Caixabank Sa Unsp/Adr

Good morning and welcome to Casabank results presentation for the first quarter of 2026. We are joined today by our CEO, Gonzalo Gortazar, and our CFO, Javier Pano. As usual, we plan to spend about 30 minutes with the presentation and about 45 minutes to an hour with the Q&A. The Q&A is live and you should have received instructions Questions by email on how to participate. Needless to say, at the end of the call, my team and I will be at your full disposal. And without further ado, Gonzalo, the floor is yours.

Thank you, Marta. Good morning, everybody. And let's get into substance. So, first quarter of the year, and... We feel quite happy with the way things are progressing, particularly in light of the unstable environment that we have outside of Spain and particularly in the Middle East and its consequences. So you see volume growth, 7% year-on-year. Revenues, you saw... The NII, which is in line with our expectation and our guidance in the quarter, still affected by negative repricing, as we had explained in the last presentation. Very positive figure from services, insurance and fees and commissions, 7.5% year-on-year. Quite remarkable in terms of the speed at which we continue to see asset quality improvement coming down to just below 2% in terms of MPLs and maintaining a very attractive cost of risk, which we see sustainable for quite some time. Good capital creation. We decided to, as in line with our policy, to affect another share by back, which we are Announcing today, return on tangible equity close to 18%, and in fact we are improving our guidance for the year from, as you say, tweaking from around 18% to above 18%, and we'll get into the reasons for that. We reiterate our guidance and... positive spirits about what we're seeing, despite the very concerning environment in the Middle East. So I'll start with the economy, not on this slide, but just learn the figures for GDP in Spain, 0.6%. growth quarter-on-quarter, which is higher than our expectations. Our economics team was expecting somewhere between 0.4%, 0.5%, and embedded into our current estimate of 2.4% GDP for the year was 0.5% growth. So something better than expected. And I think this is remarkable because the first quarter not only has Iran, but also in Spain we had some heavy rains in February and problems with particularly a train infrastructure. And to be honest, seeing 0.6% growth in the first quarter is very good news. We still have to incorporate into this 2.4% growth that we have for this year forecast growth. We need to incorporate the impact of the situation in the Middle East and the measures that the government in Spain has taken to offset at least partially what may come from increasing crude and oil prices and gas and fossil fuels and the consequences. But now we have... again, positive data from this first quarter. So quite good. Eurozone numbers have been a bit more mixed between the strong Germany and weak France and Italy, so-so. But in overall... The environment, again, is very resilient. And if you look at what's driving growth, which I'm not going to go through the list because you know what's happening in Spain in terms of very positive dynamics, very strong inertia, and some of the factors that... I wouldn't say prevent us from having an impact from the Middle East, but certainly moderate any negative impact from the Middle East, particularly the lower reliance on fossil fuels thanks to renewables in Spain. And now we're seeing... The last few weeks, remarkably low prices in Spain relative to most other European countries. A potentially positive, as we're seeing already, impact on tourist base on the spending of cards for tourists. We've already seen in these weeks better dynamics for tourism in Spain. We'll obviously have to continue monitoring the situation. But all in all, to be honest, within all the conservatism and prudence that one has to have in such a volatile environment, we see both Spain and ourselves in a very good relative position. Even Bank of Spain is saying, even in an adverse scenario, they still see growth in Spain at 2%. Time will tell. Obviously, the impact of rate movements, which is, again, very volatile, but clearly is suggesting increases in rates by the ECB and already increased rates in the markets are also positive. As you know, our NII sensitivity, I'm sure that Javier will discuss that in some detail. So with that kind of background which is in this case is very very relevant because really is critical what we see is our performance being I'd say above expectations above our internal expectations in terms of client acquisition 372,000 in the last 12 months and relational clients, volume growth of 6.6%, and then market shares with some delay, but we continue to see sustained, continuous increase in market shares across most of our product range. Transformation, technology, AI, we're spending a lot of money and a lot of time in making sure that we adapt to what the new technologies offer to our clients and to ourselves, so that as far as we can, we not only adapt, but that we lead. Here are some of the initiatives. Basically, they have to do with how the clients interact with clients, ourselves through the app mostly, how our employees interact with the bank, and this is aliens helping employees in various forms. Most relevant that we're deploying out to the whole network is for the preparation of commercial meetings with customers, which is bringing down preparation time by 75%, AI freeing up a lot of capacity to grow. And then there's a lot of AI and technology we're implementing, looking at how we run operations, how we sort of review processes end-to-end and how we make them work. much more efficient. We are very happy with the fact that this is not just plans, but actually things are happening and starting to have an impact as we speak in these quarters. Going back to financial performance, lending, 7.2 percent growth year on year for the Performing portfolio, growth quarter on quarter in a quarter that is obviously seasonally difficult. We have 1.1% growth. It's quite notable. And then you see residential mortgages, 6.7%, consumer lending, 12.3%, and business lending, 8.8%. It's very strong across the board and comparing to previous years. the traction and the pickup of activities is very remarkable. And obviously at some point we'll stop growing even faster than the previous 12 months, but the ability to maintain those levels is what's embedded in our guidance and certainly the first quarter. has surprised us on the upside. Customer funds, again, similar story, 6.3% growth in wealth management, in deposits, and market movements. But we also wanted to share with you what was the last quarter, because obviously that's when we had the negative market effects in March in particular. you can see that despite those effects of negative 3 billion, actually in April we're up by more than 7 billion, so we're recovering those impacts very easily. Again, subject to markets, but so far so good. And then most remarkable net inflows have stayed positive in the first quarter and continues to accelerate in the month of April, as you see the run rate at one and a half billion. So pretty good performance despite the events in Iran makes us quite satisfied with where we are and obviously that we can continue in that direction. You have some more details on wealth management. You can see how net inflows have been relatively well balanced between mutual and pension funds and savings insurance. the end of the first quarter, end of period AUMs are at the same level under the average, and as you can imagine, after what I said of the April performance, this is going up, so it obviously looks good for the rest of the year if the market does not deteriorate again. Now, the story of our potential on this part of the business is well known to you, our preeminent position, what we've done, and what we see is another quarter that vindicates that potential. a position and opportunity. Similar reasoning applies to protection insurance, 12% premium growth, very balanced between life risk and non-life. My box continues to be a great success and here is probably the area where we're gaining market share more rapidly across the business lines. You can see the last 12 months in life and non-life and Here you have some delay in the data. Some of it is still from December, but it's actually working well across the board, health, auto, household, good performance, gaining market share in line with what we've done for the last 10 years and a lot more in front of us because there's clearly much more potential in Spain and generally the Eurozone. And I'd like to finish with just a summary of what I said. You see what we're saying for the environment, the economy in Spain. We have lower... We're better shielded from Middle East crisis. Our clients are less levered than ever. And the financial sector generally is in a position to support the economy. So similarly or to the opposite of what we saw in the great financial crisis, where Spain was badly hit and the financial sector collapsed, not us, I have to say, but the finance sector overall obviously had some trouble. Here we have the opposite. The finance sector is going to help the economy, which is quite nice. And on our side, our scale, our balance sheet, our limited risks give us a lot of coincidence. We think that we have a good period ahead of us, hence the reaffirmation of our guidance and that slight increase for short-term return on tangible equity, which I'm sure we'll discuss later on. And with that, I guess, Javier.

Okay, thank you. Thank you, Gonzalo. Well, from my side, as always, the additional details on the P&L and the balance sheet, starting with the consolidated income statement, as you know very well, Net income at 1,572,000,000. This is up by 7% year-on-year, more than 5% quarter-on-quarter. Moving upwards, first NII, moving to revenues, is up by 0.6% year-on-year. Quarter on quarter down by 2%. You know that this quarter affected by seasonal impacts, mainly a larger day count and larger negative, still negative, loan industry success, although I'm pretty sure it's the last quarter to have those negative impacts. Then on revenue from services, pretty good news. As Gonzalo was saying, strong commercial activity here. mainly on protection, up by 7.5% year-on-year. Quarter-on-quarter, slightly negative, as we are comparing with the fourth quarter last year. You know the fourth quarter always strong positive seasonality, so that is why it's slightly negative. Below, all the revenues doing well, also up by 6% year-on-year. Dividends, I would remark that we have the dividend from Angola, from BFA, slightly smaller than last year. You know that we sold part of the stake. This is why we have a slightly smaller dividend on that front. Equity accounted up by more than 10%. Year-on-year, strong contribution from Seward Cash Adeslas. Other operating income and expenses and trading pretty much in line with last year. Total operating expenses also in line with guidance, moving up by 4.6%. Impairments along those charges, although higher in euro terms, If you look at the cost of risk on a 12-month trailing basis, it's currently 23 basis points. So this is down by two basis points versus last year. Good performance on other provisions and gains and losses. And my final comment here would be that on taxes, we are including a write-up of DTAs for 135 million euros. A few words on Portugal. Here we are disclosing what we call the BPI segment. That is, for the first quarter, 89 million net income. You know that the BFI dividend is in the corporate center. Well, here also a really strong performance in terms of business volume, up by 5.5% year on year. Since we took control back in 2017, business volume up by 43% versus 26% the rest of the industry. So a remarkable performance that results into broad-based market share gains, as you see here, on key products, even on a year-on-year basis, we are gaining market share in Portugal. High profitability, ROT 17.4% in line with the group. And it's a really strong balance sheet with MPLs at 1.6%, coverage 82. And on the right-hand side, you have several KPIs on the transformation process on IT and digital in Portugal. And we are going to be able to follow up as BPI has its own program on that front also. With that, let's move to the usual details on NII. On the central part, you have the usual quarterly NII bridge. You have a negative impact here from day count, minus 28 million. This is larger than last year as the size of the balance sheet and volumes in general are also larger. We have positives from business and alcohol. On ALCO, you may see that we have increased the size of our hedging portfolio and the fixed income portfolio, but this has been done late into the quarter, so the impact in the quarter is not that much. But once you have, let's say, a longer-term view on the upper left bridge, you may see the evolution on a year-on-year basis. You may see that business volume on ALCO is clearly offsetting the negative impact from client yields. As I was saying, on ALCO, basically what we have done is to front-load hedging activity for the second quarter, taking advantage of the significant increase in market rates. At some point, even the market pricing for rate hikes from the CV. What we have done is to front-load part of our, let's say, regular hedging activity. And here you have hedges up by close to $6 billion, the fixed income book, by close to 2 billion on top of like 3 billion of maturities that we have had in the quarter. Below you have margins and yields. I would remark that net interest margin is already starting to move up to 163 basis points, a trend that is expected to gradually continue in coming quarters. The customer spread at 300 basis points, X hedges on deposits, And you see that it's down by two basis points. The pace of reduction is clearly coming down and set to stabilize and start increasing again soon. And on the right-hand side, bottom right, you have the back book yield of the long book, 345 basis points, down by four basis points. This is also set to stabilize and start growing soon. And cost of deposits, six hedges at 45 basis points. Precisely on deposits, let's zoom in on the composition. Here you have, remember, the average quarterly balances for interest-bearing and non-interest-bearing. The most remarkable in my view here is that the relentless growth of non-interest-bearing deposits up by 6% year-on-year, also with positive evolution in the quarter, as you may see. We have a reduction on interest-bearing balances. This is basically outflows from the public sector. And the weight of those interest-bearing deposits at 26.4% pretty much stable since already a few quarters. The cost of those interest-bearing balances stable in the quarter at 156%. And this is despite the fact that, as you may see, 12-month rates are already starting to move up, starting to price rate hikes later into the year. Moving to revenues from services, really good performance here, up by 7.5% year-on-year. The remarkable, in my view here, is that the combination of wealth management, protection insurance, and CIV revenues is growing by 12% year-on-year, much more than offsetting the underlying, let's say, deflationary pressure that the industry is feeling on fees, on... lower added value products or more basic fees on certain products. You know, maintenance fees on current accounts, debit cards, etc. But the whole thing is that the key engines are really fighting on all cylinders and much more than compensating that. You may see wealth management up by 9.4% year on year, a strong growth despite the volatility in markets in March. Protection insurance up by 13.5% year-on-year. Strong commercial activity here, mainly on life insurance and health insurance, and also on the back of all the cross-selling attached to new mortgage production. Moving to costs, here everything according to plan, up by 4.6% year-on-year. Depreciation costs, as you may see, moving up by 7.4%. This is the result of the IT and AI transformation drive that is going on. But everything according to our planning. Cost to income, 39.6%, which compares extremely well with the peer average that is above 50%. Asset quality, as good as ever. So we have been able to reduce our MPLs by circa 300 million euros fully organically, 8.3 billion the stock of MPLs. That is an MPL ratio of 198% below our peers here in Spain. You may see that the evolution across the different segments is really a good one, even on a quarter-on-quarter basis, so not any sign of deterioration in any portfolio. Record high coverage, 79%, and with the unassigned collective provisions that have remained unchanged this quarter over 300 million. Cost of risk, as I said before, 23 basis points on a 12-month trading basis, even lower if we annualize the first quarter at 22 basis points. Liquidity, also a sample as always, 220 liquidity sources, LCR 194%, NSFR 145%. a really solid loan-to-deposit ratio, really stable, 87.6%. That compares extremely well with peers, as you know very well, and this is on the back of really stable retail deposits and corporate operational deposits. A few words on MREL and funding. We are ending the quarter with an MREL ratio at 28-26%. This is an M-MDA buffer at 336 basis points, pretty much the same as the MDA buffer, slightly one basis point below 340 basis points. And on the right-hand side, you have our funding activity. 60% of our three-year plan already executed, circa 40% in foreign currency. Remarkably, a few weeks ago, $2 billion in non-preferred with very big demand. And also a few days ago, new ratings upgrade by Moody's, upgrading our baseline credit assessment to A3. That results into an upgrade on 81%. Tier 2s and senior non-preferred, stable senior preferred, but this is already taking into account the incoming impact of the full deposit preference, which is actually very good news. And finally, capital. We are already deducting the 8,500 million share buyback from our CT1 ratio. That is a negative impact of 20 basis points. capital accretion plus 65 basis points, organic risk-weighted assets minus nine basis points. This is basically new lending. minus 41 basis points from dividend accrual and 81s, and then just a few negative two basis points from other impacts. So we are ending the quarter with a 51 ratio of 12.51%. And then on the right-hand side, you have the evolution of the book value per share, obviously adjusted by the DPS of 50 cents up by close to 15%. And finally, just a recap of our usual guidance slide. Here we are upgrading our ROT to more than 18% from circa 18% as we have better visibility into the year and some improvements here and there. So thank you very much and ready to take questions.

Operator, we are ready for the next question, please.

This question comes from Max Michin with JB Capital. Please go ahead.

Hi, good morning. Thank you very much for the presentation and taking our questions. Two questions from my side, please. The first one is on loan book press reports you may have Changed your approach to mortgages. I was wondering if this is the case and how you plan to grow your loan book by segment for the remainder of the year. And the second is on NII guidance for 2027. If you plug in the current forward curve, where would you see your NII in 2027? Thank you.

Thank you Max. Good morning. I would start with the mortgage question. There's been no change in our strategy on mortgages. What we are seeing clearly is the fact that we have a very broad presence throughout Spain and the fact that we can Fund fixed rate mortgages for the long term as well as cross-sell is definitely a competitive advantage. We still think that given the competitiveness of this market, What we should be aiming is to maintain market share. It's nice to have a small few basis points growth, but that is really the factor. Mortgage pricing is increasing in Spain. It is still obviously below the cost of funding of the same term if you don't include the associated profits from the cross-sell. But if you include the associated profits, then the return is attractive enough. And over the longer term, obviously, you gain clients that tend to be quite positive. So not really any change in the press in Spain is significant. very focused on what's happening here. I keep saying that we have very attractive rates. In fact, some of the lower rates in Europe, both floating and fixed-rate mortgages, and obviously that's positive for the economy, but at the same time, given the way we're efficient as an industry and the way we price, including the cross-sell, this is also a sensible price. growth for the industry. In terms of how do we see the future, you've seen very strong residential mortgage market. I think it is likely to moderate its growth, at least looking at our own production levels. What we see for the second quarter is volumes that are below what we produced last year in terms of new production. That doesn't mean The stock of lending is going to come down. We'll keep growing, but we'll keep growing at, I think, a lower pace. And this is about sort of the limitations we have in Spain in terms of building new houses, that even though the new houses initiated new permits are close to 150,000, the reality is, for the last figures known, The new houses that were finished were only 83,000. So the timing is long, a process for sort of... land approvals and just the whole real estate process is not helping. So you're likely to have a slowdown in volumes there. Consumer is doing very, very well. You see this double-digit growth we had last year. Actually, we have even increased it in the first quarter, which is surprising. I think that's Double digit should come down to high single digit when you look at sort of likely moderation for the future. So far, what we see is very strong consumer behavior. Even the figures from GDP this quarter indicate precisely consumer sort of behavior being one of the forces that is driving the economy ahead. And clearly there's room for more, even if we have to be cautious. And then businesses, again, doing very well. We have... The expectation to grow above nominal GDP growth, taking into account that some of this growth is also coming from our international branches, where given our very small position, we tend to find good investment opportunities with great risk profiles that contribute positively to our return on equity. So that's the sense. Certainly in this quarter, no change in strategy and more momentum than we would have expected given how intense in events that report to us.

Hi, Max. I touch on NII. Well, from here, we are expecting upside every quarter, I would say. We expect sequential positive evolution on NII quarter on quarter and year on year. I have to say, for the foreseeable future. So that goes into 26, 27, and also 28, honestly. So, well, it's a combination of everything we have been talking about in the past. So it's, well, better rates in this case. No longer rate cuts, price set, as it was the case earlier in the year. Volumes, Gonzalo was commenting our views in terms of lending, but also on deposits is... It's pretty upbeat, our view. And, well, what was a headwind, which was this negative repricing that we still had that negative impact in the first quarter of this year, that is ending, no? It's ending already this second quarter. And as a consequence, what was a headwind becomes even a tailwind. So you should expect consecutive quarter-on-quarter positive evolution on NII, no? There is upside to 27 with the current market rates, so better rates is always a positive for us. We are guiding you with some sensitivities. You know that the first year sensitivity is low because actually the loan book is not repricing that much during the first year, but you have the full impact. of higher rates in the second year, which actually coincides pretty much with 2027. The point is that I would like to flag is that the yield curve is not moving parallel, so there is a clear flattening of the yield curve in the sense that Short-term rates are moving up much more than long-term rates. If you look at short-term rates year-to-date, maybe implicit for 27, maybe up by, depending on the moment you look at it, by like 40 basis points, 50 basis points. But implicit rates for 29 are, let's say, almost flat versus year-end, no? So it's not a parallel move. So the sensitivity in that case is slightly lower than what we are guiding because we are guiding for a parallel move. But in any case, the net impact is a positive one. So let's see how everything settles. It's important today also the body language from DCB in that sense and see at the end of the day what central banks end doing because, you know, What is being pressured by the market is that central banks act, raise rates, contain inflation. As a result of that, long-term rates are not moving that much. So all that is having an impact. And finally, although we are really a bit on volumes and on lending, We have to see how the uncertainty in the Middle East ends impacting overall. So it's too early for us to give new guidance for 2027. But in any case, what I can confirm is that there is upside at current levels. and more into 2028, if I have to say, because we start having already quite a good data or consensus data for 2028, and on that front in 2028 is where we see a clear upside to current consensus. That is from my side. Thank you, Max.

Thank you, Max. Operator, next question, please.

The next question comes from Alvaro Serrano of Morgan Stanley. Please go ahead.

Hi, good morning. Thanks for taking my questions. Maybe a couple of follow-ups, really, just on the hedging while you're on the subject. You flagged that 7.5% sensitivity is still there, and I get that it's not a parallel movement. But if you look at the curves, there's two, three hikes priced in. depending on the day, which may or may not end up happening. So I kind of wonder why not sort of be a bit more sort of aggressive locking some of that curve in, considering your rates and cities are quite high versus historical standards. It looks like you're under-hedged. I mean, I see that you've increased the swap book, but why not more? And is this something to do with the stickiness of the deposit growth you've seen lately? So comments around how much of that curve you can lock in and why you're not locking it in. And then the other question is more maybe for one side on the general environment. I know your comments around sort of some seizing of the growth in mortgages, but it's more broadly, I don't think anybody's that worried about asset quality in Spain given the war, but maybe activity levels could slow down. At what point do you think, are you worried sentiment might deteriorate and some of the strong growth in corporate and international might slow down? Or if at one point you might decide to slow down that growth if uncertainty continues, just color on that would be much appreciated. Thank you.

Thank you, Alvaro. Maybe Javier, you want to?

Okay. Well, on hedging, precisely it's what we have tried to do this quarter. As I was saying, to some extent from loading hedging that otherwise would have been done further down the road. And we front-loaded it by the end of March, when precisely DCV was expected, what was priced by the market, what DCV was expecting to price up to three, four times. To what extent we can do even more is always an open question and intense debate in the ALCO Committee. Keep in mind that while managing the sensitivity of a bank, you have to make always an assumption on which is going to be the behavior of customer deposits. And, well, although we have our models and back-tested and so on, there is always a certain degree that if this time something can be different. So what I mean by that is that it's extremely difficult to be fully hedged. So if a bank says that it's fully hedged, well, you never know. We have a natural tendency to keep positive sensitivity to rates just in case models are not exactly accurate, and we will always retain a certain degree of positive sensitivity, as I say. But it's always a debate, Álvaro. So we think that we have done a lot this quarter, and let's see how things evolve. Eventually, when the year curve started to price one rate hike, it looked like it could be really a nice level. Then you have four hikes priced. So it's always a little bit tricky in terms of market timing. But it's always we are thinking all the time.

Yeah, Alvaro, and on the second point, obviously we do not have the crystal ball. At some point, consumer confidence and business confidence may suffer as a result of what's going on in the world. That's a possibility. I would say... if we move to a scenario in which consumer confidence is weaker, which has not happened, and could have happened, but has not happened yet, clearly. then we actually could see an increase in the savings rate, and then that is not going to be necessarily negative for P&L. So some impact... the current situation has to have. But the fact that so far we've seen really none, and also the fact that over the last few years we've been constantly surprised by the strength of the economy, despite that obviously the more significant event was the Ukraine invasion. And we actually in Spain did very well. It gives us some confidence. What's happening now in the electricity market in Spain is quite striking. If you look at the pool prices in March, you have Spain, Portugal and Finland at the very top. and then sort of most of continental European central economies, prices that are more than double the level in Spain. Obviously, this depends on wind, sun hours, all that. Even if you look at the extended periods, you see there is a very strong difference. And population continues to grow. I see it's not easy to break this cycle. We have the risk if we look at two, three, four years that the cycle gradually sort of loses force and then we gradually converge to lower levels in GDP. But when you look at the... next 12 months, barring a very serious environment outside, I think we were pretty confident. In fact, when you look at our expectation for this three-year period where we move the 4% growth in business volume to 6%, given how well the 2025 and now the first quarter of 2026 have gone, really there's an implicit slowing down of business volume growth in our targets. And in the current scenario, that kind of makes sense for us intuitively to say, well, all this cannot be positive. But then when we look at the data quarter after quarter, we see that things are moving in the right direction. I still feel that we may have a few months ahead of us that will be tough. The situation for oil in the strait and how... lengthy it is likely to be for the market to be normalized, even if there is a satisfactory agreement. And that's not clear that there will be one, at least in the short term. So I think we are seeing some, at least for some months, a complex period. The markets are kind of seeing through it, which is very helpful for AUM and commissions and all that. and obviously also for new influx. We've seen our clients being very calmed about events and knowing that what happened with the pandemic, what happened with Ukraine, happened with the tariffs, that sort of running away from the market at the wrong time is not a good thing to do. So I think we're likely to be quite resilient, even if there is a kind of more adverse scenario. What I was saying, the Bank of Spain is bringing now growth to 2% GDP in an adverse scenario, I think that we may have some impact, but we would still be meeting our 6% guidance or revised guidance for this three-year period. Having said that, again, I go back to where I started. We don't have a crystal ball. We'll have to adapt the strategy if events suggest something different. And from an asset quality perspective, we're seeing no pressure. And again, with the low level of leverage of our clients and the relative insulation from what's going on, we're not expecting issues there. We are obviously now seeing NPL falling much faster than what we expected. And April is no different. I wouldn't see a different second quarter on that scale. on that front. So we'll see, but it looks pretty good.

Thank you, Alvaro. Thank you, Alvaro. Operator, next question, please.

The next question comes from Ignacio Ulargi of BNP Paribas. Please go ahead.

Thanks very much for the presentation and for taking my questions. I have two questions, if I may. I mean, one is on the faucet and the faucet costs. So when you look to the deposits, I have seen a very good growth in the quarter. Seasonally, Q&Q, you have grown non-interest-bearing deposits by around 1%, which I think is quite supportive. If you could elaborate a bit on what is behind that strategy so that we can just see that growth going forward, I think it's crucial to the NII performance. And linked to that, I just wanted to get a bit of a sense if you have found any change in customer behavior in terms of deposit costs, now that rates are looking to go up again, whether people is becoming more price sensitive on deposits. And then one clarification, and be mindful that is a very volatile line, but I saw gain losses in disposal of assets in the quarter. Looking to the quarterly report, it comes from real estate asset disposals. I mean, how should we think about this line going forward? Thank you.

Thank you, Nacho. I'll just make a few comments and let Javier continue. But I will start with the latter. I was reading some of the comments this morning from the analyst community. Kind of typical, okay, there's a bit, but it's low quality because revenues are NII offset by fees, revenues, etc., and the bid is low quality, which I perfectly understand. That's the usual analysis that one would do. This particular line is associated to our disposals of real estate assets. It's not a transaction or a big transaction. It's very granular, and it is a consequence of a very strong real estate market, which given the imbalance between supply and demand, it's not going to change. So you are seeing here a line that traditionally resulted in bad news is going to be consistently resulting in moderate but good news, positive line. So when one look at the quality versus low quality bid, obviously the low quality is usual because it's a one-off. This is below the line, but this is not a one-off. We're going to be having positive results quarter after quarter, I would say, with maybe some ups and downs, but clearly results that are positive from real estate sales margin that we had this quarter was around 40%. It's not that we're selling just a bit above the marked prices in our books. It's a very significant change in the real estate market dynamics. So this is, to me, a high-quality good news because this is not going to be a volatile negative line that is occasionally positive, but it's going to be positive in a consistent manner. So I wanted to make that clear. That comment, because I think it's relevant, very relevant, the question and the point. In terms of deposits, there's not much change, and we're very happy with our performance, I would say. But, Javier, I'm sure you...

We'll be able to collaborate much better. Indeed. So, yes, we are happy, and the mix also. And the remarkable, precisely, Nacho, is what you said, the good performance of non-interest-bearing deposits. What is behind that is more of the same, actually. So we are operating in a growing market. So we are gaining clients, so we are gaining payrolls, employment is growing, so our market share is huge in the payroll market. So it's basically more of the same, more operational balances, deposits are growing because... because also the economy is growing, so in nominal GDP terms, so deposits should be growing in line with that. So we are being able to capture that part of the business. So as you saw in the presentation, year on year, non-interest varying up by 6%. We think that this trend, this is the direction of travel. I will not pre-commit with a specific figure here, but it's clear that we are expecting the non-interest bearing part to keep growing steadily. You know that the second quarter is a very important quarter with a strong positive seasonality. We expect that this year will be the same, so we have big expectations on that front also. So, hence, for the third and fourth quarter, you will have the retained balances from those big inflows we have usually during the second quarter. On the interest-bearing part, you can see that the time deposit, say retail time deposits, because time deposits are only retail. You know that basically SMEs and corporates, the interest-bearing deposits are current accounts that are indexed almost the major part to the overnight rate with a margin, but to the overnight rate. Hence, no impact so far from higher market rates because this is linked to the overnight, and the overnight has not moved at all. On time deposits for retail, it's true that, let's say, 12-month rates are already higher, so we may have some slight increase on that part. I remember that last quarter, Matias gave you a guidance for the cost of our deposits in the mid-40s. So obviously, with higher rate, maybe we are, well, for sure, if those hikes crystallize, we will have a higher cost of deposits, but obviously, it will be compensated or more than compensated for sure on the asset side. But the situation is calm, I have to say, so no tensions at all. Everyone is being very rational, so no tensions on any single player. So we're happy the way we are managing that. So there is a new cycle ahead, so... We thought that that would take more time, but now we are facing a new rate cycle. And our assumption is that the performance of our deposit base is going to be in line with the performance we had on the previous cycle. And those are the assumptions we are making in terms of deposit vitas, et cetera, back to all that discussion. So this is how we are confronting this new situation.

Thank you, Nacho. Thank you very much. Operator, next question, please.

The next question comes from Sophie Patterson with Goldman Sachs. Please go ahead.

Yeah. Hi. Here is Sophie from Goldman Sachs. So my first question would be how we should think about kind of gross growth beyond 2026. I understand there might be some wage negotiations and inflation is sticking up. So how do you think about like salary growth beyond 2026, 2027, 2028? And then my second question is that when I look at the international branches start to be a quite meaningful part of your loan book. Almost 10% and growth there is very high at 27% year on year. Could you just talk us through what international CIB branches include? In which countries are you present? And how do you see growth in this division going forward? Thank you.

Thank you, Sophie. In terms of your first question, you write that obviously inflation has become now a number that... is obviously going to go up in the short term. It's not clear up to what level. I guess that's what ECB and many others are trying to second guess. Future markets indicate 3.2% on average for the next two years. We'll see, because obviously also this was 2.8 a week ago. But there is obviously a different inflation rate that... To what extent this sort of leads into wage inflation or not is precisely what the ECB, as you know, is trying to avoid. Spain has, for some years, reduced the indexation of wages to inflation. It's less common. The wage growth, in fact, has moderated significantly. Recently, currently, it's around 2.7%. But there is obviously here uncertainty, and I think it's very early to say how negotiations that for us will start next year, most likely, affecting 2027 and onwards will evolve. It's also something that typically we've maintained for ourselves for obvious reasons. But you're right. to point that the same happened at the time of Ukraine, that inflation is going to have some impact generally for companies, corporates, financial institutions, everyone, and we'll have to see how that develops. And then on CIB, we have basically four very large markets in which we operate in Ukraine. In Europe is France, Germany, Italy, and the U.K., with four large branches in Paris, Milan, Frankfurt, and London. Then we have a significant and fairly attractive presence in Warsaw, in Poland. In fact, we started there. All in all, we now have outstanding, there are over 35 billion currently. It is true that it's growing, it has grown fast because we basically started, actually we started now 12 years ago with converting, we had rep offices and we started converting them into branches. We decided that we would do it very slowly because my experience is that when people expand outside of their markets, they tend to run risks that they're just not fully aware of. And this has been the result, again, of 12 years as branches. and then obviously gradually in different countries. The exposure is almost all of it investment grade, so we have refrained from going down the investment rating specter because we obviously feel that we do not have the... the necessary sort of investment focus to long-term competing SMEs and other types of high-yield marketing in other countries. But most of the clients we're banking with are clients that we knew because they were banking with us in Spain, because they had subsidiaries in Spain, or because they are subsidiaries of Spanish companies. So this is something that has been actually – Very low risk for us. NPLs have been consistently at near zero. And what we have now is a clear mandate is not to necessarily grow the business, but to continue to increase the profitability of the business. It's already obviously double-digit in terms of return on tangible equity and adding to what we do. but we're expanding the number of products and services to these corporations. Still, we are the sixth largest bank in Europe by market cap and people call on us and when we call on someone they open the door because we are on a relative basis so small and we have this great sort of funding franchise. We actually become competitive very quickly. and hence this is a nice sort of complement to our business longer term, you'll see, but obviously it will continue to move towards the European Union. In reality, the same way we say we're not seeing value on acquisitions, we see clear value in being a corporate bank in the Eurozone. given our size and our opportunities. And the way to do this rather than making an acquisition one day, we think it's been building our business gradually, organically, without any rush, but sustainably. That's what we do. We're very happy, and I think we'll keep providing good news on this front. The emphasis is not growing at all costs. The emphasis is continuing to build a reasonable business completely connected with our CIB franchise. So when we talk about Germany, to me it's part of a business where there's a branch in Madrid and Barcelona and Germany and Milan and Frankfurt and Paris. It's just part of the same business and managed in that way.

Thank you, Sophie. Operator, the next question, please.

The next question comes from Miruna Kirea of Jefferies. Please go ahead.

Hello. Thank you very much for taking my questions. Firstly, I had one on the outlook for deposits in Spain, and I appreciate your comments that the situation in Iran has a very limited direct impact on the Iberian economies. But given the higher uncertainty backdrop we are in, do you think there is upside to deposit growth as households increase their savings rate in Spain? And another one related to this, if we are in the situation in which we do get the hikes from the ECB, what would be your best guess of deposit bidders on any upcoming hikes? And then just a quick follow-up on mortgages. Are there any metrics that maybe you could share with us just to get a better sense of how much cross-selling of insurance, mutual funds, and so you are doing onto your new mortgage customers? I think one of your peers was reporting, for example, the average number of products per customer. So anything along those lines I think would be helpful. Thank you.

Thank you. I'd say on the latter point, generally what we offer our clients is up to 1% of a rebate in their mortgage rate, depending on the products that they buy from us. And this is contractual, so if at some point they cancel, then the rate... the rate goes up. So I think that's something that is working very well for us. Not the same, I think, ability for some others to compete in this market, but obviously I'll let Javier elaborate on these and the other questions.

Well, yes, well, on that one, you saw our protection insurance performance, no, up by more than 13% year on year. So on that front, obviously, the new mortgage origination, new mortgage production. is having a positive impact, for sure. So we have commented that. Maybe we can be more specific. But more than also how many products per client, this is not like because on the selling process, we don't set a specific target for that. So at the end of the day, it's more about building the relationship with the client and over time, we get the penetration. Remember back when we were talking about revenue synergies coming from former Bankia clients that were not that engaged on protection or wealth management, etc. So it's more a gradual process. It's not like saying, okay, a mortgage automatically results into a cross-selling, which it is, because as Gonzalo was saying, there is a rebate on yields from that, but then you establish a relationship, and beyond the initial rebate on the yield, you start building that relationship and getting more traction. So what this is, This is the way we work, and everything starts not on the mortgage many times, but on the payroll, being for us the anchor product, the way we have to acquire the client. Then from there, we get the mortgage, we get the consumer loan, we get the protection services, et cetera. Back to your point on deposits, if there is upside in case of increased uncertainty. Well, what we don't see is a transfer from AUMs to deposits. What happens usually is that those clients that look for, let's say, a lower risk profile on their portfolios, what they do is move from, let's say, equities to money markets, et cetera, but not to deposits because... You know that in Spain, if you convert into cash your AUMs, you have to pay taxes for any unrealized profit you have done since the very beginning. So, once you move your asset allocation within the AUM universe, then you don't pay those taxes for unrealized profit. So, We don't see upside from that. In case every time we have had strong market impacts, what has happened is that we face some slowdown of inflows. And during that short period of time, we may have some upside or uptick in terms of deposits. But honestly, not that material. And once things tend to normalize, everything settles. So I will not say that we are not considering actually on our forecast any upside on deposits coming from that angle you mentioned. So in terms of deposit bitas, I answered to a previous question that we are working with the SEMA sanctions because it's the most recent backtesting you can conduct of the last rate cycle, right? And, well, we're considering deposit vitas in the very low 20s. So that's basically what is behind our assumptions. And every time may be different, may be even better than that, or who knows. But as a starting point and as a way to calculate our sensitivities, back to a previous answer to Álvaro, is this deposit vita. Thank you, Miruna.

Miruna, sorry, because as Javier was answering, I realized you had asked about these sort of products per client. just trying to make some comparison. My experience on it from the outside and then both from the inside is these numbers are not really easy to compare. When we look at how banks define clients, there's a very different definition because not everybody that has an account with us is a client. They need to meet certain minimum activity or balance levels. And then a similar thing applies to what's a product. And there's So then you can get into a product per client that is very different if you compare across institutions. We have more emphasis on looking at... When we know what do we sell, we sell payrolls, and obviously our associated payrolls is the deposit and activity. What we sell is payments, cards. What we sell is insurance and funds. And then when you look at the market shares that we have in these products and you see – Market sharing insurance, if it's life risk, you need to add the next five or six to get to our level, all together to get to our level. If it is health, we're by far the leader. And when you look at the bank as well, we are much ahead in auto, in household, across everything. So that obviously means that we're cross-selling more to clients and that our products per client are clearly above the average of our peers. But when you look at numbers, it's very arbitrary how you define the two, so that's why we don't use it that actively for external purposes, even if obviously we keep track internally of our own definitions.

Thank you, Miruna. Operator, next question, please.

The next question comes from Marta Sanchez Romero with JP Morgan. Please go ahead.

Good morning. Thank you very much. My first question is a follow-up on deposits. So growth is running at 5% year-on-year, which is in line with your guidance, but it's below the 6% we saw for the system as of February. And it's behind what we've seen for your large domestic competitors. Could you break down that performance across retail, corporate and public sector? And where specifically do you think you're losing ground? Related to this on payrolls, your market share looks stable year on year, but one major competitor has launched an aggressive mass market campaign. Are you seeing any early pressure on new payroll captures? And my second question is on costs. We've seen a few banks in Spain launching voluntary redundancy schemes. Is that something you contemplate? One of your peers today was mentioning a three-year payback. Where do you think yours would be today? Thank you.

Thank you, Marta. On the second point, no, we're not contemplating voluntary redundancy schemes. We're adding people to our network, and we feel that we're going to keep growing the business, and I would not comment on payback of something that is not on the cards. On deposits, We may have to sort of double-check the numbers because I think we certainly see, in terms of payrolls, gaining market share, not maintaining gaining market share. The year-on-year for us is 22 basis points. We have a pretty good sense. Obviously, the market has been very competitive. now for some years. There was some time when only a couple of institutions during the crisis were pushing for payrolls because rates were negative and that had a cost by itself. But we knew that it was an anchor product for many other things, and that's why we have the 36% market share that we have today. A lot of this, I have to say, is also associated with our capillarity, our retail presence. We have 4,200 points of sale in Spain, and that makes a big difference. I know that often you look, not you personally, but the market looks at it as could we operate with fewer branches, and we always said we could, but it wouldn't make sense because the branches are very profitable, no? My experience from talking to some of the large U.S. banks is there's a huge difference in capturing payrolls when you have a very large retail presence. You capture more and you capture sort of non-interest-bearing deposits. And that is clearly what's happening to us. And even if our peers are very good peers and competitors, they have less than half the branches than we do. And that makes a big difference. Obviously, at the same time, We have top of mind in terms of brand awareness. For many people that come into Spain, actually, we're a natural bank to go. So there are many reasons we're doing well. And I think we'll continue to do Well, obviously, the market is going to be competitive and we'll make our job tough. But it is tough today. I am not particularly concerned about that one. But our deposit evolution has been pretty good, I think. Javier?

Indeed, and Marta, well, I think that here the key is the mix between interest-bearing and non-interest-bearing. And to a previous question is what I answered. So non-interest-bearing up by 6% year-on-year every single quarter during the last 12 months, four quarters. And, well, I mentioned, I think, in the presentation that we have had some outflows from the public sector this first quarter of the year. But basically, because it's always more volatile and they have their own schedule in terms of what they collect from taxes, whatever, payments, investments, so we'll not read too much. Honestly, to grow in deposits paying 12-month arrival or the overnight rate is very easy. The key is to grow with the adequate mix, which is, I think, what we are doing. But honestly, we don't think that we have any weakness on that front. So we are quite upbeat on future evolution. The situation is very calm. We are rolling over our time deposits at a very nice yield versus market rates. So not seeing much competitive pressure, honestly. So everything is very clear for us. No problems.

You should know, Marta, that with wholesale clients, obviously we tend to be the bank that not, or let's put it another way, we are not the bank that pays most for deposits because we have a liquidity when we're talking about wholesale. Our liquidity situation, this affects particularly the public sector, which is the reason why you may see a difference. These core dynamics we have for private sector deposits and for non-reported deposits indicate very good absolute and relative performance versus others. And obviously, you need to see it in a sustained basis, but we see no reason why that would change going forward.

Thank you, Marta. Operator, next question, please.

The next question comes from Francisco Riquel with Alantra. Please go ahead.

Yes, thank you. My first question is on revenues from services, which are growing 7.5% in the Q1. And I wonder if you see upside risk to the mid-single-digit growth guidance you have commented on. Wealth management, market impacts recovered already in April. Steady inflows. Insurance also growing double digits. Banking fees resilient. So you can please elaborate on these revenues from services and the guidance. And my second question is on the... tweak to the ROTE guidance that I understand all the core headlines remain unchanged, so it should be taxes. So you can please comment on the tax rate, DTA write-ups, and how sustainable is that going forward. Thank you.

Okay, Paco, I think on the second point, it's not just taxes. One of the lines that I mentioned before was precisely results on real estate sales would have clearly indicated better numbers than what we had anticipated, and I think even the turn in the real estate market, this is pretty sustainable. But, Javier, please. Yes.

Yes, back to services. Yes, good performance. And as I was mentioning during the presentation, 70% of the revenue is coming from wealth protection and CIV. And this is growing more than 12% year on year. So really happy to see that. Well, AUMs with the strong recovery in April, we are back to a situation that is more normalized with the uncertainty that all of us we know on that front on markets, but quite resilient so far. So our guidance here is to expect to be somewhere between mid and high single-digit growth on that line, skewed towards the higher end if markets perform, I would say, in a stable manner. So I think that that's important. That's the guidance we are expecting inflows in line with last year. So that's the summary. In terms of protection, we are doing pretty well. I said before also that it was mainly on life and health. Good cross-selling coming from new mortgage origination. I think that on that front we may be between high single digit and even double digit. But let's see. The good news is that here we don't depend much on markets. Actually, nothing. And we are quite upbeat on that P&L line. Volumes are doing pretty well. And we have been gaining interactions since several quarters, as you know. And then, well, banking fees, it's always the same story. So it's about... The deflationary pressure, generally speaking, on low added value fees. We started with maintenance fees. Now you have pressure also on transfer. You have instant transfers that have to be made with a low fee, like a normal transfer previously. So all that is having a kind of deflationary pressure that is being, to some extent, compensated by better volumes, but the pressure in terms of margins is still there. But the good news is that 70% of that pool of service revenues is growing over the whole And hence, we are doing pretty well. So that's the message, as always. A bid on AUMs and wealth and protection and CIB being more and more stable and recurrent. What has been commented before to a previous question about our international branches also is adding value. to this over time, to this steady pace of revenues, on fee revenues from CIB also. As from, let's say, the initial lending, you start to obtain additional business. So that's the story. Is there upside or not? Maybe, but it's too early to give you formal guidance on SLEPACO. considering all the uncertainties we still face in the year, mainly coming from the market's evolution.

Thank you, Paco. Operator, the next question, please.

The next question comes from Andrea Filtri with Mediobanca. Please go ahead.

Hi, thank you for taking my question. I'm actually following up from Paco. What is driving the ROT upgrade? Is it higher profits or lower tangible equity? And it's the higher profits, if you could detail a bit more. And can you guide us a bit more accurately on tax rate expected for 2026? Thank you.

Sorry, because, Paco, I missed the answer on taxes. We have, well, basically Andrea is part of your question also. So the write-up from DTH has been 135 million. and we think that this figure can be the max you can expect every quarter. So it's going to be higher than last year, so you're right. Why? Because, well, I made also a comment about... We are incorporating to our recovery model on DTAs long-term projections for the bank, and those are becoming more and more important. better and better, so the recovery pace of balance sheet DTAs increases. So this is why we have some step up from that front. So I think that 135 is what you can expect max. It can be a little bit below that threshold. some quarters, but in any case it's going to be higher than last year. And as for the return on tangible equity question, the improvement is, well, Gonzalo mentioned the, let's say, gains and losses and the real estate behind that. You have taxes. We have quite a good feeling in terms of cost of risk. And we see volumes doing well. So to some extent, it's not only specifically some lines, but the general feeling that everything is doing fine and that maybe upside here and there. And as a consequence, it's why we upgrade our ROT to over 18%. Thank you.

Thank you, Andrea. Operator, next question, please.

The next question comes from Cecilia Romero with Barclays. Please go ahead.

Thank you very much for taking my questions. I have three follow-ups. First, on NIA sensitivity, you were saying that given flattening of the yield curve, the NIA sensitivity to a parallel move of the curve could be lower than what you guided. And I understand your sensitivity is still 7.5% at year two. But wouldn't you also see now better upside on your alcohol maturities, given that government bond yields are higher versus last year end? Then my second one is cost. You were mentioning that the negotiation of wages, if the environment continues to be what it's like today in 2027, could bring some more cost inflation, given the backdrop. You had also mentioned to us in the past that your IT and artificial intelligence investments of the last year will start having a positive impact on efficiency from 2027. So wouldn't you say that there are levels to compensate for higher cost pressures? And then finally on provisions, Spain is holding up very well, and growth expectations still look resilient, but obviously the situation is very fluid. If Spain's macro outlook were to deteriorate, could you outline how will it flow through your provisioning models, how quickly will it impact provisioning, and how severe are the deterioration when it needs to be before you reconsider your cost-of-risk targets of less than 25 business points on average, also considering that you have unassigned collective provisions of around 300 million? Thank you.

Thank you, Cecilia. I'll try to go fast because we'll be running out of time otherwise. But basically on cost, you're right that we expect savings associated to the investments that we are making. So, of course, there are levers. We'll have to eventually look at how the whole thing adds up, but certainly we'll be doing those and traditional sort of efficiencies to offset other costs. inflation and cost pressures that we may have, absolutely.

Well, on NII sensitivity, yes, long-term rates have also moved up, and obviously we are taking advantage of that in terms of alcohol management, but by a lesser extent than short-term rates. So short-term rates have moved like 40, 50 basis points, Long-term rates have moved by 10 or less than 20. So this is why the sensitivity is lower because when you model the sensitivity, the new production at fixed rate, being mortgages or alcohol, is not having the same positive impact in the future. than what is priced at the short end of the yield curve. And this is why you don't benefit fully from that increase in the yield curve, because there is part of the new production that is having a lower positive impact. And this is why the sensitivity is a little bit smaller, but it's not much. So in any case, it's a net positive for the bank for sure. In terms of IFRS 9 models, we have to make a decision on that. In any case, the worst scenario is massively better than the scenario that we are managing for this Middle East situation. Maybe we have some changes in terms of weightings. we have to make a decision on that obviously the guidance we have given to you is already considering any potential change we can do keep in mind also that the new inputs for the model is not only gdp it's also recent history of performance which is extremely positive And there is another leg that is also very important, which is the performance of the real estate market in the terms of the impact that this has on value of collateral and as a consequence on provisions. And the real estate market is also doing very well. I say that because it's not only one thing. It's history. It's real estate and obviously macro that we have to, in the next few weeks, we have to make a decision. But in any case, in any of the scenarios that we are thinking about, our guidance is under any kind of pressure. Thank you.

Thank you, Cecilia. Next question, operator, please.

The next question comes from Britta Schmidt of Autonomous Research. Please go ahead.

Yeah, thanks for taking my question. I just wanted to follow up on your 2028 outlook. You say you see clear upside to the consensus, which already bakes in 6% growth versus 2027. And we've just discussed the curve outlook. And for 2028, the short-term rates don't look that different from previous assumptions. Could you let us know what is driving your more positive view or what is driving your more positive view versus consensus, but probably also your own plan, given your comments regarding the deferred Texas carry-forwards?

Well, it's simple. It's more of the same. So it's the compounded effect of volumes and our internal assumptions on volumes and, well, on lending, but also on deposits, on interest-bearing deposits. And remember that we constantly have the tailwind from alcohol maturities that are going to be rolled over at a better yield. And this is constantly adding. Remember that from 26 and trying to put things simple because you can make this very complex, but I think that the best way to simplify is we have combined hedges and fixed income, 26 and 27, 28 billion that are maturing are being rolled over. The average yield of those 28 billion is 0.55%. This is going to be rolled over at rates, let's say, between 2.5 and 3. So the annualized impact of that rollover is 600 million annualized. So this is not happening day one, but I mean that by 2028, you are going to have the full impact of that, and then you still have the impact for maturities that you have in 2028. You have, I think it's in page 27 this quarter, a lot of detailed information. So... That constant tailwind from legacy ALCO is going to be there. And that's why, according to our internal projections and the assumptions we are making on deposit vitas that I commented previously, we see a clear upside to the current consensus. So that's my message.

Thank you, Brita. Operator, next question, please.

The next question comes from Borja Ramirez with Citi. Please go ahead.

Hello. Good morning. Thank you very much for taking my questions. I have two, please. Firstly, a follow-up on deposits. It's quite great to see the decline in cost of deposits and also the strong deposit growth. And despite some competitors that are showing increased focus on digital account deposits. I would like to ask if it's related to your better digital offering.

Borja, we cannot hear you properly, so we cannot understand your question. I think it's something about deposits, but... Can you hear me?

A lot of echo and resonance. Yes. I don't know what it is.

Hello?

Well... Can you hear me better now?

A little bit better, yeah. Let's try.

Apologies. So... Basically, what are the competitive advantages of imaging compared to the other neobanks? I think you're showing very strong trends in deposits.

Okay. So you're talking about the advantage. If we understand the advantages we have versus other neobanks in terms of deposits, is that correct?

Yes, that is correct. Thank you.

Well, if I may, I think Imagine is very different from neobanks because it's trying to match or do better in terms of the digital offering that it has, but it combines it with a real bank behind it. And we find that our customers love the fact that even if they do not ever visit a branch, everybody knows that Imagine is part of CaixaBank. That obviously is a very strong message in terms of how confident you are to trust your money to someone else. And they also know that through Imagine they can get a full banking offering. so that you can have, imagine, as your primary bank and don't need anything else. That's not typically what you see with the other neobanks, and particularly, even if you can, you kind of not necessarily trust the same sort of solvency and stability and... and confidence that a brand name like Kaiser Bank brings but then obviously having the ability to imagine clients can go into a branch, can chat with someone, the top level have relationship agents and when we call them they love it even if they don't use it and at some point they they do use it. And then obviously we think we're a fresh offering. We have obviously the fact that we know very well the market. We can go to universities and other places where we can actually have the right employee support and school, university, et cetera, to gain clients. And then very often it's the parents that would come to the branch and would want their son or daughter to open an account. or they did open it when they were kids and they want to activate it. So we're a kind of family bank. Every client of Kaishabai has someone that is a target for Imaijin. They're happy. We'll ask clients, how about your sons and daughters? Do they have a bank account? No. Bring them in. We can facilitate things. Then they will operate online. But let's not forget that we have these 4,200 points of service, and they are great tools to acquire clients in Imagine as well.

Okay. Thank you, Borja. That's all we have time for today, so thank you all for joining us another quarter, and have a wonderful long weekend, everybody. Thank you.

Thank you very much. Bye-bye.