Banca Transilvania S.A. (TLV) Earnings Call Transcript & Summary

Dear ladies and gentlemen, welcome to the conference call of Banca Transilvania. At our customers' request this conference may be recorded. [Operator Instructions]. May I now hand you over to the management of Banca Transilvania. Please go ahead.

Thank you for joining us in the second attempt to have the first quarter of 2021 financial statements related press conference call. This time, unfortunately, Omer, our CEO, is not attending the call, he was having some meetings with clients around Romania, in fact, in the Southern Park already scheduled for this week. And we said that Romania's economy is very important. So he's continuing his trip, and I am here together with our CFO, George Calinescu, when we are going to try to present results for the first quarter. And also, we are going to try to answer your questions. We would like to start by apologizing once again for the technical problems we were facing [Foreign Language] during the call. Yes, a couple of times, we were thinking that you are able to hear what the operator was transmitting you. But unfortunately, there was a problem, which was not fixed in due time. So coming back to what Omer was starting to present and to talk to you on Monday. He was -- a little bit about the macro development in Romania. For sure, you have a lot of details in that respect. And yes, we are coming just with a couple of confirmations with regard to how financial development, economic development in the country was taking place. When it comes to the real economy, we had a strong rebound, and let's say, the resale recovery seems to be in place. And we are having in our presentation, which is available on our website, a couple of graphs, which are giving you some hinters with regard to how the real economy is having the evolution and very relevant indicators like the energy consumption or the fixed investments, which proved to be on a highly upward trend during the quarter of the year. Coming closer towards let's say, economy and macro indicators are meaning for the banking sector, we would like to mention that in terms of the monetary policy, we are currently expecting that the central bank is going to keep the policy rate around the current level, which is 1.25%. It might be that another potentially 25 basis points cut could follow, but we are not really, let's say, betting on something like that, we would anticipate some stability in this respect, especially looking also at how the inflation target is being set. When it comes to the exchange rate, that we were facing a depreciation, but for the local currency, but the pace was let's say, quite well under control or it was a very linear one without shocks or without unexpected effect. Very important aspect which we were mentioning also in the past, like 1 of the opportunities for Romania is are the available new funds. And the very good thing is that now we are seeing really quite nice increases. When it comes to the absorption rate, which rose by 7 percentage points during the first quarter of this year. When it comes to the banking sector dynamics, as you might already know, we were having a nice growth in terms of private loans, in terms of corporate exposure. So all in all, all the areas in the economy being them corporate clients or retail clients were having nice growth when it comes to the outstanding exposure. In terms of nonperforming ratio, even though, yes, everybody was looking with a lot of attention to what is happening in that respect considering last year's lockdowns and the public moratoria, the public and the private moratoria, which were applied in the banking sector in Romania, so people or analysts were anticipating that as NPLs would have been on a rising trend. However, the level is still below 4% also at the end of February. We don't have yet a figure for the end of March, but things look like being under control. On the deposit side, the growth continued during the first quarter as well as we are having a very high liquidity in the banking sector below to the report ratio declining to less than 70% across the banking sector with significantly higher liquidity when it comes to the FX sector. So the segment -- sorry, not only the local currency component. But the FX side is also bringing a lot of activity to the market. When it comes to Banca Transilvania and what we have done in the first quarter, as you were able to see also in our press release. So we were trying to have all the engines prepared and started in order to support all the new initiatives taken by the private economy. And besides going with 2 of programs which were offered to the market by the bank. We were also an active player in all the government programs, which were either continued or started during the first quarter of this year. So here, we are talking about an additional program when it comes to the guarantee scheme for SMEs, the so-called IMM Invest, which was started last year, and which continues with the second phase or continues with the second phase this year. We are having a new initiatives, which is looking for the -- specifically the agricultural sector as part of this SME invest programs, then there is a program for leasing. There is a program for factoring. And we are having the [indiscernible] program for -- which is a continuation of the first house program for individuals in the past, which is now a days called the new house. And it is one of the important players and having quite important tranches allocated under this program. Important maybe to mention a little bit if we are talking about these government programs also about the public moratoria, which were ended like the majority of the cases, at the end of last year. But the, let's say, the new items added to the public moratoria for last year was permitting clients who were not accessing the full period of 9 months during last year. To get that extra months, which were the difference between what they took and the 9 months which was allocated in the initial program to take it during 2021. Here, we can already mention that when it comes to Banca Transilvania, the amount of clients entering this program is very limited, and we are talking about less than RON 150 million of local currency, which currently under this public moratoria. While everything what was, let's say, a public moratoria, at the end of last year was finished, and we are not having them as ongoing kind of under of moratoria kind of exposures. What we were saying last year that we are doing at an accelerated pace and that it has to do with a lot of digital initiatives. We were continuing this quarter as well. And for the whole year, we are having this program and plans in place. And we are going to talk about budget, George will give you some details with regard to how much we were budgeting to spend for [indiscernible] our digital initiatives, I'm meaning in our bank. And it's not only about what we are offering to our clients, but also the way in which we are trying to increase the internal efficiency, so that we are able to process faster and to provide higher-quality products and services to our clients. If -- most probably you were able to see that this time, we are having a quite extensive report available with a lot of explanatory notes to the financial statement. So that, yes, it might not make sense to lose too much time with details regarding the different items of the P&L and of the balance sheet. What we can say in general is that we are quite comfortable with the way in which we were able to capture the opportunities in the market during the first quarter of this year. And that, in fact, potentially a little bit conservative way in which we were acting last year is proving to have been correct. With the way in which we were able to shape the balance sheet structure and for the P&L structure of the bank. We were seeing nice growth when it comes to the pre-provisioning operating profit a lot or not necessarily a lot. But if we are comparing to just first quarter of last year with first quarter of this year, you should take into account that during last year, we were having the beginning of March, the shock of the lockdown. It was quite an unexpected event for the banking sector and which was having an impact when it comes to the financial market. So that some of the movements and evolutions during the first quarter of last year was somehow out of the [ row ] when it comes to a normal evolution for our different P&L position. In terms of loan structure, more or less, we continued with the same very, very well diversified in terms of exposure, customer wise, product-wise, sector wise, so we are continuing to mitigate credit risk by making sure that we are not over investing in any of the sectors. And that sector wise, we are having dedicated approach when it comes to the sectors, which are meeting the -- or which are bringing the highest potential positive evolutions for the Romanian economy. Here, we mean agriculture, IT infrastructure. So we are trying to concentrate on these areas which are really adding a value for the Romanian economy. When it comes to the loan quality, PAR 90 is the same very good or very well managed level below 2%, with a coverage ratio in [indiscernible] it the 1 which we were having we covered also in the previous years. For the deposit side, we continue to see growth on the retail side, which is still counting for the largest part of our deposit structure, which is completely in line with previous strategies and policies, and we continue to pay a lot of attention to take [ RAL ] as well, concentrating on how we are keeping and managing very constructive and sound relationship with a wide range of clients, being it for the credit side or for the deposit side. If we are moving, let's say, to the corporate -- sorry, to the capital structure of the bank, as you can see, we are very well capitalized with a very sound capital ratio on all the segments and according to all the definitions. Again, together with George, we are going to provide details with regard to how the 2020 profit was proposed to be distributed in our shareholders meeting. Which was also taking place at the end of April. And then last but not least, we are going to be much more vocal with regard to our ESG initiatives in the market and potentially, you have seen our ESG report published for the first time in a very, let's say, complex manner and covering several tractors. We are going to come with a lot of updates and with a lot of details regarding the actions and the way in which we understand to be an active player in this respect, not only at how we are behaving as a corporate citizen. But also with regard to the education and the way in which we are going to be able to translate to the SME sector in Romania also the values, which are related to sustainability. I would stop here with the general presentation regarding first quarter [ time off ] results. And I'm leaving now the floor to George to come with some details, and then we are going to continue with the Q&A session.

Thank you, Mihaela. So Mihaela mentioned a little bit of details on the evolution of the first quarter. I will go a little bit in detail with the plan for 2021. They were detailed in the budget approved in the General Shareholders Meeting. And especially our focus on what we had. I was mentioning that we will have a focus this year on innovation, digitalization. And I will mention that out of the total, approximately RON 400 million balance investment support to transfer this budget is proposed to be allocated to investments in IT systems or digital initiatives or [ CART ] initiative. It's the highest percentage of an investment budget allocated to IT and digital initiatives that we had, I think, since I joined BT 7 years ago. So I'm happy that really we have a focus this year on IT and digital initiatives. With respect to other items of interest related to the budget for the year 2021. I think it's important to note that we have proposed a budget, which is, I would say, mildly optimistic in terms of the evolution. It takes into account what we have I was saying in terms of the evolution effect or the economy in Romania from a macroeconomic point of view. With a positive growth in terms of asset size, and especially in terms of loan book, with a planned increase of the loan book of Banca Transilvania to gross amount of RON 47.7 billion from RON 44 billion as we ended up the year with while total assets are estimated to be increasing to approximately RON 115 billion at the end of this year. In terms of key ratios, we will maintain a balanced approach, but the bank has held towards last year with return on equity, which is almost 13% at the end of this year. Of course, this will be highly dependent on the ability for the bank to distribute results throughout 2021. We have not taken into consideration the dividend distribution because we don't know at this point in time, if we will be able to have the petitions made by the Central bank on the distribution of dividends listed by the end of the year. But should that happen, we are prepared to distribute dividends, and it's our intention to do so. And if you looked at the shareholders' meeting proposals, actually, the result of the year 2020 were [ staked ] into 2. One, it was proposed and approved to be distributed as share capital increase to the shareholders. This will take place throughout the year. And 1 was kept into a reserve especially in view of the -- with the expectations to have this restriction on dividend payments, maybe at least by the end of the year. Should that happen, we will [indiscernible] again for the shareholders meeting and discussion the dividend distribution, which will be similar to what we had in the previous years, we want to maintain the same base sort of business distribution if we are allowed to do so. We have the capacity, and we are very well capitalized. We have put aside in the reserves large amounts, and we just wait for permission to do so. Let me from my side with respect to the budget and if there are any questions, we will gladly take them. Now over to you.

[Operator Instructions]. And the first question is from Hai Le Phuong with Concorde.

Can you hear me? I guess, it's me [indiscernible]. Okay, so. Thanks for your presentation. Just a few questions from my side, so first one would be on the NIM outlook. So I was wondering if this figure, as you had in the first quarter already reflects the interest rate environment, like order rate cuts that happened so far? And what is your NIM outlook moving forward? And my second question would be on personnel expenses because it grew quite substantially year-over-year. And I was wondering if it is related to wage increases or how much was it due to wage increases, and how much was it due to increase in the number of employees or other impacts?

Okay. So we are going to split the answers. I'm coming on the NIM with the details and George will take over the personnel expenses part. So when it comes to the NIM, yes, indeed within corporates the majority of the effect related towards the [indiscernible] but that is some time since the last cut was taken place. But in addition to this, please do not forget how liquid we are and the level of the loan-to-deposit ratio, so it is highly dependent on this extra liquidity. And we are hoping and we are giving our best to come with a higher pace when it comes to placing loans to the market and to make sure that the absorption of the extent liquidity is going to happen at a slightly faster pace compared to the past.

With respect to the personnel expenses increase. I want to point out that the first quarter of the year includes some one-offs related to initiatives that were discussed and agreed of the employees in the last year before the pandemic and which were not able to be put in place because of the [indiscernible]. With respect to some loyalty bonus that was to be paid out celebrating 25 years of history of BT to the employees, which has some tenure with the bank. Unfortunately, we couldn't implement this program last year because you remember very well that we were prevented from engaging into stock option plan initiatives. And also we had quite aggressively engaged into cost control initiatives because we didn't know what the impact of the pandemic will be on the financials. And now since we had a release in terms of the stock option plan. We both of this agreement that we had with our -- all the of the more senior and trusted employees that we will take back this program. And this catch on [ amounts ] which in Q1 was of RON 25 million, that represents actually the amount that we do for last year. Which we couldn't book and until now, we don't have significant increases in the gross wages of the employees. The last increase that we had was, I think, in February last year. Since then, only it maybe some related to retention purposes increases took place.

Yes. And just an addition that staff wise, in terms of number of staff, we would have been just like increases in that effect and everything was -- or the majority of them were related to what digitalization is meaning. So we were growing a lot of the teams, which are working in the digital-related departments or digital related activities of the brand.

The next question is from Simon Nellis with Citibank.

Yes, I would be interested in just an update on asset quality. I was a bit surprised to see such a large provision reversal. Could you just let us know why you feel comfortable enough to release provisions? Have you released any of the macro forward-looking provision? Just what's the ground there? And then maybe an update on just the moratoria exposure that remains the payment discipline of those who have exited moratoria.

Yes. So I'm going to start with the first part, and then George will come with some add-on, let's say. So the point is that when it comes to the repayment behavior of the client, their situation is very well under control. And with the, let's say, monitoring actions we were taking already in the last quarter of last year. We have seen that, in fact, the number of clients exiting the public moratoria was not facing any kind of problems for the time being and the repayment profile of the clients remained as sound as -- yes, we were counting. But nevertheless, we were prepared for the worse. What we were mentioning in the previous conference calls was that they are going to be, let's say, closer to having the final statement in this respect, more towards the [ second ] half of this year or potentially in the third quarter because companies were still enjoying some liquidities in their account. Which they were able to set aside during the 9 months of public moratoria they joined last year. And to the extent their economic activity was hurt this is not going to be already pretty visible in the first quarter of this year. This is, let's say, 1 aspect. And then for the second aspect, George will come with the details.

This is -- you know ever quality [indiscernible] 2 elements. It's 1 or by the collective assessment of our loan portfolio, which takes into consideration macro economic indicators and everything that Mihaela was mentioning, which didn't hope significant impact at the beginning of the year, but also it's borne by an individual component of assessment, especially for the loans that are in stage 3. And for this part, we benefited in the first quarter of some recovery from some clients in the corporate sector. And moreover, normally, historically, we weren't able to book anything in this respect in the first 3 months of the year because of cut off and the audit taking place and this individual assessment impact being sort of an adjusting event for last year. So whatever funds in the 3 months of the [indiscernible] sensor individual [ debt ] clients, it's already booked, but we booked in December financials. So that's why maybe you see only a reversal because of the macro point of view, which affects the collective assessment, pretty much things were flat. We had some recoveries on the individual level, and we couldn't booked anything on the individual level because those were booked already in last year.

Already in December. Yes, and if you are going to look, as George was mentioning, let's say, historical quarters, you are going to see that for the last couple of years. First quarter cost with provisions were usually reversals. As auditors are having now quite consistent with approach of making sure that whatever they are seeing that at potential sites during the first quarter of months during the start of our new year. It's already booked in the previous year financials. For this year. We were again like quite conservative when it comes to the cost of risk, as you can see in the budget, we have booked a quite large amount, which is related to what I was mentioning that yes, we might see the final way in which the pandemic is going to be reflected in the quality of the loan book just towards the third quarter of this year. We were nevertheless monitoring closely all clients and all exposures, and we hope that as we have seen in the first quarter, if the economy is going to have such a nice recovery pace and such a nice rebound, the level of NPLs is going to be rather limited compared to what we were initially anticipating.

Okay. That's quite clear. So just to confirm that there were no releases of the collected provisions?

No. No.

No.

Nothing exceptional. And then if I could ask just on cost growth because I think you have around 15% cost growth penciled in to your budget, but you've obviously been performing better than that. I think you kind of discussed it before, but can you explain why costs should accelerate going forward?

So it's a factor of what I mentioned as a bit before. Our investment margin is not reflected only in investments. It's also reflected in maintenance costs and all the [indiscernible] after we finish the investment on those IT initiatives that I detailed briefly at the beginning of the presentation. And if you look at the base comparison, we are comparing a budget for 2021, which includes also some initiatives related to acquisition of new business in the year 2021. With the base case, which is heavily affected by cost cuts in 2020. So we had even though the first quarter of 2020 was actually sort of business as usual from a cost point of view. In the last three quarters of last year, we put the breaks quite heavily on both investments and costs. And this is why you see an increase, but an increase with the comparison to a cost control environment, which is not very conductive to growth for the bank. So nowadays, we're coming to what we've seen maybe in 2019 in terms of investments and initiatives in BT with a comparative amount of cost to the previous year before the pandemic.

Okay. That's fair. And then just one last one for me is on Moldova. Can you give us an update there? I think you had some political or regulatory, legal risk there, right?

Yes. But unfortunately, we don't have any kind of news.

No, new news.

Or maybe it's not correct to say unfortunately, it might be also fortunately. So it might be that they were acting last year a little bit too fast without properly assessing all the aspects and now they are just trying to not do anything. And yes, we are also hoping that things are going to be just with a positive outcome. However, we are prepared with everything what would be needed in terms of having legal advisers and everything correctly in place. But yes, there were no additional actions when it comes to any kind of authorities there.

Moreover the business in the Victoriabank Bank is growing quite nicely. So the banks didn't have any issues in terms of losing clients or losing business after this allegations of whatever [indiscernible] prosecutor's office were made public last year so.

The next question is from Robert [indiscernible] Securities.

Hello. You in? Hello, can you hear me.

Yes. We can hear you.

I have two, perhaps repeated, questions. First, could you provide maybe more detail because I'm not sure if I understood the outlook for the net interest margin. I understand the dilutive impact of the excess liquidity. But still, I would be interested if the repricing impact, especially on the mortgage loans, has already been fully priced in on portfolio level. So that's the first question, the NIM outlook in more detail. And secondly, about the expected cost of risk or provisioning charges this year. I understand that you might have quite a conservative again budgetary assumptions of close to RON 600 million, if I'm not mistaken of provisioning on the bank alone level. But still, I'm a little bit surprised because that would imply a very significant increase in provisioning cost over the remaining 3 quarters of the year. So where do we actually stand, if you could comment in more detail on the provisioning outlook. I understand that in the end, you expect to do much better than the outlook outlined in the budget. The question would be how much better? And additionally, if you could reveal some figures about the first Q NPL formation? And how did it compare to the pre COVID past.

Okay. Thanks for the question. Yes. Coming to the net interest margin, it -- whatever repricing was is already fully priced in. So when it comes to the previous cut, it's already in that stands more for clarification. When it comes to the cost of risk, indeed, we are as usually, quite conservative, and we want to make sure that we are properly assessing potential risks, and we intend to show that we are able to provide a certain bottom line while making sure that from a risk perspective, we are well covered. So these were principles, which were guiding our activities to grow the entire business for our bank. The same way we are acting for this year. And we intend to -- yes, to remain with these principles. Definitely, we are not going to exaggerate with over-provisioning, if we are going to see that after the second or third quarter of the year, things are really just going on upward trends and things are, let's say, just performing extraordinary. When it comes to the level of the cost of risk, which was budgeted for this year, in fact, we are within the limits we were mentioning that cost of risk should be throughout an economic cycle. So between 110, 120 basis points. Definitely, we are still on a more conservative side, thinking that we are just in the second year after the pandemic. If, let's say, we are -- it's going to be confirmed that we are in the first -- in the year of new economic cycle, definitely things might look better, but yes, again, repeating myself and ourselves. We are within the range, we were mentioning always that it's according to our provisioning policy and the IFRS 9 policy we are having. And it's -- yes, we are consistent, let's say, with previous statement and with our provisioning policy. When it comes to the NPL formation during the first quarter of this year, we are happy to say that we were not seeing any kind of reverse in terms of trends. So there were no, let's say, real hiccups, on the contrary, things were moving just in the way in which we were anticipating. With some sectors having significantly better results compared to others, definitely whatever is linked to the hospitality sector is facing some problems, but they were not -- or our exposures sector wise are not that significant so that trend-wise, we are not facing any kind of changes until now.

I have a follow-up question on the state of the NPL resale markets. I mean how is this market doing and whether you intend to make any potential sales later this year?

So unfortunately, there were NPL resale market was heavily affected by the fiscal regulations, which prevented banks that are in a good sort of fiscal tax position to engage into sales of assets in the secondary market. We have had let's say, promises from the government that they would change that legislation. But I guess that the government had other priorities to the pandemic, all these activities around the pandemic did not focus on solving this until now. We did have promises, as I mentioned, and we are periodically reminding them, but yes, it's not on top of the agenda of the current government, unfortunately.

At the moment, we have no further questions. [Operator Instructions].

Yes. Maybe just, let's say, an observation, whatever kind of extra questions you might have after finishing the call, please feel free at usually to send short e-mail to us, and we are going to follow up with we relevant answers seen in due time. But yes, we are still available if there are going to be extra questions now.

We have some extra questions. And the first 1 is from Unger with Erste.

Yes questions. And now you've talked about the asset quality and the NPL ratio and how it remained quite stable. What do you expect for the NPE, NPL ratio for the rest of the year now going into -- you could talk about Q3? Do you feel that the NPE ratio could remain below 4.5%, 5%? Or what is your expectation there? And then on capital-to-capital ratios. What is the dividend that was set aside in capital? And also, what do you expect in terms of RWA inflation for this year? Are the RWAs, risk-weighted assets expected to move up with loan growth or any other factors that you anticipate for 2021?

Yes. So when it comes to the asset quality and NPE levels, indeed, we are hoping and we are working towards keeping the ratio below 5%. So that would be a level we are targeting to keep for this year. Hopefully, the economy is going to continue the trend we are seeing now. And if it's going to continue like this, then, yes, we are more or less or more than less comfortable that the NPE can stay below 5%. When it comes to the capital adequacy ratio, maybe I'm going to answer first the last question. We are -- as usual, there are a couple of items which are influencing the risk-weighted assets or the allocation of capital, and 1 of them is related to the operational risk, which is, yes, more or less going in line with what the bank activity is having as an evolution on a 3-year basis. So usually, we are having some updates there and some increases of needed capital. The same is happening when it comes to the market risk where by the growth of all the portfolios related to market risk, definitely also risk-weighted asset part is growing on the lending side. It's going to be just in line with the portfolio growth. So we are not going to shift the strategy towards more capital-intensive kind of exposures. When it comes to the dividend part. So as you could also see maybe if you are looking on our website, there is the presentation, we had at our Shareholders Meeting. And there, we were having mentioned that like half of the profits of last year could be used for dividend payout in cash, to the extent, yes, the regulators are going to allow such an exercise. And half means something between RON 550 million and RON 600 million.

Okay. And that's reserved in capital already. Yes?

Yes.

We have a follow-up question from [indiscernible].

So one follow-up question, if I may, on the general administrative costs. I've noticed that you had a declining advertising costs in actual terms. And given that you want to gain business and presumably market share, what would be the expectation for the coming quarters, would the level of marketing expenses return to pre COVID average and then would it imply that the subsequent quarter's run rate of administrative costs would be by at least RON 15 million to RON 20 million higher.

Yes. So what you were mentioning in your question, that's, in fact, the reality. So we are expecting marketing expenses to come back to what 2019 levels were meaning. And if you are looking at the budget for this year, you are going to see that, that is a situation. So I don't have now the figure for the first quarter in front of me, but George might have it or we can comment on it later on. But for the whole year, we are anticipating that yes. These expenses with that part of making sure that we are properly presenting ourselves to the market is going to be at the correct levels to properly support the activity of the bank.

The next question is from [indiscernible].

Can you detail a little bit on the net trading income on Q1, but what happened there?

Yes. So well, it has a lot to do with the way in which the market in general was having the evolution. And we are having a nice growth when it comes to both and fixed trading and also the trading of securities. So both of them were contributing positively to the income when it comes to what trading is meaning in the bank. On the fee side, again, we were having a nice growth, which was related to the increase of the economic activities in the [indiscernible] and BT was keeping and potentially increasing little bit of market share when it comes to the local [indiscernible] in the country. So the number of active clients was growing during last year. And as the economy was -- is again on upward trend, so the economic activities were triggering also higher turnover through [indiscernible] some clients were having with us So in principle, market conditions, combining with an increase in economic activities were helping both of them to the growth of the different income plans in our [ C&S ].

The last question is from Simon Nellis with Citibank.

I think you may have mentioned this, but I must have missed this. Can you tell us how much -- if there's any dividend accruals taken out of capital in the first quarter?

Yes. So there is a proposal to have the -- between RON 550 million and RON 600 million play. I don't know now exactly the figure, which was proposed and the cast under reserve or not distributed as stock dividends, but kept under the reserves so that it can go out like a cash dividend if permitted. But we were not -- and I apologize if we were not properly understanding a previous question in this respect, we were not diluting the [ CART ] level with this figure [indiscernible]. But the dilution would be like a couple of basis points or less than 20 basis points, if I'm correct, we are going to make the computation [indiscernible].

Okay, so the dividend, the dividend hasn't been deducted from the proposed -- the dividend hasn't been deducted from capital.

No. Yes.

And you are well capitalized, would you I guess, you're still in a good position to do further M&A. Are there any transactions that are potentially interesting on the horizon?

So we were always mentioned in the extent it's going to be something which is making sense, and it can add value to BT. We are going to look at those transactions. And yes, we are going to -- or we continue to be active there.

Okay. So you're still looking, but I'm kind of biased as [indiscernible].

Yes. So we are well prepared if conditions are proper. And I think we could thank everybody for participating, except if there is another urgent question. So please let us know if there is anything additional, which you would like to have explained now. Otherwise, we thank you very much for participating in this call. And we apologize once again for, yes, the misunderstanding on Monday and the fact that you had to readjust your agenda to connect today once again.

We have a follow-up if you have some time for Mr. [indiscernible] again?

Okay.

So actually, we had one, it's about risk-weighted asset. Again, wasn't sure if I understood it correctly. On the group level, between the end 2020 and first Q '21, the total own funds have decreased whereas the total capital ratio has actually improved by 40 bps, right? So this implies that risk-weighted assets went down quite considering [indiscernible] on the group level, what has been behind this move? Did you experience a lower credit risk ratio or than market risk-weighted assets went down for what reason.

Well, I need for double check because I don't have now all the details, we should come back with announcement by email, because I don't know exactly how the evolution for the entire group was when it comes to the different allocation of capital. So that's something we have to come back to you. I don't have now all the details or data points.

Thank you. We have no further questions.

Okay. Thank you once again. And yes, we are looking forward to meeting you and greeting you at the next conference call. And hopefully, everybody will be -- will stay safe and sound. And yes, hopefully, we are also going to enjoy some summer holidays this year.

Thank you very much ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.