Erste Bank Polska S.A. (EBP) Earnings Call Transcript & Summary

Okay. This is 11:30 and I would like to start our conference about the announcement of the Financial Results for the First Half of the Year. Together with me, there is Michal Gajewski, CEO; Maciej Reluga, CFO; Wojciech Skalski, from the management's Accounting division; Carlos Polain, Financial Controller. My name is Agnieszka Dowzycka, and I am responsible for the Investor Relations. Today, at the beginning, we would like to deliver our presentation, and then we will hold a Q&A session. I would like to ask you to send any potential questions to my e-mail address that has been posted on the website. CEO, over to you.

Hello, everybody. This is Michal Gajewski. Welcome. This is yet another time when we are holding a remote meeting. But I hope that in October, we will have a chance to hold a meeting in person. I think that the recent period, the recent half of the year, has been the most important and the most difficult thing for our economy. Also, the situation has affected our bank as well. Especially, I am talking here about the past 4 months. As you know, after the first stage related to the economic slowdown, now we are at the stage of some stabilization. We are observing also some elements of the rebound. Of course, we still don't know what will happen in the second half of the year. But today, I think we can take a slightly different perspective than we had in the first half during the presentation of the results with the first quarter. We have the 3 different worlds when it comes to the past period. At first, we had the beginning of the year, where the business was flourishing and the machine was working at full speed, and then we had the turn of the quarters with significantly lower activity among our customers. The economy somehow is frozen, then the transactionality was weaker and also the situation influenced our bank as well. And now, we are at this stage of some rebound. We can see some first positive harbingers, and we can see some positive elements on the microscale when it comes to the activity of our customers and also the activity within our bank. We are operating within the so-called new normal. Of course, the pandemic has redefined our plans, our operating model. And also, all this has impacted the revenue and cost side. It has strongly affected the habits of our customers who have switched to remote channels, and now they are using these. They are availing of all the opportunities in the electronic channels. This is why we decided to significantly accelerate the digitization of banking processes, and we accelerated automation. We are also simplifying most processes for the customer service, because our customers have to be offered best of quality. When looking at the number of video interactions with our consultants, this has increased fourfold, and the number of customers using Internet solutions has risen by some 30%. We are offering some remote solutions, and our offer has been extended. We have small contacts with SME through online banking. This is the so-called Polska 2.0. We have account aggregations that lets our customers manage their finances more efficiently. And we have further enhancements in contact with customers such as chatbot Santi. Also due to the higher activity in remote channels, there are some major spreads related to that, and we are trying to address them efficiently. We are increasing the scope of security. We were the first bank to introduce the 3-D Secure payment authentication. This is the so-called 3-D Secure 2.0. We have also extended our cyber rescue offer within which our customers receive professional help in case of threats related to their everyday online life. Of course, we have also accessed and we're -- have been very active and when it comes to the governmental enterprises program, and we have the PFR financial shield and there were over PLN 8.5 billion of subsidies, of PFR subsidies. We supported over 52,000 customers who availed of this solution. We are also investing in sustainable and innovative projects. We are actively seeking new opportunities in these areas, and the first projects include financing of portable bikes, wind farms, development of ecological city transport. And here, we can see some major progress, and I'll be talking about that in greater detail shortly. From the perspective of our customers, internally at the bank, we quickly adapted to the new normal, because over 6,000 people still work remotely. As you know, all of our branches are open. Everything is available to our customers, and our bankers work remotely. However, they have already started meeting their customers. This hybrid model, which combines office and remote work is our future, and we want to perform within that in the future. Now let us go to Slide #4, which is about our response to COVID. It's very important to tell you about our most important support initiative. We provided our people and customers with the necessary protective measures. We made changes in our product and services. We implemented the payment free, the moratoria. They are available online to our customers. They don't have to show up at our branches. We contacted our customers on a daily basis. We fully comply with our aim to help our customers prosper. Our bankers, for example, made over 132,000 individual contacts with our customers. Those are corporate bankers. And they did have to be able to assess the customers' financial standing and be able to help them in their needs during this difficult time. Customers can now apply -- can also apply for PFR subsidy within the financial shield that's available online. We offer access to preferential guarantees for businesses. Those are digital de minimis guarantees and PFR liquidity, guarantee, and our customers, our corporate customers may verify and accept documents through qualified signatures. On Slide 5, you will see details of the temporary payment moratoria. Customers may apply for payment freeze under principle. We later introduced also an option of a payment freeze on principal and interest installments, and this applies to cash and mortgage loans and business customers may apply for a free and business loan, factory and leasing. Cash flow and mortgage loans, credit cards and SME overdraft agreement performance may be suspended back to public moratoria. We also introduced an automatic limit renewal for overdraft for SMEs and that's then free of charge. And large corporates may apply for that in a simplified procedure. At the end of June, as you can see, we had 137,200 customers that had availed of the payment freeze. You see that on the slide at Slide #5. We see that broken down by segment. Our communication is crucially important, our communication with our customers during this difficult time. And so our aim has been to give the -- our customers the sense of security and support and give them advice on how to protect their health, how to avoid cyberattacks and bank safely. You may know that actor Marcin Dorocinski, who became our new brand ambassador. He's a popular actor, well liked and actively engaged in supporting social responsibility initiative with very good decision. We share common values with Marcin. He's featuring in our new advertising campaign where we present mobile payment solution BLIK and instant transfers. Let us move to Slide #7. We received the Euromoney awards in the excellence in leadership category and the organizers noticed our campaign. They especially appreciated the double impact campaign, Podwójna moc pomagania. The fundraising organized to help hospitals in the fight against COVID. This is in line with the approach of the entire group. We were also honored to be the only bank in the top 50 best employers in Poland that responded best to the crisis and best protected their employees -- our employees. Moving forward, Slide #9. Our deposit portfolio went up by 11% to PLN 165.9 billion, and gross loans went up by 7% to PLN 153 million. Customer funds went up by 8% to almost PLN 179 million. Total assets went up to PLN 221.6 billion. And at the end of the first half of the year, our market share in gross loans was 11.7% and deposits at 11.3%. As a group, together with Santander Consumer Bank, we provide services to over 7 million of customers. And out of that number, 2.6 million customers are digital ones. Now let us go to the Slide #10, financial performance in the first half of the year. We had several one-offs, and this has to be borne in mind, because this has influenced the underlying and this is something that we'll be commenting on in greater detail later on. Of course, the detailed amounts may be found in the presentation and in the report but the key lines include BFG contribution because the operating cost has influenced the general situation because the contribution was higher. We had small and big [ 2E ]. We had a portfolio provision for legal risk, and the additional provision for expected credit loss, personnel-related adjustments. We had dividend income. And there was the decision issued by the KNF. It was rather a recommendation of a decision regarding the insurance company. This is why the dividend level was lower. We also reported a restructuring provision in Santander Consumer Bank. Net interest income was over PLN 3 billion, and it was 4.3% lower year-on-year. Of course, this amount reflects the negative influence of interest rate cuts, hence lower demand for credit during the pandemic time. After the first half of the year, net fee income was over PLN 1 billion and was 1.2% lower, which stems from weaker transactionality of customers. Net total income at the end of June stood at PLN 4.3 billion, and it went down by 6.4% year-on-year. Attributable profit in Santander Bank Polska after the first 6 months was PLN 476 million and was almost 50% lower year-on-year. In underlying terms, after excluding the abovementioned factors that I have mentioned, the income was 17.1% lower year-on-year. Here, I would like to underline our very strong capital position, which materially exceeds all the regulatory requirements. Our Tier 1 capital is at 16.81% and TCR at 18.76%. The capital surplus is over PLN 10 billion for the group and over PLN 11 billion for the bank. Our liquidity position has materially improved in the second quarter, thanks to the increase in customers' deposit balance sheet and lower NBP provision. As of the -- as at the end of June 2020, our liquid assets stood at almost PLN 57 billion. And out of this amount, PLN 26.66 billion was the access over the regulatory limit. Loans to deposit ratio was at 86% for the bank and 77% on the consumer bank. LCR for the group as of the end of June was 208.7%, where the minimum threshold was 100%. ROA is 7.1% in underlying terms, 10.2% and TRA at 0.8% in underlying terms 1.1%. Now Slide #11. I'd like to talk about responsible banking right now, because this is a key element of our business strategy. We want to be fair towards our customers. We concentrated this strategy around 2 pillars. The first of them is green bank, which means sustainable investment. This is the Slide #11. Here, we are focusing on supporting the transition of the Polish energy system to zero emission. We want to continue specializing in ecological offer based on ESG. This year, we are concentrating on financial support for the extension of the renewable energy resources in Poland, and we have already completed some of the transactions in this area. We have co-financed one of the biggest solar project in Poland. We also signed an agreement with Polenergia to finance a wind farm, so a lot of things are happening in this respect. The second pillar I have been mentioning is inclusive banking. We want to create an offer which suits diverse customers' need that facilitates access to services, support customers of any kind and that promotes financial education, addresses different age groups, also the smallest one, the youngest ones and the seniors as well. We are running a couple of initiatives, and thanks to our educational projects, Finansiaki, we reached 47,000 of people. Apart from that, we signed an agreement with the European Investment Bank for the new financing for the published SME. This was the reaction to the crisis triggered by the pandemic. Slide 13, our customers in numbers. 4.7 million customers who have access to internet and mobile banking. So we have 2.3 million active digital users. That's up 8% year-on-year, 1.6 million mobile banking users, up 15% year-on-year. We have a growing number of mobile transactions, 26 million, up 60% year-on-year. In the SME segment, we registered growth of 16% year-on-year and the number of customers up to 414,000. Over 299,000 are digitally active customers, that's up 18% year-on-year. In the second quarter, we acquired 16,000 new business accounts, which translates this into an increase of 24% versus the second quarter of 2019. In the SME segment, we already have 124,000 mobile users that carried out 2 million transactions in mobile banking. That is a very impressive growth of over 70%. In the corporate segment, our customers use mobile solutions. So we have over 20,000 customers, corporate customers, that are digitally active. Let's move to the following slide. Despite the lockdown and lower customer activity, we introduced some new products and services into our offer. In banking, now parents can open an account for their young children below 13 years of age. We introduced the simplified overdraft application. We have Kantor Santander, that Santander exchange platform available 24/7. Santander opened aggregation of accounts with other banks to entertain Zdrowie life insurance. We implemented new digital services for sole traders who actively use electronic banking services. eDebtCollection, eWindykacja, soft debt collection, eFaktoring exchange of sales invoices to cash and eAgreements that free access to several dozen document templates. For corporate customers, we launched e-FX module in -- that's on the Internet banking platform, an option for automatic verification of the pay account in the VAT payers list. And we also introduced strong customer verification, authentification for the purpose of user identification. We're very actively engaged in the digital world and expanding the array of services. Slide 15. We listen to our customer. We hear our customers. And together with them, we have prepared a range of initiatives that you can see in detail described on Slide 15. Slide 16 with business highlights now. Accounted by [indiscernible] our flagship product, [Foreign Language], we have 2 million holders. That's 38% more than a year back. Balance of retail deposits up 7% year-on-year to PLN 89.3 billion. In the first half of 2020, total net sales of funds managed by Santander CFI was negative due to the weight of redemptions in the investment fund market in March and April as a result of the pandemic. And you may know that corporate bonds suffered some of the highest reduction. In the remaining months, the CFI registered positive net sales and drive first in the market in June and second in May. In June, net sales were highest in 2020 and reached PLN 466 million. So we see a positive trend. And this is, of course, impacted by the low interest rate environment. And of course, our attractive offer. In the second quarter, we saw a decrease in cash loan sales year-on-year. Sales in the second quarter was PLN 1.3 billion. May and June saw gradual increase in sales volumes of cash loans and insurance. We see a rising increase in sales through digital channels. The share in the second quarter 2020 was as much as 36%. SME customers, some highlights. Business loans up 5% year-on-year to PLN 13.4 billion. Balance of business deposits, up 65% to BRL 21.3 billion. Acquisition of business accounts up 24%. As I've already mentioned, we acquired 16,000 new business accounts. Corporate customers. Income from factoring and guarantees up 10% year-on-year. Number of FX transactions on the e-FX platform, up 7% year-on-year. New customer acquisition, up 38% year-on-year. Deposit portfolio, up 20% year-on-year. Number of -- total number of transactions in the second quarter, down 6% due to lower customer activity, and that's due to the pandemic. However, in June, we recorded a growth of 3% year-on-year. Let us move to Slide 18. Gross loan went up 2% and reached over PLN 148.5 billion at the end of June. At Santander Bank Polska in mortgage loans, we saw an increase of 4% year-on-year, that's stable quarter-to-quarter. Mortgage loan portfolio in Swiss francs went down 9% in PLN. That's stable because of the higher Swiss franc rate, FX rate. Cash loans we had the beginning of the quarter was weak, but it got better with time. SME loans, excluding leasing and factoring, we had a higher -- we see a higher result by 3%. However, in corporate loans, we saw a decrease of 5%. Comparing the first quarter to the second quarter, we see a clear decline in business loans. SCB, total gross loans at PLN 18 billion. That's flat year-on-year, slightly lower when compared quarter-to-quarter. SCB mortgage loans went down 4% in Swiss franc, mortgage loans down 9%. Excluding the mortgage loans, SCB loans went up slightly by 0.3%. Customer funds. Here we have almost PLN 166 billion, brought up by 11%. Assets under management went down year-on-year by 11, by -- I'm sorry, 18%. However, in quarterly payer terms, they went up by 9%. I was mentioning the net sales of PLN 466 million in June, so we have some positive effects, some positive rebound. Now let us go to the Slide #20, net interest income and net interest margin. Net interest income as of the end of June went down by 4.3% year-on-year and stood at PLN 3 billion. This was impacted, among others, of course, by interest rate cuts, the pandemic and the implementation of some 8 solutions, including suspending and deferring the principal interest installment repayment. We were also adjusting our pricing offer to the market conditions, but there were some deferrals regarding to the mass dispatch of communication to customers regarding the changes in pricing. This required some time. So we can see the influence right now, and so this influence is visible on net interest income. Net fee income went down by 9.3% quarter-on-quarter. Interest cost decreased by 27.5% quarter-on-quarter and 26.1% year-on-year. In the second quarter, the annualized quarterly net interest margin, we are annualizing that in quarterly terms, stood at 2.88% and was lower on the last quarter when we reported 3.32%. Another factor that influenced net interest margin negatively was the reinvestment in bonds with lower yields. Let's move to the Slide #21, net fee income. In the first half of the year, this went down by 1.2% year-on-year and by 9% quarter-on-quarter. This is over PLN 1 billion. Here, we can see the influence of weaker transactionality among customers, which, in turn, translated into lower fee income in key lines. For instance, e-business, payments, account management and money transfers. Also, income from fees on distribution and assets management decreased. However, we reported a decent increase in income from brokerage services, up by 93% year-on-year and 14% quarter-on-quarter. We also reported an increase under insurance fees, up by 4% year-on-year. Credit fees went up by 2.6% due to the decrease on credit intermediation cost within the settlement between SCB and the partners and the agents network. Now Slide #22. Total income was at PLN 4.33 billion, going down by 6.4% year-on-year. We had lower dividend income, as I have already mentioned that. This was related to the recommendation issued by the KNF for the insurance sector. Results for other financial instruments include a positive change of PLN 3.3 million in the fair value of Visa shares. We also had some profit from sales of treasury bonds in the amount of PLN 60.5 million versus the amount of PLN 49 million reported in the first half of 2019. Operating costs, operating expenses, Slide 23. After the first half of the year, they went down 6.7%, and they were under pressure. The administrative costs were under pressure from regulatory costs and the provision for legal risk, but administrative costs were down 12% in annual terms, as we saw lower costs in marketing and building maintenance and cost of external services. We implemented a series of savings initiatives within OpEx, such as, for example, digitizing the correspondence to our customers is now done through the electronic communication channel. We are optimizing contracts with suppliers. In terms of our capital expenditures, we are prioritizing initiatives and concentrating on accelerating digitization and on simplifying processes so that they're fast and friendly to our customers. So we need to be -- have a very selective approach when choosing our investments. Staff costs down significantly by 19% year-on-year. Because we have lower results, we see lower staff costs. There is a direct correlation between our performance and staff costs. Cost-to-income went up. It's now over 50%. And it's, of course, worse than what we saw in the first half of 2019. Let us move now to the provisions. That's on Slide 24. In line with the expectation for the net provisions went up 53% to PLN 947.2 million against PLN 619.2 million in the same period 2019. We all know what's behind that, the higher credit risk in the sector affected most by the freeze of the economy, individual cases, banding deterioration and high downgrades to the nonperforming portfolio, especially for cash loans and SMEs. And also, another reason for the higher provision is biannual model review as a result of which the applied parameters changed. One thing I want to draw your attention to is the additional charge made in the first half of 2020 amounting to PLN 150 million for expected credit loss. It is a post model adjustment deriving from the uncertainty around COVID and the general economic situation in Poland. And at Santander Bank Polska, we decided to maintain this additional charge for expected credit loss raised in the first quarter. And in the second quarter, the higher provisions that you see are due to the additional charge of this kind at SCB, and this additional charge is PLN 30 million. That's related to SCB. Risk charge was 1.06%. And excluding the additional charge for expected credit loss, it was 0.95%. Coverage was 54.8%, so better than what we saw last year. Banking tax and regulatory costs. So the costs are higher linked to BFG and KNF contribution. The total is PLN 339 million. We also sold a small loan portfolio, but it had a negligible impact on our P&L. So we are now on the last slide before the attachment, Slide 26, a summary. As you can see, especially looking at the figures for June, we are seeing signs of stability not only in the macro environment, but also, we're looking at our customers' activity. However, we don't know what's awaiting us in autumn. I am, however, optimistic, and we believe in the V-shaped scenario. The first macroeconomic indicators, readings make us even more convinced that the rebound will follow -- will be a V-shaped one. Looking at the figures for March, April, we saw a decrease. We saw a decline. Lower net interest income, we then had the interest rate cut by the MPC. We had the economic freeze. So lots of different elements, the verdict of the court of the European Union. We then had higher provisions. Our costs were largely affected by the regulatory and legal requirements. I want to underline, though, that we see a significant improvement here because that was very well managed. So we see lower net profit underlying by 17%. Gross revenues lower by 5.1%, fee and interest income lower by 3.7%. After the first half of the year, the effective tax rate was 34.8%. Just to sum up, I want to say that we'll continue to support the economy, to continue to support our customers in coming back to the new normal as soon as possible. And to the new normal to the best performance. Thank you very much. We will now open the Q&A session.

We have the questions coming in, so let me start. The first question regards to the impact of the reimbursement of fees from net interest income and other lines. There was a question regarding numbers as well.

So I will start from that provision regarding the reimbursement of cost. There was no provision like that. When it comes to the second question, there was some one-off in the second -- in the first quarter. In the second question, in the report, we can see the amount of PLN 100 million and we can say we know that both for quarters, we're very untypical. So we still have to wait little bit before we say whether these are recurring items or not. When it comes to the remaining questions, if a majority of them confers any potential guidance regarding net interest margin and risk charge, I will start from net interest margin. In fact, I would prefer talking about the phenomena and what we can see right now than to provide guidance for the second half of the year, because we have to put it bluntly, we are living in some unknown reality. So this will be very difficult to provide any guidance. This regards both the volumes and net interest margin. On the credit side, we have some unknowns when it comes to the demand for credit in the upcoming months. We know that the credits for the -- demand for credit on the corporate side has weakened in the first half of the year due to some subsidies and aid. As this influenced the demand, the money could be used to repay the existing loans, so this is one aspect. I would like to go to the next question right now regarding the credit volumes this year. I think that in total loans, this will be more than 0. On the other hand, we know that in the entire banking sector, we have a big over liquidity. And of course, with these interest rates, we do not have any margin. And taking into consideration the lower demand of the credit loans, we have -- on the credit side, we have the reinvestment in assets at lower yields and all this influences the situation. When it comes to the liabilities, of course, we have optimized our financing costs, but the full effect will be visible only in the second half of the year. Here, among the factors that influenced the situation was the mass communication dispatch, which requires time as I -- as we have said. There are also some maturity of term facilities that will impact our spending. When it comes to the credit policy and pricing changes, we are not excluding some further changes. Risk charge now, whether it will be higher in the second half of the year. Well, the question is -- the answer is, we will see. But as I said before, with the uncertainty we see today and looking at the scale of the moratoria. It's difficult to give any guidance. We monitor the situation. We monitor the situation of the customer. The next few months will be very important when it comes to credit risk. But let's remember what the CEO has said when talking about the provision. There are a few factors there that play an important role, and we'll see whether they're here to stay or they're only temporary. We had the model review, which changed the parameters, and that had a role. We also saw some downgrade to the nonperforming portfolio, and there are some sectors which are more -- where we are suffering more as a result of the pandemic. So we will see.

Next question is about mortgage loan sales. It was weak in the second quarter. Are you more conservative than the market? Whether it was weaker? Well, that's a very subjective thing. Are we more conservative? I think we behave in a similar way.

If I were to assess, we are less conservative to the customers that we know and more conservative to the ones that we do not know.

What were the reasons for raising the Swiss franc provisions? And what are your expectations for raising provisions for Swiss franc loans, of course?

When it comes to the portfolio provision for the large 2-way, the verdict of the Court of Justice of the European Union. As you know, the value of provision is -- considers many factors. As at the end of 2019, that's when we rate the provision. And we said we will monitor the situation. We will monitor the line of verdicts of the Polish courts and all the remaining factors attached thereto. So -- and as a result, in midyear, we decided to increase the provision by PLN 63 million, out of which 200 -- 2/3 is Santander Bank Polska and 1/3 is Santander Consumer Bank. We did not -- in the note at the end of 2019, we did not give you any details behind that additional charge, but the changes were triggered by the number of -- the expected number of lawsuits and the probability of winning the case and some projections when it comes to the FX rate.

There is another question related to the -- to the line of verdict of the Supreme Court.

Here, I would like to take this question. There is the potential for that. And of course, everything depends on what direction the line of verdict takes, because if it takes a direction mentioned in the justification for the ruling of the Supreme Court, where 3 judges said that there may be some appeal for the reimbursement of capital cost, we would like to have it in place. Currently, unfortunately, the situation remains unclear in all types of courts also within the Supreme Court. So in fact, now we are speculating about the future. We have 2,782 cases regarding indexated loans in the amount of PLN 519 million. And these are the results for the entire group, both for the consumer and for the bank. At the past conference with Joe Nevis, I was saying that one of the indicators of the number of lawsuits are the inquiries regarding the balance sheet. When it comes to the balance inquiries and the number of actual lawsuit, there was a correlation, and this correlation remains stable. This is what we have observed recently.

Okay. Another question? There are several questions regarding costs.

So I would like to comment on the decrease of staff cost in the guidance model for the future. So I'd like to address all these questions in one go. The cost discipline is being maintained all the time, especially right now. When it comes to cost synergies that we have been mentioning, we are still maintaining that. In the second quarter, we have lower staff costs, and this is also related to the weaker performance. And if this element -- and we don't know yet whether this element remains in place. That's regardless of what happens, both in terms of OpEx and CapEx. We have been undertaking many initiatives if that's arraying at cost optimization in the upcoming quarter. I hope that we will be operating like that at a great scale. You are asking for the information about our cost level in our new normal. I think that this is just too soon to speak about that. And even if the elements that we're talking about right now are not recurring in the upcoming year, I think that there may be some different ones that will impact our activity.

Now we have the question about the breakdown of credit that is covered with moratorium.

I think that we have presented that on Slide #5. There was the number of customers presented on Slide #5, and I don't know whether there was some sense in talking about all these figures. I would just like to mention that in the report, in the capital lines, there is the information concerning capital adequacy. This report has been published on the website. In the report, there was the breakdown into 137,000 of customers that represents PLN 21.1 billion, and their reports present a detailed breakdown into households and other factors. I would not be talking about the specific elements right now, because those of you who are interested may go to the detailed information.

Another question. What is the portfolio at the branches now compared to pre-COVID levels? Will that impact your decision to maybe optimize your branch network?

The traffic at our branches reduced significantly at the beginning. We were fully available from the beginning. We only shut down very few branches due to some diagnosed COVID cases. We also reduced the working hours of the branches, which was later exchanged. We also introduced the plexiglass and the protective measures for employees and our customers. We provided facemasks and hand sanitizers and, of course, maintained the social distancing rules. So the footfall was very low at the end of March, continued throughout April, but we saw a rebound towards the end of April. Customers came back to our branches. Now we see maybe around 80% of the levels observed before the pandemic. We also introduced the new products and services, and we moved them of the processes fully to online. So some customers do not need to visit our branches. They can do it from the comfort of their homes in electronic banking. So we still monitor the traffic level. You see that every year, we have reduced number of branches. So the process of optimizing the branch network is a constant element of our strategy. It's really business as usual and not any special plan or program. We're changing our business model. We are becoming more modern, more digital. The processes are coherent. Those available online are also branch processes available at the branch. So in fact, we look at the specific data for the yields, the profitability. The omnichannel customers are those that generate most profitability, highest profitability. So that's my answer to your question.

One more question. I had somewhere, let me find it. Can we -- can you tell us about the reasons behind the high provisions for losses?

As you know, apart from the portfolio provisions linked to the Swiss franc loans, we -- on a regular basis, we raised provisions for individual cases. We're fully transparent in our reports, and we record the number of cases that we raised provisions also for individual risk of credit risk. The amount was PLN 34 million, out of which PLN 23 million is Santander Bank Polska and PLN 11.4 million is Santander Consumer Bank.

We have a question whether we foresee any changes to the schedule of fees and charges.

We continue to observe the market. I have read interviews with the CEOs who claimed that banking for free of charge, that era is coming to an end. I don't agree with this, but we look closely at our competitors at other banks. We follow third party policy rules. So we want to create value for our customers and then charge an adequate fee. So we are fully committed to this. We continue to monitor the market situation.

I think that we have exhausted all the sections that you wanted to talk about. There were many questions. In fact, with many of you ask the very same question. I hope that we have addressed on the curiosity. But if there are any questions, we may remind -- remaining any you had, please don't hesitate to ask them offline. Thank you for participation today, and we hope to see you in person next time. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]