Deutsche Bank Aktiengesellschaft (DBK) Earnings Call Transcript & Summary

Good afternoon, and welcome, everybody. And welcome to the Deutsche Bank's session at our conference. I'm absolutely delighted, as always, to welcome James von Moltke, the Chief Financial Officer of Deutsche Bank.

Thank you for having me here today, Magdalena. I'm delighted to be here.

Thanks very much. And of course, what we're going to do, we're going to try to going to do 30 minutes of questions and that we -- that we've prepared for our fireside chat and then, of course, we're open to kind of any questions that you would like to ask as well. So please feel free to put it on the conference chat.

James, let's start with what's on everybody's minds. Of course, the outlook of the kind of global economy in the world has very much changed over the last month. And of course, today, we talk about Russian invasion of Ukraine and the impacts of sanctions. You have talked a little bit about what it means for you a week ago at your strategy update, but talk to us also about not only implications for the group, but implications for your private and corporate clients. How do you see them reacting?

Sure. Well, look, thanks, Magdalena, for the question. I think everybody is reacting to an unprecedented situation in some ways. So we're heavily in dialogue, particularly with our corporate clients on the implications for them of this crisis. And it can be the cost of energy, potential disruptions in energy, it can be the way that supply chains are being disrupted, access to certain raw and finished materials. It can be transport that is being interrupted as well as access. And so particularly, therefore, with our corporate clients, there's a heavy engagement on how they respond to that. We think we're very well positioned to be the counterparty, the bank, that they engage with, as they reassess those conditions. Our institutional clients, as everyone is seeing in the markets, are working through their risk positioning and how they manage the volatility we see in the marketplace. That's something we've been working hard to intermediate. And then on the private client side, I'd say there, of course, the impact is more moderate. As always in these situations, there is a reaction to move to cash, to become more conservative in investment positioning. That's something we can, of course, manage and facilitate. An interesting question is going to be how long that persists for. And so in all of this dialogue, the impact is obviously very scenario dependent that we're -- as we see it.

Thanks very much for that. James, let's talk about kind of near term, because, of course, we've heard about this strategy 2025 a couple of days ago. But quite a lot of uncertainty, quite a lot of volatility in the market, very, very recently. And then and your -- you kind of reiterated that you're very much committed to the 8% return on tangible for this year, and, of course, coming with that 70% cost income ratio. How flexible is this cost base to accommodate the targets, should we see, in terms of more of a downside to the revenue side? Could you tell us about a little bit more of a flexibility of the moving parts to that 8% return on tangible?

Sure. Sure, Magdalena. Look, as we reiterated last week, we've got the company fully focused on, first of all, of course, supporting clients in this market environment, as we just discussed, but from a financial point of view, delivering on the targets that we set for 2022. And I think one of the key messages from last week is, as we got into January and February and even over the past several weeks, as we've managed through the -- at least the initial fallout of the war in Ukraine, we've been able to demonstrate that we're delivering on the path we outlined for the first quarter, step off, if you like, into 2022 in order to deliver on our targets. And that's a lot of things. It's the revenue side that we shared the January, February numbers with. It's executing on an expense trajectory that we shared with investors at the end of January. And of course, managing the fallout from this crisis. So we call it, mark-to-market on that path is, we continue to see a path, we're executing all the steps that we'd outlined towards that path. And at least as we look to the first couple of months of the year and very likely the first quarter performance, we think the step-off has been exactly what we needed to steer towards to achieve our targets for this year. Of course, as we said last week, there's more uncertainty that's been injected into the environment, and we can talk a little bit about that. But as we also disclosed last week, certainly, our own risk exposures to Russia and Ukraine and the way we managed at least the initial fallout from the situation, didn't deter us from executing on that path.

Absolutely. Absolutely. And this is kind of a very nice way for us to move into that kind of a little bit of a sensitivity analysis. Of course, we've heard your long-term goals, the 10% return on return on tangible. And of course, also cost income ratio coming down quite significantly towards early kind of 60s. So let's stress this kind of this -- the case here, maybe from a perspective of macro from a perspective of the policy direction that's going to matter as well and a potential for a credit cycle. If we assume that Europe may be sliding towards this [ stagflationary ] environment, what would it mean when you think about your kind of cost of risk development as well?

Sure. Sure. Well, well, let me start with the first quarter. As I little bit just alluded to, we see the impact on the first quarter as being relatively limited at this point. Our sense is that, and we shared a little bit of this last week, I think our businesses are sort of all on track to deliver a revenue performance that is in line with last year, potentially above last year, and we've had a very strong performance in FIC. And so while, of course, there is some impact, as I mentioned, whether it's on asset prices, clients moving into cash, those sorts of things, there are offsets that, by and large, are helping us. On the credit loss provision side for the first quarter, there probably will be a modest impact. As you know, we'll look at some staging impacts, some downgrades that take place naturally in our internal systems, and then the FLI impact or the forward-looking indicators in our IFRS 9 provision. So what would have been, I think, a very strong quarter of perhaps $150 million to $200 million of credit loss provisions, might increase by as much as $100 million, let's say, including all of those factors. So it might put us in a $250 million to $300 million range, I think still quite good on a relative basis. And that would be -- we don't anticipate any meaningful Stage 3 events at this point from the situation rather like 2 years ago in the pandemic, Magdalena, though, there are a number of impacts that you see on a bank's balance sheet that in the early days of the crisis, and that's something that we will see. There is a drawdown on capital, which we would expect to be temporary from things like PruVal as I mentioned, downgrades, which increased credit risk RWA. Potentially of increase in market risk RWA. And so we -- I think our initial sense is that might pull us down by as much as 25 basis points in the quarter. Although again, a lot of that we would expect to be temporary. And that comes on top of a quarter in which we expected to see some pressure on the ratio just from business growth, which in fact has been there. So in short, I would say the very near-term impacts are quite modest and so we can absorb those quite easily in the first quarter. And as I say, keeps us on track towards the targets that we've set for '22. If you go out further in time, Magdalena, so I'll start with the medium term and then perhaps the long term. The medium term is incredibly scenario-dependent. So we're naturally running through with the risk colleagues and again, engaging directly with clients on what we think the implications and what our clients think the implications will be. So we sort of look at a moderate downside and maybe some more stressful situations for the economy and for banks. But at this point, I have to say, it's so scenario-dependent that it's not even worth giving much of a sense of what that means. Again, because our exposures are very limited directly, for us, it's looking at indirect exposures that what are the tertiary impacts of this crisis on things like supply chain, energy costs, as I mentioned. And then lastly, in the longer term, my own feeling is that the path we laid out to 2025 is pretty solid. There may be an economic cycle that will be stronger or weaker in the period to 2025. It's always hard to pinpoint where we'll be in the cycle at that point. But the idea that there is underlying economic growth and strength in the world that preceded and were large -- and I suspect will come once this crisis is behind us, I think that's still intact. I think the idea that rates are rising as we saw yesterday, I think that thesis is intact. Do we all worry about a stagflationary environment and that, that would be a negative impact on the economy and on the banks as well? Of course, we do. But I don't see that at this point necessarily as a base case. And lastly, on your question of flex, that's something that we've been working for sure to create. As our business -- as the margin expands in our business, our view is we will have more flexibility. Obviously, on the most volume-dependent parts of the income statement like whatever travel and variable compensation, asset servicing fees, those things will naturally change. There are some things we can do, of course, in managing day-to-day expenses. And we have that discipline to do so, especially in areas that have some pressure on revenues. But -- and then over the period to 2025, we also have some flexibility as to how we prioritize and manage our investment spending in that period. So short version, Magdalena, we do feel we're gaining more and more levers to steer the company over time as we essentially normalize the bank in its performance.

Yes. Yes. Absolutely. Let's maybe dive a little bit deeper into a corporate and private bank. The long-term targets kind of look ambitious. They are -- there's -- and that is where I suppose the biggest delta is versus the market -- some of the Street expectations and how you see those business progresses -- progressing over a longer period of time. Can you just kind of remind us, again, it's all about the levers, right, where we could potentially be missing something?

Well, look, I guess the starting point as we wanted to lay out last week was, we don't think the compound growth rates that we suggested for Corporate Bank and Private Bank, that were, respectively, 6% to 7% and 4% to 5% are, in fact, all that aggressive. And for one reason, it's what they've been producing on an underlying basis over the last 2 or 3 years. So from our perspective, it's a continuation of their trajectory. What's different is a very strong interest rate headwind that has existed for us. We refer to it affectionately as deposit margin compression, but it's essentially the runoff of older hedges, that's now changed to being relatively neutral or an increasing tailwind over the years to come. So in essence, that switch from headwind to tailwind is a big part of why you will see more top line growth in those businesses. Then we also have a lot of confidence in the positioning of the businesses. So that each of the 2 businesses or really 3 businesses, because of the International private Bank is, of course, the wealth management component where we see pretty strong growth, that those businesses in executing on their strategic plans are driving growth that should be in excess of the market growth. So if we think that the weighted average market growth for our business, just if you ride the tide is something in the mid- to high 2s, so a little bit less than 3%, you add a little bit for doing better than the market based on your -- on the execution of your strategies, and then you take the interest rates from a headwind to a tailwind, you have a set of compound growth rates, which we actually think are not that demanding. They're kind of low single digits and with a very good sort of bottoms-up foundation.

Perfect. I'm going to move on to the Investment Bank and particularly FIC. Because, of course, huge parts of the franchise and of course, that's where we've also kind of seen the quite significant market share gains. And from here because, of course, there were stages to the plan. But from here, how do you see that kind of FIC franchise going forward? What are kind of more structural trends that you could potentially see, maybe particularly in Europe, that could provide the kind of medium-term underpin to the broad FIC and financing business?

Yes. Well, we think those structural trends are absolutely present. The idea that there is a huge amount of issuance and increasing levels of indebtedness that are being taken on in the economy, especially as we see more fiscal expansion, obviously, fiscal expansion at the EU level, we see volatility in this decade being absolutely a continued feature of the markets. Particularly, by the way, as the Central Banks step back from quantitative easing, which dampens volatility naturally. So when you get back to a more normalized world, if you like, in terms of volatility of various instruments. And then for us, we've got a FIC franchise that has really found its footing over the past couple of years. So as we executed on our compete-to-win strategy starting in '19, we saw very quickly that the business has settled down. We knew who we were to our clients and our clients knew where to come to for the needs where we can be really competitive. That's shown itself now from -- in product area by product area, where we've been able to get sort of our organization really coming and working, I think, extremely effectively on behalf of our clients. We do think there's more that we can do inside our FIC franchise, still within the wheelhouse of where we're competing. They have 4 businesses are rates, credit, FX and emerging market, and we do those well. But in each of those 4 areas, we think there's still opportunity for investment. So we see a good path ahead in what should be a relatively strong sort of secular market or at least a stable and growing secular market and one where our positioning is good. But I do want to just reiterate, Magdalena, is your first question was about CB and PB, which is absolutely, I think, right, in terms of the order, not to diminish the importance of the FIC franchise, it is hugely important to us. But one of our strategic goals has been to provide a balance in our earnings mix, in our revenue mix. And I think increasingly over the years, that will be more and more visible. As strong as our FIC performance, we expect it to be, we think it's a more balanced profile than the market really understands.

Perfect. Thank you. Thank you for that. James, let's kind of shift a little bit towards the capital return, because, of course, we've got the onset of the dividend and the buyback kind of program, you've just -- kind of given you've upped your capital return to EUR 8 billion kind of medium term. Could you just kind of give us a sense of when you think about the evolution of that capital return, and of course, its mix? What did you have in mind when you kind of start -- this is what we would like to do. And what are the, I suppose, growth regulatory kind of from questions you kind of addressed with that -- trying to address internally with that [ EUR 8 billion]?

Sure. Look, it's always a balance in these things in defining capital distribution plans. And for us, especially given that we suspended our dividend for 2 years, and we were sort of reentering, if you like to get a normalization. We started the dividend deliberately at a relatively low level of EUR 0.20 this year. But by doing that, we position ourselves to do 2 things. One is, give investors a very clear path of strong increases in the cash dividend. So as you saw last Thursday, we announced that the cash dividend we intend to pay would be up by 50% per year for the next several years. So in doing that, we wanted to signal a high degree of confidence on the part of management that we're positioned for sustainable profitability, and, therefore, rapidly increasing cash distributions. But equally, by starting at a relatively low cash dividend, we've given ourselves room to pursue share repurchases now in the early years, especially where I think the corporate finance math of buying back shares at relatively, in our judgment, low prices, certainly lower multiples of tangible book value, is very beneficial to shareholders. So the governing principles are a clear path on a cash dividend, a 13% CET1 ratio in 2025, and as long as we maintain the glide path to that 13%, we've created some room to do repurchases really everything above that glide path, we would intend to deploy in repurchases. And we think that's -- it's the appropriate balance and clarity, balance, obviously, also meaning some of the regulatory impetus to retain flexibility and to retain a degree of prudence, and we think we achieved that with the layout we gave on Thursday.

And I can -- I'm getting up sometimes when it comes to your kind of some longer-term payout policy. Whether the kind of long-term regulatory impacts in the final innings of Basel IV are kind of within your framework?

It is absolutely. So the first leg is to get to 25%. And then we think that 50% payout ratio that we announced last Thursday is consistent with the glide path from 25% to call it, 29% that we would need in terms of retaining capital and also giving us flexibility. We need some degree of flexibility in terms of how much we retain the balance sheet growth out of potentially bolt-on, M&A transactions we do over time that require capital. So we want to have that flexibility to fund growth and keep the glide path on Basel IV.

You kind of -- and from this kind of inorganic capital side, and of course -- I know we've kind of talked about this for some time. But as you look at the group at the moment, and we're kind of at the final kind of year of transformation, where do you actually see opportunities? Because, of course, what we have seen in European banks over, let's just say, the last year, in particular, is a lot of kind of a smaller portfolio optimization type of moves, getting out of countries or getting out of business lines or getting into countries business lines, smaller moves, but seem to be quite nicely optimizing the business. How do you think about the kind of inorganic capital spend, let's just say, on the medium term?

Yes. Magdalena, we've actually done some of that ourselves. In fact, we have 2 smaller, if you like, portfolio sales that we've pursued that are under contract, and we expect to close this year, a fund platform out of DWS and then the Advisers business in Italy. And we think those are good strategic decisions for us for a variety of reasons. And then we've looked at transactions, potential small portfolio type deals, without having succeeded so far. So it is something that we're looking at. It's always hard to judge where we'll be successful and what the right fits are, but it's something that we're definitely on the lookout for. And so retaining a bit of flexibility in our capital distribution path, we think, again as sensible, as it can support the right type of bolt-on M&A situations.

Absolutely. Now James, something slightly different. And we kind of talked about it a little bit in our discussions so far. There is a certain gap between the Street expectations on your earnings and your actually very, very consistent message, both short term and medium term. What do you think the Street is missing?

It's always hard to say. I can't put myself in the shoes of the analysts and -- but look, I think on the -- as a starting point, it was clear to us, as you know, I've been talking about this since 2018 that the management team was aware that we had a credibility deficit we needed to recover. And I think we've come a long way in that regard. So one part of the puzzle is the work we've been doing to regain credibility. And over time, my hope is that as the gap between management's plans and expectations in the market will close. I think the second thing that's been consistently out there has been a question of reversion on revenues to a mean of some sort. And in fairness, I will say that our Investment Bank performance outstripped our own expectations, if I go all the way back to 2019. And in fairness, the interest rate environment was tougher than we anticipated in 2019. And we've anticipated that both those 2 things would essentially unwind and the balance in our businesses would come through. But I will say, I don't mind some outperformance in the financial market-oriented businesses over time. And the more we can keep that, the more we can demonstrate that some of that outperformance, some of those market share gains, are in fact, sustainable. I think that will also help. So I think the short version, Magdalena, is we just need to continue to demonstrate consistency, predictability, delivering on what management says. And I do think that, that gap will start to close over time.

Okay. James, the last question before I move to some of the audience question, is really about technology. Last week, you've talked about it as a growth driver, as an enabler, across various businesses for you. Could you just give us a kind of more tangible sense of what you're thinking where your marginal kind of investments go with that kind of medium term in mind?

Sure. Well, it's interesting. It's spread over many, many different projects in our technology estate. But one important goal we've had, and I have to credit Bernd Leukert and his leadership. As you know, we've had a very complicated, call it, legacy estate over the years, both in terms of, if you like, the infrastructure and our application landscape. And we needed to make investments to improve that legacy. And that takes time. It takes a considerable investment. But over time, you do see the improvements. And you do 2 things. One is you lower the cost of the legacy, you lower the cost and the number of applications and you create more room for, call it, forward-looking innovation-type investments. Where are we looking in terms of that innovation? It's a lot of dimensions, but I'll give you one example, sort of enhanced user interface and capabilities. One investment we're making alongside the German -- the merger of the German platforms, is a new kind of mobile front end that we think is going to be very powerful and unify our capabilities across the brand. So there is an element of that investment that's also forward-looking, and we think will support a great client experience. Equally, we've talked for years about the Autobahn platform and how we engage with clients on Autobahn. That's been an area where we've continued to invest. So more and more of it, the investment will be geared towards client experience, client connectivity, new product capabilities, like we've spoken about in the Corporate Bank and making sure that we, at the very least, keep up with developments in our marketplace, if not start getting towards the leading edge over time among peers. While at the same time, bringing our total technology costs more in line with, what I would think is, a benchmark for a firm of our size and complexity. So there's a lot going on under the hood, but I have to say we're seeing tangible progress every day, and we're very excited about the progress we're making.

Perfect. Thanks very much. I will now move on to the audience kind of questions. There's a few. The first one is about ratings and their impact from here on. So -- and that really is. Is there more funding kind of savings coming through purely as a cumulative impact of the ratings and also on the client side, whether this is still a kind of differentiator? Would you say that with much higher ratings now, do you get kind of more clients or more cross-sell?

No, we think there is more uplift still to come. I mean it's slowly been bleeding into the P&L over time. And it's a process that's -- I want to say, it's every day. Of course, there was a particular surge when we got the S&P upgrade in November. And it was more of a wave of clients coming back. But we do continually see a growing body of clients, not just in number, but importantly, what they can do with us and what they want to do with us, coming back to the platform. And so I don't think that trend is behind us yet. In some senses, that was the important upgrade, because in the senior preferred rating or the counterparty rating, we got to A with the major rating agencies, and that was the threshold we needed to get to. But I do think there's more lift still ahead, as we improve further from here. Hard to judge when that will happen, but it's certainly something that we target. We look at our secondary spreads against peers, and we think there's still some distance to cover. It varies depending on the market environment, but there's sort of 20 basis points, again, in some of our secondary spreads that we think we can still narrow a gap to. And so yes, there are still some steps ahead and some benefits ahead, Magdalena.

There's another question we get more details about your kind of fixed performance year-to-date. The question effectively goes, can you differentiate the trends in performance between rates, Credit and FX?

Well, look, the 3 of the 4, I'm not saying Credit is struggling. Credit has a very strong comp in '21, against which to compare. So I think the credit business is performing well, but the environment isn't one of outperformance in Credit necessarily. But the other 3 businesses are in a sense, as long as you're managing your risks very carefully, because the markets are moving by -- people always talk about standard deviations. I think that's going out the window because the movements have been so violent. But as long as you're managing your risk carefully, what we're seeing is strength across the other 3 of our areas. So FX has been extremely strong, both on the sort of, Institutional side and the Corporate side. Emerging markets, it's been at least partially emerging markets event, this war. And then, of course, the rate movements have been pretty dramatic this year, not just since late February, but also in the early stages of this year. So we've seen what in a -- obviously in an ironic way. So we've seen a very unusual dynamic environment, but one that where 3 of the 4 FIC businesses have been able to capture a real performance in this quarter.

Great. Because, of course, there's a follow-up, how about the investment banking pipeline. I suppose, it's a question about we know how the volumes look year-to-date, but do you think the postponement or the kind of lower reality?

We think it's more -- we talked about this as recently as yesterday. So yes, we see the same -- the pipeline -- well, the Dealogic volumes are down about 30%. We still had a pipeline from last year that -- some of which got done in January, February. But we would say overall, it's more of a delay than it is a falling away of activity. But like the other comments earlier, that's going to be a little bit scenario dependent. We're going to need to see more clarity about the direction of travel in the war, and then I think a period of greater stability in terms of valuations of volatility in the market. But our sense is you will see activity come back. And as ever in a crisis, there is new activity that takes place that -- it's -- as people adjust to a changed environment, so too the corporate strategies, financing requirements and so on, adjust to a change in environment.

Perfect. Thanks very much. There's one question about kind of payments. Overall, your kind of view on the kind of embedded payments within your business. Kind of says JPMorgan is spending billions of dollars from a perspective of kind of building up the payment assets. How do you think about it? Look, JPMorgan and the payments assets?

The payment assets -- No, no, absolutely. And we're investing as well. So I might have given that example, when you talked about technology area. It's absolutely one of our bigger, in aggregate terms, the various projects that we have underway in Payments in aggregate is among our bigger investments at the moment. We're -- alongside a handful of our global peers, we're one of the leading banks in Global Payments with a leading euro-dollar, Euroclear and one of the leading European banks in dollar clearing. So it's a critical sort of business activity for us. But as you say, there are new business models to capture in Payments. And that can be merchant acceptance, merchant payments, which is one of the strategies Stefan Hoops and his team is pursuing. It can be things like embedded payments that exist in this new world of the Internet of Things. We call sometimes asset-as-a-service, so this idea that things that used to be installed CapEx become, in a sense, leased assets used by the drink rather than with a big investment. There's a number of different business models that we're pursuing that we think we're extremely well positioned to capture. And that's, again, also a destination for a fair amount of our technology investment at the moment.

Great. I've got one on Russia. And the question really is, when you look at your corporate lending and commitment exposure, you've given that numbers. But when you look at the type of counterparties that you're facing there, how comfortable are you?

Actually, very. I mean we -- in the sense that it's the type of counterparty you'd want to have. I mean it is overwhelmingly where it's Russian counterparties, it's internationally active Russian counterparties with cash flows outside of Russia. And also our exposure is booked outside of Russia. So that's good. A lot of it is relatively short term. It will be trade finance and other things. So there's a liquidating element of it, which is also good. And in respect of our domestic, inside Russia exposure, it tends to be MNCs. So overwhelmingly, it's multinational corporations whose subsidiaries bank with us in Russia, and where there's a parent guarantee. So the exposures are what they are, about $1.4 billion. But underneath that is I think, strong counterparties, strong collateral cash flows, ability to pay. So far, largely affected by sanctions. And so yes, we're comfortable not just with the absolute size, but within that, the embedded risks. And also, by the way, on the collateral side that whether it's margin calls or clients, we haven't seen any major disruptions in the value of our collateral or the ability of our clients to post collateral. Actually what you can say, it wouldn't even qualify with major. We have not seen any disruptions in the ability of clients to post.

Great. Thanks very much for -- James. One thing for me, maybe. When you -- particularly in the last kind of strategy discussion we had a few days ago, there was this kind of this more of a discussion of delivering one firm to the client. Like for a good few transformation years, we kind of -- we talked about businesses. And their own kind of evolution over the last transformation and, of course, now your new strategy. But there's this kind of evidence from your perspective, let's deliver the firm, let's kind of ensure that, that cross business, cross-sell coming through. Can you talk to us a little bit about this?

Sure. Delighted to. And Magdalena, as you say, it's actually when we sort of focused on the Global Hausbank, sort of umbrella to this strategy, it was very much the idea that it's not just the Corporate Bank, it can be a Hausbank too, its clients. I'm in a way to try to turn the lights again, is -- it's a broader thing than that. So each of our businesses can be that to their clients, can be a service provider, a risk manager, can provide global access to their clients, but can do so with a product array that is, we think, appropriately comprehensive to their needs. So whether it's an entrepreneur with -- in the family-owned business in Germany or in Italy or in Spain, we can provide that individual, that family, with a range of products onshore that can make us the Hausbank, the main provider of their financial service needs. So we really like that. Whereas I think when we launched the compete to win strategy, it was more about pulling the Corporate Bank out, so it could be -- could have an independent identity. We thought that was important to create that independent identity, independent strategy, independent control, over its resources. Now having established that, as you say, a lot of it is about bringing the whole bank to our clients with that product set and capabilities, and the network globally to support their needs. And so -- hence, the Global Hausbank view. And we think we've got the businesses, each of them well attuned to how to capitalize on that opportunity for the group.

James, how this has changed the, I don't know, the managerial KPIs or the way you remunerate? Because, of course, it's a subtle, but in reality, quite a big -- it could be quite a big difference?

It is subtle. And it's hard to do it right. First of all, we've had what we call cross collaboration revenues on the managerial scorecards now for a couple of years. It's something Fabrizio Campelli talked about at the Investor Day in December 2020. And since that time we'll be measuring that and it forms part of our monthly management reviews, how are we doing sort of byproduct area against our expectations. We're also trying to incentivize, if you like, lead creation, but from one business to the other, and measure that. Inside the organization, we've been building some tools. It's hard to do right, because you don't want the wrong incentive built into that. You want to have a -- create a good partnership and what have you. So it's something we've been piloting and doing over time, but that will increasingly become part of how we measure the businesses. And then it's in the day-to-day practices of the teams, it's who goes to the meetings and how well prepared are they to talk about the whole capabilities, the whole relationship across the bank. And so as you just get better and better at that over time, and we're definitely seeing that in the way we're approaching our clients and getting the businesses to be coordinated.

Great. And on this point, James, I think we're going to get some -- bring our session to the close, but thank you so much for joining me today. And a very insightful session as always. Thank you.

Thank you, Magdalena. Good bye. Thanks for the time today.

Cheers. Thank you. Thanks. Bye-bye.

Thanks.