Banco Santander, S.A. ($SAN)

Good morning, everyone, and thank you -- as Q1 2026 results presentation. Today's presentation will follow the usual structure. First, Héctor will talk about our results with a special focus on the performance of our global businesses in the context of our new strategic cycle. Then Jose will give a deep dive on our financials, and then Héctor will close the presentation with his final remarks before opening up for Q&A. Before we start, let me remind you that this is the first quarter that we are presenting our results after the disposal of Santander Polska and using the new group reporting structure we announced in February. As a result, all underlying metrics exclude impacts from Poland, both in 2025 and 2026 to make the accounts compatible. Now Héctor, floor is yours.

Thanks, Raul, and good morning, everyone. Q1 was another excellent quarter for Santander, demonstrating the strength of our strategy and the resilience of our business model. profit reached a new record of EUR 3.6 billion, up 12% versus Q1 '25, supported by all of our global businesses, even after a EUR 210 million [indiscernible] finance provision in U.K. On the back of our solid franchise with a growing customer base as we continue to enhance customer experience, leveraging on our global platforms. . We achieved this as we continue to execute on transformation, making excellent progress towards a simpler and more integrated model. This is translating into tangible results with our efficiency improving by 2 percentage points and underlying ROTE increasing to 15.2%. Our balance sheet remains very solid with robust credit quality and a strong CET1 capital ratio which reached another all-time high of 14.4%. In this concept of high capital levels, our underlying RoTE adjusted for excess capital around 16.5%. All this contributed to strong shareholder value creation with dividend per share growing at 19%. Going into more detail into our income statement, our P&L was very strong from top to bottom with -- Client profit growing double digits year-on-year. We delivered strong top line growth -- with revenue up 6% in constant euros, supported by all global businesses. NII and fees up 5% and 7%, respectively, accounted for around -- 95% of total income, supported by a significant increase of 8 million customers and the network benefits we're capturing through our global businesses. Revenue grew while expenses fell, showcasing the positive effects of our transformation. LLPs were affected by Argentina, reflecting sector-wide trends in the country. Excluding Argentina, provisions declined 2% year-on-year. Finally, as I have just mentioned, we have the impact of the EUR 210 million related to the motor finance in the U.K. All in all, as we have shown over time, our results are sustainable and less volatile than peers even in the current uncertain geopolitical environment. What we are seeing in our results clearly reflects the strategy we outlined at the InvestorDay. Our business model is unique as it combines global and in-market scale with customer focus and diversification across Europe and the Americas. This, together with our 3-pillar -- and supported by disciplined capital allocation and investment in data and AI is delivering consistent results. This is not just a framework. It is a model that is already delivering higher revenue, lower cost, improved profitability and strong value creation. Let me start with our customers. We are adding 8 million new customers year-on-year, making good progress towards our target of reaching 210 million customers by '28, including the expected contribution of 8 million customers from TSB and Webster. At the same time, we're improving the economics per active customer with revenue growing 3% and cost decreasing 4%, driven by ONE Transformation. So we're not only adding customers, but also increasing their value exactly as we set out at our Investor Day. We continue to deliver on ONE Transformation, driving operational leverage. At the Investor Day, we introduced a more granular cost-to-income framework with clear levels to track efficiency across the group. Simplification and automation however delivered 1 percentage point of efficiencies. Our network businesses also contributed 1 percentage point by driving customer primacy and capturing scale benefits. Our global approach to technology is enhancing productivity by building once and deploying across the group. While we start to capture the benefits from AI, even in an initial investment phase, and all of this is something that is entirely under control. Although global businesses contributed to group growth as we continue continue to improve profitable bank with branches combines notion with the expertise and proximity of our team -- we are making strong progress in the rollout of our platform Gravity is now fully implemented in Spain and Mexico and Chile and is ready to be deployed in Brazil during the year. At the same time, we're scaling our customer interaction platform, enabling greater personalization and increasing customer engagement and primacy. This is translating into tangible results. Fees grew 7%, cost per active customer declined 7% and productivity keeps improving. As a result, retail's underlying profit grew 9% year-on-year, driven by strong operational leverage with good revenue growth, both NII and fees and cost down 5%. At the same time, asset quality trends remained robust, in line with our expectation with cost of risk improving year-on-year to 1.07% excluding Argentina. Looking ahead, we expect further profitable growth as we continue to scale our platforms, deepen customer relationships and capture additional efficiencies from TSB and Webster. With Openbank, we are building a more integrated, scalable and efficient business supported by a global digital platform. We are transferring the business by simplifying the model with a single legal entity in Europe accelerating cross-selling and AI deployment and the integration of our U.S. businesses. Our focus on deposit gathering is improving our funding mix and supporting profitability. As a result, we are already seeing strong benefits, particularly in the U.S., where the digital bank has gathered EUR 11 billion in deposits since launch, delivering around EUR 150 million net funding cost savings annually. We're also strengthening our position in mobility finance, expanding beyond traditional auto lending. In parallel, we're scaling our embedded finance capabilities through Openbank Pay and new partnerships. This is translating into progress on our performance operating targets. -- and into a solid underlying financial performance, driven by strong revenue growth, continued efficiency gains and credit quality under control, resulting in a 15% PBT growth, excluding Motor Finance. As anticipated, profit growth was impacted by the end of electric incentives in the U.S. with the tax rate now expected to remain stable. Looking ahead, we expect profit and ROTE growing to improve as we continue to scale the business, optimize funding and deliver more efficiencies. In CIB, we continue to build a world-class business for our corporate and institutional clients, leveraging our global network and diversified model. We are deepening client relationships and strengthening our advisory capabilities, taking more relevant roles in complex and cross-border transactions supported by our integrated coverage model. At the same -- time, we're improving connectivity across markets and products, enabling us to serve clients more simply and operate more efficiently. Collaboration across Global Banking, Global Markets, GTV and commercial remains a key driver of our value creation and is increasingly extending across the group. A clear example of this is that GTV solutions are now embedded in more than half of our leverage buyout and M&A mandates. Even in a more challenging context, CIB continued to deliver strong results with a profit of 16% year-on-year. At the same time, CIB continues to deliver one of the best efficiency ratios in the sector and an ROTE of 21%, reflecting our focus on profitability and capital discipline. In wealth, we continue to build the best wealth and insurance manager in Europe and the Americas, leveraging our global scale and capabilities. We have simplified the model into 2 clear verticals, enabling us to capture synergies and strengthen collaboration across the value chain. In private banking, we are reinforcing our global positioning, particularly in the ultra height network segment supported by more specialized coverage. As a result, customer assets and liabilities grew 11% year-on-year. In parallel, we are consolidating our insurance and asset management solutions, bringing together liquid and insurance products. We are building an integrated insurance platform across life, pensions and protection and could become one of the biggest deltas in the future. Collaboration across global businesses remain a key driver of growth with distribution fees up 7% year-on-year. In summary, this is supporting strong growth. Profit rose 11%, driven by solid revenue performance across businesses lines on the back of the strong commercial activity. Finally, payments, our high-growth platform business. We continue to scale our global platforms and strengthen our position across acquiring, processing and cross-border payments. In Getnet, we're expanding internationally and simplifying integration through a single API, enabling companies to easily scale across markets. Our platforms continue to enhance capabilities, supporting multiple payment methods and improving efficiency, while Ivory keeps expanding in customer base and geographical footprint. This is translating into strong results with revenue up 20%, a higher EBITDA margin and a lower cost per transaction with profit up fourfold year-on-year. Overall, the business is building a strong momentum with clear upside as we continue to scale. Our strong operational financial performance is driving high profitability and double-digit value creation for the 12th consecutive quarter. Underlying ROTE improved to 15.2%, reflecting our disciplined capital allocation strategy. At current capital levels, this is even more compelling as it would be around 16.5% and at normalized CET1 with further upside from M&A and ONE Transformation. Underlying earnings per share grew 17% as a result of [indiscernible] plus cash dividend per share increased 19%. And reflecting a strong profit generation and the impact of buybacks. Including the full buyback currently underway, we have already returned EUR 7 billion to our shareholders out of our commitment to distribute at least EUR 10 billion for '25 and '26. I will now hand over to Jose, who will go through the financials in more detail.

Thank you, Héctor, and good morning, everyone. I will take you through the group's P&L and capital performance in more detail. But first, let me remind you, as Raul explained in his introduction, that this is the first quarter we are reporting after the disposal of Poland and under the new cost structure that we announced in February. As a result, the impact of Poland is reported in the nonrecurring items line in both 2025 and 2026. We will also book in this line, the M&A-related charges from TSB Webster that will arise in the coming quarters. As usual, we present growth rates in both current and constant euros. The difference this quarter was around 2 percentage points, mainly due to the depreciation of the U.S. dollar. Turning to performance. As Héctor mentioned, we are yet again delivering record results for the eighth consecutive quarter with our transformation driving strong operational leverage and profitable growth. Revenue grew 6%, supported by solid business activity, while cost declined both in line with our public targets for 2026. Loan loss provisions were impacted by portfolio deterioration in Argentina, reflecting sector trends in the country. In the rest of the group, provisions declined 2% year-on-year. The other results line includes a motor finance provision in Openbank Europe of EUR 210 million. As a result, profit continued its upward trend growing 14% year-on-year in constant euros. Total revenue increased 6% year-on-year to EUR 15 billion, in line with the target we set for 2026. This growth was underpinned by customer activity and 8 million new customers we gained in the last 12 months. All global businesses contributed to revenue growth, which was mainly supported by another record quarter in CIB, up 15% driven by strong client activity, especially in global markets. Openbank, which also performed well due to a strong net interest income growth, especially in Europe. And retail on the back of solid NII performance and our increased focus on fees. Payments and wealth also showed very good figures, with payments up 20%, driven by higher activity across business lines and wealth growing, supported by higher assets under management and focus on value-added products and services. The group's net interest income increased 5% year-on-year. The vast majority of this improvement comes from retail and consumer, but corporate investment banking also contributed to the overall growth this quarter. Additionally, NII was resilient in retail across most countries, even with less favorable interest rates in general, supported by higher volumes. Openbank delivered solid NII growth, driven by higher volumes in Europe and South America and an improved funding mix. In wealth, NII was impacted by deposit costs, reflecting the nature of the business in a lower rate environment, while in the Corporate Center, we see the expected sensitivity to lower rates. On a quarter-on-quarter basis, net interest income was slightly up for similar reasons, despite the usual seasonality in South America and a lower day count. Overall, this performance is ahead of our Investor Day guidance for NII. We had another strong quarter in fees, up 7% year-on-year, supported by customer growth, increased activity and a better mix towards higher value-added products, driven by our network businesses and ONE Transformation. Growth was well diversified across our businesses. In wealth, fees grew double digits, supported by a strong commercial activity across business lines and favorable market performance. Retail delivered solid numbers across our footprint, supported by customer growth. Openbank fees increased across our core markets as well, mainly Brazil, driven by portfolio expansion and higher insurance activity. And we saw double-digit growth also in payments supported by high activity levels with Getnet's total payment volumes increasing 11%. In CIB, fees were impacted by a softer performance in European countries after a record first quarter 2025, although the pipeline remains solid and supports trends going forward. One Transformation remains a key driver of our profitability improvement, leveraging our global platforms and connectivity to deliver operational leverage. This is reflected in our efficiency ratio, which improved further to 42.8% this quarter, supported by strong underlying business dynamics with revenue increasing and cost declining 1% year-on-year in constant euros or 4% down in real terms. In Retail and Openbank, which are leading our transformation and represents 75% of our cost base, costs declined by 3%, even in the context of the ongoing rollout of our global platforms and revenue grew 3%, resulted -- resulting in very positive operational jaws. In our network businesses, CIB, Wealth & Payments costs grew below total revenue and broadly in line with fee income, reflecting targeted investments in capabilities to drive low capital-intensive growth maintaining high recurrency levels. This excellent performance resulted in an 11% rise in net operating income from already very high levels last year. Looking ahead, even in a scenario of higher inflation, we expect to deliver cost reductions supported by the tangible benefits of ONE Transformation and additional mitigating actions both firmly under our control. Our balance sheet's risk profile remains low with solid credit quality across our footprint even in a more challenging environment, supported by prudent risk management and resilient labor markets in general. Having said that, some of the reported metrics this quarter are imported -- are impacted by Argentina, reflecting sector-wide trends in the country in a less favorable context and should improve gradually as the effect of lower originations comes through. Excluding Argentina, credit quality remained very solid. Loan loss provisions were 2% down year-on-year, with resilient performance across the group in general. Cost of risk improved 2 basis points and the NPL, the NPL ratio of 5 basis points to 2.94% with a stable coverage ratio. In addition, our NPL portfolio has collateral guarantees and provisions that account for almost 90% of its total exposure. Stages grew in line with our portfolio with a stable distribution across buckets. Retail and consumer represent 90% of the group's loan loss provisions. In retail, we saw a strong cost of risk improvement, excluding Argentina, with solid underlying trends in key markets such as Spain and Brazil. In Openbank, cost of risk also improved supported by a strong performance in the U.S. and resilient trends in Europe, even with the impact of Argentina. In Corporate Investment Banking, provisions were affected by some single names in Brazil and in Europe. As of today, we are not seeing significant deterioration in employment and credit quality remains stable. Moreover, it is in periods of higher instability when diversification -- diversification becomes more relevant. Looking ahead, it is still too early to draw conclusions on the geopolitical environment, given the level of uncertainty at the moment. However, as long as labor markets are not significantly affected, we would not expect material impacts on our credit quality targets. Moving on to capital. We continue to generate capital at a strong pace, while growing the business. In the quarter, our CET1 ratio increased by 90 basis points to 14.4%. We generated 29 basis points of net organic capital. This was mainly driven by disciplined capital allocation to high return new opportunities with a new business return on tangible equity of around 21% and strong contribution from our risk transfer initiatives, which offset 20 basis points of risk-weighted asset growth. The disposal of Poland added 39 basis points to CET1, net of the EUR 3.2 billion additional share buyback corresponding to around half of the capital generated from the transaction. In addition, regulatory and model updates contributed 20 basis points. Overall, the strong capital generation in the quarter puts us on track to end the year above 12.8% in line with our target. The impact from TSB and Webster, which we now estimate at around 210 basis points will be phased across the second and the third quarter. Importantly, our performance in these countries is not dependent on integration execution alone. Our transformation plans are already delivering tangible improvements. For instance, in the U.S., return on tangible equity has reached around 12%, one of the highest levels in recent years. While in the U.K., we are also seeing improving trends in both efficiency and profitability. All in all, our capital position remains very strong, supported by sustainable capital generation and profitable growth, with TSB and Webster strengthening our capital generation capability capacity going forward. Héctor, back to you.

Thanks, Jose. As you can see, this is a great start of the year, and we are well positioned to deliver our '26 targets. Our businesses continue to show solid momentum with revenue growth, cost discipline and strong operational leverage supported by ONE Transformation. This is translating into record underlying profit, a stronger capital position and double-digit value creation. In summary, we are delivering consistent and predictable results with very positive trends that we expect to consolidate in the coming quarters. On the back of this strong start, we reiterate our guidance for the year supported by the strength of our diversification, which, as Jose has mentioned, becomes even more valuable in periods of higher macro uncertainty and mitigating actions, particularly in cost which ONE Transformation enables us to deliver on our target even in a more challenging environment. Overall, we remain confident in our ability to deliver sustainable and profitable growth and to continue creating value for our shareholders. Our financial north star is clear, to deliver a ROTE above 20% by '28. This is about execution, disciplined capital allocation, ONE Transformation and scaling our global businesses to accelerate value creation, and that's exactly what we are delivering. And now we are happy to take your questions.

Thanks, Héctor. Let's move to the Q&A.

[Operator Instructions] We already have the first question from Ignacio Ulargui from BNP Paribas. .

I have 2 questions, if I may. One on capital. I mean after the good performance in the quarter that we have seen, how should we think about the buildup going forward in coming quarters? And if you could give us a bit of a sense of what has been the 20 basis points improvement in the later turns in the quarter. And Jose, whether we are still factoring the negative of 20 basis points per quarter headwind for the year that you flagged initially for 2026. The second question is on Brazil. and the performance of NII has been very strong, but we have seen an increase in the NPL ratio. If you could give us a bit of some sense about what has been the driver of deterioration, how should we think about credit quality in Brazil and provisioning NII evolving from here? And I mean just -- you have probably confirmed that with extra comments that should we stick to the 100 to 110 basis points guidance for cost of risk in the period '26-'28?

Thank you. Thank you, Ignacio. So I will take first question on Brazil, and then Jose will talk to you about capital if it's okay for you. Okay. So it is important to understand, and let's put things into perspective, okay? So our loan book in Brazil only represents 10% of the total growth. That's basically great about what we have and the diversification that we have. So let's talk a little bit about the conditions we see in the country. [indiscernible] We believe, is expected to grow around 1.5% in '26, even with this geopolitical situation. We see a resilient labor market, okay, despite, I mean, the rates that we still have in Brazil. It's important to say that Brazil is a [indiscernible] oil exporter, okay. I believe that's why we believe that GDP should benefit. But the problem is also gas and fertilizer prices could see inflation in the short term. Remember that Brazil is a very important food producer. And in that sense, basically, they get hit by that. The Central Bank began the easing cycle. In March '26, they got 25 basis points. They're down to 1,475. And we assume that [indiscernible] is going to end up by 13% by the end of '26 and hopefully, 12% by the end of '27, in line with the forward curves that we have seen. Remember that every 100 basis points in SELIC improves NII by EUR 60 million, okay? That basically tells you a little bit of the sensitivity that we have there. Just to talk about, I mean, as you said, I mean, a strong -- very strong start of the year, Q1 '26 profit grew 6%, okay. Loan growth and market interest income is underpinning a 2% year-on-year increase in NII. Interest on capital is growing the tax effective rate overall, is setting a 2% year-on-year increase in cost that is quite good given the particular situation of inflation in the country. So and also, it's very important to tell you how we're managing the mix, okay? We're basically moving towards higher clarity business, maintaining a cautious approach to underwriting, particularly in the corporate portfolio. And these factors will support our path to 20% RoTE in the medium term, which is basically what we're aiming for, okay? It is important to say the cost of risk is around 4.1%, all right? It went up a little bit because of some single names that we were expecting because of the credit conditions and the interest rates in the countries. But nonetheless, we'll see it stable for the rest of the year. We have a couple of situations that we're monitoring very closely, but we don't see that we will affect the number anymore. The outlook, as I told you, NII will be solid, and it's current, I mean, with the guidance that we have. In terms of the guidance on the total -- on the cost of risk, I think it's going to be around where we are. It is important to acknowledge the ones we get also and Webster that basically will decrease the overall cost of risk of the whole group. So we believe that we're going to be perfectly around the numbers that we told you in terms of guidance. And with that, Jose, could you go into the capital please? .

Thank you, Héctor. The 20 basis points regulatory tailwind in the quarter comes from an updated model for what we call Carteritados, small SMEs in Spain. This is a new model. So it's structural. It's not a benefit that it's temporary. So it's here to stay. For the next 3 quarters, we would expect still some headwinds from updated models, inspections, et cetera, which, again, will be probably less than 20 basis points, somewhere between 10 to 20 basis points in the next 3 quarters. So we feel comfortable and very confident that we will be above 12.8% by the end of the year, which was our target communicated at Investor Day.

Thanks, Jose. Can we get the next question, please?

Next question from the line of Alvaro Serrano from Morgan Stanley. .

Just a follow-up on capital. Because if I look at, I think, it's Slide 25 on the capital bridge, it does look like you're going to be above that 12.8% to 30% -- even above the 13% range based on what you've produced in Q1. So can I -- can you sort of walk us through the rest of the year in terms of organic? I know you've touched on the capital headwinds. And if you are above 13%, should we -- extra distributions on the cards potentially, if you end up above 13% this year? And the second question is on cost. Obviously, a very good performance on costs. I've -- in particular, what stood out to me was U.K., very large step down. Can you sort of maybe talk to that step down in cost in the U.K.? And is that sustainable? Can we see more even ahead of TSB?

Thank you, Alvaro. Okay. So on capital, it's very important to acknowledge that we have expressed you or we have told you about really exact capital here that we have, okay? So it's very important to understand that, I mean, if we continue and we're able to deploy capital at the levels we deploy in it above 20% in our organic business, we will continue to do so because I believe it's in the best interest of our shareholders to reinvest capital at those levels. And we see that opportunity, we will take it. If not, I mean, you have the whole capital hurricane, which you know exactly what we're going to do. If we don't have that capital to be deployed, then as can explain to you what we can do about that. In terms of cost, yes, we have a pretty good numbers on cost. The reason is perfectly explainable, it's ONE Transformation. Remember, ONE Transformation is we're simplifying as much as we can. We are automatizing all processes. We are eliminating a whole bunch of people that we have in operations, we're sending that people basically to concentrate on the front line in order to be serving customers and trying to transform completely the way service within the bank. And that's basically what's going on. And that's why you see the operating leverage you saw in the U.K. with revenues basically going up and cost coming down. And you will see continue -- I mean that trend will continue even without TSB because we believe that we can run that bank in a much leaner way. We had a lot of finality. We had a lot of complications. We're simplifying in a very important way. So yes, you will see costs coming down in the U.K. towards the end of the year. And then we would do actually much better once combined with CSG with the synergies that we will get there, okay? I don't know, Jose, if you want to complement on capital.

In the first quarter, we generated 29 basis points of organic capital because risk-weighted asset growth was 0. So we were able to mobilize assets more or less in the same amount of growth. That's a condition that obviously has 2 components. One is the growth. The other one is the capacity to mobilize assets in the next 3 quarters. So we obviously depend on the markets and demand for private credit in the next 3 quarters to be able to meet that condition. So as long as the conditions remain, that part will continue to perform as it performed in the first quarter, but it is not entirely under our control. Second, we had a good performance in deductions in the first quarter, which, obviously, we're working very, very hard to continue delivering good numbers in terms of deductions, but again, these depend factors that do not entirely depend on us. for instance, the valuation of pensions, the valuation of the available-for-sale portfolio, et cetera, et cetera. And then we have the up to 20 basis points regulatory headwinds that I mentioned. So in a perfect scenario where everything behaves well, et cetera, come, we have 3 quarters more or less in line with the first quarter. It may be. But again, that I don't think should be our central scenario.

Could we have the next question, please?

Next question from the line of Andrea Filtri from Mediobanca. .

Thank you for my question. I wanted to insist on the capital side, you're only 60 basis points away from your 13% target for year-end, so only 40 [indiscernible] you have just said that it's not impossible you could repeat, could we then expect an acceleration in growth? And where would you see the businesses within the group that can absorb more growth? And secondly, I don't know if you could comment a little bit about the U.K. our financing charges and if you consider it done for the current level?

I think I explained the quarter. I'm not saying that we -- obviously, could we have 3 quarters aligned with first quarter? Yes. That I don't think is a central scenario, basically because, one, we should be able to mobilize assets at the same rate we did in the first quarter, which is EUR 10 billion. Well, hopefully, we will. But obviously, it's not 100% certain. Second, we grew assets in the first quarter at a relatively healthy pace because we were able to deploy that capital at over 20% return on tangible equity. As long as we can find opportunities to invest at that level will continue to invest at that level. And if we have more opportunities, obviously, we will invest more. But that's something, again, that depends on the opportunity to grow. So 60 basis points to 13%, 40 basis points to 12.8%. I think, again, is, as I said at the beginning, we feel confident that we will be above 12.8% at year-end.

Andrea, this is Héctor. Just basically, I mean, to complement a little bit, and what you have asked is you said, I mean, what businesses can we have more growth. I think we have a great opportunity. It meets at corporates and SMEs. so if we see an opportunity to reinvest and we see that the market is strong, we could be looking at basically growing that and using capital because the returns are pretty good. And you have markets such as Mexico, A little bit on Brazil, if the situation basically goes better, in the U.S. as well. We've also been seeing an opportunity in the U.K. We grew the portfolio on CCB in the U.K., EUR 1.6 billion this quarter because we saw the opportunity and the spreads are there, because some of the players have gone out of market. So we see an opportunity in some places. But we always will be very, I would say, focused on profitability and very disciplined in the way we deploy that capital, okay? And this is what we have. In the U.K. Motor Finance, it's important to say, okay, we booked an additional EUR 207 million pretax provision this quarter. Current stock provision on this matter is at -- sorry, EUR 725 million, that's GBP 633 million. And I do believe that we're very well covered on our expectations. You know that this is always a moving target, given that some of the customers basically can go on to directly, et cetera, but we don't expect that to be much more than we have already have done. So we believe we're done on that.

Thanks very much, Héctor and Jose. Could we have the next question, please?

Next question from the line of Cecilia Romero from Barclays.

My first question is on asset qualities. With recent market volatility, are there any areas or geographies of cushion emerging, and specifically on Argentina and Mexico, where cost of risk has a step up quarter-on-quarter. Can you walk us through the key drivers of how do we think about the run rate for the rest of the year? And also following [indiscernible] cases in private credit, how should we think about Santander's poster and risk controls in this area? And finally, could you provide an update on the process and regulatory time lines for the TSB and Webster acquisitions?

Okay, very quickly, okay. By geographies, our diversification is actually quite good in this particular case because we're exactly in the part of the world that I believe that the geopolitical situation is which we are more -- much more defensive and we see countries that could benefit such as I was explaining Brazil and Mexico that could benefit for the whole thing. So -- and also we see the U.S. basically coming very strong. So in that sense, I do believe that we are located in the best places right now as of this situation. Situation in Argentina to be [indiscernible]. I mean, and I was actually in Argentina, not lost so long ago. It is important to acknowledge what's been going on in Argentina. The government is basically -- main goal is to decrease inflation. By decreasing inflation, they basically actually, there is no pesos in the market. They are basically drawing off the market in terms of pesos. So the spreads have grown up tremendously, so that you basically have a real rate that goes almost to 40%. Inflation, we believe in Argentina, last time we checked, was around 2% per month. that basically, we believe inflation in Argentina would be around 24% to 30%, let's say that. And rates are at around 60%. So with rates at that level, it's impossible to the consumer market. We started to lend a little bit to give a live of credit cards and to start creating a real bank in the country. Unfortunately, with those real rates that hasn't come down as fast as we thought that we're going to be. I mean, customers started basically to get into delinquency because they couldn't afford the real rates as much. So we basically closed on completely, and we are just doing loans to the corporates that basically have dollars and with the dollars that we have, we're lending to them. Cost of risk went all the way to. [indiscernible] Okay. We believe that it should normalize at around 7%. That's what we expect, and we are under control completely because we're not lending to consumer anymore, okay? And we believe that if the government continues the way it goes, real rates should come down towards the end of the year, and we could come back to the market to start lending again. But at this point, that's not the case, and we will be monitoring the situation very closely. In terms of Mexico, look, I mean, cost of risk is around 2.7%. We have been taking measures into that. We changed the mix, and I explained to you last quarter that we were much concentrated in CIB, in lending to the midsized corporates and SMEs, and we stopped basically -- you see our credit card portfolio went down 7% year-on-year. That's what we believe that Mexico was going to suffer always, I mean, when there is inflation and this turnabout Mexico softens a little bit. We believe that is under control, and it's going to be below 3% for the end of the year. So no worries on that. In terms of private credit, look, this is not a core business for us, as you know. It's less than 1% of the total portfolio of the bank. We are very much concentrated in the very good names in the market. 70% of what we have outstanding there is subscription lines to the best names in the industry. So we don't foresee any problems on that. And the other risk that we have is very much concentrated in what we know best, which is project finance, which is energy. So nothing really in our views to worry about. But it's important to acknowledge that we have put a lot of controls in place, that we have a lot of governance, and we are tightening up a little bit just to be completely sure that we are on the right side on the things. And in terms of TSB, we believe that the transaction, as you know, was just authorized. We're going to enter into the Part 7 situation. numbers shall come in, in the second quarter of the year. And on the other side, the situation with Webster is going a little better than we expected in timing, but it's going to be for sure in the second half of the year.

We get the next question, please.

Next question from the line of Francisco Riquel from Alantra.

Yes. My first one is, in the U.S. Cost of risk is better than what I expecting trending down. So if you can update on your guidance for the year on cost of risk in the U.S. and comment on asset quality particularly in auto lending in the U.S., I see the loan book here is shrinking. And on CIB, the loan book here is growing strongly, what you can comment on risk taking here in this book? . And then also, my second question is on Brazil. I wonder, NII has come a bit better than I was expecting. So what is driving the rise in NIM in Q1, I see a 30 bps decline the retail NIM, as you report, but then the total NIM in the country is up 15 basis points in the quarter. So what trends shall we expect for the rest of the year? And lastly, a follow-up question on asset quality in Brazil. I understand the government is preparing a new decent rollout plan to help individuals renegotiate debts? What impact if any shall we expect?

Okay. In the U.S., look, I mean, yes, you're right. Provisions are better than we expected. And that's because even though the cost of risk has normalized, we continue to see a trend after 90 days delinquency, which I have always -- every single quarter, I explained this, but we're still surprised that it's still around 60% or a little less than 60%. So what's been going on is customers are coming back to us. And after 90 days delinquency, they try to get regular. They pay us a little bit. They try to maintain it, and that's what has helped us to sustain that. Also, it's very important that -- and I also explained the trend that we were coming down a little bit, if you saw, in terms of origination in Prime. In Prime, we have stabilized that. It's at 38%, and it continues to grow because we have new contracts with some of the OEMs that are basically helping us out to sustain the Prime. What is important also to see that is that after the March 1, all of our outer portfolio is being financed by our own deposits. Given that Openbank help us with EUR 11 billion of now new deposits, all of our portfolio is now not dependent on wholesale funding. That has basically given us an extra margin. And that basically will help us to get to the ROTE that we promised you in the U.S. towards 18% when we have Webster, et cetera, towards the end of '28. So the U.S., all in all, basically is going well. The cost of risk, low employment is of the essence in order to sustain that cost of risk and we believe is going well. In terms of risk-taking, what you have seen is that, yes, we have increased a little bit because we are lending to [indiscernible] corporates. We believe the market is basically helping us a little bit. We see better margins. And also, we see some opportunities in CIB in the sectors that we know very well, basically energy, there is a huge opportunity there. We see some projects in project finance that are being pretty good. And also the market has been very strong surprisingly in the U.S. So all in all, that's what we -- but we are very much under control, very disciplined in the sectors we're investing. So we basically don't foresee any situation. NII in Brazil is basically because of the auto business. Openbank is actually doing very well, okay? We have increased a little bit the portfolio in that year. If you remember that I explained to you that we changed the mix, and that is giving us the extra margin and the extra NIM that you'll see in Brazil. .

No, if I may complement Brazil because I think the mix here is important. We are growing deposits year-on-year by 6% relative to loans, customer loans up 2%. So this is one of the objectives that we had for Brazil, which is improve the funding structure and the quality of our funding structure. Actually, yield on assets, it's up 68 basis points. Also cost of deposits, as we improve the quality of deposits, it's up 58 basis points. So when we look at the margins, yes, they are slightly down, but what explains the customer NII performance is the fact that we are growing deposits more than loans. And again, this is one of the key strategic objectives in Brazil like it is in Mexico, which is improving our funding more customer deposits, less market dependence.

Sorry, sorry, sorry. I forgot about the plan in Brazil. Yes. So look, we're working really close -- we're one of the banks that are working with the government in this plan for the credit cardholders that are basically trying to restructure the loans. So far in our negotiations with the government, I believe that the plan would be positive, okay, to help some of the people that are over indebted in Brazil. So in that regard, we will have a little bit more view on how the plan basically evolves towards the end of the week. But all in all, what we have seen is that the plan is going to be positive and it's going to help our people in order to be able to pay the debt in the credit card, and it's going to help us overall for what we have seen, but we still not have the final plans as of yet.

Thanks very much, Héctor. We have the next question, please.

Next question from the line of Miruna Chirea from Jefferies.

Firstly, I wanted to ask on your expectations for the efficiency ratio for the first of 2026. If I take your revenue and cost guidance for 2026, it points to a cost-to-income ratio below 43% for the full year. And in Q1, you are at 42.8%. So how should we think about the efficiency ratio from here? Should we expect it to be broadly flat for the rest of the quarters? Or are there any ups or downs along the way that you would flag? And then secondly, I just wanted to ask if you could let us know if you've made any changes to your ECL macro scenario this quarter? Or any changes to the weightings of the scenarios of any overlays for economic uncertainty?

Okay. In terms of efficiency, okay, you have seen that basically in the first quarter, '26, we have minus 1% in constant euros, that's minus 4% in real terms. Revenue grew around 6%. So you see an efficiency improvement of 3 percentage points to 42.8%, okay? And this is supported by the execution of ONE Transformation. What we're doing here on basically concentrating on what I said. I mean, a lot of simplification, a lot of automation the [indiscernible] platforms are starting to be in some of the countries that is helping us out basically to spend a lot less money in terms of what we used to do in IT, instead of doing things 10 times, we do it in once and deploy it to all the countries. So we see that trend will continue to be, okay, are going to be in line with our goal of reducing cost in constant euros on '26, okay? So it's important. We aim to deliver an absolute cost down in cost and us every year assuming the impact of M&A. It's important to acknowledge that. And as we grow the customer base, we will execute next stage of ONE Transformation, as I explained to you, that's going to improve our efficiency from 45% in '25 to around 36% in '28. That would basically lower the cost base below EUR 27 billion in constant, which is basically what we're expecting to -- in terms of the macro .

Yes, we are obviously monitoring very closely what's going on in the market. We have updated our macro scenarios. Relative to what we had 3 months ago when we did the budget, we now have a slightly lower GDP growth in Europe, maybe 0.2%, 0.3%. And with a likely increase in rates to 2.5% at some point next year. No longer we are looking for lower rates in the U.S. in the near term, but there will be countries that might benefit from the current situation, like Brazil or Mexico, net exporters of oil products. . So net-net, these are small changes that do not change fundamentally the outlook for our business in terms of growth in revenues, customers, profitability. So yes, we've updated the models -- but given our diversification, and as I mentioned in my presentation, it is in these times where the value of diversification is more evident. And in this case, we don't think we need to change our outlook.

Can we get the next question, please?

Next question from Carlos Peixoto from CaixaBank. .

So a couple of questions from my side as well. So basically, on the capital front, just a quick one in terms of regulatory impacts, how much you expect until year-end? Then on the Corporate Center, if you could give us some visibility on what's under the other income caption on the revenue side and also the rationale behind the tax rate this quarter, which was -- well, the tax yield this quarter, which was more meaningful than usual in this one. And then just finally, if I may, on Spain, if you could share some guidance on your view on the outlook for NII and also for cost of risk.

Capital, we expect regulatory charges probably between 10 to 20 basis points from here till year-end, the next 3 quarters, less than 20 basis points. The corporate center. In the other income line, we have the evaluation of the impact of the updated valuation of Marlin and some equity stakes. And finally, on Spain, I will comment quickly on NII, and I will let Héctor comment on the general outlook. We've had a very good performance in NII in Spain in the first quarter. Basically, the [indiscernible] strategy, the hedging that we've been conducting on the asset side, the forward starts from mortgages, floating liabilities, all of that strategy that we started a couple of years ago, it's actually contributing a lot. But the most important factor is the extremely good management of our deposits. The cost of deposits in Spain is being kept under control, while we are growing volumes. We are actually growing asset market share in deposits substantially basically because we are growing payroll. We are adding hundreds of thousands of payrolls every year, and this is bringing very good quality deposits. This is sustainable. This is structural from our outlook for NII in Spain is up year-on-year, mid -- low to mid-single digits increase in NII in Spain in 2026.

Thank you, Jose. I think it's important to tell you, Carlos, that I mean, Spain is the one that is much more advanced in terms of ONE Transformation, okay? These guys are doing a really good job in terms of a lot of simplification, automation in everything that we're doing. And also concentrated in the most important part of ONE Transformation, which is customer experience and primacy on the accounts, okay? As Jose was explaining to you, we get a lot of payrolls right now, and we're growing really the number of customers in a substantial way. But the most important thing is that we're getting the transactional deposits. Deposits in Spain grew 6% year-on-year. And this is key to the business and for the ONE Transformation that we're executing in the country, okay? So retail is doing a pretty good job in that sense, and we'll continue to do so. As you know, also, we have a very good franchise on the corporate side. We continue to concentrate on that one to compete really hard because the market is very competitive in Spain. But not the lens, we believe there is an opportunity with everything that we're doing. And we have another important thing, CIB, even though it's a little less of what we were having in the first quarter of last year, it's performing really well with everything that is going on. So the combination of basically the corporate segment or the midsize corporates together with the products that we sell them in CIB, which is network benefits, it's helping us quite a lot to take Spain to the next level. So all in all, even though that you're going to see an increase in revenues, of course, was telling you also a decrease in cost, which will help us to get much better margins, okay?

Next question from [indiscernible] from UBS.

I I've got a couple of them. First one is on the CIB revenue sustainability into the rest of the year. If you can give us a little bit of color basically of potential risks. I mean, we're seeing lending growth, I think, is still in the 18% annual growth. I think in Spain, as we mentioned, actually stepping up the pace there. I think we've seen a very strong performance of global markets. So just trying to understand actually to what extent the meetings are with revenue growth you're seeing -- sorry, earnings growth actually you're seeing in CIB is completely sustainable into the rest of the year? And then the second question is on headcount. We've seen, I think, 2,500 reduction in the quarter, around 11,000 in the year. So if you can give us some color basically about how to expect head count levels to evolve in the next 9 months?

Okay. First of all, I mean, CIB, we have really strong revenue performance, as you have seen. Basically, loan growth is 18%, as you said, is boosted NII across global markets, global bank in [indiscernible], okay? So -- as we enter the '26, '27 M&A cycles, we are very well positioned to capitalize on an integrating anticipated upstream activity that we set. We are basically very much concentrated in industry coverage and in high advisory capabilities, mainly that, as you know, that we have hired in the U.S. is helping us. What's going on is a lot of business that used to go away from us when some of our customers in Spain, Portugal and so part of our used to do in the U.S. Now the hiring was basically because we have the capabilities. The same thing is in Latin America, okay? So that's why you see the fees basically so strong in the U.S. because it's doing customer, I mean, business to our customers, and this exactly what we're doing. Why are we growing a little bit in terms of the loans because we see an opportunity there with big customers, okay? So for example, in the oil industry, we decided to expand a little bit the credit lines. Why? Because the sector is strong, prices are going up, so let's take advantage of that. So those are the type of examples that we're doing. -- we are very much under control and monitoring every single part of the business and really following up first of all, profitability, control and everything monitoring the sectors in which we basically deploy capital. So it's very important to understand that. Global markets yes, you see a spike because usually, when there is volatility, you have opportunities, but it's mainly client visions that we do in global markets, okay? So you'll see that in trading, we have done pretty well, but this basically businesses with our customers, a lot of FX, a lot of hedging, as you can imagine, hedging interest rates. So explain [indiscernible] we're selling to our customers. So we believe it's sustainable -- but let's see what happens. I mean, if the geopolitical situation complicates much we come in a reason, let's see what's going on. But so far, so good. I mean, it's doing well. And we will continue to basically be doing it in a very cautious way, but in the right way, okay? And in terms of head count, yes, you're going to see -- I mean, head count is going to grow because of the acquisitions that we just and Western towards the end of the year. But nonetheless, we see opportunities in terms of what we're doing, again, ONE Transformation, okay? When you simplify, you automate processes, et cetera, you require less people than you do normally. And that's exactly what's going on. And that's why you see basically the decrease on some of the teams that we used to basically handle a lot of people and they're very good examples of that where we are automating a lot of processes that is helping us out to do it in a much better way.

Next question from the line of Sofie Peterzens from Goldman Sachs. .

Is Sofie from Goldman. So my first question is just on the asset rotation and -- you have done quite a lot on this front in recent years. I think back in 2024, you did around EUR 60 billion last year, I think, EUR 40 billion in this quarter, EUR 10 billion. So if I do like back of the annual calculation, I get quite meaningful capital impact. What is the regulator saying about all this asset rotation? And how confident are you that you can roll it over, especially if we have a kind of deterioration in the macro environment? . And then my second question would be on the outlook for Mexico. How do you see Mexico evolving? It was a little bit weaker this quarter. Would you consider any inorganic growth opportunities in Mexico in the next got to the 5 years. So if you could comment on this.

Okay, Sofie, so Jose will give you an overview of what we're doing in terms of rotating the balance sheet, et cetera, and I will give you an overview of Mexico. If you see Mexico had a really strong first quarter, okay? Let's see how our peers do, but I think that we're doing quite well vis-a-vis the market. We did the right things. We took the right decisions. We have the right mix. And we're pretty happy with the way the business is basically evolving. At this point, we don't believe that we need to do an inorganic transaction in Mexico to continue thriving. I think that the size that we have in the market almost 15% of the market basically give us enough space to do and to grow the business in a substantial way and in a very secure way, first of all. But also important that we told the market that we are now very concentrated on the TSB and Webster. So we told the market that we're not going to do any significant inorganic transaction for the next 2 years, and we will continue to do that. We need to concentrate on integrating those two. And so far, that's exactly what we're doing. And we see Mexico -- I mean, just to finish that evolving pretty well during the year. As you know, there is a negotiation of the [indiscernible], that's the new NAFTA. If parties don't come to an agreement is automatically renew for 1 more year. But hopefully, we'll come to a thing. But I think it's both in the interest of all the parties basically to come to an agreement, given that Mexico is a very important component of what the U.S. requires in order to be competitive, okay? So we are optimistic about it. .

Sofie, you're right. We had a good quarter. We mobilized EUR 10 billion in risk-weighted assets equivalent. So time is 40%, more or less at the same rate we did last year. One could have expected that with the current market conditions, the demand for these assets would have been less. Well, probably because we've been doing this for a long time. Investors know our systems and the quality of the assets that we sell. I think we have a competitive advantage relative to other market participants. And we have actually seen an increase in the interest to participate in our transactions. And we have been selling credit in the first quarter at levels similar or even lower that we had last year for similar transactions. And again, we've seen an elevated interest in participating in our transactions, probably again, because we've been in the market for longer than others, we have a trusted and proven technology and the quality of what we sell is actually better. Having said that, obviously, the market will dictate if the strong demand we saw in the first quarter will stay -- will remain for the rest of the year in the coming years. As we have discussed, we are obviously in a position to readjust our capital hierarchy immediately, if that was the case. But again, so far, the demand is actually very strong. And we think, looking at the people or the investors that are participating in our transactions that we are attracting a lot more interest because, again, we are a trusted party in these transactions.

Thanks very much. Could we have the next question, please?

Next question from the line of Britta Schmidt from Autonomous.

I would be interested in your view on the outlook for longwall, specifically in Spain, Brazil and Mexico. In Spain, we had a negative bank lending service outcome, which is probably not a surprise, but how do you think this will impact loan growth going forward? And also in Brazil and Mexico, your GDP revisions, has there been any sort of adjustment that you're making for your projections? The second one will be on the wealth management fees. A very good quarter this quarter in the quarterly time line. Maybe you can comment on what's been driving that and to what level that is sustainable? And then just lastly, on the tax rate, which was, I guess, lower than expected this quarter, you're doing more interest on capital in Brazil, I guess, should we expect the tax rate to be hovering around the 25% for a while? Or what would be your expectation for the full year?

Thank you, Britta. In terms of, I mean, loan growth basically in Spain, Mexico and Brazil, what we're doing is being, first of all, focused on profitability. It's very important that you know that. Also profitability, but we also take into account what we see and the trends of what's going on in terms of the cost of risk and what the difference in every single part of -- in every single country, okay? So for example, in Spain, we see an opportunity that right now, corporates and SMEs are basically in a good time. So we are trying to slow that and also a little bit of growth in CIB. In Mexico, the same, the portfolio is very much concentrated on that side. We believe on the personal loans and credit cards, we need to be a little cautious given what's the dynamics in the market. But we'll see and we continue to see an opportunity of growth, and we will present the loan portfolio in Mexico this quarter because we saw an opportunity, mainly in CIB and midsize corporates. And we will continue that trend if we see market opportunities, okay? In terms of Brazil, again, it's all about the mix. As Jose explained to you in detail, it's all about the mix and basically continue growing the deposit base to become much more competitive in that market and have much better margins. So in Brazil, we will continue basically to focus on that. [indiscernible] again, 1 part that we're growing. And we are being very cautious. It's interesting, but you see the mix in Brazil in credit cards basically getting more complicated, but on personal loans, it's actually doing quite well. And that's why because we are concentrated on the [indiscernible] segment of the population. So in Brazil, we are very keen on looking at at the different segments of the market, and we are focused right now in the affluent given the current market circumstances and the way we see rates basically evolving. If we see that rates basically come down a little faster than we believe at this point, then we'll see if we access mass markets again, but we will be doing it in a very cautious way. What we're doing right now in Mexico and Brazil mostly, we're not on the open market on credit cards and personal loans. We're only lending to our customers. So we're running the customer base, as Jose explained you, very much concentrated on payrolls because when you have the payrolls, you have all the information, you see what the customer does, you see the trends on how they consume and then we'll give them credit, okay? So we're only giving credit to our customers, not open market in those countries because we believe it's the right way to go. And it's exactly what's been working in order to sustain and to maintain the cost of risk at the levels that we would like, all right? In terms of wealth management, fees will continue to go up. That trend will help us because we believe that the biggest delta that the group has is insurance. If you see how we play in insurance in every single country, if you see those in Brazil, in Spain, in Mexico, in Chile, in every single place we punch our weight. There is always another bank that basically has a large or have the lion's share of the market in that sense. So we believe it's a competitive edge that we need to slow, and we're very much concentrated on that. So you're going to see that as one of our main focus. We're basically hiring the best people that we have in the bancassurance market. We're putting them in the places that we believe we have the most opportunities. And even though in Private Banking and Wealth Management, we'll continue to do well. Insurance is the one that you should focus on because insurance is the biggest delta in the future, okay? Then on the target, Jose? .

In the first quarter, taxes eased basically because of Brazil and Argentina, despite the end of the auto EV tax incentives in the U.S. As long as rates remain high in Brazil, we will continue to have a lower tax rate in Brazil. But again, the tax incentives in the U.S. means that we will have higher taxes. So it's difficult to forecast, but I would presume that we are going to see a slight increase, gradual slight increase in the tax rate towards the end of the year. But again, it very much depends on the level of rates interest.

Very I think the next one is the last question. Could we get that, please? .

Next question from Borja Ramirez from Citi. .

I have 2 quick questions, if I may. So firstly is on the I saw that your loan portfolio increased by around EUR 6 billion in the quarter, excluding Poland, I think mainly in Spain. And I think that there may be upside related to your guidance for NII in Spain, particularly we have a higher interest rates. So that would be my first question. And then my second question would be -- it's great to see the deposit trends in Spain and a higher share in the payrolls and lower cost of deposits. I would like to ask how -- how are you combining this with your Openbank platform? Is this also related to your digital capabilities from [indiscernible]? And also, if you could remind me of your total deposits at Openbank at good level, how much are you catering in data?

Thank you, Borja. Okay. On NII, Q1, we grew around 5% year-on-year. that's around 1% quarter-on-quarter in constant euros. This is basically supported that Jose was explaining by active margin management and the growing balances that we have, increase on deposits. okay? What we believe is we're going to grow around low to mid-single digits, okay, in compound average growth over '25 to '28 in constant euros. The macro assumptions include, as we already explained, the rate in Brazil continued to ease, okay, which is very important, okay, 13% over an of 26%, so we're not being that aggressive. Rates in the developed markets at Roseland is around 2% in Europe, 325% in the U.K. and 2.5% in the U.S. So no much more than that. In 2026, for the 2 largest global businesses that we drive NII, we expect, first of all, in retail, low single-digit NII growth, very disciplined in deposit pricing, as you heard, modest volume growth and the contribution of the hedging strategy is supporting margins. And in Brazil, specifically, we see monetary easing as a tailwind of NII, but it's very important that you understand that the key central part of our strategy is primacy and primacy is transactional deposits. And ONE Transformation is all about this, and we will continue to focus on that, and that will help us, okay? In the other business is the outlook on Openbank. We expect mid-single-digit [indiscernible] growth in Europe, where we have hedged our exposure to higher rates and NII will be supported by margin management. In the U.S., we will benefit from the lower funding cost and higher yields on loans that we remain focused on profitability. It's very important to understand what I said when I was talking about the U.S. business that now after March 1 is fully funded by our deposits. That will enable us to have much better margins for all the year and on. And we'll continue and Openbank has been an important part of that because, for example, open back deposits in the U.S. is around EUR 11 billion already. So that basically tells you exactly what our strategy is focused on and focusing again deposits and much more than that in transactional deposits. .

If I may complement, Borja. As you know, we merged Santander Consumer Finance with Openbank. So now Openbank includes all our consumer business. Openbank Europe has EUR 82 billion in deposits. And the U.S. Consumer U.S., which is Open Bank U.S. has EUR 50 billion, EUR 51 billion in deposits in total. So that's the right way to look at this because again, we've merged the consumer business with Openbank and then both business operate together. . So EUR 51 billion -- dollar, not euros in this case, in the U.S., EUR 82 billion in Europe.

I think we might have one more question on the line. Can we please check if we have another question?

Yes. We do have a question from the line of Pablo de la Torre from RBC Capital.

I just had one on your U.K. trends, if I may. So I know your comments regarding the efficiency improvements in the country, but trends for retail volumes, especially in deposits seem to lag a bit the domestic banks. So cost of deposits were up in the quarter, NIM was down quarter-on-quarter. You also seem to be pricing rather competitively your front book deposits at the moment. I just wanted to know when you expect to see the NIM in the U.K. to inflecting the key moving parts there for the rest of the year, including any expected changes in trends post the TSB integration? And if I may, just if you can give us an update on your U.K. structural hedge.

Okay. Let me give you a little bit a brief idea on what the trends are. First of all, the U.K. market and actually was the last week is very competitive on deposits. I mean we're killing each other for deposits. Why? Because, I mean, you know that people believe that rates are going to go up and it's very competitive in that sense. And we believe that it's much better to cover ourselves and capture a little bit more of deposits given the trends that we see on the market. Nonetheless, and I don't want to talk [indiscernible] have different strategies of what we're going to do in that market, okay? We're doing exactly the same as seen the rest of the other markets. We're increasing -- there are 2 ways of basically getting the [indiscernible] in every single market. One is paying for them, but the most important one is customer experience, and we're working really on that. So we're going to be able to deploy or one app towards the second half of the year. We're working really hard on that. That basically would enable us to have a much better customer experience, and we'll focus our customers to basically become their primary bank -- and that's basically when you get the transactional deposits into account and you get better structure of deposits in there, and we're working towards that, okay? We're going to be very much concentrated on that. Second, the TSB mixture is going to help us quite a lot. One of the good things that TSB has is very sticky deposit base and actually much more deposit on loans, and that basically helps us to have a much better structures in terms of deposits. Now with TSB, we're going to be the third largest bank in the U.K. with current accounts. So that basically is going to help us a lot in terms of managing in a much better way what we have and manage our deposit base in a much profitable way, if I may say.

Pablo, let me give you some numbers because I'm not sure I understand your comments. Year-on-year, our total deposits are up average balances first quarter of this quarter relative to first quarter of last year is up 4%. So it's a very good performance, actually with a lower average cost. So the average cost of deposits is down quarter -- year-on-year in the first quarter of this year relative to the last quarter -- to the first quarter of last year despite that volumes are up 4%. Again, on the asset side, yield on assets goes down from 4 or 5 basis points year-on-year. So the NII is affected by the higher volume -- higher growth in deposits than in loans. But again, this is part of the strategy that Héctor was just explaining. We are -- we believe that we are doing well in deposit gathering in the U.K. For the overall NII in the U.K. we have to take into account that the lengthening of the duration of the structural hedge has had a very limited impact in the first quarter. and this should kick in more in more size in the next couple of quarters. As the yield of the investments is around 4%. -- currently 3.8% in the first quarter. So we would expect the NII in the U.K. to actually improve in the next few quarters as again, we continue to improve the funding mix and the quality of our funding in the U.K., growing deposits, we think at least in line, if not more than the market. The structural hedge, well, we have more or less flat in the quarter at around GBP 101 billion. The duration 2.5 years, the yield is 3.0%. And the loans that we are buying. As you know, we are lengthening the structural hedge buying between 5- to 10-year bonds more or less the interest rate curve is pretty flat at around 4%. So we would expect this strategy to actually add to NII in the U.K. in the coming quarters.

Thanks very much, Héctor and Jose. This concludes our Q1 conference call. Thanks very much for your participation. And if you've got any further follow-ups, the Investor Relations team is available at your disposal.