Skandinaviska Enskilda Banken AB (publ) (SEBA) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the update call for investors and analysts. [Operator Instructions] I must also advise you the conference is being recorded today, Wednesday, the 18th of March 2020. I'd now like to hand over to your speaker today, Johan Torgeby. Please go ahead, sir.

Thank you very much, and welcome to everyone to this market update conference call, we could call it. These are truly extraordinary times, and I'm sure we are all living future history right now. And we thought it would be timely that today plan to share some of our views on the current developments, and I thought I will start for a few minutes, and then I'll hand over to Masih Yazdi, who will talk a little bit about more capital liquidity and what has happened from an SEB perspective. This is a very hard situation to clearly assess. And I'm thinking about that famous quote from FDR that "Today, we only need to fear, fear itself," and it feels very much in line with that statement. And I think it's quite understandable. So we, right now, do not know what this means, how and when will it be contained and what will the damage be on the journey to contain this particular situation. This all started in China, January. I remember the week of the Davos World Economic Forum, 3 weeks later, and the markets had really not reacted at all, but it really started there to become a global phenomena where everyone got asked what the potential implications could be. We did see some tentative signs in the credit markets, but not in the equity markets. And quite quickly, thereafter, it was pretty obvious to everyone that it did start having an effect on supply chain disruptions, but it was very specific and it was here and there. Anyone who was clearly dependent on Chinese elements in its supply chain and lack of opportunity to replace that element, they started to feel that production did not really progress seamlessly. Now, of course, we then saw a very dramatic change into the demand side of the equation and that was particularly hit on leisure, travel, airlines, hotels, et cetera. And it was quite obvious as the response, which is quite natural to contain a pandemic, is to have social distancing and to minimize interaction, travel and other type of groupings. And in the last couple of weeks, of course, the national response over the world for this has been to have some more or less extreme measures in order to contain the peak level of contagion of the coronavirus, and it has now a very uncertain but clearly negative impact on real economic performance. A little bit of light in this whole quite distressed scenario is, of course, that for once the epicenter of what is the crisis is known to be a pandemic, that is a very unusual thing for many of us, but history at least shows us, time and time again, that pandemic, they pass. So to us, this means very much that we have a passing phenomena, where we have a great uncertainty in what damage is going to do to the economic health in order for it to take -- allow it to take the time necessary for it to quiet down and to be contained. When it comes to SEB, this is now, of course, a clear supply and demand side shock concurrently for the global economy, and the financial industry is now trying to take its role as a responsible part of -- a critical part of society in order to weather this storm. So as we think this is a passing phenomena, it's all about stay in power and making sure that we can ride this storm out. We have, as many other larger companies, contained the situation through social distancing in order to create different groupings in the bank. We are part of a critical infrastructure, just as important as health care, policing or firefighters, banking systems and to uphold a high standard and quick response, if anything goes wrong when it comes to payment systems and such is very key, as well as being a credit and liquidity provider with a potential enormous increase in demand for credit and liquidity coming our way. When it comes to employees in order to make sure that we are up open 24/7 regardless of what happens, we more or less have 3 categories in the bank. The first one is, of course, anyone who would show symptoms or have a family member showing symptoms, we can call them to their home because they are sick, and that's a very small number of people in the bank. Currently, we estimate it to be around 3% to 4%, not to be mixed up with any confirmed case of corona. And then we have a self-selected number of people in quarantine. And here, we're talking about 5% to 7%. That's people who have been or been in contact with people, particularly during this team holiday where many Swedes or Nordic people went to Italy or those areas, and those are soon coming to an end. But we still have around 5%, 6%, 7% of those in quarantine. And then the larger number, which we decide ourselves is what we call the contingency, we're asking people to work from home to the extent they can and really splitting up any critical function in the bank in most cases in 3. So we have 3 separate geographical locations for anything which has to do with payment, operations, IT and markets. And that quarantine number is very likely to be falling. And the contingency number is very likely to be increasing, as we are in Sweden at least, following the European trend of increasing social distancing measures, where we have not yet closed the schools for younger children. And hence, we've had a little bit less stress than other countries in order to make sure that you can work from home. So all that feels under control, despite being very, of course, sensitive in a critical tense moment. But so far, so good. And we have had no indications of operational distress or operational mishaps that we can't handle as appropriate. I think I'll stop there and hand over to Masih to go through some of the financial and balance sheet metrics that we've seen over the last few weeks.

Thank you, Johan. Good morning, everyone. This is Masih Yazdi, the CFO. And I think, I mean, it is too early to have a view on how long this economic contraction will last, and therefore, what the impact will be on our P&L, our capital and our liquidity. What I'll try to do is to describe how the bank looks like going into this crisis and more directionally how different P&L lines could be impacted. So to start with, if you look at how we look at year-end on capital, we had a CET1 ratio of 17.6%, which implied a buffer of 250 basis points above regulatory requirements, or in Swedish krona terms, a buffer of almost SEK 19 billion. Now with the removal and reduction of countercyclical buffers in several countries, this buffer expands by around 140 basis points or SEK 10 billion. Hence, assuming the same CET1 ratio as we had by year-end, the pro forma capital buffer would be 390 basis points or almost SEK 30 billion. Adding to this, the bank's net profit last year was just above SEK 20 billion. So the capital buffer plus the annual profit was almost SEK 50 billion. Going forward, the development of the capital buffer will depend on a lot of things, the profit generation of the bank, lending growth, any potential risk migration due to slowing economic activity, FX rates and the net of pension assets and liabilities, to mention a few parameters. If you look at development year-to-date, we note that the Swedish krona has weakened somewhat, which is negative for the capitalization. We know that equity prices have fallen, which is negative for pension assets, and we note that long-term interest rates have also fallen, which increases pension liabilities. On the latter, we can note that in the last few days, long-term interest rates have gone up slightly again. If I move to liquidity, we entered 2020 with liquid assets of SEK 458 billion. Now with the LCR requirements temporarily removed here in the Swedish banks, this means that a good chunk of this liquidity can be used if the markets are frozen or volatile. In addition to this, the Swedish covered bond market is still open and functioning. And as you can see in our fact book, our overcollateralization level in our cover pool was above 70% at year-end, meaning that we can issue some SEK 200 billion of covered bonds if needed. In addition to that, there is a possibility to use the Riksbank facility that has been established of SEK 500 billion. However, we know that the conditions for this facility are not that attractive. All in all, we definitely don't need to issue any long-term funding in the first half of this year and possibly not at all in 2020. Overall, on capital and liquidity, I would say the situation of the bank is very, very strong. While we plan to stay as prudent as we always are, our strategy during this turmoil is to repeat what we did in 2008 and 2009, i.e., to support our customers, help the corporates and households in the jurisdictions in which we operate, and we see this as an opportunity to strengthen our core relationships even further and to build on some new ones. Moving into P&L. I'll try to describe the directional effects one can expect given the developments in the market so far. Starting with net interest income, we note that funding costs, obviously, are going up. However, at this point, this is a fairly theoretical exercise, as our need for funding is low and as we have ample liquidity. On lending growth, there are both positive and negative drivers. On the positive side, it is possible that many customers will want to strengthen their liquidity situation, leading to higher lending growth. On the negative side, a general economic slowdown could lead to slower lending growth for other areas. And it is too early to say what the net effect of this will be in 2020. On net commission and fee income, there are several factors that have moved in a negative direction in Q1. Firstly, falling equity prices will put pressure on asset under management, leading to lower fees. Secondly, payment fees can be expected to be negatively impacted as consumption could be lower, especially the use of corporate cards, which to a large degree are used for travel and hotel expenses. Within equity capital markets, debt capital markets and M&A, fees are typically lower when market volatility is high. Lending fees will depend on lending growth, and finally, markets-related fees will depend on activity level in FX, fixed income and equities, which typically increases in an environment like the current. You can see in our fact book, what -- how large share of fee income is divided within these different areas I just talked about. Turning to net financial income. The very volatile markets with higher credit spreads are inevitably going to lead some valuation effects, not least related to CDA. In addition to this, the development of NFI will depend on what has been warehoused at the bank during this turmoil. Historically, SEB has seen a positive development of NFI during more turbulent times, so that there's obviously no guarantee that this will be repeated this time around. On costs, there will be some cost inflation related to contingency measures that we are taking, but there's also an offsetting effect from less travel and entertainment expenses. Finally, on asset quality, it is too early to assess what will happen. But obviously, the weaker economic outlook is likely to lead to higher expected credit losses triggered by the IFRS 9 reserves. That was that on P&L, capital and liquidity. And I think from here on, we can open for Q&A.

So operator, please open for questions and answers.

[Operator Instructions] Your first question comes from Magnus Andersson from ABG.

Yes. Thanks for the update. Just a couple of questions. First, on NII, have you seen any signs already of a drawdown of credit lines on the corporate side?

There has been clear indications of increased demand, including some discussions around weathering the storm. There has not been a meaningful yet increase in drawdown. There has been a marginal increase, but it's so small it could have happened for any reason. But we are planning for a -- not making a prediction, but we are planning to be there like we were in 2009 with a significant both increase in drawdown and extra facilities.

Okay. And furthermore on NII on the mortgage market, I guess, consumer confidence is deteriorating every day. Have you seen any slowdown there in terms of transactions being closed, request for loans, et cetera, already?

No. We checked the other day, and there has been no tangible signs of that, but it would be probably reasonable to assume it will come.

Yes. Okay. Good. And then on the cyclicality of IRB models, it's potentially a impact on capital. When -- in terms of timing, when do you think we could see a higher risk base for the corporate segment feeding through to your risk-weighted assets?

I think it's -- it's Masih here. I think it's difficult to say. Overall, I think our models and our risk rating philosophy is very much through the cycle. So we use a lot of through-the-cycle parameters in our rating methods. It's difficult to say because of that, you have a lot of parameters you look at. Some of them are very point in time, some of them not through the cycle. I mean one parameter is, for example, the management and the Board of the corporates we lend money to, and they typically stay the same for a long period of time. But then there are P&L factors you look at. So I think it's just way too early to say.

Okay. Is it the same, if you -- look, you mentioned IFRS 9 and the potential impact on reported loan losses and the whole idea that they should be recognized much earlier than in the previous crisis, does that mean -- I mean your forecast element in there, does it mean that we should see an impact already now despite the fact that you haven't had any impairments or anything yet? Will it come really quick this time? What do you think?

Yes. There's no easy answer, but I think it's a problem that, that is very likely to be the case. And remember, IFRS 9 has -- first of all, it has a macro assumption to it. So regardless of any impairments or even regardless of your own assessment of a company's or a person's ability to repay, you will just -- for the fact that we have everyone reduced the probability of a strong economic development, and we have increased the probability dramatically for a much weaker one. So those will hurt immediately. And I'll just elaborate a bit. It's been interesting to see that EBA and ECB, they have actually instructed some of the local FSAs to be very careful in interpretation of the stability and the strength of the banking system, given these procyclical characteristics of IFRS 9. So we are, of course, debating this heavily at the moment because the point of IFRS 9 was to increase comparability, increase transparency and reduce procyclicality. And right now, it looks to be impossible to compare, very hard to understand and it might actually go up just by the fact that we have macroeconomists changing the probabilities of a negative outcome. A few other problems here with IFRS 9 is, you probably know this, but it's forbearance, it's -- forbearance means that anything you do on reducing the interest cost or reducing an amortization or giving a payment holiday, which is just what we need to do right now in order for good companies and private households to weather the storm, and in IFRS 9, a clearly immediate negative impact on expected credit losses. But the whole point of doing those things is, of course, to mitigate a negative outcome. It's to increase the probability that they can repay and reduce the probability default. But it will have this corkiness in accounting that it goes the opposite way. And as you've seen, at least, in Swedish media lately, everyone is going to be quite willing now, also instructed by the finance inspection yesterday that 'should we need, we can take away the amortization requirement.' And the accounting of those are still a little bit up for debate. But regardless, I think we need to just have a cool and fact-based analytical mindset right now because those things are accounting and not necessarily a true reflection of reality.

Okay. And then finally, just on dividend, there's been some discussion after the Norwegian FSAs -- Norwegian FSA urging the banks to also think about their dividend for 2019 to be paid out in 2020. Do you feel any pressure from the authorities about the dividend you have proposed for 2019? I know it's a pretty short time to your AGM, it's Monday, right, so that's...

That's correct. No, I can just say, I don't have any other comments. We follow it very closely. We clearly hear what the authorities are saying about cautiousness, around paying out too much and using the capital strengths that we have for that, but no further comment for now.

Your next question comes from Martin Leitgeb from Goldman Sachs.

Yes. First of all, many thanks for hosting this call. It's really helpful. I was just wondering if you could shed a bit of light on which parts of the loan book you would see most exposed to the slowdown we are going to see. And then how you think that part of the loan book, how you're positioned in terms of risk, just thinking about the typical areas mentioned, travel, hospitality and maybe some oil-related sectors. If you could help us quantify how big your exposures are and how comfortable you are with those exposures? And the second question, just going back to the earlier question on dividends. So is your expectation that the -- I mean, as of now, that there is no change to the 2019 dividend and that we go ahead as planned?

Yes. If I start with the loan book, and I'd like to paint a picture of a matrix for you. So think about the size of the company on one scale and then industry of the other. So first of all, we clearly see that the -- as natural, the smaller the company, the small and midsized corporations, they have typically less stamina to weather the storm just because diversification is lower. They don't have the same access to the capital market and a temporary but still dramatic shock to the income line, namely in some sectors right now, it takes a complete stop. It's just a matter of time. Larger companies, they have more diversification. Things happen in different paces in different places. And therefore, they, by the design, have more stamina, so to say. And I would put one category first when it comes to the balance sheet exposure, which is it's obvious having a problem right now, and that's hotel, travel, leisure, airlines, packaged travelers and hotel businesses, maybe some of the entertainment areas around it. These are relatively, I would say, very small exposures, and particularly on the SME side, where they are not the global players who do have some strong financial powder to weather the storm. It is almost negligible. Then there is another -- the next sector is really the retail sector because when you shutdown these countries, there is a part of the consumption that gets hit immediately. And it is related to the first point. It's not necessarily the daily things that you buy in your life, so we don't see any risks in that. But the capital goods, it's everything that is associated with a larger decision we like to invest. And those we expect to have a pretty tough time right now. We've also seen some of the retailers just shutting down their offices because of contagion risk and for social distancing. So let's take Apple, for example, they decided to shut down everything. You can go through many of the high street retailers will see in apparel, et cetera, that they're all going to have very little income in the short term because they have to shut down because there is no commercial activity going around it. Oil and gas, it's nothing new. We've had the '15, '16 oil price stress, particularly in our Norwegian exposure. That has, of course, been going back to being accentuated. We've done a lot of restructuring, and we will continue doing that. I think a good guiding principle is to see what happened and what losses actually happened last time around, as a guiding principle, and they were pretty limited, but it's a lot of hard work in order to make sure that, that sector is able to weather the storm. Anything else, Masih, on the balance sheet?

No.

No. And again, on dividend, I can't really comment. It's the decision for the Board if they were to do anything. But for now, until we announce anything else, we'll just proceed according to plan.

Your next question comes from Robin Rane from Kepler.

Could you share your view on the Swedish government, the Swedish Central Bank response? Do you think they're adequate? Or do you want -- do you think that should be more done?

Yes. Interesting question to elaborate around. First, I think the finance inspection in Sweden, I think, have done a lot of the things that would be forceful and natural, and we applaud it, so to speak. It's been very good response. When it comes to the Central Bank, it's very good. They've acted banking debate in what time frame, but they've acted very forcefully and come out with clear evidence that they are high on alert. But as Masih said, the first iteration of what we've gotten from the Central Bank to this kind of insurance-based liquidity facility of SEK 500 billion didn't have exactly the terms that we found to be interesting. The government has gone also quite long in and it looked very good the other day when they came out with a SEK 300 billion package. But after doing some more research, it looked to be quite just an expensive loan for the companies that could take that, and they announced yesterday, they will review it. So a little bit of mixed picture, but for us as a bank, the most important thing, of course, has been on the capital side, that the countercyclical buffer was reduced as that has created ample firepower for us. We're talking a couple of hundred billion of more corporate lending, which is extremely helpful.

I'll just add on the Riksbank facility to understand that. So what we, as a bank, need to do to be able to use that facility is to put in collateral at the Riksbank. And the collateral that they approve is government bonds and covered bonds. And that collateral needs to be 20% government bonds and 80% covered bonds. On the government bond side, I don't think Swedish banks own any government bonds because the Riksbank own them themselves and other investors own them. So it's difficult to get hold of government bonds. And if you want to do that, you have to issue commercial paper and buy those government bonds at negative yields. So the cost of buying government bonds are around 70 basis points. Covered bonds, the same thing, you have to issue commercial paper, buy covenant bonds and put them as collateral in the Riksbank and the cost of that is about 50 basis points. So the weighted average cost of getting whole of this collateral and put at the Riksbank is around 50, 60 basis points, which is quite a bit above the 0 interest rate level. And when we look at it, since we can have ample liquidity and we have a lot of room to issue cover bonds, the cost for us funding ourselves, the way we always do is actually lower at this point in time. So that's what we're referring to when we're saying that the conditions are on that facility aren't that attractive at this point in time, but it's a very good backup insurance to have, obviously.

And your next question comes from Riccardo Rovere from Mediobanca.

I hope you can hear me well. Just to get back one second on the previous question. My understanding from what you're saying is that the facility that has been set up by the Swedish authorities does not look that attractive to you. I'm just -- so my question is, all -- did that kind of facility is more or less mirrors what other authorities in other countries and in other areas are more or less done? So my question is, do you think that this way you're proceeding to provide liquidity to the real economy households and corporations is not exactly effective? Or let's put it this way, what would make banks more willing to lend to the real economy if this kind of facility from your governments may not be -- maybe, let's say, not perfect. Let's put it this way, do I get it right? Because I think it's relevant to understand the velocity at which these -- let's say, these measures are transmitted to the real economy. I mean I live in Italy. Italy was literally shut down in 100 hours. Okay, the whole country was shut down in 100 hours, in 3 days. So you need velocity. So I wonder whether all these mechanisms are rapid enough, do you think or not?

Okay. Thanks for that question. So I'll start this way. I mean we have ample capital and liquidity without all the facilities. We have every attention and all the ammunition we need to support the real economy, and we have all intention to do so. So the facility is not a problem from that perspective. We're referring to the conditions of the facility, which at this point in time are not attractive enough for us to use them. But I mean you can look at it as an insurance on your house. You're going to have the insurance. You're going to pay a fee for it, but you won't be disappointed just because the house didn't burn off. I mean you're just happy you had the insurance. So I think it's a very good insurance to have in the system, and it is possible that the markets deteriorate from here, and that from here on, we increase our balance sheet massively, and we come to a point where we have less liquidity ourself and then that facility could be more attractive. So it's a very, very important backup insurance. But it doesn't mean that we will use it as the first source of funding as we went into this turmoil with a very, very strong balance sheet. I have to agree to some degree due to luck and to a very large degree due to the actions taken by regulators in the last 10 years, but also because we have been cautious after a very long bull market and have had the ambition to have a lot of ammunition in terms of both capital and liquidity would markets deteriorate, and we had that going into this. So that is just what I'm referring to. So that's the sort of Riksbank action. And then you have the government actions. I'm pretty sure that they will come out with more fiscal stimulus if things get worse. I mean I think the whole society banks, governments, authorities, everyone are aligned at this point in time, everyone has the same intention, everyone wants to do whatever they can to support the real economy. So I think everyone just has a very good intentions on this. And over time, we will do mistakes, others will do mistakes, but everyone has the right intentions and will calibrate it so it sort of is right in the end. I'm sure about that.

Right. But again, still not clear to me whether you think the measures put in place by the authorities also in Sweden, are they rapid enough? I mean will you act rapidly in case -- will banks, not SEB -- will you act -- SEB or banks, will you act rapidly in case there is need for more liquidity by the real economy?

Okay, let me say like this, the intention of the Central Bank and the government and the financial regulator, we applaud it. They're all fine. When the Central Bank puts a line in place, and if you want to use it instead of funding, you will have to look at price. It is not a priced facility to the extent that you would like to use that rather than the newly found firepower that we have gotten because of the countercyclical buffer. So it's not a price. It's not an arbitrage to go and use it. Some people thought that when the thing was announced, but it's a really good, like Masih said, insurance. To have those there, we might have to use it if we were to consume all the other things we have. But the current terms and conditions, it means that we would rather just continue to use our own balance sheet as we typically would do and having that as a very well-established insurance policy. Now if you step up 1 level and just think about what the Central Bank has said, they've actually indicated they'll do whatever it takes. So regardless, if we think the terms and conditions of this, these are the details of both the government program and the Riksbank's program, the Central Bank's program that we can debate. But I'm very confident that signal they are sending is that they're going to be vigilant. They will act accordingly. And we will, of course, debate all the corkiness of all these, how do you shape these programs for them to be as effective. The system and SEB is so strong right now, as Masih said, that we don't need them. And also that to point to another, we have been talking for the last couple of years about the strong capital position of SEB and that we've had a capital buffer over and beyond the management buffer of 150, and we pointed to an unforeseen circumstance that might come in the future, where we want to deploy it for customers. Now we are here. So this is the time where the whole system will be tested, what banks will be called, who have the strong relationships with its clients. And once you get the call, who can deliver without having any constraints in your organization to have the balance -- to have the balance sheet and your banking balance in order to accommodate it. And this is very much what's happening right now. And if you look at just the balance sheet expansion that can happen organically without using any other liquid source or having any problem, we're talking about to a couple to SEK 300 billion from the countercyclical buffer reduction. Look at 2009 and 2010, SEB was one of the few banks who significantly increased its balance sheet. Last year, we had an organic growth, 8% to 9%. Here, we're talking in 1 year of a 20% increase of corporate lending. So these are ample. So I hope we are being interpreted as we want. We like what the government and the Central Bank is doing. Those 2 have some terms and conditions that could be looked upon. We don't need them right now. And the third argument I'll make is that if there's anything I have learned over the last 14 days is that as the epicenter of this crisis is not a banking crisis or a financial crisis, there has been a very inconclusive, I would say, even strange effect on everything that the Federal Reserve has done, all the things that the governments have done, all the things that the regulators have done because the problem is not to extend more loans necessarily today. The epicenter of this problem is fear of being fearful. It's something completely different. So we've had a very, very inconclusive effect for the financial market. And it's not like we need this money right now. It's just very, very good to show the market and the world that there is ample liquidity. So we -- the least of our problems right now is to source liquidity. We have those at ample space.

And your next question comes from Sofie Peterzens from JPMorgan.

Here is Sofie from JPMorgan. I had one question, it goes back to the dividend comment. So this morning, we heard some quite powerful comments from investing at the Riksbank that he doesn't like the prospect of large banks paying dividend. Also, last night, we had Saab canceling their dividend. I hear you said that you have your plans to change your 2019 dividend. But have you got any indication from the government or the Central Bank that there could be some dividend restrictions? And my second question would be on your AGM, which is scheduled, I believe, for next week. Do you -- can you -- are you allowed to do fully a virtual AGM in Sweden? Or are there any restrictions like you have in Denmark on virtual AGMs? And my last question would be on net interest income sensitivity, 25 basis point cut in rates.

Okay. Thank you. Well, on dividend, I'll just reiterate what I've said. It's nothing that I can comment on right now. We have a proposed dividend for the AGM, and that stands until any other decision has been taken. There is a clear -- there's clear messages coming our way, both bilaterally, but nothing different from what has been public from the Central Bank, who have said, just like you said, that they would not look favorably on increased or high dividends. And it's the bank's responsibilities now to do what is a prudent capital preservation strategy. We've had from EBA and ECB instructions that we should be cautious or restrictive. We've had the Finance Ministry saying this is not the time for high variable compensation and/or high dividend payout ratios, and we've had from finance inspection that we should be careful and cautious. So the message is very clear to the banking system from the politicians and the government entities that right now, everyone needs to take a responsibility for having a prudent capital base and making sure that we can weather the storm. We have no other ambition than that. So we will, of course, take it from our own perspective, not as a macro comment and act accordingly. But right now, I have no comments on that otherwise. On AGM, there's nothing legally or such that hinders anyone in Sweden to do a virtual AGM. However, there is no well-developed digital version of an AGM in Sweden. I've heard there is one in Norway. But this is to do with Euroclear and other ways of voting and allowing according to the corporate law that anyone can go to the AGM and vote as they see fit and ask any question they see fit. We can sort everything out digitally, except for the voting. So there's no way of identification of a shareholder in a digital form. That has been done by post as an old style. So we don't have the option of completely going into a virtual AGM, so to speak.

Sofie, on NII sensitivity, we've said that rates hike, we said before the rate hike of 25 basis points, so that would be approximately SEK 1 billion gross annual impact, excluding lending margins. If there will be a rate cut of 25 basis points, it will be the same thing. Now I would just put in a caveat there that there are things happening with interbank rates with now STIBOR and LIBOR being slightly elevated because of the stress in the system. So that could change that sensitivity marginally. But generally, it's the same sensitivity going up as going down, just you know.

We have no further questions at this time.

Okay. Then I thank you, everyone, for participating. These are very exceptional times. And therefore, there will be many exceptional measures being done. I think everyone just needs to appreciate that in this market, we are doing almost real-time decision-making and things change very, very rapidly. And we thank you for your support, and wish you a good day. Thank you very much.

Thank you. That does conclude our conference. Thank you all for attending. You may now disconnect.