Piraeus Finl Hldgs Sa

Ladies and gentlemen, thank you for standing by. I am Mina, your chorus call operator. Welcome and thank you for joining the Parios Financial Holdings Conference call and live webcast to present and discuss Parios full year 2024 financial results and business plan 2025 to 2028. 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 Paris Financial Holdings CEO, Mr. Christos Megalou. Mr. Megalou, you may now proceed.

Good afternoon, ladies and gentlemen, and good morning to those joining us from the U.S., Today, we will cover our full year 2024 financial results, as well as the revised four-year guidance vis-à-vis our financial outlook. This is Christos Megalou, Chief Executive Officer, and I'm joined today by our CFO, Theo Nardelis, Chrysanthi Berbati, and Xenophon Damalas. Paereus, has delivered superior results in 2024, our best performance ever. We generated 81 euro cents reported earnings per share, driven by strong results in all core income statement lines. This performance paves the way for distribution of 30 euro cents cash dividend per share. I am proud of our results and thankful to our people for their hard work. Let's start our presentation with slide four for the key achievements of 2024. We generated reported earnings of 1.1 billion euros, up 36% year on year, surpassing our initial budget of 900 million. This came despite absorbing 200 million one-offs for transformation and cleanup. We expanded our performance logbook by 3.6 billion, or 12% year on year, to 33.7 billion, beating the initial target for 2024. Importantly, retail lending was at break-even level after more than a decade. We achieved normalized return on average tangible book of 17.5% in 2024 and 18.1% in Q4, at par with best in class in the region. We delivered 7% net revenue growth year on year, benefiting from strong growth of client balances with fees growing at four times the annual rate of net interest income. Our revenue diversifying efforts are reflected on our fees over net revenues of 23%, best in class in Greece, while fees over assets reached 80 basis points beating the initial target of 70 basis points. We increased our assets under management by 23% to 11.4 billion, mainly driven by mutual funds. Our cost-to-core income ratio stood at 30% among the best in the European banking market despite inflation and our investments. Asset quality dynamics remain solid with MPE ratio further down to 2.6%. Cost of risk has stabilized at low levels standing at 21 basis points excluding the servicing fees an outcome of the successful management of MPE inflows. Our CET1 ratio increased by 135 basis points year-on-year and reached 14.7%, with the MDA buffer at the level of 460 basis points. The total capital ratio stands at 19.9%, with a buffer over supervisory guidance at 410 basis points, and our MREL ratio stands at 29.2%. Following our solid financial performance, we will give back 35% of 2024 profit to our shareholders. This corresponds to 6% yield for 2024 based on today's market cap. As a result, a proposal of Euro 373 million cash dividend will be submitted for approval to our annual general meeting of shareholders on 14th April 2025. This is 30 cents per share up from 6 cents per share last year. Slides 8 to 10 present detailed information regarding our net interest income intrinsics. Net interest income performance was driven by the growing loan book, along with bonds and hedging, with net interest margin at 2.7% in 2024, loan pass-through at the level of 83%, and deposit beta settling at 20%. Slide 11 outlines the impressive evolution of our net fee income, which has been supported by loan expansion, bank assurance, asset management, and rental income. Net fee income over assets stood at the best in class level of 82 basis points in 2024. Our pursuit of operating efficiency bears fruit, despite the inflationary headwinds. We have managed to maintain discipline in cost efficiency, as shown on slide 12, while at the same time proceeding with targeted investments, such as NAPI, and increasing the variable pay to our employees. Slide 13 provides a summary of our asset quality indicators. Our MPE ratio dropped to best-in-class 2.6%. while the underlying cost of risk fell to historic low levels, shaping at 46 basis points or 21 basis points excluding servicing fees. NPE coverage stood at the prudent level of 65%. On slides 14 to 16, we present the dynamics of our performing loan book. Credit expansion was strong, with performing loans rising by 3.6 billion, supported by all business lending segments, while retail is at break-even. Loan growth more than doubled versus 2023, and 24 initial budget. Our total financing to RRF projects reached 1.3 billion, fueling 3.6 billion investments. Paereus has a superior liquidity profile presented on slide 17. Our liquidity ratios remain solid post-full TLTRO repayment, as evidenced by the 219 percent liquidity coverage ratio and the historic high balance of deposits at 63 billion. Turning to our capital base on slide 18, our CET1 ratio remained at 14 0.7% on the back of strong loan growth while also accounting for distribution payout of 35%. On slides 20 to 24, you can see analytically the digital journeys and transformation projects that we delivered in 2024. We are proud of our successful rebranding that signals a new era for Paireus, our plan on the transition to a modern retail bank model, as well as the strategic actions towards building energy efficiency and carbon footprint awareness. Our strong results position Pireus well among the broader group of regional peers. To give you some context, on slides 27 to 36, we present the key metrics for Pireus versus domestic and regional peers. We benchmark ourselves in terms of Return on average tangible book value. Credit expansion. Net interest margin. Deposit beta. Net fee margin. Fees over revenues. cost to core income ratio, NPE ratio, cost of risk, and capital ratio. In all KPIs, we are either at par or best in class while we are growing at an accelerated pace. We expect to generate significant value for our shareholders. Capitalizing on our strong 2024 performance, today we announce our updated financial targets for the 2025-2028 period. Slide 40. summarizes our macro and market assumptions. We project a favorable macro environment that will drive lending growth and market opportunities. The ECB deposit facility rate is projected to land at 2% from end of 2025 onwards, and Greek GDP is expected to grow by approximately 2% annually. Slides 41 to 42 display the business plan highlights and the financial KPIs for the next four years. Slide 41 presents the core KPIs of our business plan. We expect reported net profit of approximately 1.1 billion per year before reaching 1.3 billion in 2028, with loans expanding 12 billion by 1228. Our MPE ratio is expected to retreat even further, falling below 2% by the end of 2027. Total capital ratio is anticipated to increase to circa 21% in 2027 with comfortable buffer. Capital distribution is an important part of our strategy, and we stick to our target at returning around 40% of our profits to our shareholders out of the 2025 profit onwards. Slides 43 to 50 present in detail the drivers and assumptions behind our 2025 2028 targets. Slides 51 to 53 provide a picture on our digital footprint and AI strategy. Slides 54 to 56 present our plan regarding our digital bank, Snappy, that is expected to launch by mid 2025. Our vision for 2028 is to be the number one financial services group in Greece with meeting returns while maintaining solid capital position, supporting our customers and people, as well as generating value for our shareholders. And with that, let's now open the floor to 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. Those participating via webcast, please review related information in the Q&A live session should you wish to ask a question. For those participating in the question and answer session, please use your handset when asking your questions for better quality. Anyone who has a question may press star and 1 at this time. One moment for the first question, please. The first question is from the line of Ismailo Eleni with Axia Ventures. Please go ahead.

Hello, and thank you for taking my questions. I have three from my side. The first one is on slides 45 and 46. Capital doesn't seem to grow much in 2025, yet you signal out the growth in tangible book value when it comes to returns. So I was wondering how much of the 0.7 billion increase in tangible book value goes towards funding organic RW8 growth or the permanent increase from Basel IV? So that's question number one. My second question is on cost. We've seen some 3.5% growth in recurring stock costs this year and 3.8% in total recurring expenses. Can you help us understand how the cost stays flat for the next four years when you forecast 2% inflation for the country? And my third question is around the 50% payout assumption that you have throughout the period of your business plan. I want to ask if you could talk about the upside and downside risks to that, especially referring to the potential depletion in capital that could come from the acquisition of ethnic insurance, and also if you don't get the damage compromise, and if there is any chance the 2025 payout could potentially be at stake. Thank you very much.

Hi, Eleni. Your question about CD1, I think it's pretty clear on the page where things are being guided. We're actually looking at the – we're trying to help you guys compare the organic capital generation of 24 and how that changes for 25. We're basically saying that there's two things. There's the Basel IV impact. And there's also the fact that we're stepping up 35% to 50% distribution and baking in the extra DTC amortization. So that's basically the reason why the accretion of last year of 1.5, 4.25 stays flat. I mean, when it comes to your TBV question, it's actually a mix of multiple things, right? I would say it's both the extra growth versus previous guidance, as well as passive the Basel IV implication. To the staff cost, I mean, it's a low single-digit growth that we've got in. I mean, in the approximate, you're seeing it rather stable. There is kind of a mild growth that's baked in, in line more or less with the inflationary figures I discussed. For 2024, we did have a step up in Q4. that we used room that we had to increase, I would say, the variable compensation buffers that we had available to increase the penetration of variable compensation, both in terms of numbers of employees receiving bonuses as well as relevant size. I mean, as far as the 50% payout, look, we have to take this one step at a time. We've got, we started at 10%. We are today confirming 35%. That returns a substantial cash yield to shareholders. The next wave is 50%. And then we'll kind of see. But we need to be focused on that next milestone, and we'll keep that steady throughout the timeline of the plan. also to demonstrate how that still generates capital increase despite the increase in growth aspirations. I wouldn't comment on the potential trends actually you mentioned. One thing to say is that we're looking at the buffers above P2G. and they need to be at rather comfortable levels. And in any scenario, they remain there, right? Even with this plan that doesn't have any transaction baked in, the B2G buffer is well above 400 basis points when our distribution policy talks about 100 basis points as management buffer. So overall, a very comfortable position either way. And all of those capital trajectories, reminder, have everything baked in, right? So it's... the extra growth, the extra amortization of DTC, as well as a 50% throughout the year accrual.

Thank you for your answers. Just a follow-up, if I may, on slide 46 on the Basel IV impact. Is it on a transitional or a fully loaded basis? Thank you.

It's on a transitional basis for what we have taken for 2025, which, as you know, for the transition is a major part of the credit risk element.

Thank you, Theo, for your clarifications.

The next question is from the line of Sebi Mehmet with J.B. Morgan. Please go ahead.

Good afternoon. Thanks very much for your time. Just a couple questions from me, if I may. So one, Theo, I know you mentioned that already, but if I may just follow up again. maybe ask the question a bit differently. If we look at your capital deployment plans, may I ask where the dividends would stand in the order of preferences relative to M&A? And I know you guys will be good stewards of capital. You've earned every basis point of it very hard over the years. But when it comes to deploying it now, Could you give us an order of priority, if I may, just in general, without talking any specific M&A transactions? And my second question is on your outlook and specifically the cost of risk part of it. I see you're guiding for 50 basis points in the next two years, and then it goes down to 40 basis points. If you think about the breakdown of this, you had this year still about 25 basis points of fees in there. So where does the fee component go in the coming years? Does it come down or not? Because if it stays there where it is now, obviously we'll be talking about some very low underlying cost of this. So if you could maybe comment on that, that would be very helpful. Thanks very much.

Hi, Mehmet. And thanks for the question. I think it's very useful for everybody. and helps us underline the following. We would not surrender distribution aspirations, especially the ones that we have communicated for any sort of M&A activity. And if we believe that that was creating shareholder value, we would be explicit about it. That's why, despite the potential transaction that is currently under negotiation, we are today reconfirming the 50% distribution agreement. for 2025 and baking in for simulation purposes the coming years. So whatever we commit as distribution, as a step up of distribution, and we have talked about clearly the 50% step, comes first. To your cost of risk question, it's a 50-50 mix and kind of stays there, I've got to say. synthetic trades that are also part of fees are becoming very attractive. We did a recent one at a very low cost. The cost of capital for such trades have come down and it's a great tool for us to be economizing capital and capturing growth opportunities rather than surrendering them for the future. The growth is now and we will go and take our fair share and more. So Indeed, it is a very low underlying cost of risk. We also saw it this year at the 20 base point level. We expect that to sort of continue in line also with the outlook on MPEs we have put out here.

Super. Thanks very much for the clarification.

The next question is from the lab of Kemeny Gabor with Autonomous Research. Please go ahead.

Oh, hi. A couple of questions from me, please. The first one is on the foreclosed assets, where I understand you took some additional provisions in Q4. I also understand that you are not expecting to take too much in 2025. Can you comment on on how this portfolio is structured right now. The latest I saw was a 1.9 billion of net book at the end of 2023. Maybe you can comment a bit on how this has evolved and why do you assume that no further provisioning will be necessary here? My other question was on the long-growth guidance, where you very nicely outperformed your 2024 targets. So I guess you expect slower origination going forward. To what extent is this a function of a couple of big tickets maybe not materializing or stuff to forecast for this year? And to what extent do you see a slowdown in the broader activity based on your current pipeline? Thank you.

Hi, Gabor. Foreclosed assets. Look, foreclosed assets for some of you guys and other stakeholders is a question, also given other European examples of overall, I would say, asset quality and balance sheet health. So at 1.9 billion, we're kind of close to 2023. We have taken a lot of steps to accelerate organic sales We have more than double those sales. Those sales are currently happening at breakeven levels. So even a slight profit came out of the 2024 organic sales, if I remember correctly. But still, given the size of the book, it will take a long time to get down to kind of European average or numbers that... the stakeholders that are concerned, and I'm not talking only about supervisors, also some of you, some of the analysts, raters, et cetera, would go down to. And there are constraints that have to do with the way the market functions with official sector functionality, land registers, et cetera. That's why we chose to also, I would say, try an innovative structure that we've got in place to... You recognize about $300 million of such repossessed assets. That transaction would require an upfront hit that we have baked into Q4. We do expect to recuperate that money over time from earnouts and other elements that the structure contains. But right now, I would say we took together with the organic boost, also an inorganic element, bringing down the balance to around 1.5 billion. From now on, we are assuming organic sales to continue growing and accelerating, and we would get to a comfortable, I would say, situation of reposistasis being below a billion within the context of the plan. And that is why there's no further baking. It was a choice. We believe we're not surrendering a lot of value here. We're actually going to make the money back. And it was a turbo boost, I would say, to the reduction we possessed.

Now, Gabor, on loan growth, just to say that, first of all, we are very happy with the 12% increase net credit growth that we have managed to achieve in 2024. We are actually observing there one particular big one-off, that was the Attica motorways, which in our case was 700 million euros at the fourth quarter of 2024. When we do our numbers, we always work our numbers bottom up. So the 8% growth that we are posting for 2025 and as a CAGR for the next few years is a very educated number. We'll end up with about $12 billion buy and large loan growth in the four-year period, 2025 to 2028. We were quite happy that in 24 we've seen retail coming neutral, which was the first time in almost many years, and also with the small business lending growth of around 200 million. So it is an educated number that we are working year on year and the guidance we provide is based on that. Obviously, one-offs are always welcome to increase the balance if the case may be. But the growth that we are projecting is in line also with the 2% GDP growth that we are baking into our plan for the country. So we do expect that we will be... performing balances bank over the years to come. And we need to see year on year how this growth will plan out. But the 8% number that we give you is a very educated number.

Thanks very much. Can I just squeeze in one more small question, please? I believe when we spoke in Q3, You talked about a likelihood of a buyback commencing this year. Why did you decide to go for cash? And what is the outlook for launching a share buyback this year? Thank you.

Look, on the buyback, we have been looking at a number of things. Number one, a priority for us was to establish a very strong cash yield. We think it is important for the base case scenario to be based on a strong cash yield going forward. In order to do that, we did take many views, observing many views of our shareholders, but also we took into account the share price evolution and where our market cap sits as we speak. So establishing a strong cash yield was very important for us, and we did. And then on a case-by-case basis, on the basis also of how our market cap will be performing, we will be evaluating on a year-by-year basis, the strategy going forward vis-à-vis buybacks versus cash payments.

Very clear. Thank you.

The next question is from the end of Soufleros Andreas with Eurobac Equities. Please go ahead.

Hello, can you hear me? Yes, Andrea, go ahead. Okay. Thank you for taking my questions and congratulations for your results. I have two questions regarding NII trends. As we have seen in your presentation, you have experienced a contraction of about 15 basis points on loan spread, but in your assumptions regarding your new business plan, you have assumed about 270 basis points for loan spreads. Does this mean that you have seen a reversal to this trend for the next couple of quarters or for the next years? This is my first question. The next section is regarding deposit beta. You have assumed about 20% of deposit beta. Does this mean a pass-through rate for 10 deposits of 75%? Is that right? And my last question is regarding Snappy. You have assumed some losses up to 2027. This was included in your initial planning. And can you please quantify these cumulative losses up to 2027? And what's your anticipated profit post this year? Thank you very much.

Okay, Andrea, so to your first question, well, you're rightly pointing out the spread of Q4, and I guess you're comparing that to the trajectory we're giving. There's two things to that. One is the, I would say, drag to the spread of Q4 that some of the bigger dispersals have done, including the major syndicated deal that was mentioned before. And second is over the coming years, we've got retail kicking in with growth versus, I would say, a static situation that we saw in 24. So we have a lot of more detail where you see a kind of a byproduct in the analyst toolkit. But It's not a reversal trend. It's more kind of a mixed effect of the new production and how that translates to the actual numbers. As far as the deposit beta goes, I think we can all graduate a little bit from those metrics. I think these were all kind of forecasting metrics for the future. I mean, we've kept them in right now because we're all used to looking at them. We tried to bring explicit numbers as to what the cost of time double will do. We have a 12-month period ahead of us of dropping interest rates. We're already... witnessing market reactions to those rate drops. And that's why we've guided kind of explicitly as to where the mix is going to go, as well as where the actual cost of time debt was going to go, where January was below 2.1%, the new data was given. We're guiding for 1.7. I think that calculates around 50% pass-through, if I'm not wrong, between the year before of end of 24 versus the year before of end of 25. Overall, so overall for Snappy, we have the business plan of Snappy baked into the group results. It's 25 and 26 are planned. cost deployment years. So it's, as we call them, burn years to step up the customer volumes and customer acquisitions. That's typical for all fintechs. And that is a 25, 26 expected cumulative loss of around 50 million. 27 then becomes breakeven, assuming the customer loading That's up to where we are expecting it. And then we start seeing a mild profit as of 28. So, you know, for the coming, I would say two, three years, the cumulative loss of Snapyard expect around 50 million.

Okay, thank you. I have one follow-up question regarding, I don't know if you can comment on that, but do you have any target on return on investment regarding your recently announced transaction for Ethniki Insurance? And if this targeted return on investment has already accounted any restructuring costs that may include these transactions for the next couple of years, or if you can communicate the amount of these restructuring costs that they may include. Thank you very much.

Andrea, I think we're getting a bit ahead of ourselves here. We've got a potential transaction in place. It hasn't been signed when. And if we sign it, we're going to be announcing it. But what I can promise you is that we would not be in these discussions if we thought that we are in any way diluting return on capital for shareholders or if there are hidden or major transformation costs that are to be baked in, etc. We have a very good view of the potential target, and that's why we are where we are. I think if we are to proceed, we will be able to announce good things, but it is not for now.

Thank you very much. I think that was very clear.

The next question is from the line of Memishoglu Osman with Ambrosia Capital. Please go ahead.

Hello. Many thanks for your time. A few on my side, please. On deposit costs, just a clarification for time. Are you assuming in the 28 budget, 1.7 as well? That's my first question. On fees, the bank assurance fees rose quite sharply, Q and Q. Just wondering if there's any further color you can share with us what's driving it same with rental income is 25 now the new normal level and finally just going back to distribution discussion did i pick it up right it sounds like you put in 50 for 25 earnings but then after that it's more like a plug number and it could go higher just curious how you know where it could go or any color there you can provide us where the distribution payout could rise to. Thank you.

Now, Osman, on bank assurance fees, we have always been maintaining that bank assurance is an area of growth, that the penetration of... the insurance product and then following on, the bank assurance placement of products is very low and there is a great room for improvement. And if you want, also our strategic move on insurance is based on that premise, that strategically we expect that fees will grow in the area significantly. We have experienced this growth in 2024. We are continuing to experience in the first few months of 2025. And if you want, our conviction to proceed with the transaction is actually based on this premise. So no surprises there. We would expect to see growth in the bank assurance product going forward over the years.

And Osman, your other questions. Yes, TD is assumed to reach a terminal rate of about 1.7% throughout. That, of course, is in conjunction with the expectation for a terminal 2% URI board. Rental income, it's an area of investment, right? We keep growing at Rastor as our subsidiary. We'll continue doing so. and rental income will be growing throughout the plan over the coming years. As far as distribution goes, I think you mentioned it correctly. It is kind of a plug number after 2025 to stay at 50%. This is what we can talk about right now. Once we reach that milestone, we will reconsider. But right now, the assumption is for 50% sustained distribution, over the period of the plan. With healthy growth coming in, the accretion on capital is somewhat contained. So I think we like a lot that picture. We're going to work very hard to deliver it, also delivering the relevant spreads.

Perfect. Thank you very much.

The next question is from the Nile of Negro Alberto with Mediobanca. Please go ahead.

Yes, thanks for taking my questions. The first one is during your presentation, you mentioned that you want to become a financial service group. So my first question is on the potential acquisition of Ethniki. Can I ask you if you are planning to become a financial conglomerate? or if you are planning to request to the ECB just a supplementary supervision on the insurance business. The second one is on fees. Can you give us more color on the fee income trajectory in the coming years, excluding the negative impact from the government measures? seems your guidance is pointing to a flattish trend in 2025 and then recovering throughout the plan. So, more color on that would be great. Thank you.

Hi, Alberto. Look, financial conglomerate status is definitely in play, assuming that we would go ahead. There's multiple criteria, but it all boils down to significance. And we believe that the outfit that is produced by, that will be produced by the potential transaction would eventually qualify, but that's not entirely up to us. But we do have strong arguments around that. It's not an application, just to be clear. It is a status you receive. and it's based on assessment that is done at the supervisory level. So that's that. We will see where we get to with this, but we have made also our analysis. We believe that the end outfit would qualify for FICO status. Fee income trajectory, I think you spotted it. I think we've got a situation of a, of a very strong 24 with impressive growth on fees despite the headwinds that are well known. Our target is to sustain that fee pool throughout 25 and then take it up from there.

Thank you. Just one follow-up, if I may. If you are considering any restructuring cost during the plan to reduce the staff?

Yeah. So nothing major is there, but we have tried to keep the guidance at the reported level so as to make sure that you guys have clarity as to what the actual return is going to be. We believe that in the area of distribution, this is much more important than normalized profit or recurring versus one-off situation. So small numbers overall, all baked into the reported profit guidance.

Cool. Thank you.

The next question comes from the line of Butkov Michael with Goldman Sachs. Please go ahead.

Good day. Thank you very much for the presentation. I had a few follow-ups on the performance loans outlook. So of the €3 billion growth per year, which you approximately guide for in the guidance, What part do you expect to come from the retail growth, so from mortgages, from consumer lending? Also the question, do you incorporate or do you see the upside risk related to any pre-performing loans getting back to the balance sheet or to the system? What's the latest view of the regulator on that? And lastly, on SNAPI, So as far as I understand, this business model of fintech banks is usually oriented on the consumer and consumer lending, which growth was difficult, again, in the last years. Of course, there are the promising dots in that area, as you say, in 2024. So where do you see the growth on the consumer lending side, if I understand that correct, for the Snappy? Or you expect to focus not only on Greece, but also on the other European countries where this service may be of use? So, yeah, thank you very much.

Hi, Michael. On 2025, if you see on page 44, we have some numbers into the plan and the guidance we give for the small business, mortgages, consumer, and a little bit of Snappy as well. It's basically, we expect that... retail will grow, will start growing from 25 onwards. 24 was a balanced year after years of contraction. So we see this growth coming back again. And we do expect also that this will gradually work out for Snappy as well. The snapping numbers going forward, you know, they do include some international numbers as well. But, you know, we do project, as we said, losses for the first two years and then break even and growth going forward.

And to your question, Michael, about the re-performing. We don't have major, rather any numbers, I would say, baked into the growth as we've seen. We did a 3.6 billion growth with no re-performing, and we're now telling you guys the expectation to be around 2.5 for the coming years. So we don't have any major assumptions there. The structure by which we're performing loans will be traded in the country is still, I would say, up for grabs. And the question is not so much of supervisory nature, but more so of a commercial nature and services strategy in their effort to decumulate the senior notes of HAPS. So overall, our... Our key principle when it comes to performing trades is that we will not be increasing the risk profile of the balance sheet. We will not be increasing probability of default or stepping into a situation that could create inflows for us. That's much more important than baking in an extra, I don't know, a few hundred million of growth. in any particular year. We're working with the market, with servicers, doing such trades. There are no constraints, and nobody's the wiser, and nobody has the competitive advantage in performing trades versus anybody else. It all comes down to risk appetite.

Okay, very clear. Thank you very much.

As a reminder, if you would like to ask a question, please press star and one on your telephone. The next question is from the line of Buluguris Alexandros with Euroc Securities. Please go ahead.

Yes, hello. A quick question on your time deposits. You assume I see on your 2025 guidance an increase in time deposits. I think the trends we're seeing are ready for more or less time deposits being stable, if you could explain that. And the second question regarding settling back a bit on the fees that you mentioned, could you remind us of the expected impact of all the measures taken in January after the announcements with the government? Thank you.

Hi, Alex. Yeah, there is an assumption of a nominal increase in TD. It also has to do with evolution of some of the off-balance sheet products and how these will be converted as inflows to time depot. But I would say these are all of, I would say, marginal impact. There's no major market trend behind this. I would say it's more of a bottom-up detail of the plan. The impact of the measures has been quantified at around 30 million. We've made that very explicit when it comes to commission. And on top of that, we've got a one-off 25 million for the school subsidies that has been baked into the 2024 numbers. Thank you.

Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Magalu for any closing comments. Thank you.

Thank you. Thank you all for participating in our full year 2024 results conference call. We look forward to discussing with you all, physically or virtually, during our investor outreach program, which commences this week. 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 afternoon.