Bank Millennium S.A. (MIL) Earnings Call Transcript & Summary

Good morning, everyone. It's 14:00 CET. Welcome to Bank Millennium Second Quarter/First Half '23 Results Call. With us, we have our usual presenters, Mr. Joao Bras Jorge, our CEO and Chairman of the Board; and Mr. Fernando Bicho, Deputy Chairman of the Board and our CFO. First, Mr. Bicho will do a brief presentation of the results, and then obviously, we'll be available for questions. Thank you very much. Over to you, Fernando.

Thank you. Good afternoon. And once again, thank you very much for attending this meeting and for your interest. As usual, we will go through, first, the financial performance of the Bank and then through the business results. So, we'll start with a reference to Pages 5 and 6, which shows some key figures about the P&L and business activity of the Bank in the second quarter and first half 2023. From the Page 5, we would highlight the very positive performance in terms of net interest income during the quarter, which increased by 6% versus the previous quarter. And for the first half of the year, 21% versus 1 year ago; while at the same time, fee and commission income stayed flat versus the previous quarter and costs dropped due to the absence of regulatory charges, namely from contributions to the banking guarantee fund, resolution fund in this case. We also benefited, in this quarter, from lower cost of credit risk. And although we have to make still substantial amount of provisions for FX mortgage legal risk, we ended up with a positive result of PLN 106 million in the second quarter and a cumulative net profit for the first half of the year of PLN 358 million. In terms of -- on the Page 6, we would highlight the continuation of the solid growth of active customers and digital customers. And regarding the first one, we are approaching the threshold of 3 million active customers in retail. Also for the solid performance in terms of deposits, particularly deposits from individuals. And on the other side, a drop in the loan portfolio, to a large extend driven by the drop of the FX mortgage loan portfolio but also to some drop in loans to companies. And last but not the least, we continued to improve the capital ratios of the Bank, increasing the surplus over the minimum regulatory requirements and we'll illustrate this later in this presentation. On Page 7, so apart from the significant improvement in the results of the Bank, we had the third consecutive quarter of positive results. And this represents, on an adjusted basis, a growth of 53% year-on-year. We benefited from the growth of NII by 21% year-on-year during this semester and the improvement of the net interest margin by 57 basis points year-on-year. As a consequence, the reported ROE stood at 12.4% and 22.7% on an adjusted basis, and the adjusted cost to income stood at 29%, while the NPL ratio was at 4.5%. On Pages 8 and 9, we illustrate the status of implementation of the 3-year strategy for the years 2022 to 2024. And we can say that we are on the right track to achieve this strategic objectives in the different fronts, starting with the increase in the number of active customers in retail, which, as I said before, is approaching the 3 million threshold, which we were targeting for the end of 2024. So, we are on track to achieve it right before this moment. Also, the share of active clients -- active digital clients is increasing and it's already at 89%. And also, we have this share of digital in sales in the first half of '23 already at almost 75%. Regarding financial targets -- regarding the target of annual profit level, excluding extraordinary charges. We are already in the end of the first half of the year with PLN 1.4 billion, when we had the target for the full year 2024 of PLN 2 billion. And the cost-to-income ratio, of course, is significantly lower, also in the higher interest rate environment, and in the first half of the year, it was at 29%. And the return on equity, I already mentioned, was 22.7% on an adjusted basis. Regarding the credit quality, the quality of the portfolio remains strong with the NPL ratio at 4.5%. And we continue to decrease the share of FX mortgage in total loans. In this page, we are showing the share in total gross loans, so without deducting the provisions for legal risk that are already allocated to the loan portfolio. Otherwise, of course, the share is much smaller. On Page 9, we also illustrate some of the achievements and delivered initiatives, including the significant number of settlements that were done from the very beginning until now with FX mortgage customers, almost 20,000 since we started this effort. Also 500,000 newly opened current accounts from our Millennium 360 offer and the reduction of our own greenhouse gas emissions by nearly 60% at the end of '22 compared to 2020. We also will highlight the strategic partnership established with Europa Insurance Company that was announced in the first quarter and a number of other initiatives namely, recently the new mobile application for corporate clients based on modern mobile technologies and also the implementation of voice-bot technology in Contact Centre. And we have a number of projects which have already started or are being rolled out, including the transformation of the sales and service model for affluent and micro business clients, combining digital channels with remote advisors' expertise, the transformation of the branch network and the expansion of Automatic Cash Service format and also the support for corporate clients in the green transformation. Going now to the details of the results of the Bank in the first half and second quarter. So, the key points are; a third consecutive quarter of positive results, PLN 106 million, with a net profit, excluding extraordinary items of PLN 776 million in the second quarter, which means a 16% growth quarter-on-quarter and 69% growth year-on-year. On the left side of this page, we break down the net results of the bank, segregating the extraordinary one-offs, including FX related and others in order to be able to illustrate the significant progress that we have been making step-by-step in terms of improving the capacity of organic generation of results. Going into more details on Page 11, the major -- of course, the major driver of the improvement on the revenue side is net interest income, which grew 6% quarter-on-quarter and 21% year-on-year. This is, we have to say, even above our expectation when we had our meeting 3 months ago. This was achieved through a combination of still some increase in the average yield on the loan portfolio, while at the same time, we have already a reduction of the average cost of deposits during this quarter by 16 basis points to 2.75%. As a consequence, we had a substantial improvement and rebound in the net interest margin to 4.85%. So, an improvement of 27 basis points during the quarter. On the fee and commission income, nothing new. The fee and commission income was flat versus just 1% up versus the previous quarter, 5% down versus the -- from August quarter of last year. And here, we don't have major drivers of change. We have, although, because on one side, we have lower fee and commission income from loans due to more limited lending activity, while on the other side, the transactional fees have been increasing. And also, we see some improvement coming up from the volume -- higher volume of assets under management. On Page 12 and moving to costs. Of course we -- the picture looks good because overall, we had a decrease of operating cost by 17% year-on-year, although if we take out the costs connected with banking guarantee fund and the extraordinary event of 1 year ago of contribution to the institutional protection scheme. Of course, we have overall growth of operating costs by 15%. Still, the performance in the second quarter was better than the first quarter as we did not have contribution to the Resolution Fund that was booked in the first quarter and even we had some [ savings ] because the amount initially booked was actually higher than the final contribution that was done. The process of optimization of the branch network is still going well, although with small adjustments and also a small drop in the number of employees was -- took place in the second quarter. Moving to asset quality, it continues to be very resilient. And we would highlight in this quarter, first of all, that the cost of risk was significantly lower than in the previous quarter, with the total amount of provisions of PLN 52 million, and this brought the average cost of risk for the first half of the year to 45 basis points of total loans. We benefited also from the positive impact of sale of NPLs with a pretax impact of PLN 36 million. And this performance of the portfolio plus the sale also supported the -- again, improvement of the NPL ratio to 4.5% in the end of the second quarter. Regarding liquidity and capital on Page 14. So, starting with liquidity, of course, a very strong liquidity position, even strengthened during the second quarter with an LCR of 260% and loan-to-deposit ratio of 74%. And with a ratio of debt securities over total assets of 25%. Regarding capital ratios, we had another improvement in the level of the Tier 1 and total capital ratio. So, at the end of the June, Tier 1 ratio was at 11.7%, which means a surplus of 1.5 percentage points over the minimum regulatory requirement and total capital adequacy ratio was at 14.8%, a surplus of 2.1 percentage points over the minimum regulatory requirement. So, from this perspective, we continue to execute what we have said to the market in recent quarters. We continue to be focused on the strengthening of the capital ratios of the Bank. You see from the graph, a significant improvement that we were able to achieve during the last 9 months after the shock of the credit holidays. And I should add that in July, the capital ratios will further improve due to the fact that in the meantime, we have concluded another synthetic securitization of leasing receivables, which will further improve capital ratios by around 45 basis points to 50 basis points. Regarding MREL, the improvement in the results and capital position of the Bank also supports the reduction of the level that needs to be done in order to achieve the MREL requirements. And regarding a situation where the interim MREL requirement without CBR has been already met, while the other one is still to be met. And of course, we will be developing further actions in order to achieve the ultimate goal set for the 31st of December this year until the end of the year. Moving now to the FX mortgage portfolio. So first, in terms of the numbers of the quarter, we have an inflow of new court cases of 1,525, as you can see on Page 16, which is lower by almost 200 versus the inflow of the first quarter. And on the other side, we had -- we have signed 924 settlements with customers, an increase versus the 806 of the previous quarter, and the cost was very similar to the previous quarter. We ended up creating, in the second quarter, an amount of provisions of PLN 715 million over the portfolio originated by Bank Millennium. So a little bit slight higher number than the one preliminarily disclosed in our current report of 16th of June. As a consequence of these provisions and further utilization of provisions, the current stock of provisions for FX mortgage legal risk represents around 65% of the total outstanding. And then, later in the Q&A probably we'll address some more questions regarding the recent trends, but this is the most important information regarding the FX mortgage portfolio, as you probably saw or you can see we are also providing additional disclosure in our first half report that was also today released. Moving now to the second part of the presentation, regarding business highlights of the first half of 2023, we would stress the good performance of customer deposits that grew 5% year-on-year and especially the growth of retail deposits that have grown 10% year-on-year. And I would say that it is especially good taking into concession that at the same time, we managed to decrease the average cost of the deposits during the second quarter. Also very good in the second quarter and first half of the year has been the sales of cash loans, which grew 25% year-on-year. And also, apart from the number of active customers that I already mentioned before, also the growth of 172,000 cards year-on-year. On Page 19, going now through the loan portfolio. Of course, we had a decrease in the overall loan portfolio on a net basis of 7% year-on-year or 2% if we exclude FX mortgage loans. And this is especially the reflection of a significant slowdown in mortgage lending during the last 2 quarters on one side. And on the other side, also some decrease in the corporate loans as we have been actively managing the risk-weighted assets. Regarding the deposits, as I mentioned before, solid performance and in the second quarter with relevant growth in terms of retail deposits, which also had, as a consequence that we were not very aggressive in [ quoting ] deposits from companies. And as a consequence, there was some drop versus the previous quarter. The structure of the loan portfolio continues to show the dilution of the FX mortgage loan portfolio, which represented 5.5% of total gross loans already being deducted by the allocated provisions for the legal risk. And last but not the least, we also see improvements in terms of investment projects where we see already a growth year-on-year of 7% also benefiting from more favorable market conditions. On Page 20, we show more details about the numbers of retail business. The most important is the growth of consumer loans, which on the back of the strong sales that we have achieved during this first half of the year. So we have a growth of the overall portfolio -- of the gross loan portfolio by 3% year-on-year, while there was a drop of PLN mortgages by 1% year-on-year. So, without the FX mortgage loan, the portfolio -- the retail portfolio was flat year-on-year. And regarding the sales, apart from the sales of cash loans that I have already mentioned, that reached PLN 1.64 billion in the second quarter. The sales of mortgage loans were slightly higher than the first quarter by 7%. But in the first half of the year, 55% lower. Although still with these numbers, we achieved a 10% market shares in new mortgage origination and 10.8% market share in cash loan new sales. Retail customer funds grew 10% year-on-year. Of course, during these 12 months with some higher growth of term deposits due to the higher level of interest rates, although there is some tendency to slow down this process. On Page 21, regarding the number of accounts and customers apart from the numbers that I already mentioned, we would also highlight the solid growth of micro business customers and the growth of 175,000 of current accounts. On Page 22, the success of the banking digital is shown by the 2.62 million active digital users, a growth of 8% year-on-year; the 2.37 million active mobile users, a growth of 13% year-on-year and the 1.7 million BLIK users in the first half of 2023, a growth of 22% year-on-year. The numbers of digital sales are also very strong. As you can see on Page 23, the -- we had 81% digital share in cash loan sales in the first half of the year and a growth of 18% in the number of cash loans disbursed online in this first half versus last year. We had a 41% share -- digital share in current accounts acquisition in the first half of the year and the growth in the number of accounts opened online by 21%, and Term deposits traditionally always has -- always numbers are higher than 90% in terms of the -- of the share in total deposits. On Page 24, illustration of the new features that continue to be introduced for retail customers in order to ensure convenient and secure solutions for daily banking. We have been continuing to expand the use of biometrics in the mobile app. We also have now the possibility of having online disbursement of the mortgage loan. And we also have improvements in the search engine and new BLIK services introduced. And in terms of Goodie platform on Page 25, we have more than doubled the number of acquired cashback users year-on-year and PLN 2 billion turnover exceeded in the Goodie cashback service with more than PLN 40 million cashback paid to customers. On Page 26, and moving now to the Corporate business. Of course, the lending activity was somehow more limited in recent quarters due to the effort of optimization of risk-weighted assets. And so the Bank has been focusing more on small and medium-sized companies than large tickets. And as a consequence, we had a decrease of the gross loan portfolio by 8% year-on-year, but at the same time, showing improvement in transaction activity. At the same time, deposits from companies are, of course, largely dependent on pricing. And so we have, in the second quarter, in fact, not been too much aggressive in terms of pricing. And so we had some small drop in terms of overall deposits from companies due to very tight price management, but we still keep a very good balance between current accounts and time deposits. In terms of the businesses of companies and also transactions on Page 27, we see that leasing sales were slightly better than in the previous quarter by 4%, although overall, they still dropped 10% year-on-year and factoring turnover was flat versus the previous quarter. We see a clear increase in the volume of FX transactions by 10% quarter-on-quarter and year-on-year. And we continue also to offer a number of solutions and different programs for the companies also in cooperation with BGK and at the same time, investing also in the digitalization of the corporate business, and this is very visible on Page 28. We launched, in May, a new mobile app for companies. The number of activations has been at an average of 400 per week. This activation was extensively tested and we also drew on the experience that was gathered for the development of the mobile app for individual clients. And so, we have this new platform where we put a lot of hope in terms of potential for customers' activization and creating stable relationships with them and promoting, of course, the corporate banking products and services. On Page 29, we also illustrate the support that we are giving to our customers in the green transformation and digital solutions with things such as ecological loan, a technological loan, loans for financing photovoltaic projects, and also the development of digital customer service and access to a larger CDM network. And so this shows that although some temporary restrictions in terms of overall lending growth in corporate, we have not stopped the process of investment in new solutions for our customers that we believe will also support in the future, our further growth in this segment. So, this ends the presentation of our first half year-end results, and now we will go through the Q&A session. Thank you.

Thank you very much, Fernando. Because they say it's good to break habits sometimes, so we decided to break a habit of accumulating questions into subjects. Also because we have some very active analysts, we decided to honor some of them. So the special mention reward, goes to Noemi Peruch from Mediobanca. She's always first with questions and she fired quite a number of these, and we will go one by one, and hopefully, this will cover quite a number of areas of interest for pretty much everybody. The first question from Noemi is, are there any nonrecurring items in cost in the second quarter? Or is this new run rate for OpEx and staff costs.

So, regarding staff costs, nothing extraordinary in this quarter and I mean, non-recurring. Regarding admin costs, of course, we have the effect of -- on one side, we did not have the contribution for the resolution fund that was booked -- that is booked once a year in the first quarter. But additionally, we had the release of part of the provision that we have made for this contribution in the first quarter, so which translated into a reversal of a cost of around PLN 23 million, if I'm not mistaken, that we are booked from the first quarter. So this can be considered a non-recurrent item because the actual cost in the first quarter should have been lower. Apart from this, there was nothing else significant in the second quarter.

Thank you very much. Continuing with questions from Noemi. Cost of risk was particularly low in second quarter. Was there any single name release? Would you update your FX, sorry full year guidance from cost of risk?

We shared also, in the press conference in the morning that the quality of the credit is very high. And of course, especially that we keep very low unemployment, and we are even foreseeing a decrease of the interest rates. The guidance would be more around 50 basis points instead of 60 basis points that we were giving in the beginning of the year.

And this low cost of risk in the second quarter was not driven by a single, let's say, release. It was a combination of factors. One of them we already mentioned, it was the sale of NPLs, and a number of other verification of criteria of the classification of the loans. And so we -- of course, it was clearly better than the first quarter. And we don't see signs of deceleration in any of the, let's say 4 critical portfolio that the banks has, which means mortgages, consumer loans, corporate loans and leasing. And so that's why we are more optimistic regarding the cost of risk for the year.

Also, it will be worth mentioning there is a bit of a mathematical contribution because our book is not growing very fast and some segments is even decreasing. So there's no dilution effect that you would see otherwise. So also, you have to factor this into account while forecasting our cost of risk for the full year. Continuing with questions from Noemi. This time, it's on NII. We have seen deposit costs going down quarter-on-quarter. Could you please give us some color on customer behavior and competition? Do you expect competition and appetite for term deposits to soften going forward, so deposit rates do not move much.

So, of course it is also a lot of mix and price management. In a simplified way, quarter-to-quarter, we have PLN 2 billion of time deposits in corporate debt decrease and PLN 1.5 billion of time deposits in retail debt increase. And of course, the corporate time deposits are usually at a higher level than retail. So, I would say that besides a more prudent price management probably this quarter with the teams in marketing also understanding that scenario of decreased interest rate is coming, but this is change of this mix as well. In terms of the competition, -- in terms of the products, the advertising and everything, it's too early to see the effect, but it's visible that even the offers in retail now are more attached with some conditions or a [ TVT ] or new customers or some additional products and not so much a plain vanilla time deposits with high prices. So, we believe that we are going to see this decrease. However, I would alert that, as usual, the credit adjusts very fast and deposits adjusts very slow. So when we had the increase of interest rates, this was very beneficiary for the banks. And as soon as we will have a decrease of the interest rates, this will be less beneficiary in the banks in beginning. So it's -- we will see the repricing of credits to go faster than the reprices of the deposits.

Thank you. Moving slightly away from numbers. When do you expect to lead the recovery plan? When do you expect to have visibility on moratoria?

So, the recovery plan we need to issue MREL. So we were very transparent last year in setting the priority. So we explain that first, we will address the capital and then we will address MREL requirements. We end up to be faster than we forecasts, so we end up to solve the capital ratios at the end of the year. And now we are, happily we see this progressing and even increasing the buffers that we have versus the minimum requirement of capital from KNF. So it's fine. And now we are addressing MREL and as soon as we address MREL, and we have visibility that we will not have any constraints and also -- it's also because when you leave the recovery, there is a consequences like paying banking tax and everything as soon as we feel, then we'll apply to this situation. And in terms of visibility of moratoria, this we don't have any visibility at all because the moratoria appears, without any reason and without any possibility of being expected last year. And so it's completely unpredictable. Of course, it's difficult to understand. The market have embedded a decrease to 6% reference rate at the end of this year and 4% reference rate at the end of 2024. It's difficult to understand the justification for credit holidays in this environment. However, it was also difficult to understand justification last year. So we don't have any visibility.

Could you update us on your MREL issuance plan? Are you working on further RWA efficiency measures?

So, starting with RWA. Of course, we are always looking at further ways of optimizing risk-weighted assets, mainly through additional securitization of synthetic securitization of assets. And so we'll be continuing to explore this route to transaction that we have concluded in July. It is already the third transaction since the first quarter of last year. We finished one in March last year, another one in December, and this is the third one, we think now we're leasing this. It is still possible that additional will come, but it's still too soon to mention about potential impacts of such transaction. Regarding MREL, so first, the improvement of that to the Bank has shown in results, operational profitability but also in terms of its capital position has been supportive in terms of reducing the gap to fulfill the MREL, not only the interim level that we are obliged to fulfill now, but also the final level that is enforced from 31st December onwards. Second, our MREL requirements were lower in June as communicated to us by the Banking Guarantee Fund and as we reported in our current report, as a consequence of the reduction of the Pillar II buffer done by KNF in December last year. So the third -- as a consequence of the improvement on the capital ratios and also all the improvements in the capital ratios also have an immediate benefit in terms of reduction of the issuance needs for MREL. We are analyzing the market and monitoring the market conditions in order to see the possibilities of issuing bonds eligible for MREL during the second half of the year because as it was already said before we have, as a target, to fulfill the MREL requirements, the ultimate ones by the end of the year. The progress that was achieved during the second quarter is that we already fulfilled the minimum one. I'm saying the MREL without the combined buffer requirement. And of course, now we want to fulfill all the MREL requirements until year-end. So this is the plan.

Thank you very much. Next question is from Remi, could you update -- the trends of incoming losses and settlements were encouraging. What's the current level of FX provisions do we expect going forward?

So, we tried several times to explain a little bit how we are addressing the negotiations and the settlements and everything. We explained that we have a team of 150 bank professionals that interact in a constant basis with the clients and registered all the interactions and trying to find whatever the solutions is possible to them. This means that even when we have legal scenarios that are very disadvantaged for the bank, there is a constant line of communication and we try to find solutions for settlement -- amicable settlements with the clients even in this situation, doesn't matter if they are in court or if they are not in court. So, it's always a trend 2 quarters or 3 quarters ago, I explained that due to the -- all the settlements that we have done, it would not be possible to maintain this target of 2,000 settlements per quarter and that we would move to a more 1,000 level, and this is more or less what we are working. We would like to cross this 1,000. We are making 900-and-something, so it's okay. This is -- in terms of trends, it's difficult to assess yet what is going to be the trend. So, we never know what is -- what we are receiving from courts, if it is, what are the customers engaging lawyers because there is, of course, here in the legal system also bottleneck, so it's something. But from what we see now, the trend is similar. And so, we had already quarters with higher levels and quarters with lower levels. And it's -- in very basic and round numbers we are, for a long time on this 500 court cases per month, so it's -- or 1,500 per quarter. And we don't see -- we already saw quarters that were more. Now we are seeing quarters that is less, but also we are not taking a conclusion that is slowing down. So, we believe that is stable. In terms of provisions, I will start and then Fernando -- see if has to say something or not. So, we try to disclose and this time, we are disclosing even more as much as possible the methodology that we are using. We always explain that the methodology at the end of the day, the biggest impact is number of court cases and the results of the courts. At the moment, the results of the courts are already in the maximum that we can put in probability to lose. So now I would say that the driver is the number of court cases, but maybe you want to address something more.

Yes. So, of course, it is always a tricky question because, of course, we have been facing for several quarters, some negative developments. And so -- which then contribute to the further -- to the continuation of this provisioning effort. And during this first half of the year, especially we had the elimination of this factor of remuneration for banks due to this European Court of Justice judgment and also some more conservative adjustments connected with the inflow of the number of court cases, which turned out in the -- during this first half of the year to be higher than what we were thinking it would be in the fourth quarter of 2022. And so these were 2 drivers of increased level of the -- of the higher amount of provisions during this first half of the year. Having said that, so going forward, of course, what the drivers of provision will be connected with the inflow of the court cases and the trend. Also -- is also important to the level of the settlements that we will be able to achieve with customers in court cases and outside of court. So this is also a driver. And also any other developments in terms of, to this prudence in terms of court decisions that also can influence the loss that is booked regarding each case. So of course, we don't expect in the second half of the year, extraordinary events such as the ones that happened in the first half of the year, right? So from this perspective, of course, we should expect a lower amount of provisions in the second half of the year than in the first half of the year. It's very difficult to give a complete guidance for quarter-by-quarter provisions because, as I said, there are multiple things that influence, but I would say that -- the general statement that, of course, we would expect that the second half would be less costly than the first half.

Thank you. Now we're making leaps into [indiscernible] area. And the question is, what is your NII sensitivity to 100 basis points rate cuts?

Okay. We were expecting this question, to be honest. And so I mean -- so first of all, we are disclosing some -- this estimation in our first half report on Page 40 and 41 of our financial statements. And according -- and of course, there are always some assumptions underlying the estimation, which we are also disclosing. But, the answer is that a decrease of 100 basis points, immediate and assuming that all the assets and liabilities will be already aligned with the currently existing level of interest rates will translate into a 2% impact on the Group's NII reference levels, it means that the next 4 quarters would be lower by [ percent ] and last quarter annualized. Again, this is based on a number of assumptions. It's also based on the fact that part of the assets are at fixed rate or temporary fixed rate because we also have a question about some hedging strategies later on. So, of course, I would connect the answer to that question. Of course, what protects the bank against decreases of interest rates is the -- on one side, the bond portfolio at fixed rate that exists, which is divided in 2 components. One is the holds to collect and sales, and the second one is the holds to collect portfolio. So, this provides a cushion against decreases of interest rates, at least for the period of the duration of the bond portfolio. And the second is also the fact that part of the loan portfolio of the bank is at fixed rate. One is fixed rate for the product as per se, namely the consumer loans. They are sold at fixed rate for the lifetime of the contract. And the mortgage loans in recent quarters has been especially done at periodically fixed interest rate, which means the interest rate is fixed for the first 5-year period. And so this also provides some cushion against the drops and reduces the sensitivity.

Now I have to bit improvise, but let me handle that.

And I'm sorry -- see if all combination of all time deposit is linked to WIBOR or fixed. We don't have deposit [ index to ] WIBOR?

Okay. We partly answered the questions regarding the sensitivity or plans to reduce the sensitivity of our NII or interest rate linked assets to rates. As Mr. Bicho said before. There is a question from someone calling himself Santander. So Santander is asking us actually a question that many of our colleagues would like to share answer. So the question is, does Bank Millennium plan further salary increases?