Good day, and thank you for standing by. Welcome to the BAWAG Group Q3 2025 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question- and- answer session. To ask a question during the session, you will need to press star one, one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one, one again. Please be advised that today's conference is being recorded. There will also be a transcript published on the company's website. I would now like to hand the conference over to your speaker today, Anas Abuzaakouk, CEO of the company. Please go ahead.
Thank you, operator. I hope everyone is doing well this morning. I'm joined by Enver, our CFO. Let's start with a summary of third-quarter results on slide three. We delivered a net profit of EUR 219 million, EPS of EUR 2.77, and a return on tangible common equity of 28%. The performance of our business was strong, with an operating income of EUR 555 million, pre-provision profits of EUR 354 million, and a cost-to-income ratio of 36%. Total risk costs were EUR 52 million, translating into a risk-cost ratio of 37 basis points, as we continue to see solid credit performance across our businesses. In terms of our balance sheet and capital, average customer loans were up 1%, and average customer deposits were down 2% quarter- over- quarter.
We have a fortress balance sheet with EUR 13.5 billion of cash, an LCR of 201%, and an overall strong asset quality with a low NPL ratio of 76 basis points. During the third quarter, we completed our EUR 175 million share buyback and canceled 1.6 million shares, leaving us with 77 million shares outstanding, which is down 23% from our IPO back in 2017. For the quarter, we landed a CET1 ratio of 14.1% after deducting the dividend accrual. The operating performance of the business across the group was solid, yet we continue to be patient and disciplined, with 19% of our balance sheet in cash in a market environment where we believe credit is still frothy. The integrations of Knab and Barclays Consumer Bank Europe are both going well, with the growth of the cards business really standing out.
The teams are focused on the blocking and tackling of integrations and executing on our roadmap. The gains you see are incremental but build up with each passing quarter. This is the first quarter where you see integration efforts start to materialize in terms of reduced operating expenses, and this will continue in the quarters ahead. As for key milestones, we are planning for the Knab bank merger to be completed by the end of this year, and I've been working on testing key system migrations scheduled in 2026. Our goal with both integrations is clear: fully integrate into the group operating framework and culture, work as one team, and speak with one voice. Both integrations have also served as a catalyst for an organizational redesign as we grow into a Pan-European and U.S. banking group.
The foundation of this redesign is a digital-first approach to banking, complemented by a strong advisory-focused branch network. We are now able to realize the gains of technology investments made over the years in creating a common tech ops platform that can scale, with the benefits increasing from various operational and AI-driven operational initiatives. We plan to share more of what we've been working on with year-end results. The recent stress in corporate lending does not come as a surprise. We have witnessed the blind focus on volume growth leading to lax underwriting and increased risk-taking in various forms. In contrast, our approach has always been to remain patient and disciplined, prioritizing risk-adjusted returns over sheer volume growth. Ultimately, increased stress and volatility in the market work to our advantage, as they lead to a repricing of credit risk and a return to more rational and disciplined lending.
We are on track to exceed all 2025 targets and are building momentum going into 2026, with strong earnings and capital generation, a fortress balance sheet, and a long-term mindset geared to avoiding the latest fad or hype cycle. Our focus is prudent capital allocation, making investments that drive long-term profitable growth, and preparing the business for both the opportunities and challenges stemming from volatile markets, technological innovation and disruption, and an ever-changing banking landscape. Okay, moving to slide four, capital development. At the end of the third quarter, our CET1 ratio was 14.1% after completing the EUR 175 million share buyback program and EUR 120 million dividend accrual for the quarter. For the quarter, we generated 114 basis points of gross capital, of which 94 basis points were through earnings.
We executed a mortgage SRT during the third quarter, providing relief of approximately EUR 470 million of RWAs against mortgages that were under the standardized approach. We have excess capital of EUR 258 million, 110 basis points above our capital distribution target of 13% in 2025. In terms of any Basel IV output floor impacts, we have zero RWA inflation, as we have a buffer of 20 points to our output floor level, given 90% of our business is currently under standardized approach. We will revisit any further capital distributions with year-end results after considering any new business and/or potential M&A opportunities. On to slide five. Our retail and SME business delivered third-quarter net profit of EUR 188 million, a very strong return on tangible common equity of 37%, and a cost-to-income ratio of 35%. Pre-provision profits were EUR 311 million, up 57% compared to the prior year.
The retail risk costs were EUR 56 million, with a risk-cost ratio of 58 basis points. We continue to see solid credit performance across the business, with a low NPL ratio of 1.2%. We expect continued growth across the retail and SME franchise in the fourth quarter, driven by strong operating performance as we fully integrate the two acquisitions and solid growth in consumer and SME, with mortgage origination starting to pick up. On slide six, our corporate real estate and public sector business delivered third-quarter net profit of EUR 39 million and generating a strong return on tangible common equity of 31% and a cost-to-income ratio of 25%. Pre-provision profits were EUR 53 million, flat versus prior year. Risk costs were positive, with a EUR 1 million release, as we continue to see solid credit performance across the business, with an NPL ratio of 10 basis points.
As I mentioned earlier, we believe there will be increased stress across the corporate lending space more broadly. No different than U.S. office, when stress builds up, you begin to see the difference in underwriting and asset quality. As far as our U.S. office exposure, this was down 17% during the quarter and 82% since 2022, with a remaining portfolio of EUR 118 million of performing loans, equal to approximately 20 basis points of total assets and 2% of total real estate assets. We will stay patient and continue to focus on disciplined underwriting, risk-adjusted returns, and not blindly chase volume growth. With that, I'll hand it over to Enver.
Thank you, Anas. I'll continue on slide eight. Strong quarter with net profit of EUR 219 million and a return on tangible common equity of 28%. Core revenues were up 1% versus prior quarter, with net interest income up 1% and net commission income up 4%. Operating expenses were down 3% in the quarter, and cost-to-income ratio stood at 36%. Risk costs were EUR 52 million, or 37 basis points, broadly in line with the prior quarter. The tax rate in the second quarter was 26%, reflecting our more diversified geographic footprint in 2025. On slide nine, the key developments of our balance sheet. Overall, average customer loans were up 1% and average customer deposits down 2%, quarter-over-quarter, resulting in a 2% decline in total assets. We maintain a strong cash position at roughly 20% of our balance sheet, ensuring enough liquidity for future market opportunities.
However, with spreads remaining at current market levels, we will stay patient and continue to focus on risk-adjusted returns. Core revenue developments on page 10. Net interest income was up by 1% in the third quarter. The average three-month arrival remained flat this quarter and is expected to remain at this level, so we will start to see more positive developments in the coming quarters. The group's deposit betas decreased by 10 percentage points to 38%, primarily due to a reduction of high-cost deposits. In terms of outlook, we expect to see a continued positive trend for the rest of the year. Net commission income was up 4%, reflecting the ongoing positive trend in retail and SME, as we have seen over the past quarters. We expect a stable development in the fourth quarter.
On page 11, operating expenses were at EUR 200 million, down 3% in the quarter and in line with our expectations. The integration of the acquisitions is progressing in line with plan, and we see initial integration effects already materializing. We are also making progress on operational initiatives aimed at further streamlining our processes and unlocking long-term productivity gains across business lines. We'll provide an update of our progress with full-year results. We expect integration effects to continue to develop positively in the fourth quarter, and we therefore reaffirm our full-year guidance of approximately EUR 800 million in operating expenses for 2025 and operating expenses below EUR 200 million for the fourth quarter. Regulatory charges were EUR 10 million in the quarter and expected to be around EUR 40 million for the full year.
Moving to page 12, risk costs were EUR 52 million in the quarter, broadly in line with prior quarter and in line with our expectations. Asset quality remains solid, with an NPL ratio of less than 80 basis points. We continue to see a robust credit performance and continue to see risk costs at approximately 40 basis points for the full year. Let me close with the outlook and targets on page 13. We expect to exceed our 2025 targets of a net profit of EUR 800 million and earnings per share of more than EUR 10. With that, let's open up for a Q&A. Thank you.
Thank you. As a reminder, to ask a question, you will need to press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one, one again. We will take our first question. The question comes from the line of [Nogonara Sokolova] from Morgan Stanley. Please go ahead. Your line is open.
Hi, good morning. Thank you for taking my questions. My first question is on the use of excess capital. Can you walk us through your latest thinking on how you decide between deploying excess capital towards the dividends, share buybacks, or M&A opportunities, and what are your key priorities in determining the optimal use of excess capital? How should we think about the potential frequency and scale of the share buybacks going forward, given that your CET1 ratio at 14.1% remains well above the 13% distribution target and your capital generation is strong? The second question, just on the asset quality, do you see any read across for BAWAG from the recent U.S. credit events and the broader concerns about the credit cycle? What are you seeing on the ground regarding your U.S. exposures within your portfolios?
If you can give your rough estimate of BAWAG 's exposure to private credit. Thank you.
Okay. Thank you, Gunnar. Let me just try to unpack. There's a couple of questions. I'll start with the excess capital. So, Gunnar, just consistent with prior years in our capital allocation framework, we'll wait till the end of the year with year-end results, assess the excess capital situation. Then based on, obviously, where new business development comes in in the fourth quarter, as well as any potential M&A portfolio opportunities, we'll make an assessment as far as capital distributions. The framework is organic growth, new business opportunities, which we have a pretty decent pipeline in the fourth quarter. We have our 55% dividend accrual, which has been happening throughout the course of the year. Then we'll look at special dividends or buybacks in the absence of M&A. All of that will be assessed. As to where we stand today, buybacks have been a part of our capital distribution framework.
If you kind of take a forward-looking view in terms of 2027 targets, our excess capital generation, kind of overall valuation, we still think share buybacks are a critical part of that distribution framework. It makes sense from a capital allocation standpoint. We have to look at that at the end of the year and see what's on the offering. As to your question on just overall corporate credit, as we went through the third-quarter results, I made a comment around just our broad view to corporate lending. No different than what we've seen in other asset classes in the past, you see this kind of focus on volume growth really translate itself into aggressive lending. That aggressive lending, you see that in eroding underwriting standards in this really kind of singular pursuit of volume growth. That leads to bad things.
I think what we've seen over the past few weeks in kind of the U.S. corporate lending space more broadly, people say private credit, but I think it's more broad than just private credit. I think you see some cracks there, and that's something that people should be aware of. I brought the highlight or the example of U.S. office. I think when you have these periods of distress, you really see the differentiation in terms of underwriting quality between different lenders, be it banks, private credit, or the like. Hopefully, people are familiar with how we underwrite over the years. I think U.S. office is a pretty good example of that in terms of differentiating our underwriting standards and our approach to lending. I think this will be no different. We'll see what happens.
I think, look, we have a very narrow view of the market, but it's hard not to say that there's been stress recently in this space.
Thank you.
Thank you.
Thank you. We will take our next question. Your next question comes from the line of Jeremy Sigee from BNP Paribas Exane. Please go ahead. Your line is open.
Morning. Thanks very much. These follow on a little bit from the previous questioning. Could you talk a bit more about loan growth? You've obviously seen some in the quarter. You had 1% Qo Q loan growth, and you mentioned the decent pipeline. Could you just talk about where the opportunities are? Where are you seeing demand and attractive pricing that you can take advantage of? That's my first question, where you see the good loan demand. Secondly, just again following up, you talked about the year-end review of capital deployment and the question about M&A opportunities. What's your view on timing for how soon you could start more serious work on M&A projects? How much would we have to wait for that to be realistic?
Okay. Good questions, Jeremy. Let me start with the loan growth, and I'll address kind of just M&A framework more broadly. Loan growth, if I kind of take you through kind of a tour of just the different asset classes, I would say consumer and SME has been pretty robust across the board if you kind of see quarter-over-quarter, but as well as on a year-to-date basis. That's really driven by the credit card business. I'd mentioned it that the Barclays Consumer Bank Europe has really been a standout business, more so than we had underwritten to, to be honest. The consumer loans in general across the different jurisdictions have performed well. We see opportunities in secured lending starting to pick up. On the corporate side, that's more idiosyncratic. That has been, I'd say, a bit more spotty in terms of quarter-over-quarter.
We had 3% growth this quarter, but that's on the back of deleveraging from prior quarters, and that's going to be more idiosyncratic in terms of unique corporate lending opportunities. Real estate has picked up. That was up 2% this past quarter, and we see a pretty good pipeline. Hopefully, we get back to kind of where we were at year-end. That's been a positive development. Housing has been a challenge, not so much from a market opportunity. Those are out there. It's just from a risk-adjusted return standpoint, the pricing has been pretty aggressive, and we try to be disciplined in terms of the margins that we anticipate on that side. We're seeing a pickup in the third quarter. Hopefully, we'll see positive developments in the fourth quarter as well. I'd say the two areas that have been the most challenged are public sector.
That was down quarter-over-quarter. The challenge with public sector is there's opportunities, but when you see public sector tenders whereby municipalities or states pricing tighter than sovereign in the same country, that just seems a bit unusual and upside down. That's something that we won't participate in. That's less a credit issue. That's just more from a yield and margin standpoint. The securities portfolio, you've seen continuous deleveraging. The reality is investment-grade corporate credit is at all-time tights, whether it's bank, paper, CLOs, sovereign, across the board, across that whole construct, spreads are super tight and at all-time lows. We'll be patient. That kind of takes you through a tour of all the different asset classes. That's on the loan growth. On M&A, I would say, Jeremy, two types of M&A.
There's the bolt-on M&A, which is more kind of you're really kind of there's an installed customer base, there's a unique channel, and then you kind of absorb it into your overall platform. By platform, I mean kind of your centralized functions and your technology and your operations framework. There's the strategic M&A. As it relates to strategic M&A, that's going to take some time if there was anything on the offering. The bolt-on M&A are things that we can execute at any time. I think by the end of the year, we'll have a better sense of where we stand on the bolt-on M&A. That was a too long-winded answer to two questions.
That's really helpful. Thank you very much. Cheers.
I'm in a talking mood this morning. Thanks, Jeremy.
Thank you. We will take our next question. Your next question comes from the line of Gabor Kemeny from Autonomous Research. Please go ahead. Your line is open.
Morning. A few questions from me. First one is on MII, where you had very solid dynamics in the retail and SME segment and some more negative dynamics in corporate center. Can you elaborate a bit on that? Going forward, shall we expect the customer business to drive your MII, or is there any distortion we should model from the corporate center? That's the first one. Second one, MBFI, big focus, obviously. Thank you for providing the additional disclosures on page 21 in your presentation. Very helpful. Any additional actions you have been taking on the back of the recent events, news flow, or is it all business as usual for you, especially if you could comment on the U.S. part of this exposure, please? The final one is really a clarification on capital deployment just in terms of the sequence of events from here.
In the next three, four months, you will see how the M&A pipeline develops, and let's say at the Q4 stage, if you have nothing imminent, you would distribute what you have above a 13% CET1. Is this a fair way to think about it? Thank you.
Yeah. Thanks, Gabor. Let me just take the live one on the capital distribution because that's a fairly easy answer. Yes, that's the case. We'll come back in February with year-end results and be able to make an assessment in terms of where we've seen with capital distribution and let a new business and then potential bolt-on M&A. I'll just take the MBFI or the kind of the lender finance more broadly. We did provide additional disclosure, Gabor, on slide 21. The reason being is just to be able to differentiate between what you're seeing in the market as opposed to what does actually lender finance mean. Really, the takeaway here is these are senior financing facilities, warehouses, akin to kind of a CLO, advance rate of up to 50% on average, kind of a look-through LTV of 2.5 x across the host of corporate lending that takes place.
I think the real thing to focus on is the granularity of the pool. There's over 400 companies across 10 facilities. We get comfort from that granularity, that diversification, and overall concentration limit. That's performed very well, absent one idiosyncratic event, which I think Enver had mentioned in the first brands where we had an $8 million exposure. Other than that, we're in a pretty good position. As I said earlier, during these periods of increased stress and volatility, that's where you start to see opportunities where credit risk gets repriced. Hopefully, we're able to take advantage of some of the opportunities that there's more rational and pragmatic lending in the marketplace. I'll pass it to Enver for the NII.
Yes. I think, Gabor, your question was on what is driving the NII growth in the future. Definitely, it's business-driven. It's going to be all business. The elements that you see in the corporate center are reconciliation topics and also some technicalities around timing of repricing and interest rate changes. I would expect that to be rather close to zero and in the future to see everything happening in the business segments.
Very helpful. Thank you.
Thanks, Gabor.
Thank you. We will take our next question. Your next question comes from the line of Amit Ranjan from JPMC. Please go ahead. Your line is open.
Good morning, and thank you for taking my question. The first one is on deposits. If you could talk about what is driving the quarter-on-quarter decline, please, and how should we think about the growth going forward? Also, related to that, the net interest margin, should we think about the 3.25% in 3Q as being the trough and the trajectory should improve from here on? The second question is on you talked about long-term productivity gains. What are your thoughts around productivity gains from AI? If you could talk about any projects that you're working on currently, please, and what's the outlook there? Thank you.
Do you want me to start with the OpEx? Then we can take it. That's more nuanced in detail.
Oh, yeah.
I would say just on the OpEx, this is the first quarter. Q2 was a peak as far as overall operating expenses. You saw the decline this quarter, and that will continue in subsequent quarters as we start to harvest the gains of the integration efforts and the productivity focus. You know, AI is a bit of a catch-all. Everybody talks about it. It's a bit of a cliché, and there's some hype to it. The reality is for us, and we'll talk about it at year-end in terms of some use cases, AI has just been an accelerant. We shouldn't lose focus that a lot has been done already in terms of machine learning, which I guess falls under AI, process re-engineering, and automation. That's been going on for years, and we've been making those investments for years.
I think AI is just an accelerant to that, but we'll provide more details at year-end. Enver, you want to take it?
Yeah. On the deposits, Amit, in Q3, what really happened was a reduction of high-priced deposits, both on the retail side, which were predominantly online deposits in Germany, and the other part was money market deposits on the corporate side. High-priced deposits were let go in Q3. I would not expect it to continue. Our assumption right now is for the rest of the year, stable deposit volumes, and probably in the other years, a bit of growth on the deposit side. In terms of net interest margin, we always said like 3.25%- 3.30% is kind of the guideline that we have for NIM, and that's going to be very stable also in Q4. That's the expectation.
Okay, thank you very much.
Thanks, sir.
Thank you. We will take our next question. Your next question comes from the line of Borja Ramirez from Citi. Please go ahead. Your line is open.
Hello. Good morning. Thank you very much for taking my questions. I have two. Firstly, on the NII trajectory going forward, I understand business volumes are one of the main drivers. I would like to ask if there's any benefit from the structural hedge. Also, if you could please remind us on this. My second question would be, given the German fiscal stimulus, I would like to ask if you expect some benefit in the corporate loans going forward. Thank you.
Let me take the NII question for you. Yes, it's going to be business growth as one of the main drivers for NII growth in the other years. We will benefit, obviously, from the structural hedge. That roll-off of the hedge of prior years is a net contributor in the next two years and is a part, obviously, of the NII guidance that we provided for 2027. In a ballpark, you'd say it's probably one-third deposit-driven and two-thirds asset-driven, the NII uplift that we expect. On the fiscal stimulus, it's not there yet, to be honest. We would expect maybe there is an uptick in public sector activity, but it still takes time, I think, till the transmission mechanism works.
Thank you.
Thank you. We will take our next question. Your next question comes from the line of [Tobias Luch] from Kepler Cheuvreux. Please go ahead. Your line is open.
Yes. Good morning. Also, three questions from my side, please. One on capital and two regarding the U.S. On the capital and the SRTs, maybe you could elaborate a bit, you know, what is in the pipeline for Q4? In terms of the excess capital we might see by year-end, is it fair to assume roughly EUR 400 million on that side? On the U.S., with the exposure, I think the filing we have is $6.7 billion by H1. It gives the total exposure on balance sheet. You're around $7.5 billion on total. You gave some splits in presentations and so on. We get to $5.1 billion. Maybe you can elaborate a bit on the gap we don't see currently. You mentioned $300 million non-bank financial institutions, but give a bit of a flavor of what the rest is.
Thirdly, in general, it seems like you're a bit more upbeat on the expansion into the U.S. recently in the wording, at least what I'm reading. Maybe you can give us also a bit of a flavor, you know, like how your further actions over the next years in the plan, you know, how they see this U.S. exposure basically moving from that kind of 12% on balance that we had currently with H1 results. Thank you.
Great. Thanks, Tobias.
Yeah, I'll take the first one.
Capital SRT.
We just did a mortgage SRT in Q3, and we are working on a smaller consumer SRT that is smaller in size than the one that we just did in Q3. In terms of excess capital, Tobias, we don't provide the exact guidance, but probably you can see from our organic development what we are doing in the quarter and extrapolate the numbers.
Great. I'll take the U.S. question. Good question, Tobias. I would say let's start with the acquisition of Idaho First Bank. When we did that a few years ago, that was to be able to provide a banking license and raise deposits in the U.S. At the time, the bank was $0.5 billion or so in size. Fast forward a few years, what we've been able to do is complement what we've already done in terms of corporate and real estate lending in the States. Just to also not confuse the lender finance that you'd mentioned, that is on the corporate side. That's part of that $7 billion that you mentioned of real estate and corporates.
The retail and SME side is a mix of what we have in Idaho First Bank, what we acquired, what we've grown there, as well as what we're doing on the retail and SME side in terms of asset origination platforms. That kind of runs the gamut. 80% of that is effectively secured lending in one form or another. That's been part of our overall growth trajectory. I think you hit the nail on the head. The most important thing is if you look at the context of what we call the DOC NEL versus Western Europe and the States, that split will probably be 90-10, 85-15, 80-20, not at any given point in time, but that will kind of go through cycles. I think those are kind of the bookends of how you should think about the overall asset exposure across the different jurisdictions. Is there something else there?
Yeah, that's it. Okay. Thank you, Tobias.
Thank you. Yeah, thanks. Thanks. I think that's quite interesting. Also, you know, I guess you keep the kind of split with a retail SME, therefore, versus corporates, right? That's not going to be changed on that whether or yes, expansion. Maybe quickly on this $100 million non-bank financial institution exposure, can you elaborate a bit on that? Maybe, you know, are there other, you know, bigger blocks of asset exposure to one or the other address you might want to highlight?
No. I mean, the reason we put that additional disclosure, Tobias, was just to kind of demystify when people talk about private credit or NDFIs or all these different topics. We wanted to be able to kind of highlight lender finance and what does that actually mean. I would caution people, right? There's a whole gamut of what exactly does NDFI lending entail. This is through the lens of BAWAG and how we actually underwrite in the areas that we're focused on and what gives us comfort. I think it's going to be different for every bank until there's consistency in terms of disclosure and also just operational definitions around these terms, to be honest.
Thank you.
Thanks, Tobias.
Thank you. We will take our next question. Your next question comes from the line of Ben Mayer from KBW. Please go ahead. Your line is open.
Hi. I'd like to take my question. I've got two quick ones. This is a follow-up on SRTs. I was wondering, do you see any constraints to using this tool just generally? What kind of benefits do you see? Do you have a target in terms of basis points of capital uplift that you're seeking with these particular tools? This is my second question. You saw quite a decent increase in your total reserves Qo Q. I was wondering, should we expect that to continue into year-end and into next year? Thank you.
You want to take that?
Ben, I'll take the SRT question. Could you just repeat the last question?
You said that increase in reserves.
Okay.
Which is, by the way, Ben, that's reserves and prudential filter.
Yeah.
I must have got confused on that too.
On the SRT, good question. Are there any constraints? Yes, leverage is something that we look at. Maybe just to remind everyone why we are doing SRTs. The majority, I mean, close to 100% of our balance sheet is on the standardized approach. We use it for two reasons. The one reason is that we applied for risk mitigation. For especially, you know, consumer loans and the likes, it's a downturn protection, more so than a capital relief transaction. For the mortgages and, you know, high-quality assets or low-risk assets, it's really just to bridge the gap between a standardized approach risk weight and the true risk of the asset. There is more potential. The real constraint is the leverage that we are looking at. I think that's how we would look at it. On the total reserves, it's both, as Anas said.
It's the LOPs as well as the MPBacks that, you know, builds up in that position.
You should note, Ben, there is as you have consumer unsecured and cards.
Yeah.
Right? Those have the highest provision. That's the strongest correlation in terms of coverage, and that runs from 70%- 90%. That's probably why you see this uptick. Don't forget the NPL ratio or the prudential filter is in that number as well.
Okay, thank you.
Thank you.
This concludes the question- and- answer session. I will hand back to the room for closing remarks.
Thank you, operator. Thank you, everyone, for attending the call today. I look forward to catching up with your end results in February. Take care and have a nice day.
This concludes today's conference call. Thank you for participating. You may now disconnect.