Banco de Sabadell, S.A. (SAB) Earnings Call Transcript & Summary

[Interpreted] Good morning, ladies and gentlemen, fellow shareholders, on behalf of the members of the Board of the Directors and on my own behalf, I welcome you to this ordinary general meeting of shareholders that once again, we are convening holding it in Alicante. We thank you for attending in person or by remote. I would like to greet a member of the Board of Directors because of an accident, he is not present here, but he's following us remotely. Mr. Manuel Valls, the Chairman is repeating the same word in Catalan. So on behalf of the Board of Directors and on my own behalf, I very much welcome you to this ordinary general meeting that we are holding here in the city of Alicante. We thank you for your attendance in person or remotely. I would like to greet Mr. Manuel Valls. He had a minor accident and couldn't be here today. So I would like to create him because he's connected remotely. Throughout today's meeting, we will, as usual, provide you an in-depth picture of the bank's current situation, the main actions we took last year and our bank's vision for the future. Mr. Cesar Gonzalez-Bueno, our Chief Executive Officer, will describe the performance in 2023 last financial year and the results achieved by the bank and its group. To conclude, we will submit for your approval the motions included in today's agenda, which was duly circulated to you some weeks, some days ago together with the notice of call for this meeting. Before continuing, as is required, the Secretary to the Board, Mr. Roca will state the number of shareholders present and represented and also the quorum with which this meeting can be validly convened. The Secretary has the floor now.

[Interpreted] Ladies and gentlemen, dear shareholders -- the Board of Directors agreed to convene this general meeting of shareholders and the notice of call was part of the announcement that was duly published on the website of the National Securities and Exchange Commission and the bank's website and also in the official gazette of the company's registry, the Borma and in the newspapers, Informacion de Alicante, La Vanguardia en el País as our Chairman pointed out, we will have shareholders attending in person. And also, it could be we can both -- you can both vote and attend and ask for information remotely through remote means. So request for information are closed right now, and we can extend the period for some time. So request for information that -- that are submitted remotely will be answered replied to within 7 days by members of the Board of Directors. As our Chairman pointed out, I would like to highlight that there are 80,022 shareholders of a total of 3,360 million shares represented 61.78% of the share capital. Therefore, we call this forum met and this meeting to be validly convened. Before I give the floor to our Chairman, those shareholders that are present and wish to intervene, I very much ask them to they are advised to approach to the shareholders. That's available today. So when the time comes, we will can call you in order so that you can intervene and make your addresses. So the Chairman, you have the floor. So as we have enough since the legally required quorum is present, I declare this meeting to be validly convened. So the notary has the floor. Mr. Antonio [indiscernible].

[Interpreted] According to the regulations of the company's register, I would like to ask the Board of Directors whether there are any reservations or claims referring the addresses and the statements by the Secretary and the Chairman regarding the attending shareholders share capital. And I hereby informed you that the Secretary will mention the final number of shareholders at which time you can present your reservations claims. I understand that there are none.

[Interpreted] So thank you very much, dear notary. Thank you. So having verified the participation, the necessary quorum, I declare this meeting to be officially opened. Dear shareholders. Banco Sabadell closed the 2023 financial year, the best year in its history. And this achievement is due in large part to the determined accelerated implementation of the strategic plan we implemented in 2021 road map, a guideline that has enabled us to strengthen our market position and to significantly improve our profitability. It hasn't been easy. But first of all, the consequences and the different circumstances derived from the COVID-19 pandemic then the war between Russia and Ukraine tested the challenge the macroeconomic foundations, underlying economic growth. All these conditions resulted in a series of supply shocks that made inflation a major concern once again, while economic growth slowdown throughout Europe. Central Bank's policies, including ours, the ECB, the European Central Bank increased interest rates very rapidly so as to curb inflation, which was mainly caused by the COVID-19 bottlenecks and also the additional impact of higher oil, commodity and food prices. The tightening of the monetary policy played a major role in shaping economic performance in 2023, the ECB raised its deposit facility rate to 4%, its highest level ever since the launching of the euro, this measure played a key role in reining in inflation. That is why the ECB, like the other major central banks has stopped raising official interest rates on the financial markets expected and are discounting it. They are expected to start lowering down the rates by the middle of this year. Despite the positive scenario of interest rates and a geopolitical environment that is again quite complex and uncertain the global economy, despite all this on the global economy proved resilient, achieving around 3% growth. However, there was significant divergence between the robust growth achieved by the United States and emerging countries such as Mexico and the virtual stagnation experience in the Eurozone affected mainly by witness in Germany and the Eastern European countries. Focusing on our country in Spain, its economy proved a good performance, achieving 2.5% GDP growth a-year-to-year, significantly higher than the 0.5% growth rate in the Eurozone as a whole. The Spanish economy benefited from the recovery of tourism and the lower weight of energy-intensive manufacturing industries as well as from the reduction of energy prices after the peak at the beginning of the year. In addition, the foreign sector benefited from reduced trade exposure to China and from gains in competitiveness vis-a-vis the main European partners as a result of the greater containment of labor costs in Spain. Within this context, it's important to highlight the good performance of the Spanish labor market with employment at record highs and the unemployment rate at its lowest since the beginning of the global financial crisis as well as a solid financial situation of Spanish households and enterprises. In contrast with the past, the Spanish economy today doesn't present any major imbalances either in the real estate or in the balance of payments, which has been in surplus since 2012. Going forward, looking forward, our economy faces 3 major challenges while maintaining its strong position currently lack of investment in capital goods, low productivity and deterioration of public accounts, although the deficit and government debt have been reduced in recent years, that is still high and well above the eurozone levels. This, together with the prevailing economic and geopolitical uncertainty, the reduction of the European Central Bank's balance sheet and higher interest rates, making it imperative to continue with the fiscal consolidation processes in a way that doesn't undermine wealth creation by businesses. Despite the complexity of the events last year in 2023, I would like to emphasize the resilience and the strength driven by the Spanish banking sector over the past financial year. The strict application of regulatory reforms and the systems comfortable levels of liquidity and solvency has ensured obviously, financial stability over the events that took place last financial year. In 2023, the Spanish banks focused on the potential effect of the economic slowdown and rising the rising interest rate scenario. The effects that these 2 aspects might have of the ability of companies and households to cater debt. In order to limit the potential negative. In fact, the banks worked closely together with hand-in-hand with companies, especially those most affected. Fortunately, the impact was much less than expected and the NPA, the default ratio remained at record low levels. This enabled the banking industry to continue generating capital organically and to apply a prudent provisioning policy. And consequently, we could increase our resilience to face future challenges. Spanish banks increased profitability in 2023, bringing it closer to the cost of capital estimated by the markets. All this despite the extraordinary tax burden to which we are being subjected. These achievement is at attributable undoubtedly to good risk management in previous years and to the shift in monetary policy. All these and the good earnings prospect in a normalized interest rate environment was reflected in bank's share performance throughout Europe and more in particular in Spain. Banco Sabadell obtained a record net attributable profit of EUR 1,332 million in 2023, 55% more than the previous year. This result was supported by a 24.3% increase in net interest income and a reduction in the volume of provisions due to the improving bank's credit quality. These factors offset the reduction in fees and commissions charged to customers and the higher tax bill. So our Chief Executive Officer, will discuss those matters in detail, Mr. Cesar Gonzalez-Bueno. We also continued to improve our capital position attaining a capital ratio of 13.2% and our profitability with return on tangible earnings of 11.5%. The balance sheet has also been strengthened with a reduction in nonperforming assets, containment of nonperforming loans and an increase in coverage in reinforcing thereby the positive message to the market. These excellent results last year are clearly attributable to good execution of the strategy that Banco Sabadell announced in 2021 a road map that has produced an intense transformation of the business and mark a turning point in terms of profitability due to the development of new digital capabilities improvement in the value proposition at the reduction of the cost base. This was supported by the revenue headwinds as a result of higher interest rates. All in all, these good results enabled us to improve shareholder remuneration by 55% over the previous years, and we are quite optimistic regarding the company's future performance, the Board of Directors has resolved to propose that this meeting approved a supplementary dividend of EUR 0.03 per share in addition to the interim dividend that was already paid. Also EUR 0.03 per share that was distributed last December 2023. In addition to the cash dividend, after obtaining authorization from the supervisory authority that is European Central Bank. The Board of Directors proposes under Item #4 of in today's agenda of this general meeting to implement a share buyback program out of 2023 profit to reduce capital stock by most EUR 340 million. These, together with the payment of dividends, this is a total remuneration for our shareholders in 2023, which combined the cash dividend and the share buyback program, and this will be consequently equivalent to 50% of attributable profit. And it represents slightly more than 10% profitability for our shareholders. The shareholder return calculated on the basis of the share price at the end of the financial year. Last year, we completed a first share buyback program and also the capital reduction that was approved at last year's general meeting that, that was completed, amounting to EUR 204 million, which involved the acquisition of 186.7 million shares at an average price of EUR 1.09 per share, representing approximately 3.32% of the company's share capital before the relevant capital reduction. These good figures are in line with our plan to achieve sustained shareholder returns in excess of the cost of capital in a context of normalized interest rate, which is what the market is currently discounting for the medium term. Since the end of 2020, the share price has increased more than 4 fold with the result that this result is in the top performance in the IBEX 35 and ranked second among the more than 40 institutions in the European banking sector index. In its role as a catalyst toward economy and channeling – as a channel for funding, Banco Sabadell continues to focus its activities, organization of processes on contributing to sustainability and fighting climate change. The bank has made decisive progress in its decarbonization strategy, having established climate commitments in 7 intensive sectors and has also defined its levers for action, thus, reinforcing support for funding company's transition. This is one of our priority focus that is to support our customers, both companies and individuals with a strategic advice and canceling by identifying technologies and design and sustainable financing solutions for the transition to undertake their transition process. In addition to channeling savings and investments towards sustainable investment products and also managing the ESG risk of the customer portfolio. On the social front, our bank's commitment to customers, employees and society as a whole is reflected, among other aspects in its support for initiatives in the areas of education, culture, inclusiveness and financial health. So we collaborate with corporate volunteer programs on social impact programs, promoting diversity and talent among its employees and through our through Sogeviso, our subsidiary, we support the social management of housing, and we have received several awards such as the special price for the SERES Foundation in 2023 for the commitment to social innovation. The bank's commitment to sustainability as a factor for transformation, promotion of business competitiveness and creation of a positive social and environmental impact has been recognized positively by the market. This is evidenced by its inclusion in the Dow Jones Sustainability Index, DJSI, Europe by Standard & Poor's for the first time. Additionally, its high ESG ratings from agencies such as Sustainalytics and the Agency IFS. They confirm the excellence of Banco Sabadell's approach to the challenges of the sustainable transition. As regards to our peers. In parallel, Banco Sabadell continued to enhance its corporate governance in line with best practices. In 2023, Mr. Pedro Vinolas was appointed independent director to replace Mr. Anthony Frank Elliott Ball, by agreement of the previous General Shareholders' Meeting and Mr. George Donald Johnston was appointed as Lead Independent Director. Additionally, the Board of Directors has resolved to ask this year's general meeting of Shareholders to appoint a new independent director, Ms. Ana Colonques Garcia-Planas succeed Mr. Jose Manuel Martinez, I would like to express my acknowledgment for his valuable contribution to the bank based on his extensive successful track record. I would also like to thank him personally for his commitment and loyalty to the bank and for his support in this 11-year tenure on the Board of Directors. Thank you very much, Jose Manuel. Ana Colonques will bring to the Board her extensive experience in business and in managing a family enterprise to the Board of Directors. Her appointment will increase the percentage of women on the board to 40% in 2024. This brings the bank fully into line with the recommendation 15 of the code of good governance of the National Securities and Exchange Commission and consequently, with all the 56 recommendations. This year, Ms. Mireia Giné Torrens is being proposed for reappointment as an independent director. Among the other items on today's agenda, the different motions for resolution. I would like to highlight Item 6, which requests authorization for the Board to undertake additional share buyback programs. The Board determined -- and this is the reason for it that 30% of CET1 ratio after the application of Basel IV is more or less the level above which it would consider the possibility of returning surplus capital to shareholders. Finally, -- as in previous years, Item 8 on the agenda refers to the reappointment of KPMG as external auditor, while Item 10 refers to the consultative vote on the annual report on directors' remuneration for 2023, in which the director remuneration policy approved at last year's meeting was applied. It was applied in the previous meeting last year. Banco Sabadell phases this year 2024 as a year in which it will consolidate its business model and management team with the objective to achieve a profitability above the current 11.5%, supported by an increase in recurring revenues, which we believe this will be the case, cost containment and good performance by the cost of risk. In 2024, we will take one more step to achieve a sustained return above the cost of capital and higher than that of our competitors, an ambitious goal that is necessary to attract more investors. To this end, true to its business model of proximity, Banco Sabadell will continue to improve in all areas, focusing especially on advancing the technological and digital transformation to offer a smoother, friendlier and more personalized customer experience. The bank is strengthening the factors underpinning its medium-term sustainability as a major Spanish and international banking institution, expanding its customer base among both companies as well as individuals and offering a quality service in a new environment characterized by rapid technological progress and the maintenance of our personalized relationship trades that represent the essence, the DNA of Banco Sabadell's culture. Finally, before giving the floor to our Chief Executive Officer, Mr. Cesar Gonzalez-Bueno. I would like to express my gratitude, ladies and gentlemen, shareholders. My -- again, my gratitude and the trust you place in us. Thank you very much.

[Interpreted] Good morning, ladies and gentlemen. Thank you, Mr. Chairman. The year 2023 has been a great year for Banco Sabadell. Today, we'd like to discuss 3 specific aspects. Our good financial results, strong commitment to sustainability and the determined execution of our strategy. I will also conclude by briefly discussing our financial goals for 2024. Let us take a look at the results for the year. The net profit attributable to the group amounted to EUR 1.332 million in 2023. This figure represents an increase of 55% with respect to 2022, and it is an all-time record. Then the return on tangible equity, ROTE, improved from 7.8% to 11.5% in 2022. Looking more in detail at the profit and loss account, the net interest income increased by 24.3%. The increase in interest rates, boasted credit yield. These positive impacts outweighed the effects of lower demand for credit and higher funding costs. Net fees and commissions fell by 7% because in the current scenario of rising interest rates, we reduced fees and commissions and services to customers. Meanwhile, recurrent costs rose by 3.5%. This is moderate taking into account the context of inflation. The sum of these 3 items, net interest rates, fees and costs referred to as core results increased by nearly 30% year-on-year. Moreover, we need to speak about provisions, which performed really well and which were reduced by 11.8% compared to previous year. In short, the various line items in the income statement performed well, resulting in a record bottom line. Turning now to the balance sheet. Lending fell by 4.1% with respect to 2022. That decline was 4.6% if we isolate the exchange rate effect. Lending fell by 4.8% in Spain, while TSB, it declined by 4%. As I mentioned, demand for credit has slowed in a context of rising interest rates. This was particularly evident in financing links to investment projects, namely mortgage loans and medium and long-term credit for companies. Meanwhile, lending increased by 1.3% in other international business, Mexico, Miami and the other foreign branches. Customer funds declined slightly specifically by 0.6%. On balance sheet funds fell by 2%, while off-balance share funds increased by 5.4% in 2023. Regarding capital and liquidity, the bank strengthened its sound position. The fully loaded CET1 ratio increased to 13.19% in 2023. The MDA buffer, that is the minimum requirement for capital is stood at 431 basis points. The bank's capital is increasing steadily and organically quarter-after-quarter. We also have a wide ample buffer over the regulatory requirement. Apart from that, as for liquidity, the liquidity coverage ratio was 228% in 2023, well in excess of the minimum requirement, which is 100%. Meanwhile, the loan to deposit ratio, the LTD remained under 100% in 2023, specifically at 94%. This is lower than that 100%, and it shows that the bank is able to finance all of its lending with customer deposits and therefore, has a surplus liquidity. Turning now to the quality of the balance sheet. The bank continues to improve its risk profile. The ratio of net nonperforming assets, that is the nonperforming loans plus foreclosed assets less the associated provisions decreased from 1.98% in 2022 to 1.81% in 2023. The volume of nonperforming assets declined by 3% year-on-year, while the average coverage ratio increased from 52% in 2022 to 56% in 2023. Meanwhile, the total cost of risk fell to 55 basis points in 2023. The second item I would like to discuss with you is our firm commitment to sustainability. I would like to highlight just 4 of the main developments and milestones of this area first. The bank has mobilized more than EUR 38.6 billion in sustainable financing and investment, of which more than EUR 15 billion were in 2023. Our goal is to reach EUR 65 billion in cumulative terms by 2025. Secondly, the percentage of women in the management team increased to 32.2% in 2023 from 29% in 2021. We are approaching the goal set for 2025, which is 33%. Thirdly, I would like to refer to our support for customers in situation of financial, digital or territorial vulnerability -- for example, we continue to proactively offer solutions to customers experiencing difficulties with their floating rate mortgages, going beyond the requirements of the code of good practices. In addition, the bank has adopted the banking industry's protocol for digitally vulnerable customers. The protocol provides measures such as expanding teller hours and a free telephone line to provide customer service to elderly. In the area of territorial vulnerability, we are part of the industry's agreement to strengthen financial inclusion in rural areas and established measures to provide physical access to financial services. Fourthly, Banco Sabadell was included in the Dow Jones Sustainability Index Europe produced by Standard & Poor's, which selects Europe's most sustainable companies. Ladies and gentlemen, I will now discuss how we are advancing with our strategy. It is a clear strategy, which is being executed with the termination in all the group's businesses, retail banking, business banking, CIB, corporate and investment banking, Spain, TSB and our other international businesses, namely our subsidiary, Mexico, the branch in Miami and the group's other foreign branches. When we launched the strategic plan in 2021, we defined specific priorities for each business based on its financial and competitive situation. But with a common objective, improve profitability while responding better to customers' needs. The bank has experienced a sweeping transformation in those 3 years. Retail banking is probably the area that has experienced the greatest and most visible transformation. We have developed a 100% digital remote model for consumer loans, current accounts and cards that is those products where customers want independent autonomy and immediacy. Some of the results in 2023, 56% of the bank's new customers signed up 100% digitally. This possibility didn't even exist in 2021. And currently, 75% of consumer loans are now arranged digitally or remotely compared with just over 40% in 2021. We have also implemented a superior support model for mortgages, insurance and savings and investments. These are more complex products where customers demand expert personal support from our managers. We have now developed around 800 specialized product managers. For example, in 2023, more than 50% of new mortgages were originated through these specialized managers. The managers work with the customers throughout the entire contract process. This is something that the customers value very highly rating according to our surveys, 4.4 out of 5. At the same time, we have worked to improve business efficiency, the efficiency plans that were implemented have enabled us to reduce the workforce by around 20% and the number of branches by around 30% compared to December 2020. This downsizing, which was carried out non-traumatically, and by agreement was necessary to adjust our cost base to competitive realities and to ensure the bank's long-term sustainability. In short, we have built new direct banking capabilities while enhancing traditional banking capabilities, and we have improved our efficiency. Looking ahead, we plan to leverage these capabilities that we have built to decisively increase digital customers acquisition and become the main bank for more customers. I will now discuss business banking. This area is absolutely key for the bank. In this area, the bank has a strong franchise with a good brand recognition. And with this solid base, our strategy was to develop specific strategies or measures to promote its growth while reducing its cost of risk. On the one hand, we focused on more targeted growth in lending with the aim of reducing the cost of risk in this business. To this end, we stepped up the use of data analytics in risk management, and we have improved and simplified onboarding processes and developed risk analysts -- who are industry specialists. In 2023, 85% of new lending was with priority customers and sectors with an improvement of percentage 5% over 2021. We also implemented specific growth levers. I will give 3 examples. One is the strategic agreement with Nexi, a European leader in the payment business. With this agreement, we will improve our value proposition and the customer experience in point of sale terminals, which is a key product for stores. The second example is the new relationship model for SMEs and large companies, which has been recently introduced. This model promotes manager specialization and enhances the value proposition for those segments. Moreover, SMEs can now enjoy the premium support previously offered only to large companies. The third example is sector-specific offerings for self-employed workers, for freelancers and businesses that provide customized solutions for the needs of 34 different sectors. Customer acquisition in these sectors increased by 40% with respect to 2021. Another key aspect of our strategy was to launch in early '23 of a new model for private banking, which is now integrated within the corporate banking business to take better advantage of the synergies between businesses and entrepreneurs. The value proposition has been improved with a range of more customized products and services, differential support and new technological capabilities. Additionally, scope of customers has been created with a high net worth segment has been created with additional benefits for the segment. Currently, private banking has around 500 specialist bankers. Its assets under management increased by 8.5% in 2023. Going forward, Business Banking will focus on growth and customers' engagement that is we want to be their primary bank and to achieve higher penetration rate in products and lending. At the same time, we will continue to improve the cost of risk. As well as, as for corporate and investment banking in Spain, our objective was to improve the good return on invested capital. To achieve this goal, we focused on managing profitability on a customer-to-customer basis. At the end of 2023, 83% of our customers in Corporate Banking had a RAROC above 10%, whereas only 40% exceeded this level at the end of 2021. RAROC is a metric that is used to measure -- the customers' risk-adjusted return on capital. We also expanded the transversality of our product units that are – especially that is structured finance, treasury, investment banking, trading and custody and BS Capital. These unit design transactions and offer bespoke products, not only to large corporations but also to companies and small and medium-sized enterprises. These specialized business units increased revenues and capital gains by 15% in 2023 with respect to 2021. Going forward, the work -- the goal of corporate bank in Spain is to continue to grow, managing profitability through RAROC as a main element or too. Moving on to our international business, TSB, our subsidiary in the United Kingdom took action in 2 directions. Firstly, it focused on its core business, that is mortgages, in which it is a recognized player in the British market. TSB increased its mortgage volume by 10% since the end of 2020. Secondly, it implemented a major adjustment plan so as to cut down costs, thus, it reduced the number of branches by 54% and its workforce by 19% compared to December 2020. These initiatives, coupled with the trend in interest rate enable TSB to achieve a radical turnaround after reporting losses between 2018 and 2020. Since 2021, TSB has been making a positive contribution to the group's bottom line quarter after quarter. With -- sorry, with a steady increase. It contributed EUR 195 million in 2023, more than double the 2022 figure. Going forward, TSB's main challenge is to improve its cost-to-income ratio, which is currently placed at 71% to this end, it has launched a new efficiency plan to be implemented this year for which a restructuring charge of GBP 53 million was recognized in 2023. I will now comment briefly on the main numbers from our other international businesses. Banco Sabadell Mexico achieved EUR 44 million in profit last financial year compared to EUR 1 million in 2021. Sabadell Mexico is focused on dealing with companies and large corporations, and we have enhanced the franchisees' profitability by reducing costs and optimizing its assigned capital. The Miami branch has increased business volume by 6% since the end of 2020. Miami is a profitable franchise that combines corporate banking with international private banking with an outstanding profitability rate. As for the rest of the foreign branches, we've reduced their capital consumption by 14% with respect to December 2020. Here, our focus has been to optimize assign capital and to concentrate on supporting Spanish customers in the dealings in other countries. Regarding future plans, we are going to roll out the digital account for private individuals in Mexico. The goal is to increase the volume of retail deposits in order to reduce funding costs and consequently, improve profitability in Miami and the other foreign branches, we will continue to focus on ensuring return on the assigned capital. As you can see, this is a determined progress with our strategy – in our businesses this strategy implemented since 2021 has transformed the bank and delivered very good financial results. I have already discussed the 2023 results. Now I would like to compare the main financials for 2023 with those for 2020 before the strategic plan was launched. In any case, take into account that 2020 was an important year of adjustments by the previous managing team. So it's not absolutely significant. But in any case, the net profit has increased from EUR 2 million to EUR 1.33 billion, our highest ever. It is also true that the rise in interest rate environment was quite helpful, but the strategy was, well, fundamental and played a key role. We have made a huge lead in profitability from an ROTE of 0% in 2020 to 11.5% at present. The capital ratio was 200% after generated organic capital quarter. Quarter after quarter, we are now at 13.19%. Moreover, taking into account the shareholder remuneration since 2020, comprising dividends and share buybacks has exceed EUR 1.26 billion. Meanwhile, the cost of risk has improved considerably from 116 basis points to 55 basis points of these achievements were recognized by the market as the share price increased 4.3 fold since the end of 2020. All in all, the bank has achieved a radical turnaround in recent years. The strategy played an important role and also the [ B9 ] environment was very supportive. But I want to highlight another crucial factor. Banco Sabadell's people, our team, all of us that make up this bank. We were the main reason for success. They are an example of professionalism, commitment and dedication to service. Therefore, I extend my utmost gratitude to all of the bank's personnel. Dear fellow shareholders, it is clear that 2023 was a great year for Banco Sabadell record earnings, a sound capital and liquidity position and improved risk profile and a firm commitment to sustainability as well as a determined progress with our strategy. Regarding 2024, I will briefly comment and coming close to the end. So I'll comment on the main figures that we have released to the market. The net interest income will continue to improve with low single-digit growth. The increase in interest rates will continue to have a positive impact on credit yields though less so than last financial year. We will also continue to diligently manage liability pricing. Fees and commissions will decrease. We estimate they will do so by mid-single digit, mainly due to the reclassification of commissions after completing the sale of our payments business Nexi. The trend towards lower fees and commissions will continue in the context of normalized interest rates. Recurrent costs will grow by 2.5%, which is a moderate rate given the current situation despite the higher labor costs. And also, the objective with regard to the cost of risk is to continue with improvement we've seen in recent years. Our results in 2024 will be better than in 2023. That is what we hope. As always, we will be focused on rigorous risk management and control of nonperforming assets. Those will be our priorities. As a result, we are targeting a return on tangible earnings RoTE over 11.5%. That in the bank's probability will continue to improve this year. We look to the future with optimism and confidence. The bank is strong with focused management priorities, a well-defined strategic enrollment at the first class team of orders. We will continue to drive shareholders' value creation and while generating a positive impact on our customers, the economy and society as a whole. Ladies and gentlemen, thank you very much for your attention.

[Interpreted] Dear Chairman, dear shareholders, first of all, define our quorum that shall be considered to calculate the outcome of any vote fell today is as follows with minor changes, 80,050 shareholders in attendance of representatives holders of a total of 3,361,270,861 shares represented in turn, 61.75% of share capital. I would like to dear Chairman -- we will have now the interventions of the shareholder to have so requested to intervene. So there have been several requests. So we kindly ask you to collaborate and be brief. So you -- initially, you were giving 3 minutes for each of the intervening. We very much hope that is sufficient. We thank you in advance for compliance. I will call Mr. Manuel [indiscernible], representing [indiscernible]. And there is another intervention by Mr. Jorge [ Cordova ], also from [indiscernible], -- he will speak just after that. Thank you.

[Interpreted] So we are attending this general meeting of shareholders on behalf of the of [indiscernible] representing a small savers, shareholders, the delegated their vote so that we can represent them on this meeting. So your institution presented a very positive result. As you all know, it was underpinned and supported due to the inflation rates and the increased interest rates, both nationally and internationally, a monetary policy that could very efficiently be reflected in the lending, the number of loans approved, but this efficiency doesn't have a good reflection of – on the remuneration of the savings products for our customers. So you are getting used to very good years. So that leads us to reflect on to what extent to what you will be ready to do to keep those high earnings. The first toll we paid was remuneration to small savers. And we wonder what will come next, mainly the next 2 -- I mean, the workforce will be -- will come next. And the reduction in cost could substantially influence and impact the quality of the services provided. What is your degree of demand? And on the other hand, according to your data, minority shareholders represent 80% of the total amount of shareholders. These data, together with the attendance figures to the last general meetings provided us -- led us to achieve important conclusions. First of all, it seems obvious that the current format of this general meeting doesn't appeal to minority shareholders. It seems that the only activity to point out and to highlight is the remuneration for directors and the voting on variable remunerations, shareholders, including minority ones are legitimate owners of one part of your company of your bank. So they should have a right to take part in the main decisions that will affect the future of our institutions. Secondly, compliance with those transparency of duties shouldn't overwhelm our shareholders because it's too much documents documentation transparency should go hand-in-hand with clarity Considering the remuneration you perceive, we are absolutely sure you are capable of transferring information and documents in a more brief and clear and understandable way. To conclude some clarifications we need and we consider of the utmost importance for our shareholders. We would like to ask you about the rumors of mergers. Although in previous cases, you stated that this operation is not considered. It's not on the table after -- so there is a concern and it has been so in the recent years. That was the case of BBVA that has happened to several banks. And there is vote possibility to create alliances with other European banks. So rumors usually lead to actual manifestations and conclusions. To conclude. And lastly, the technical merger with Unicaja will imply -- would imply a lack of deciding capacity. So it is totally understandable that we, shareholders, are uneasy -- well, these possibilities or potentialities. What will be the final possibility or situation? Can you guarantee that we won't be negatively affected by this potential scenario. Thank you very much.

[Interpreted] Mr. [indiscernible] and Mr. Jorge Cordova has the floor now.

[Interpreted] Ladies and gentlemen, we attend this General Meeting of Shareholders in representation of [indiscernible] small savers, shareholders and customers of Banco Sabadell, they represented, we are the proxies today. Your institution, credit institution has one of the lowest capital ratio throughout Europe. Undoubtedly, this contributed to maximize its earnings. Do you intend to increase this financial solvency ratio to cover possible exposures in the current decreasing interest rate scenario or less default, although you comply with the minimum requirements established by the ECB, why don't you take advantage of those important earnings to strengthen the solvency because this should be a habit. We are concerned about your plans to cut down on workers and the number of branches or offices nationally. And this will have a negative impact on the elderly all the customers that have -- that are not digitally skilled -- what has you used to provide customized attention to the elderly? How do you intend to guarantee the quality of the service usually offered by Banco Sabadell. This year, there has been -- there is an aggressive campaign for the Banco Sabadell accounts, accounts that provide an indefinite profitability and earnings for their potential customers. So you are not the first ones or will be the last to apply this type of practices in your advertising. Telefonica was one of the main examples, and you know how this all ended. You are aware the profitability might change and evolve depending on the market conditions. Is it necessary to mislead our consumers? Do you consider the possibility that there will be claims -- as a result of the conditions that were agreed when contracting products and services? In former in previous meetings, we expressed our concern about sustainable development. You proudly communicate the progresses achieved to our shareholders. Our doubt supported by the conclusions achieved by ESMA, the European authority about the sustainable investment funds. So this authority, this body warrant on several occasions about -- but in a recent analysis, we saw that the results do not differ substantially from non-mining loans. All these despite the increase in mergers, do you conclude that the European regulator is lying. This goes against your plans and investments in companies that contribute to destroyed environment or to invest in weapon industries and companies wouldn't be advisable that minority shareholders are aware of the activities or where you are investing our money. To conclude, I encourage you to stop considering taxes as your enemy, it's much more rewarding to consider that you are contributing to repair and the disasters, and there was a sale out – bailout. So this way, we have contributed.

[Interpreted] Mr. Chairman. Please go to the desk, and we'll see if we can solve your problem.

[Interpreted] Mr. Chairman, Mr. [ Funez ] and Mr. Cordova, I would like to thank to take your interventions, which have been very thorough. And they are as through that I need a discussion -- a lengthy discussion for that. I think, well, you covered many topics. But maybe Cesar, you can double check with me, but I can answer to some of them. I can -- well, it's not about answering, but just making comments because these are your reflections. These are reflections you are expressing as regards different aspects of the bank. So I will make some comments on that. I think it's important what Mr. Funez asked about the strategy to keep the profits of the bank and to make these profits sustainable. This is one of the questions we already mentioned. Obviously, also, Mr. Cordova mentioned whether the capital ratio and our solvency can be kept. Well, we're clearly in a situation where the solvency of the bank is 13%. The provisions that the bank has are the ones required and necessary and even more than that according to the criteria of the European Central Bank, the auditors, et cetera. So from the solvency point of view, the bank is okay. And there is a very low concentration in terms of risk. So please do not feel any concern about the solvency of our bank because it is more than guaranteed within Spain and within the main banks, the capital ratio that is highest in Spain is Sabadell's Bank. There were some lower savings banks that may have higher ratios than us. Solvency ratios, I mean, but it's true that this 13.2% ratio in our bank is enough, is more than enough. As regards to the capital ratio, we have 430 MDA, which are the excess capital versus the required capital. And according to what is considered necessary in the bank's model which could cause us not to distribute dividends. And in our case, it's 430 basis points. And this has been -- it's according to the newspaper expansion, we have the widest figure out of all the banks in Spain. So clearly, if you take on the head of considering solvency, we, of course, may have a ratio of 40% or 100%, but this will not be profitable for the shareholders. So we need to find a balance. We need to find a figure, a number that we believe is necessary. This is part of the dialogue and part of the discussions we have with the Board of Directors with our auditors. And even if 13%, we believe, is quite a high percentage. The bank has a position which has been publicly expressed, saying that 30% is a ratio that is more than enough. And that any increase beyond 13%, of course, well, the Board of Directors will then consider apart from your opinion or my own opinion, what would happen if we have a bit more capital -- and it's not only your message, but the message is that most of the shareholders send us. And most of you say that 13% is excessive, and we should distribute -- this is a debated question, of course. And I will note down your comment on the solvency of the bank. But at the same time, we need to understand that we have to find a balance between the return on investment and to make the bank attractive for the investors and to make it also sustainable. The risk for discontinuity should be reduced. We went through a serious crisis in 2002. This generated a great distortion in the financial system. Banco Sabadell in different ways could save these crisis with many losses as any other banking institution and the shareholders assumed many losses. So it is not correct to say that what you mentioned about the taxes, it all goes in defense of the interest of our shareholders as is our duty in our Board of Directors. As regards to the remuneration of the deposits, maybe I will leave this to you, Cesar. And the question about the results, the inflation and how we foresee this remuneration of the deposits.

[Interpreted] Well, thank you, Mr. Chairman. I will first focus on the questions that you did not deal with -- the reduction of staff and branches. Well, there's nothing on the table. There are no reasons to -- for concern because there's nothing there. In terms of the elderly, will we measure these with great attention. But all the indicators show us that the service we provide is excellent not only for this specific group of people, the early but for all the customers in general. And well aware that the banking is an essential service and with the commitment to continue supporting the most vulnerable people, we have several actions among which we can highlight the free telephone line for customers over 70, the wide schedule in the different branches. We also have postal letters and not only digital communication. We -- well, we can see that there are some customers still using in paper statement and not digital, and we keep this -- and there were some other actions for the elderly to better understand our systems and to reduce the digital gap in a program that we are really proud of because we have a corporate volunteer program. This is people who were part of the Sabadell Group and who are not working with us anymore and who want to help the society by doing this. In terms of quality of service, we are in the top of the ranking echoes, which is the reference index to measure the quality of branch service. Besides, I would like to mention that we take it really seriously because it's amongst our goals of the management team, the factor, which is the NPS, the Net Promoter Score, and it does have good results. As regards to the online account, it's a great product, and the proof for that is that it has been really welcomed. There is a great growth of customers through this digital account more than with any other type of procedure, and we really thought about it so much. Indefinite is something that is not defined, which doesn't have no horizon. But it is not permanent. So it's true that when you make an account permanent, it would be reckless from the financial point of view because we'll think about the interest rates going to negative or that they would be much, much higher -- this is not a remuneration that is impossible to change, but the idea is to keep it for a long term. And this is why we call it indefinite in time. And it will stay there for a long time. We are not going to continuously be changing the profitability. But in the contract, it was our duty defending the shareholders and defending the solvency of the institution in the long term to establish this provision. It went through all the filters for self-production. It is really very demanding. And it is an external firm guaranteeing the communication is true and doesn't mislead the customers. The sustainable investment funds, well, we have an alliance with Amundi, which is a fund manager. It is the first in Europe, and it's in the top 10 world level, setting the criteria for sustainable aspects. I believe with this, I have covered or we have covered all your comments. As regards to the comments from Mr. Manuel, it is true that inflation and interest rates have favored the results of the bank. Are they excessive, Well, in 11.5% of ROTE as the Chairman says, we are still under our cost of capital. And this is why our listing is 0.7% over the tangible value instead of a one because at the point where the shareholders consider that their adjusted -- the profitability adjusted to risk is equivalent to the cost of capital. Usually, this figure becomes one. So from the financial point of view, it is difficult to argue that the profitability of the bank is excessive. And this is why we will continue to check if we have to improve it, as we said for -- in our goals for 2024. In this exercise of distributing -- all of our sectors that we work for, well, we work for our shareholders, for our customers and of course, for all our workers and for the society in general. And it's a difficult balance. I believe the Board of Directors with our Chairman, leading it tries to establish this balance. I think it is very reasonable how to play with all these balances.

[Interpreted] Yes. Cesar, now regarding the future, you were mentioning days before. And I would just like to support what Cesar just said. The profitability of 11.5% is not the cost of capital yet. So for the future, and this is what I was going to answer. Our ambition is for this profitability to be over the cost of capital. And this can happen in 2 ways, either because our profitability goes up or because the cost of capital goes down. Our profitability going up. our CEO has already said in his intervention, what is the strategy for each of the businesses in the bank. Each line of business has its own strategy. Some of them are more focused on growth. Some others are not so focused on growth in Spain and on all the different geographies where we have a footprint. For the future, what the bank will need is to reduce the cost of capital so that really the perception of the cost of capital is what this is to keep the robustness of our balance sheet. We have a robust balance since the year 2020. This is where the last provision operation was executed. And since that time, the balance is quite diversified, it's quite robust and sound. And as we convince ourselves of this, and we continue to consolidate these figures year-on-year. We have seen that the cost of risk has gone down, how the NPL ratio is going down, how the need of provisions is also going down. So if this continues to happen, this will be one of the elements that are part of the sustainability of the bank in the long run. Second question is our competitiveness in our competitive situation in our competitive environment. It may be lower versus other banks. This is the second element where the bank will continue to take steps. And this is about the deployment of the strategy of the year 2020, which was executed with a strategic plan presented by the CEO to the Board of Directors in 2021, and that is being executed. This is the execution of a strategy that is being done successfully. The third element for the sustainability of the bank in the future is the customer service that would be recognized as competitive by our customers. And of course, there were always more things we can do. We were a bit behind in terms of digitalization. But in these last 3 years, there has been a relevant investment in digitalization for the bank. The next few questions we have on the table is simplifying the relations with our customers, simplifying the communications. We are in a world where the regulations imposed many rigid conditions in our relations with the customers. And so our challenge for the future is for these rigid conditions to be overcome, and so that the bank can continue to be flexible, robust, but of course, meeting all the regulations, but having found a way to have a good relation with the customers and also limiting the risks in a way that is quick, flexible and close to our customers. This is our main goal and the essence of our bank. And this is what makes us different to the rest of the banks in Spain. This leads us to think about our vision of the future. You were asking about mergers. Well, in previous meetings, we've had with the press at this point, the bank is not considering any merger. First, we are not considering this. We are in a situation where we want to develop and maximize our bank's model. The model that we have implemented. And in summary, in brief, I believe our CEO has made a great summary, and it was crystal clear, of course, you can ask questions after that, but I believe his interpretation was really clear. We are basically in the mode of deployment, as we would say in English. It's about deploying all the different models for retail banking, business banking, CIB in England, in Mexico, in all of these places where the bank has a footprint, there's an action plan, and this is quite successful and would lead us to growth in terms of customers as well as in volume and growth in terms of the satisfaction of our customers. These are the parameters we want to have for the sustainability of the bank in the long term. So no mergers are considered. In any case, of course, rest assured, not only you, but all the rest of the shareholders that are represented here, the bank will, of course, take no such steps -- if it doesn't make sense for the shareholders or for the stability of its financial system. Mr. Armando Payá, representing trade union Comisiones Obreras. There are 3 interventions now for the representative of Comisiones Obreras, Laura from UGT and another intervention from another trade union. So the 3 in a row.

[Interpreted] Mr. Chairman, CEO, ladies and gentlemen, good morning. My name is Armando Payá. I'm here representing more than 4 million shares that our colleagues have delegated to Comisiones Obreras, our Trade Union. We are once again here, but this time, representing the workers of Banco Sabadell through 3 different interventions that Comisiones Obreras UGT and define have agreed upon representing more than 60% of the staff of the bank. If we have reached this point, it is not to celebrate. It is an alarm. It is a reflection of the critical situation that our staff is facing on a daily basis. Ladies and gentlemen, your position continues to not move. You are giving your back to the reality. Your ignoring it. You had the opportunity to sign up a collective agreement that would have meant an important change for our staff, but you decided not to do it. And with different proposals that we cannot accept. It is true that the bank has provided very good results, record results, and we are really happy for that because we did it. However, those earnings, those record benefits are distributed to main customers. They should be distributed to the workers because they made in incredible effort and had to face the close of offices, branches and the technological breakthroughs are never there. But year after the year, they freeze our salaries and conditions that are below the bar. So we are the workforce that day by day with our dedication, with our effort, we contributed to the success of this institute, but the salary increases are really low. A system that is really opaque and unacceptable conditions with directors that are toxic that are using applying medieval practices to increase their earnings without noticing who are left behind. Do you know do our shareholders how you achieve that profit? What is the human cost of those increases in EUR 0.03 per share. So we will do our very utmost to prevent further negative impacts. We -- by intervening in the general meeting, we and in the future, we will do our best to defend the interest of our workforce, our staff. We have been warning you for the last 4 years. Our staff is communicated it through all channels. We are fed up. We are tired. This Board has the opportunity to revert to change the situation and to show a real commitment with its members of the staff, leave behind your arrogance, taking into account those who really contribute to successes of this bank so that you are the company, you intend to state your. There is no way of going back. We are ready to face the new challenges. Thank you, I give the floor to my colleague from UGT Trade Union. Ms. [ Laura González ] , you have the floor. The floor is yours.

[Interpreted] Dear Chairman, dear CEO, ladies and gentlemen, good morning. I am [ Laura González ], and I'm here represented on behalf of the UGT Union in this and joined the statement together with Comisiones Obreras and [indiscernible]. I am here to express the voice of my colleagues that are working on their positions and discharging the duties as diligent workers so that Banco Sabadell is a great bank day by day. I am here to speak about responsibility, your responsibility as members of the Board of Directors. You have the incredible chance and opportunity and also the means to revert the situation because this is causing a lot of harm to our workers. And you are neglecting this critical situation. Apparently, you think -- you have a workforce, you don't marry it, you don't deserve. Whenever you ask us to step forward, we made all the sacrifices in the face of harsh economic and financial situations when we were an essential sector during the COVID pandemic. And despite all the fears we had to be there or post day by day a day offices. When in record times, we adapted to remote working to provide services to our society. So there we -- the members of the staff and the union representatives were responsible and lead up to the expectations. And now it's up to you to compensate for those efforts. And now it's really now do we want to be the best place to work in altered service and statistics and those awards that are paid for cannot consider reality. We work -- members of the work force suffer from mental health problems and we suffer from stress, anxieties and we had to request leads because of that. It is the environment we want to work in. Our salaries have been frozen for several years because of some clauses that any type of salary increase is not considered. And this leads to more disappointment among the member of the staff last year, there was a salary increase of 4.5%, but this wasn't implemented to everyone. And Banco Sabadell was the bank that did the worst job. The gross increase was close to nothing. So you should be ashamed of that, shame on you. It is a way to compensate and to reward us for those great efforts. Now is the time you should be up to the expectations and start considering as your best asset. That is what you say. We [indiscernible] are your best assets. So you should be serious in negotiating any serious agreement for the workers. So collective agreement. We have been working in hostile environment with an incredible workload. And you are your offices, launch campaigns that are difficult to abide and we cannot reconcile because there are too many tasks. So it's high time that you stop neglecting as workers, we are the essence of this bank. It is now the time to consider as we deserve. As trade unions, we are not mere on lookers spectators. We are indispensable to agree on the labor measures affecting the home staff. But despite that, you are used to present everything as a fait accompli. We are not just onlookers. We are really tired of not being paid up. I mean fairly. And that is why the respect for the managers is not as it should. So we work as robot. The important thing is not to team up, but to have a good image, but there is a hollow image there is nothing really at the core. Ladies and gentlemen, take advantage of this opportunity to recognize the members of your staff in a real and fair way without discrimination act and behave as you would like to be considered personally. So please do not refer to Article #5 of the collective agreement for the banking sectors. As we speak, you are obtaining really significant earnings. So what's fair and what would make a difference is to increase everything for all the members of the staff with our compensation. So we officially request this again on this you need to provide this additional payment to all of us without any exception because those record earnings and profits are achieved by the work of every member of the workforce. So you need to be responsible and to distribute the earnings you wouldn't have achieved without us.

[Interpreted] Ms. Margarita.

[Interpreted] Dear Chairman, dear CEO, ladies and gentlemen, good morning. My name is Margarita Bermejo, and I represented the [indiscernible] that together with Comisiones Obreras and UGT represent jointly more than 60% of the workforce. What happened in Banco Sabadell used to be something else. Do you really think that those toxic work environments and frozen and stable salaries are a sustainable situation. You cannot continue ignoring and neglecting us. We used to have social peace. Those were the prevailing conditions in the past, but things have changed for the worse. This is a conflict scenario where our labor relationships are not there. There is not a clear communication with us with the workers. We hope for that we will get tired and fed up of protesting, but we -- that is not the reality. We are -- I mean, we suffer a lot of pressures. And this is not only bad for us, but also has a bad result. When workers feel motivated, well rewarded and with the appropriate tools, results increase and a positive labor environment helps retain talent. But even though you don't think so, we have to retain talent because our colleagues -- we are seeing that our colleagues are leaving to look for better salaries, of course, but not only that, we're looking for better career prospects because you are missing that you don't guarantee a good career prospect. Do you think that we can't find staff for the vacancies you're launching? We are connecting and getting in contact with friends and so the first -- this should be a clear sign that something is not being done correctly. You cannot play with the feature of our families, we what as you are enjoying the fruits of our effort, we should all benefit by those significant profits. This should be -- this would be a smart strategy to generate value for our shareholders. We are here to offer solutions to find a common path benefiting both parties. But you don't make our -- this path an easy the way. Of course, you dress up for the occasion, but we cannot dwell on the past. It's time to look forward to adapt to the new times. And nobody believes those kind words of reward to the members of the staff in sum. We urge you to listen to us to our claims so that you improve the working conditions at Banco Sabadell. So excuses are no longer good. You shouldn't blame the Bank of Spain or the Ukrainian work – or the complex situation. The success of this company depends on our efforts. So we should be officially rewarded for that. Thank you.

[Interpreted] Thank you so much to the 3 representatives of the trade unions. Again, I would like to express the consideration that both the Board of Directors of the bank as a whole are listening and paying attention, real attention to what you say. So our staff, our workshop. What course is at the core of everything we achieve of our activities. So clearly, we need to be and we should and have been always been in close contact. So despite your complaints, many of them, of course, are legitimate perfectly understandable. We know that we always negotiated and had a very healthy dialogue situation and good relationships. But it has been so for always. So we are -- you are negotiating a new collective agreement. So this is a, yes, a delicate situation. In the past, there was a precarious situation. We had to keep jobs to avoid redundancies after the financial crisis, we had to face hard situations -- things are, of course, got better. So everything you are saying today, we will take duly note. And so that our bank is an ideal place to work in. And we want our workforce to be happy and satisfied and we motivated -- so as we are amidst this negotiation process of the collective agreement, so I'm not aware of all the details. I'm going to give the floor to our Chief Executive Officer, so that you can complement my reply.

[Interpreted] Dear Chairman and Mr. – thanks to Mrs. Laura Margarita and Mr. Armando. The truth is that in many of the things you stated, I have to recognize maybe not in how you express them, but in the actual context in what you say, we feel very much in line with your concerns. And in many aspects, we are on the same page, I must say. So many things have been said, so I would like to address and to comment on some of the aspects you mentioned having to do with our staff and you, as representatives. Regarding remuneration salaries, for the members of our staff. We are always underpin by equity values. Equity is important. So those that have more seniority, will earn more, but also we consider the merit and performance. Sometimes we -- they are encountered there are conflicts because we consider things differently. We have different worlds and ways of understanding. But we also abide by the current regulation. Last year, the increase of salaries was 4.5% of the base salary, affecting 55% of our workshop. By definition, they have the lowest salaries remuneration. Regarding variable remuneration, the payment percentage for the 2023 financial year paid in last February, achieved 110% in Spain and RAE affecting those included in the collective agreement in force in light of the good results of 2023, there was an extraordinary payment of a whole 1.5 months of the fixed remuneration according to the collective agreement, and this will be duly credited in your account this month in April. So that is a reflect. So the members of the staff are duly recorded because of those positive earnings. And I must be honest. We very much look forward to a good agreement for all parties. I'm absolutely honest here. We would very much like to have that, to achieve that, and we will do our utmost to achieve that goal. Obviously, undoubtedly, the non-compensation is a key aspect. I want to be very clear here in this regard. What's on the table right now is to increase equally even those that are well above the remunerations under the collective agreement. And of course, performance and management criteria should be taken into account. So we are discussing here. We have a kind of a conflict, but this is absolutely normal and logical. This is part and parcel of the negotiation process. We have different positions. But we very much believe that we will achieve a satisfactory result of these negotiations. So deliberations are under course, and this was approved at good will. We applied an increase on 2.5% on the base salary. And this increased 2.25%. And of course, we hope that we will have a positive. So that was an advanced payment. We are the only bank that have done so for the moment in this year. So whenever we face the similar situations and circumstances, we always achieved good agreements. One good example is the impact on social benefit signed last November with 85% of the representatives of our workforce. And with this, we will increase interest rates and mortgage conditions. Regarding the workload you mentioned, recurrently, -- you stated repeatedly that those metrics have been altered that are not real, that are not fair. That do not reflect the reality. But of course, we know that if you are not -- you don't feel motivated and well considered if you don't have the resources that are necessary, the quality will get undermined. Customers will be less satisfied and the working environment will suffer as a result of that. And we know who wants that. So it would be false to say or not to recognize and acknowledge that the voluntary restructuration that was agreed with all of you was important, 20% of the staff. And we also have to say goodbye to people to highly experienced people, people, senior workers. And of course, that was a great sacrifice. We obviously had to acknowledge the effort made by all of you during COVID pandemic times. Of course, we recognize and now is the extraordinary efforts you had to do with the ICOs and the impact it had, not only on the bank and its profitability, but beyond that on of course, we had to come out of important crisis in Spain that affected all of us, and we all had to work over I mean the workload increased consistently. There are many initiatives. So anything you can think of. And of course, that puts stress on your branches and work groups are being created to alleviate this situation. This Lego team, there has been some initiatives having launched to improve the day by day when you visit the web when you are on the Internet, we are very much aware of the difficulties. I mean, technical and technological difficulties we face and this is something we work -- work on the Board of Directors. This is -- we are doing important investments because this is a very complex topic, and we want to improve. Regarding diversity, we haven't talked on this topic yet, but we made progress on 2 aspects. 59% of promotions approved last year affected women. And we are getting back to the balance -- recovering the balance that is so important for all of us. And to conclude from the service, you mentioned having entered the results and figures do not reflect reality. No. I'm sure that when the working conditions are bad, everything gets worse on the other way around. You mentioned 69%. Is that enough? That has been -- the limit has been set in 69%. Should it be enough? Should we be content with that rate? No, of course, not. There is room for improvement. There is 31% of the staff that don't feel sufficiently motivated, but we have improved -- grew by 7 basis point last year -- basis points last year. Sorry, I was a bit long in my reply in my explanation. So well, I beg your pardon for that. But I want you to be clear about that. We are negotiating our -- of course, there are tensions and there's stress where we will do our best to reach an agreement by which we are all satisfied. Thank you for your contributions and for your understanding.

[Interpreted] Now we give the floor to Damián García Bartolomé. I will kindly ask you, if possible to try to shorten your interventions as much as possible.

[Interpreted] Okay. Very briefly, it is just going to be 2 questions. One is regarding the capital ratio, the CET1 ratio. You mentioned that the goal is 13%. I thought that as with the rest of the banking industry in Spain, the consensus was 12%. So that was my first question. Why are we moving from 12 to 13, I'm thinking that maybe this is because we need capital in the short term for something specific. I don't know -- that was my first question. The second question is regarding the dividend. The acquisition of our own shares is against the payout. Other important institutions such as Caixa or BVVA do not do that against the payout. They do that against the excess of capital considered in this ratio beyond 12%. Clearly, CaixaBank approved this in the last General Meeting of Shareholders. So the question is this policy to do it against the payout is going to be forever? Or will we reach a point where we consider these otherwise because the CET1 ratio will continue to increase if we continue this way. So at some point, will you stop? Do we need against the payout and we will do it as CaixaBank because they are, do we need against the excess of capital. These were my 2 questions.

[Interpreted] You were very kind. Mr. Damián.

[Interpreted] The goal of the bank is not 13%. The bank doesn't have a goal. Our goal is to have a capital ratio that is solid enough, robust enough to face the future. So we didn't set this as a goal for ourselves. But what we did said at the Board is that from 13% of the Board of Directors under stable circumstances where it is considered that there is not enough growth for the future in order to use these productive capital, as is the case of the banking institutions you mentioned that made this capital against capital. In this case, the bank said or the Board of Directors said that beyond 13%, the Board of Directors may consider having other share buyback programs, not against the results and not as part of the remuneration for the shareholders, but is a return of the capital to the shareholders. This is how this was communicated. So this is not just as simple. So this is just this way. I think with this, I answered your 2 questions. The dividend, during this year and the year before, apart, we kept a payout of around 50%. And within this 50%, we increased the remuneration to the shareholders in cash dividend and with complementary programs of share buybacks, keeping both of them within the range of 50% payout. Why? Because we want to be cautious. We can increase this ratio. You see that there are some shareholders that may have the opposite opinion. Some other shareholders believe as you do that with 50% is enough. We have 450 -- sorry, 430 basis points of excess capital. And is this too much? Or is this too little? Well, we believe we should be cautious. And for us, beyond 13%, we will consider whether this capital can be used in a more productive way for shareholders or at a given point after the corresponding authorizations, which, as you know, we require that. In the agenda, we have requested under the Item 6. As I said in my speech, we include the possibility for this year or next year to carry out some additional actions for share buyback program. This doesn't mean that we are going to do it, but we do demand certain flexibility from the Board of Directors to do so in case we consider that the capital ratio is too excessive.

[Interpreted] Mr. Antonio Gallego, I understand he's not there. Oh, sorry. [indiscernible] can get ready.

[Interpreted] Ladies and gentlemen, I am not going to assess anything because I do not have enough knowledge about this matter on how you lead the bank, but I can say the following. Alicante was really happy when the bank Sabadell decided to bring its registered office here. Now there are some rumors saying that you want to move this away from Alicante. This would be a hard blow for all of the Alicante citizens. And we don't think it is a good decision. Maybe we are not treating you correctly or maybe you think that, as my grandmother said, the situation is not the best for Barcelona, not because the Catalans because I love all of them, but maybe this is not the same case of the politicians. Well, jokes apart, these are not jokes, but it's a reality. I can also say the following. For the older people, I have a great respect for all the people working of the bank. However, I would say a couple of things. First, do not take out the paper statement documents, these documents because we have the pay format. And I am really fighting with technology. For me, it is very important to have my paper documents from the bank. At the same time, again, I love all the workers, but there are some black ships -- and they -- these people, they should take into account that they will also become older in the future, and they should treat us as they would like to be treated in the future. So I simply say that I'm very satisfied. I have been working with this bank for 70 years or being a customer for 70 years, I will continue to do so. But I trust that you will continue your good work, and please continue to work. If it's a bit better than now, so much better.

[Interpreted] Mr. Antonio, first of all, we feel really welcomed here in Alicante. For the bank, it is very positive to have its different operational headquarters in the different territories because we have offices here in Alicante in Madrid and in Sant Cugat in Catalonia. This is a way to have a diverse footprint in these 3 different autonomous regions in Spain, in Catalonia, in Madrid and in the Valencian community. These are important places for our commercial relation to also in other places where the bank is present. The Basque Country or in Oviedo where we also have some sites or offices. This model works well. So there is no reasonable for us to change our registered office. We always will take a look at our environment that there are no reasons for that.

[Interpreted] [indiscernible]. Please do not forget the paper documents. Yes, yes. I will tell the CEO about it because I cannot help you with this personally, but I would let our CEO -- thank you.

[Interpreted] Mr. Chairman, Minster, Chief Executive Officer, shareholders, dear colleagues from the bank, technical staff and support staff. Thanks for creating these events because all the tasks are important and necessary, not only those who have a 6-figure salary. My name is [indiscernible], and I am here as a shareholder with voting right, but mainly as a worker and Secretary of the Trade Union in Sabadell with around 22% of the legal representation of the workers in this bank. In -- when we work as a trade union, we work thinking about all the workers, not just part of them. We also represent here in the General Meeting of Shareholders, the vote of the colleagues that gave us a proximate and we would like to thank them about it. My intervention will be in Catalan. And I would like to highlight that despite the documents are available in Catalan and in Spanish, the working documents are more and more only in Spanish, even the internal regulations. Every language according to the surveys, provide a different perspective about the world. Those of us who have the Catalan language, we want to be able to use it. We want to be able to work in Catalan because language rights are also labor rights. The excuse is usually the cost -- it is -- well, one of the problems of capitalism is that, that we only measure things about cost. We -- this is just having a model, seeking profit at any cost. And if we focus on the Banco Sabadell 1.3 billion earnings profit that the CEO have expressed as an all-time record despite the bank taxes. And this is overcoming the figures we had in the past. However, apart a great part of this profit come from ill treatment, yes, ill treatment -- ill treatment to customers we are sending them to the teller machines to do the operations in the places where we have a teller machine, making people ask for an appointment to do anything, saving the payment of our deposits, even if the interest rates have gone up. This is generalized in the Spanish banking, but authorities allow that. What can we expect -- also about the workers. As we reminded the workers have not received any compensation because of the effort carried out during the pandemic. Recognition shouldn't just be awarded. It should be a financial remuneration and economic compensation. And this added to the commercial pressure makes us decrease our purchasing power and everything is just the same as last year. It is a shame. If we compare with your profits, a part of your profits come from this strangling of all the workers of the bank. This situation led us be poorer than in the previous years, core and power every year. We have to change this. This is unacceptable. In our collective agreement as well as in the different agreements we have to revert this situation. The Chairman was saying that the economies are robust, that the families are robust. Well, maybe the families you know because most of the families, including many of them depend on the salary of Banco Sabadell workers are having a really bad time last year in the same place. We had to address you to improve the working conditions, the salary conditions. It was in your hands, but it seemed that you didn't want to do anything about it. And it seems this is just the same. It is in your hands not to apply Article 5 of the collective agreement and to cut the increase of salaries because we are not seeking fair compensation on a generalized manner. You were speaking about the situation that could happen about people, while earning a lot and increasing their salary, but this is not the reality. Most of the people who didn't have a salary increase do not have a great salary. And this is something you are well. hiding with the indexes, et cetera, you're speaking about empowerment to include everyone in the branches. But again, this is another mechanism of capitalism. In this area, you are destroying the meaning of words, and I said this last year, the conflict between the workers and the company is there and will continue to be there, especially with this mindset of maximizing profits and not sharing it with all of us because now you are proposing that those that are earning more may have even double the variable remuneration. But this is just a very few of the staff, very few people in the staff. It is shameful that with the profits obtained most of the workers continue to lose purchasing power. And here we are. Here, we continue. Here, we continue and we will continue in the future, but it depends on you that you are discussion that you have a nice dialogue with us. We are always dragging behind after the top management of the companies. We can only fight with our legal instruments with our collective bargaining negotiations. But this was applicable to other banks in our sectors, and we offer ourselves to face this fight as trade unions. I had some answers to the comments made by the Chairman, but I will leave it at that here.

[Interpreted] Everything that has to do with the possible replies to Mr. [indiscernible] as the CEO stated, we at the Board will be diligent and vigilant and absolutely ready to reach agreements with the trade ones regarding the collective agreement. I mean not everything is up to us. Now everything depends on us. It depends on the -- all the representatives of banks and different trade unions. So I very much hope that in the future, shortly, we will solve all those aspects with a good agreement. Regarding the other topics you mentioned, I don't know what to say, how I can contribute to the dialogue. So I will give the floor to our CEO and the members of the Board, so that they take into account your -- everything you stated. Mr. [indiscernible] and Mr. Francis [indiscernible].

[Interpreted] It seems that your interventions are more or less similar. So we will try to join them, if possible, because we are -- as we are running out of time, we would kindly thank you for doing that. Ladies and gentlemen, dear shareholders, the members of the Board, my name is Mari [indiscernible], I'm representative of a trade union. We are attending this meeting on several occasions because you might not be aware of some circumstances of the bank because you are up there looking at us. So we are suffering a suffering a situation of neglect. We are suffocating because of the working conditions. I would like to focus today on explaining some of the well, the slogans we've included in our science when we were outside at the gate today. So of course, you are familiar with the term of default referred to nonpayment of debt, debt you incurred on with hundreds of working people. So since 2014, you stopped paying them between 10% and 18% of their salaries, their target, rings a bell. Do you remember that because you used multiple co-action and persuasion techniques to warn people so that they decided not to claim not to present claims against their superiors despite the fact they merited that money those, and there were some legal decisions by the superior court. Another debt hasn't been paid back right, 2018, 2022. So the TSG, the highest court are forcing Banco Sabadell to pay back those assets to those people that contributed to achieving earnings published in the different financial years. Do you know that right now, the default interest rates are over 40% of the whole debt? Do you think that we can conclude this. We cannot afford to go to court individually. So there should be a way to resolve this conflict by paying attention to the individual rights of workers and you are not doing this so far. So you are getting used unfortunately to make use of the superior position you have the powers to avoid paying customers back for the mortgage costs they had to pay unlawfully and trying to convince them to persuade it not to put claims. So dignified agreement, that's another slogan with used today. So this is the base for -- and this is how we state the working conditions of hundreds and thousands of people and our workers, our training trade unions ALDA is taking part for the first time ever in this collective agreement to achieve good conditions because there were some mistakes made in recent years. And among other consequences, we have the impoverishment of works forces by 10.6% exactly. They were cut down the numbers of workers. We have the opportunity to hear about those incredible benefits and profit and earnings we achieved the last financial year. And please remember, who's to thank for -- so of course, there is a since that we manage to thank – we should thank those that contributed to achieving. We need to be generous with those that did the best to achieve record high results for our bank. So in the negotiation agreement in the discussion table, we saw the lack of respect you show to the workers and the representatives. You attend meetings. You arrive at the meetings with an important delays we arrive about an hour late. You never you never asked for forgiveness. You never propose interesting proposals for the collective agreements. On our part, we -- the workers, we came out of the street to give you -- to show you how United we are how confident we feel and we went to the strike. And well, it was a record strike in the last 40 years. This was the best year ever, as Mr. [indiscernible] stated this morning. So please be dignified to consider that we need to listen to the members of your staff and show a behavior that is dignified so that we can work happily and so that we have recovered this sense of belonging. Unfortunately, we've lost it, we left it on the way because of the many disappointments we had to experiment. So be consequent, be fair. So just forget about the -- and let's not continue with your state to school. So I want my intervention to be included in the record and in the minutes of this meeting.