CaixaBank, S.A. (CABK) Earnings Call Transcript & Summary

Look, maybe we start with 2021. Obviously, it was the year of the merger between Bankia -- with Bankia. And in November, you completed the IT integration.

Maybe we can open up with your thoughts on the experience, where we are now in the integration and your high-level thoughts about the future.

Thank you, Alvaro, and thank you, everybody. It's obviously very nice to be here in person as well. And I'm very happy to see that people don't expect us to do more deals because I can tell you it's a lot of work. And we're very happy how things have actually progressed over the last 15 months. But also, we're very keen to continue doing what we know how to do, which is running our business in our current perimeter in Spain and Portugal. Things for us over the last year, really we're still in mid-March. And if you remember, we closed this merger in late March last year. So it's not even 12 months. And over this period, we have integrated our business models. We have integrated our people. We have integrated our technology. We look at IT, it took us sort of mid-November. It took us a bit around 8 months to integrate the IT systems. We did it in sort of one big bank, which went actually very well after a lot of preparation, but it's quite a significant point for banking integration of this size. We have never done an integration as large as this one. And I would say, as diverse, because the systems that we were inheriting from Bankia actually were also the result of many integrations that Bankia had on its own. So it was quite a complex integration, which we managed to do, I would say, very well. And that was certainly a base on which to build the further step, which is the integration of our retail business. We did integrate our CIB business, our private banking, our sort of middle market business in the second quarter, very soon in the process. But in order to integrate the retail bank, we needed first to have one common technology and this platform that allowed us to start integrating branches. We did approximately 750 branches in the month of December of integration, and we are planning to the remainder, rounding numbers, we're talking about 1,500 integration of branches. We did half of that in the last month of 2021. And we're doing the rest during this quarter and next quarter. By the beginning of April, we will have integrated approximately 80% of the branches, close to 1,200 branches. And in terms of people, we agreed last year to a reduction of head count of 6,500 people and again by beginning of April, so basically a year after the merger closed, 90% of the people would have left, hence the majority of the work would have been done. We still have this first half of 2022, clearly double work in terms of both our ordinary business as well as the integration, particularly in those areas where there was sort of a higher overlap. And this means that probably, I think by the summer, I think we can officially say that 100% of the organization will be exclusively focused in running the business working for our clients. While today, in this first quarter and the second quarter, we still today obviously have a good number of internal issues associated to the reorganization of the business. Throughout this period, out of our 19 million clients in Spain, we will have changed the branch of approximately 10 million. So 10 million out of 19 million would have either changed their own branch or see how their branch has become a branch that is receiving clients from a nearby branch from Bankia or CaixaBank. So in any case, experiencing some change. Obviously, some changes also in terms of relationship managers for various clients. So the organization is coming to an end in this very complex and long process. And hence, I expect that clearly by -- again, by the summertime, we will officially say, okay, this integration is done which, again, has been a lot of work, but I also would say by the end of the second quarter, we kind of officially say we're done. It would have been 15 months since it was closed for an integration that has been the largest in Spain, a very complex one. So we are extremely satisfied, I have to say, about the decision to go ahead with this integration and also about the way this has worked out over the last 15 months. It doesn't mean that we didn't have problems, but I think the market share of problems that we had was certainly lower than what we expected. And as of now, we feel that we've made good use of this 15 months of integration and look to the future with a high degree of confidence.

You touched on that this integration is not easy, clearly not. And they often come with some revenue loss. In your case, last year, a lot of the debate was around the market share in loans coming down. What do you think was behind that loss of revenues, just the sort of the integration sort of from your disruption from your side? Or is it clients wanting to diversify providers, risk management, or as I said, just teams their finding their place, trying to sort of get an understanding of when we can look forward to sort of a more visibility on that front?

Yes, indeed, you're absolutely right. During last year, we had a lower volume on the lending side than the market. I have to say, before getting to leave very quickly, when that was not the case on the liability side, we actually gained market share. When you look at long-term savings, mutual pension and life savings we actually gained 19 basis points of market share in a year of integration, which I find particularly noteworthy. And at the same time, needless to say, we not only delivered on the cost savings that we had announced at the time of the merger, we increased those savings and we accelerated the time in which we would achieve them. So I have to say when we look at the asset side, let's not forget what was actually 2 key objectives, which is, again, maintain an increase in our franchise on the long-term savings and deliver on the cost savings. What happened on the lending side was different depending on which segment you look at. On the business side, we clearly had -- and I mentioned that we integrated the franchises very early on in the month of April. From that point on, we had 2 impacts. One, the most visible is for certain clients where the addition of Bankia and CaixaBank implied a very large proportion of their funding. We saw certain clients looking to diversify and adding or rebalancing the lending away from us and to someone else, even though we were obviously more than ready to sustain our very sort of large percentage of the funding model of a given client. Clients meet to large clients and like to have diversified lenders and that had an impact. And there's no question, even though it's difficult to measure when you have 2 big teams integrating on the spot in the month of April. I'm sure that there was some distraction during the second and third quarter that affected our performance. But it's very relevant to look at then the fourth quarter. We actually had positive lending growth on the business front in the fourth quarter, helped by the seasonality that is typical of the fourth quarter, but not only, also I can see a genuine inflection point because it was also through the case that this process has largely sort of run its course of diversification away from us from clients and whatever was the friction of the initial integration. So that was one significant segment. And on consumer lending, we did have a reduction of volumes, again, with a very positive fourth quarter, which is another strong indicator of one may -- maybe, again, an inflection point. But here, it's mostly associated to a lower demand for consumer lending and the fact that our consumer lending book is of a shorter tenure than some others, basically because of the mix we have. And hence, we actually need to do more work to renew our consumer loan book. And it suffers sort of faster than others from a reduction in new production, which was associated not to our market share, but to the overall sort of status of the economy. And conversely, I expect to see this business benefiting proportionately more when we see consumer lending picking up as we are seeing and expecting for this year. And then finally, on the mortgage side, I think we had a combination of 2 factors. The most relevant one is being a policy from our side of trying to make sure that we are strict with respect to pricing mortgages. You have to be reminded that in Spain, we have this stamp duty that actually banks have to pay depending on the term of the mortgage, maybe 30, 35 basis points of margin that disappears because it has to be paid as tax. And hence, we see that spreads are thin. And obviously, that, during 2021, has made us diverge from market pricing on average and made us less competitive, I would say that together with the second factor, which is also possibly always an impact when you have a large integration and you are losing market share in one given segment, it's difficult not to think that the large integration has had some impact on that. And obviously, we are humble enough to think that yes, probably there was some distraction at certain points in the year when the market was hot. We have initiated 2022 with a strong emphasis on not just the mortgage, but what we call the house ecosystem, what we call MyHome. And we're expecting actually to see better performance or relative performance from our mortgage business during 2022. It's still early days, but we have good feelings about the way we can revert the situation during this year.

Obviously, the integration is now -- the IT integration, sorry, is now complete. And you mentioned that in April, 80% of the branches will be reorganized. How do you see those revenue trends turning? And obviously, a lot of the logic behind the merger was your high cross-selling ratio than Bankia. I think it was 5x higher. Are you -- is there any early examples where you've seen those revenues start to come through, obviously, at a micro level? And how should we put those sort of that sort of revenue turning in the current context of market have turned a little more volatile and unpredictable amount. Maybe you can contextualize that?

Right. Well, let me start and then let Javier complement, but I would say, in terms of synergies, we are close to, as I was saying, finalizing these sorts of -- the main task of our integration. We're still having branches being integrated as we speak. And certainly during the second quarter, there will be some sort of final integrations after the summer. But the bulk of them would be done from now to the end of the summer. So thinking of when can we be in the best shape to make these revenue synergies actually materialize, I think second half of this year and onwards is a reasonable timeframe. Not that we are not already, obviously, cross-selling and doing other things, but I think that while we still have this very large integration in process, it's not realistic to expect the numbers to make a difference. In terms of the revenue trends, I would pause and again, Javier can take it from here.

Okay. Thank you. Thank you. Good afternoon to you all. Well, probably I would start by mentioning NII evolution. You know that we had pressure last year. I remember on our fiscal year results, commenting that, well, excluding any further ECB actions, NII would trough in the first quarter. We think that we are on track for this. But since then, we have plenty of news on the rates front. Clearly, ECB, we have already had 2 meetings since then, has made clear that ECB is removing the commodity's stance in terms of monetary policy. That's made clear, as you know well, that is ending the asset purchase program by the third quarter at the latest. And probably at some time afterwards, we'll have rate hikes. Actually, the market is already pricing for 25 basis points rate hikes from October this year to October next year. Well, actually, about 12 month overall, it's the key benchmark for us in terms of mortgage repricing, it's already up by 25 basis points. So this is a massive change for us. But in the very short term, what they have done is also to make clear that the TLTRO funding benefit is not going to be rolled over. So this obviously is something we cannot manage from our side. So from June, it's true that we are going to have a negative impact from that front. Although already into 2022, we'll already have this positive repricing on the mortgage portfolio mainly. I would say also that the fact that with this landscape, we are going to be able to take advantage of fixed income investments. Remember that during the last year, we were refraining from rolling over maturities and we are happy now to see that the market is moving towards our view. And well, as from now, we are already being able to deploy our excess liquidity on that front. So all in all, I would say that we face a situation where very probably this time, from 2023, we will no longer be operating into a negative rate environment. So this is a massive change for us. It's going to have a very material impact on NII going forward. We know that we have been quite vocal on the large sensitivity we have. You know that for a parallel shift of 1 percentage point, we expect NII to have an improvement between 20% and 25%, which is very significant. So I think that this time, probably it's different. We don't expect that rates will go up much further than what the market is already discounting. But for sure, for us, it's a massive change. In terms of other parts of the business, you mentioned fees, Alvaro. Well, it's true that you know well that we have quite a large asset management business. Market volatility always affects. It affects actually AUM balances. I would say here that you need to take into account one key thing. So the end of the year AUM balance is approximately 5% above the average of the year. So in order to have a year-on-year impact, you need to first have this 5% negative impact, which so far it has not been the case. But well, time will tell. Obviously, there is plenty of volatility. During the first 2 months, we have had inflows. According to past experiences we have had, remember the first quarter of 2020 with a strong correction in markets, we don't have net outflow. So we'll see this time. But we see this as a -- well, a push in the trend. But over time, we firmly believe that we are in a secular trend towards, let's say, off-balance product. And you know that we are very well equipped for this. Part of our revenue synergies planned precisely is on that front. But it's true that, obviously, in the very short term, there will be some impact, at least on a quarter-on-quarter basis and also probably on the pace of inflows in the short term. Then obviously, this situation affects the CIB business, may affect origination for large corporates, capital markets. All this is with more subdued activity as with the rest of the industry. That's -- well, obviously, this may affect, to some extent. There were some questions about how this situation could affect the summer season, but actually even Spain may be considered like heaven in that front and we may be attracting some tourist inflows. So let's see how everything plays out. It would be great for the country that we have a more normalized summer season compared to the previous years. And finally, insurance. On that front, we are doing very well. We are quite a bit that we have still plenty of room to increase the penetration rate of those products amongst our clients. And even further to former Bankia clients. Both non-life and life, we have this bundled offer, we call commercially -- you know well, MyBox. This is the brand. And this is doing pretty well. So I think that trend for -- is set to continue. So well, let's see how the situation plays out, Alvaro. But in the short term also, we may have some slowdown in terms of loan demand in the -- I see mainly fit for corporates and SMEs. I don't think that for now, this situation is affecting, let's say, consumer expectations and we don't have yet the feeling that this is affecting -- the situation is affecting consumer loan demand, mortgage demand, but what, time will tell.

That was going to be my next question. In terms of -- you obviously don't have any direct impacts we've been discussing during the day, some banks that do. But the second order effects in terms of how this might impact the recovery in particular in the consumers with purchasing power squeeze. I don't know how do you think that might affect. You guided the guidance was for flat loan growth this year, it already seemed it was taking a bit longer, not without sort of you already explained the idiosyncratic issues, but taking it a bit longer for loan growth to recover in Spain. How do you see the returning direct effects on loan growth, in particular, but from maybe the consumer or in general demand from your side? You touched on it, but I don't know if there's any anything...

So far, we are not observing much changes, to be honest, that is true that during the month of March, the situation has further deteriorated. And we'll see. And as I say, we feel that we will probably see a slowdown in terms of new loan demand, because some -- mainly for corporates because corporates will think twice before entering into new borrowing, probably they will have to wait and see for the capital spending plans. But I think that the impact will be mostly there instead of on consumer spending and everything related to housing, et cetera. You know that after the pandemic, there is a very strong feeling amongst Spanish citizens not to -- well, I imagine that everywhere, and I see it in London today to, well, to start doing things, to spending, to travel, to go out, to plan for holidays. And we think that this has a strong momentum. So we really need very bad news from the geopolitical situation to reveal this trend, but unfortunately, situation is very fluid, and we are following the news by the minute.

You've touched on rates, but maybe it's worth sort of reminding the audience, the mortgages are actually linked to 12-month Euribor and that's already gone up sort of 20 basis points, even more, depending on the day. It's been a bit volatile. That should start to come through already in Q2, right?

Well, you know that we have like 12 months -- sorry, a 2-month delay because what is happening in March in terms of rates is passed on to the mortgage 2 months afterwards. So by the month of May in this case. And actually it's February, March when we are already having this upward move. So we may still have 1, 2 months where things are not moving that much and then gradually repricing. So this is why I say that there is, to some extent, some hedge because of this, to this end of the minus 1% funding from ECB that is ending by June, that is pretty much clear now.

Moving on to other areas. There's about EUR 20 billion of ICO loans, a large part will start to pay principal in Q2. There's clearly no signs of asset quality deterioration so far. But visibility is sort of -- or conviction maybe, is being tested at the moment. How do you see the resilience of those loans? You've obviously got EUR 1.4 billion, I think, as COVID overlays on your provisions and you're guiding to less than 25 basis points cost of risk. So the message is pretty strong, but maybe you can touch on that?

Sure. We continue to see very good asset quality trends today in the market. No deterioration in nonperforming loans. And what's more important, we don't -- not seeing any deterioration in sort of early defaults before the 90-day calendar. And in fact, what we're seeing is months where actually are much better than previous months even before the pandemic. So sort of arriving into this situation, we couldn't see sort of better dynamics at this stage. It is about that -- in any case, there is going to be some impact from these ICO loans. So we have approximately 60% of them that had moratoria on principal and we'll start paying principal starting April, May, mostly. It means that another 40% have already started paying and the dynamics of payments for that part of it has started or resumed normal payment schedule is good in line with the rest of the portfolio. In this 60%, we are going to, by definition, have some impact. But again, based on what we're seeing today, I have to say we have a high degree of confidence that this impact is going to be moderate. And that in any case, we're going to be able to use our unused COVID provisions, which, as you rightly mentioned, amount to EUR 1.4 billion to offset any losses that come from this portfolio. Remember, the portfolio has, on average, 77% guarantee from ICO, from the official agency. So it's fairly well protected on top of that. We have also not just overlaid provisions, but we have also reclassified into a 3-year nonperforming, a number of these loans even though today are still paying, but because of their rating and sector characteristics, we think they are going to enter into default during the year. And hence, not every single nonpayment is going to imply an increase in nonperforming loans because, again, we've been cautious and recognized ahead of the problem a good part of it. So all in all, when we talk about cost of risk this year, we thought that it should be in line or below 2021, hence, those 25 basis points. Now we have a very different aspect, which is the war in Ukraine, how that is going to impact our operations, I would say, on first and second sort of derivative. The impact is not meaningful rather than not material, not even meaningful. We don't have a significant or any material exposure. And our clients don't have significant exposure direct to Russia. We are all subject to a change mostly in what's an energy crisis in terms of increases in prices, raw materials, et cetera. And that is going to be an impact, obviously, for everyone in Europe and in fact, one way or the other, the rest of the world. When we look at the current scenario, what we see is a deterioration of GDP and it's very difficult now to have a fixed sort of scenario because situation is very fluid, and we will obviously evolve in terms of our thoughts as the situation evolves. But currently, what we see is an impact on GDP of approximately 1.3 percentage points, moving from 5.5% that we were expecting for Spain to 4.2%. So in any case, in a clearly positive territory, bear in mind that just the base effect means that maintaining the GDP of the last quarter of 2021 implies more than 3% growth for the whole year. So we're talking about 5.5% is not an optimistic assumption. It's also the result of sort of lower-than-average 2021, where with this impact of 1.3 percentage points in GDP, our model suggests that our cost of risk will increase by approximately 5 basis points or EUR 180 million. So that you have an idea of the sensitivity to the current situation. Obviously, because we have EUR 1.4 billion in use provisions, we're talking about these [ stats ] and based on our models, an impact of -- in the vicinity of EUR 180 million. Certainly, it means we're very well-equipped to cope with this situation if the current environment which we're looking at is correct. We're obviously going to stay very vigilant to see how things evolve, if they evolve in the right direction, or they deteriorate. We don't have a crystal ball, and we will manage our business prudently on that basis.

Maybe I'll ask the last one. And well, maybe if there's questions already, I've got one more. But if there's questions already, we'll take it from the audience. Let's wait for a microphone. Here in the front, please.

[indiscernible] Thank you for your presentation. One question. Energy as ongoing costs. So I've looked, yes, for example. In the States, energy, it's about 10% of disposable income, even 15% for the average household and they earn about $70,000. In Spain as in the rest of Europe, average household earns less and the energy bill is often higher. For corporates, energy is at least 10% to 15% of their cost, even more. And bottom line EBITDA margins across Europe are now higher than 8%, 9%. So the key question I'm asking myself and I'd love to pick your brain is, but if energy costs will double or triple, who the hell is going to be able to make money here. Just mathematically. Because this is a one-off shock just on energy cost, and we know it's going to be that over the next 2 to 3 years. Have you done any sensitivity because you have a good feeling on numbers, are being one of the best historically very prudent? Or am I just looking at the wrong picture?

Good afternoon, David, and thanks for the question, and good to see you. Now obviously, it's a very relevant topic for us and I guess for everybody. The estimates I gave in terms of the deterioration in GDP in Spain captured precisely and mostly the increase in energy prices, which for our economist imply that $10 imply 20, 25 basis points of lower growth. A question here is whether these energy crisis or surge in prices is going to stay at what level and how long? And certainly, that is anybody's guess. What we are expecting is the maintenance of these levels for a period. But clearly, some solution to the current situation, which will eventually bring down prices, not to the original level but to levels that are lower than the current. It is going to have an impact for sure. I think in the short term, governments are likely to implement measures, fiscal measures, to soften the immediate impact on the economy. But obviously, in the medium and long term, we cannot just fool ourselves by making energy cheaper than it really is. So I think there's a merit in softening this blow for a temporary period. But after that period, we need to find a more permanent solution. And more permanent solutions will include a push in renewables. But obviously, that's not going to solve the issue in 6 or 12 months or 18 months. But if we look 3, 5 years down the road, I think that should be part of the solution. And we, as banks and certainly as CaixaBank, hope to be part of implementing that solution. And then there's energy efficiency. We've learned that every time one factor becomes more expensive, fortunately, industry learns to deal with less use of that factor. And whether we look at it in industries and/or consumers, families, this is going to be the case. Now if the shock is as sharp as we're seeing now and is sustained for a period, there's no question there are going to be industries and companies that are going to be in trouble to compete. And here, we are combining what is the top-down analysis with the bottom-up, looking at our risks, mid and large. And we'll do also even sort of on a modelized basis with a bit more time on the smaller scale. What we're looking at, and we probably are looking at a reflection of what the Spanish industry is, is an impact that is manageable, that is negative, that is manageable. If, again, what we see is that the situation either deteriorates further or actually becomes endemic for a long time, I think what we will have to do is review those hypotheses. Having said that, more in a micro rather than macro level, we reached this shock in a position of strength compared to any time we've been in the last 5 to 10 years. We have now an income statement that is very exposed to noninterest income because we have built all these businesses over the last few years. At the same time, the part that is actually linked to interest income, it's expecting a significant improvement because of the outlook for rates. So I think revenue-wise, it feels good. Capital, we have the strongest capital position we have had probably ever, given also the change in capital regulations. We have EUR 1.4 billion of unused provisions for COVID, which seem that are clearly going to be in excess of what is likely to be needed, although we will know for sure in the second half. We have great liquidity. We have had a very conservative -- thanks to Javier's insights, a very conservative position and hence, a lot of liquidity to redeploy as interest rates have changed the outlook. And then we're almost done with the largest integration we've ever done, meaning we have the cost savings, better scale. So knowing that it's very difficult to predict exactly how the future is going to pan out and there are more negative scenarios than others, which we all have -- which we all have to be prepared for. We at least feel that from the position we are on today, we have a lot to do and a lot to resist in the coming months.

It's a question, it's here and then to the floor in the back, just here.

Just a question related to the rate increases. So we haven't seen this for quite a while in Spain. What kind of deposit breaches do you see at different levels of rates from the minus 50 basis points? That's point one. And then just thinking of the potential negative or offset of that on the asset management business, do you see any kind of issues there in terms of the continued migration from maybe on-balance sheet to off-balance sheet type funds? And what's the impact on money market funds in particular? I assume some of them are -- might make their way back. So it'd be interesting to get your take on the potential offsets there?

Okay. Thank you. Well, first thing is that we are not expecting very large rate increases. So I think that our view is that probably we will settle somewhere in the 1% handle, I don't know where exactly, but this is my view, and actually it's market's view also. So I think that is very different, which is the evolution of this, let's say, deposit base. If you are thinking about rates reaching those levels, whether rates are going to be at 5%. So I think that is a completely different analysis. What we view is that for retail, which is our main, let's say, customer and the larger balances are from retail as you know well. We are not going to face major demand for time deposits at a cost until rates reach plus 50 basis points. So 50 basis points positive. So this is our main assumption and according to past experience is what we think. It's not going to be the same with corporates. You know that we have been charging to some corporates. Actually, we are charging to approximately EUR 37 billion and making EUR 90 million annually running on that front. By the way, remember that this is accounted as fees. It's not on NII, it's on fees. And on that part, probably they will ask for positive interest soon, much sooner than retail. So this is first thing. To the point, to what extent these derails the -- what is in our view, a secular trend to, let's say, off-balance sheet product. We think that as long as we are in those, let's say, levels of rates, we will not face a major issue, no major changes. And we are pretty much comfortable with this. We have been doing this business in the past when we had a deposit price war in Spain with deposit rates at 4%, and we were doing a positive business. So obviously, it's going to be a little bit more difficult. So that's the message. We think that in this initial part of the journey towards positive rates, our sensitivity in terms of shift to time deposit is going to be pretty moderate.

Last question, [ Florin ], there in the middle.

I'd like to speak about costs. So 2 parts to my questions. I think in your last plan, you talked about 3% cost growth per annum, and you delivered much better than that. I would like to understand how much of that performance was due to the fact that you delayed some investments or maybe another way to put it, do you feel that your investment budget is big enough? Do you need to increase it? And then the second part related to costs. I think for the first time probably since the introduction of the euro, Spain is having quite high inflation. And when you're discussing this with unions, your suppliers, et cetera, to what extent do you think that's something that could -- that you can still keep under control?

Sure. I would say you're very right, we are expecting 3% annual growth rate in costs and we eventually delivered flat costs. Obviously, the environment also was very different and worse in terms of the level of rates in particular over that period. I would say that was a result of cost containment rather than delaying expenditure or CapEx, but I also have to say during last year as the year of integration, the convergence of 2 systems or the integration of Bankia systems into CaixaBank to priority over many other developments. So yes, there is a small catch-up effect not associated to having delivered a 0%, but having gone through -- from the technology point of view, through an integration, while you're integrating, this takes priority over many other things. And hence, some other things need to be developed. So yes, there is a genuine backlog of things we would like to do. Even in the absence of a previous integration, the speed at which the business is moving, and the -- I would say the hunger that we, our own people have in terms of doing things better, coming up with new ideas, developing new businesses, doing things in a more efficient manner, always means, while sort of the sector is under transformation, it always means a significant demand for new investment. And when we look at a cost evolution going forward, we're not going to look at cost only with a view to minimize them, but also as a means to improve our competitive position and to generate more revenues. Because we believe in this business. So yes, when you look at non-personnel costs, in particular, there's a lot of things we like to do and we'll continue doing. And hence, it is realistic to think that we're going to have a cost base that will grow. Now on the other hand, 2/3 of our costs are personnel and these costs is regulated by a 5-year collective bargaining agreement, which runs into the end of 2023. So we have already agreed salary increases at around 1% for this year and next year. And hence, in the year '22 and '23, we're not going to be subject to those kind of pressures. We will see how things look after that period. So all in all, we are going to keep being very cost conscious. But at the same time, we're going to keep looking at this business as a business in which we want to be in 3, 5, 7, 10 years from now, and that requires investment, which we're going to keep doing.

I'm going to squeeze one in, because I think it's important on the capital return as the full year results. You mentioned the intention to do a buyback. Are you still confident that could go ahead? I mean we had [ Andrea ] before you would seem pretty relaxed about normal distributions, but conscious there's an extraordinary distribution. So any reassurance you can give them that as we wrap up?

Well, my reassurance is really not to say anything new. We're in the process. We have requested approval for conducting a share buyback. We have also announced the dividend. We see a situation like the current one as situation that is obviously negative, but one from which we are very well protected because of our limited exposure and all the reasons I gave before. So I would say no news on this matter. We'll continue ahead with our plans to implement the share buyback. Obviously, this is subject to the current approval process, which we're having with the ECB. And with respect to the words of [ Andrea ], I have nothing to add. He's been here just before, and he's been very, very clear. So glad that is the position of his view, which I fully concur with.

Thank you very much. We will have to leave it here. Thank you very much.