BFF Bank S.p.A. (BFF) Earnings Call Transcript & Summary

Good day, and welcome to BFF Banking Group Conference Call about 9 Months 2021 Results. [Operator Instructions] Please note, this event is being recorded. I would like to turn the conference over to Max Belingheri, Group CEO; and Piergiorgio Bicci, Vice President and CFO. Please go ahead.

Thank you, and welcome, everybody, to our results presentation. We are pleased to report on Page 2, adjusted net income of EUR 79.4 million, growing almost 6% year-on-year. That's despite the impact, as we described in the previous quarters of the DEPObank bond portfolio. The growth of net income was driven primarily by the positive performance of the security services and the business payment business unit. We've seen, though, a good recovery also and better collection in factoring and lending. And as you will see later, also a positive trend in terms of recovery of volumes and reduction in the gap on the loan book in factoring and lending. Reported net income is at EUR 240 million, including the badwill, and we continue to focus on the ALM strategy to extract synergies on the funding, reduce excess liquidity and translate that into better profit for the group. Capital remains plentiful. We reported total capital ratios of 23%, and CET1 ratio of 18.5%. That doesn't take into account of the accrued dividend, which are EUR 79.4 million, equal to the adjusted net income of the period. It's already after the deduction of EUR 6 million of treasury shares buyback, which we've executed in September, October 2021. And importantly, it's already met of the EUR 165 million of dividends pertaining the 2019 and 2020 earnings, which we've been able to distribute in October 2021 as one of the first Italian banks able to pay dividends after the termination of the regulatory ban. Synergies of the integration of DEPO has already been locked in for the 2023 targets, but starting 2 years earlier from the year-end 2021, which is a good progress on the integration of DEPObank. We have already done the first step of the migration of VIP system. So the IT system of DEPO is now on the same outsource as we have, and we remain with one additional step, which will be done in December of integrating the 2. But I would say, 90% of the work has already been done without any particular operational issue. If we look at the 3 businesses, the factoring and lending loan book is still down 6% year-on-year, but less than the 2 previous quarters. And if you exclude Italy and Spain, it's actually growing across our other geographies. The LPI stock has increased year-on-year despite the higher collections. And we've seen in general, better trends in the quarter compared to the previous 2 quarters of this year. We decided to integrate the factoring and international market departments consolidating, therefore, under a single leadership, all our activities, if you want additional BFS area, focusing, therefore, on the growth opportunities as we see ahead of us here. In securities services, assets under deposits have grown 16% year-over-year, supported clearly by the market rebound and some commercial development. The profit before tax is up 18% year-on-year despite the excess liquidity in the first half of 2021, which has impacted the performance of this division. On payments, transfer and collection transactions are up 11% year-over-year, above COVID levels. We are still seeing a weakness in card settlements. That's an area of rebound that we expect that will come through in the next year with a full rebound of the economy. The profit before tax there is 66% above the 9 months 2020 due to the recovery in the rebound and good performance also on the outsourcing business. We received from Bank of Italy, the inspection report of the inspection we conducted in the second quarter of this year, and we are working on a response to those -- to that report. So if we move to Page 3, and we look at the plus and minuses of our quarter. So on the minuses, we're still seeing high liquidity in Italy and Spain, accelerating payments of the new invoices as in the first half 2021. Volumes are stable, which means we actually closed part of the gap that we have had at the beginning of the year, but we still have a negative growth in the loan portfolio. But as I mentioned, less than in the previous quarter. And we have seen a bit more competitive pressure on the securities services business. With plus side, we've paid a dividend, EUR 165 million paid on to the shareholders in the mid-October of the last month. We're still continuing trend of recovery in capital lending, good performance in securities services and payments, as I described before. And importantly, as I mentioned, we have already locked in the synergies that we have earmarked for 2020 to 2023. Liquidity remains plentiful, but at the same time, under control excess liquidity at the group level. Moving to Page 5, which is in Page 4, Page 5, just our presentation from accounting perspective, how the numbers are then described in the presentation. On Page 6, I reiterate the important point of the decision from our regional point of view that we have made for consolidating a single department of all of our activities in factoring and lending across the many geographies where we operate. They should allow to strengthen the focus on the traditional business, allow us to either better the development of our customer relationship across the many geographies, and improve also our operational performance. So I expect further step in integration of the business, which now get organized around to division of factoring and lending, credit management on one side and transaction services on the other. I'll leave the floor now to Giorgio to present you in details the number, and I'll come back at the end for the final consideration.

Thank you, Max. Going to Page 7, we have the split of the results of the different business units and taking account that the most important impact that we have on the profit before tax is related to the negative effect of the mark-to-market of the Govies owned by DEPO at the acquisition date. But despite that, the result of the of the P&L at the end of September is higher than the result in the same period of the previous year. And now we can go on #1 to look to the different business, starting from the factoring and lending at Page 8. As mentioned before by our CEO, we started to cover the gap of the loan book. We have strong loan growth in Portugal and in Greece. In Italy and Spain, we are still suffering due to the acceleration of the payment of the current invoices, but we started to cover the gap. And this period is lower than in the previous quarters of this year. This is also driven by the new business volumes that are stable compared to the previous year, and the announced are still the same that has been described before. If you take into consideration, excluding Italy and Spain, we can see that also in the volumes in the loan book, we increased compared to the previous year. Going to the next page, Page 9. We can give a look to the KPIs. So stable volumes are higher year-on-year. LPIs collections, this is also a positive impact driving from the liquidity that has been injected by the government, especially in Italy and Spain. The LPIs collection has increased 12% year-on-year. Despite that, the LPIs stock continued to grow, higher than 3% year-on-year. And I recognize that LPI stock is stable compared to previous -- to the previous year. The gross yield on average loans declined, mostly due to a different mix in the portfolio. We can confirm our good discipline on cost with the OpEx on average loans at 1.1% despite the reduction of the loan portfolio. And we confirm our negligible cost of risk. Going to the Slide #10, we have some highlight of the P&L that is being impacted by -- for the factoring and lending by the smaller loan books -- loans' book, but is higher as collection of the LPIs. Most important thing to highlight is that also we have net fee, commission income grew by 44% year-on-year, thanks to the good performance of the credit management services. And also, we can confirm that our OpEx and D&A are mostly under control. The increase is driven by the higher investment that we have -- that has been made in Poland. Going to the securities services business at Page 11. We have a positive trend in assets under deposit, driven by the new business development, the initiatives and also the marketing trend. This result has been -- the contribution -- a good contribution came from the alternative investment fund segment, where we have seen a better market performance. For the global custody, the asset under custody increased by 22% year-on-year. And we are continuing to have the same benefit as in the previous month of the year, derive from an higher asset that are being driven by the M&A activity on the existing clients and also the market performance. The result of this is grew of the commissions and that has been driven by the growth of depositary bank and global custody services. And also in this sector, we have put in place a good discipline in cost, and we have a better ratio of cost/income than previous -- compared to the previous year. Going to the Page #12, we have some highlights on the P&L of the securities services. The net fee and commission income is higher than 9% compared to the previous year. And the net interest income has been negatively impacted by the higher deposit and cost of liability that we saw for the -- in the previous month and in the first 6 months of the year. But now, we put in place some [ A&M ] activity measures in order to neutralize this negative aspect we see at the result of this in the corporate center result. Same approach for the OpEx cost. And we have a significant year-on-year growth of deposit before tax that is higher than the previous year, around 18%. It's important to highlight that from a commercial point of view, we have launched a new ESG product for the asset management companies, and we are confident that we can be a good point in this -- for the sector that we can offer to our clients also for the future. Jumping to payments business at Page 13. As mentioned before by Max, we have the card settlement transaction that are stable compared to the previous year, but we are still suffering from the negative effect of the COVID pandemic that we are still suffering. The checks and receivables transaction are declining as expected. So it is not a trend, but checks are instrumented that in the future, we forecast that we will be using lessons in the past. But on the other side, corporate payments transactions are higher, 7% year-on-year. And so this is also a good result. From a commercial point of view, it's important that we won the extension for 9 years of the tender for -- of the management of the guarantee fund for SMEs. This is also a good starting point for the results of the next year. So the result, the payment result is a strong commission growth that is higher 12% compared to the previous year. So at Page 14, we have the P&L of the payments. And the result is 66% higher than the previous year, and this is the result of the points that we have been -- that we put in place is in this business line. Going to the corporate center, as mentioned several times, we are -- we have the negative impact of the mark-to-market that are not the bonds owned by DEPObank acquisition data that now are not in the P&L, but they are on the capital side. But despite that, we've put in place a lot of measures in the first month of the year in order to accelerate the extraction of the synergies coming from the combination. We can see at Page 16, part of these results because we reduced the liquidity in ECB. And so we did not have the negative impact of the effects of liquidity in part of in the first 6 months of the year. We have started to purchase the government bonds that now at the same level than previous of the merger with DEPO. On the combination of the 2, we replaced the wholesale funding with internal resources, and we continue the declining and the decrease on the fixed-term online deposit, and we started some passive repo activity due to the fact that we have replaced on the leverage ratio. So what we have put in place is that our balance sheet is more efficient than the one that we had at the beginning of the path with the tab same. At Page 17, we have synergies. As mentioned by Max, we have locked in the target for the 2020 and 2023, sorry. And so we put in place some activities. We accelerate, as I mentioned in the previous month the strategies kind of activities. And we can say that we reached the target that we have for this current [ activity ], and we can start to see the benefit of these assets, especially from the end of this year. For the balance sheet, at Page '18, most important thing to highlight is that on the liquidity side, we have all the ratios that are high compared to the regulatory performance. So we have LCR at 276%, and NSFR is close to 190%. So we have a good position also on that side. And in the box on the loan on the left, we can have a look on the bond portfolio that came back to the amount -- total amount that we had in the previous year. So this is one of the [ excess of 30% default ]. For the asset quality, Page '19, we have -- it is important to consider that the impaired loan up mostly towards the public sector. We didn't have any particular issue on NPL in the last quarter. At the same time that we had in the first 6 months of the year, and this is related also to the big extension that we pay also on the selection of our client in general, our counterpart in order to don't take any kind of excess risk with our accounting process. For the capital position, it's Page 20. We are continuing to have a very strong capital position, which have EUR 79 million of dividend capacity. This is not included in the capital ratio. Our capital ratio -- total capital ratio is 22.9%. The CET1 ratio is at 18.5%. And that -- these ratios are to be significantly higher than our target that I remind to you that is 15% on total capital ratio. So I leave the stage also to Max to make some final consideration and to go through that before the question that you can make up.

Thank you, Giorgio. Thanks for going through the stages. In terms of takeaways, now we are seeing a positive performance on the loan book in many countries. And Italy and Spain are impacted by liquidity, but we are seeing, I think, some good signal of more positive trends. We have continued to keep the balance sheet reserve, a stable level to the source of huge profitability, it's also positive and given the contraction of the loan book. Securities services and payments have performed well. And importantly, the synergies, which are important are already being locked in 2 years ahead of schedule. We have started, as we announced in the second quarter, to resize our Held-To-Collect portfolio, which should have a positive impact going forward. And then coupled with not having excess liquidity, we have a negative carry, which has impacted instead, particularly first quarter of this year. Our credit risk remains good, that's positive, particularly, as it is in the economic environment outside, and the NPL ratio, the net NPL ratio is actually still marginal in our book. Capital remains plentiful. We have EUR 179 million – EUR 176 million of excess capital. That does not include dividend capacity of almost EUR 80 million that we have generated in the 9 months of 2021. So a very strong capital position should have us to grow strategic flexibility. With this, I conclude my remarks, and happy to take any question you might have.

[Operator Instructions] The first question is from Antonio Reale with Morgan Stanley.

It's Antonio from Morgan Stanley. I have 2 questions, please. The first one is on NPI on the recovery. What's your expectation from NPL recovery into year-end? If I look, collections seems to have improved somewhat given the liquidity injections especially in Spain. Last year you booked, I think, EUR 7 million in pretax as net of recovery. What can we expect for this year? I think you're slightly still negative targeting for the 9 months. That would be great to get your expectations. My second question is on funding. It's like that you lost EUR 40 million of funding synergies already this year, so that some incremental EUR 20 million increase in NII, all I recall in the second half of the year. How much of this EUR 20 million did you already book in Q3? And exactly, can you share how sticky of the funding of DEPObank proven to be so far? And then lastly, on volumes. Can you sort of talk about Italy, Spain and Poland, in particular, those make the lion share of your volume growth. And we've now entered into the most important quarter of the year for you seasonally. Can you just talk about volumes pipeline with a focus in these regions and your expectations?

Thanks, Antonio. Let's go through the question, the first one. The NPI recovery that the final hunting season of the year, we have had in the first half of the year, good performance in the first 9 months, so a good performance, particularly in Spain, or very good volumes. And also, as you know, a very high recovery rate. We have reorganized starting from the 1st of September, the collection team across the board, and that has had a positive impact on the pipeline we have in Italy. As you know, we have a counterparty that needs to agree on transactions, but we are quite hopeful that with this organization, we should get better over recovery in the last quarter, also given the timing of the year. On funding, we have, in the third quarter, EUR 9 million of lower interest expenses through the synergies. And therefore, we started to see the impact through the NII. Clearly, we have still, if you look at Page 16, pockets of funding, which is more expensive than our transaction services funding, mainly the EUR 367 million of retail deposits and the EUR 181 million of Tier 2 and bonds. We were unlikely to renew the Tier 2, given the fact it doesn't really help on the leverage of concentration or concentration level. And therefore, that should go out of our cost of funding we might issue in AT1, but that will be a reduction set of capital. So that's on how it will be good work. Funding, it's fairly sticky. It is linked to the contracts we have with customers on the depository bank. We have reduced the deposit from transaction services because we have actually repriced and remain more stringent for people not to leave too much cash in our account, which is a tool we can use, we think on the other side, in case if we need liquidity to reopen the path from customers. So we've been more proactive in that respect. So if you look, for instance, on Page 11, the end of year deposits have gone down from EUR 7.8 billion to EUR 5.5 billion from 2019 and 2021 because we proactively managed that outflow, which means that we can proactively manage an inflow in case we need for any reason, the increase of those deposits. So the stickiness is relinked to the customer remaining with us. In terms of volumes and volumes pipeline, the overall volume levels have remained good. Actually, we have had positive momentum on our sales management business, which is small business, but it actually is -- we continue to have pretty steep customers. On the purchases, we have seen closing the gap where we want it to be. Clearly, we see that's a long way to go. But we think the changes we have done again on the factoring and lending business to drive performance. And that's in November and December, where we will end the probably important months for us.

The next question is from Luigi Tramontana with Banca Akros.

My first question is on synergies. You did a very good job and already locked in your run rate synergies. So my question is, now what do we have to expect? Are you going to give us an upward revision of your synergies, especially on the funding side. For instance, corporate center, I understand that next year, we are going to have at least EUR 12 million more NII just because your liquidity is now below the tiering threshold. So EUR 6 million there, and another EUR 6 million due to the bond portfolio that you are recomposing. So first question is on synergies. What do we have to expect going on? The second question is on the securities services. Apparently there are some Italian mid-sized asset managers, reconsidering their suppliers for securities services. So do you have any comments on that? How is evolving your customer base, given also the repricing you are doing on the deposits? And what is the concentration in your customer base in the securities services?

Thank you. Look, on synergies, we have 2 sides. One is clearly the refining average cost. We have, as I mentioned before, answering to the question of Antonio, some areas where on the funding side, we can expect clearly more value. On the corporate center as well, having achieved -- on the cost side, having achieved already synergies, but not having used all the integration costs. We clearly have some room to achieve better. We are not planning at the moment to indicate new targets for the synergies. We stick to our medium-term target. Also because, as you know, it's a business which has a lot of moving parts, and we want also to give a conservative target to the market in case we have surprises in our business or for that reason. So we confirm the target, knowing that we have some upside on that front, which can cover any risk on tenders. On the securities services side, we have indicated there is increasing competition. As you also mentioned, it's clearly a competitive market. Moving a depositary bank is no simple task. So we expect if there are movement there that will take time as we come through our books. That's on a positive. On the negative side, we have a relatively concentrated client base. This has been disclosed also in our disclosure to the market. And so we are keeping an eye on how those relationships evolve. There's clearly not as many payment asset managers. So the decision also what happens is driven often by the asset manager, but also the shareholders. And so we're keeping an active conversation with the asset managers, but also the shareholders, also in the light of the potential M&A transactions.

The next question is from Andrea Lisi with Equita.

The first one is on client loss in Italy. In the August call, I remember that you said that won an important contract there. So just to understand if this contract is already in the third quarter numbers? Or if we should expect it in the forefront? And second question is on cash injections. So how do you consider likely to risk of further cash injections like the one in Spain in services payments and impact [indiscernible]. Just a comment on the approach of clients, and it's primarily in Italy and Spain in the last call, I remember that you said you not lost any client and then you were working to take new one. I expect the same happened in the third quarter, but to have a confirm on that. And if you can remind, which is the weight of your bigger clients on the -- in terms of loans in the factoring business. As another question is on cost, after the work you have done in terms of synergies, if it is reasonable to serve -- see the third quarter levels as a reasonable base also for the coming quarters, or if in the fourth quarter is likely to observe some cost inflation? And if it is reasonable to observe the farther integration charges already in the fourth quarter or maybe in the next years? And last one is, if you can provide us a bit more color on the inspection you decided from the Supervisory Board. Any comment you give, appreciate it.

Sorry, 2 -- so Andrea, 2 questions I missed, the comment you made on the weight of customers. Certain point of that. Can you ask? Sorry.

Yes, sorry. It was about the -- because integration in the portfolio in the factoring business, that was the point.

Okay. And the last question you've asked?

Yes, it was about -- you commented about an inspection you received from the supervisory body. And if you can give any color on that will be appreciated.

Sure. Okay. On -- just taking one by one. So if I skip some, please. [indiscernible] I give it out anyway. On the customer, we signed [ it in overseas ]. So we did a transaction in overseas starting in the third quarter, and then we have quarterly agreements should come through also in the fourth quarter. On the cash injections, look, we don't know what the governments will do. We don't see a cash injection coming in Italy. You see focus on the Italian side for new invoices and not as much for the old invoices, and you buy through the new invoices [indiscernible] of the quarter, the old invoices are more difficult to purchase. And so clearly, the impact is more on the market we can address anyway. And on Spain, very likely that there will be another cash injection at the year-end now. Remember, those are done through loans. So they are in a sense again, a loan from the [indiscernible] that we are seeing, so that means going forward. In terms of customers, I mean the terms are similar. We are working to add new customers. We're not really losing them despite the liquidity that, I think an important signal of how sticky the business is. But it's a high liquidity environment, so more complicated to sell the product, and the team is doing a better job in [indiscernible] is clear that we are selling the product better in the markets where payment times are not put under pressure by the high liquidity of the system, not only Portugal or in some. That I would say the same trend. But I think with a slight perception of increasing interest rates, potential clients can be more [indiscernible] to selling the receivable in -- at year-end. We remain concentrated on large customers. The mix, the portfolios on [indiscernible] is still around 40% of our top 10 customers in Italy. And we want to maintain a good focus on large customers because in order to bring less credit risk at the end of the day. We haven't reused yet the pricing leverage represented by the funding coming from transaction services, which we think always is an upside that is going to be the trend when we see attractive standards for large portfolios in the coming year. Cost, look, the integration charges have been booked so far at the level we've indicated, and we book the other integration charges and it came along, but we need to address potential more of excess synergies. Most of the integration challenges are the IT costs, and addition of the open-air market has been completing the transition of the core banking. We usually have a pickup of cost in the fourth quarter. So I think you'll see the trends in the previous year for bank. On the Bank of Italy inspection, it's a routine inspection. So that is not unexpected. And we -- not really much comment about the result. A series of indication of how to manage certain. It's looking better in the bank, which is always perfectible. And we don't expect a massive impact in our business. As you know, we have had a lot of discussion with Bank of Italy to get approved for the purchase of paper and that can be -- and the inspection came here at the beginning of the integration. I think there is a time check from the regulator on how we are doing before taking on this important second level Bank in Italy.

The next question is from Filippo Prini with Kepler.

I have got 2 questions. First one is on the standard loans. Do you think that the tuning down of the decline of loans, if you compare to the kind of the past quarters to be mostly to a big effect because comparison starting to become more terrible, or can be taken as the first, although maybe weak inflection point? And second is a clarification on the figures that is on your press release, the EUR 8.8 million after the adjustment in net accounting. Just to understand what makes [indiscernible] is something to mitigate the effect of the fair value of the held-to-collect portfolio of the bank.

I leave Giorgio, the answer to the numbers, we can give more precise in the questions. On the loans trend, yes, we are quite pleased actually that we are showing a smaller contraction compared to the previous quarter on our loan definition on our -- I mean that we have a deposit growth quarter-on-quarter. That's driven by prices stabilization of payment time on one side, better volume performance than in the previous quarters. And we take it as an indication of a better trend overall in the business. So if you look at Page 29 from the presentation, you see that actually, the loan book is coming up. It's growing quarter-on-quarter on factoring and lending from the beginning of the year. We really had massive impact at the beginning of the year. It's not where we want to be. You know that we have indicated the market sort of mid-term growth trend, and we're working quite hard to get back to that trajectory. But we really were impacted by the payment time of the public administration. But overall, you see also again the page on the volumes, we have basically stabilized the volume dynamic in the quarter-on-quarter, we actually shown growth compared to last year. So I would say, yes, a good indication, and we're really entering the last quarter, hopeful. But we are always exposed to the dynamic of the customers and the decision of development particularly in Spain injection or cash into the system.

For the EUR 8.8 million highlighted in the press release, the benefit is due to the first value for the foreign exchange rate hedge accounting that we have on funding for BFF Polska Group.

Okay. So it's a timing from Poland.

Yes.

The next question is from Simonetta Chiriotti with Mediobanca.

My first question is on volumes. If we look at the third quarter, Italy is up in terms of purchases by 7% with plus 21% in NHS. Spain is up 10%. So very positive trends. And I'm wondering if this is due only to your more attractive commercial activity, or if there is also an underlying improvement in the appetite of your customer, more generally speaking. The second question is related to BFF Polska, appears as the weakest part, the weakest market. If you comment on this. Then on LPI over collection, so the impact on P&L remains negative, while the collection is growing. So if you can walk us through these dynamics, how the accounting of LPI over collection, the impact of rescheduling and so on. Finally, the corporate center in the third quarter and the revenues were EUR 12.5 million, which compares to EUR 9.5 million for the whole first half. And also costs were being much lower than in previous quarters. Can you help us to understand again the drivers of this improvement. And if we can expect a similar performance in the last quarter of the year?

Yes. If you look at this -- let me answer the last question. If you look at the quarter-on-quarter performance, we have the synergies on the corporate center. The funding synergies, the EUR 20 million that I mentioned before, we have EUR 1.1 million of higher interest income, which is actually interest on the bond portfolio. And then we have EUR 11 million lower cost, of which we have EUR 9 million in Q4 -- in Q4 last year. And so that those the major impact. On the over collection, yes, it's been negative on the P&L, and that's driven by the fact that we actually have rescheduling, because that's particularly in Italy, because as I mentioned, the government is paying, renewing losses on the old loans. And so the old loans are most in legal actions. And so we keep the IRR of the portfolio at the level we always purchase, because there are legal action. They're actually -- and they are relatively old invoices. Then it means actually, we are carrying forward a pretty good year. So that will translate into net margin erosion going forward, but we have that effect, which is driven by the payment behavior of the [ fabric ] administration. In general, thanks for noting the good performance quarter-on-quarter, particularly in Italy and Spain, look, in Italy, we are seeing a bit better performance of the commercial team. I think there's more interest from customers. It's also true that when you are in the first half of the year, customers already made of their decision and particularly in a high liquidity, good payment environment is [indiscernible] decision. When we go toward year-end, we tend to rethink what they really need. And so that's why we are -- now we are hopeful that we can ensure continuous improving trends compared to what we've seen in the first 2 quarters of this year, last quarter of last year, which was not particularly good for us. In Poland, we always need to remember that we are really exposed to the investment cycle in Poland. We have a lending business. And the investment cycle in the COVID environment is not necessarily very positive. And so in terms of new business volume, that's what you've seen. If we think of that type of business though is clearly a longer-term business. And so actually, the portfolio in Poland ergo, year-over-year, we have less volumes because it's accumulation of longer duration loans. Actually, the performance has been paused in Poland. In Slovakia, just to mention [indiscernible], we have 10% growth of the portfolio that's driven by, again, the fact it is market with a very long payment.

This concludes our question-and-answer session. I'd like to turn the conference back over to Max Belingheri and Piergiorgio Bicci for any closing remarks.

Thank you. Look, we think it's an important quarter. It's a quarter with less moving parts than the other. So it is more intangible also to the market, quarter where we have shown the results of the hard work of the management team as to integrate quickly DEPO and we're quite pleased actually by those results. You see, there are challenges in the market, as we have mentioned, as also some of you have asked in your questions, but we think we have, now with a more diversified business, the opportunity to continue to deliver good results. And the fact that we have a plan to liquidity and capital is a strategic flexibility as we mentioned in the past, to pull-through our organic and inorganic growth strategy. So thank you, again, for attending the call, and look forward to talk to you again soon in the future.

The conference all has now concluded. Thank you for attending today's presentation. You may now disconnect.