Bawag Group Ag Ord

Good day and thank you for standing by. Welcome to the BAWA Group Q1 2026 results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 and 1 again. Please be advised that today's conference is being recorded. and there will also be a transcript on the company's website. I would now like to hand the conference over to your first speaker today, and as Abhisar do, CEO, please go ahead.

Thank you, operator. I hope everyone is keeping well. I'm joined this morning by Enver, our CFO. Let's start with a summary of the first quarter results on slide three. We delivered net profit of €232 million and a return on tangible common equity of 28%. During the first quarter, the operating performance of our business was very strong with core revenues of $579 million, pre-provision profits of $391 million, and a cost-income ratio of 33%. Realizing the benefits from our investments over the years as we build out a pan-European and U.S. banking group. Total risk costs were $65 million, translating to a risk-cost ratio of 46 basis points. We have a low NPL ratio of 80 basis points and continue to see solid credit performance across our businesses. In terms of our balance sheet and capital, average customer loans and average customer funding were both up 1%, quarter over quarter. We have a fortress balance sheet with $13.6 billion in cash, equal to approximately 19% of our balance sheet, an LCR of 176%, and overall strong asset quality. Our pro forma CET1 ratio stands at 15.4%, with $650 million of excess capital. On the back of a record year in 2025, and having integrated both Canav and Barclays Consumer Bank Europe, which was rebranded to EasyBank earlier this year, we are thrilled to have been selected by PTSB as the preferred buyer. We said this last week, but I cannot stress this enough. The trust and confidence placed in us by the PTSB Board and the Minister for Finance of Ireland as the bank's majority shareholder is something we take very seriously and are keen to demonstrate our capabilities and contributions. Ireland is an incredibly attractive market with all the ingredients for successful banking, pro-growth economic policies, rich in human capital, and a gateway to EU markets. We aim to drive competition through investment and innovation, supporting PTSD's customers and, more broadly, the Irish economy, while delivering long-term sustainable growth. We plan to provide an updated mid-term outlook with full-year earnings, assuming a successful closing of the PTSD transaction, which is subject to shareholder and regulatory approvals. Excluding any potential PTSD impact, we reconfirm all of our 2026 targets with net profit over 960 million euros, return on tangible common equity over 20%, and a cost-income ratio of under 33%. Okay, moving on to slide four, the PTSD acquisition. PTSD represented an opportunity to acquire the third-largest bank in one of our core markets, and one that we have followed closely over the years. PTSD serves approximately 1.3 million customers, with a strong history as primarily a mortgage lender, providing essential retail banking services through a community banking-focused branch network across the country. The total balance sheet amounts to €30.5 billion, with €22 billion of customer loans and approximately €26 billion of deposits. Our three key focus areas will be, one, accelerating growth by complementing PPSB's current product offering with the full suite of retail and SME banking products, as well as corporate, public sector, and commercial real estate lending. Two, investing in technology and distribution, building up greater digital capabilities while investing in an advisory-focused branch network. We aim to consistently invest in the franchise to position PTSB to compete both in today's environment and over the long term, ensuring the franchise is at the forefront of innovation. Three, marrying local knowledge with broader group capabilities as we leverage the local expertise of the PTSP team with a deep understanding of the Irish market and close relationship to customers with the TechOps platform and balance sheet strength of Bala Group. On slide five, the impact of the PTSP acquisition on the Bala Group franchise. The PTSP acquisition will grow Bala Group total assets by around 40%. The group will serve over 5 million customers across seven countries, with over 90% of revenue and customer loans from euro area countries. Further diversifying our earnings, funding, and geographic exposure. Given PTSB's solid position in mortgage lending and retail deposits, residential mortgages will account for two-thirds of total customer loans and retail deposits will account for three-quarters of all funding. Further strengthening our balance sheet funding and serving as a catalyst for growth. We see significant opportunities to invest in technology. enhancing digital capabilities, customer engagement, and product innovation. Today, technology spend accounts for around 30% of our total spend at Follow Group, a competitive advantage and true differentiator. Our spend is strategic, judicious, and focused on the long term. We plan to leverage our tech ops platform, strengthen in-house capabilities, and position the bank to compete not just today, but long into the future. On the back of these investments, there will be several synergies in non-personnel related costs, which account for 55% of operating expenses at PTSP. Our goal is to establish a consistent operating rigor, deliver for our customers, underpinned by a strong culture of operational excellence, anchored to our meritocratic principles focused on retaining, developing, and promoting top talent. We also plan to capture benefits from overall funding and capital optimization, It involves strong credit rating, funding stack, and balance sheet management. From a financial standpoint, the acquisition will be P&L accrete of day one and in line with our through-the-cycle group return requirements, with a return on tangible common equity over 20%. The transaction is expected to contribute net profit over 250 million euros by 2028, translating into over 20% EPS accretion. and from a capital allocation perspective, is more accretive than a share buyback by more than two times. Given our strong capital position and capital generation, our goal is to fully self-fund the deal, which we will discuss in more detail. We also see opportunities to grow our product offering, growing both the number of lending and advisory products, expanding cross-sell opportunities across PTSD's customer base, as well as addressing new customers in new segments. We will leverage our product factories and partnerships to provide a full suite of retail and SME banking products. We hope to do this through a modern and digitally-enabled branch network, reducing friction from transactional banking and freeing up capacity for more customer-focused advisory. The goal is to provide customers with simple, intuitive, and affordable financial products and services that promote their financial health. However, we will remain patient and disciplined given our conservative approach to risk management, emphasizing risk-adjusted returns rather than leverage-driven growth. Given our experience with acquisitions in prudent nature, the goal is to build a strong foundation that will serve as a springboard for future growth. This is potential upside opportunity to our targets as we do not put any timeline on these organic incremental growth opportunities. Since 2012, Our strategy has been consistent. Grow within our core markets, prioritizing our customers' needs, deliver efficiency through operational excellence, and keep a safe and secure risk profile, all while embracing a continuous improvement mindset and building the right culture. The PTSD acquisition will have been our 15th acquisition since 2015, as M&A is a key plank of our strategy. We hope to capture all the learnings over the past decade to ensure a successful integration, leveraging best practices as we continue to adapt and improve with each new acquisition. With that, I'll hand it over to Enver to go into detail on the capital development and how we plan to fund the deal.

Thank you, Anas. I will continue on slide six. Capital development, our reported CT1 ratio landed at 15%. On a pro forma basis, our CT1 ratio was 15.4%. equal to $650 million of excess capital above our CP1 target of 12.5%. This factors in the sale of a minority investment that signed in the fourth quarter of 2025 and is expected to close in the second quarter of this year. We generated 103 basis points of gross capital from earnings, and we also completed one SRT transaction, which mostly funded the underlying business growth. We have not made any dividend accruals in the first quarter, and we plan not to do so in the first half of 2026, which leads me to the next slide and how we plan to fund the transaction. Slide seven. As of today, we anticipate that the transaction will cost us approximately 450 basis points of CT1 capital, which means that we need to be around 17% to also meet our management target of 12.5%. Our starting point as of here on was 14.6% or 210 basis points above our target. And we plan to generate another 250 basis points the first half of 2026. 200 of the 250 base points will come from a dividend policy change for 2026. In simple terms, we'll use our first half profit to fund the deal and only our second half profit of approximately 500 million euros will be eligible for a dividend payment. In addition, we plan to execute several RWA measures that will generate roughly 50 base points. So in total, with the starting access capital of 210 base points and the dividend policy change and the RWA measures, we should have more than 450 base points of excess capital by June 2026 to self-fund the whole deal. As an alternative, we would have the opportunity to further adjust the dividend for 2026 or raise capital. that is clearly not our preferred option. In terms of CT1 targets, these remain unchanged at 12 and a half percent or about 13% for access capital distributions. Moving to slide nine, our P&L and balance sheet overview. We delivered a strong quarter with net profit of 232 million euros and the return of tangible common equity of 27.6%. Core revenues increased by 1% quarter over quarter with net interest income up 2% and net commission income up 1%. Operating expenses declined by 3% in the quarter, resulting in a cost-to-income ratio of 32.5%, in line with our through-the-cycle target of below 33%. Risk costs mounted to 65 million euros, reflecting the changing asset mix towards consumer unsecured. In terms of balance sheet, customer balance increased by 1% quarter-over-quarter, while custom deposits were down 3%. Fungible common equity increased by 3% quarter-over-quarter, not including any dividend for 2026. We continue to maintain a fortress balance sheet with 14 billion in cash, representing approximately 20% of our total assets, an LCR of 176%, and strong asset quality reflected in a low MPL ratio of just 80 basis points. Moving to slide 10, On slide 10, core revenues, net interest income increased by 2% in the quarter, driven by customer loan growth of 1%, with growing consumer business and overall flat mortgage portfolio, with varying trends across countries. Net interest margins stood at 345 basis points, reflecting ongoing changing asset mix, while the deposit data decreased to 35%. We also provide an updated NI rate sensitivity, Every 25 basis points increase delivers 25 million euros per year after 12 months and 50 million euros per year after 24 months. Net commission income increased to 99 million with continuous strong results across business lines of retail and SME, particularly in credit cards and payments. For the rest of the year, we expect net interest income to grow gradually and a stable development in net commission income. On slide 11, operating expenses amounted to 188 million euros, representing a 3% closely defined with a cost income ratio of 32.5%, which is broadly in line with the pre-acquisition levels and are through the cycle target. The integration of the cloud business is now broadly completed while the integration of the rebranded EasyBank business in Germany is well on track. Waste costs for the quarter amounted for 65 million euros, with an increase of consumer unsecured in the overall asset mix, primarily driven by credit cards, and the corresponding ECL increase in Q1 driven by exposure growth in new business being the main drivers. We continue to close and monitor the evolving geopolitical situation and its potential implications for our portfolio. Direct exposures to sectors most sensitive to geopolitical shocks remain limited, particularly industries with high energy intensity or significant supply chain dependencies. Slide 12, retail and SME. The retail and SME segment delivered net profit of €198 million, a return on tangible common equity of 35.5%. Pre-provision profits amounted to €341 million, broadly flat quarter over quarter. Risk costs amounted to 65 million euros, corresponding to 67 business points, while credit policy remains solid with an MPL ratio of 1.3%. We expect continued growth across the franchise. Corporates, real estate, and public sector, this segment delivered net profit of 42 million, with a return on tangible common equity of 30.8%. Our focus remains on disability underwriting and risk-adjusted returns. And finally, on slide 13, reconfirming 2026 applicant targets, we reconfirm our net profit target of more than $960 million in 2026. Our 200-cycle targets also remain unchanged with an ROTC of greater than 20%, cost-income ratio below 33%, and a CET1 target of 12.5%. And with that, operator, let's open up the call for Q&A. Thank you.

Thank you. To ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. We will now go to the first question. And your first question today comes from the line of Gunara Sakulova from Morgan Stanley. Please go ahead.

Hi, good morning. Thank you for taking my questions. I have three, please. The first question, regarding the PTSD transaction, what level of shareholder acceptance do you expect, and how material is the risk that the shareholders could push for a higher price?

Well, thanks for the question, Bunara. We can't comment on the shareholders outside of the government, but the government obviously is committed at $57. So, we'll see how things develop, but I do think it was a robust process and we're confident that the transaction will come to fruition.

Thank you. And the second question, on the 40 basis points participation sale that you also highlighted the last quarter, can you remind us how was it generated and why it doesn't have any impact on the P&L? And additionally, for the 50 basis points risk-weighted asset measures related to the funding of the deal, could you outline any expected P&L implications and do you need any regulatory approvals for that?

Gunnar, it was a bit hard to hear your questions, but I think you were asking about the participation, how that was an impact of 40 basis points. Did you catch that?

Yeah, I think the timeline. Gunnar, I think it's simple. Closing will only take place in the next two to three weeks. Once closing is completed, you will see the full impact reflected in our CT1, which is basically reversing the deduction that we have on CT1 right now from that participation. And I think the second one was on the...

Sorry, go ahead. And the impact on the P&L, you don't have any impact from the 40 basis points sale, correct?

There is going to be a P&L impact, but that's not reflected in the CT1 impact.

And from 50 basis points risk with the passive measures, is there any P&L impact from this, and do we need any regulatory approvals?

Yeah, so we've stated on the page all financial effects are completely reflected in the targets. So, obviously, if it comes to the P&L impact or for the CQ1 impact, that's all considered in our numbers already. P&L, if that's what it was.

And there's no regulatory approvals required for the SRTs and other measures?

Depends on the measures, but most of them don't require approval. Some might, as SRTs, need approval from the CDC.

And a quick question. Looking at your peers in Ireland, for instance, Bank of Ireland is operating at 14.5% CT1 target. Would you expect your Irish business to run at a similar level of capital, or do you see a scope to operate closer to the group target of 12.5?

I think it's premature to discuss any capital targets. I think we've been pretty consistent that 12.5% We'll address that upon closing, obviously, subject to shareholder regulatory approvals. Thank you.

Thank you. And just a last question, if I may. Regarding the share buybacks, is it fair to assume that you would need to reach a CC1 ratio above 13% before considering initiating any further buybacks?

That is correct. Any excess capital involved is based on 13% value.

Thank you.

Thank you. Thank you. Thank you. Your next question comes from the line of Jeremy Sigi from BNP Paribas. Please go ahead.

Thank you. Good morning. Two questions, please, both to do with the sort of shape of PTSD. Firstly, with CNAB and Barclays, it was striking that, you know, you reduced bits of balance sheet quite materially on integration. There were bits of portfolios that were not core for you, Are there any bits of PTSD that you identify already at this stage that you might want to slim down or do less of? And then my second question really is the opposite of that, actually, which is do you already have ideas of products and services that you do elsewhere in the group that you think look compelling additions to PTSD, things that could work well with that franchise that they're not already doing?

Yeah, thanks, Jeremy. Just as it relates to Barclays and Kanab, outside of just the securities portfolio, everything was core. There was a consumer loan portfolio in Kanab, which we had sold off, but that was part of the day one we had anticipated. So there weren't really portfolios that we ran down or sold off, other than what was kind of highlighted at the get-go. As it relates to PTSP, obviously they're primarily a mortgage lender. They have started in SME lending and consumer loans. We hope to further those efforts. And I think the complementary to your second question, the complementary products, we tried to lay out on one of the pages where we said specialty finance. We think factoring and leasing could be really interesting. We hope to introduce our brokerage product as well, in addition to kind of obviously the advisory products and insurance as well as in funds, which ETSP is already doing. So hopefully we'll be able to enhance that. And then on the non-retail and SME side, I think there could be some interesting opportunities. in particular commercial real estate for pretty big public sector lending in the South region and potentially corporates if those suggested returns are there. So I think the takeaway is we're going to be able to bring a full suite of retail and SME and corporate banking products and pretty excited about the opportunity. Fantastic. Thank you. Thank you. Thank you.

Thank you. Your next question today comes from the line of Gable Keveny from Bergstein Autonomous. Please go ahead.

Morning. A few questions from me, firstly on PPSV. Can you give us an idea on how you think about the size of the bed wheel creation from this deal? perhaps including the fair value reserves you see on PTSB's balance sheet. And then, further to that, on your statement that you would invest the bedroom in the business, can you walk us through how you are actually thinking about the restructuring and the integration of, so what you would actually invest in, if you could elaborate on that? Next question would be on your financial targets. So as I understand you are driving up to more than 25% return on allocated capital, based on the 1 billion of capital you would invest here. My question is on the profit side, the more than 250 million, because I see the PTFE standalone consensus being at around the 220 million euros for 2028 right now. So it doesn't seem that you count on meaningful revenue and cost synergies. Can you walk us through your thinking there? And the final question will be, I believe that you are going to be subject to subordinated under our requirement with your balance sheet exceeding 100 billion euros. Can you give us any sense on how you expect to meet those requirements and then the impact on your financials? Thank you.

Okay, Gabor. I will, let's mix it around. I'll take that second question with respect to the net profit target, and then Andrew will take the bad world, and I think you were referring to the balance sheet subject. So, A, the net profit target is greater than $250 million. We tried to give some indications in terms of if you look at kind of the scenarios around the non-personnel costs and the percentage of PTSB where we see some, I think, initial opportunities and synergies. Historically, we've tended to be pretty conservative and prudent in our forecasts. This is no different with this particular transaction. I would say that probably the biggest element I've mentioned during the presentation is the revenue opportunities, which we think are going to be very interesting. Those are not in the targets, incremental growth opportunities, the introduction of new products and new segments. And the reason being you need to have a solid foundation, and those are organic, and we're never going to just chase things. We're going to be patient and disciplined and focus on risk-adjusted returns, but we think those are going to be really interesting opportunities. as Ireland has a really robust banking market. So I will pass it to him for the other two questions.

Yes. So, Gabor, on the first question on the bedwell reinvestment, it's very consistent to what we have done in the prior positions. So we try to reinvest most or all parts of the bedwell, typically into tech investments, integration costs, if necessary, for restructuring costs, and also marking balance sheet items conservatively. So it's a mix of these things that altogether will, you know, make us reinvest most parts or all parts of the bet or the transaction. On your third question on MRO, so we obviously have informed the SRB that it's too early to say, like, if there is going to be a subordination requirement on our level. If that is going to be the case, we would expect there is going to be a transition. it's going to take a few years. So, again, a good tour, but something that we have in our plans as well.

Thank you. Just a small follow-up on the balance sheet marks. Where do you see a likelihood that you will have to mark down practically balance sheet items at PTFE?

So, we cannot really go into the details, but how we look at it are certain spread levels, especially on the asset side. that we define as a benchmark, and again, we have done that consistently with all assets or businesses that we have acquired in the past as well. Understood. Thank you.

Thanks, Gaurav.

Thank you. Your next question today comes from the line of Amit Ranjan from JP Morgan. Please go ahead.

Yes, hi. Good morning, and thank you for taking my questions. Can I ask on slide 7, please, and the timeline of first half 26, is that a guide point for you, i.e., you would assess the capital position at the end of first half and that drives future capital measures? Is that guide point agreed with the regulator? What's the rationale for that, please? The second one is on slide 13. You are reconfirming the through-the-cycle targets. Can I please clarify if these targets are including PTSP as well, please, or standalone? And the last one is on deposits. If you could please talk about the sequential decline during the quarter, if it was related to any particular region, please. Thank you.

Thanks, Abhinav. All good questions. One I have here, it's kind of natural if you think about it. So we'll have the scheme vote happening around summertime. expected now for july so we want to have a clean starting point as of half year then all the application and processes will happen after that so clean starting point so by that point in time we want to have the full south funding capacity addressed so that's why we chose to have it as a half year uh on the targets for people to send along so the targets that you see in the back are standalone without ptsd reason for that is tied to the first question is timing so the timing can of the deal we expect closing to be Q4 or early 2027. So right now we don't assume any impact on the financials in 2026 other than potentially the capital position itself. And the third one, deposit decline, it's unfortunately the seasonality of things. So a better way to look at it is the average deposit balances that you see across the different lines, and they have been flat or increasing quarter over quarter. So it's simply just a point in time that sometimes at year-end, you know, just at point-to-time balances are higher versus Q1. We look at the average balances, and they kept growing, actually, over the quarter.

Okay, great. Thank you. And so, one clarification on slide 10, the NI sensitivity to 25 basis points, is that for a parallel shift?

Sorry, say it again. Is that a parallel shift? Yeah, it's a parallel shift, yeah. Just to make it simple, we assume the parallel shifts of the curve, yeah.

Okay, great. Thank you. Very helpful.

Thanks, Alan. Thank you. Your next question today comes from the line of May Nemes from UBS. Please go ahead.

Yes, thank you for the presentation. I have two questions, please. The first one will be on the phasing of bottom line benefits. Could you give us a sense to what extent we could see already quite substantial bottom line contribution coming through in 2027 given your planning to invest the bad villain to investments restructuring changing balance sheet marks and so on and to what extent can we get closer to the flagged 20% benefit already in 2027 or is that largely back and loaded that's the first one Second question would be on the existing footprint. It seems like loan growth is showing a continuation of trends that we've been seeing in the past couple of quarters. Could you share your views on the outlook on loan growth, particularly, I guess, in housing loans? And if you could perhaps talk a little bit about the country-level trends. Thank you.

Yes, I'll take the first one. So, again, we gave the guidance for 2028 of 250 plus. But the way we look at it is, first of all, it depends on the closing timeline. So, if the transaction closes end of year, we will have the full year contribution 27. If it only closes in Q1, obviously, it's going to be less. So, that's number one. And the second one, I think the way we look at it is gradual. You know, it's going to be a gradual development from, you know, now to 2028. So, we will have already rather than impact in 2027.

And Mate, with regards to loan growth, like we do every quarter, I guess, if we just go around the, kind of round the horn on the different products. Mortgage is more of the same from prior quarters. Certain countries, it's a pretty challenging market. We do see the Netherlands picking up. Ireland, there's some interesting opportunities. But I think Austria, Germany continue to be pretty challenging. from a pricing standpoint, as well as what you see in terms of advance rates and credit. Consumer and SME have actually been pretty solid. If you go back the past five, six quarters, it's actually been performing really well, and credit cards is really a completely different dynamic. That was part of the reason of the risk costs. We actually overperformed in the credit cards, but you get hit with the ECL charge in the first quarter, so that has progressed better than anticipated, and the consumer loans and the specialty finance does continue to grow. That's kind of the retail and SME story. And then the corporates, commercial real estate, public sector, the real driver there is the real estate or commercial real estate business. We had a strong closing in the fourth quarter. We have a pretty, I'd say, robust pipeline. Some of that got pushed into the second quarter. So we should see growth on the real estate side. And then corporates, it's more of the same. I do think that you are starting to see more discipline. in part, obviously, what we were seeing in the private credit space. Hopefully that provides a lot more discipline and rational pricing yet to be determined. In the public sector space, there's unique opportunities, but those are more idiosyncratic. So I think in kind of taking all of that into the mixer, we're still at our growth targets that we had communicated earlier in the year. We feel pretty confident about, so I hope that helps. That does.

Thank you.

Thank you. Your next question comes from the line of Hugo Cruz from KBW. Please go ahead.

Hello. Thank you for the time. So I have a few questions. So first I would like to ask you about what could be the tax rate for the group after the PTSP acquisition. I'm mindful that Ireland has a lower tax rate than the rest of your footprint. So, for example, could it make sense for you to move costs to Ireland to take advantage of this differential? Second, you know, your guidance on dividends is quite clear, but obviously it will depend on the volume growth that you report in the second half of the year. So, I don't know if you could say anything about that. Third question. Do you expect to adopt any further material RWA measures in the second half of after the PTSD acquisitions? You know, again, I'm mindful PTSD has quite a high RWA density, so I wonder if that could be a source of synergies. And finally, PTSD is deposit rich. How can you use that? Can you use those deposits outside Ireland and therefore grow deposits outside Ireland less than you would otherwise. Thank you.

Yeah, Old Park is a group structure, Will. So, yes, obviously we're thinking about the overall group structure, but it's really premature to share any details of that. What I can share with you is the tax rate direction. So, as of now, we are oscillating around 26% of... as a, you know, group tax ratio. I think after the combination, we should be in the low 20s. So that's what we can say as of today. Obviously, if things change from a structural perspective, that number could be different. Then I would also take the deposit question. So just the inbound success of deposit rich. The thing is, we are deposit rich in almost every country. So we are deposit rich in Austria, you know, Netherlands, and then in Ireland as well. So, yes, we will think about a structure to make sales capital and liquidity quite fungible, but ideally we can deploy that excess liquidity in the market in Ireland. That would be our primary goal. And then there was a question, I think, on if there are any RWA measures planned for the second half. So, our focus is not to get the, you know, measures done for first half to get wholesale funding capacity addressed by half year. But we, you know, always look at things, and potentially there could be more, you know, happening in the second half, but that's not our priority right now. Is there something else? Google, could you repeat? I thought there was something that I think I missed.

Sorry, it was just one more, which was the volume growth, you know, the dividend in the second half. It's a function of volume growth, so I was wondering, yeah.

Oh, that's a function. Yeah, so, you know, we've indicated that on the page that we expect net profit at the second half to be larger than the first half. And that's a function of two things. So asset growth will continue. NIM expansion as asset mix and deposit datas are getting better will improve. So top line is going to grow gradually while the upper line is going to come down further. So you will just see better operating leverage if it tries to hire profit in the second half.

Okay, thank you.

Thank you.

Thank you. Your next question comes from the line of Tobias Lukas from Kepler. Shavro, please go ahead.

Yes, good morning also. Two, three questions from my side, please. Firstly, touching on capital and SRTs, could you maybe share the SRT benefit that you achieved in Q1? and also maybe shed some light on the further plan for 26, and maybe also give the total amount of the loan book, which is currently under SAT program. Secondly, on the potential share-buy-back readiness, so if I understand you correctly, you're basically set up for the full acquisition by the end of H1. Then you, in H2, total earnings will be distributed as dividends, so that would bring or keep you at a roughly 12.5% Q1 ratio, then assuming you kind of earned it 13% by Q1, would that mean that by Q2 next year, by the end of Q2 next year, you would have excess capital, which could be considered to be distributed, again, not accounting for potential RWA measures, SOT, etc.? ? So, if that was the case, you know, like how quickly would you then potentially announce sort of buybacks? Should we expect that then to happen around Q2 results and be executed quite fast? Thank you.

So, thanks a bit. I hope I got all the questions. First one, on the SRT, in fact, the reaction with the benefit in the first quarter was around 20 basis points towards CP1 ratio. And I think the second question or kind of the topic of the second question was potential share buyback readiness. It's really too early. So we need to completely focus right now on getting everything done for the transaction. But we will follow the same principle as we did in the past. So it comes to your end and probably then also the first step. We will assess the capital position and then look into organic growth, potential other opportunities, and then decide if we want to distribute. Nothing is going to change. So our excess capital policy will remain the exact same as we have done in the past. And it's really too early to say we are going to do something in Q2 of 2027. Let's wait for that and then address it by then. Very forward-thinking, though.

Yeah. Sure. Thanks, Amber. Maybe quickly following up on the SAT, so 20 bits for Q1. Can you remind us how much of the book is now basically under SAT or what kind of RWA relief you got so far from SATs in percentage points and what you potentially still consider for the year to come?

Yeah. So we have that page in the appendix, page 15. Very short of split. Right now, $10 billion of the balance sheet is covered under the SRT.

Thank you. We have one further question, and the question comes from the line of Chris Hallam from Goldman Sachs. Please go ahead.

Yeah, good morning, everybody. Just two from me. So first of all, thank you for the updated NII sensitivity. How would that change with the integration of PTSD? Obviously, they run quite a different hedging program to you. And so would you plan to align that and bring them on to your sort of beta hedge program? And would any costs associated with that all be wrapped up in any sort of day one costs on the acquisitions? And then second, just to come back to some of your comments just now on the dividend, I guess I'm just trying to solve for whether the number for FY26 should be 500 million or lower. And I appreciate it's too early for you to say with any certainty. But just from a sequencing perspective, you get to the 17% plus CT1 needed to fund the deal by the end of the first half. Then through the second half, you're essentially accruing at 100% of net profit. You're then going to make a determination in January or February as to what the right size dividend is for FY26. So as long as the impact remains at 450 basis points, you should mechanically be able to pay out the 500 in April next year and remain above that 12.5% for Q4 pro forma. The only thing I think that might bring that 500 million div number lower is organic heart degree rate growth in the second half of this year. Is that the right way to think about all of that, just from a sequencing perspective?

Yes, Chris. 100% going. Okay. And just going back to the anion sensitivity, so it's too early to provide the combined anion sensitivity, but also PTSP, if you look at their branching structure, is heavily deposit-funded, which means they are sensitive to rate modes. When you talk about the hedging approach, you know, we will try to be as consistent as possible across the group, but we will also, obviously, reflect what the what the specifics are in different markets, and the Irish market is different than some of the other markets that we are in. So I think the best way to address it is it's going to be a mix of what currently PTSD is doing and what we're doing in the dollar group level.

Okay, super clear. Thank you.

Thank you. That was our final question for today. I will now hand the call back for closing remarks.

Thank you, Operator. Thanks, everyone, for attending. Really good questions. We look forward to catching up with you guys for second quarter results. And for those who are attending, tomorrow's AGM as well. I look forward to talking to you. Take care, guys.

Bye. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.