Bank of Cyprus Holdings

Ladies and gentlemen, thank you for standing by. I am Yota Yokoro's co-operator. Welcome and thank you for joining the Bank of Cyprus conference call to present and discuss the preliminary full year 2023 financial results conference call. All participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Panikos Nikolaou, Chief Executive Officer. Mr. Nikolaou, you may now proceed.

Good morning, everyone. Thank you for joining our Financial Disrupts Conference call for the year ended 51st of December, 2023. I am joined by Elisa Livaviadou, Executive Director of Finance, and Anita Pavlov, Manager, IR, and ESG. After my introductory remarks, Elisa will go into more detail on our financial performance, and then will be happy to take your questions, both during this conference call and afterwards. I would like to start by briefly reminding you of our powerful equity story and our current strength on slide number four. We are a big financial group across banking and other financial services in Cyprus, which is a highly liquid and concentrated banking sector. And we operate in a supportive macroeconomic environment. The typical economy remains strong, delivering good growth, proving once again its flexible and resilient characteristics. We are one of the most leaked parks in Europe and hence enjoy the benefits of fast and steep interest rate rises in 2023. At the same time, we have been undertaking proactive actions to position ourselves against a more normalized rate environment in the years to come. We have strong leaders under our control. Our diversified business model, our ongoing focus on cost control, our robust asset quality and now a strong capital position. All support us for continuing to deliver shares of the value. We remain confident that under a more normalized integrated environment of around 2% to 2.5%, we can produce sustainable mid-teens over the medium term. Let's now get to slide number five, which shows another view of the macroeconomic environment. In an environment of weak European growth and geopolitical turbulence, The macroeconomic outlook of Cyprus continues to stand out. The economy expanded by 2.3% in the four quarters, and for 2023 overall, delivered growth of 2.5%, outpacing the Eurozone average. Based on the latest position of the Ministry of Finance, economic growth is expected to be around 2.9% for 2024. Tourist activity continues to improve with arrivals for 2023 now back to their pre-COVID levels. Tourist resits for January to November 2023 were 11% higher than the corresponding 2019 levels, indicating high spending levels by tourists. The unemployment rate decreased to 6% in the third quarter and is expected to grow further to 5.8% for 2024. As in many other countries, consumer inflation continues to be tested by energy prices, but has now come under control. In Cyprus, inflation stood at 2% in January 2024 and is expected to average around 2.5% for the whole year of 2024. Slide 6 highlights the group's strong financial performance for the year, supported by the high interest rate environment. Net interest income for 2023 has more than doubled compared to prior years, benefiting from the steep rise in interest rates and our high liquidity. But I want to also draw your attention to other metrics. We have diversified sources of income, and non-NII is an important revenue driver, covering around 90% of expenses in 2023. Cost to income at 31% reflects both strong revenues and disciplined cost management. Asset quality remains strong with our MP ratio at 3.6%, in line with our 2023 target, and our cost of risk at 62 basic points was in the middle range of our guidance range of 50 to 80 basic points. Let's now turn to slide number seven. The strong performance has led to accelerated shareholder value creation. Our situation increased by 350 basis points to 18.7% pre-distribution, all 16.5% when accruing at the top of our individual distribution policy of 30% to 50% payout ratio in accordance with commission-delegated regulations. This reflects strong organic carbon generation of around 418 basis points in the year. Earnings per share was at 1 euro and 9 cents, a tangible book value hit by 24% before distributions. We reconfirmed our distribution policy. We are targeting a payout ratio between 30% to 50% of adjusted decay profitability, building progressively through the years. We have begun our engagement with regard to shareholder returns for 2023, and any return will be in line with that being the point. We looked after our shareholders in due course when we received the final ECB approval. Looking now in more detail of the quarterly evolution on slide number eight, we delivered a rate of 25.6% in the fourth quarter, the fourth consecutive quarter of returns over 20%. This was supported by strong American income, which grew by 3% in the fourth quarter to $220 million. We believe that this now will be weak. Slide 9 shows how our performance is tracking against the 2023 targets. We provided guidance for 2023 in the middle term at our 2023 investor update event in June. And I'm pleased to share with you that 2023 actual financial performance exceeded all of our targets. Our guidance was for NII to exceed $650 million. We delivered an NII of $792 million for the bulk of high GDP deborahs, averaging 3.3%, and well-managed double parts through and mixed. The cost-to-income ratio of 31% came ahead of our sub-40s guidance, mainly due to better revenues. As already mentioned, NP ratio at 3.6% was in line with our target, and our cost of risk at 62 basis points was in the middle range of our guidance of 50 to 18 basis points. And our ROCTA of almost 25% clearly met our over 17% guidance. Moving now to the outlook for 2024 on slide number 10. We are reiterating our target for 2024 and 2025 of over 17% and over 16% based on a 15% CTR rate. And most importantly, we do so while we are incorporating conservative assumptions for rates, normalizing around 2% to 2.5% in 2025. Starting with ECB rate development, we expect a higher average ECB rate in 2024 of 3.4% but now expect a faster normalization at 2.7 and 2% by the fourth quarter of 2024 and the fourth quarter of 2025, respectively. Our guidance for 2024 is as follows. We are updating our expectations from above 625 million to above 670 million. Elisa will discuss in more detail the drivers on the next slides. We maintain our first three calculations around 40%, and we reconfirm our current guidance of over 70% on the 15% CT1 ratio. On the quality, we expect to continue improving the MP ratio to around 50% ERN, and in terms of risk, trending towards the normal level of 40 to 50 basis points. On capital, we expect significant CT1 generation in the range of 200 to 250 basis points, previously used for 2024. Our aim to provide sustainable shareholder returns is reiterated. Debit agents are expected to build prudently and progressively over time towards a payout ratio in the range of 30% to 50% of the group's adjusted gain profitability. And importantly, we reiterate our 2025 guidance for a rate of above 60% based on a normalized rate environment of 2.2%. The path of rate normalization seems very volatile currently, but we want to reiterate our commitment that Ambaro Cyprus can sustainably deliver mid-teens rotating and normalized rate environment of 2% to 2.5%. I will now hand over to Elisa to take us through our NIA guidance for 2024 in more detail.

Thank you, Michael, and good morning from me, too. So starting on slide 11, we have seen a rapid increase in interest rates in 2023, and recent market expectations have been extremely volatile in respect of the path of rate cuts. 2024 is expected to be a transition year, a year marked by a declining interest rate environment. Currently, market expectation is for rates to normalize by 2025. Yearly bull rates have already started to move in anticipation of these moves, with six-month URI for expected shortage at 3.2% in 2024. As you can see on the charts on this page, the current rate outlook is more conservative compared to market expectations in November 23 at the time of our third quarter results. You can also see how it compares to our rate assumptions at the time of our investor update event in June last year. We think this is an appropriately conservative scenario, which is how we run the bank. As a result, we would expect NII to decline in 2024 to a level above €670 million, higher than our previous guidance, or above €625 million. We expect quarterly NII to decline during 2024 and start stabilizing towards the year end. I will explain the main drivers of this. Higher deposit costs. Term deposit pass-through increased slowly during 2023, to 18% in the fourth quarter. But we expect it to continue to increase to an average of 40% as deposit balances reprice to the higher front book rates. We expect rate cuts to pass on gradually to new deposits. Hence, we expect a slow and gradual repricing of the deposit back book in 2025. We continue to allow for a change in deposit mix, with time and notice deposits increasing from 32% in December 23 to around 45% of the total by December 24. On the lending side, we expect single-digit loan growth in 24 and 25, supported by economic growth. Almost half of our loan book is Uribor linked, and this will be priced to lower rates. Also, expanding costs will increase to reflect the full-year impact of the 2020 EMERI issuance and further plan the issuance in order to meet the 2024 EMERI requirement. Finally, we will continue the structural staging activities to reduce the NII sensitivity. This will come at a cost in 2024, but will support future revenues. While continuing to carefully grow our fixed income portfolio to around 16% of total assets with NII benefiting also from the rollover of the portfolio to higher rates. Let me now touch on the bank's NII sensitivity on slide 12. As you know, we are structurally rate sensitive on the asset side, but over the last year, we have reduced this rate sensitivity, and we plan to continue to do so in 24 by converting some of our assets from variable to fixed. The NII sensitivity to 100 basis points rate drop has reduced by 16 million euros during the year from 34% to 14%, and reflects the following actions. About one-fifth of the group's loan portfolio is linked with the bank's base rate, which provides a natural catch against the cost of deposits. We added more fixed-rate loans by granting around 245 million of such loans. We increased the investment in fixed-rate bonds by 54% to 3.1 billion euros, We entered in reverse repos of 400 million euros. And finally, we entered and received fixed interest rate swaps totaling 950 million euros. We expect to continue careful further hedging of the balance sheet in 24 to reduce the NII sensitivity by a further 30 to 40 million euros. Specifically, we intend to add another 4 to 5 billion euro structural hedging positions with expected average duration of three to four years, depending on market conditions. These actions will have a cost on the 24 NII, but will support future revenues, and most importantly, will result in lower rate flexibility. Slide 15 shows the income statement of the group. I will not go through every line here, as we'll be discussing the drivers of our profitability in the following slides, but I would like to highlight the tax of 487 million for the year, corresponding to earnings per share of one euro and nine cents. Slide 16 strikes the main drivers for the strong NII, which more than doubled in 23. For QNII at 220 million euro is, we believe, the peak. As already discussed, we expect continued increase in deposit costs, while the repricing of loans will start reflecting lower URIBOR rates. On slide 19, you can see that deposits remain broadly flat on the prior quarter, but increased by 2% year-on-year to $19.3 billion. We are encouraged that the shift in deposit mix towards time-managed deposits is progressing more slowly than we expected. In Q4, it was around 32% of the total. And if you look at the breakdown of our $19.3 billion deposit base, you can see on the bottom left chart that almost 80% of our deposits are from Cypriot residents. Additionally, deposit pass-through levels were well managed, facilitated by the very liquid Cypriot banking sector. This is evidenced by the evolution of our cost of deposits, which remained low at 24 basis points, corresponding to a pass-through of 18% on time and notice deposits in Q4, up from 15% in Q3. We expect the cost of term deposits to continue to increase from 74 basis points in the fourth quarter as deposit balances reprice to the higher front book prices. We expect rate cuts to be passed on gradually to new deposits. Hence, we expect slow re-typing of the deposit back book in 2025. Overall, we assume an average term deposit pass-through of 40% in 2024. Now let's move to new lending on slide 20. During 2023, we granted €2 billion worth of loans driven mainly by corporate demand. The cross-performing loan book remained broadly flat at €9.8 billion, both Q and Q and year on year, as repayment had offset new lending. Going forward, we expect some recovery on the loan book as repayment stabilized with low single-digit loan growth assumed 4, 24, and 25, supported by GDP growth. Towards that goal, in December 23, we agreed to acquire a small portfolio with cost of value of 58 million euros. Completion is expected in the first half of 24. Now turning to the fixed income portfolio on slide 21, as of 31st December, the portfolio amounted to 3.5 billion euros, up by 42% on the prior year. representing 14% of total assets net of TLTRO. The majority of the portfolio is measured at amortized cost and is held to maturity. Hence, no fair value gains or losses are recognized by the group's income statement or equity. The mark-to-market positive impact of the amortized cost portfolio amounts to 3 million euros as of December 31st, reflecting a reduction in bond yields. We expect to continue to carefully expand our income portfolio in 2024 so that it represents around 16% of our total assets. Moving now to non-interest income on slide 22. On this slide, we would like to highlight that non-interest income is an important driver to the group's profitability, covering almost 90% of OPEX for 23. Going forward, we expect it to continue contributing significantly in the coming years at around 70% to 80% of total OPEX. Net fee and commission income continued to grow by 6% year-on-year, driven by higher credit card commissions and transactional fees. We expect net fee and commission income to grow broadly in line with economic growth in both 2024 and 2025. The net insurance result was also ahead compared to the prior year due to improved experience variances and the reduction in the lost component of the insurance recognized up front in the life insurance business. I would also like to remind you that FX gains are volatile profit contributors. Now, moving to slide 28, which provides an overview of operating expenses. Our cost-to-income ratio of 31% in 2023 was supported by strong revenues and disciplined cost management. Total OPEX rose by 5% year-on-year, driven by the termination cost of €7.5 million, variable pay of €11 million, and the cost of the customary reward program of 2.5 million euros. Excluding these items, costs were slightly down by 1% year-on-year. On a quarterly basis, our cost-to-income ratio increased to 32%, driven by seasonally higher expected expenses. Now let's move to slide 13, capital. The bank's capital position remains robust. During 2023, we saw a rapid capital buildup, unlocking around 480 basis points of organic capital generation, driving our total capital ratio and CP1 ratio to 23.7 and 18.7, respectively, predistributions. Accruing for a dividend at the top end of our dividend policy of 50%, in line with the regulatory framework, our total capital ratio stood at 21.5%, In our CP1, at 16.5%. Let me remind you that this level of dividend accrual does not constitute an approval by the regulator for a dividend, nor a decision by the bank with respect to the 2023 dividend payment. Further details on capital requirements are set out on slide 56. Moving now to slide 32, an asset quality. The NP ratio stood at 3.6% at year end, or 1% on a net basis. In line with our 2023 target, our MPE coverage improved to 73%. When including tangible collateral, MPEs are fully covered. During Q4, we recognized €53 million as unlikely to pay exposure with the completion of our assessment. Most of these UTPs are not macro-related and continue to present no arrears. We expect to reduce our MPE ratio to around 3% by year 2024 Our MPE ratio started off below 3% by end 2025 is reaffirmed. Now turning to slide 33 and cost of risk. Q4 cost of risk was partly flat on the prior quarter at 73 basis points, averaging 62 basis points for the year. This cost of risk includes 19 basis points relating to the classification of specific customers with the idiosyncratic characteristics of UTPs, even though they adhere to their payment schedule and present no areas. Going forward, cost of risk is expected to trend towards the normalized level of 40-50 basis points in 2024 and 2025. Additionally, we incurred impairments and other provisions of €15 million in Q4, relating mostly to REMU stock properties on specific large liquid assets. Moving on to real estate on slide 34, REMU, as you know, is our engine to manage the stock of properties acquired from defaulted borrowers. As you can see, REMU stock properties reduced by €217 million on the prior year to €862 million as of December. With balance sheet derifting completed, The inflows are expected to remain at extremely low levels and our focus will be on delivering sales. We remain on track to achieve our 2025 target of reducing the revenue stock to around half a billion euros. And we continue to sell on average close to 90% of independent pieces of open market value or 106% of book value. The prospect for the real estate market in Cyprus remains strong. Based on data by the Central Bank of Cyprus published in October, property prices rose by 7.6% year-on-year in the first quarter. It's important to note that these prices remain below their 2010 peak level. So now I'm back to Panikos for our closing remarks.

Thank you, Elisa. Moving now to slides 35 and 36. 2023 was a milestone year for the bank, achieving strong financial and operational performance. We generated profit after tax of $487 million, equivalent to a rate of almost 25%. This facilitated rapid capital beat-up, reflecting accelerating shareholder value creation. Going forward, we are entering 2024, a year of potentially declining internet environment and positional strengths. we will continue to execute on those levers under our control and we remain confident that we can deliver a ROTE of over 70% and a 15% CintiVa ratio for 2024. Under a more normalized interest rate environment of around 2 to 2.5%, we reiterate our 2025 ROTE target of over 60% on a 15% CintiVa ratio. This concludes our presentation. We will now open the floor for your questions.

Ladies and gentlemen, at this time we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, then you may press star and two. Please use your handset when asking your question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from the line of Ismailo Eleni with Axia Ventures Group. Please go ahead.

Hello, good morning, and congratulations for this strong set of results. I have three questions from our side. First one is on the structural hedges. Out of the $4 billion to $5 billion guidance, what percentage would be allocated to the interest rate swaps? And the second question is, as attention shifts to the net fee and commission income, if you could give us some more color on how you're planning to keep growing that part of your income statement and what are the moving parts. And the third question would be on your C21 target, like the guidance you provided. Could you talk a little bit more about the underlying assumptions here, especially the RWA trajectory? Thank you.

Okay, let me start with the next commission income. Okay, and I will again reiterate that this income is strong contributor and diversification initiative and resilience for our business model. So 2023 increase by six percent excluding non-recurring items. We expect this to grow in line with the equity growth. We also presented in the presentation the contribution from our insurance sector, which is a growing factor, and contributes about 50% of our non-NIAI in 2023. So insurance subsidiaries are growing and contribute to this growth. We also, for the first time, presented Genius with a new initiative. And we are launching actually today our marketplace. And Genius is another new source of non-NIA in the years to come. At the same time, again, the first quarter, we are launching our Affluent Banking Initiative, which is a kind of more general offering to the wealth clients of the bank, which is also an additional initiative for non-NIHI contributions. Going back to the CTU and TASCET and the question on the RWAs, I think RWAs are relatively flat through the year, so organic growth will not consume much capital for the bank, and at the same time, revenue reduction will actually release capital from the bank. I think that is a question about structural hedging.

Eliza? Structural hedging, around three-quarters of our hedging strategy is through IRFs, and the rest is covered through reverse repo and the natural balance sheet items, fixed loans and fixed income investment bonds.

Mrs. Mailou, are you done with your questions?

Yes, thank you very much. And again, congratulations for the strong set of results.

The next question comes from the line of Boulogouris Alexandros with Europe Securities. Please go ahead.

Yes, good morning. Congratulations on the numbers as well from me. A quick question on the deposit mix. You have in your target that it will reach 45%. Isn't that a bit too conservative given the reducing the declining rate environment? So are you being a bit too conservative or is there some data that you see that you think this indeed seems to be going up to this level? That's my first question. A second question regarding the fixed income portfolio. You mentioned that you target to go to 16% of assets by end of 2024. and the fixed income book has increased in 2023 as well. Should we see this trend continuing, or is this 60% where more or less you want to be? And one other final question regarding loan growth, and this is something that we are gradually seeing in the Greek market, regarding re-performing loans from all the NPLs. Is it something that you would consider as well, binary performing loans later on in two, three years time as a potential growth inorganic, let's say.

Thank you. Okay. I will start with generally on DevOps. It's not just the mix, but also in DevOps it comes through. And generally, I comment that the Cyprian banking sector is very liquid and concentrated. So this will not change. And this was also the main driver of us having total deposit cost of just 24 basic points, an overall pass-through rate of 6%, 80% on 10 or 10. So we expect to continue some gradual repricing of the Mbappé book, which means that there will be an energy to the mix as well. I remind you that the pass-through of 40% or whatever pass-through we end up in the end does not necessarily mean that the deposit cost will go up because the URI borrower rates are actually expected to drop. What is important is total cost, total deposit cost, and we provided a number there and guidance which says that every 10 base points increase have an effect of around 19 million to the NII. We focus mostly on double-digit calls rather than on pass-through and meet. Of course, we have to navigate 2024 reduction until most stabilization comes in 2025 in the rate, and until we start gradually seeing the rate cuts to pass back to the depositors. But all in all, pass-through mix, I mean, have been all taken into account in our ROTA guidance for 2024 and 2025 in another conservative rate assumption scenario. So going to the loan growth and the performing loans, actually, what Elilda mentioned, before about the acquisition of the $58 million coming from Gary Bell. This was kind of a small acquisition of the performing loans in Cyprus, but I would say that we need to be careful on doing this because the definition of stage one, stage two, and stage three, based on the ECB guidelines, it's much different of what the services of the MPs are actually in mind, so we'll be very, very careful and this will take some time. I don't expect this to materialize within the next one to two years. And this is not part of our plan A for loan growth. We don't assume in our loan growth assumptions of any acquisition or re-performing loss. All these are actually in line with the growth of the economy.

So on the bond portfolio, this is a dynamic exercise, as you know. Our 16% guidance is based on our current risk-return characteristics of the portfolio versus other alternatives, be it the EPP or other options on liquidity management. It's not a ceiling, but it's also not something we can dive to more specifically at this point, i.e., a higher or a different level. Our current strategy goes to the 16% level on the basis or on the back of current rate expectations and current risk-return dynamics of the bond portfolio.

Thank you.

The next question comes from the line of Hamilton James with Numi Securities. Please go ahead.

Thank you, and thank you for the presentation. I just wanted to touch on the Genius business. You've mentioned it in your presentation, and it's the first time that it's appeared in the slides. I was just wondering if you could give us a flavor of where you feel this could land in, say, two or three years' time, What are your aspirations for it? Obviously, you mentioned low interest income, but I'm more sort of thinking about the sort of strategy, the data and analytics you might get from it from the sector of the bank.

Okay, thank you, James. As I already mentioned, Genius is a new subsidiary aiming to drive digital economy in Cyprus and create an ecosystem-driven platform to create opportunities for all. What we need for Genius is to connect business together, B2P, which is already live, to connect customers with business, B2C, which just the first step is already live, with the marketplace we launched in February, and of course, to combine all this and support them with the banking and financial products. So this is part of us investing in the digital bank value chain, diversify our income, and as I already explained earlier, this will be an additional contributor of non-NII, which you know that we aim to cover most of our expenses through non-NII. In the near future, let's say in three years, we expect naturally more contribution, tangible contribution in our NII from Genius, but we also expect more progress in the business-to-consumer part of Genius towards a more lifestyle platform service in Cyprus. We probably expect to have loyalty schemes. We'll have personal analytics. offers promotions, financial and insurance products offered to the clients, service bookings, consumer communities, different ecosystems, including green ecosystems, car ecosystems. So all these have to do with us developing the business-to-consumer concept of Genius. And we are very, very enthusiastic about doing this. And this, after you will see it, coming in 2024 onwards.

Thank you. I had one other regarding loan book growth. Could you sort of chat a little bit about how you see the dynamics of sort of the growth that you're talking about given the tough environment that we saw in 2023? Is this just as we see lower rates, you'll see fewer sort of prepayments, or is this sort of a more active process of expanding growth, or is it just purely the macro?

Okay, I'm afraid I didn't hear very well the question, but I got the headline, which is loan growth. So I will start by saying that 2023, the loan because of higher repayments. I remind you that 2023, 2022, we have a loan growth of 3%, which we expect as normalized repayments to come in 2024 to be the case, and it's in line also with the growth of the economy in Cyprus. So we expect to return back to loan growth in line with the economy in Cyprus, And over and above to support this assumption, we accelerate our international strategy for diversification, including peace integration and some corporate laws in Greece. We expect to start seeing more tangible results on this, on the second half of this year. So, of course, it goes without saying that I will not change the volume of our portfolio And this is very important for us that actually since 2016, 99% of our new exposure are performing and have been performing through tough times in Cyprus, COVID, the war in Russia, Ukraine, the inflation, the high rates. So all these are also important for us because they define our future cause of risk. Thank you.

The next question comes from the line of Cruz Hugo with KPW. Please go ahead.

Hi, thank you for the time. I have a few questions. First of all, on the NAI, you talked about the fixed income portfolio. Can you talk about what's the upper limit for the hedging as well? You flagged some additional hedging in 2024. So can you do more in later years? And then on OPEX, if you could tell us what's your guidance for OPEX and ideally splitting the impact of levies and other regulatory costs. And then also for provisions, if you could give us other provisions, if you could give us the guidance there as well, it would be very helpful. Thank you.

So if you go on hedging, the 45 million, billion, I'm not sure how that we put in the slide or disclose, is not the actual limit. As you know, we are, we were, and continue to be a relatively rate-sensitive bank, and we will look through the hedging in 2024 at opportunities to reduce this rate sensitivity going forward. and make it 10 more predictable and more, and planning more manageable. I mean, at the end of the day, our NII decision, our heading decision, all linked back to our road to target, which is about 17 for this year and about 16% for going forward on normalize rate. So there is no after feeling for the first five million, or there is not the after feeling, but it's what we plan to do

Okay, on OPEX guidance, I will take you back to the cost-to-income ratio of around 40%. So this covers everything. Of course, there is some room to go into investing in technology. We need to keep continuing investing in technology. There is also some inflation to go. But we should not forget that Our focus on cost discipline in a forward-looking perspective is there and will continue. Probably you have noticed that in 2023 we have concluded a small exit plan for employees, around 50 people, at a cost of almost $8 million to $9 million. I also remind you of the aggressive and rapid downsizing of our network and also our number of FTEs. Cost to recover 40%. It's a good project to have in mind. On the provisions, I think. Okay, I think on the provisions, I don't expect any one of provisions. We do expect, as we said, the normalized cost of risk to trend towards the 40 to 50 basis points. And this is our basic scenario for the year to come.

Okay, and sorry, I asked as well around the levies. Do you have any kind of confirmation of what the levies could be in 2024?

The bank levy is at 15 basis points because it's Hugo's formulaic in terms of cost.

Okay, thank you very much.

We don't assume any additional levies and we don't assume any of the existing levies to be actually canceled. So this is a This is the main assumption for the financial plan.

Thank you.

As a reminder, if you would like to ask a question, please press start and 1 on your telephone. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Nicolaou for any closing comments. Thank you.

Thank you all for your participation and questions. As always, we will be very happy to arrange one-to-one calls to take you through in more detail on our actual results for 2023. but also most importantly in the driving factors and assumptions of our 2024 and 2025 guidance. Thank you all.

Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for calling and have a good day.