Earnings Call: H2 2020

Feb 18, 2021

Ladies and gentlemen, welcome to the BCV Full Year 2020 Results Conference Call and Live Webcast. I am Paolo, the Chorus Call operator. I would like to remind you that all participants will be in listen only mode and the conference is being recorded. The presentation will be followed by a Q and A session. The conference must not be recorded for publication or broadcast. For the call today, the speakers will refer to the slides which are available for reviewing on the IR section of the BCV website since this morning. At this time, it's my pleasure to hand over to Mr. Pascal Keener, CEO of BCV. Please go ahead, sir. Thank you very much. Good afternoon, everybody. Let me go directly on Page 4. I would like to highlight only 3 main points That are going to be detailed later on by Thomas. But the first point is the decrease in revenues It is mostly only due to the COVID-nineteen crisis. Probably, you will see that other Continental Bank will not have this The decrease is quite clear because a big part of the decrease is due to trade finance and many other top line banks do not have any Trade Finance Business. Thomas will come back on that. The second point is the decrease in profit. I would like to stress here that Despite the decrease with an ROAD of 9.3%, we still are I think in terms of ranking the 1st Capital Bank in terms of Profitability based on ROE. I think that's important. And last but not least, we carry on with our dividend policy Let me go directly maybe to Page 6. So in terms of business trends, so mortgage loan In line with the market, we feel an increase of 4%. I will come back later on, on that. Deposits, I mean, you have to add up site deposits and deposit because we had a change in accounting statements. And if you add up the 2, You see a significant increase here due to customer liquidity. Thomas will also give more some more detail. Otherwise, loans to corporate are rather stable, but I will come back to that because you have different effects here. I'm going to comment Page 7 and 8. I think you saw that. And 9 was the same. We had So the announcement about that, so I don't think I need to comment that. So let me go directly on Page 10, retail banking. So basically, in terms of mortgage loan, a very good year, steady increase. Nevertheless, we are very cautious on buy to let mortgages. We are also Cautious in certain areas in ConventGo because we have areas with a vacancy rate of 0.5% and we have other regions with The vacancy rate of about 2% to 3%. So this is clear. We grow faster in those areas where the vacancy rate In terms of customer deposits, several effects. I think some customers think BCV is a safe bank. Some customers think BCV probably is nicer with them as far as negative interest rates are concerned. And this is also the effect of the lockdown, if it's a lot of semi lockdown and the restriction in traveling. People spend less. People travel less. We had a clear decrease in customer transaction For payment transaction, being a credit card, debit card, ATMs, cash, so this has an effect on the revenues that explain part of the reduction And it has also an effect on deposit and savings since people spend less, basically, save money During 2020, I think that's going to be not the case if the vaccines work and even Everything is back to normal. It's in the second half of twenty twenty. 1, probably we see here A boost in spending. I hope so anyway. Then revenue and profit is directly what I said. So the consequences of what I said. Otherwise, I would say a good year for Retail Banking. So Corporate Banking, 3 business, as you know, 3 businesses And really here different dynamics. For SMEs, let's say, the credit line as well as the utilization of credit line Without taking into account, the COVID loans are very stable. So this is a good news. This shows that The SMEs at least in Switzerland or in Contonvo are very resilient to the pandemic. Now in terms of increase, the increase is mostly basically those COVID loans, 6,000 SMEs. We have granted a credit a COVID loan for roughly EUR 700,000,000. So you see that those loans are quite small. We talk here about very small SMEs. The customer deposits up because exactly when you get a loan, you get the credit on your cash account. I would also say that looking at the number of SMEs having troubles, this is exactly similar as 2019. So I'm talking SMEs which have credit with BCV and roughly 60% of SMEs do not have credit Either with BCB or with other banks. So I'm not saying in this call that all SMEs are in perfect shape. I'm saying the SME we are seeing in our Credit book, they are very resilient and we don't have more issues than 2019 or 20 17, in a way, this is normal. When you look at all measures taken by the government, basically, they were helped In this phase, there are certain sectors where it's more difficult, travel, hotel, restaurants, But we don't have a good very big exposure in the sector. So basically, my point is that here the credit book is still You see very good. Large corporate, I mean, this is volatility as usual, so nothing really to comment here. I see 2 to 3 difficulties in large corporate, in Switzerland, firms active in travel, in air transport, In freight, in cruise, those kind of things, this is probably more difficult. But I'm quite confident that If we can go back to normal, say, at the end of June, in summer, I think those corporates We'll be in good shape. If there would be another lockdown, that would be more difficult. I'm not talking about, let's say, Specific, BCV, last conference, I'm talking about Swiss corporate, where banks like BCV might have might be part of a syndicated loan. Trade finance, that was in a way a big issue in 2020. In March, when we realized what was going on in China, In February actually, we decided to be very cautious and to decrease our exposure voluntary in order not to have Some risks. Unfortunately, we nevertheless had some risk. We discussed that Last time in August during this call. And basically, we are very cautious for the second part After year, which is in a way positive, you saw the numbers this morning. So it's resulted basically in a reduction Our volume of around 20% and it has a direct effect on revenue. So trade finance, First point, it has reduced revenues. And second point, we took some provision. And as you know, some part of the provision are in the revenue lines. So that explains this trade finance issue as well as, let's say, fewer transactions From retail customer and private key customer as far as ForEx, etcetera are concerned, this explains a big part of The reduction of revenue, I mean this is rather a temporary program. Trade risk, as I said, some new provisioning needs, Not only trade finance, but a big part is trade finance. But nothing during nothing new during the second half, Almost everything was taken in the first half. And the rest of the portfolio, I believe, is really good, is really resilient. And I don't expect today many issues going forward. Private Banking and Assisted Asset Management, a large increase in Under management, the performance of the market and also people bringing money to us from almost all segments. Mortgage loan, it's less than the market, 3%. And okay, the rest, I mean, We put some effort on bringing to market investment sustainable responsible products. We established a partnership with Etos, Who is a leader in Switzerland. And trading, that's a innovative good news. The bad news is that the market will be difficult. The good news is there was an increase in volatility, and we could, as usual, take advantage of This kind of situation with our revenue up roughly 10%. So I hand over to Thomas for the financial part. Okay. Thank you, Pascal. Hello, everybody. I'm on Page 15, which once again summarizes the income statement with key numbers and evolutions, which you know. I think it's more interesting to dive into the different elements and to start off with the revenues. On page 16, so here we see that well, the main issue if I can say it like that comes from net interest income, which decreases by €48,000,000 with regard to the total decrease of €57,000,000 So what you see is on the bottom of the chart, You see that with regards to net interest income before loan impairment charges minus €23,000,000 Here, of course, half of it almost half of it is the voluntary reduction in trade financing. And then the reminder of this is the negative interest environment. But also, for example, They reduced the net interest income on dollar with regards to the decrease of the interest rate curve in dollars and the pressure Margins has resulted on the liability side. Now obviously, the comparison is not in our favor with regard to 2019, Which was a year of impairment reverses. So year on year, this is plus €25,000,000 In difference, which explains this big step in net interest income decrease €48,000,000 Now it's clear that the main part of this loan impairment charge comes from trade finance As you already understood. Now with regard to commissions, again, which By €13,000,000 Again here, the voluntary reduction of trade finance comes in with almost the same Amount is with interest income. So overall, we talk about more or less €20,000,000 in decrease of interest income with regard to that decision. The behavior of private clients, as mentioned, we reached commissions in the BancoMart, ATMs, FX and credit cards. However, there was a positive trend in commissions from the Wealth Management Business, be it Private Banking or Asset Management, in particular on the transactional side. The trading income is up. Now this is of course to one hand side, The trading desk, dating floor with activities, which is based on the flow of commercial clients or private clients. But in this number, you also have a part of the treasury income, which Use FX swaps to take advantage of the extension at the Swiss National Bank. So it's important that from economic perspective actually the net interest income or the interest income Decrease is less than that because part of this actually from accounting by accounting rules taken into trading income. Vikram, maybe if there are questions on this, I'm happy to answer to that. Now again, also I want to insist on the point that after the record year of 2019 had exceptional items. Also on the other incomes, we see one exceptional dividend from SEK 6,000,000, Which obviously did not came in this year. So that is why others are down by €8,000,000 So the page 17 gives us more details on the evolution of operational charges. And you know that this is out of our ongoing concern to keep firm control on operating expenses. And you see that other operating expenses are down by €9,000,000 be it on our Efforts of managed IT costs. You remember maybe I mentioned that we had initiatives underway to reduce this. Now this is happening. And on the other hand, obviously, the COVID resulted in less events, less marketing. And I must also say that as a regional important actor, we have been nice with all kinds of suppliers, event organizers When we cut when we ended the contract because an event could not take place, We also had kind of social responsibility to leave some amount to the suppliers. So still demand money still we saved money. Now, okay, headcount is pricing down, but it's in the same order of size on Page 18. With regard to assets, Now here, this is important. You see, of course, on the client side, but it's a good one of mortgages and loans and value to customers, which I think Pascal Kina explained already. But you see also the effect of the increase in cash and equivalents. Now this is directly linked to the monetary policy of Swiss National Bank, which actually Increased quite significantly the exemption limit up to which Swiss banks can put money at their interest rate at the Swiss National Bank. It's actually the small supplier of the liquidity, legal and credit reserve, which This exemption was introduced in January 2015, but then was increased twice, Last time in April 2021, it was a factor of up to 30 whereas it was initially 20 when introduced in January Now it's obviously now our aim to always make sure that this is fully filled up Because in this environment to have 0 at Swiss National Bank, obviously, is a kind of support with the Swiss National Bank provides to the Swiss Banking System. And also the idea behind that, that universal banks like ours, our retail banks cannot charge negative interest So, small depositors. So, here we will actually the Cisioner Federal Bank provides some support, we can call it like that. So we use this professionally and we fill it up as you can see. On the next chart, the liabilities and equity, On one hand side, we've increased due to banks. And on the other hand side, maybe in a not such optimal way from a company perspective, With customer deposits, which increased, as Pascal mentioned, by more savings, also to some extent to The credits which were provided and the money went directly into deposits, the common credits. And with maybe some tendency to bring money To the BCV and where we will be changed we will change ourselves as we go further with regards to negative interest rate So far less than 1% significantly less than 1% of our clients have negative interest provisions and over a total amount of About a quarter of the deposits. While shareholder equity is slightly down, this is a New way of provisioning expected loss for healthy credits And which we actually we created out of reserves in the equity. And this takes me directly to Page 21. How did we do? How did we create this provision For non impaired loans, actually we took €35,000,000,000 out of the reserve for general banking risk and the Shareholders Equity. And actually this goes in different we've reached in different items of the balance sheet. For the Balance sheet exposure is directly reduced from the balance sheet exposure, be it cash and the bank exposure, other loans and mortgages. And for the off balance sheet exposure because there is credit risk in off balance sheet exposure, as you mentioned quite easily, it's On the right hand side, it's a provision item. So you can see that this CHF 23 plus CHF 12 are the CHF 35,000,000 which we created. This is now an endogenous number, reflecting risk rates, expected losses And we'll evolve but marginally year by year. As you can understand, we imagine we simulated this And we see that the amplitude of fluctuations year by year of this expected loss provision is at most plusminus €4,000,000 Year on year, at most with a certain infinite interval of confidence, obviously. Now, as you get to assets under management, While basically we have more information here of the €4,500,000,000 of net new money, You see again is typically seasonality, which I always insist on when we are on the 3rd party when we talk about First half results, the netting money has been overall businesses Be it Asset Management, be it Private Banking, but also more a balance sheet business like personal or SME clients. The things has been already largely commented. Without regard to our capital ratio on Page 23, now it's High and even higher, because by reducing an activity which has quite high risk rates, it's obvious that our CET1 ratio is up to 70.7 percent, but also because this already mentioned in August last year, because Zimmer reduced Some of the multiplies, because I think we are conservative in our internal models. On Page 24, Well, you see this other effect of the time in which we live with excess liquidity to some extent. Our ATS here is Fabio. The regulatory limits HQLA is composed to 3 quarters of our cash equivalents Swiss National Bank and 1 quarter out of Our HQLAs, which are really top AA, AAA bonds. Now coming to the key element, which is also which I'm proud of it, if we have this charter And which is a clear confirmation of that we walked the path now in our 3rd horizon. We are in the search right now of 2018 of 340 to 380. And given the current environment, we maintain €60,000,000 per share as proposed to the AGM, which will provide €310,000,000 in distribution, meaning 94% of payoffs. So this is all for my part. Pascal? Thank you. Okay. Going forward, I think I'm not going to be very long in my explanation. I mean, we have a relatively low visibility On the pandemic, my personal feeling is that not feeling, but see the vaccines are working. Maybe everybody would like that we could vaccine people faster. But nevertheless, I think Until summer, I'm convinced that most of the elderly people as well as the vulnerable people will have put their back sign. So that means that I'm in a way optimistic that we can see the light at the end of the tunnel for H2. So I suppose that 2021 will be better than 2020. You see on this chart the estimate of the GDP, now whether it's by 2% or 3% or 1% is quantification, but I'm convinced it will be positive. There will be a rebound because I believe that people need to spend now need to consume after those several months of difficult times. In terms of it's interesting to see that the real estate market, the mortgage market Has not been at all affected by this pandemic. And this is not only in Johan Tovar, but in whole Switzerland. And I expect The market will carry on like that. You see, in the last 3 years, I always told you that We want to be careful. We want to carry on being careful, but there is a small change in 2020. In the last 3 to 4 years, Houses were built at a rate which slowly was higher than the growth in population. And we could see this vacancy rate increasing. And now people carry on building houses, it is clear, But the growth population increased in 2020. We had in the good year 1.2% to 1.3%. Then it flew down to 7, 6, 8 and now we are back at something like 1.1%. So I don't know whether 2020 is an exception or whether this will carry on in 2021. But in a way, this is a new element That supports, let's say, an increase in demand. And this is good in a way for the real estate market as well as for the mortgage market. So we will see. And this increase of population is, of course, driven by immigration, not by Swiss people or people around the Lake of Geneva having more babies during the lockdown. That might also Okay. I'm done with my presentation, and we are ready for your questions. We will now begin the question and answer session. Questioners on the phone are requested to use only handsets and eventually turn off volume from the webcast. Webcast Viewers may submit their questions via writing via the relative field. The first question comes from Stalmann Stefan from Autonomous Research. Please go ahead. Yes. Good afternoon, gentlemen. Thank you very much for the presentation. I have two questions, please. The first one Relates largely to net interest income and net interest margins, which were actually quite weak in the second half compared to the first half. And I'm curious to understand whether we can actually look at the second half net interest income as something like a Normal run rate going forward or whether the second half of the year has actually seen a constant Deterioration of net interest income so that in December, the run rate of net interest income was even lower than what The average for the second half would suggest. And also I'm curious to learn more going forward about what the pressure points I hear from net interest income. So for instance, if there's still pressure from the runoff of swaps, how does the situation look like In terms of front book, back book margins, mortgages and other loans. And maybe in this context, Could you remind us what your SMB threshold actually is in absolute terms? I seem to remember something like SEK 8,000,000,000, but I'm not quite sure. Thank you very much. Thomas, maybe Okay, Stefan. Hello. Very good questions. Now, first of all, In the second half of last year, on the treasury side, we did more FX swaps To take opportunity to take in U. S. Dollars or euros, for example, and to And when we do that, precisely in that moment, we put pressure on the net interest income and the gain is In trading income, precisely the point I mentioned, which of course, I apologize, makes it very difficult for you guys to follow is really from an economy perspective going on with regard to what I mentioned? That is an element which you must be aware of. Now, but more fundamentally speaking, what of which you mentioned, right, we have Seeing a little bit of pressure on the asset side with regard to the repricing of the mortgages. This is an ongoing issue, right, of the existing mortgage book repricing. This is long, long, long, long decrease of interest rates in I want to say in absolute terms, if you can say that. And in front of this, of course, it's only partially compensated by, of course, yes, the reduction of The cost of our bonds, particularly over the Fundrise Central, the covered bonds and with regards to the long lag of our swap book, right? It's only partially compensated. So this provides some pressure, which is then Partially offset by volume growth. So if I take the building blocks together of repricing of the asset on the asset side, Right. In front of this, I put the repricing of the bond side of the long leg of the swap book and the volume growth. I almost set off the pressure, but it's a slight decrease still, but it's almost set off, okay? I think these are the key elements which have in mind. But and then I mean, and then keep in mind please to add other elements. Now that the net interest income in 2020 had a non Market element, I mean, the voluntary reduction in trade finance, right, is a contextual decision, Right. And for the moment, I dare to say that once we are out of this COVID crisis, We get back to more or less 2019 levels and that activity, right? But this obviously is a decrease in net which in proportion terms is stronger in the second half than the first half because as Pascal mentioned, this reduction happened in February, Was fully let's say March. So this is another impact on the second half of the year where it was fully loaded, I could say that. So I think these are the elements which we should put together. To make a long story short Is that from economic perspective, we are quite able to stabilize our interest Income, if I take the part which is in the trading book and put it together with an interest income which you can't see, I apologize. Obviously, this is a challenge for universal bank like ours because I mean it's a lot of activity. It's still rising volumes in mortgages loans to defend an interest income, which is the whole argument for efficiency for cost control, right? But the good news is from an economy perspective, we maintain it. Particularly of the current element, obviously, is This whole dependency on monetary policies, I don't want to get into this right now. And the second key message I give is that we have And contextual particularity with the income effect from trade finance, which we stay in the market. We obviously that we learn, but there is definitely there's no strategic change structural change from our business with regard to trade finance. Did this help? Right. Thank you very much. Yes, very helpful. I was wondering regarding the SMB threshold. Is it something that you could give us thoughts? Yes. Well, I mean, well, let's put it that way, right? It's always quite close to the numbers, which we publish. So it is quite higher than the number you pronounced. Right. Because it seems like there were 2 different ways to read your From the material that you published, I guess if I look at your balance sheet, I would guess it's a bit north of €11,000,000,000 But If I look at your HQLA assets, I would get to maybe 8.5%, because you say it's 75% of HQLA is SMB deposits. So I was a bit, I guess, confused about Okay. Let me be clear on that one. No, okay. Let me be clear on that one because some people call HQLA, as I see it, and it's kind of a ballastry way of looking at things, It said my total liquidity at S and B and the total amount of My bond book, some of that is some of my HQLAs, Right. Which means I have gross Lee speaking, because then how much I can actually I know, I see what you mean. Then I it's a question to what rate I can take them into the account. But broadly speaking, right, from the account a balance sheet point of view, I have the 11 plus €4,000,000,000 of HQLAs. Then I see what you point on Page 24, the weight to which I can take them into account is a little bit less. So Category 1 and Category 2 HQAs. But the important point to get to the core of your question, right, look at the balance sheet, look at our total assets, Right. So the total cash and equivalents, right, in particular, if you take the cash BA de Coute, What you see is almost the slightly above the SMB threshold. Right. Very clear. It really grows with the SMB threshold. That's very clear. Thank you very much, Thomas. Thank you for your questions. The next question comes from the line of Andreas Brunn from Credit Suisse. Please go ahead. Hello. Thank you for your presentation. I've got 4 short questions. Firstly, could you comment on the current Activity in trade finance. Then secondly, is there more to come with regards to the Decrease in operating expenses are put differently. Can you reduce operating costs even further going forward? The third one, do you give any comment regarding the outlook because You left that out this time. And then lastly, how much Was the net interest income decreased due to trade finance? Can you be more specific there or Give us the number. Thank you. Okay. So first question, situation in trade finance. So you saw the number, minus 20% in exposure. So for the time being, we're still careful. But definitely, we will Again, increase our exposure, our risk appetite during 2020, if everything was correct. Whether we will be back at the level of 2019, that I don't know. So we will go step by step. But let's say, we should have during 20 21, probably more revenue than 2020. But you see, it takes time to slow down. It takes time also to speed up. So So we decided to slow down in March 2020, but till you get really the effect, it takes a couple of months. So it's the same When you want to go back, so probably I could imagine that the revenue will be roughly similar, maybe a bit more Nevertheless, in 2021, but it will not be 20% more, let's be clear on that, unless we increase significantly our exposure, Things that we don't want to do at least as of today. Now the decrease in net interest income, We don't include the number very specifically, but it's a number with 2 figures. So between something like I'm talking about revenue, not provision here, Hi, I'm saying between 10 or 20. That was the first question. Then the outlook, Yes. So look, I mean, it's quite difficult. I mean, the best guess I can do is that I think 20 21 will be better than 2020. Now it depends on the provision. That's the main point Always. In terms of operating expense, the second question, I don't think we will go further down. We had this effect on IT cost and this is mostly not totally, But you have to think also that in 2020, we had a decrease also in operating costs due to marketing costs. Many events were canceled, The customer event, the general meeting, etcetera. So that helps. Now for the time being, I think everything will be concerned till probably the end of the first half. So we might also see something similar. But I hope, I hope that in a way, I think we'll be better as of the second half because if things That means we should also get more revenues. So I don't think that we can think that operating cost We see a decrease in the same proportion. They'd rather be something like stable, I would say, and between 2021, 2020. The next question comes from the line of Javier Loderio from ZKB. Please go ahead. Yes. Hello, everybody. This is Javier. Maybe three questions from my side. The first one is on trade finance. Sorry to returning to that area. I would be I would have curiosity just if you could give us a little bit of flavor What kind of business you're actually financing? Is it soft or soft or hard commodities? Maybe as well as geographical exposure, So that we can guess where the credit risk is actually in trade finance, that would be Well, no. And then an additional leg on that question would be under what conditions would you actually increase This exposure, is it just international trade increase or whatever? Then another Question I have is actually on the funding side. Bond yields are quite low. If you would issue bonds Right now, you would ensure you low coupons for several years. If you are now entering With deposits or engaging in more deposits, you never know what kind of deposit you are going to pay in 2 years' time. So Did you think is that an opportunity for you just to increase the bond funding because in 2020, the actual Bonds have decreased. Then the third question would be on the net new money. I mean, the second half was much, much better than in the first half. I would like to know about the profitability of this net new money. Is it actually did the net new money enter then actually was it the Clients engaged then afterwards in investment products or remain that money on the balance sheet? These were my three questions. Okay. I'm going to take the first one and Thomas the second one and the third one. So trade finance. Trade Finance is built roughly on 3 pillars: metal business, So steel, etcetera, agro and agro is the diversity of different raw material And what we call energy. So we don't finance oil, crude oil, but we finance derivatives, We finance the gas and those kind of things. So I would say something like 35%, 40% metal, 35%, 40% are growth and the rest of 20%, 25% basically energy. The first so it's quite diversified. Roughly, We have something like 40 to 50 different raw materials. And then there are detail of raw materials. So it's quite an infinite world, if I may say so. Basically, I would say a bit more than 50% of our customers are traders around Geneva and Maybe another 10% to 20% in Switzerland and the rest abroad, but mostly Europe. We don't have that many customers outside Europe. We used to have, but We stopped. So we decided to refocus Certain parts of the business, certain countries, I don't want to go into more details, with certain raw materials Depending on geopolitical issue and also on long term customer relationship. So we will have a probably a more focused portfolio. A big issue, a big question in this business is, Should you be diversified and have as many customers as possible, ready to mitigate your risk Or should you focus on selected customers that you know very well? And the answer to that question is not that simple. It depends probably on the geographical region and it depends on the kind of material. And So we're not going to change competitive business. You see that some banks stopped, BNP in Geneva is stopped, ING, I think. We're going to carry on this business because it is a good business with an attractive return on equity over time. Now if you don't accept spikes, I mean, probably peaks In provision, sometimes then you should not lose on this business. And we believe we have the muscle, we have the equity to So some losses when they occur. But overall, this is a profitable business. And for us, It's a fantastic business because if you think of the balance sheet of a Continental Bank, I mean, what do we have? We have credit, SME credits, Parts corporate and mortgage. I mean, this is very sticky. I cannot video the mortgage book in 6 months. I mean, We have many contracts that go well over 5 years. The average duration probably is 4 between 4 5. And if you take SMEs, I don't see myself asking all SMEs in this region, please, we would like to be reimbursed. So that doesn't work. So when you have a business like trade finance, when the average transaction is 3 to 6 months, It's interesting because you can accelerate, you can speed up, you can use your equity if you have excess equity. And when necessary, You can slow down in a couple of months either because you see risk or because you need some equity for any reason. So I think this is kind of a joker in the balance sheet of a bank like VisaV. So we're going to stick to that business. But now this is a business where you have to be very flexible. You see, you are traveling this business 15% to 20% new customer every year Because those traders, they appear, they disappear, they merge, it's a very strange business. But we will focus on Swiss and European traders or companies. We're not going to follow maybe some large bank that went to Singapore. This is too big for us. This is too far. So I think one key success factor in the business is the knowledge of customer, the knowledge of Because again, there are 2 kind of businesses in trade finance. 1 is corporate. Basically, You fund the balance sheet of a trader, and we are not really in this business. Maybe it's 5% to 10% of our overall business All you finance transaction and we finance transaction for more than 90% of our exposure. And that means There is a product, there is a seller, there is a buyer, there is a boat usually, so from point A to point B. And this is what we do. But if we don't want to mitigate risk, because risk is fraud in this business, you have to understand very well new transaction. And this is why I think we will maybe focus more on selective countries, selective clients Going forward, but the overall exposure will remain probably the same because we are a tiny player in this market. And we could probably Double, tripled the business within the next 24 months. It's no issue. It's just a matter of risk appetite. Okay. So okay, I will start off start with your question on funding, which is quite amazing question. I mean, Remember 15 years ago, basically, when you looked at the bank and you saw a balance sheet, which has almost no client deposits, It was a risk factor and probably also an issue with regard to rental profitability. Now what your question and I said it correctly is a question, it would not be interesting to substitute the deposits by bonds. From a pre economic perspective, obviously, this would be a high impact on profitability, at least from a short term Short term view. Now this is not our ambition. We believe In the structure of the Universal Bank, we think it is much more resilient and sustainable If we have client money, client deposits and we fully serve our clients with regard liability products, Asset Products and Other Services like Business Private Banking Mondays. Now, so how we so basically we keep the same Financial strategy and obviously now it is obviously quite interesting To have some refinancing, be it our own bonds or be it with the Van Brieft and Tradle, which obviously is It's a very low interest rate. And as I mentioned before, which is one of these elements, which compensate for the low Interest rates on mortgages. Now with regard to net new money, Your question, first of all, is the first half against second half. If you look at the analyst presentation in Chart 22, and as I already mentioned, different opportunities, Basic kind of seasonality in our making money for different reasons. One reason at least is with regard to the There's one large client who also is our main shareholder who basically receives taxes And more or less more in the second half of the year because a lot of people don't want to have them in their deposits because there is a Takes on Fortune in this canton. And then the these taxes which are perceived they are sent To the federal government, at least a significant part of it in the first half of the year. So that is already one element of Seasonality, which we typically see year after year. So we really should look at net new money numbers on an annual level. Now, the dynamics we have mentioned before right there in all businesses, I want to underline the strong contribution by our asset management activity. Now with regard to margins, Yes. I answered your question. You answered a kind of questioning of how do we how does it work with capital margins In our wealth management activity, well, I think the key element here Is that probably the dynamics in asset management are quite clear, right? There is an ongoing margin pressure And it's definitely a need to have new volumes and the net new value in front of this To defend the earnings, which we are able to do. So without going into more detail with regard to this, I hope I answered your question. Yes. Thank you. Thank you very much. There are no more questions at this time. Okay, guys. Thank you, Raimo. Thank you, Laj. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call and thank you for