the completion of the plan, the annual gross saving is estimated at €28,000,000 or around 13% of staff cost. The renewal of the collective agreement for 2019 remains under discussion. Additionally, around 100 full time employees relating to Heath are expected to be transferred to the buyer upon full migration, expected to conclude soon after the year end. In addition, we continue our branch footprint rationalization as we expect to reduce the number of branches by 8% by the year end, further improving our operating model. We remain focused on further improvement of efficiency. So on Slide 20, which is the income statement. In a nutshell, net interest income increased to €90,000,000 in the 3rd quarter, mainly assisted by the further decrease of the cost of deposits in the increased interest collections not previously recognized. Total income decreased to €162,000,000 from €177,000,000 in the 2nd quarter. Total expenses for the quarter decreased to €99,000,000 from €105,000,000 in the 2nd quarter due to lower operating expenses and staff costs. Loan credit losses decreased to €30,000,000 and cost of risk was at 0.9%. Restructuring cost for the quarter increased to €9,000,000 reflecting the continued effort to accelerate the listing. Profitable tax from organic operations for the Q3 was €18,000,000 and the overall profit asset tax amounted to €19,000,000 And with that, I'll hand back to Danilo for his closing remarks. Thank you, Alisa. Our results this quarter reflect continued progress against our objective of balance sheet repair and normalization of our bank. Good progress we made throughout the year. However, there remains more to do. This management priority going forward are to continue to deliver balance sheet at pace with maintaining a pro trader position. At the same time, we remain focused on further improving efficiency to reflect our smaller revenue base supported by ongoing digital transformation. I'm looking forward to sharing my perspective and vision for the future of our bank with the release of the full year financial results. This concludes our presentation, and we will now open for questions. The first question comes from the line of Larianne Jonas with Exxia Ventures. Please go ahead. Good morning, guys. I have three questions. First one on the STF perimeter and having in mind that place of arbitration has not been as expected by the market. So just wondering what is your strategy there given the low amount of participation and if you have the planned business. I assume that you're expecting to have most of the eligible clients applying for the scheme and now I think that we are like a month until the end of the application period, it's very unlikely we're going to achieve that. So do you have any sense of volume that you're planning to achieve? And what is going to be the strategy on the remaining clients? Then my second question is on your portfolio sale. Is there any progress in regards to the I've seen the update on Slide 6, but is there any comment in regards to a potential impact? If I remember you're planning to have a cash and mutual transaction. I just wonder if you still speak to that kind of broad guidance for the time being. And then my final question here is regarding the reversal of provisions in the performing book from stage 1 to stage 2 into stage 1, just wondering if you can give some guidance on what kind of exposures are those and if you think that there is more to come as well and a final question. Thank you. Okay. Thank you, John. I'll hand over to Danica to really answer the TIA question. Marcos? Right. Prestea, we see it as an enabler for the portfolio in a way that firstly, the schemes is less yet costly. We have opened discussions with more than 1500 borrowers. And we have received today 4 87 applications, and we are seeing an increased pace moving towards the end of the year. Through that scheme, we are able to identify the non viable corridors. So there is a percentage on that book that is not viable. Mini rate cannot support this structure. So we are in time there to identify the portfolio and the strategy on resolving that book. And there is also a percentage of people that they are they want really to share their information through the scheme. In any way, our results and our plan, we do not have any amount in the 2020 NPE plan. And my opinion is that the Astea portfolio that will not take up 15, It's only around less than 50% of our NPE problem. So we could seek that to be manageable moving into 2020, 2021 and key strategy. It has no amount of our, let's say, NPE portfolio and it was not accounted for our NPE 2020 reduction target, mostly 2021 and 2022. So, Patent Bank, as you all know, with our best idea, we have managed to reduce our R and Ds well not secured. And during this period, we have been there have been many, many challenges in the environment, but we have managed to go through and call our terminal solutions. And we are confident that for the portfolio that at then we want not to participate in this year, so we're going to have a clear solution going forward. On the talking of the portfolio sales, I will hand over to Nick. Nick, are you there? Yes, I'm here, thank you. On the trade, I didn't quite catch the full question. I got the jab that you're asking for guidance on the outcome trades. So I think as you will have picked up from the current comments already made on the call, there's a lot of work going on behind the scenes in preparation and progression of a number of different potential trades. I think none of them are at the moment where they would be confident and able to come from history in any guidance. So unfortunately, in line with the way we think it seems in respect to the 2018 trades, I think you're just going to have to wait and see. And at the point in time that we do have confidence in the guidance, we'll give you a good update on progress at that point. Okay. Thank you, Nick. And on the reduction provisions for the performing book deliveries. Yes. That's great to all. Now on the performing book the Q3, well, it was actually negative, negative 21 basis points and that was positively affected by one off releasing provisions, meaning when you see some of the loan migration from Stage 2 to Stage 1, as was mentioned. The expectation is that the cost of risk of the performing book is to remain low. And this, of course, is supported by the performance of new lending, whereby 98% of new lending we have done since 20 16 is performing. Okay. Thank you. Next question please. Your next question is from the line of Doctor. Lee Aswan with HSBC. Please go ahead. Hi. Just focusing on the core business for the time being. Can you please comment on loan yields? We've seen some stability for a change in this quarter. So it would be interesting to hear your thoughts about how you expect them to behave going forward. And then also if you can add some color on what you expect to see in terms of new production in the Q4 and onwards? And I appreciate that you're only going to see us making some disclosure with full year results. So it's a bit premature to us to call that. But maybe you can give us some color on what you think are the main pillars that the bank should be looking at in terms of its strategy in the medium and longer term? So Elisa will comment on the loan yield stability. So as you've seen loan yields over performing book are actually basis points higher than the previous quarter. In fact, this increase as you described, that's come from higher collections of previously not recognized interest. So that should not be seen at the run rate. However, we do feel that reference rate pressure seems to be abating, although competitive pressure remains relatively strong, especially in the retail and smaller semi side of the school. So we feel that forward, lending yields may come at a small under small or modest pressure, but not a big drop that we've seen in previous quarters, which were also driven by reference rate reductions in both UroL and Tigray, but also the plant based rate. On new loan generation Okay. New loan generation, I expect a similar performance as of Q3. I mean, we expect to be approximately €2,000,000,000 plus line of the year of new loan generation. And the last question about the main pillars going forward, 2020. As you all know, a number of priorities is complete the de risking the run and achieve significant reduction of our R and D book within 30%. Secondly, we need to stabilize our revenue base and find new revenue streams like a smaller, let's say, participation in single loans, in entering sort of carefully to a shipping market. And at the same time and most importantly, we need to rationalize our cost base. And by firstly about cost base, I mean cost, operating cost, liquidity cost, which is also important element and cost of provisions. So this is the nice value that I would be happy to share with you probably in March 2020. The next question is from the line of Bruno Goudesari, Exane Brosco, Morning Call. Please go ahead. Good morning. Just a clarification regarding the Istia program and the discussion you had with my colleague before. For the clients that do not participate in the SDR, eventually, which has to pay 64 or do not want to share the data, you will have the ability to foreclose, I assume, because that was the purpose of the plan. It? Thank you. Yes. The simple question is yes. The simple answer is yes. Yes. And this was the headquarter of the scheme from the beginning, I mean, we provide a chance to the Board to participate in this year so that they avoid foreclosure. If they opt not to, then there will be an upside on the table. Do you think there will be political pressure not to show again or There will be periodic pressures. There will be periodic pressure for the last 5 years, and I expect that but the improvement of this is expected to have any pressure. The next question is from the line of Cunningham Corinne with Autonomous Research. Please go ahead. Good morning. Thank you very much for the call. Just wanted to explore a little bit more on the law changes on foreclosures and whether or not that's actually slowing down some of the big projects. I think we were hoping for some progress on larger scale disposals before year end. So just the whole combination of lower take up on Istia, foreclosure laws weakening potentially, Is that having a material impact on the ability to get some of these block trades done? Or if it's not, if you can give us some color on what's taking the time? Thank you. Thank you, Nick. Thank you. Can you take this question, please? I think the my comment on that has been that the trades are all progressing in line with the expectations we set ourselves at the commencement of each of those processes. So no, there's no delays on any of them. You'll obviously be aware that any potential repeat of a illicit style trade, which is kind of jumping trade by any measure and certainly relative to Cyprus and I think takes time in preparation and should not be rushed. It's not been carefully managed. In terms of closure law, again, there is as we've seen in the parliament during August, there is potential legislation in place, which generally sits in the Supreme Court, which could have some, what I would describe as relatively minor implications for a very small subsection of the NPL portfolio, where slightly more checks and balances are put in place around bank's compliance with the area of management directive, which we have been operating under consistently and carefully for the last 4 or 5 years. So that's not something that is troubling to the bank. And clearly, we would like the matter of foreclosure resolved once and for all. I expect it will be resolved once and for all. But no, it is not at this point having an impact on the timetable for any of the potential trades we're progressing. Next question please. The next question comes from the line of Quinn Dara with KBW. Please go ahead. Hi, good morning. Thank you for the presentation. Just a question on the employee reduction, if you could give us a time line on the exit of those employees and when the cost reduction would be fully crystallized in the P and L. And that the exits are part of the Helix program would be an additional cost save on second class? And then a second question is on the portfolio scale or potential portfolio sale of NPEs that you're working on. And if you could just give us maybe an idea of where you are in terms of time line, the portfolio that's being reviewed by bidders, etcetera? And what kind of milestones or time can you give us on the progress you expect to see on loss during 2020? Thank you. Okay. Thank you. On the 470 people that we like to them, we will be doing in Q4. So it will be this year, all of them. So the cost reduction will be evident from 2013 going forward. On the Helix II path, I will hand over to Alisa to explain the mechanics. So on Helix, when the staff actually legally exits the bank, there will be a saving in the staff cost line. However, we do get compensated with our part of the agreement from the buyer from a total. So there would be also a partly reduction in the dividend fee. In the press release, we do report this met in the decline. However, when you see the statutory P and L, you will notice that going forward, a reduction in the servicing fee or in the fee income and also a reduction in staff costs. Any further portfolio sales will automatically lead to a further debt reduction in 2020. And the last point, I will hand over to Nicky if you can provide more color on the timing of the portfolio sales. I sense the desire from many of the participants on the call for more clarity on what might happen in future trade, and I fully understand why you're asking the questions. I can't really go any further than the comments already made on the call, which is targeting a finalization of those initiatives during the first half of twenty twenty. And that is my expectation on the time line, but with the caveat, as always, that we are clearly attempting to execute certain trades, but we are not promising them at this point in actually the same way as we were using language prior to the 2018 trades. Mr. Goddard, are you finished with your questions? Yes. Thank you. We have a follow-up question from Mr. Floriani Jonas with Axia Ventures. Please go ahead. Hi, guys. Just a few more questions from my side. On fees, could you give a basis on what is the latest in regards to the discussions and sizes on the Advanced Bank increases going forward? Any update there would be helpful. Then secondly, on the deposit rates, on the chart you show on Slide 15, with the 19 basis points cost of deposit, just wondering if you can share the number of what is the level of your the front cost that you're running now on deposit costs compared to the 'nineteen? And finally, if you can expand a bit more on the NII component of the interest production that have not been previously recognized? I mean, can you give us more details on that than on the likelihood of this happening in the coming quarters? Okay. On the first question, there is no restriction on the ability of the bank to charge any fees. I mean, we will proceed with a new fiscal outlook on our IBU science starting January 2020. And we're exploring ways to revise our catalogs within the first half of twenty twenty to the remainder of our clients. As I mentioned in management, we are also expect to charge liquidity fees in certain categories of clients, and this would be probably being affected early next year. On the remaining succession, I'll go back to Alisa. On the deposit book, our deposit book, the maximum duration we have is 12 months. And actually, given where the rates are, the average duration of the deposit book is below 6 months at the moment, actually significantly below closer to 3 months. The difference between front and back book, Jonathan, is not material. There is a bit more of the sizing to front, but we've seen the majority of it from the back book. What you should expect to see from here on is on the non retail side of the book, a bit more repricing from the legal entity and institutional investor side, a bit more repricing on the euro deposits and incrementally the liquidity fees are beneficial right now. On the liquidity fees, we do plan to go through a phased approach. So we will start with a fast regulation, the more the least sensitive and the least volatile portfolio and the portfolio that doesn't affect our LCR ratio. And test the water, make sure that it doesn't cost undue noise and instability and then roll it forward depending on decision. Finally, on NII, there was this quarter, similarly to actually previous quarters, especially in the pre release period, we had interest collections for cash received interest income received in cash on loan where this income was not previously recognized through the P and L. This is a phenomenon we used to have in significantly higher amount when it was higher. It's aggregated. We view this more advantageous in private case, specific income that comes attained this quarter and another recurring P and L profit stream going forward, especially after the trades if and when they happen. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Nicolaou for any closing comments. Thank you. Thank you all for participating. As I said in my legal statement, we have more clarity on the strategy of the bank with the announcement of the full year results. Thank you all. Welcome, ladies and gentlemen. The conference is now concluded and you may disconnect your telephone. Thank you for calling and have a pleasant evening and morning.