Earnings Call: Q2 2020

Jul 29, 2020

And just a reminder, all this conference call is being recorded. I'd now like to hand over to the Chairperson, Doctor. Nielmar. Please go ahead with your meeting and I'll be standing by. [SPEAKER MIGUEL MENEZ DE SOLAY:] Good afternoon. This is Miguel Maier speaking. Welcome to the 1st semester earnings conference call. The activity of the bank on the first half of 2020 and mainly on the Q2 was, as expected, strongly affected by the overall reduction of the economic activity in Portugal and by a less pronounced decrease of GDP in the remaining geographies where we operate. Despite still dealing with a high level of uncertainty, as shown by the significant reviews that institutional entities are doing to their previous forecasts, we have no doubt though that we are facing a deeper session. But it is important to underline that the confidence and activity indicators of June July may support some optimism regarding the recovery of the economic activity. It is, however, too soon to take for granted that we have already started a solid and sustainable recovery. So BCP's priorities remain focused on the reinforcement of the bank's resilience and adaptation capability. As highlighted on the last earnings presentation, we promptly adjusted the bank's priorities in anticipation of the pandemic impact, having switched our focus from a growth driven mode to a defense balance sheet mode, mainly in the admission and monitoring of credit, the protection of capital, the reinforcement of liquidity, the control of costs and investments and the additional preventive charge of impairment to face foreseeable losses caused by the pandemic. The earnings in the first half were also influenced by a lower contribution from Bank Milan in Poland, but I want to highlight that the Bank Milan showed a resilient commercial and operational performance in the second quarter and the synergies of the integration of Eurobank have been delivered. Unfortunately, and due to well known reasons, which we'll still believe could turn into a fair and balanced outcome, the FX mortgage litigation risks have overshadowed relevant achievements of Bouygues Millenium in other major fronts. The earnings of our subsidiary in Mozambique were quite consistent, showing once again the resilience of that subsidiary's business model. I want to stress that the granting of loans in Port Col has been centered on the credit lines backed by the state to support the economy. We achieved the market share on those credit lines that almost doubled our natural market share, counting on strong commitment from our commercial and operations teams and benefiting from the investments already made in Automation Technologies. Let me also underline that due to the changes we have been making these years in the risk appetite and in the loan underwriting standards of the bank, we have now what could be considered a present level of exposure to most vulnerable sectors of the economy, which represents around 7% of the performing loan book and from which I highlighted the low exposures to real estate promoters, around 2.4%. On the credit segments, we foresee as potentially more effective, namely the SMEs and the unsecured consumer loans. Our exposure to SMEs has adequate collateral levels and most of the mainly work for the domestic market. And our unsecured loans in Portugal just represent less than 11% of our household loan book and less than 5% of total loan book. We are still moving in a high uncertainty environment, having our teams focus on the priorities we define for the near future. The economic impact of the pandemic will depend heavily on the evolution of the global sanitary situation, and some of the mist is currently being sustained by recent news about the testing results of vaccines under development and the positive signs for the envisage economic recovery base being particularly relevant for Portugal, the recent agreement for the European recovery program and the multi and model European budget. We have important challenge ahead, but fortunately, BCP counts on teams that already prove their resilience, their ability of adaptation to new realities, their capability to recover credit and their relationship skills. In the 1st semester, our consolidated net profit reached EUR 76,000,000 affected by additional provisions and impairments to face the major risks ahead, including EUR 108,800,000 of impairments to mitigate economic impact of COVID. The core income on the 2nd quarter was mostly influenced by a decrease on commissions. However, year on year, the core income grew 2%. Let me highlight that on the Q2, there was an inversion of previous quarters' NII downward trend in Portugal, showing a positive evolution of more than 3% from Q1. Our high intensity commercial activity played a crucial role for the year on year growth of business volumes with both the performing loans and the customer funds having a similar growth around 5%. The support PCP provided to the economy in Portugal during the most critical confinement period is a clear example of such commercial intensity. We stand out as the principal bank that financed more than 12,000 companies with COVID lines backed by the state guarantee, and we swiftly implemented the moratorium to more than 120,000 months of households and companies. During this period, we have expanded our mobile customers' base by 36%, and the digital sales have boosted to 35% of total sales. Looking at the net income of CHF 76,000,000, we see an year on year decrease of 55%, which, as I just mentioned, was influenced by the impairment charge in Portugal, Poland and Mozambique due to COVID, but also by provisions of €38,000,000 this year in Poland to mitigate FX litigation risks. Therefore, the cost of risk increased to 85 basis points in the 1st semester. NII was negatively affected on the second quarter by reference interest rate cut in Poland and Mozambique, while in Portugal, we saw, as I already mentioned, a 3.5% increase of NII, inverting previous quarter's downward trend. The commissions remained stable year on year despite a decrease on the Q2 as it was hit by the lockdown and social distancing measures in full. The recent legislative measures in Port Gallo put additional pressure on the commission's evolutions, although these political headwinds could be reasonably though these political headwinds could be reasonably mitigated by an increase of the relationship with our clients with a model supported in transactional package and actively managing the bank's price policy. As a result of this evolution, the core income grew 2% year on year. The customers confirm their positive feedback regarding their satisfaction with our digital approach, and that satisfaction continues to be reflected in the growing number of mobile customers. Overall, the number of mobile customers on consolidated basis grew 36% year on year, with the mobile customers already representing 44% of our global customer base. In Portal, we reaffirmed the leadership in customer satisfaction, having recently been electing as best digital bank in 2020, and our app is receiving top recommendation ratings by Google Play Store users. In June 2020, 43% of our digital customers in Portugal use exclusively our app, a growth of 10 professional points since June 2019, and they are responsible for 87% of digital interactions the customers have with us. The app's high degree of satisfaction and utilization level by the customers is driving the growth of mobile business, and that is shown by the 70% increase this semester in the number of sales, 79% increase in the number of payments and almost doubling the number of transfers. We have established as a priority to put our innovation competence at the service of the customers is to provide them better convenience and user experience, aiming to exceed their expectations and obtain their confidence and preference. The onboarding on the apps is simplified and enables a streamlined day to day management of the customers' banking needs, a best in class that provides innovative and digital exclusive products and service that is open to integration with other complementary digital platforms, while promotes aggregation and initiation of payments on the customers' accounts in other banks. These innovation priorities reaffirm Millennium SCP as the customer's first option when they want to start a digital relationship with the bank, and this first mover choice is of utmost importance to retain customers on the long term. We are getting more than 1200 mobile customers daily. Although operating in a tougher environment due to COVID-nineteen pandemic, we managed to increase our business volumes without compromising our risk management standards. I want to highlight the EUR 2,400,000,000 increase in the performing loans, EUR 4.7 billion growth year on year, of which EUR 1,500,000,000 was achieved on the 1st semester of 2020. The customer funds also have grown 5% year on year, increasing EUR 4,000,000,000 since June 2019, of which EUR 1,500,000,000 also achieved on the 1st semester, mostly on balance sheet resources from depositors, which reveals the customers' confidence on BCP on the edge of a global crisis caused by the pandemic. We did not refrain our commitment to improve the quality of the balance sheet, having reduced EUR 1,100,000,000 of NPE since 2019, while improving even further the already good coverage levels we have. As usual, this effort has greater relevance in Portugal, where we reduced EUR 1,200,000,000 of NPEs, of which EUR EUR 338,000,000 on the first half of twenty twenty. In the second quarter, the reduction capability was severely restricted by the lockdown measures. However, we managed to compensate the inbounds and even able to achieve a small reduction. We have a solid recovery now as we already proved and we will prove once again. The NPE coverage increased to 58%, considering just the impairments. And if we could if the collaterals are included, the NPE's total coverage reached 109%. The impairment charge done this year due to foreseeable losses related to COVID pandemic justified the increase on the cost of risk in Portugal and in the international subsidiaries. Our suitable capital position and our resilient business model capable of organic generate capital even under current circumstances made possible that we have accommodated risks as the ones we are facing without disruptions in the capital ratios. Total capital stayed at 15.5%, standing 2.2% above the regulatory requirements, percent all points above regulatory requirements, while the fully implemented common equity Tier 1 improved to 12.1%, visavis 12% in the previous quarter, which stands at 3.3% points above regulatory requirements on a conservative approach without considering the temporary flexibility permitted by regulators since March. We continue to have a very comfortable position in terms of liquidity situation, as shown by the liquidity ratios. The additional EUR 2,200,000,000 in ECB net funding resulted from our take up Atlas TLTRO auction as part of our NII management and optimization policy. However, this increase in net funding was followed by an increase in eligible assets as well. As a final remark, I would like to underline our priority in defending the quality of the balance sheet, our commitment to stand out as a benchmark in operational efficiency, the investments we are making in the customer relationship model highlighting the mobile as a distinctive element of our franchise, use we are making of technology to leverage automation and operational efficiency and most of all, the remarkable commitment of BCP employees the process of transformation of the bank to the new environment. I now give the floor to Miguel Braganca. Thank you. Thanks very much. Ladies and gentlemen. As you see now in Page 16 in our income statement, we show a growth of 2% in our core income, driven basically by the NII that rose 2.6%. The operating costs grew 4%. Both of these factors, the core income, the operating costs and the impairment are somewhat influenced by a small change of perimeter that is the acquisition of Eurobank in Poland. The core earnings are stable. In terms of the non usual operating costs, which are basically severance payments, they decreased somewhat. And the other income very much influenced by the mark to market of funds in our balance sheet and by the lack of capital gains in real estate that we had last year decreased EUR 70,000,000. This makes our operating net income decrease around 12% when you compare with the same period of last year. And then the major impact now of the COVID and of the legal risks that we have mainly in Poland is this growth of 45% in impairment and provisions that imply then that our income before tax decreases 53% and our income after tax in minorities decreased 55%. Let's go a little bit more in detail in terms of this movement. We see that the NII grows 2.6%. This NII is linked to a growth in volumes together with some margin compression that the NIM decreases by 13 basis points. In Portugal, what you see is that there is some decrease in margin that is basically explained by the excess liquidity that we have. We have been generating a lot of customer resources that have been invested at negative rates at European Central Bank or in short term money market instruments. However, we already see some growth from Q1 to Q2 in Portugal of 3.5% growth that we expect will continue with the tailwinds of the TLTRO. In the International Operations, there is a growth of the NII, to a large extent, explained by the acquisition of Eurobank in Poland. However, there is some margin compression in this is also explained to a large extent by the decrease of interest rates in Poland and in Mozambique. The fees and commission, in spite of a very adverse environment, show a lot of resilience with stability in both in consolidated level and in Portugal and growth in international operations due to the change of perimeter that I've commented. In terms of the income that is explained in Page 19, we see a small growth in mandatory contributions, around 6%, as you see in the left hand corner, and a decrease in the net trading income, to a large extent, due to the mark to market of restructuring funds and decreasing the other net operating income. This other net operating income is basically a net effect of the capital gains in Real Estate and mandatory contributions. So as this year, we did not have almost any capital gains in Real Estate. The number that is there is basically the negative number of mandatory contributions, both in Portugal and in Poland. Operating costs, you see some decrease in spite of the challenging environment of the recurring operating costs in Portugal of 2%. And when you consider also restructuring charges, the operating costs will decrease even more. We would think that until the end of this year, we would think that the level of operating costs that we saw in this first half of the year will continue. So we are not expecting any type of cost inflation, and the positive numbers that we have in the first half of this year is something that we expect to continue. In the international operations, we have here the perimeter change of Eurobike. I would like to stress that the capture of the synergies is going ahead of the plan. So we expect it to deliver more cost cutting than what was announced when Eurobank was acquired. Cost to core income. In spite of all these adverse movements, we continue to show best in class numbers when you compare ourselves both with our competitors in Portugal and with the main banks in the eurozone. In terms of impairments and provision charges, there is an increase in the cost of risk. The cost of risk in Portugal grows from 70 6 basis points in the first half of last year to 82 basis points. And if you consider the quarter in an isolated way, you see that we are very close to 100 basis points as was somewhat anticipated in our last call. This is a trend that we expect to continue. It is the provision that we had this year already reflected the anticipation of the IFRS 9 scenario modeling. So we have already registered, according to the IFRS 9, the different scenarios with the probabilities, and there was a provision of around EUR 70,000,000 allocated to Stage 1 and Stage 2 credit based on the new scenarios. In the international operations, there is also some increase in the cost of risk from 69 basis points to 92 basis points, which has increased our own gross results from around EUR 5.20 million to around EUR 6.30 million. In terms of other provisions, we see here an important increase that is basically linked to legal contingency fees in Poland. Credit quality. If you see here the one the last 12 months, you continue to see here a decrease in the NPE number of around EUR 1,100,000,000. And what you see is that our NPE ratio according to EBA, including off balance sheet, so the whole exposure, including securities, is already below 5%. And if we consider only loans, we have here a ratio of 7%. Going forward, as we have already anticipated, as we don't have more information than you have in terms of when a vaccine will come through and exactly the extent to which this crisis will affect our income statement. The visibility that we have is until year end and as anticipated. So our normal rhythm would be a decrease of around 30% if it were not for the COVID virus. We in this environment that we live today, we do expect until year end the maintenance of the NPE with the positive efforts that we are doing and the positive recovery performance that we are having being compensated by some increase of nonperforming exposures due to the crisis that we are leaving. In terms of customer funds, you see that our franchise is very, very healthy. You see that individual customer funds grew 12 percent in Portugal, the total of 5%. And even in the international operations, we see here a growth of around 5%. This, of course, has a cost. We are trying to be very disciplined in terms of the pricing. So our cost of deposits is very close to 0. But we are that individual banking driven because we think that for the future, it still makes sense to have deposit clients. In terms of loans, we see a growth of the performing loan book that is more than twice the reduction of NPEs. So the performing loan book increases EUR 2,400,000,000 while the reduction of NPEs is around DKK 1,100,000,000. And mainly in Portugal and international operations, the book was quite stable. What you we also see right now is that the new performing book is having, in Portugal, a more positive impact in the NII than the reduction of NPEs. In terms of capital, we have increased since March our capital ratio around 16 basis points. This is this has many effects, some of them more relevant, some of them less recurrent. But what I would say is that our organic capital generation coincides with this increase in the capital ratio. So as we have commented, we have a positive capital generation quarter after quarter. In the positive quarters, we have an organic capital generation in excess of 20 basis points In the situation in which we are facing this crisis situation that we all know, we were still able to generate capital by around 16 basis points. Leverage ratio and RWA density, I mean, showed also the resilience of our banking model, a very liquid banking model with a Nardevouet density that is quite high, which shows hopefully the conservativeness of our risk models. In terms of the pension fund liabilities, we had here we tried to manage the pension fund in a way that is that tries to give a good balance between return and risk management. The profitability of the FUD was slightly negative, around -0.2 percent. And but there was an increase in the discount rate because the reference discount rates have increased in the period. That more than compensated these effects so that effectively, we are more than covered for the liabilities that we have. I will pass now the floor here to Bernard. Okay. Just take my mask. Good afternoon, ladies and gentlemen. On Page 32, starting with the Portuguese operation. Net income decreased by 38% year on year to EUR 45,000,000,000 affected mainly by the COVID-nineteen context. Net earnings were influenced by lower NII that I will detail on the next slide, lower commissions and other operating income due to the lower level of sales of real estate assets compared with the first half of twenty nineteen and by a devaluation as well on the restructuring funds as well as higher impairments charges that more than offset lower operating costs. On the cost side, costs went down by almost 5% and were positively influenced by lower recurring costs as well as lower restructuring costs compared with the first half of twenty nineteen. On Page 33, looking to NII evolution. In Portugal, net interest income amounted to EUR 379,000,000 in the first half of twenty twenty compared with EUR 399,000,000 in the first half of twenty nineteen. Favorable impacts of the expansion of the credit portfolio accounts for almost EUR 10,000,000 that more than compensates the negative impact of EUR 7,700,000 from the NPE reduction. The reduction of the wholesale funding as well as the continued reduction of deposits had a positive impact of more than EUR 15,000,000 or EUR 50,000,000 that was not sufficient to offset negative impacts of the securities portfolio of minus EUR 30,600,000, which reflects the lower yield on the amounts invested in securities. The reduction of the credit rate the relation of the credit rate of EUR 11,000,000 and the application of the surplus liquidity that had a negative contribution a negative contribution of €8,000,000 Let me also highlight that it was possible to see a turnaround on NII in Portugal when we compare Q1 with Q2, where there was an increase of 3.5%. On Page 34, regarding spreads on term deposits, back book spreads to that 48 basis points compared with 53 basis points on the first half twenty nineteen. It was also it is also important to consider that there was a decrease on the 3 month arrival of 4 basis points that happened during this period. Spreads on loans stood stable around 2 70 basis points, and NIM in Portugal stood at 153 basis points, lower than last year, reflecting the impact from guaranteed loans related with COVID-nineteen as well as lower production on the personal loans. Moving to Page 35 regarding commissions and other income. You can see that banking commissions decreased 3% in the year due to COVID-nineteen related mainly with impacts on payments, transfers and cards. Market related fees went up as a result of securities and asset management fees. Looking to other income, the strong decrease was mainly explained, as Miguel mentioned before, by lower gains on real estate sales, the devaluation of the corporate restructuring funds that affect the trading line. And on the opposite side, there was a strong contribution from the equity earnings due to the reversal of the liability test on insurers. Going to Page 36, looking at costs, there was a reduction of 6% in staff costs and of more than 7% in other admin costs, partially explained by lower one offs and lower admin costs due to the lockdown. All in all, recurrent costs went down 2%. There was also a reduction in the number of employees as well as reduction on the number of branches. Moving on to Page 37, which refers to asset quality. NPE reduction was strong since June 2019 with more than EUR 1,200,000,000 decrease. On the first half of twenty twenty, there was a reduction of more than EUR 335,000,000, mostly concentrated on the 1st months of 2020 before the increase of the pandemic. Cost of risk increased to 82 basis points due to the update of the macro scenarios on credit models. Let's move to Page 38, which looks at the NPE coverage breakdown. You can see that total coverage to that 115% were as coverage for individuals with high levels of real estate collateral stood at 100%. And for companies at the high level of 119%. And as you can see in this slide, coverage by loan loss reserves is high in loans for companies because real estate collateral is lower for this segment than for individuals. On Page 39, looking at foreclosed assets and restructuring funds, there was a decrease of more than EUR 354,000,000 and EUR 144,000,000, respectively, compared with the first half of twenty nineteen. And to what concern with restructuring funds decrease was influenced by the COVID-nineteen context, affecting the net asset value of the units that we hold. In terms of property sales, there was a slowdown in the first half of twenty twenty compared with the previous year, once again influenced by COVID-nineteen outbreak. As you can see, even on this challenging environment, sales are still above the book value of the assets. Now moving to Page 43. Customer funds were up by 5%, mainly due to the increase of demand deposits. Off balance sheet products stood at the same level as previous year. And in terms of gross loans, there was an increase of 3.3%, mainly related with loan to companies that increased 6%. In this period, performing loans, as mentioned, increased 2x the high level of the decrease that we have in terms of the reduction of the NPEs. Going to Page 41, we have a detailed overview of the evolution of the performing book, which increased 7.2% year on year as a result of the strong support to companies, which accounted for 83% of the total performing loan book from June 2019. On Page 42, you can see our support to companies and families on this difficult period. As mentioned before, since the 1st days of the outbreak, BCP were close to our customers, supporting their needs and helping them to make the most adequate decisions. On companies, BCP have more than the double of the natural market share in terms of loans. So credit lines with state guarantee that we provide have a share of 38%, and we already provide more than EUR 2,200,000,000 of funds to our customers. Related with moratoriums to households, the moratoriums reach EUR 4,100,000,000 and mortgages account for more than 92% of the individual moratoriums. Moritorms for companies, we see it as a prudent measure regarding the uncertainty of the situation. So companies are taking advantage of this measure to manage their needs. And it's important to highlight that out of those EUR 4,700,000,000, 1 third are related to what we consider the most vulnerable sectors and only onethree of those have LTVs above 80%. Moving to Page 44, which with regards to the results of the international operations, we can see that there was a significant reduction of the contribution from the international operations to net income that were mainly explained by the lower contribution from Poland due to the COVID-nineteen provisions and additional provisions for FX, legal risks and integration costs from Eurobank. Moving to Page 45. Net income in Poland was impacted by several one offs, including EUR 38,000,000 for legal risks. Net profit, when adjusted by for extraordinary items, was down 7.7%. Net operating revenues increased by 14%, which includes the accretion value from Eurobank as well as the strong franchise of Bank Millenio. Operating costs in Poland increased year on year, mainly impacted by the Eurobank acquisition, and CET1 ratio stood at 17% and total ratio at 20%, well above the regulatory requirements. Return on equity, excluding the effect of the one offs, stood at 8.7%. Moving to Page 46, regarding integration costs of Eurobank on the first half of twenty twenty stood at EUR 8,000,000 and total integration costs increase incurred up to June 2020 account for 77% of the overall plan. Eurobank's synergies of EUR 14,000,000 more than compensates the integration costs and are expected to total EUR 35,000,000 for 2020 as a whole. On Page 47, some detailed information about Banc Millennio. NII up more than 22%, and we have to bear in mind the 140 basis points of interest rate cuts from the recent rate cut from Bank of Poland, NIM stood close to the level of previous year. Operating costs were higher than first half of twenty nineteen due to the Eurobank acquisition, mainly related with staff costs and other admin costs. But it is possible to observe some significant decrease in trends when compared with the Q1 of 2020. Fees and commissions increased 10%, and on the opposite side, other income was lower due to high mandatory contributions as well as lower trading gains. Moving to Page 48, related with asset the the more consumer loan portfolio. Cost of risk was higher as a result of COVID environment and the coverage ratio by loan loss reserves stood at 108%. On Page 49, looking at volumes in Poland, customer funds increased almost 10% with the highest impact resulting from demand deposits. In terms of loans, gross book went up almost 6%, and it is registered. And important to mention that the new production in mortgage reached on the Q2 2020, the highest level that was registered in terms of production. And cash loans are also on the same on a good trend, achieving the levels of production before the lockdown. With regards to Mozambique, turning to Page 50. Net income was lower than the same period of 2019, driven by lower net operating revenues associated to last year gains on securities as well as lower NII resulting from a lower interest rate environment. Costs increased compared to Q1 to first half twenty nineteen, mostly explained by staff costs considering the expansion of the network. Capital ratios stood above 41% and return on equity of more than 17%. Moving to Page 52, NPL ratio 90 days past due stood at 20%, Cost of risk stood at 190 basis points, reflecting COVID-nineteen provisions. And coverage by loan loss reserves stood at 67%. Moving to Page 53. With regards to volumes, we can see that customer funds grew 13% and loans were broadly stable according to June 2019 or with a small increase year on year, reflecting our conservative approach under the challenging environment in Mozambique. So thanks for your attention. And before we move to Q and A, I will return to Mr. Miguel Borgesa for some final remarks. We like to present to you exactly how we are evolving according to our long term strategic objective and intent. And here, the key message that I would like to highlight is the following. First, in terms of franchise, we are clearly over delivering. In terms of the transformation of the bank, in terms of turning our customers more and more digital and mobile, in terms of customer acquisition that we are having positive surprises. And for the long term, for the value generation, this is very, very important. In terms of NPE and cost of risk, this asset quality world, that was one of the weaknesses of the bank. What we were seeing is that we were clearly on track to achieving our objectives, and we have shown the operational capabilities to manage NPEs and to reduce NPEs. And these operational capabilities that we have nurtured in the past and developed in the past years will be crucial in this new environment that we will live in the next years. And we sincerely hope that this will be a key competitive advantage in terms of maintaining the asset quality at acceptable levels. In terms of CET1 and liquidity risk, we are also on solid foot grounds, and we do not expect any deterioration in this regard. In terms of ROE and cost to income, this is an area that, of course, we will suffer more in the next periods. Without compromising the long term objectives of the bank, a bank such as ours, with the franchise that we have, with the client preference and client loyalty that we have, clients that, as I often stress, like our service as much as they are prepared to pay for it. So we are not a free bank. So we offer quality client preference, and the clients recognize it and pay for it. We think that the bank such as ours should be capable of earning its cost of equity that we estimated around 10%. In this short term period, of course, we will leave a period of more turbulence, and it's more difficult exactly to forecast on a quarter by quarter basis exactly what will be the impact in terms of top line and consequently through the leverage effect in terms of bottom line. But nevertheless, these key value generation for our shareholders, both in terms of development of the franchise and in terms of having the capabilities and the core competencies to achieve this ROE, we think that we are evolving on a good track. I have opened the floor to Q and A. So please We have one question and it comes from the line of Ignacio Elargi from Exane. Please go ahead with your question. Hi, good afternoon. Thanks for taking my questions. I have two questions and one very detailed one on the restructuring funds. So the first one, see your pre provisioning profit evolving from here in the second half? So 2Q, it's normally the weakest part of the year and that have had the effect of the pandemic. How do you see that evolving from the year? Certainly, on costs, whether you could be able to take any additional costs cutting measures, particularly thinking about Portugal, even though the situation is very challenging, if you could take some measures that in order to protect your provisioning profit? And the last question is on the restructuring funds. How do you see I mean, how do we expect we need to expect the restructuring funds performance in terms of paying income, whether we should see additional provisions and additional hits in coming quarters? That should be the main drivers that we need to look to expect this type of negative to earning income that we have seen this quarter? Thank you. Ignacio, thank you very much for your questions. Very useful questions. In terms of the pre provision profit until the end of the year, we see here some tailwinds in terms of NII, namely with the TLTRO. We took EUR 7,500,000,000 and we expect this EUR 7,500,000,000 to be able to increase our NII in it's easy to do the numbers in the next two quarters, around EUR 15,000,000 per quarter compared with the last quarter. So it's basically an arithmetic operation. The remaining effects will basically cancel each other. In terms of commissions, we are taking also some measures. We expect some marginal growth. The growth will be higher if it were not for some headwinds due to legal limitations. But we nevertheless, we expect some small growth in Portugal and going to the pre provisioning profit. In terms of costs, we had a very good half year in terms of costs this half year, and we expect to maintain more or less the same cost level for the second half of the year, which is good because this was a quite low cost level. So until year end, that's what we are expecting. In terms of the restructuring funds, we have basically we had in the past some restructuring funds that were more linked to construction. Right now, our restructuring funds are more linked to tourism, and they have good assets in the tourism business. So the assets are good for some of the people that know Portugal. I mean, good hotels in the Algarve coast region, so with good quality, with good franchise and so on. Of course, in a moment where tourism is leaving, what it's leaving, we have to mark to market the hotels. And of course, at least they lost a large part of the cash flow of this year. So and this we still feel bullish over the long term about 2 years in Portugal, but at least the cash flow of this year is 1 or almost 1, so to say. Our base case right now is that tourism will be reasonably back to normal in the summer of next year. So if it is reasonably back to normal, we would not expect, I mean, a higher devaluation. If it is not, so probably this would have another impact in terms of the researching funds valuation because, I mean, a business is what it is. I would like to recall that these funds are not managed by us. They are good hotels, but of course, they suffer in tourism as any other business. So what are the key drivers for it, I would say? The vaccine and whether we'll have a normal summer year next year or not. Okay. Hope I've answered your questions. We have some questions coming from the line of David Giseki, Juvei AVAIG, Samira Dacha and Sophie Detonant. Your lines are open. Hi. Here is Sophie from JPMorgan. I don't know if you can hear me. But basically, I I see you. Okay, great. So we saw one of your Iberian competitors this morning paid very large DPA write downs. How should we think about potential DPA write downs for DCT? Is this something that we could potentially see coming your way as well? And so how should we think about that? And my second question would be the CRR quick fix or the SVE supporting factor. Did that help your score at the Tier 1 in the Q2? And if not, how much tailwinds should we expect going forward? And also, if you could remind us of the IP intangible software benefit that you expect and if you're expecting any headwinds on capital? And then my final question was because of risk guidance for 2020 is 100 basis points, right? Thank you. Okay. Thank you very much. In terms of DTA write down, in these accounts, we have already made our projections until the relevant period or the end of the relevant period. And these projections that we have for DTAs already reflect the COVID. So of course, these are always projections, but they already reflect the COVID. I would also here like to highlight that in Portugal, in the context of this COVID, there was a deferral, so to say, of the period that we have for tax loss carry forwards for 2 additional years and for the tax loss carry forwards generated in 2020 2021. We will have 12 years now, this was a recent legislation, that somewhat protects our DTAs. Having said that, I would like to highlight that DTAs are already deducted from the capital ratio. So this is as you know, whether we write them down or we write them up, this should not be relevant in terms of capital ratio and so on. But we feel quite comfortable that our present projections already reflect the COVID. As I was commenting in terms of capital ratio, I mean, we have grown 16 basis points of capital ratio, and this queen sizes reasonably well with our organic capital generation. And then there was there were a lot of movements that will cancel each other. But one positive movement was the SME factor. But this SME factor, in our case, is very small, and the software is also very small. It is irrelevant. And they also got canceled by other small effects. So in our case, this is relatively negligible from a capital standpoint. In terms of and we got somewhat canceled for the RWA for market risk. So there were sort a couple of movements that come from each other so that effectively, our increase in the ratio coincides with the organic capital generation. In terms of the cost of risk, In our last call, I said that from now on, for this year and for next year and based on some simulations and between 90,000,000 and 120,000,000 for this year and for next year. We still maintain this view even in spite of these new scenarios that we are seeing because as we have shown also here last time, our business model is not tremendously sensitive to the GDP evolution. Even in the last crisis, as you've seen, I mean, our mortgage cost of risk on the top of the crisis with unemployment at 16% was around 50 basis points. So and this is around half of our book. So for the time being, we maintain this guidance. But of course, I mean, this could be closer to 90 or closer to 120. Let's see exactly where we are. In this quarter, we have done, as you've seen, around 110, so which is reasonably aligned. Already anticipating through IFRS 9 the scenarios I would say, more extreme scenarios, I would say. Thank you. That was very clear. Okay. We have another question coming from the line of Jonas Floriani from Axia Ventures. Please go ahead with your question. Yes. Hi, everyone. Thanks for the presentation. I have two questions. One is again on your capital and just having in mind the recent changes from the ECB side kind of allowing the banks to run more time with a lower capital level. Does this change in anything your strategy? And how do you see your capital levels going forward, at least over the short term? Second question is more related to asset quality. I was just wondering how you're thinking about the day after in terms of the support measures. What do you expect to see in terms of asset quality dynamic once we see these support measures being phased out towards the next year. Thanks. Okay. Thank you very much. In terms of capital, we still think that a bank with our business model and with the strength in the market that we have and being a retail bank, we should have over the cycle and structurally a CET1 of around 12%. Having said that, we are not, I would say, on a totally automatic mode, so that if we are a little bit below 12, we immediately do a cash call. Or if we are a little bit above 12, we immediately try to decide a share purchase program. So the way we see it is the following. With more flexibility from the regulator, as long as our business model remains capital accretive as we think it is, we think it gives us more time to cope with some fluctuation around 12%, and it gives us more time to think over the longer term. But we will fluctuate around this level. We think that I mean, it may come somewhat down before it goes up. But what this gives us is more time and more serenity to think over the long term and exactly what we have to do. In terms of asset quality, as I was as I commented, until year end and based on the assessment that we do until year end, we do think that it is possible to not to increase the NPEs in spite of the crisis. So our base case, and this is my fluctuate, is a base case of stability of the NPEs from now on. This is something I'm speaking basically about Portugal. Next year, it's very difficult to make a projection. What we know is that the most sensitive factors are, as was already shown in our last presentation, slightly above 7% of our book. And if we take a look at the moratoria that we have, only 1 third are in these most sensitive questions and as sectors. And as Bernardo commented, of this onethree, only onethree have an LTV that is worse than 80%, which gives us some comfort in terms of recovery and in terms of potential LGV. So of course, we are not we don't want to sound complacent, but we think that our business model, the internal capital generation that we have, the diversification in terms of credit portfolio and in terms of business mix that we have will allow us to be within the most resilient banks in Europe. Thank you. And another point that I would like to hear to highlight probably a colleague of mine is here touching your point. I would say that for individuals, the moratoria is very efficient in the sense that almost all the moratoria that we have as was presented is in mortgages. And in mortgages, basically, what we have is somebody does not pay the installment during 6 months. And let's say the person has a 25 year mortgage, the 25 year mortgage then translates into a 25 year 6 months mortgages. So this will be extended over time and will not create a cash flow problem for the client. So it's a very long term, okay? We have a question coming from the line of Noemi Birouche from Mediobanca. Please go ahead with your question. Good afternoon and thank you for taking my questions. I have 2 questions from my side. The first question is on loans. As the remaining part of the guarantees are unlocked during the second half of twenty twenty, do you expect to end up with a market share closer to your natural one on state guaranteed loans by the end of the year, I. E, only marginally increasing at the 2.2 loans already granted? And my second question is on asset quality. Can you share with us the evolution of Stage 2 loans in Q2 vis a vis December 2019? Thank you very much. [SPEAKER CARLOS ALBERTO PEREIRA DE OLIVEIRA:] In terms of loans, the large part of the loans with state guarantee were front loaded. And in this situation or in this trench, we have had a market share that was twice our national market share. The remaining part will be lower, will be much lower. Unfortunately, for us, because we like to think of ourselves as more efficient and more performance, In these recent tranches, the government has created a quota so that every bank can only originate, so to say, its marginal market share. So assuming so in the new loans, we will have probably a market share that will be our natural market share. But of course, the average between our natural market share and twice our market share will be higher than our market share. So we expect at the end of this process to I mean, to have it depends on how much new loans there will be, but at least 50% above our natural market share. In terms of Stage 2 loans, in terms of Stage 2 loans, let me just here check. Basically, Stage 2 loans in the context of were basically stable vis a vis much, okay, at around EUR 5,800,000,000, even a small reduction, okay, from March to June, a very small reduction in Portugal. Thank you very much. By the way, in consolidated terms, it's always it's also basically the same at EUR 6,900,000,000 in March June. We have a follow-up question coming from the line of Jacob Leifer from RBC. Please go ahead with your question, sir. Hi there. Sorry, I didn't avail. I didn't ask the question before. So on the question is on the moratoria once again. A few things. Number 1, Eurex is saying that and please do help me understand if I'm actually getting something wrong. But you're saying that your exposure to high risk COVID sectors is about SEK 2,600,000,000. At the same time, it seems like you have about SEK4.7 billion in public company loans under moratoria at the moment. So I just wanted to get a little bit of a dynamic there. Why these companies need the moratoria? Is it precautionary? What's the dynamics that you're seeing there? And again, I mean, I understand your justification there for the mortgages and so consumer loans that you have collateral. But as a note, it does seem high because I mean together on aggregate, it looks like there's a 25% of loans that are under some sort of moratoria, which so far based on the banks have reported up to now, it seems like a sizable figure. Okay. Thank you for your question. I think first, in terms of the loan book, it is important to distinguish the individual banking from the corporate banking. And as I was commenting, in the individual banking, as you see in our Page 42, I mean, mortgage is more than 92% of the volume. And in mortgage, the moratorium, I would say, is very diluted over time because effectively, you basically convert a 25 year loan or a 30 year loan and in the 30 year loan plus 6 months. So I would say this I mean, we'll almost surely not pose any type of problem in terms of the aggregate. And if you see what happened to mortgages in the last crisis in Portugal, that was much tougher than this crisis, with the unemployment going up to 16%, unless we think there will be a total catastrophe with one virus after the other for the next years, which we will have another type of problem, I would not I mean, be too much worried about it. In terms of companies, I would say there is a little bit of everything. I mean, the companies don't lose anything by asking the monetoria. So they do not get marked as NPEs. They do not get marked at a central bank. They do not pay any special moratorium fees. So in the context of uncertainty, I mean, a prudent company would typically ask for a moratorium because they do not have anything to lose, Basically, I think this is the main question. So there are a lot of prudent companies that ask the moratorium for, as you say, precautionary reasons. Then we have to look at I mean, let's not be, I would say, naive. Of course, there are also some companies that are in distress that ask for the monetary, not necessarily. This is probably not the explanatory factor. But of course, if everybody asks also the companies that are in distress or that could be in distress, we would ask for the monetoria, mainly because also the criteria for the risks with state guarantee have to be, of course, stringent criteria because this is new money. So we don't even having 10% to 20% only 10% to 20% at risk. It has to be new money. So we have to do it very prudently, and we do it. And the total size of, of course, of the guaranteed package is also not that large when you take a look at the whole economy. So what we try to look at is the number of the moratorium. This number is EUR 4,700,000,000. And trying to give you some information, we cannot go too much in detail due to regulatory reasons. What we can tell you is that of this EUR 4,700,000,000, around onethree is in the higher risk segments, okay? So around EUR 1,600,000,000 in the higher risk segments. Having said that, not all the companies in higher risk segments, I mean, are potentially bad loans. So we try to give you here some highlights in terms of this onethree, where are the areas where we are less guaranteed, where the collateral, I mean, is not high enough, I mean, to give us comfort. And just as a rough sum, taking the collaterals or the loans that are either uncollateralized or with an LTV above 80%, we see that of this onethree, onethree have an LTV around above 80%. So basically, what we are speaking is about EUR 500,000,000 to EUR 600,000,000. So this is the number that we think could in the next based on the information that we have right now, could be entries from these high risk segments in terms of NPEs. Of course, in the meantime, we will have some decreases of NPEs also as we have been showing in the past. So that this is the reason why we said that we expect our NPEs in the next quarters to be broadly constant, okay? Okay. Thank you. We have a question coming from the line of Gabor Khinani from Autonomous. I have a few follow-up questions on asset quality, please. First one is on the debt moratoria. Have you assigned any provisions so far to the debt under moratoria in the sensitive sectors at all? And if you will, at what stage would you consider doing so, in Q3 or Q4 perhaps? 2nd question is on the restructuring exposure. As I understand, you would only do further impairments if the tourism sector doesn't recover by next summer. So does it mean that you are not expecting impairments on the restructuring funds in the next 2 to 3 quarters? And finally, can you remind us what drove the reversal in the other asset impairments in Portugal? Thank you. Okay. So let us so we have created based on IFRS 9 that has to with the scenario analysis and with the macroeconomic scenario impact on the different clients that we have. For our Stage 1 and Stage 2 clients and the clients in Monitoria are typically not Stage 3 because clients that are already with 90 days past due, they typically cannot access to the Monetolia. So we have created, I would say, a provision of around EUR 70,000,000 that has to do with Stage 1 and Stage 2 clients, including the clients in Muratorio. So we have not segregated specifically the clients in Muratoria for any specific purpose, but they are also part of our generic provision of Stage 1 and Stage 2. Of course, as the situation evolves, we will assess the credit risk of the clients. And if some clients increase their risk and go from Stage 1 to Stage 2, for instance, give an example. Of course, this will increase the cost of risk. And of course, this will be one of the key drivers for our cost of risk in the next quarters. That's why I have already commented that our natural cost of risk in a steady state will be below 50 basis points. And what I was saying a couple of minutes ago was that in this scenario for this year and the next, what we expect is a cost of risk between EUR 90,000,000 EUR 120,000,000,000 and EUR 120,000,000,000, and this reflects exactly this movement of clients that deteriorate their risk because, I mean, they have less cash flow or they have more debt visavis their capital generation, okay? So this is the first issue that I would like to here to highlight. The second issue here that I would like to highlight is regarding the fresh. The resection funds are not managed by us. So they are market funds. They are supervised by the Portuguese SEC, by the Portuguese CMVM. They are independently managed, and their valuation is oversight or overseen by the Portuguese regulatory authorities. And basically, what we do is that we register in our accounts the value that is of the mark to market of the funds, okay? So this is just I think it's important to tell that. These are funds listed in Portugal and Luxembourg, And that's what we do. So this is and this is a very transparent way of looking at this. As far as we know, this evaluation that was given to us was based on the assumption of a degradation of the tourism this year, but the recovery for the summer of next year. We were told that. So we did not perform the valuation ourselves, but we were told that. In the next quarters, the asset management companies will do their assessment and will have their own views and change or not their views in terms of what will be the tourism sector development going forward. And of course, if they by December suddenly see that we have the tourism in normality. Before March, there will be probably a positive sign. If they say that we will lose, if they somewhat see that we will lose or if they expect that we will lose the next summer, this will have another impact. So we here are more recipients of information than anything else. In terms of the other results, now this is basically the I understand the other income the positive impact of the other income. As you know, we have a 49% participation in ARIES, ARIES Portugal, in an insurance company. And what this is, this is the impact of their net income this year that was positively influenced by liability adequacy test that was particularly positive this year when you compare with last year. We have a question coming from the line of Carlos Peixoto from Caixa Bank. Please go ahead with your question. Hello. Good morning. A couple of follow-up questions on my side, I would say. Basically, if I understood correctly, you expect 3Q and 4Q NII to spend EUR60 1,000,000 above 2nd Q solely on the account of the TLTRO effect. Shouldn't would there be any positive effect from volumes or the moving parts to complement here? At the same time, on the cost side, you mentioned that second half cost being aligned with first half. My question is whether that includes the specific items, the EUR 13.2 million, if I'm not mistaken, EUR 1,000,000 that were booked in the first half? Or should we exclude that from day to day equation? Finally, on moratoria and well, basically on the COVID-nineteen impacts on provisions and moratorium and so on. Basically, if you could shed some light on in terms of the way that the mechanics that's on the model translates into provisions or whether basically what type of expectations you have in terms of GDP embedded in the model right now? And what could be the sensitivity to a 100 basis points additional drop in Portuguese GDP this year? Thank you. Okay. In terms of the next quarters, you're right, there will be a lot of effects, a positive volume effect. It is truly there will be a positive volume effect. These state guaranteed loans also had a lower spread than our normal margin. So they are typically at 125%, 130%, where our normal margin in companies is twice as much. So this is something that based on our best guess right now, there may be some movements, but there will be relatively immaterial when you compare them with the EUR 50,000,000. So there will be a positive volume effect. There will be a negative margin effect on the asset side. So I mean but we expect them to broadly there will be a negative effect from the recognition and from the additional impairments. Once we impair more, I mean, the amount of margin that we recognize is lower. So we expect these movements broadly to cancel each other. In terms of costs, I mean, right now, what we have announced actually, Ignacio had asked the question and I was not totally clear on this. Right now, what we have announced is that a further tougher, I would say, cost cutting in terms of people will not occur this year. So we are not expecting any major restructuring this year. But it is possible that we do this by next year. But this will be properly announced, and we will probably show to you what will be the investment and the payoff. And of course, if we decide to move to go forward with such an initiative, it will be something that will be strongly in the shareholders' interest, okay? So but up until now, we do not have any program of this sort approved, okay? In terms of the how does the impairments, how does the scenarios work? As we have here explained last time, we have models, as you would expect, that based on which we do our impairments, we will calculate our impairments. And in terms of these models, we typically have a central scenario, and then we have an optimistic scenario and a downside scenario, okay? So our models in the central scenario that we associate a probability of around 60%, assume a GDP decrease in Portugal of minus 9.5 percent with an increase next year of around 5%. So our models are based on this scenario. And based on the downside scenario, I would say, to which we associate a probability of 30%, is a GDP decrease in 2020 of around 13%, with an improvement of around 6% next year. So to the central scenario associated with the of 30%, to the downside scenario associated with the probability of 30%. This is the assumption 60%, 60%, This is the base of our models, and it is with these numbers that we reached the EUR 70,000,000 provisions. We did a sensitivity analysis this morning based on the scenarios that the ECB showed and communicated to the market yesterday whether this would materially change our IFRS 9 provision, and it does not. So our scenarios are broadly in line with the scenarios that the ECB has communicated to the market, and the scenarios of ECB would not change this IFRS 9 provision. We have a question coming from the line of Hugo Cruz from KBW. Please go ahead with your question. Hi, thank you. I just ask around guidance for your tax rate for the rest of the year? It's been very volatile. So any guidance would be much appreciated. I think it is the way we do it, there is some volatility interquarter, I would say, in terms of tax, right? Because this has to do for instance, in this quarter, we had or we already have contributions that are not tax deductible, just to give you an idea. In the tax rate of this specific quarter, where we have parts that are not tax deductible, we tend to of course, our tax rate is higher than anything else. So the tax rate is best if you take a look at it from a full year perspective. And based on a full year perspective, I would say the normal tax rate in Portugal is 30%. There are some costs that are not tax deductible. So for the tax rate in Portugal, I would assume values between 30% 34%, depending on what is tax deductible and what is not tax deductible. But it's on a full year basis, you may have we do have and we will continue to have some volatility in the quarter based on the quarters in which we receive income that is not taxable, such as dividends or costs that are not deductible, such as contributions. We have a question coming from the line of Maxim Machine from GB Capital Markets. Please go ahead with your question. Hello, good afternoon. I hope you are all well. Thank you for taking my questions. I have a couple. So first, I might have me, but could you please explain the increase in risk weighted assets in the Q2? In fact, I've noticed that they increased by 1.4% and I believe most of growth in loan book came from corporate loans with state guarantees. And also if you could quantify the impact of the SME support sector, that will be helpful. And then I would also kindly ask you to provide more color on the impact of the regulatory government measures that will limit some of the fees that you expect on your fee revenue? Thank you. In terms of your first question, actually, this was one of the first questions that was asked here in the beginning of the Q and A session. As I was commenting, there were a couple of nonrecurring factors influencing our capital ratio. The growth of 16 basis points in our capital ratio is basically explained by our organic capital generation. I commented that both the SME support factor and the software issues are not particularly relevant for us. And the RWA is an increase that has to do with the market risk factor that is a one off this time. So it is not particularly relevant also. So I think over the longer term, what is important is the organic capital generation. In terms of the government measures, of course, it's always rare to have the government interfering in fees and commissions. So but to be fair, when you compare with what is happening in other countries, I mean, this is not particularly high. What is here particularly rare is the precedent. There are here 2 types of measures, one that received a lot of attention that has to do with a national payment scheme called MBY that people like a lot and that banks were charging somewhat. And this gained a lot of, I would say, public interest. And in our case, this has an impact that is around EUR 500,000 per year, so it's not particularly relevant. In other cases, we are speaking about mortgage payment processing and mortgage payment fees. And the government, the way it did, is applicable only to the new business, not to the book. Of course, if it is applicable to the new business, we can compensate it, of course, with higher spreads. So because it does not affect the back book, it will only affect the new book. This was a part of the business model of our mortgages. We knew that we would charge the spread and we charge a mortgage processing fee. If we do not charge this mortgage processing fee for the same economic income, of course, we would, of course, try to find other ways of getting our appropriate return on capital. In any case, if we do not if for competitive reasons, we are not able to increase the fee in this amount of the increase other fees or the spread. In this amount, we are speaking about impacts that would be around EUR 2,500,000 per year. So nothing particularly relevant. Of course, it's I mean, everything helps, but I would say it's nothing particularly relevant in terms of our business model. Thank you very much. We have a question coming from the line of Sophie Detannon from JPMorgan. Here is Sophie again from JPMorgan. Just a very quick question. On the FX mortgage provisions in Poland, how should we think about these going forward? Okay. This is a difficult question because if I were to decide alone right now in terms of the FX mortgage risk, I would say this is a nonquantifiable risk that should not merit based on the information that we have right now, a provision but should only merit a note in the accounts explaining the risk because effectively, up to now, we have not lost in final terms one single case. So and effectively, in second instance, what we have right now, even since October of last year, in second instance, so not final, we have won one case and lost one the other case. So hardly statistical material to develop a provision. But in any case, the way we should look at it is the following. I mean, if all the market is doing a provision, we cannot be the only ones I mean, not doing a provision because there are always comparative analysis. There is always, I mean, a sensitivity of the supervisors and the auditors to a situation in which everybody is doing a provision. So I would say the best guidance that I can give you in terms of this provision is that we will do something aligned with what the market is doing because this is effectively, I would say, our constraining factor right now. Having said that, the situation in which we are right now is a situation in which there are some headwinds. There are, of course, since the decision of the European Court of Justice, there are, of course, some signs that these could ever because there are some other questions in the European Court of Justice in the case of Santander and in another case of Raiffeisen that if they are answered in a way that is we think that is fair and that is fair, I would say. This might revert, I would say, the more recent headwinds. We don't know whether this will happen or not. But right now, we are with headwinds. There will be new questions in the European Court of there are already new questions in European Court of Justice in other cases over the banks. These headwinds may turn into tailwinds. I would expect the market, while we are having such type of headwinds, to continue to provide more or less the same level that we are having in the last quarters. This is what I would expect the market to do. And if the market does so, we will also do it most probably in spite of the fact that the cases are different and so on. But most probably, if the market continues this way, we would also to continue this way. If the winds turn, of course, we will adjust our provisioning strategy to this new direction in terms of decisions of the courts. But I think it's very important. We are doing something very much because we cannot be the only ones being right, and we do not have statistical material for our own model. So this is basically we have 2 cases, 1 we won, 1 we lost since in second instance. What additionally, what we can tell you is that, of course, you are the analysts, and do you know much better than I do how to do valuations and how to do valuations for market purposes. But this is already reflected, I would say, in the market price or probably even over reflected in the market price of our bank in Poland. So I would strongly suggest you to do some of the parts and to analyze our bank in Poland based on the value that our bank in Poland has in the market and then to see what is left for the remaining part of the group and to compare it with our pre provision profit generation because, of course, there is a challenge in Poland, but this challenge is already reflected in the price of the bank in Poland. I will now notice that there is no more questions. I'm going to hand over to Mr. Miguel de Brangaza. Please go ahead, sir. Okay. We really appreciate your interest and commitment and effort in analyzing our equity story and our investments proposition. We feel genuinely optimistic about the long term prospects of BCP and about the shareholder value creation strategy that we have. And we strongly think that investors that are able to stick with us in this time will benefit from the shareholder value generation. But this will not be possible without your effort, without your communication, without your engagement in explaining exactly what and how we work and how we accrue value to our shareholders. Thank you very much. Ladies and gentlemen, thank you for your participation today. This concludes today's conference. You may now disconnect your lines. Thank you.