Good morning, everyone. Welcome to our 2022 Annual Results Presentation. I'm gonna give a short presentation on the significant, and it has been significant, progress that the bank has made in 2022, and then our CFO Nicola O'Brien will provide a more detailed review of our financial performance. After that, Nicola and I will be happy to take questions. Let's move to the business performance. You'll see that it's been strong strategy execution, delivering what we call record results. During the year, we've welcomed over 200,000 new customers, and we've expanded our branch network to 25 new communities nationwide.
By the end of 2022, we are now serving over 1.2 million customers with our customer base larger and indeed much more active than it has been before, which, again, is another important factor. Our mortgage book has increased 40% since December of 2021. That's benefited from the migration of the Ulster Bank assets on organic growth as new lending volumes offset repayments and redemptions. The transaction with Ulster Bank will give us valuable opportunities to serve more Retail and SME customers, and it will make us better equipped to target new markets where there is considerable scope for Permanent TSB to scale up its presence significantly through 2023. Our mortgage market share has increased to 18.5%.
Mortgages are a core product of our business, and I'm pleased that we continue to play a significant role in helping customers attain new homes. The bank has achieved an Underlying Profit of EUR 45 million, and that's an increase of 165% year-on-year. Although the economic outlook is uncertain as we begin 2023, we face into it with confidence. That's not only confidence in the bank and colleagues, but also in the Irish economy, which has proven its resilience in recent years. Net interest income was EUR 362 million in 2022, and that's 16% higher year-on-year, and that's benefited primarily from a larger loan book, the changing interest rate environment, and the migration of the Ulster Bank assets in November.
The Exit Net Interest Margin for 2022 was 1.54%, that's a three basis points increase on the last year. That's despite the cost of holding excess liquidity in H1. What's most important here is our Q4 NIM was a very strong 1.92%, that's an increase of 37 basis points year-on-year. It more accurately reflects the upward trajectory, which we will see in 2023 and beyond. The opening of 120,000 new current accounts and increased transaction activity has also supported a 20% increase in fee and commissions income year-on-year. If you look at operating expenses, excluding exceptional and other non-recurring costs, they came in at EUR 344 million, which is 16% higher than the prior period.
The bank continues to maintain a tight control over the administration cost base. However, in 2022, we've accelerated our planned investment in technology, driving higher investment costs together with a rising depreciation charge as we pay for the investment in the business. Operating expenses will continue to be subject to inflationary pressures as we move forward, and Nicola will get into more detail later on. The most key part of our results this year is the exceptional gain of EUR 222 million, and that's primarily driven by the Ulster Bank transaction and the net of provisioning and transaction costs. It has supported a Profit Before Tax of EUR 267 million. Asset quality continues to improve and is reflected in the reduction of our NPE ratio to 3.3%.
It's only five years ago that that was 28%, so significant move in that respect. If you take it in nominal terms, they've reduced to EUR 667 million and are 18% lower than December 2021. That impairment release of EUR 20 million is reflective of the continued growth in HPI during the year, while also remaining conservative as we assess the impacts of the rising cost of living challenges on customers. All capital ratios remain above management and regulatory minimum, with the common tier equity ratio on a fully loaded basis at 15.2%. Even after a 40% increase in our balance sheet, that has increased by 10 basis points. We have to remember that we didn't ask our existing shareholders for any additional capital to support that growth.
In October 2022, we also completed a successful EUR 250 million AT1 issuance, which was 2.5 times oversubscribed and was issued at that time to support the migration of the mortgage assets which happened in most of our mortgage assets which happened in early November. We'll just move on to the macro outlook. House price growth has been a feature of the Irish housing market over the last several years. However, higher interest rates and lower household income as a result of the cost of living challenge is expected to curb growth in 2023. Housing commencements were lower in 2022, and therefore completions were expected to reduce across 2022 and 2023. This should offset any reduction in demand due to the changing interest rate environment. We still see a supportive environment for house prices.
Consumer price in 2022, measured by the Harmonised Index of Consumer Prices, recorded headline inflation peaking in 2022. Several successive ECB interest rate rises over the last eight months are expected to begin to have desired impact, with the HICP estimated to reduce to 5% by 2023. We know that the target continues from the ECB to be around the 2% level. The labor market continues to expand, with the current labor force now reaching an all-time high of 2.58 million employees in the economy. The employment rate, the rate itself reducing to 4.3% in 2022, and a slight increase in 2023, up to 4.6%. There's a lot of significant job creation in the market, and also we see inward migration in that respect as well.
The mortgage market itself saw a year-over-year growth of 34% to EUR 14.1 billion, as a switch, a portion of the market experienced significant increases as customers sought certainty in light of the changing interest rate environment. It is expected that this will still be a factor in 2023, but to a lesser degree. Therefore, we're forecasting the growth at 3% to EUR 14.5 billion of a market. Mortgage approvals have continued to grow by EUR 2.5 billion to EUR 15.9 billion in 2022, with a surge in remortgage and top-up approvals as low levels of supply affect the levels of house purchases.
The market itself is quite important. We look back over a number of years, we would not have been forecasting a EUR 14.1 billion market for 2022 and indeed a EUR 14.5 billion market for 2023. It's been very, the growth has been very attractive in that sense. Can we just move on to our strategy? This is our strategy on the page. You know, we review it on an annual basis, it's key by way of our supporting our ambitions as an organization. Our purpose is to work hard every day to build trust with customers, that we say that we're a community that serves the community.
We highlight this by not only investing in the 25 branches that we've taken on, but also on a daily basis throughout the organization, trying to link with customers and ensure that we're meeting their needs, whether it's new products or the service they receive with regard to existing products. Our ambition is to be Ireland's best personal and small business bank. We've made great strides this year in our business lending. It's up 50%, and we've further ambition in that respect, and I'll talk about the impact of the Ulster Bank deal on that in due course. If you think about what we're trying to build our strategy on, it's on strong foundations that have been laid in recent years. If we look at going forward, where are our three key strategic areas?
Well, it's in customer journeys and experience, and particularly in that area of customer experience. It's in our in continued investment in digital platforms and how we ensure that customers have an option to go digitally or to walk into a branch, and that's seamless. That digital experience is where it should be. It's around ensuring that we're with proper cybersecurity measures and indeed that our operating platform is resilient and can work 24/7 in that respect. Lastly, around data. We know how important data is in this current world. It's ensuring that we maintain historic data, we report properly, but also we can use it for insightful customer interaction in that respect. If I look at the how we are going to achieve the ambition, it's going to be focused on four key areas.
I mentioned the connected customer experience. This is around having customers at the heart of our decision-making, they're at the heart of our business. It's about feedback, complaints, reacting, continuous improvement in that respect. We are serious about that customer experience and ensuring that we can do the best we can in that space. It's around a cultural evolution, which is around setting, new cultural and reputational standards for banking in general, but also celebrating diversity and inclusion and the basis of which we can, we can not only benefit financially and from a business point of view from that, but also improve our culture in that regard. I mentioned already about having secure and resilient foundations around us investing and ensuring that we've robust and resilient operating platforms and an environment which protects our customers and colleagues.
Lastly, in its broader sense, sustainable business growth, which this is around us using data and analytics to ensure that we can build external partnerships, we can build a product set for customers, we can make a return on that, and indeed, we can support customers in their transition to lowering CO2 emissions in that respect. These are the four pillars in which we'll move forward and priorities which we'll move forward as an organization. I believe they will result in a very strong organization going forward. We'll talk about forecasts, et cetera, as we get into the presentation later on. Let me just talk about the Ulster Bank transaction. We started the Ulster Bank transaction at the start of 2021.
We just signed the agreement. We had to face into then how we were going to migrate mortgage branches, SME customers, new current accounts for new customers and also plan for the Lombard Asset Finance transfer. What I can say is that we're in extremely good shape. In November, we closed the transaction with a EUR 5.2 billion migration of mortgage assets. By the way, I think that's the largest integration that ever happened in Ireland to date. There may be larger ones in due course. That was the largest one to date. It happened successfully. We closed and opened 25 branch locations in a 2-week period over January. They're up and running. They're branded as Permanent TSB.
The staff with Permanent TSB staff and all the systems, et cetera, work, ATMs, all that stuff. In February, we migrated EUR 165 million of the micro SME book. That was 3,200 new customer relationships. Indeed, when you look at that wider, that's borrowing relationships, but there's a wider customer in-interaction there in that book as well. And that migrated successfully in February. To date, we have taken on and transferred around 280 Ulster Bank staff, and the remaining staff will transfer with the Lombard Asset Finance business in quarter two.
That Lombard Asset Finance business is really important to us because it will allow us then enter directly the leasing and hire purchase market, which is important from a business customer point of view. Overall, the transaction to date has delivered exactly what we would said it would, and the numbers today show us that they've come through as we planned. We're absolutely delighted with the colleagues, the ex-Ulster Bank colleagues who've joined us and, you know, really, really delighted in how they've commenced their own career with Permanent TSB. It's been fantastic. Let me move on to the just the balance sheet aspect of where we are. If you look at slide six, you'll see that new customer lending was EUR 2.8 billion in 2022.
That's double what it was in 2020. I appreciate there was a COVID impact in that year, but still it's doubled by way of its size and scale, and it's up 40% year-on-year with a compound annual growth rate of 26%. Really strong in that regard. If you look at our mortgage market share, it's increased to 18.5%. While the mortgage market itself grew by 34%, we grew our book by 40%. If you actually pare that down, our growth in our market share in quarter four alone was 22% of the market. There was momentum through the whole year into the end of 2022, and we're seeing that momentum carrying into the early part of this year as well.
SME lending, we lent EUR 150 million in, at the end of 2022. You can see that's 3x what we would have done in 2020, and it's 50% up year-on-year. The key success here will be the loan to Asset Finance business. I mentioned that already. Also we are providing a competitive competition in this market where we believe there is a need for indeed, more competition in that respect and a space for Permanent TSB in SME lending. In Personal Lending, it was up 3% year-on-year. Our credit card and overdraft balances were up 10%, and we're seeing further growth in Personal Lending as we move along in that space. If I just turn to the next slide, which is slide seven.
As I mentioned, our core here, our core purpose is around building trust and loyalty with our customers. That's what we wake up every day to do, and why we come to work, it's to actually build that trust level, which is demonstrated in lots of different ways. It's demonstrated through our NPS score. You can see it's at +10 there, but we have ambitions in that space. New current account and the accounts up 477%. New to bank mortgage customers up 1%. That excludes all the Ulster Bank customers. If you included them, it'd be substantial. Our digital activity is up 20%. Our active digital customers are up 20%. Payments up 13%.
In fact, if you look back to 2020, those numbers are up in the region of 40%-50%. When I talk about having a resilient platform, it's all about being able to serve and support existing day-to-day banking customers, but also have a bank that can attract more, and that's what we're all about. If you look at the top right, our total customer numbers are up over 1.2 million now, up 9%. We've ambitions to go even further. Our current account numbers are 870,000, of which 78% of those are active through our digital channels.
As I mentioned, we'll be bringing a new digital app, a new front end to the market in before the half year, and that will support that digital customer interaction and activity by delivering more journeys. We also have a very successful partnership with SBCI. We've total funding of EUR 82 million, of which EUR 72 million is lent. We will also enter into future schemes that the SBCI will bring. Our First Home Scheme, well, we're approximately EUR 3 million in approvals, of which EUR 1 million has been drawn. If you look at one of our key developments for us during the year is around our proud sponsorship of Team Ireland for the Olympics and Paralympics in 2024 in Paris.
We are really looking forward to supporting both teams as they compete against the world in next year in that respect. If I just move forward to how we're transforming the organization. As I mentioned, it's around building a sustainable future for the bank. Anyone who's traveled the journey with us over recent years, I think this year really shows what is a sustainable future for our bank by way of its size, scale, profitability, and its positioning in the market. If you look at the things we've delivered on digital capability, our new single digital current account, 50% of customers opened their account digitally.
We're the only bank in the market that has a joint current account digital offering today, which we brought to the market in November. If you have an account jointly, you can open an account digitally with us. We're the only ones in the market. Actually, Revolut don't have that either. Just to mention that. Term lending applications, 94% completed digitally. We had the moving bank online hub, which we introduced in Q2 of 2022. We had the SME digital current account application process, which simplified how SMEs interact with the bank. We hear lots of noise around that AML journey, et cetera, we simplified that. Whether you're a limited company, a partnership, or another type of SME organization, we actually simplified that.
As I mentioned, the digital joint current account was launched in quarter four. We also have a very successful digital mortgage application journey. In fact, last year up to 5% of our mortgages were completed digitally end to end without branch interaction or broker interaction. That is only going to increase as we move forward. If we look at our operational excellence, we've taken out paper statements, we've been growing our robotic processes. Really now, with the Ulster Bank transaction now kind of settled, we'll be going back really at more robotic process automation to try and do more in that space. This form of switching process we've improved, and that's on the basis you can see the amount of accounts we've opened and opened them, we believe seamlessly.
We've taken out the paper and current account applications through the digital account and indeed through the CreditLogic digital journey for a mortgage. We've taken out 250 pages of paper by way of that online journey, and it's about how we spread that online journey out through our branches and out into wider society. What are we planning? We launched already a new online banking desktop. We're bringing a new banking platform or app in the second quarter. That will allow us to have 68 digital customer journeys on that, on that app in due course. It will also allow us to develop more and more customer journeys on that app and indeed improve that customer experience. By the way, branches and technology. Branches are a key part of how we offer our service.
They're a key part of who we are. We now have 98 branches across the country, with 25 new branches opened in key locations. We're also investing in branches by way of new kiosks. I mentioned, bringing the online mortgage application journey to the branch as well, and also developing customer web chat. These are all activities that we've done and what we're planning to build more sustainability from that point of view, but from a profitable point of view, but also from a CO2 and transition point of view. If I talk about just how we think about ESG, we launched a Green Mortgage product last year, with EUR 500 million in Green Mortgage lending. That's up 20%.
In fact, before we launched it, we had a number of customers who fitted into the, their category as well. Our lending was higher than EUR 500 million, but for the purposes of how we think about that Green Mortgage lending product, it's half a billion. We're the first bank to disclose our carbon footprint by way of Scope 1, 2, and 3. It's in our numbers today. No one has done that yet. Now we'll move forward with regard to setting scientific targets around how we can reduce that. We have developed a sustainable supplier charter with no doubt, like lots of businesses, there's more to do in that space. We're also a founding member of the International Sustainable Finance Centre of Excellence. That's on the environmental side.
On the social side, our recent employee Voice Can survey, our culture index was 80%. It's 10 basis points over the benchmark. The target, if you were looking at a target, you'd be looking at a 70%, but we're ahead of that. We've also contributed EUR 600,000 to community organizations during 2022. It's probably one of the most pleasurable parts of my job when I do that. It's great, we will continue that into 2023. Our board gender composition is 42%. Our senior leadership gender composition is 38%, and that's up from 28% in the last three years. Our ambition in both of these spaces is to have gender balance in the organization at 50/50 level in 2025.
Lastly, we've been for the last three years in this space, we've been announcing our gender pay gap at 16.5%. It has reduced by 1% since H1, we will continue to work in that respect. On Friday last, the CIPD Award was the Inclusion and Diversity Award for a large business in Ireland. If I look at governance and disclosure, we're proud to say today that Sustainalytics has awarded us and given us a rating, a low ESG rating. We're very, very pleased with that rating. Naturally, we will now be engaging fully with Sustainalytics over the coming years around how we manage that rating.
That's a key step for us together with the disclosure of Scope 1, 2, and 3 emissions today. We have a board approved sustainability strategy, which is quite broad. Naturally, the green transition is part of that, but there's other aspects of social inclusion and indeed how we play into the Irish business market is in there. We are a signatory to the Task Force on Climate-related Financial Disclosures. We will be reporting those disclosures in the first half of this year. They're not disclosed today, but we will be bringing those. We also have a CDP rating of C, and that's indication and awareness level of engagement in this space.
You know, today, around our green proposition, around CO2 transition, I should say, we are laying down sort of the red line by way of what our emissions are, where we are with Sustainalytics, where are we on CDP, and we'll come with our TCFD in the first half of this year. It's really us laying out our position on how we can work from that by way of ensuring that we, as a bank, play a large part in the transition that the Irish economy has to go through. Indeed, we see it as a business opportunity with the bank.
We're both positioned, particularly when we think about all our mortgage customers who need to either upgrade or retrofit their house in due course. We believe this is a significant business, but also a social benefit for us and for wider society. I'm gonna pass over to Nicola now to bring us through the financial performance, and then I'll come back on the medium-term outlook. Thank you very much.
Thank you, Eamonn. Good morning, everyone. I'm delighted to present the bank's 2022 financial results, my first since taking up the role as Chief Financial Officer this year. Looking at the income statement, as Eamonn mentioned, this has been a transformative year for the bank. I'm pleased to report that we have posted the highest level of profitability since before the global financial crisis.
Our reported Profit Before Tax of EUR 267 million is EUR 288 million higher than full year 2021, largely driven by the accounting gains associated with the Ulster Bank transaction. In November 2022, the bank purchased Retail and SME businesses at a discount to their fair value, thereby adding a gain on the bargain purchase of EUR 362 million, which is being recognized in CET1 own funds. Our Underlying Profit has increased by 165% to EUR 45 million as a result of higher total operating income and impairment release through the P&L, partially offset by higher operating expenses. Overall, total operating income has increased by 13% year-on-year to EUR 409 million.
This increase is supported by a growing loan book, plus the initial impact of the interest rate rises and the migration of EUR 5.2 billion of residential mortgages from Ulster Bank in quarter four. The foundations are in place for further growth as we realize the impact of a full year of the larger customer base. We're encouraged by the extent of the opportunity that we see in the Irish retail banking market. Underlying operating expenses have increased by 16% or EUR 49 million and are in line with management's expectations. Regulatory charges have increased by EUR 1 million to EUR 51 million, up 2% year-on-year as we pay higher fees on the back of increasing deposit balances. We've recorded a P&L impairment release of EUR 31 million, reflecting continuous growth in the house price index whilst maintaining a prudent level of provisions given the high inflationary environment.
The overall net impairment release is EUR 20 million following capital deduction of EUR 11 million in relation to the NPL calendar provisioning. Exceptional items show a gain of EUR 222 million, EUR 260 million higher than prior year as a result of the net EUR 239 million gain relating to the NatWest Ulster Bank transaction, which includes the gain on bargain purchase of EUR 362 million, transaction costs of EUR 74 million, and a day one expected credit loss of EUR 30 million on the EUR 5.2 billion of assets migrated. There are circa EUR 19 million of other provisions. Total operating income has grown 13% year-on-year. Net interest income increased 16% to EUR 362 million.
This increase was driven by the two months of interest income on the migrated assets from Ulster Bank, net organic growth of the existing PTSB performing loan book, which grew 7% year-on-year, and interest rate repricing on lending and treasury assets, partially offset by higher wholesale funding costs. Net interest margin of 1.54% increased from 1.51% in the prior year, with the quarter four NIM of 1.92% more accurately reflecting the net interest income increases materializing. The total yield on assets was 1.71%, 8 basis points higher year-on-year. This increase in total asset yield is primarily due to the interest rate rises on the tracker portfolio, partially offset by higher wholesale funding costs. The bank is disclosing an interest rate sensitivity analysis to assess the potential impact changes in interest rates can have on net interest income.
Assuming a starting ECB refinance rate of 3% and a deposit rate of 2.5%, a 100 basis points increase would result in higher interest income of EUR 50 million. A 50 basis points increase would result in higher interest income of EUR 25 million. A 100 basis points decrease would result in lower interest income of EUR 53 million. These sensitivities should not be considered as a forecast for future performance. They do give a good indication of how the bank is leveraged to the interest rate environment. We're pleased to report the positive performance in net fees and commissions, which is set to continue into 2023, with growing customer numbers increasing transactional banking incomes. Given the material growth expected in net interest income, the bank's ambition is to continue to grow fees and commission income to more than 10% of total income.
The total performing loan book is on a positive growth trajectory. Our total home loan performing book is EUR 18 billion at December 2022, EUR 13 billion of which relates to the bank's existing portfolios and EUR 5 billion relates to mortgages migrated from Ulster Bank in quarter four. The bank's performing home loan book has grown by 7%, a strong performance with new lending of EUR 2.6 billion, outpacing repayments and redemptions of EUR 1.8 billion. Tracker mortgages now make up 27% of the bank's home loan performing book, down from 35% in the prior year. Variable rate mortgages are now the smallest cohort of the performing home loan mortgage book. They reduced by 17% year-on-year as customers considered the rising interest rate environment. 26% of variable customers chose to fix with the bank at a lower fixed rate in 2022.
Fixed rate mortgages are now the bank's largest cohort of mortgages, accounting for 63%. The fixed book increased from 48% a year ago, reflecting the successful launch of the bank's 5-Year Fixed Rate Green Mortgage and the Four-Year Fixed Rate Only product, both of which have performed strongly since their launch. The switcher market, particularly in the second half of the year, increased significantly on the back of the rising interest rate environment. We saw customers choosing fixed rate products for rate certainty. When we look at the EUR 5 billion of performing mortgages that migrated from Ulster Bank, 88% are on fixed rates, with the remainder on variable rates.
The average yield on new mortgages is 2.56%, a reduction of 13 basis points year-on-year as the bank's Green Mortgage, which offers a discount of 20 basis points on the five-year product, and the four-year fixed rate only product were very popular with our customers. To date, the bank has increased interest rates by an average of 100 basis points across its fixed rate mortgage products, the full benefit of which will be recognized during 2023.
Aided by the automatic pass-through of ECB rate rises to tracker mortgage customers and the inclusion of the Ulster Bank assets, the yield on the performing home loan book has increased by 40 basis points year-on-year to 2.92%. Looking at the graph on the right, top right-hand side of the slide, we're very encouraged by the growth in the SME loan book, which Damian has mentioned earlier, having increased 59% year-on-year, with the pace of new lending exceeding outflows. New business has performed strongly with EUR 150 million of new lending, 53% higher year-on-year. The bank, as Damian said, had EUR 82 million loan funds available through the SBCI. EUR 72 million drawn down, with the remainder to draw down in 2023.
We're delighted that in February of this year, EUR 165 million of micro SME assets successfully migrated from Ulster Bank, and we expect to migrate the Lombard Asset Finance business, circa EUR 450 million, in quarter two of this year. These migrations, along with our new lending ambitions, should see the bank's SME loan book grow to circa EUR 1 billion this year as we deliver on our ambition to provide a meaningful alternative for business customers. Looking at costs. Underlying operating expenses of EUR 395 million have increased by EUR 50 million or 14% year-on-year. Of this, regulatory costs are 2% higher year-on-year at EUR 51 million, with higher deposit balances driving increase in fees.
Looking at the Cost-to-income ratio, taking the underlying operating expenses, costs before regulatory costs of EUR 344 million as a percentage of total operating income, gives a Cost-to-income ratio of 84%, two percentage points higher year-on-year. The 2023 outlook for the bank's Cost-to-income ratio is for it to reduce by 10-15 percentage points as the top line income grows and the bank maintains good cost discipline. If we look over to the right-hand side of the slide, we can see a cost walk showing the primary movers within the underlying operating expenses, which have increased from EUR 295 million in 2021 to EUR 344 million in 2022. Increased staff numbers, coupled with wage inflation, has resulted in a EUR 16 million increase in staff costs year-on-year.
The bank supported circa 2,900 staff, direct employees and contingency workers, with a cost of living support in December 2022 in the form of a EUR 1,000 voucher, which increased costs by EUR 3 million. We continued our planned investment in the digital banking program, maintaining our operational resilience and allowing us to enhance servicing of our existing and new customers' everyday banking needs in a more direct and efficient way. We're also investing in developing our accountability framework, developing our change function, and are delighted to be the main Team Ireland sponsor of the Olympic and Paralympic Games in 2024. Depreciation is in line with expectations, EUR 5 million higher than the equivalent period in 2021 as the bank pays for the investments made in prior years.
The bank will maintain investment spend as we move into 2023 and beyond, with particular focus on the expansion of digital customer journeys, customer payment options, cyber security enhancements, and operational resilience. Despite this significant investment, we anticipate a material reduction to the Cost-to-income ratio in full year 23, down below 70%, benefiting from the income growth previously mentioned. The positive trajectory will continue across the medium term as revenue growth, together with ongoing cost discipline in the context of inflationary pressure, will support a lower Cost-to-income ratio. As mentioned earlier, the bank has recognized a P&L impairment release of EUR 31 million for the year. However, the net impairment release is EUR 20 million, as we dropped the EUR 11 million from capital. Subject to the prevailing macroeconomic environment, the bank expects a cost of risk of not more than 10 basis points for full year 2023.
As you can see from the graph on the top right-hand side of the slide, provision stock reduced by EUR 83 million since year-end 2021, with closing provision stock of EUR 521 million. This reduction is largely driven by the reduction of provisions held in relation to legacy deleveraging transactions. ECR model results have also reduced year-on-year, reflecting improvement in asset quality. A EUR 7 million post-model adjustment increase has been included to reflect more uncertain macroeconomic outlook in light of inflationary pressure. A EUR 37 million day one ECL was added on the first tranche of Ulster Bank mortgage assets. The bank's closing provision stock of EUR 521 holds a conservative EUR 137 million post-model adjustment provision, which will ensure that the bank is adequately provided for in the event of any deterioration in asset quality.
The table on the bottom right-hand side of the slide shows the forecast macroeconomic projections for full year 2022 across the base, upside, and downside scenarios, which informed the IFRS 9 model run for the year-end. The bank has made significant progress with the non-performing loan book, reducing 20% or EUR 167 million since the prior year. The NPL Ratio is 3.3%, 2.2 percentage points lower than the prior year-end position. The asset quality improvement has been achieved through a net cure position, together with an increased growth loan balances as a result of the first tranche of Ulster Bank assets. You'll see from the table on the right-hand side of the slide, our total asset quality and level of provision coverage of 2.6% has reduced by 1.5% since full year 2021.
With a Stage 3 Expected Credit Loss of EUR 220 million on EUR 650 million of assets, we have an overall Stage 3 coverage ratio of 34%, which we believe is appropriate. The deposit franchise is performing very well, with current account balances increasing by EUR 1.9 billion or 26% in 2022, and retail deposits increasing by EUR 1 billion or 9% year-on-year. 93% of the bank's total funding is now driven by customer deposits, the bank's loan-to-deposit ratio has increased from 75% to 90% this year. Liquidity Coverage Ratio and Net Stable Funding Ratio have decreased from their position in 2022 due to the utilization of excess liquidity to fund the NatWest- Ulster Bank transaction. As you can see, the bank's key liquidity and funding ratios remain favorable to European Bank averages.
The bank successfully completed a EUR 300 million MTN issuance in June 2022 and a further EUR 250 million AT1 issuance in October 2022, which leaves the bank with an MREL ratio of 28.9% at December 2022. Both above management and regulatory requirements. The MREL target for January 1, 2024 has been set at 27.15%. The bank expects to issue circa EUR 1 billion of HoldCo Senior Debt during 2023 as we onboard the remaining Ulster Bank assets and take into account upcoming maturities and build management buffer. It is our intention to make an annual issuer of MREL eligible senior debt, given the projected risk-weighted assets growth from the enlarged balance sheet. Our regulatory capital ratios remain comfortably above the regulatory minimum requirements.
The CET1 ratio on a fully loaded basis is 15.2%, an increase of 10 basis points year-on-year. This movement is primarily driven by capital accretion from the Ulster Bank acquisition and the Glenbeigh IV loan disposal, offset by capital utilization from the net growth in the underlying loan book, ongoing investment in software assets, AT1 distribution and P&L payments. The management CET1 target on a fully loaded basis remains at circa 14%. To summarize, the bank has had a transformative year, which results showing a robust financial performance with a positive outlook. Profit Before Tax of EUR 267 million shows the net positive gain from the Ulster Bank transaction, which was capital accretive.
The Underlying Profit Before Tax of EUR 45 million increased 165% year-on-year, with Q4 2022 Net Interest Margin of 1.92%, showing the momentum building in net interest income, while the bank remains positively exposed to rising interest rates. Total new lending of EUR 2.8 billion, 40% higher year-on-year, with the mortgage market share of 18.5%. The bank has continued strength in its deposit base, with new current account and deposit account balances having increased by an additional EUR 2.9 billion in 2022 as we grow our loyal customer base and strengthen the franchise. While the bank's underlying cost-to-income ratio remains high at 84%, it's on a positive outlook, targeting a 10- percentage- point reduction in 2023.
The bank has completed a lot of work to assure the balance sheet over the last number of years, resulting in an NPL Ratio that has reduced to 3.3% while still protecting capital. The capital position, as I said, remains strong, with CET1 on a fully loaded basis, having grown 10 basis points while we grew risk-weighted assets by 26%. We actively manage our capital position and having assessed a range of scenarios, the CET1 ratio will remain well above the bank's minimum regulatory requirement. Looking forward, the bank's medium-term targets represent higher and more sustainable returns. I'll hand you back to Eamonn now to talk you through in more detail the outlook for 2023 and the medium-term outlook. Thank you.
Thanks, Nicola. Thanks for that. I'm going to talk, as Nicola mentioned, it's all about 2023 beyond. Just, you know, it's clear that we're coming into 23 with a different bank. I mean, we've migrated most of the EUR 6.7 billion of assets from Ulster Bank. We're growing our employee base to around 3,000. That's through welcoming 330 new Ulster Bank colleagues, of which 280 have already arrived and are already ingrained in the organization. We're extending our offering to business customers through Asset Finance and the Micro SME offer, increased our branch network. We're launching new and compelling customer journeys.
We're also, as I mentioned, we've set the levels now for our sustainability strategy on our green transition in that respect. Also we're very excited about activating the Olympic and Paralympic sponsorship for July and August 2024 in Paris. Very excited about that, and you'll see more about that during the year. If we look at the outlook, what we're saying is we expect total income to be around EUR 650 million. We expect the Cost-to-income ratio to be below 70%, as Nicola has mentioned.
We believe the cost of risk will be around 10 basis points, possibly less, but in around that level, an Underlying Profit of over EUR 160 million. That leads to an underlying ROE of around 7%. That's what we're positioning ourselves for 2023. All the pieces of the jigsaw are there with regard to achieving that. There's no what-ifs in that number in that respect. It's positioned. If you look at our medium-term outlook, we would have presented this last year, indeed it's approved, given the overall environment of where things are.
Just to pick on a couple of things there, you know, the cost income ratio in the 55% level, operating profit above EUR 300 million, that's inclusive of a cost of risk of 30 basis points. We will see how that obviously evolves over the coming years. Total income going up over EUR 800 million. All those pieces of the ingredients, we believe in 25 brings us to around 11%, ROE, and not too long after that to 13%. That's our ambition and our medium-term goal. We are, as I say, that's improved from last year. Just lastly, just the investment case. Why would you buy shares in Permanent TSB? Indeed, why would I hold my shares in Permanent TSB as a shareholder?
You know, really, as we've seen the market evolve, we're now in a very strong market position. We are a challenger bank in that respect, and indeed, our journey, from A to B, will be, I believe, stronger growth in that respect. We have a larger, and as I mentioned earlier, a much more active customer base, that's transacting more, that's interacting more in digital channels, and that is actually quite a positive move as well. There's ongoing transformation of the customer and colleague experience, and that's, you can see that coming through in our cultural scores. You can see that coming through by way of our customer experience, and indeed we've more to do in that respect.
We are continuing to invest in the business, but yet we can bring the Cost-to-income ratio to the level that's mentioned in 2025. Again, that's quite positive. By the way, as a business, over many years we've been investing in the business, to ensure that we're achieving the right outcomes in that respect. We're but much more balance sheet assured in that respect, in that we've strong capital with capital generation. We've strong funding and a much lower risk profile than we would've had a number of years ago. But, you know, 95% of our origination last year was in the mortgage space. Even if we roll that forward a couple of years, it will still be in the 90% zone.
You know that, you'd have to argue that that does represent a low-risk profile in that regard. The sustainability strategy has been set. We're on the road, and now we've strong foundations by way of executing that sustainability strategy. Overall, I believe we're well positioned for the targeted growth we're putting forward. I think it's absolutely reasonable that we should be saying that we can achieve an ROE in the range of 11%-13% at this moment, given what we can see in the environment. We can see by way of our strategic position and the marked sea change that the Ulster Bank transaction has brought to the bank across many, many areas. Thank you very much, and we'll be happy now to take some questions. Thank you.
Thank you. Thanks for the presentation, guys. It's John Cronin from Goodbody. Just a few. One, in relation to the 2023 total income guidance of EUR 650 million, what official rate assumptions are you incorporating there? Second one, another probably question for Nicola is, are any, anything you can say to us in terms of expected Exceptional Items to hit the P&L in 2023? How should we think about modeling that? You know, how does that break out maybe between day one ECL and other? I guess thirdly, one for you, Eamonn, I guess on the, if you're back to profitability, okay, it's the, you know, it's, it's, it's the first year, you know, it's a turnaround from 2021.
Without getting ahead of myself, what do you need to demonstrate, I guess, to the ECB over time in the context of the dividend stopper? I mean, would it be years and years of consistent profitability? Anything you can kind of, I suppose, guide us to in terms of how we should be thinking about the potential for a prospective change there, albeit recognizing it's not within your direct control. Thank you.
Okay, John.
Yeah. I think the first one up on the rate assumptions, I suppose when we did our forward-looking view, our forecast, it was very hard to determine what interest rates were actually going to where they were going to go. Within that, at the moment, we have a refinance rate of 3.25% in 2023 and a deposit rate of 2.75%, and static at that for going forward. Certainly from where we are today and with the market indicating higher interest rates in the future, we have upside with regards to that. On the second question on exceptionals. Next year you will see some exceptionals, primarily because we have, we still do Asset Finance. 2023, saw the SME Micro book come in just there in February.
We'll bring that day one ECL in. We also have some additional mortgages to bring in. Overall, our day one ECL was around EUR 80 million. If you think of it, the EUR 37 million has been brought in space. You know, we have a remainder to bring in. There are operating costs that will be in the exceptional line item with regards to the program. Those program costs will probably be there, although not as heavy, because principal completion is done, but they will be there until into the second quarter.
Is there anything you can say on maybe give us a bit more color in terms of quantifying those for the purposes of modeling out the P&L?
I think the bigger portion obviously would be on the Asset Finance piece. You take a day one, they're all stage one assets that will come in on day one. You know, maybe think about it as in terms of EUR 20 million on your asset finance. And there's about EUR 1 billion or EUR 900 million of mortgages to come across. Similar to what we would have had before based on the other.
On the operating cost please.
Operating cost, you'd imagine, you know, we had about EUR 17 million this year in relation to the program costs for what we just call Project Sun. There'll be, you know, an element of that as you think about, you know, five months costs.
Just on the dividend blocker, you know, the dividend block was introduced back in 2016. I think it's fair to say the bank is a completely different, in a different strategic and financial and business position than it was in 2016. If I look back since that period, you know, we obviously had the NPL story to deal with at that stage. Then we had the negative rate environment that came in, then we had COVID, then we had the war, now we're into an interest rate environment that's upward moving at a different interest rate environment. There's been significant amount of items through that period. I think also we have, yes, while we're very comfortable with the Ulster Bank transaction, we still have yet to finish it.
I mean, there's still the two pieces yet to do, which is the asset finance business, as I mentioned, and also a portion of the remaining mortgage business. We're saying that's EUR 900 million, which have yet to migrate. We've yet to finish that and really settle down the profitability in that respect. We continue to engage with the regulator with respect to the dividend blocker itself. As you mentioned yourself, it's in their own, they sole decision in that respect. We continue, I believe, to demonstrate our ability to manage the bank through all those challenges in a safe way, protect capital, and indeed now be in a position where we can grow our capital base over the next number of years.
We wait and see, but our responsibility is to try and make the bank as best as it can be in order to be sustainable, generate a return, pay a dividend, but also generate capital that we can support the economy by way of new lending as well. I think I'd like to think we tick a lot of the boxes, but that engagement still continues.
Thanks very much.
Alan.
Hi, folks. Good morning. Maybe to follow on with two from me. Firstly, on the mortgage market share, obviously a very big step up in Q4.
Mm-hmm.
I'm just thinking about what extent that will be sustainable into 2023, maybe firstly and perhaps beyond that. I guess there was some dislocation in the market, maybe in Q4 with different pricing decisions going on at different speeds. Perhaps it was an element there. How, how do you think about that, I suppose for 2023? Just secondly, looking at the cost of risk guidance for this year, circa 10 basis points, but circa 30 basis points for 2025. The lending mix is going to
Mm.
tilt towards, I guess, lending that carries a higher cost of risk. Is that the sole driver of that difference, or is there a reason to think, I guess, that the 2023 number is still below trend?
Let me take the first one. As I mentioned, the quarter four market share was around 22%. You know, that's the drawn market share rather than the application market share. You're typically working off a three- to four-month lag between application and drawdown, which actually is saying that we're quite buoyant coming into the start of the year in that respect. You know, there have been changes in the market. We see how some of both the banks and non-banks have reacted to interest rate increases. There's also the switcher market that has been more prevalent last year. We don't believe it'll be as prevalent this year. First-time buyers as well have been quite active in there as well in that respect.
You know, I actually, I think our market share can go higher than 18.5%, I think by way of our product offering and our positioning. I'd rather not say what we think it could be, but we do believe we can have a larger market share. Then we have to manage that as we transition it through as an organization by way of how we think about our capital, how we think about our funding and our position in the market. We won't lose the run of ourselves is what I mean, but there is an upward trajectory in that respect. On the second aspect, Nicola.
Yeah. On the expected credit loss, I suppose, you know, less than 10 basis points this year in 2023. When you think about us at the moment, we're at 96%-97% on our asset base is residential mortgages. You know, that trajectory is good. Our asset quality is good, and the basis point risk there is very low. As we grow forward, we're actually building, you know, by the end of 2023, EUR 1 billion in an SME space with the ambition to actually grow that towards 10% of the overall market for new business in SME as we go forward.
That actually mix between consumer, unsecured, SME secured and unsecured, and then our mortgage portfolio brings us to an average over the next, over the medium term of less than 40 basis points. It's a mix of business that we'll do. Obviously, we have to take into consideration the macroeconomics that we build into the forward-looking model, and we're probably conservative with those.
Yeah. It is fair to say we're building a business book, we can be somewhat selective as well. We want to support business, but also we can be selective. We've seen how various sectors in the economy have reacted over the various challenges that I mentioned earlier on. you know, we'll see how it turns out. We're trying to show some conservatism in our approach at the 30 basis points, but time will tell in that respect. I always go back to our de-leveraging. If you look at all our leveraging we did, which was over EUR 6 billion, we effectively that was booked at net book value.
Our provisioning has been tested numerous times by way of its level of conservatism from a provisioning point of view, and also from how we think about provisioning in the future. It's been well tested by way of that real interaction with the market. We always stick to that provisioning under guard.
Thank you.
Thank you.
Back. Are we opening the lines? Pete, is there any questions online?
Yeah.
Of course. Our first question comes from Dermot... Your line is open.
Good morning, Eamonn. Good morning, Nicola. Thank you. Thank you very much for taking my questions. A couple maybe if I can. Firstly, around net interest income, and especially around the deposit pass-through fees. I'm just wondering, we've obviously seen very little by way of deposit pass-through so far, how you would expect that to develop out in the next 12 to 18 months. Secondly, maybe just the investments you're doing. Obviously you've provided a good insight into what you have achieved and what's planned in the near term. Just wondering in terms of the longer term cost-to-income ratio of 85%, is there scope for that to be improved perhaps as some of those investments continue to come through and bear fruits in terms of efficiencies that you can make. Thank you.
Thanks, Dermot.
Just on deposits. You know, Nicola's outlined the growth we have on deposits during the year. Significant growth in our current account base as well. We have to remember that that's part of our deposit base, and we would like to welcome and indeed try and attract more current account customers to the organization. We have the best current account in the market as awarded by bonkers.ie. We want to attract more customers in that respect, which will drive deposits. By the way, the pass-through rate for term deposits, you know, it's no doubt that in this new interest rate environment, there is a need to rebalance balance sheets as well to ensure that, you know, you've got the right mix of both term and core deposits.
We will see, I expect, more credit growth in the market as well, which will ease into the excess funding that's there. It's our ambition to ensure that we have a competitive range and also we can bring some duration into our book as well. We will compete then with others in that regard. I'm not gonna say today what the pass-through rate will be, but we want to be as competitive as anybody else in that respect, and indeed, ensure that we have the proper duration mix on the liability side that we're managing accordingly. Then it's a case of modeling purposes, you assuming what that might be given the overall environment.
It's ensure it's in deposits just to say deposits and deposit customers are very important to us in that regard.
Yeah. On the second question then in relation to investments, Dermot, like we're still continuing to invest in our business. I think you can appreciate that for 10 years or more, you know, we didn't invest in the business. We still have to invest. Like that investment in relation to the larger program of work that we're doing at the moment is coming to an end. We are still having to invest in, you know, our business with regards to, you know, our product offerings, our customer servicing. We're running 25 extra branches. We'll have 330 additional staff within our business. We also have to invest in operational resilience, cybersecurity, fraud, you know, all of these things that actually face the business on an ongoing basis.
I think actually to bring the cost-income ratio down below 70% in 2023 and on a downward trajectory, you know, to around 55% by 2025 is probably as good as we can do right now as we continue to invest in the business. You'll know that there's, you know, every day there's something new that the banks have to invest in and make sure that we're protecting our customers and protecting our business. It's important that we stay on top of those things.
Great. Thank you.
Our next question comes from Alastair Ryan from Bank of America. Your line is open.
Yeah, thanks very much. Good morning. Just in the near term, that your appetite for volume versus price, it certainly feels like your volume expectations for the market for 2023 are pretty conservative. Average weekly earnings are growing pretty strongly, employment's growing pretty strongly, and mortgage pricing is still pretty low. It feels like that market could easily be bigger than you're expecting. How do you respond to that in the near term? If that is the case, do you take your share? Do you grow a bit faster, or do you price up instead, because you're, you know, busy onboarding or dealing with a lot of complexities? Thank you.
Thanks for the question. Indeed, you know, we've seen significant growth in the mortgage market this year, Alastair, about 34%. You know, we would be more on take our market share to a certain level, not to over exceed that certain level. It's about ensuring that there's a balance between price and volume and also the capital requirements related to that. I would expect and we would expect an increase in our market share, but in a controlled manner, rather than trying to just chase volume for the sake of it. That makes that we want to ensure that we meet in that regard. Does that answer your question?
Well, just to press you a little. EUR 395 million in a five -year fix— you're by no means the most expensive in the market. That's still pretty cheap. The five-year swaps are
3.5 or so. Would you put prices up to slow yourself down? You know, are you happy with pricing where it is? This slight increment to the cost of money and you do more volume if that came through.
Yeah. Naturally the interest rate environment is still evolving, in that there's an expectation that ECB rates may go up again. We watch, you know, we see the mortgage volume as being critical to us and how critical it is, as Nicola mentioned, a significant and majority part of what we do, so we protect it quite well in that respect. You know, we'll watch price accordingly. You know, the way the market has evolved, one could go after lots of volume, but that is not the way we want to progress. We want to ensure there's a proper balance between price and volume in that respect.
We'll see if ECB raise rates again, and we watch our own offer in that, in that respect. That's all really I can say at this moment. Like if you went back again, if you look back five years, I think our market share of the Irish market was around 9%. It grew to 12 % , 15 % , now we're at 18.5%, and we believe we can still grow a little bit more. We don't want to grow overly fast at this moment and ensure we have that right balance is the way I would say it.
Yeah. Probably like we won't be a price leader, with regards to, you know, all of our products. We'll certainly remain competitive in the marketplace, actually, you know, assess for the right credit assumptions.
Thank you.
We now turn to Robert Noble from Deutsche Bank. Your line is open.
Morning. Thanks for taking my questions. Can I just ask about the nearer term, base rate impact? The 192 basis points NIM in Q4, does that fully reflect the rate rises that we saw in Q4? What are the repricing and timing mismatches within that number that will then roll into Q1? Then just going forward, I mean, how has the tracker book behavior changed as interest rates have got to increasingly higher levels as well? Thanks.
Yeah. The, the first time that we started to actually increase rates in the bank was on our tracker, which was following the August in August, following the July rate increase for the first time. The 192 NIM in quarter four is primarily being dictated by that tracker move. On average, by quarter four, we'd only moved an average of 42 basis on fixed rates. For anybody that was in the pipeline, we gave our customers 90 days for them to actually still draw down on that lower rate that was in the pipeline. That actually only completed on the fourteenth or fifteenth of February. The rate changes that we've made in quarter four won't necessarily be impacting until the end of quarter one into quarter two for anybody that was in that pipeline.
We had a very strong pipeline going into the year, end of the year, about EUR 700 million. It's primarily in the tracker space with an average of about 50 basis points of an increase on new business fixed and then for those pipelines to flow. This time of year, you would actually be completing a lot of mortgages that are already in your pipeline because they, it takes on average, maybe five months to actually close. On the tracker book, the behavior for us, we have seen an uptick in relation to customers looking for rate certainty. We have seen, obviously, our tracker book went down from 35% of our total performing book last year to 27% of our performing book this year.
I think now at this stage, customers will probably have made their decisions with regards to where they're going. Interest rates will most likely increase again. We still could see some more attrition in fixed rates, but I think probably from the next rate rise, we'll see that leveling off.
Great. Thank you very much.
Does that answer your question enough?
Yeah. Lovely. Thank you.
We now turn to Borja Ramirez from Citigroup. Your line is open.
Hello. Good morning. Thank you very much for taking my questions. I have two quick questions, if I may. The first one is with regards to your, to the financial targets. I would like to ask if you could please provide the sensitivity if we were to assume a deposit rate at, let's say, 3.5%, like, or more, what the market is pricing today. My second question would be with regards to your Loan-to-deposit ratio, which if I read well is 90% as of December. I would like to ask if you have a target going forward for the Loan-to-deposit. Thank you.
Thanks, thanks for those questions. In relation to the deposit rate, I suppose we look at it in two ways. You know, we have the refinance rate for our assets, and then we have our deposit base. The sensitivity that we've given in our slides is that for, you know, 100 basis points of a move, we would actually have a EUR 50 million increase in interest income. That sensitivity is there. That would take a combination of, you know, the pass-through on both assets and on deposits. If you think about our cost of funds and you think about our loan-to-deposit ratio at 90%, we're a deposit-led lender. It's very important for us to have those deposits.
We were at 70% Loans to Deposit Ratio, we're now at 90%. That's more efficient for us as a business. You know, we could go to 100%. Our European average peers would actually be in that space. We still have some additional space there to grow. That's important to us. Our cost of funds, as we think about that, you know with some wholesale funding to do because of MREL, the remainder would be from our deposit base.
At a cost of funds of about 20 basis points today, you know, you could see that going towards, you know, a 50 or a 60 basis points through 2023 as we pass through to our deposit base and as we take on that additional piece of wholesale funding.
Thank you. Just to confirm, the 50 to 60 basis cost of the deposits?
It's a blended cost of funds for the bank, so it includes some wholesale funding and our cost of deposits.
Very clear. Thank you very much.
We now turn to Daniel David from Autonomous. The line is open.
Hey all. Congratulations on the results, thanks for taking the questions. I was just wondering if you could provide a few more details on the capital headwinds and tailwinds in 2023. I guess looking at what's to come from Ulster Bank and the relationship with NatWest also. Could we expect you to be down around your target of 14% at the end of 2023, or is that a bit more longer term? Just on the cost of risk of 10 bps next year, does that include any assumptions on the release of PMAs that you hold? Finally, just on MREL, just interested to hear what sort of a buffer you're thinking about above minimum requirements going forward. Thanks.
Okay. I'll just take the first one. Yes, we still have to complete, you know, in this year. We already migrated the SME book, EUR 165 million. We will migrate EUR 900 million of mortgages, and we will also migrate the asset finance book. They will lead to a reduction in our CET1 because they will utilize capital as they land. Yes, we'll head towards that 14% level through the year. As we face into then next year, we'll be building off that level. It's a case of how that moves, you know, on a month and a quarterly basis, but we're reporting it.
Yes, we'll be reducing it to the capital generators on the Ulster Bank transaction, landed in November, is reflected in the 15.2% fully loaded rate, and then the remaining migrations will ease into that. We'll be still at quite safe levels in that respect. Nicola, do you want to pick up the other piece?
Yeah. In terms of the impairment and the PMA that we have there, EUR 137 million in our provisioning stock at the moment, like it's prudent for us to have that at the moment. The models don't actually cater for inflation in the same way as they would cater for unemployment or house price index and things like that. Until some of the uncertainty with regards to the inflationary pressures comes out of the market, I think it's actually prudent for us to stay with regards to that level. I won't say that it'll be the full EUR 137 million, I think there'll be, you know, some ebbs and flows with regards to that. Underlying the asset quality is very stable.
I think unless something happens within the marketplace to dictate that, at least we have that provision there that will actually safeguard us and our cost on the MREL buffer. This year, you know, we have to do EUR 1 billion of MREL in the market as we bring on those additional assets and grow that balance sheet. It's important for us to build that buffer as we go. We're heading towards the first of January 2024 with a 27.15% MREL target. As we grow, we actually want to build that buffer up to a level where it would be the equivalent of a market size deal so that we would have that in our buffer.
We're not actually talking about a percentage over risk-weighted assets, but we're looking at the equivalent of a benchmark maybe sized deal or a near benchmark sized deal. That won't be in 2023, but as we move towards the end of 2024 and into 2025, that we'd have the equivalent of a benchmark deal as a buffer.
Thank you.
We have no further questions.
Great. Well, thanks very much, everybody, for being here and for asking lots of questions.
Yeah.
Take care. Thank you.
Thank you very much.