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

Ladies and gentlemen, thank you for standing by. I am Maria, your Chorus Call operator. Welcome, and thank you for joining the Banca Transilvania conference call to present and discuss the first half 2026 financial results. At this time, I would like to turn the conference over to Mr. Omer Tetik, CEO; Mr. George Calinescu, Deputy CFO; Mr. Catalin Caragea, Deputy CEO and Chief Risk Officer; and Mr. Aurel Bernat, Executive Director of Financial Institutions and Investor Relations. Mr. Tetik, you may now proceed.

Hello. Good afternoon or good morning I hope you enjoyed a good summer holiday, although it was the heat wave and a lot of news during the summer, I guess everybody was very much connected. For us, we are here to present our second quarter and first half results. I would like to thank you for your interest and for your continued trust in Banca Transilvania and our business development. Second quarter was actually quite a strong one in terms of business generation and asset creation. Despite the fact that geopolitically, economically, socially, there are a lot of challenges. But we think that Romania's structural drivers for growth still remain intact. In terms of production, in terms of infrastructure investments, growth. Romania is on a, let's say, transformational good track from a consumption economy, we are going towards a production and industrial economy. And although the growth of GDP doesn't look very promising, still, I guess, the convergence of European Union, median and average numbers is quite promising. We have delivered quite a resilient performance. And if you look at the first 6 months of the year, you see that at the group level, we have delivered RON 2.5 billion net profit, over 27% increase with return on equity of 22%. While the [indiscernible] remain strong, we see also good drivers, especially on the fee and commission income, which supported on all business lines profitability and lending momentum was also quite strong. Most of the pipeline items during the first quarter that we were mentioning had been started to being realized. We see, as you will see in the slides later, strong demand from large corporates, mid-corporates, and also slightly increased demand from SME customers as well. While we were growing our business line, our capital position is also very strong. [indiscernible], we are adding our first half profit to our capital position plus the EUR 1 billion month preferred issuance that we had in the month of April, support our business growth further. We have seen higher account openings, higher customer numbers, higher business volumes and also very happily our digital adaptation of our customers is very strong. So that's with the help of [indiscernible], even in a challenging environment, we are very comfortable of delivering further our budgeted numbers. I will now leave Aurel to give us a bit of insight of what happened in Romania and how the macro current landscape stands and maybe two ideas about the future, new features, and then we will come back to business numbers again.

Thank you, Omer, and thank you, everyone, for being with us today. So in terms of macroeconomic, despite every macro headwinds that we saw so far, our long-term plans and future developments remains stable. Just as some key figures, you can see the nominal GDP versus the real GDP growth. The nominal base was maintained, but lately during '25 and '26, we had a more sluggish development of the Nevertheless, we might be in a moment of bottoming out since from here, we are seeing a much stronger growth starting with 2027. In terms of budget deficits, actually all the measures that were taken during last year or started to be taken from last year they paid out because now we are seeing at past year a much more narrowed budget deficit up to 2%. So this would mean that if this trend will continue, we might be landing between a 4% of a simple net or around 6%, which are the actual expectations keeping in sight also the agreement that we are having with the European Commission, well below the level that was actually agreed. The inflation on the other side, even though it spiked at around 10% recently, it is now declining. We have the last reading at 8.2%. Most probably the fadeaway effect of increases from last year concerning VAT and releasing the cap on the energy prices and so on. We will have a positive impact later on during this year. And the overall inflation, the year-end inflation should land between 67%. So with the narrowed budget deficit, total trade deficit, which looks much better than it looked before with a low financial intermediation, which is still at level of 20%, 23%. This all gives us a positiveness in terms of future development. Obviously, the nonresidents direct investments and personal remittances and European funds are the ones also driving future growth. Meanwhile, in the banking sector, we see well-capitalized banks overall with a positive pickup in terms of lending growth, as Omer was mentioning related to the corporate loans. Also, the household loans are both well above the European average. On the liquidity side, notably, we see a rebound for corporate deposits whilst the household maintains anyhow more positive approach compared to the European average. Strong asset quality in terms of nonperforming loans, we are actually at 3.2% at the sector level and also in terms of Tier 1 ratios well above everything what is in the surrounding area. In terms of how we're seeing the future, meaning the short-term future until the end of '26. We have not revised our numbers during the last quarter. We are still maintaining the 0.2% real GDP increase with an inflation in the average between 67% with a relatively stable unemployment rate. the very stable monetary policy of 6.5%, driven mainly by higher inflationary environment. And the budget deficit, as mentioned at the peak of 6%, but for obvious reasons from what we are seeing until now, it should lend below that threshold. The public debt is accounted to reach 61.8% with a relatively stable currency. As opportunities I mentioned before, the European funds, cohesion, safe and RRF, the most relevant drivers for change having investments in transportation, in the energy field, given health care, and they are here to stay and contribute to the overall well-being of the economy. From the sovereign ratings point of view, we have from all the three agencies, investment-grade level with the same negative outlook. The main concern remaining political environment and also the fiscal consolidation beyond 2026. And here, as a short note, we prove that on a short time we were able to manage this consolidation without a social unrest. So now the question remains whether it will be continued and how strongly it will be continued on the long run. We are optimistic about the environment that we are in and the future development of the bank. Now in terms of development, I'll turn to you, George, for business performance. And thank you very much.

Thank you, Aurel. We have a first half year of 2026, which is reflective of the good evolution that we have in the first quarter of the year with the net result at the individual level of almost RON 2.14 billion and almost RON 2.5 million at the group level. We had questions from the analysts that are asking us how do we stand when we compare the evolution in the first half of the year with the budget. And we can say that we are right in accordance with the budget that we have for the year 2026. And what we have in the first 6 months reflects this very well. From the point of view of profitability from the point of view of return on equity, where with almost 22% at individual level and also at consolidated level, we are ahead of the target that we had set ourselves for the year of being above 20%. When we talk about evolution of the balance sheet. Assets, loans and deposits all grew. Total assets with almost 218 billion at the level of the bank and almost 233 million at the level of the group. We had almost 4% increase, both at individual and group lapel, whereas loans increase in the first 6 months by 7.6% at individual level, reaching almost 114 billion at individual level and by more than 8% at group level reaching 122 million at the end of the first 6 months. Gross loan to deposit ratio increased in this period as it reflects the evolution of the loans reaching almost 66% for the first 6 months at the bank level and 68% at the group level. On the capital evolution, Catalin will go into more details in the sections of the of the presentation. What I can say is that cost/income ratio in this period reached 44.6% at individual level on a decrease in trend and 45%. This is including the turnover tax. Without turnover tax, we would have been 38% at individual level and 39.7% at group level. So both of them below 40%, excluding this turnover tax, which increased this year versus the previous year. When you go forward and we take a look at the evolution of the revenues. You noticed that actually net interest income increased in the first half of the year when we compare it to the last year. And here, with the 3.3 billion at the level of the bank and 4.2 billion at the level of the group, we have 4.6% increase at the level of the bank and 6.3% at the level of the group. Net interest income remains the main engine of growth for the revenues in the year 2026. With the net sales and commission growing quite nice in the first 6 months, continuing to grow from the first quarter we have 13.5% increase at the level of the bank and 18% of of the group. The group reaching above RON 900 million in terms of net fees and commission for the first months of the year. When you look at the net interest income margin, we see that the margin remained quite flat in the first part of the year, with an evolution almost at the level of the year 2025 with 3.88% versus 3.92% for the bank -- for the group and 3.41 and versus 3.5% for the bank. In terms of composition of the revenues, if you take a look at the other elements and you see the evolution of the composition, both at BT level and the group level, you can say that the bank is showing a diversified source of revenue in the year 2026 with an increase in terms of net fees and commission. But also we have some increases in terms of net trading or gains from financial assets that are due to the evolution of the FX revenues with the clients or due to the market evolution and some one-off revenues reflected in other income besides the bancassurance revenue and dividends that we traditionally reflect there. We actually have a question that was coming in, and we can tackle it now, asking us how much are these one-off revenues reflected in other income. Because other income increased quite a lot in this period. And we can say that approximately 100 million are reflecting the one-off revenues in the period, both of the individual and at group level. When we look at expenses, we can say that from the point of view of operating expenses, we delivered improved efficiency as well in the year 2026 despite the increase in turnover tax, which you can see that has impacted both the bank and the group quite significantly in the year 2026 due to the fact that the percentage of the turnover tax doubled in this year. In terms of personnel expenses, with 7.1% increase at individual level and 7.8% at group level. we managed to start the question -- the growth of these expenses, especially if you take a look at the quarter-on-quarter evolution of these expenses, you can see that in the second quarter, the amounts are below the ones in the first quarter. And we expect this to be the level that will be normalized for the second part of the year as well. If you take a look at the other operating expenses, you can see as well that excluding the turnover tax, which has increased, as I mentioned before, due to the fact that the government increased the percentage. At the bank level, the amounts are increasing by approximately 4%. While at the group level, the amount of operating expenses are decreasing by 5% year-on-year and both amounts are below the inflation level. This performance is reflecting the good continued cost discipline as well as procurement initiatives and also simplification of the process and the increase of the contribution of the digital channels. In terms of cost-to-income ratio, as I mentioned, the trend is constant at an individual level, but is decreasing quite significantly at the group level and reaching 38% and 39%, respectively, 38% individual level and 39% at the group level. What does it mean in terms of this reduction in cost? Does it mean that we reduced the investment in the franchise? No, this is not the case. We continue to invest in technology. We continue to invest in cybersecurity in data improvements and artificial intelligence. We continue to improve our digital customer journeys and to modernize our distribution model. And these initiatives will help us in improving our capacity to grow. Now I will hand over to Omer to continue with the main business line development.

Thank you, George. And as I mentioned at the beginning, all our business lines had strong results in the second quarter in the first half. This gives us also comfort about delivering the budgeted numbers on the lending and asset generation side. Coming back to retail banking, our [indiscernible] portfolio reached 44.7 billion per total with a growth of 3.1 million. Although the growth in the first half of the year had been more on the consumer loan side, still our outstanding portfolio is quite balanced between secured and unsecured lending. And I say due to, let's say, very aggressive, let's say, price competition -- we are trying to be very selective. We are trying to work with our existing customers that we have a history and trying to create also additional value. We are not just trying to create a mortgage by itself. We have granted 6,400 mortgages during the period, out of which 1,000 to green mortgages. And I'll say -- we are also happy that our deposit growth continues, although we are not -- for the ones who are following more closely, we are not one of the most aggressive banks in the pricing. We are in the midrange, I would say, in terms of our deposit pricing. And despite the switch of the customers from current accounts and savings accounts towards term deposits. We have managed to grow our total deposits and also reached RON 113 billion lay almost. In the past landing sites. Our strength is coming from digital origination in the -- especially after we managed to enroll products -- lending products, our secured lending products to better pay. We have seen a huge growth and 36,000 consumer and card loans have been granted through better pay in the first 6 months of the year. We see the impact of higher transactions and transaction volumes and amounts also in our fee and commission income results on the retail banking side. Our bank issuance is growing quite strong. Going to corporate banking side, we have definitely a stronger momentum in the corporate banking especially on the large corporates, but we are happy to see that also in the second quarter, mid-corporates and SMEs have been growing also well. Our growth has been over 10% in the first 6 months of the year, year-to-date. This is well above the market averages. And our combined SME, micro, mid corporate loan portfolio over RON 29 billion, which is 9.7% growth year-to-date and large corporate banking been channeling the pipeline into production in the second quarter. When I'm saying that we are comfortable about delivering the budgeted numbers, hopefully, in then we will present the third quarter results, you will see that even more of the pipeline has been coming to production, becoming real production. And large corporate loan portfolio reached almost RON 40 billion with the deposits of RON 14 billion. And I would say, SME and mid corporate deposits at EUR 46 million. These are mostly in the current accounts and creating also business volumes for us. When we have dive deeper on the SME banking, corporate and SME banking, we see that even the micro loans, very small tickets for small companies increased around 300 million and SME loans by 1 billion in the first 6 months and mid-corporates with 1.3 billion at New production is 18% higher year-on-year. Where BT GO, our mobile banking app is very much central to our strategy, customers benefiting from the, let's say, comfort and utility of BT GO where they can not only make payments, but also access other services, including [indiscernible], has been switching to BT more and more both for the borrowings, but also current accounts and transactions. Agribusiness is also another driver this year, although obviously, it has been a couple of challenging years. This year, the harvest looks good and new production in the age business reached RON 1.3 billion, almost RON 1.4 billion. total agribusiness portfolio being at RON 7 billion. Another driver is also together with the investments supported by European Union funds has been our health care division and our Healthcare division, new production is at RON 1.4 billion with a total portfolio of RON 3.2 billion. But together, these two specific business lines, Agri and Healthcare they are serving more than 70,000 customers, [indiscernible] accounts, the ecosystem reached over 600,000 unit customers. Large corporates, definitely, as I said, has been the driver of growth because of the definite ticket sizes. But it is also, let's say, secondary business generator for us because besides being able to work with very reputable low-risk customers, it supports -- for example, our growth of factoring almost RON 4 billion, reaching the factoring amount from an insignificant factoring player, we are becoming 1 of the market leaders. POS is acquiring business salary accounts, current accounts are all coming with a small, let's say, lag maybe after granting this large corporate loans. And we still have a very strong pipeline of syndicated or by little transactions and comfortable that we will be even surpassing our budget for this year. Speaking about all the lending activity, now we are definitely also have to be attentive on the risk side, and I will ask Catalin to give more insight on the risk numbers.

Thank you, Omer. When looking to the capital and risk posture, we can see that this is mirroring the balance sheet and the profitability standing of the bank and the group as a whole. In terms of capital ratios, both the group and the banks and the loan are looking in a favorable position. And if I would mention just the total capital adequacy ratio, this is well above the minimum regulatory and well above the targeted level of 20% that we continue -- we are continuously -- if we look at the evolution, we can see that we are continuously growing the total amount of the own funds. This being solely driven by the sales capability of the bank to generate profit and to incorporate this profit in its equity in its capital position. If we look from the year we are seeing an increase of around RON 1.1 billion in terms of own funds. Although we incorporated at half year 2.1%, the net amount of 1.1 billion, it's much lower because of the transitional provisions, regulatory transitional provisions that hit at the beginning of the year, the [indiscernible] funds through several -- in fact, to one big component which was the [indiscernible] bonds, which have been -- the negative results have been deducted from the own funds. They benefited previously on a temporary exception from the regulator. It's not being for BT being a market situation. If we look to the RWA density, we are seeing a slight uplift from 2025 to June '26, from -- if I'm looking to credit risk from 78% to 81%. This is fully explainable by 2 factors. I would say that half of it is given by another temporary regulatory exception that was applicable in 2025, and this is referring to the euro-denominated sovereign exposures for which the risk weights were brought to a higher level by the regulator. So basically not having anything income on it with the credit risk of the portfolio. And another effect is given by pure business effect because this year, our focus was on two particular segments, as some was explaining you on large exposure on large corporate. And also this year, we observed a higher business volumes and coming about unsecured loans. And this, of course, this came besides coming with good revenues, they came with also with the higher risk rate that is seen in the RWA figures. However, this is still within the and well within the -- our tolerant. If you look to a broader picture, we can see that if you look to the capital requirements imposed by the regulator, we don't see any movement in throughout 2026 and also the movement that we have seen at the beginning of the year were driven by a slight update in the Pillar 2 requirement, but is being in line with the asset evolution of the bank. Because as the bank is growing, of course, the regulator is seeing a bit more risk, but for the effect as of 16 basis points of this was negligible for us is the absorbable. However, if we look to the distance between the minimum regulatory and the published capital ratios, we are seeing a very comfortable level from the total capital adequacy ratio where we have more than 3.5% buffer to 5%, almost to 5% and coming to in level which is capable to absorb the business growth that is planned and is budgeted as well as any potential negative effects that might come due to any, let's say, systemic effect over the credit portfolio then not only. When looking to the asset quality, the asset quality shows an improved picture when compared with March figure. If you remember, at the Q1 results, we are announcing some corporate defaults, which brought the NPL ratio slightly above 2.5%. However, in the second quarter, we didn't have any negative or adverse effects in the loan book. And we also deployed some cleanup measures rising of around RON 250 million exposure together also with the debt of all debt sale of around RON 50 million. So altogether around of RON 300 million, which brought us our NPL ratio back to the level of 2025 which compared with the market average 2.9% is placing BT in a good position. When looking to the cost of risk, cost of risk is at the end of June, if we see in our -- 70 basis points budgeted risk cost level even below that. This was on a basis for the decrease versus 71 basis points in March was on a better portfolio quality. In the second part of the first -- or the first semester, collaborated with augmented business volumes. If we look to the -- and this is compared with June 2025, it's around almost 20 or even more than 20 basis points lower risk cost ratio. At the group level as well, we are witnessing a better position in terms of risk costs when compared with June 2025, not so much difference, just 3 basis points lower than in 2025. However, we are seeing a difference in between the bank and the group. And this is explained by [ 2 tests ]. One is consolidation effects. And the second 1 is, just as a reminder, at the end of last year, we brought in our group a new subsidiary, which is running micro financing and consumer lending in the Republic of Moldova. And of course, being the specificity of this subsidiary is being a higher risk cost, but of course, this is backed by higher revenues, of course. If we look to the evolution per stages here, we've done throughout 2026, some methodological updates, we are seeing that it is improvement when coming about this management framework. And we are seeing in terms of Stage 1, a higher share of stage 1. This is, on one hand, given by this the logical update, but also, on the other hand, by higher volumes. Of course, we are originating volumes in Stage 1. However, if we look to the total amount of provisions we did the release provision. So although we are making adjustments and improvements in the risk methodology, we still preserve our reserves or we keep our reserves there. And this as a matter of fact, we can see that on Phase 2, when we are looking to the coverage for Phase 2, we allocated more provisions in a conservative manner. So if we look compared by the end of 2025 for March '26, the coverage increased up to 4 percentage points for Phase 2, which is listing us and looking to our competitors and -- or to the market average -- in a much more conservative posture. When looking to the liquidity. Our liquidity position is always very favorable with very good indicators in coming both LCR and SFR as well as loan-to-deposit ratio loan-to-deposit ratio, although increased a bit is still at a very low level at 68%. So placing the bank and the group as a whole in a good position from a liquidity perspective. When looking to the rail capacity, here, of course, we are seeing the effect of the -- in the own funds that I said before with the transitionary provisions which are phasing out. But here, we also had the positive effect of the 1 billion SMP that is record EUR 1 billion S&P, which in April took its place in the mill capacity and still keeping a very comfortable above the minimum regulatory. Just as a reminder, we -- our risk appetite is saying that you want to be on a continuous basis, 50% -- 50 bps on top of the regulatory. So basically, we are having, of course, times higher buffer, of course, this buffer is built in order to account for the business growth that is to come in the upcoming period. This being said, I will give the floor to [ Relo ].

Thank you. So Catalina, everybody will know my nick name, which is Relo, by the way, but it's my pleasure having it. In terms of [ BRG ] is 14.6%, which represents a low risk level. It is still improving given by sustainalytics. For the bonds and the impact, we had an equivalent of EUR 1.5 billion, which were fully allocated in terms of proceeds for the last year and 40% green and 60% social. You can also see the key impact metrics, which are relevant, but I think that we should also talk about the accessibility and inclusion because it took quite some tremendous work from many of our colleagues. We have more than 350 ATMs and recycling machines with audio guidance. We have the branches with wheelchair accessibility and one fully adapted flagship. We have this the inclusion throughout our environment, starting with the BT Pay and assisted devices and on with different support from the Romanian association for blind in terms of measures for coal designing. That would be in a nutshell going forward further. I will turn to Omer for Digital.

Thank you, Aurel. I mean we have been already mentioning in different moments, but I cannot emphasize -- I cannot just say, you're up on emphasizing this more because better pay definitely see with the number of coverage, number of usage, utilization is the best practice in Romania. When we look at the numbers, I say, the mobile NFC payments are increasing 24%. And the volume of transfers increased 26%. If you add up we say inflation and our customers' numbers growth. This is even a higher performance. This explains clearly that our existing customers are also switching to our mobile banking app BFA. But it's not just payments and current account application. Now we are investing heavily to developing its ecosystem with savings products, investment products and actually 62% of the new data asset management customers new production came from -- through better pay. We have also launched the enrollment capacity for Beta Capital Partners. 30% of the new customers in BT PAY sales has been through better pay, and we are also now developing for BT brokers to be more active. There are already products accessible through Better Pay. And it's also, I'll say, through Roundup and other savings options, the savings products, we TPA is becoming our the largest branch, largest sales channel by far. But on the other hand, recently, we have celebrated the 3 years of age of BT GO, where over 600,000 companies as of end of June enrolled and there out of the 600,000 customers, 86% are transactionally active and number of transactions reached over 61 million and volume of payments over 700 billion. The BT GO is where -- BT Pay. It's not just an account management and payments services application, but we see our company customers, non-retail customers, doing their insurance, doing their savings and also the invoice and cash flow management through better pay we are very happy to see that ratings of both apps are in the stores, [indiscernible] Google, Android store are top match as compared to our competitors. I will leave George to give briefly about our [indiscernible] and the group, and then we shall switch to [indiscernible].

Thank you very much, Omer. So, what can I say? The first half of the year shows that subsidiaries are integrated more and more with the bank and the other companies in the group. And we mentioned dividends. We mentioned the integration within the application ecosystem. What I want to focus because there are a lot of information presented in this presentation and as well on the financials and presentations that were published. A couple of key things that happened. So first of all, better asset management, which have increased assets under management by over 12 billion, more than 100% increase year-on-year and more than 0.5 million active investor base. The success of the BT Romania ATF, which has more than 400 million net assets in the first half of the year and more than 1,000 investors until now. We talk about mico invest, where there is an increase in the portfolio of loans of 17%. And we have -- we have to mention also better leasing where volumes you're rating partnership with that they increased by 56% year-on-year and the digital experience of the clients has increased in the first half of the year. Having said that, let's move to the Q&A session.

Thank you, George. We'll begin with the first set of questions coming from Swiss Capital, Daniela Mandru. On a stand-alone basis, the extern of our tax cost to income ratio improved versus the comparable period. Where do you see the underlying cost-to-income ratio settling for the full year 2026 and how much further efficiency improvement is realistic from here? Moving to loans. Net loans increased 12% year-on-year and 8% versus end of 2025. Do you now see full year 2026 net loan growth potentially exceeding 10% and which segments should drive the second half. And loan growth continued to outpace deposits, pushing the net loan to deposit ratio up by 3 percentage points. What is the comfortable level for Banca Transilvania?

Daniela, thank you for the questions. I will start with the second one. It is more related with the budget. I don't want to go, let's say, to be very aggressive, but yes. I mean, when we look at the pipeline and the third quarter results, it is very likely that we will have double-digit growth of lending portfolio. But as we are very careful of our liquidity, risk-weighted assets and quality of our portfolio. So it depends very much on how much of the pipeline we can realize this year or it will be next year also because it's an active composition with the customers. And here the main growth is coming from large companies and midsized companies. So they are also assessing their budgets, geopolitical and local situation before taking bigger investment decisions. But again, I mean I'm comfortable to say that my colleagues doing the hard work to exit budgeted numbers. And per the loan deposit ratio [indiscernible], our loan-to-deposit ratio is slightly increasing. There are concerns when it's decreasing there are other concerns. We think that with our business model, even 75%, slightly above 75% of loan-to-deposit ratio is quite healthy. It depends on very much the loan structure and deposit structure and the pricing. But with our current operating model and balance sheet numbers, I would say that we still want to improve and use our liquidity in profitable lending portfolio. That's why Basie are also not becoming very aggressive, as I mentioned already, in deposit pricing as compared to our competitors. Because we have a very comfortable liquidity position. With regard to its cost to income ratio, I will let George to give details.

Thank you very much, Omer. Where business is growing, cost control is continuing. We will have some savings coming in the second part of the year. We have increased revenue in the second part of the year. So I would say that cost income ratio would stay at the same level or even be better in the second part of the year towards the year-end.

Moving to the asset quality, Daniela wants to know if we can clarify the reduction in management overlays on the expected credit losses to almost 10% from 13.5% at the end of 2025. Should the current overlay level be considered broadly normalized? Or do you still see scope for the releases in the second half of the year?

As I was explaining also during the main presentation, we've done some improvement -- material improvements in terms of provisions. And none of them was related to the P&A and the overlay. Basically, what we did, so we didn't release any provisions. So we don't see the risk cost any impact out of this methological changes because, as I said, we are looking to keep our coverage at, let's say, adequate level for the risks that are flying around us today. So -- and this is visible in the coverage ratios, which didn't drop a contrary they increased. What we've done, we moved part of the overleaf in the normal parameters in the standard parameter. So this is just a shift which is much more aligned with the IFRS standards and metrological -- this is under methodological requirement to live. If we talk about future, I don't see at this point a need for further adjustment logical adjustment. And of course, there are no plans related to provision releases or we are keeping our strategy to be well covered with provisions given also the threats that are around us, both external and internal in terms of portfolio quality.

Thank you. We will now continue with a couple of questions on the [indiscernible] from the Competition Council. [indiscernible] asked if the recent decision is served, thus the 950 million lay become payable before the final resolution of litigation. In other words, with the service loan change your current assessment and on the same topic on seeking from a tough ask to give some updates on the current [indiscernible]?