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

Thank you, everyone, for coming to this session with CaixaBank. I'm thrilled to introduce one more year, both Gonzalo Gortazar, CEO; and Javier Pano, CFO. Thanks for being loyal attendees to every year to this conference. We appreciate that.

Let's start with the usual polling question. What is the most important target for CaixaBank to achieve to ensure continued outperformance? The EUR 12.5 billion NII in '27, the mid-single-digit growth in revenues from services, the 4% CAGR in cost, the less than 25 basis points cost of risk or to distribute all the capital above 12.5%. Well, I think that's clear.

No surprise.

So we're going to have a word about that.

Maybe.

But let's start with the business plan. You're 1 year into it. You've obviously updated the strategic targets. Wondering you touched on the main highlights you've achieved so far? And what do you -- how do you measure progress from here?

Well, thank you. Thank you for having us, Alvaro. Pleasure to be here. And I'd say we had a very good first year for -- of our 3-year plan, where we basically grew business volume, both on the asset and on the customer fund side by 7%. We grew premiums by actually 13%, which was quite nice. We grew market share generally across the board. We grew the number of net new clients by 390,000. And on the back of all that, it was pretty clear that we would most likely beat our 3-year targets. So we reset those, and we moved to expect 6% growth in business volume. And associated to that, accordingly, increasing profitability with return on tangible at 20% next year and reduction in cost income. And generally, obviously, a pretty good environment on growth back 1.5 years ago, when we started talking about growth in the market, we were actually met with some skepticism, and we thought that growth was possible. And in the end, growth was actually 50% higher than -- or even more than 50% higher than what we were expecting. So we feel good about that part of the plan. Then we talk about transformation. Transformation is a bit more difficult to observe and everybody is talking about how many things they are doing. And sure we'll talk about AI, which everybody is asking us and everybody else. But really, it feels also that we have sort of used well our time in terms of transformation. We -- part of that is hiring more IT professionals so that we internalize some of the capacities that we think we need to have in-house, and we have added 650 last year. We renovated our app, which we call Now, as you know, it's now ranked #1 in the Google Store in Spain and consistently for some time. Now we've increased strongly digital sales. We've launched new initiatives like platforms of Facilitea Ocasion Coches, which is housing and cars, has -- they have had pretty good acceptance among our clients. And we've made another push, Imagin, where we had leadership in this sort of age of 20- to 35-year-old. We're the largest bank with Imagin in Spain. We have -- half of our net client growth is coming or half of our client growth is coming from -- or through Imagin. And hence, generally feeling that we have good progress in not just the short term improving financial performance and growth, but also looking at the longer term and taking advantage of the good times to make sure that our advantage is sustained over time.

The momentum of the business is obviously very good, but maybe not immune. Can you give us a bit of context how you see the resilience of the business in the current sort of uncertain Middle East sort of geopolitical environment, how do you see the resilience of that business and any sort of early signs of how clients are reacting or how you're thinking about it?

Well, the Middle East brings uncertainty to everybody, obviously. We think that uncertainty, fortunately, both Spain and us in particular, are pretty much removed from the center of the action. So we don't have any particular direct concern at this stage. There's obviously the second order consequences of what's impacting energy costs, supply chains, rates and the economy. All these things are obviously things that we follow very closely. But I would say with a position of relative strength, we are, I think, still of the view that it's more likely that this situation will last few weeks and hence, in a few months' time, we'll have a normalized energy market, maybe at levels that are probably higher than the ones that we saw pre-war, but consistent with the rapid normalization. And hence, for an economy in Spain that we expect to pre-war grow at 2.4%, what we're saying is based on the sensitivities that we have run on basically energy for Spanish GDP, we're probably going to end up closer to 2% and to 2.5%. That's the kind of impact associated to an intense, but not a long war. And at those levels, I think asset quality volumes are substantially in line with what we were expecting at the beginning of the year. In fact, at the beginning of the year, we were expecting 2% GDP growth. We we actually raised our estimates after the very strong sort of closing of 2025. And on the other hand, obviously, we have a sensitive to rates, and I'm sure we'll get into that later that indicate that if rates go up, that's likely to increase our profitability, particularly in next year. So as long as we are talking about this kind of conflict, I think we are in pretty good shape and certainly master of our own destiny and we'll obviously have to adapt the strategy and tactics and certain decisions to the environment. But generally, we have a fairly positive view of the future.

I was going to say that the key highlight of the plan was the EUR 12.5 billion, but I feel that now is a common knowledge. Maybe we can discuss what are the main assumptions behind that EUR 12.5 billion reminds the audience. Obviously, the hedge is a big step up. It has a big step-up next year and is part of that. And I think it's interesting that this morning, we did a poll where the audience doesn't seem too convinced that rates will be going up. So maybe in that context, do you need rates to go up? Can you lock it in ahead? Maybe is there room to increase the hedge and take advantage sort of around the EUR 12.5 billion?

Okay, sure. I try to elaborate and good afternoon. And well before talking about 2027, let's talk also about 2026. So...

I thought I was...

Just to remind everyone that we have brought forward our initial 2027 target for 2026, and we are expecting NII to be over EUR 11 billion already for this year. We're expecting an acceleration that is going to be more clear into the second half. In the first half, we are still facing some negative repricing on the asset side. On that sense, I would like to remind the audience that something we already flagged on our results presentation that during the first quarter, probably we have some negative quarter-on-quarter evolution because it's a very seasonal quarter in terms of volumes also it's that they count which clearly has a negative impact. We have also more floating rate loan repricing in the first quarter than in any other quarters. But having said that, from here, we're expecting a clear acceleration into the second half. Basically, it's a compounding effect coming from volumes. We had, as Gonzalo was saying, a really strong year -- last year, and we have revised our assumptions for volumes. We're expecting the loan book to grow somewhere between 5% and 6% for '26 and '27, and deposits very close to those figures. So we are quite positive of that. And you know that on deposits, we have quite a nice mix in terms of interest-bearing and noninterest-bearing, which is an extraordinary contributor to our NII story. So from here, basically into 2027, beyond this additional compounding effect from volumes, we have some idiosyncratic circumstances. You know that we have some legacy and fixed income investments -- legacy fixed income and hedges that actually are yielding a very low yield. So we have like over EUR 30 billion combined hedges plus fixed income that is maturing between '26 and '27 that is yielding a yield that is less than 0.5%. So the plan is, well, to roll over those hedges of those fixed income maturities. Market yields are currently like over 2.5%. So this is an extra boost of 200 basis points on a EUR 30 billion plus investment. So that means that it's a positive impact of over EUR 600 million annualized on our NII. So this is the main, I would say, explanation behind this extraordinary increase on our NII that is expected for 2027. In terms of volumes, I think that we have been quite conservative. Gonzalo was mentioning that we were actually budgeting considering GDP growing circa 2%. That is, by the way, what we now expect with -- considering the current circumstances in the Middle East, the most probable scenario. So well in line with nominal GDP is the kind of loan growth and deposit growth that we are expecting. So we think that 2027 guidance at EUR 12.5 billion that I see is the most important aspect of our guidance is a safe bet. So I think that is -- we are safe on that. Moreover, we may face some upside. As you all know, the market is currently pricing rate hikes already this year. The yield curve is -- in the short term is higher by, let's say, circa 30 basis points approximately. So this is a positive outcome. You know that we retain a positive sensitivity to rates, so approximately 7% impact on NII for a 1 percentage point shift on the yield curve. This is 1 year forward sensitivity, which actually is 2027. So you can modelize this pretty well. So there is eventually some upside. And in terms of hedging, well, we are always tactical, opportunistic. So we can always take advantage to try to advance a little bit those reinvestments or additional hedges, we can -- we have to do further down the road. So yes, it's obviously something we will try to do to exploit those market opportunities.

You both touched on the strength of the loan growth, up 7% last year, almost across the board in terms of loan book. But one thing that's become more relevant in your case is relatively new is the loan growth outside Spain via the international branches. When we think about that additional growth opportunity, how big can that be as a percentage of the overall book, even from an operational perspective, how far do you think it can go? And can you give us a bit of color on what sectors, what regions that growth is concentrated in?

Sure. Our international presence is on the CIB side, focused on the large European countries, mostly the U.K., Germany, France and Italy, that's 95% of our activity. This is something that we have developed gradually by -- we used to have rep offices in all these sort of large capital cities in Europe. We converted them into branches. London was over 10 years ago, and we have been building the business gradually to make sure that we obviously make no mistakes and there have not been any meaningful ones. The rationale for us is we become a very large bank in Spain. In Spain, there's a lot of foreign European multinationals and corporates operating. And we got very quickly the invitation to be banks at the parent company level. We also had the opposite, Spanish companies developing a presence in Europe and asking us to actually go with them. So it was very natural as a normal extension of our business. What we're not doing is some funny business we don't know how to do. We're doing a business we know how to do in Spain with corporates, but at the European level and then how that's been the history. Obviously, when you start from basically 0 exposure, you tend to grow in relative terms faster. Last year, we grew by 20%. Our international book is now around just over EUR 30 billion. Again, investment grade, large EU economies in -- with companies that we know well and without any surprises. How far will it go? Gradually, the growth is going to be coming down because we have a larger base. We don't know how -- we do not have an absolute target level of we need to grow this portfolio in any way. We just need to make sure we do good business in terms of risk return, taking only the sort of the very top of the risk pyramid because that's really the strategy. It's working out well. It's a double-digit return on equity. And I think we still have room to grow, not just growing our lending exposure, but growing sort of a full range of services that we have been developing in the various countries. We have close to 200 people more or less looking at our presence in those places. We also have a good nice presence in Warsaw in Poland, but that's smaller. We've been even longer there in Poland operating. And then we have a good international branch in Morocco, which is very attractive, but very small because of the nature of the business there. But we are the largest Spanish bank in Morocco and Morocco has now obviously pretty good prospects and certainly good returns for us. So it's part of our CIB strategy, working very well and not generating any concerns as an opportunity. But on a marginal basis, it will be gradually contributing less and less.

In Spain, obviously, the growth is good and accelerating and you're taking market share in mortgages. which has led to a debate around pricing that we ask you frequently. You've discussed 150 basis point spread for the total loan book. How do you see mortgages fit in there versus what you see in corporate and consumer?

Well, obviously, mortgages is massively tighter than that blended average. Well, you said that we are gaining market share. Our aim is not actually gaining market share in mortgages, so maybe a few basis points this year. We have a back book market share circa 25%. So our aim is to maintain that market share basically. So it's extremely competitive segment. You know that you have to rely on all the cross-selling attached to a mortgage to make it profitable, which it is. And in our particular case, I think that we are well equipped for that because we are good at cross-selling. You know that. And one of the most important products on that cross-selling is insurance. On insurance, we not only get the commercial margin, we also have the industrial margin as we own the factories. And also, our balance sheet structure probably allows to take that, let's say, duration risk into our balance sheet more comfortably than some of our competitors. So I don't know. But in any case, it continues to be a tight market. Well, we have other segments that are clearly compensating that. For example, consumer lending is a business that is growing last year double digit. And this year, we are also very positive with much better margins. And SME lending, I would say that is maybe on corporates in line with the average. So I would say that this is the case. In the case of mortgages, that extra margin that is added by the cross-selling is not landing into NII in several cases. So you have the business on insurance or wealth management or other areas. But we tend to look at the profitability looking at the whole thing at the broad spectrum of products that are being cross-sell with the mortgage.

Maybe to touch on fees and the mid-single-digit growth that you're targeting over the plan. How much more do you have in terms of product penetration in your client base? I'm thinking about the old Bankia customers. And how do you square that with the sort of vulnerability to the short-term volatility we're seeing in the market at the moment?

Well, on that front, it's right what you say. Still former Bankia clients are still lagging a little bit versus the average former CaixaBank clients. But -- well, this is not the main source for our performance on those businesses. So you know that we have 2 key businesses here, wealth management and protection insurance. We have on wealth management, a market share in Spain that is approaching 30% and is well above 30% on protection insurance, and it's a market share in that last case that is growing significantly. So well, here, the point is basically that the penetration of those products in Spain is still low. So it's still below the average to put you some numbers. On wealth management, a number of clients with, let's say, wealth management activity with us, it's slightly over 20%. And on insurance, it's high 20s. So -- but this is well below the average of the eurozone. So there is a lot of potential still. We have a lot to do. The tailwind coming from former banking clients, obviously, is a nice to have, but it's not the main driver. So we are targeting revenues from wealth management and protection insurance in the high single digits area. So that's the case, and it's basically the main driver for that mid-single-digit service growth that you are mentioning. We have other areas with more traditional banking fees that are more subdued, more subject to some competition. Lately as a result of precisely what Gonzalo was commenting on international CIB activities, we have been able to have a more recurrent and frequent pace of fee revenues coming out of CIB. So all this is doing well, and we feel that this mid-single-digit guidance is also really solid.

Okay. I'm going to bring up AI that you already touched on. And another the polling questions we had earlier in the morning was you've got a crowd here that think AI is a net positive for the banks. I think that you should feel at home...

I can only get it wrong.

I guess the question is how you're thinking about it? And when -- is it sort of a source of potential disruption, high competition versus the efficiency debate? And I don't know if you can maybe give us some color around workforce potential sort of savings in central services, noncommercial FTEs, for example, give us a flavor of what the long-term potential is around those efficiencies and not necessarily within the plan, but thinking 3, 5 years out.

Sure. Obviously, AI is a very important development for all sectors and particularly for the financial services sector. I think there's a broad agreement on that, fortunately. And certainly us, but most financial institutions, I know of are actively adopting it. How we see AI for us is a perspective of history, AI -- generative AI and LLMs may be relatively new. AI implementation is over a decade old, certainly for us. And hence, we've been working. And together with AI, AI is critical. It's important technology, but the raw material for AI is data. So you need to have the data, you have the data in a way that is workable. We, in 2012, already decided to move on to a single data pool platform, which we've been evolving over the last years and moving it also to the cloud. But I think there, we have a significant advantage because for the market in which we operate, Spain and Portugal, we have very rich data. I would argue that richer than anyone else because of our size, we have it properly stored and we can access it in a proper way. And we have the people that have been using that data for quite some time. AI is going to be an accelerator of this competitive advantage that we have with data. Many other people will have AI, but most of them will not have the same data, certainly not as rich as we do. And hence, the key here is adoption. We have the AI, the tools. Some of them may require some investment. And in fact, they do. We have the data. The question is, let's make the most out of it. Let's make the organization adopt it. We are at a very sweet moment for us to do it because we have growth. We have growth in Spain, growth in Portugal. We're gaining market share. We have that engine -- commercial engine that we have always had at full speed. And hence, you look at a tool that provides clearly higher productivity is the best of the times because basically, we can put more revenues onto our platform, make sure our people don't feel AI as a threat because that obviously goes against rapid adoption of the tool, and they see it as an opportunity because they are going to be more productive and they may get rid of those tasks that are more boring, mundane, whatever, do more business, be more productive, we'll make more money as a bank, they will make more money as employees. So this is -- now 10 years ago, when we were restructuring the whole sector because revenues were coming down, blah, blah, blah, this message would not have been possible. Now fortunately, the hard work is done, certainly for us after the integration. Now we're growing, and we have a tool that gives more productivity to grow faster and hence, become more efficient in terms of cost/income ratio by growing revenues rather than attacking our cost base directly. This is the way we see adoption over the next 2, 3 years. Obviously, when you look beyond that, I think there's other elements to take into account. Current degree of outsourcing for the industry is fairly relevant. For us, it is. This is mainly operations and IT. And here, there's likely and not overnight. I don't think AI is going to change the way we do business next year. Certainly, when you look back 5, 10 years from now, you will see there's been a major change, but it's going to be progressive. It's not like a cliff change, certainly not how we see it in Europe and in the banking sector. So by the end of this decade, I think we would have been able to reduce a lot our reliance on operations and IT, basically external FTEs. We currently have the equivalent approximately of 12,000 external FTEs, which is close to 25% of our internal FTEs, fairly significant potential then. And then over the long term, we'll see. We are very actively developing new businesses. I talked about the Faciliteas, but we have plenty of other initiatives coming. And those are predicated for someone like us on the basis that we are digital and physical, and we have very large market shares in both worlds. And the real world is both physical and digital. We compete with purely digital players. They like our physical presence and vis-a-vis other physical players, the fact that we have anyhow over 12 million digital clients actively visiting our app every day provides us with a scale in Spain that allows us to develop new businesses. And I think the Facilitea cars platform, where we now have 14,000 cars is an example where, obviously, we have the clients and online clients, but we can speak and we did to all the car dealers saying, this is the idea that we have. We want you to come on to our platform because we have the commercial people to go knock the door and they trust us as a serious organization, they came on to the platform. So we have both -- obviously, both sides of supply and demand and very quickly gain scale. We had actually 30% growth in vehicle financing last year, which is quite remarkable. So there's plenty of ideas, opportunities for people that are active commercially and have that mindset of creating more jobs. And then when you look at sort of the decade of the 30s, there's going to be substantial retirement because just reaching retirement age. And I think generally, we may see depending on the industry or on the other sort of factors, what you may see is a different replacement rate, which certainly makes for an adjustment that is more both socially and financially agreeable. So all in all, we feel it's a great tool. We want to be ahead. I think we have some advantages, and we're moving very quickly across the board in how clients interact with the bank and sort of introducing AI agents in our app and other relationship, how our own employees relate with the bank when -- typically when advising clients. So obviously, through Salesforce and Agentforce now we have deployed to -- or we are deploying to the whole commercial workforce over 30,000 people, AI agents that shorten interview preparation by -- time by 75% and obviously improve effectiveness because you make sure that AI doesn't forget about opportunities that you should include in the conversation and can react, obviously, instant time to a conversation. And then there's a lot of process reengineering around everything we do. It's based on numbers and sort of information. And really with AI, you can redesign things to be much more productive. And hence, in the midterm, we're going to see that reduction of outsourcing that is also going to contribute to the bottom line. So increased efficiency, obviously, there should be and there will be some savings passed on to customers. I think this is a lot of economics that margins will have some pressure. I don't see that as a cliff effect and sort of a big bang and now our margins are gone, it's just a continuation of the natural sort of loss of economics that as you become more productive, you're going to need to be more competitive in your product offerings.

You touched on it on the employment aspect, which is one of the things that's been debated around the unintended consequence from AI. The asset quality picture remains very benign. I think that's not been questioned. But as a CEO, when you think about the second order effects of AI on unemployment, how do you think about underwriting that environment? Can you talk us through your discussions with the management team? How do you think -- how can you preempt that? Or how do you think about that risk?

Well, I would say, again, we have time. We don't have much time to adopt it. I think that's not a message to sit back and relax for organizations or people. We need to adopt it. But for these to transform into profound changes in the job market, in particular, this is not going to be immediate, not because it takes time to adopt. The kind of productivity gains are going to be gained over time. And if you look at Continental Europe and the way you deal with these things, this is not, I think, some other markets when the labor rigidity and the social contract is different. So you get somehow -- some companies very quickly react and act unemployment, and that may temporarily create an issue. I think Europe is reacting in a different way, the same case I talked about retirement. If you look at Spain in the next 10 years, 25% of workers are going to reach retirement age. So question is who is going to pay the pensions of these people. That used to be the question. Now we may have an answer is that workers that will stay will be more productive and will be able to pay these pensions. And this can be sort of as a big picture can be done in a smooth way. Obviously, in some companies, in some sectors and in some occasions, things will be a bit more abrupt indeed. But I think overall for the economy, we're not seeing a concern. I certainly -- and very often, actually, some of the sectors that are more affected. When you talk to CEOs of some of them, they say, actually, we're busier than any time because they are asking in the temporary period asking more of our services. So I can do this more efficiently. But then given that I can do this more efficiently, let me add other things that we can do at the same time. So I think shorter term, this is going to accelerate activity. And over the longer term, I think the demographics in -- particularly in Europe, will be able to cope with this sort of job transition. And we'll have to follow it and adapt as things develop.

Last question, and then I'll open it up for questions, although I'm going to preempt that it's been a quiet crowd during most of the day. So let's see. Last question for me is on the 20% ROTE target for 2027. How do you think about distribution versus organic growth? And maybe sort of alluding to that or in that context, talk about potential for M&A. We've seen in the sector bolt-ons, you already have very high market shares in most of the products. How should we think about that and the long-term profitability picture because you already have sort of very high profitability. How should we think about the long-term ROTE picture beyond the plan?

Well, I would start saying the 20% figure is a milestone is what we're estimating for next year. It's not the destination as the circumstances -- if the current circumstances stay in all likelihood, we'll continue to improve our profitability going forward. And obviously, that is the main target that we have is a combination of profitability and growth. So it's profitable growth. And this links immediately with what do we do with our profits. Best thing we can do our profit -- with our profits is reinvest them organically with low risk at least 20% plus levels. And this is the first priority we have. This obviously, because of the growth that you can expect in the eurozone, even if it's Spain and Portugal growing faster than the average, this still leaves a lot of earnings that we're going to use to remunerate our shareholders with our 50% to 60% payout and the rest in the form of share buybacks. But the rest is not a fixed number. If we're able to grow faster organically, and retain those kind of 20% profitability levels, that's a better proposition because that sounds to me should be worth more than 2x book. And if I -- we take money out of the bank, that's going to be a onetime book. So whatever we can grow the business with the right profit and with the right risk characteristics and low execution because it's organic growth, we will do. Again, it looks like we'll have to grow the business 50%, 60% and still more capital that will be distributed in the form of share buybacks. Whatever is the excess of 12.5% target that we have gives us plenty of comfortable room given the nature of our business. Those are the sort of the highlights. And I think at this stage, we feel pretty good as to how we make progress. There's absolutely no M&A we have in mind. We do not want to do business outside of our geographies or do business that requires M&A. We don't think there's value creation when you go cross-border in retail banking. And we think that is a natural distraction that could happen, but we are going to be very disciplined in terms of capital. The excess capital and the profitability that we generate is not ours, it's our shareholders. And hence, what goes beyond organic growth will be paid out in either dividends or share buybacks. There's no product need we need to fill in Spain or Portugal. We are very concentrated in these markets, but there we have all what we need to compete. And what we do not have, obviously, we need to develop organically. And sometimes we will find partners to do something together. We not accelerate growth, but not M&A, not capital intensive.

Great. Any questions?

A fellow CEO of a large European bank like yours mentioned the need from the European banking system to prepare for the competition coming from hyperscalers and fintechs. In the context of the Spanish market, how sort of would you be thinking about these challenges in the future where you have, for example, incumbents that are growing. There's a digital bank that's become the, I think, the fifth largest bank in the market and is still capturing clients. How well do you think your bank is prepared for that challenge that may be coming from these hyperscalers and fintechs in your market?

Thank you. Obviously, this is a key part of our strategy. It's very important to make sure we've been very successful in the past, but we want to be very successful in the future. And rules are changing because technology is allowing new players into the market, absolutely. So I think one is to be very conscious, zero complacency. We need to be best not just with the old environment, but with the current and the future one. And on that, we've been planning for a long time. One example, because it's just one, is Imagin, which we launched as the first mobile bank in Spain 11 years ago, which has a larger market penetration than the new entrant in its target ages and is actually doing very well. When I look at the business volume for Imagin per customer, and I compare it to the 2 main new entrants, it's 9 to 6x per customer higher because Imagin is a well-rounded bank. It has really a very complete offering, whether it's funding, whether it's investing, insurance and obviously, lending, we benefit from a huge advantage in terms of data and lending. And we just need to make sure that we play to our advantages. So if there are things that we're not doing well and there are always things that we can improve, we just need to make sure we get there and that digitally some of the native players have been ahead of the incumbents, and I think we're closing that gap rapidly. I'm saying Imagin -- and well, CaixaBank is -- Imagin is very close, is the highest rated app in the Google store, and that includes the new entrants. So it means that our offering, which we revamped over the last 1.5 years is pretty good digitally. And we'll continue to compete, I think, very reasonably on that space. But at the same time, we have people. I don't think anybody is going to replicate our relationship manager structure. So a lot of people get quite sick when they have a service issue and they have a real question and they can only talk to robots. And in our case, you are an Imagin client, you have a chat and the ability to chat someone you can chat with a chatbot, obviously, but you can also speak to your relationship manager if you want to. And that has been very successful. So I think we have enough tools in our pocket to compete and maintain our sort of preeminent position. We certainly are very focused on that.

Next question.

Two questions on my side. The first one is on the recent threat from the U.S. Are you concerned about that? And are you seeing or aware about anything...

Can you repeat the recent...

Threat from the U.S.

Threat...

Threat, yes...

It's really about, Trump...

Threat from the U.S.?

Yes, Trump, yes...

President Trump, yes...

We...

Just on the...

The second is just on consolidation, if you expect more M&A in the Spanish banking sector.

On the first one, I think that we have much more in common. And I would say rather than Spain, it's very clear that at least to says there are some diverging views on the war between European countries and the U.S. I think it's in the interest of everybody to maintain that sort of history of friendship. And I would say we are not concerned on that front because there's much more that actually ties to each other than the current sort of disagreements on important topics. And then on M&A, I would say we're not going to participate. Is there room for further M&A in Spain? Absolutely, yes, there is. Is it likely to happen in the short-term? I doubt it given the recent experience with one fairly large attempted deal and the fact that people are kind of feeling good currently and improving profitability and have limited pressure to engage into transaction. M&A always means you give something away, and that always is difficult. If everything looks rosy or most things look rosy, I think that's less likely to happen. Having said that, M&A at some point just happens as we learned yesterday and gets to surprise everybody.

Great. I think we're 10 seconds until we complete the allocated time. So thanks very much, both Javier and Gonzalo. Thanks.

Thank you.