thank you very much for joining. We are ready to kick off HaligBank full year twenty twenty results call. The presentation will last for approximately forty five minutes and will be followed by a Q and A session. I'm now passing the word to Halic Bank team.
Thank you, Kirill. Good evening, ladies and gentlemen. Welcome to Halic Bank conference call on presentation of financial results for the twelve months and 2020. Participants to today's call on Halic Bank's side are Mr. Musekhneetova, Chief Executive Officer mister Anton Mousin, first deputy CEO, digital banking, transactional business, IT mister Yakar Prikova, deputy CEO, chief financial officer mister Murat Kasenov, deputy CEO, corporate banking and international activities Mr.
Dorien Sartayev, deputy CEO, SME Banking, PR and Marketing Mr. Zumadek Mamutov, deputy CEO, Retail Banking Mr. Victor Skryd, Financial Director, Finance and Subsidiaries and myself, Mira Kasenova, Head of FI and IR. Now I would like to hand over the call to Murat Kosynovak.
We are delighted to welcome everyone to our presentation of the financial results 2020. 2020 has been an extraordinary year with major challenges posed by unprecedented pandemic that impacted daily lives of our clients and employees. For Halib Bank, from the onset of pandemic, the main priority has been to stay close to our clients and support them. We discussed this during our previous calls. Today, we see the situation has stabilized, and economy is getting back to normal.
In spite of these headwinds, we once again have proven unique resilience of our business model, which manifested itself in our very strong set of results for 2020. First of all, as always, in times of stress, we experienced clients' flight to quality towards Halit Bank. As a result, our client base increased by 9% and reached 8,700,000 customers. At the same time, we experienced massive shift of our customers towards using digital channels. Our retail online bank lines increased by 41% to 6,200,000.
We believe that customer preference towards digital are permanent and will remain going forward, And we are transforming our business accordingly. Our gross loan portfolio increased by 16% with very strong growth momentum in retail and SME segments. We also continued to consolidate our dominant position in corporate segments with loan portfolio increasing by 10 in spite of market stagnating. Correspondingly, both our revenue base and net income for 2020 were well ahead of our 2019 numbers. Such strong performance was delivered during the year, which saw country GDP contracting by six point 2.6%.
Finally, Halilig Bank is one of only few banks globally that not only paid dividends in 02/2020, but more importantly, distributed record dividends to our shareholders with dividend payout of 60%. Around twelve months ago, we shared with you our financial guidance for 02/2020. Going in 02/2020, we were quite a bit on our business performance outlook. These performance metrics were shared with you well before impact of COVID on the economy and our business. We expected loan portfolio to grow by more than 10%, return on equity to exceed 20% and CET1 ratio to remain above 20%.
As you may see, we over delivered on all key target metrics. Growth of our net loan portfolio amounted to 18%, while return on equity exceeded 25%. I also I would also like to highlight our cost of risk, which despite massive headwinds posed by COVID, amounted to only 0.4% in 2020. The only metric which is broadly in line with our initial guidance is net interest margin, contraction of which will be explained later in the financial section of the presentation. We are focused on maintaining strong momentum in 2021 and keeping our strong execution record going forward.
Clearly, macroeconomic environment this year will be much more constructive and supportive for the growth of our business. We'll share with you our guidance for 2021 a bit later in our presentation. I'd like to briefly summarize some of key milestones that we managed to achieve during the course of 2020. We accelerated our shift to digital channels. During 02/2020, we made most of our products and servicing available via digital channels, including fully remote onboarding, online consumer loans, auto insurance, and lending to individual entrepreneurs.
We made huge progress in expanding our ecosystem services that include online travel platform, Halik Travel, ticket operator, Kino KZ, online brokerage, Halik Invest, and online marketplace, Halik Market. My colleagues will present these platforms in greater detail. ESG is becoming an important theme that we are taking very seriously. We continue to implement ESG framework and published our first sustainability report in accordance with GRI standards. In spite of challenging operating environments, we affirmed our credit ratings and also took advantage of our strong liquidity to prepay one of our Eurobond issues.
I already mentioned record dividends that have been paid to our shareholders Finally, in recognition of our achievements during preceding few years, Euromoney, International Finance, and Asia Money extended to Halig Bank several reputable awards. 2020 has been a challenging year for the global economy. Kazakhstan as well as experienced GDP contraction of 2.6% on the back of COVID pandemic and low oil prices. At the same time, Kazakhstan has been one of the least affected economies in Former Soviet Union and Central Eastern Europe region.
We confidently took into strong economy rebounds. We consider the look into strong economic rebound in 2021 on the back of efficient government support measures as well as oil price recovery of over 150% since March. Now I'd like to give the floor to Mirikha Senva.
Thank you. Now let me switch to HALI Group consolidated financial results for the twelve months and 2020. During last year, the bank generated 352,700,000,000.0 tenge of net income. The increase by 5.4% compared to twelve months of twenty nineteen was due to the growth in net insurance income and other noninterest income, positively affected by the repayment of swap agreement with the National Bank in July 2020. As of year end, we demonstrated 25.5% return on average equity and 3.6% return on assets.
Total assets of the group increased by 12.5% versus year end 2019, mainly as a result of increase in deposits and total equity and revaluation of FX balance sheet positions due to KZT depreciation versus US dollar during 2020. Customer deposits increased by 16.4% versus year end 02/2019, mainly due to fund inflow from the bank's clients and, to a lesser extent, as a result of revaluation of FX denominated deposits. Increase in interest income on loans to customers was partially offset by the decrease in interest income on securities due to transfers in placement from high yielding NBK notes into low yielding FX deposits with the National Bank following the repayment of swap agreement with NBK for the amount of $912,000,000 As a result, interest income increased by 3.2% year on year, while net interest income increased by 0.4%. Interest expense increased by 6.9%, mainly due to the increase of average balance and share of TZT deposits in the amounts due to customers. Net interest margin decreased to 4.7% for 12 of 2020 compared to 5.3% for twelve months of 2019, mainly due to transfers in placement from high yielding NBK notes into low yielding FX deposits with the National Bank following the repayment of swap agreement.
Net interest margin decreased to 4.4 for for 2020 compared to 5.4% in 04/2019, mainly due to transfers in placement from high yielding and big gainers into low yielding deposits with National Bank following this repayment of swap agreement and due to accelerated amortization of discount on the bank's Eurobonds in the amount of 7,200,000,000.0 ten year due to a special prepayment in December 2020. Excluding this one off effect, the adjusted NIM will be 4.7%. Our gross fee and commission income increased by 6.6% year on year as a result of growing volumes of transactional banking, mainly in payment card separations as well as bank transfer settlements. The increase in fees derived from bank transfer settlements by 17.3% was mainly due to the launch of online installment loans in 02/2020. The increase in fee and commission expense by 15.6% year on year was mainly due to increased number of transactions of other banks' cards in the acquiring network of the bank, partially offset by the decrease in deposit insurance fees payable to the Kazakhstan Deposit Insurance Fund due to lower rates for the bank on the back of increase of capital adequacy ratios.
Operating expenses increased by 8.9% year on year due to the increase in salaries and other employee benefits as a result of the increase in sales based payments in retail business in 2020 and due to the loyalty program bonuses payable to the customers, which are included in the trading expenses related to the advertisement starting from the 2019. The bank's cost to income ratio increased to 26.8% compared to 25.4% for the twelve months of 2019 due to higher trading expenses for the twelve months of 2020. On the balance sheet, compared to the year end 2019, loans to customers increased by 15.9% on a gross basis and 18.5 on a net basis. Increase of gross loan portfolio at the year end 2020 was attributable to increase in corporate loans, 10.1% on a gross basis, whereas SME and retail loans increased by twenty four point one percent and twenty four point four percent, respectively. The bank's asset quality is notably improving despite the turbulent economic environment.
Thus, ninety day plus net NPL ratio decreased to 4.1% from 6.4% at the end of third quarter, mainly due to write off, repayment, and restructuring of program indebtedness. The ninety day plus NPL coverage ratio increased to 196.5%. Cost of risk for twelve months of 2020 decreased to 0.4% compared to 0.7% for the twelve months of 2018 and decreased to minus 1% in April compared to 0.2% in March mainly due to repayments of large ticket corporate loans. Stage three ratio decreased from 14.8% at the end of 3Q to 12.3%, mainly due to write off repayment and restructuring of problem indebtedness. We are additionally shown here how well the work out of problem loans collateral was done by the bank's space during twelve months of 2020.
On liability side, the corporate and retail deposits increased by 19.113.8%, respectively, compared to year end 02/2019. At the year end, the share of corporate QCT deposits in total corporate deposits was 59.9% compared to 55.5% at the end of 3Q, whereas the share of retail QCT deposits in total retail deposits was 45.9% compared to 43.5%. Compared with the end of 3Q, total equity increased by 9.2% as a result of net profit earned by the bank during the fourth quarter. The banks the bank continues to have significant capital buffers with CET1 and total capital adequacy ratios standing at 24.425.5% at the year end. Now I would like to hand over the call to Muczeh Nietova, CEO of the bank, to provide the CEO outlook and key strategic targets.
Yes.
Good day, everybody. I'm glad to announce our guidance for 2021. As already stated, we managed to deliver strong 2020 results despite extremely challenging situation globally and locally. We made impressive progress across a number of strategic initiatives and delivered strong financial results. We remain very focused going into 2021 and plan to build on our ongoing business momentum.
With a strong macroeconomic tailwind, we aim to capture even more growth opportunities in the market in 2021. We continue strong loan growth at 16% with around 22% of growth for retail loans and 14% growth for corporate and SME loans. Net fee and commission income should grow at around 25%. Main drivers here are our initiatives to increase transactional activities by our customers and new digital products and services, which we launched last year. In terms of asset quality, we do not expect any surprises expect that our cost of risk will be in the area of 0.7%, reflecting our disciplined underwriting approach.
Finally, we expect that in 2021, our consolidated net income should exceed 400,000,000,000 yen ROAE at around 27%. NIM expected at around 5% and robust operational efficiency with cost to income ratio of around 27%. As stated, one of our key strategic priorities for 2021 will be to further accelerate our digital strategy. We plan to significantly broaden customer engagement on our home band platform and by the 2021 to have at least 4,000,000 monthly active users, up more than 50% year over year. This will be driven by our ongoing product innovation, launch of new digital services and encouraging our customers to actively use digital channels.
We see strong utilization of our digital channels for loan issuance, not only for retail but for legal entities as well. Over 60% of loans to corporate and SME clients will be disturbed via online channels, while share of fully digital loans in retail and micro business segments will exceed 55%. We keep our focus on growth of transactional business. Share of non interest revenue is expected to increase to at least 31% of total operating revenue. Overall, our digitally ecosystem services that we will cover in great detail a bit later should bring more than 5% of total revenue already in 2021 from 1.4% for 2020.
We expect them to become even more important business contributor going forward. Now I would like to hand over the call to Anton Mussin, First Deputy COO, who will provide you a digital update.
Hello, everyone. Let me give you a quick highlights on the results of our digital transformation program that we have achieved in 2020 and key milestones in our 2021. We continue our focus on four major pillars of our digital transformation, which are development of our digital channels, our digital product products and ecosystem, our technology platform, and, of course, our organizational digital organization. Here on on the slide, you can see major results we have achieved during last year. First of all, this is the significant growth of our digital channels.
For example, mobile banking solution HomeBank achieved 136% growth in month's monthly active users last year, and corporate SME customers' Internet banking solution online bank even achieved even better growth, 175% year to year comparing 2,019 and 02/2020. During last year, we have launched several new digital ecosystem services. First of all, this is how it market, our brand new ecommerce platform launched in the very end of 2020. Zsolavec Mamutov will provide more details on this project in the retail section later. We have launched Halik Invest, our mobile trading and investment platform in November 2020, as well as Halic Travel, our mobile ticketing platform.
In parallel with this, we have redeveloped our entertainment resource, KinoKeyZ, and launched new digital auto insurance service. There is a significant development in technology platform that we have launched in 2020. There is our data factory program. I will give more highlights a bit later now in my in my speech. We are bringing new big data technologies back to the bank with this program and expect first monetization results out of the data insights by the 2021.
Finally, speaking about our our organization, it's important to say that we are growing new digital team. Last year, we have more than 100 specials, product leads, analysts, UX UI specialists, developers, and others. Let me give you more details on different aspects of each digital pillars that and our targets for 2021, please. Next slide. In regards of digital channels, one of the important target we want to achieve in is the 4,000,000 daily active users in our home bank, which is a significant growth according to 2020 results.
We expect to achieve this integrating our ecosystem services seamlessly into HomeBank as well as adding access to government services through HomeBank and introducing new products and services like digital auto loan. Regarding our SME digital solution online bank, we have launched new mobile banking solution last year and already achieving good numbers already achieved good numbers during last year. The second part of 2020, we have developed a new set of functionalities, including in app mobile post terminal, online corporate card. We just have been launched as well as many other services. In 2021, we are launching a big promo campaign to distribute new online banking solution, and we expect good results in Mao and Dow reflecting on this slide.
Next slide, please. In regards of developing of our digital product, we expect to have the significant growth in 2021 both in retail and SME client segments. Here are some numbers demonstrating this performance and for 2021. There is good continued growth in digital loans and retail. Year to year from '20 to '21 is 15%, and SME digital loans, we expect four times growth comparing to our 2020 results.
Mantelix, who's leading retail and SME SME client segments, will give you more details in their sections in regards of digital loans portfolio. Next slide, please. Speaking about our digital ecosystem, there are few important points that I points that I want to highlight in our strategic approach. First of all, we start to position our home bank as a super app, meaning one access point for our retail customers to the most of our ecosystem and banking services. This was one of the major strategic decisions we have done last year based on number strategic drivers listed here.
In addition to this, it's important to mention that in HomeBank, we have much high conversion ratio selling our digital service. For example, comparing this with other channels rather than home bank, we have five to 10 times higher conversion rate. In regards of our oh, in regards of development of our ecosystem service, we focused our attention this year on further development of already existing ecosystem services having the concrete and quite ambitious target for each for each project. Let me give you some highlights of these targets. For HALIC market, we expect 15% of the overall retail credit finance coming from Halic market by the 2021.
For Halic invest, we expect significant ramp up of customer base, and we're planning to have 30,000 new customers in 2021. For travel, we plan to have three times high amount in 2021 and two point four billion ten gig in GMV. For Kinokes, our plan to achieve almost 60% of market share, cinema tickets online sales, and 3,000,000,010 gauge GMV. In regards of our digital digital auto loans insurance project, we expect to gain premiums almost four times comparing with 2021 in this fiscal twenty twenty year '21. Next slide, please.
Finally, let me give you some details regarding our organization and technology platform. Major initiative that we have started last year, as I will as I was already mentioned this, was a data factory. This should bring monetary results already in 2021. Here are results per each segment per each client segment we expect to gain during the next fourteen months. The most significant growth we expect in the in the retail, which is 18% in commission income and 19% in interest income.
There are a few important initiatives that has to be mentioned in our digital part of the organization. We have created in the very beginning of this year user experience and service design competence center, which will be focused on creation of best in class user experience, first of all, for our digital product and services and growth hacking of existing ecosystem projects. In the beginning of 2021, we have also created dedicated data science unit, which share will bring data insights to our data factory program and other business and operations initiatives. And last but not least, we have started this year very important project, HALK Academy, with the several major IT universities in Kazakhstan focused on prepare preparation of dedicated IT specialist based on Halik Bank technology stack. This will we we we believe will help us to minimize the lack of digital talents on Kazakhstan market that we are facing right now and prepare right pipeline of IT candidates for our digital transformation program.
Let me pass the word to Zomadek Mamutov for our retail lead.
Retail business on key directions of retail as of 01/01/2021. As a result of hard work, we've obtained some high performance. So customer base growth of all going for active retail clients. Product wise, I'd like to know the positive performance in 2020 in all directions. Lending, we have gone full, but more than 24% in a year, averaged one point three trillion ten gig for the group.
Speaking for Kazakhstan, our share in the retail portfolio has grown significantly, 16.1 to 18 as of the end of year. So 1.5% growth at the end of the year despite all the restrictions and headwinds of 2020. For the natural persons deposit base, growth of almost 14% for active cards. We have also seen active growth by plus 7% on the year. I'd like to specifically speak of our results for digital direction to show the growth of retail in 2020 as the whole strategy is built around the installation of the ecosystem for products and services for our customers, making them available online.
And, of course, we work very actively Interesting. Coming up with new online and digital products. As Anton mentioned, we see active unique users to 2.6 unique users per month. So the growth at 2.2 times in a year. We're very happy that our work for continuous improvement of the service was not left without attention of the customer base.
Next slide, please. Here, I'd like to speak that we remain the largest player for settlements, payments, and other kinds of transactions. As a result of 2020, the volume of transactions stood at 24,000,000,000,000 ten year. So on year, we have achieved the growth of last productive over 200%, continuing to increase our product lineup, also teaching our customers to use our online service in the structured transaction. We see the growth of cashless transactions by 52% of the overall volume.
Next slide. Really, I spoke all the focus on digitalization of our products and services. On this slide, I'd like to speak in more detail of our new product solutions that was launched
Online within
one year. Online cash loans, online deposits, digital cards, and online finance. It's a novelty launched this year in Kazakhstan. While launching our products online and building a proper customer path, we've been, first of all, looking at convenience and promptness of you starting with digital cards that fully repeats the service of the physical cards where they have no other payments, settlements, transfers, and cash withdrawal from our ATMs without a card. So without physical plastic, they can place an order for digital cards, get them in our in our outlets or use them without the plastic card, without any product.
Paper. A separate product is online refinance. It's a new product launched in the restaurant, and we see the high demand for this product. Speaking of additional services and services launched as part of our ecosystem, Anton had already mentioned many products. I would like to simply add that we have took online a product of Haluk app.
We're speaking of our loyalty program that includes over 22,000 partners throughout Kazakhstan. Haluk and four, Haluk tours as separate marketplace, letting our customers buy travel online and, of course, HALK market of which Anton spoke. I'll be elaborating on that on my next slides. On top of these product service, of course, we're developing our channels, actively developing cooperation with major retailers and further developing partnerships. And we can say we're now to work with the overall customer traffic, also self-service channels in 2021.
Card issues machines with identification of customers, which lets our customers to issue cards on their own, and we have great plans for developing the functionality of such devices. Next slide, please. Now few more details of credit growth in retail in Telestand despite the situation. We're growing very confident. We have great potential for further growth despite the lockdown in 2020.
We have achieved comparing year on year. 2019, we've seen growth of 2.5 in sales, which speaks of the increased efficiency of our retail sales channels. Now comparing our performance, so with the reduction of lockdown, we grew we're growing 40% speaking of loan products. Given our potential, and I'm referring to the potential products that have become available in the second half of the previous year and at the end, we see a potential for growth of 30% more so reaching the level of 901,000,000 for the year 2021. The growth drivers for sales is our online retail products.
50% of sales are planned of growth, excuse me. Not of sales, but 50% growth is planned through development of online lending. Speaking, generally, we plan to sell online over 65% of the overall loans in 2021. Next slide, please. On this slide, you can see in more detailed information regarding lending.
Of course, retail helps us capture new customer base and customer retention also through the use of services from competition. Well, we had just three partners for these service. Now their number has grown significantly. Additionally, we have reached out for the segment of of airline tickets with our partner, Firestone. And we plan in the course of 2021 to actively increase the number of partners in our ecosystem.
Now installment loans in have reached 8.2% of all sales as of December 20, and we plan to increase online installment to 15% of all sales. Speaking in numbers, in 2020, 34% of loans were written online. In 2021, we plan to increase this to 50% of installment loans in overall sales. Next slide. Now Halit just late last year launched in the in the format, which at the time of the first release included 19 partners available in 22 cities of the country and almost 19,000 unique products with all the payment method available with installment loan or card payments.
So banker.
From progression of with our mobile app, HomeBank. The main goal for 2021 is to increase in the number of our partners in health market, which should lead to significant increase of the lineup of products in different categories. And we will also actively work on our platform in the in the following direction, high level of sustainability with high loads resilience. We'll also work on functional keys to improve the convenience for our customers, and we plan to reach 15% share by the year end 2021 through the structure of online sales. So we don't plan to work in use, but we'll continue further advancing our solutions with the their further improvement.
And in conclusion, I'd like to speak of key priorities in retail business development for the year 2021. For the development of sale channels, the main initiative for us is the approach of the service model called digital for products and process. We shall continue digitalizing all our process and products available for natural persons. Speaking of home bag, we shall be introducing all services online to so that 100% needs would for our customers will be covered online. For the advanced client analytics of which Anton spoke before me, we're actively working on implementation of advanced models for customer expectation models.
For the ecosystem, we're moving to the to the new format, which will be provided in our mobile app. And, of course, customer loyalty programs, we're actively working on improving loyalty with series of initiatives planned, which will increase loyalty and briefly of our stations used for active users in online home bank. We plan to reach up to 4,000,000 a month, 65% of online sales of all loans. The share of online deposits to reach 30% and more. Share of noncash card payments of no less than 60% this year.
Thank you for your question. I'd like to give the floor now to Murat Kushena.
Thank you, Zumodek. Despite challenging market conditions, 2020 was another year when we enhanced our market leadership in corporate and SME segments. We further increased our SME client base by 15% to 337,000, improved our penetration among largest corporates in Kazakhstan to 79%. Due to pandemic and situation banking sector, the credit market as a whole was stagnant, as you can see. At the same time, given superior funding and capital position, Halib Bank managed to show robust growth due to demand from our clients with strong credit profile as well as due to refinancing of selective companies from other financial institutions.
Online bank is powerful platform for our SME and corporate customers. We continue to develop its functionality. Last year alone, we added following services to online bank such as online clients onboarding and online loans to individual entrepreneurs. Swift GPI transfers from card to current accounts via online bank, and we are the first bank on the market to launch online issuance of corporate cards with delivery. We see strong increase in number of corporate Internet banking clients, which increased by 63% within last two years.
The service of online opening of accounts to individual entrepreneurs launched in 2020 is a strong catalyst for our client base increase. Increase in number of clients and enhanced functionality were the drivers of strong increase in number and volume of online bank payments throughout the year. On consolidated basis, the aggregate credit portfolio for our corporate and SME clients increased by solid 13%. Portfolio remains quite diversified by industries, as you may see. Despite challenging market conditions, we not only retained good asset quality but also managed to reduce NPL ratio for corporate loans, mostly due to completion of a carve out process for large ticket problem corporate loans.
We also continued developing new services and digital initiatives to further strengthen our value proposition for our corporate and SME clients. Now let's speak more into detail about large corporate segments alone of Halibank. Despite already high market share, we increased the number of borrowers by 13% and amount of gross loan portfolio by more than 8% on unconsolidated basis only. We continue with our cross sell efforts to existing client base. Number of bank products per client increased to 2.89.
And for borrowers, the number of banking products per client exceeds five. Our strong market leadership in large corporate segment is confirmed by Best Corporate and Investment Bank Kazakhstan 2020 award from Asia Money, which we have received second year in a row. On consolidated gross basis, large corporate loan book increased by more than 10% in 2020. Gross interest increased gross interest reached $255,000,000,000, and PELL coverage is standing at very comfortable 350% level. Now let me give a floor to Doreen Sartaev, our Head of SME Banking.
Hello, everyone. We are really proud with our business results, business outcomes of the complicated 2020, while working with our SME customers. The growth of portfolio totaled 24%, but the number of borrowers has become even bigger and increased by 32%. The this was due to the implementation of our digital initiatives. There was a 46% growth of the account balances of our SME customers, which was basically predicted by our personal model, our credit ratings, and the better service network.
Next slide, please. Loan issuance, in terms of the amount of loans, we've been better versus in 2019, 5.7%. And almost third and fourth quarter also we produced more than 2019. The second quarter because of the lockdown was a little bit worse versus in 2019. But in general, in terms of volumes, we've been better.
The number of loans, the numbers are even greater. Well, this is due to a very large number of loans for micro business loans, and the number of new loans were increased by 20.2%. 45% of which have been digital. Plus another figure, which I'm really proud of, 83% of loans issued to micro businesses, individual entrepreneurs, these were digital. Next slide.
Well, here in this slide, we would like to show you the the background of the growth of our loan portfolio. SME is getting better, meaning it's improve
having its
quality, and the level of NPL has gone down down to 7.8%. Speaking about the industry industries in general, traditionally, SME is represented in trade, but the last year was the special one and agriculture grew up to 15% in our portfolio. Next slide. Well, our unique digital product for the online onboarding for individual entrepreneurs increased our results four times in terms of the influx of the new customers. Prior to the implementation, we would open 6,000 new accounts per month.
Right now, this figure is 23,000 new accounts per month for our own individual entrepreneurs for onboarding. Plus, we're setting some serious plans for 2021 in terms of the number of borrowers, individual entrepreneurs who are planning to grow by 44.6%. And the loan portfolio, we're we're planning to increase it by 30%. And you can see there is a great share of online transactions. After the hard 2020, we are planning to increase the revenue streams from our transactional SME customers by 20%.
Next slide, our priority of working for 20 in 2021, we divided this into three main areas. This is continuing with our development of digital product space, lending and onboarding for individual entrepreneurs. Also, in terms of lending, we're planning to be a bit more active in our digital lending channels, specifically include investing more into digital marketing. Also, this year, we're planning to invest, investment loans for individual entrepreneurs. In terms of onboarding, we're planning to launch a lot of models of flexible subscriptions for individual entrepreneurs depending on their specific needs.
And we'll also continue working to improve the client's path, integrating HomeBank and other facilities together for individual and natural persons and individual entrepreneurs plus our digital factory. It will data factory will ensure the 14% growth of our transactional revenues. Thank you.
This completes our presentation. Thank you very much for your attention. And now we would like to open the floor for your questions, please.
Just a quick instruction. So to state a question, you can raise your hand or submit the question in the chat. Please also state your name and company before asking the question. And if you have joined by phone, please press 9 to raise the hand.
Hi. Yiren? Hello? You're on the line?
Yes. Hi. Yiren Terova, BCS Global Markets. Thank you very much for detailed presentation, and congratulation with great results and interesting targets for 2021. My first question is about your 2021 guidance on loans loan growth, especially in corporate.
I think 30% is quite massively interesting target. So where do you feel this huge demand is coming from in corporate segment? And also fee and commission, 25% growth, which is, like, after two years of why the sub use dynamics looks also very firm. So if you just guide by what sources of, like, this growth are in terms of maybe different direction for business. This will be my first question.
Elena, thank you very much for your question. Yeah. Regarding the guidance for credit growth, as you can see, we divided it into retail loan growth and corporate and SME. So the 14% increase for corporate and SME, it includes not only large corporate but also SME segments. So one of the drivers might be the digital online loans, which we are providing to small businesses.
And we continue to grow in the corporate and medium businesses. It's quite diverse demand, which we are seeing. Actually, we have quite strong pipeline. The number of loans also, which also include the investment loans, which have been already approved and it's been installed. So we would see the drawdowns under these loans.
Another growth might be coming also from our subsidiary in Uzbekistan. Like the contribution of Uzbekistan in last year, growth of portfolio was below 5%. And expect this year, it would contribute close to 10%. So that is the additional source of growth, which we start seeing this year as well. Regarding your second question on fees and commission income, as we mentioned, as you can see on this slide, we think that's one of the biggest drivers would be developing further developing of our digital ecosystem products, which was extensively covered during our presentation.
And also, by now, pay later loans, the development of our, as I said, partnership with our key partners.
Amar, thank you very much. And just a follow-up into this question on guidance. So your expectations of margin of around 5%, does it mean that you don't affect do you not expect these negative implications from allocating funds into low yielding fixed deposit? So you target high growth of lending, which is effectively higher margin.
Yeah. Last year, particularly, you you saw that net interest margin was affected by the shifts of certain part of our assets from high yielding Tengue instruments in lower yielding dollar instruments. We, as mentioned during our previous calls, were tackling the situation. And so we think that the activities which we've done which we were doing on the growth of loan portfolio, particularly the growth of loans to small businesses to retail customers, which has a high yield compared to the rest of the portfolio on one hand, as well as repayments and prepayments of Eurobonds, these all would help to bring our net interest margin back to the level which we think is more appropriate given the mix of our balance sheet.
Thank you. The next question is coming from Simon Nelis.
Oh, hi. Thanks very much for the presentation. There are not many banks showing earnings growth this past year We're paying dividends, so so well done there. I I guess the first question is on dividends. Given that earnings have gone up, can we expect the dividend to increase as well?
If you could comment on that. That would be be my first question. My second question would just be on asset quality. Maybe you could elaborate on on why it improved so much in the fourth quarter. Although I see that stage two loans actually continue to rise, What are the risks that, you see migration from stage two into stage three, and what what are you expecting that's in your 70 basis points risk cost guidance?
And then last, just on fees, I guess, two the two part question. Firstly, my understanding is that the increase of buy now, pay later, you you start seeing a lot more fee income rather than net interest income. So so what portion of fee income is expected to be kind of more related to the buy now, pay later lending activity versus kind of traditional fee sources? And then just a specific question on the competitive environment for acquiring. I think you're a leader there.
I know Kaspi just rolled out, this QR code based acquiring system at a much cheaper cost than what I think is prevalent on the market. Do you think that could lead you to reduce pricing in acquiring? Thank you.
Thank you, Simon. Quite a number
of good questions. Yes. Sorry.
Too many questions. No. No. It's okay. So if you're okay, so I will start answering some questions.
And I will keep probably the answer on dividend payouts for a bit later during this call. Our CEO has just stepped out for a moment. And when she will be back, I think I want to get more from her. For her to respond on this question. So your second question was regarding the asset quality.
And what was the main drivers behind the improved in our asset quality reduction in NPLs and stages. As you probably know, we have increased our stages and NPLs at the time we merged with Cascades Bank. And that was happened in 2017. And normally, it takes a number of years until you will go through all the stages of the workout process. And part of the large corporate tickets problem loans, which we managed to successfully complete the workout was related to that particular transaction.
Some of them were historic loans of Halig Bank, but for which the process also were lasting for quite a number of time. What was surprising for us last year was how the demands for certain assets remains in the country, irrespective of the pandemic and lockdowns which we witnessed. So for example, on this slide, you also see that our subsidiaries, SPVs, which are dedicated for working out the problem loans, they also see quite good dynamics in terms of disposal of assets. So it's almost 25% of reduction. And again, this is irrespective of the fact that during certain months, most of the business on selling assets were paralyzed because the regulatory authorities was not working.
The clients were restricted in terms of moving around the cities and among the regions. So from that perspective, the demand which we see on certain assets, including for quite illiquid ones, like, for example, land plots remained quite robust and was helpful. So the main answer I see that number of loans which we managed to work out, they had kind of a bit legacy of nature. Yes. The next question, I'm not quite sure that we get it clearly.
You were saying your your question was on buy now, pay later type of loan. Could you please a bit
Yeah. I guess the question is that my understanding is that you're you're showing a lot more you're recognizing a lot more loan related fees now because of this product versus the past? And is that the main driver of the rapid growth in fee income that you're projecting, or are you also looking for a nice pickup in the other more traditional fee income sources, which I guess are payments and cards?
Yeah. I'll ask Victor Skrill, our finance director, to respond to this question.
Mhmm. Hello, Simon. Yes. We expect that contribution from that source of product would be around 13% to net income. Sorry.
To net fee commission.
13 in 20 that amount.
Yes.
Okay. That's that's very clear guidance. Okay. When the CEO is back, maybe you can touch on the last the the dividend question later on.
We can go next. Yeah. Simon. Yeah. Is with us.
So I will repeat the quest could you please repeat your question again? Yeah.
The question is, you know, very few banks have shown earnings growth and paid dividends, which you nicely have done. So well done there. Just question whether we could expect further dividend growth since your earnings grew in 2020 versus the 2019 dividend.
Yes. Hello. Yes. We, as a management board, will recommend to the board of directors, which will take place on March 19 this week, to pay out to pay out dividends this year. But as you know, that shareholders' meeting will approve finally in the April.
So our recommendation would be to pay at least 60% of the net profit for the last year.
Okay. Very clear. Thank you.
Okay. Mhmm.
Thank you very much. So the next question is from Andrew Keeley.
Hello there. Hi. Can you hear me? Yes. Great.
Thank you. Yes, thanks very much for the call. And yes, congratulations on the results and outlook. I guess a couple of kind of slight follow ups to previous questions. So just in terms of your asset quality, obviously, the cost of risk last year was a line that you comfortably beat your guidance through, it seems like, more success in terms of working out problem loans than you perhaps initially expected.
I'm just trying to understand whether your kind of 0.7% guidance for this year, you know, the extent to which that kind of includes how you see the kind of the pipeline of problem loan workouts, you know, playing out. You know, is there, again, the kind of potential that you could have a a really nice kind of beat on that line, in 2021, or do you think given the kind of fact that you've you've probably worked through a lot of the kind of big, you know, the big kind of ticket legacy problem loans, etcetera. The, you know, the the potential for kind of beating that that guidance is perhaps more limited than we saw last year. So any kind of thoughts on that would be be very helpful. And then a couple of other kind of questions.
In in terms of your fee income, I I think from what I can see, your your deposit insurance fees were were very, very low in the fourth quarter, I think you referred to this in the presentation. Could you just give us a bit more color as to what kind of run rate we should expect for that going forward? Because that had a very big impact on your fee income in the fourth quarter. And then finally, just on Halit market, obviously, it's very early days, but do you have any kind of details or targets for the kind of GMV through Halit market? And any kind of color on kind of take rates there?
And then perhaps just how the credit finance is split between online cash loans or, you know, and kind of buy now, pay later. Thank you very much.
Thank Thank you very much for your questions. Let us answer one by one. On your question regarding the cost of risk guidance and asset quality, I would like to ask Almas Mohanov, our chief risk officer, to to provide the response.
Yes. Hello, Andrew. As you see, we guide our cost of risk for the next year for 2021 at the level of previous years. If you look at 02/2019, cost of risk was around point 7%. And, historically, we've been around that levels.
Like, Bharat mentioned today, the one off impact of 2020 was due to continuous work that was done on legacy portfolio that we acquired from Kikibi, and this portfolio is somewhat decreasing. If you look at stage three loans, you can you can see that the stage six loans decreased significantly. So there's still room to recover those legacy loans. But in terms of focus for 02/2021, we should be probably looking at previous track record specifically in 2019 and and previous years.
Thank you.
I guess. Yes, yes. Can you just also clarify, do you have any kind of macro provisions that you added from kind of COVID impact, etcetera, that are yet to be released and that could be released this year? And if so, what size are they?
Yes. We've actually, we we front loaded reserves back in first quarter of last year, if you recall, to account for possible changes due to our COVID situation. And through the time, we see that after the payment holders have ended, we see that actual payment discipline on retail and SME clients. So we've already adjusted our models in 2020. So going forward, we do not expect any significant changes to the models, so no possible big impact from reversals.
Andrew, I I think you also had a question on our fees and commission dynamics as far as remember. So I will ask to to comment on this. Mhmm.
Yes. With respect to your question of what run rate we should expect with respect to deposit insurance fees, we expect that it would be lower by around 30% in thousand twenty one compared to 02/2020.
And I think your third question was on Halic. Halic market. Yeah. Halic market. Do you have set any formal plans for this year?
So I'll ask Zsolnavik Malhotov, our head of retail banking, to to provide response. Thank
you, Morag. Yes. In 2021, we Yeah. More focused on opening up a product segment. That is the main direction for this year as we need to work really strongly with the product lineup for all the needed categories for our customers.
So we'll be they're actively working, starting partnerships with with our customers for major businesses, SMEs, and the corporate segment, and also invite new partners from the market to our new platform. We plan to reach the level 100,000 unique SKUs to have the minimum required base so that the next year 2022, we can we wish to ambitious targets on GMV. And also a separate mainstream as part of our health market development is a development of the platform itself as it was launched just in December 2020. We need to continue working on the improving resilience of our platform and prepare it for robust growth. That would be our focus for 2021 when it comes to the Halgo market specifically.
Thank you.
Okay. Thanks very much.
Thank you. The next question is coming from Tunde Oyo.
Hello? Tunde,
can you hear us?
Oh, sorry. Can you hear me now?
Yeah. Yes, Tunde. Hello.
Sorry. I was on mute. Sorry about that. Thanks for the presentation, and congratulations on the very good results. Just a couple of clarifying points for me.
On slide 17 where you talked about asset quality, just wanted to clarify some of the data points there. So if you look at the slide on the bottom right hand side on the debt payment holiday, that number for retail and SME, which is 13.621%, is that a percentage of gross loans? Or is that a percentage of loans in that particular segment? So just wanted to understand how to interpret those data points there. Thanks.
Yes. So that that is the percentage of a particular segment. So twenty one percent point three of SME portfolio and 13.6 of retail portfolio.
Got it. And the and the other and the and the and the ones below that are also interpreted in that way. Right?
Yes. Yes.
Okay. Thanks for that. The the other question I have is on your data factory that you mentioned. I mean, I was quite intrigued about what you've done on the digital side, you know, in the very short period of time and and the results you've achieved. But can you talk a little bit more about the initiatives you're actually making on the on the data factory?
I I understand it on the gross level as big data, but you have huge amount of expectation in terms of contributions to operating income. And I just wanted to understand what exactly are you doing, I mean, as much as you can share. And, also, more importantly, how you're handling cybersecurity risk going forward, given how much of your transactions are moving towards DigitalFront in the in the next couple of years? Thanks.
Yep. Let me answer to this question.
And let me give you a few, I would say, details on what we're doing for the for the data factory. Actually, we are bringing us, as I said in my speech, bringing the new stack of the technology to the bank. Folk focusing the first wave of the use cases that the big data use cases that we have developed in the end of from the business case perspective we developed last year. And the realization of these cases will be done this year and the 2022 as it's been it's been set here. So the results will be achieved during the next fourteen months.
There is the focus of the first wave of the program. We are focusing on the retail SME corporate clients, focusing mainly on the cross sale and reducing churn activities, outbound and inbound campaign. Speaking about the retail, we are focusing on some retail on some real time campaigns that we can run with the with our customers, again, inbound and outbound. And so the results have been calculated, as I said, last year. So I believe and I'm sure these results will be achieved based on this new capabilities that they're bringing to the bank.
In regards of cybersecurity, please clarify your question. So you you want Yeah.
I just wanted to understand your approach to cybersecurity and how much comfort you have around that. I know you haven't had any had any incidents, but just wondering what your approach is there, especially given you're now having way more transactions. You're doing more online loans, doing more online transactions. And then and then how what kind of approach do you have towards mitigating those sort of risk in that angle, you know, going forward?
Clear cybersecurity, especially developing our digital agenda, is one of our major priorities right now. We are growing this team and mean, the cybersecurity team injecting cyber make it as as it's been mentioned. So we are redeveloping the digital organization as well. So we are injecting cybersecurity officers into the our, I would say, digital teams who's working on the specific and dedicated digital products. So this is one of the new things that we have start implementing during last year.
Then there are a few initiatives regarding the implementation. There is a road map actually in the bank regarding the implementation of the certain dedicated IT systems. So we are exact exactly in the middle of the realization of this road map. Some of them will be implemented this year in order to reduce some risks that we see related to the digital transformation.
Okay. Thank you.
Yep.
Hello. We also have a few questions which we received through online q and a. So let us pick pick up few of them. The following questions are coming from Karim Salabini. The first question is on the cost guidance, what drives the highest cost expectations of 02/2021?
Yes. Let me cover this question. We have several components for cost growth for 02/2021. The first one is increase in salaries of our employees. And the second component is increase in loyalty program expenses for bonuses and some promotions, which which would be driving also transactional activity of our clients.
So there are they would be benefiting also to revenue growth and transactional activity growth, which we already cover.
The sec the second question from Karim was regarding the competitive landscape Uzbek expansion. Yeah. As you probably know, we have our Uzbek subsidiary called Tengge Bank, which is operational since 2019. It is a universal bank. It starts opening branches.
Already two branches has been opened. There are plans to open few more branches this year. It is a bank which operates within corporate segments and which obviously include SME business as well as retail. And we are looking at business with Uzbek customers, not only from the perspective of developing our subsidiary in Uzbekistan, but also from the perspective of providing cross border transactions from Kazakhstan, who supporting the trade operations of our Uzbekistan customers with our Kazakhstan clients, with supporting the export of Kazakh companies into Uzbekistan. So the developing of Uzbekistan operations should be considered from from two perspectives.
Again, further building our subsidiary, but also the supporting of trade flows and trade business and expansion of of Kazakh businesses. And we see more and more development, which is happening in Uzbekistan, and we also see more and more interest of Kazakhstan's Kazakhstan companies to start operating in Uzbekistan or to increase trading with their Uzbek counterparties. From the landscape perspective, we as you probably know, the banking sector is dominated by state owned banks. There are number of midsized local owned companies. There are neo banks which is entering the market.
So the market is probably still at early developing stage. So from that perspective, it's quite interesting for us to focus on it and bring the expertise into the market and as well as support, as I said, our clients, which are entering rapidly developing Uzbekistan market. Let us speak further questions. Next question is coming from Kiara Salini, who's asking the question on the following. You guided to net income above $400,000,000,000 in 2021.
What can you share on your dividend payout in 2021? Well, we have a dividend payout policy, which says that we are paying our dividend payout ratio is between 50100%. As our CEO, mister Munchakmetla, just mentioned, the proposal from the management to the board of directors, which is still needs to be approved by the general shareholders meeting is to pay dividend 6% of net income for 02/2020. And for 2021, the decision will be done, obviously, once we have completed 2021 and we have the full year results available. The next question is coming from Azamat Ishq Ishkabayev.
And the question is regarding the growth of commission expenses higher than commission profit. What is the reason? And I will ask Victor Skrill to provide a response.
Mhmm. Thank you. The reason for that is that we have share of other cards issued by other banks going through our acquiring network. And thus, on one side, are gaining higher revenue. But on the other side, we are also paying some high commission for those transaction, which leading to low margin on those types of operations.
And thus, we have, like, some different trends in operating income and operating expense on the card transactions. But going forward, we expect that the combination will be increasing. The combination of our cards and other cards will be changing, which would be beneficially influencing our net scheme commission results from payment cards.
The next question is coming from Svetlana Aslanova, VTB Capital. The question from Svetlana is on market share in retail and corporate loans in 2021 as well as deposit base performance. I would ask Zumvech Mahmouda first to answer the question regarding dynamics of retail loans and deposits in 02/2021, and then I would ask the registrar to respond on the corporate probably from more SME perspective.
Thank you for the question regarding retail lending. Naturally, we are focused on further increase of our share. The numbers that were shared today in the presentation showed that we intend to further grow our market share for unsecured loans. Also, you can see growth in the need of population in secured lending. Of course, we're speaking more about mortgage, and we'll be very active developing these interactions.
And, of course, we'll continue being focused on retail lending for our retail business generally. And now on the deposit base side, we plan to continue increasing our deposit base. Yes. We shall actively raise new customers, and we see for this year growth of no particular less than 14%. We plan to reach these results.
We plan to grow not only the balance of our customers, but also the deficit base. Speaking of the overall number of customers that will use this product. Speaking of accounts, naturally, growth will continue to be based on attracting new customers as well, not only improving our relations with the existing portfolio and customer base will continue growing. And this next year, we'll be mostly raising it to the account. So we we achieve we we expect that positive growth that will customers in this direction next year.
So the way I'm passing it over
to you. Yes.
Speaking of lending to SMEs, we see growth points through penetration of credit products to our transaction base. We are the major transaction bank in the country with the large base of customers using our accounts in online banking. We see not all are currently using our loan products. And while the and with the major growth of lending to small and micro business was through penetration of lending to the transaction base, and we expect the same in the mid sized business in the course of this coming year. Also, you see the balances are growing of our SME customers.
We plan to continue that growth through introduction of new underwriting of with new good products that have already been tested and show good performance and motivate customers to do more transactions through the bank. Thank you.
Thank you, Jean Beek and Davrien. The next question is coming from Uly Adamson. The question is the following. What is the just
a moment.
The question is on the effective start up rate for 2001 that you're assuming in your guidance.
Yes. We expect that it should be slightly higher compared to 2020 and be around 11%.
The next question is coming from Patrick Pastoling regarding the decline in risk weighted assets in 2020 despite strong growth in loan book. How much of these risk weighted assets decrease is related to temporary regulatory measures? With CET1 ratio at 24. Your return on equity guidance at 2760% payout ratio. Your CET1 will exit to summer 'twenty one at mid- to high 20s.
At what stage do you consider your capitalization as excessive? Yes, there are obviously the impacts from the regulatory measures. Probably, I can I can speak the effects of temporary regulatory release as an impact on CET1? It's around 1.7%. So probably the effect on risk weighted assets, I don't have the exact figure that probably it will be more or less of the same magnitude.
Regarding the capitalization, yes, we do not have the formal guidance on capitalization. Typically, we're making a decision on the dividend payout ratio, we are looking on a few factors, including the prospects of growth where we can profitably deploy our capital. As you can see, last year was quite good in terms of credit growth. We also have ambitious growth perspective for this year. So we think we have the ways where we can profitably deploy our capital.
Another way, we also look at the current macroeconomic condition because we think that it is important to protect our credit ratings because these are the elements of our you know, of of of our business model, which help us to secure a strong position in Kazakh banking banking sector and which supports our strong position in terms of funding costs. The next question is coming from Lal Taylor. Do you consider Kaspi's growing QR payment network as a competitive threat? What strategic actions, competitive responses are you considering? Could you please allow one one moment, please?
Yes. Let me answer to this question. Yes. This is one of the things that we have to, I would say, see on the market and that that we have to compete. And there are few actions that we have already taken in order to in order to answer to this strategic tech challenge.
One of the answer is the tap to phone solution that we have launched last year, which is developing quite good and demonstrating the good numbers where we have the, I would say, the the the the commission and fees rate that the fees rate, which is comparable with the what CASB is providing. And the numbers that we are demonstrating with this solution are quite good. Plus, we are working on the few different strategic answers, technological and not technological, in order to in order to respond.
Thank you, Anton.
We have another question from Tunde.
Sorry. Thank you. Yes. Sorry. Just a follow-up for me is on your strong growth on on the loan book in 02/2020, which, you know, as you rightly laid out in the presentation, you gained market share.
I'm just wondering as we move forward into 2021 and and even years ahead, right, What kind of industry growth rate are you sort of estimating for 2021 given you are expecting to grow at about 16% in aggregate? Do you expect to continue gaining market share despite being the largest player in the market? And if you can please sort
of
elaborate on what has been the source of the recent market share gains. You know? Is it just orders falling off, or is it because of digital initiatives and orders not doing it? Or are there any other things that you could point to the reason for your increase in source of competitive advantage? Thanks.
Artuna, thank you very much for your question. I think the tendency which we saw in 2020 would continue in 2021. When we talk about the sources of growth, it's, I think, coming from different sources. One thing is, of course, our strong client base because we deal with strong clients which are leaders in their respective sectors, leaders in their respective regions. They also took the advantage of current situation in order to further strengthen their position.
And so that's why we were able to support the our strong customers with providing financing both on working capital facilities on setting the financing for their capital expansion. Another source of growth is refinancing from other financial institutions. It might be from other banks in Kazakhstan, and situation is still not good with all banks. And you probably know that there are some news on consolidation, some some news which some banks were losing the license. And that situation actually helped us to capitalize on our strong capital and funding position and to cherry pick on very selective basis good customers.
So typically, that happens when the situation in the banking sector or with certain banks, I would say, is is shaking or we have the situation like in last year. Typically, this is at the time when we try to further strengthen our position both on retail and and corporate as well as the SME customers. And I think another layer of growth, which I think is probably relatively new, which we need to witness last year is a small business. And so we see that a big number of small customers, which were not traditionally funding themselves from the bank because they are considering other procedures are quite difficult, and their perception was that taking the loan from bank is a very difficult task on one hand. On another hand, because the cash flows in the economy was quite high, the banks were also considering these customers as quite risky.
And as Dorian was mentioning in in our presentation, we launched innovative digital loan proposition for our small and micro clients. We call them individual entrepreneurs, which have a very comprehensive the risk digital solution behind that. And so we see increased number of non cash payments in the economy, which makes these customers more transparent to the banks. And online decision making is making these loans taken from the bank is much more easy and affordable for these type of customers. So we think that last year, we opened another target client segments, And we think this is another way how we look into the credit growth and credit demands into the into 02/2021.
Great. Great. Yeah. Thanks. Appreciate that.
Yeah. Another question is coming from Uchir Desai. What will your bank branch strategy looks like going forward? Will you look to reduce the number of bank branches as your digital business increases?
Thank you. Speaking of branch strategy in the bank, like I said previously, within our larger initiatives, the growth of our service channels for customers. Well, right now, we are focusing our work on this project that's called fidget fidgetal format, fidgetal, fidget. Basically, presumes the transformation of our service models. It's now being more oriented on training our customers in digital services rather than issuing simple products, dispersing simple products.
So the, AM training customers in the digital services will probably take more and more. So that we could basically move to a brand new format that will enable us to actually reduce the number of physical branches, physical outlets. Reducing number of physical branches, this is simply an inevitable problem. I see. We see the trends.
We see the behavior of our customers, the needs and demands of our customers. So we're getting prepared for this, and we will do this right. We do this right, first of all, by changing our operational procedures and changing our service model.
Thank
you. This is it.
Dear all, for the time being, there are no more hands and no more new questions in the chat. So in is there any final remarks?
Yes. Dear, ladies and gentlemen, thank you very much for participating our annual results call today. And as usual, our IR team remains open for any further questions or comments. Take care. Stay safe.
Thank you very much. Bye.
Thank you, ma'am.