Erste Group Bank Ag S/Adr

Good day and welcome to today's full-year 2024 Preliminary Results Conference call of ERSTI Group. Throughout today's presentation, all participants will be in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be provided at that time. And now, I'd like to hand the call over to your host, Mr. Thomas Sauerauer. Please go ahead, sir.

Thank you very much, Sergey, and a very warm welcome to everybody who is listening in, also on behalf of Erste Group. Today's call will be hosted, as per the usual format, by Peter Bossek, Chief Executive Officer of Erste Group, Stefan Dörfler, Chief Financial Officer of Erste Group, and Alexandra Habel-Adrabek, Chief Risk Officer of Erste Group. They will lead you through a brief presentation highlighting the performance of the fourth quarter and the full year of 2024, after which time they are ready to take your questions. And before handing over to Peter Bossek, the usual pointing to the disclaimer on page two in regard of forward-looking statements. With this, Peter, please.

Thank you, Thomas. Good morning, ladies and gentlemen. Welcome again to our full year 2024 conference call. I'm on page four of the presentation now, 2024, and particularly the fourth quarter of 2024 was all about strong revenue and volume momentum. We have delivered on all our promises and produced the fourth consecutive record annual net profit. We bought back another €500 million worth of shares, paid a healthy regular dividend, And most importantly, we grew the business organically. Customer loans and deposits rose in the mid-single digits. Net interest income as well as fees easily hit new quarterly and annual highs. We have clearly set the bar high for 2025. But we are optimistic that we can again do very well this year. More on this later. And of course, we have set the path to the future by kicking off a number of strategic initiatives. that target the further development of our brand, of our digital offering, improved efficiency, expansion of our asset management offering, and the consideration of M&A opportunities. If we look at our P&L performance metrics in more detail on page 5, one of the key achievements of 2024 definitely was that we managed to keep our net interest margin stable despite market interest rates coming down. Stefan will talk about the reasons later. This paired with a very strong fee print, fees were up north of 11% in 2024, was certainly the basis for yet again delivering record efficiency. Risk costs came in line with guidance, with diverging trends in CE and Austria. Alexander will give you all the details shortly. Consequently, net profit hit a new record in 2024 and return on tangible equity equaled 16.3%. Earnings per share reached 7.2 euros as a new record. As I already mentioned, and I'm on page 6 in the meantime, organic growth was a key contributor to our strong operating performance in 2024. While loan growth was subdued in the first half of the year, loan demand definitely picked up in the second half of 2024. and particularly in fourth quarter. And this improved momentum was not restricted to a single country, but visible in all our key markets, most importantly Austria, Czech Republic, Romania and Slovakia. This means that we have achieved our mid-single digital loan growth target for 2024, even though this looked a bit shaky earlier in the year. Even more importantly, these trends bode well for 2025, so we certainly target loan growth of about 5% again in 2025. And if you are a little lucky and the current bumpy economic recovery gains a little bit more traction and geopolitical tension relaxed somewhat, it could be even higher, but let's see. Customer deposit was equally reassuring with trends being similar as on the asset side, while total deposits were up by a healthy 3.8 in 2024. Core retail and SME deposits even grew faster at 5.2%. This beside the fact that we are certainly not chasing or overpaying deposits as is evident by our strong NII performance. In terms of quarterly dynamics, we observed the same positive momentum that we saw in customer loans. There is not too much to report on other balance sheet developments other than we had a busy start to the year. When it comes to bond issuance, here as well Stefan will give you the details later, and that we deployed excess liquidity into financial assets. Moving to our key balance sheet indicators on slide 7, thanks to our overall strong business performance, all parameters continue to be strong. Our loan-to-deposit ratio was at a healthy and sustainable 90%, reflecting balanced loan and deposit growth as already mentioned. Asset quality continued to be satisfactory, with NPL ratios creeping up slightly to 2.6% at year-end 2024. This was exclusively owed to increased defaults in Austria, as we already witnessed in the early quarters of 2024, while asset quality situation across Central and Eastern Europe remained outstandingly strong. The fact that NPL coverage, excluding correctness, dropped again in the first quarter was on the one hand attributable to the new NPL inflows being well collateralized and on the other hand due to significant releases of FLI and industry overlays. More about this later from Alexandra. Before moving to the macro backdrop, a word of clarification on our capital ratios. The fact that our fully loaded CT1 ratio is unchanged quote-on-quote at 15.1 is not a typo, but a consequence of us already having applied for another share buyback. in the amount of 3.7% of 2024 reported net profit adjusted for 81 dividends. So if you do the math, that's about 700 million euros. This is the third round after having bought back shares in the amount of 300 million and 500 million euros in 2023 and 2024 respectively. Of course, this planned share buyback, even though it's already fully deducted from capital, is subject to regulatory approval. And with this, let's now turn to the operating environment. I'm on slide 9. Now, the economic outlook is still far from exciting, which led to a cut in growth projections for 2025 compared to last autumn. But to focus on the positive, growth is still forecast to improve in 2025 vis-à-vis 2024 in many of our core markets. Inflation is not going away anytime soon in the region, as higher energy prices led to upward adjustments of forecasts in quite a few of the markets. Overall, the expectation is still that consumer price inflation will hover in the low mid-single digits, in the CE region. Current account balances for most countries are set to remain balanced or even positive, with the only notable exceptions being Romania and Serbia. In many of our markets, especially in those that reported larger deficits in 2024, the budgetary situation is forecast to improve in 2025, which will keep public debt in relation to GDP at sustainable levels. Looking at this forecast, we are clearly not in boom times, but they provide an acceptable basis for further organic growth in all our markets. Analyzing the 2024 performance of our retail business, I'm on page 10 now, organic growth was a theme that became increasingly relevant as the year progressed. While at the start of the year loan demand was muted, first consumer loan demand picked up, especially in Romania, but also in other markets, which was followed by better demand for mortgage loans, most notably in the Czech Republic and Austria. We also registered improved volume growth in retail customer deposits, as I already mentioned. Our success story in promoting retail security savings plans as a means of building long-term wealth also continued. The stock of such savings plans reached 1.6 million, supporting long-term fee growth in our asset management business. As proposed to previous quarters, the time series now also incorporates the savings banks, which previously were not included. Our market-leading digital retail platform George also contributed to this success by making it easy and convenient for our clients to manage their savings plans. In the meantime, we have onboarded almost 10.8 million customers to George, which was instrumental in pushing our digital sales ratio in the retail business to 60%. Going forward, it's our clear target to build on this success by further developing this platform so that we can provide meaningful financial advice to even more customers. In the corporate business, and I'm on page 11 now, loan volume strength took a positive turn in the fourth quarter, with quarter-on-quarter growth of 2.6%, which lifted annual growth to 4.7%. Good growth contributions were made by all segments, but in particular in the real estate business, where we executed a high-profile transaction in Vienna. On the liability side, deposits in the corporate business were up year-on-year by 6.8%, and somewhat down quarter-on-quarter, effectively business as usual. The market business continued to do well, although tracking somewhat below the exceptional strong performance of the previous year. This came as no surprise in light of lower central bank rates. Our customer business performed very well, though. We were involved in the issuance of €132 billion worth of bonds and 250 book-running mandates, generating healthy income in the security business. Asset management built on a good start to the year, with assets under management reaching an all-time high of €91.6 billion. In addition to a strong organic performance, acquisitions added €6 billion to this total. And with this, I hand over to Stefan for the presentation of the quarterly operating trends.

Thanks very much, Peter, and good morning, everyone. Referring to page 13 and loan growth, I would like to highlight a couple of points on individual country performance. In the Czech Republic, the recovery in loan growth was fully confirmed by elevated new business volumes in the mortgage business in the final quarter of the year. Year on year, corporate loan volumes also improved, which was mostly attributable to better demand in the large corporate business. In Austria, the recovery of the mortgage business continued, but this was clearly more pronounced at Erste Bank Österreich than at the savings banks. The other Austria segment saw an exceptionally strong finish to the year, with a number of large corporate and CRE transactions materializing in the final quarter of the year. In Romania, the strong growth seen in consumer loans in the earlier parts of 2024 slowed down in the fourth quarter, but was compensated by a higher level of money market loans. With this, we posted double digit loan growth in Romania in 2024. So overall, we've therefore finally managed to achieve our 2024 mid-single-digit long-growth target, and given the encouraging trends towards year-end, are also optimistic that we can do about the same in 2025. As for customer deposits on page 14, we also enjoyed a strong final quarter of the year. This is not fully evident from the headline figures, which were still satisfactory, with annual growth equaling 3.8%. However, the metric that we really watch is our core deposit base, that is customer deposits in our retail, SME and savings banks business lines, which account for about 80% of our total customer deposits. These grew by 2.7% quarter-on-quarter and 5.2% year-on-year. In my book, an impressive performance, bearing in mind that at the same time our NRI print was also very strong. I will talk about that in a minute. In terms of notable segment developments, a word on other Austria and Hungary. In the former, the declines are attributable to lower deposit volumes in the market's business. This is a normal cause of business, as you know, in line with the more volatile nature of this operation. And in the latter, that is in Hungary, this was also due to lower markets, but also corporate volumes, while the retail business produced good volumes growth year on year. Other than that, there is nothing material to report on customer deposits, as the structural shifts we watched so closely for so many quarters have stopped with interest rates coming down. So let me now move to net interest income, and you see it on page 15, all the developments quarterly and annually. To put it in a nutshell, whatever way you look at net interest income, quarter on quarter, year on year, or comparing the full year figures, our key revenue line performed very well. Year-on-year, quarterly, NII grew by 7.3% to well above 1.9 billion euros. Quarter-on-quarter, it was up by 1.7%. And if we compare 2024 versus 2023, NII was up by more than 4%. And I can tell you, it's a pretty clean NII. Happy to answer any questions you might have, but please take away, it's a clean print. This means that we posted all-time highs not only on an annual but also on a quarterly basis. And with this performance, we also managed to keep our net interest margin stable at close to 2.5%. So how did we get there? As we already mentioned, volume growth was robust in the second half of the year, and this clearly helped. In addition, we were quite effective in repricing deposits downwards in line with central bank cuts. Also, the shift to turn deposits, that was a key feature of customer behavior when rates went up, actually stopped, with declining interest rates. Lower wholesale funding costs and higher income from our bond book also helped. Now, against this, we had a number of rate cuts in 2024 in the Eurozone and in CEE, which impacted us negatively, but were more than offset by the positives I just mentioned. Now, if we look at annual geographical performance, the key highlight is the strong performance across Central Eastern Europe. There was not a single country in which NAI would not have grown significantly. In four countries, namely Romania, Hungary, the Czech Republic and Serbia, we even achieved the double-digit growth rates over 2023. While in Austria, we saw declines, but these came not at all as a surprise after the extraordinary year 2023. With such a strong performance, and Peter said it already, the bar for 2025 is clearly higher than anyone would have thought just a couple of months ago. Still, we stick to our outlook that we have previewed already in the last quarterly call and project that we will manage to keep NRI in 2025 in the flattish zone. Or, if you will, we are rolling our plateau logic that we have discussed so many times with you one year forward. How do we arrive at this guidance? We believe that loan growth, higher interest income from our bond book, shift downward pricing of deposits, as well as lower overall sensitivity to rate cuts, now amounting to only 200 million euros for a 100 basis point instant downward rate shock, will all provide tailwinds to NRI, while lower rates will translate to lower income from central bank placements and lower income from variable rate loans. So the expectation is that tailwinds and headwinds will broadly offset each other. Moving to net fee and commission income on page 16. Fees turned in another strong performance in the fourth quarter, posting an increase of more than 11% year-on-year and 6.1% quarter-on-quarter. The quarter-on-quarter drivers were pretty much unchanged compared to those observed earlier in the year. Income from securities business, particularly in Czech Republic and at the savings banks, supported by a good market performance, but also by healthy new sales, a continued rise in fees from payment services, and finally, an increase in insurance brokerage fees driven by year-end bonus payments. The year-on-year growth drivers were similar, but the result was also helped by inflation-induced repricing of payment services, particularly in Austria. So in short, we improved fee business in all fee types and all geographical segments. Looking forward to 2025, we aim to build on the strong 2024 baseline by growing fees in the mid-single-digit area. However, while growth drivers should be similar as in 2024, we will enjoy less of a repricing tailwind due to lower inflation rates in the reference period. Let me turn to operating expenses on slide 17 now. Cost inflation, landing at 5.2% in 2024, was in line with our guidance, as costs in the fourth quarter saw a significant rise due to a number of seasonal effects, such as higher bonus accruals, higher marketing and consulting spent at this time of the year. Year on year, the increase was primarily driven by the salary increases in the range of 6% to 11%. Let's not forget the salary increase in Austria of almost 8%, which was hitting us as from April 2024. Looking at the expected cost developments in 2025, we currently again project cost inflation to be around 5%. While wage inflation should definitely come down from the levels we have seen in 2024, we will incur some costs related to strategic initiatives, ranging from the development of digital advice to the expansion of our asset management services, that we fully expense and that are not yet expected to make a positive revenue or efficiency contributions in 2025. Moving to page 18 now, with quarterly revenue momentum being strong, but at the same time quarterly costs also being elevated, we posted an operating result that was up year on year, but down compared to our record high in the previous quarter. The savings banks, the Czech Republic and the Hungarian business showed weaker performances this quarter, leading to an overall cost-income ratio slightly above 50% for the last quarter of the year 2024. However, looking at 2024 as a whole, we have delivered the best-ever operating performance with a cost-income ratio of 47.2%, with this finally even delivering positive operating chores over the strong year 2023. For 2025, based on what I just said about the revenue and cost outlook, we expect only a small deterioration in efficiency and forecast that the cost-income ratio will stay below 50%. And with this, over to Alexandra.

Thank you, Stefan, and good morning once again. Let me lead you through page 19. As already outlined by Peter, our risk performance was fully in line with our upgraded guidance in 2024. We booked about 400 million euros. That equates to 18 basis points of average customer loans. This print included releases of FLI and overlay provisions in the amount of about 270 million euros, 96 million euros of which were booked in the fourth quarter. With this, our balance of FLI and overlay provisions now amounts to roughly 407 million euros, and we expect to release another 100 million of those in 2025. The trends we have seen throughout the year also continued in the fourth quarter, meaning risk costs being booked primarily in the Austrian corporate space and in terms of business segments, mainly at the minority-owned savings banks, with limited impact on our shareholders. In the retail business, our performance was strong across all geographies, including Austria, as unemployment rates remained in the green zone in all countries and loan demand picked up. Our Central and Eastern European operations continue to enjoy an exceptionally strong performance across all business lines in 2024. On a net basis, we effectively booked no risk costs in CE. For 2025, we remain optimistic that the strong performance in sea continues and that we will see some improvements in Austria during the course of the year. Consequently, we start the year off with a risk-cost guidance of about 25 basis points, which still is a fairly moderate level. Let's now turn to page 20, asset quality. The consolidated MPL ratio at 2.6% still remained at a historically strong level at the end of 2024. While the slow downward drift in Austria continued on the back of increased MPL inflows in the corporate business, and this was true for Erste Bank Österreich, the savings banks, as well as the holding, the performance across CE continued to be very strong. Effectively, we see lower MPL ratios in quite a few CE countries, such as the Czech Republic, Slovakia, but also Hungary, than in the Austrian businesses. This gives us a high level of confidence when looking into 2025. MPL coverage declined to 72.5%, as already mentioned already by Peter. We released FLI and overlay provisions throughout 2024, and in particular in the fourth quarter, and also because many of the inflows we saw were still highly collateralized. We consider this level more than adequate. In terms of projections for 2025, we expect that the group MPL ratio will stay more or less at current levels. Similarly, coverage is expected to move around current levels, again depending on the structure of new defaults and further FLI and overlay release potential. With this, I hand back to Stefan.

Other result, page 21 please, includes other operating result as well as gains and losses from financial assets. In the fourth quarter of 2024 was significantly better than a year ago, but in line with historic patterns, weaker than in third quarter. This is mainly explaining our continued proactive approach to balance sheet management, which meant that we sold bonds in order to take advantage of better reinvestment opportunities. This led to a negative impact of 67 million euros in the quarter and overall 91 million euros for the full year. Secondly, we booked a couple of smaller impairments, mainly in the Czech Republic and Romania, totaling 23 million euros in Q4. And thirdly, we topped up our provisions for an expected VAT ruling, affecting Austrian operations by another 12 million euros. out of which around about 40% is in ERSTE entities and the rest in savings banks. The balance was attributable to regular items such as banking levies in Austria, Romania and Hungary. I assume we will discuss this in the Q&A later on in a different context. Summarizing the P&L for the full year, on page 22 we see a net profit of more than 3.1 billion euros, resulting in a healthy return on changeable equity of 16.3%. Quarterly net profit was down both quarter on quarter as well as year on year, for reasons explained already. Earnings per share for 2024 and the fourth quarter amounted to 7.2 and 1.33 euros respectively. When we look at 2025, We start the year again with an ambitious return on tangible equity target of about 15%. With this, let's spend a few minutes on wholesale funding and capital. And as you can see on page 24, wholesale funding volumes increased quite substantially in 2024 as new debt issuance more than offset the decline in interbank deposit volumes as TLTRO was finally phased out. The stock of debt securities was pushed up primarily by issuance of covered bonds, certificates of deposit, as well as MREL-related issuance in the various resolution groups. Overall, of course, our strong funding profile continued to be primarily built on a highly granular and geographically well-diversified retail deposit base, which also showed dynamic growth in the fourth quarter as discussed earlier on. On page 25, we look in more detail at our long-term wholesale funding activities. We have successfully completed our 2024 funding plan that included a number of benchmark transactions ranging from covered and senior preferred bonds to an AT1 transaction. In fact, in 2024, we also did some pre-funding for 2025 already, with the transaction highlight being the re-entry of the Tier 2 market after an absence of about two years, I guess. We were also starting quickly out of the gates at the start of the new year by issuing two benchmark transactions, a €750 million senior preferred bond and a covered bond in the volume of €1 billion. You find the respective spreads levels on the slide. In total, for 2025, we expect a similar funding volume and mix as was the case in 2024. When we look at the development of regulatory capital and risk-weighted assets in the fourth quarter, on page 26, we see that regulatory capital did not increase as much as one would expect as the profit inclusion from the full second half of 2024 was partially offset by a deduction for a planned third share buyback in 2025. More on that in a minute. On the RWA side, the quarterly updrift in credit risk was due to strong exposure growth, especially in the corporate business. Taking an annual perspective, we saw an increase of credit risk-weighted assets of about 8%, while total exposure grew by more than 9%. Both retail and corporate business growth contributed to this. Portfolio effects. You can think here of rating downgrades, rating migration, and LGD changes, to name the key drivers, effectively cancelled each other out in 2024, as did method or model effects with all other residual impacts. Operating risk-weighted assets were also up quite a bit in 2024, driven by annual severity recalibration already executed in the first quarter. Market risk did not move significantly in 2024. And finally, for my part, let's go to page 27 for our capital ratios. I've mentioned that CET1 capital did not increase as much as one would expect. Also, Peter mentioned it already. And consequently, our year-end CET1 ratio did not enjoy the typical year-end spike either. As was already mentioned, because we incorporated a planned third share buyback into the capital calculation, equating just short of 24% of adjusted 24 profit, round about 700 million euros, that is. Net profit adjusted for the 81 dividend, of course. We have already applied for regulatory approval on this capital distribution. This comes on top of a dividend in the amount of 41.2% of adjusted net profit. Here we talk about the 3 euros that Peter already mentioned. Looking ahead into 2025, it's very important that the capital trajectory, we will see a nice bump up of about 50, maybe even 60 basis points in our CET1 ratio in Q1 as a consequence of the introduction on basal 4. Just remember, we always talked about 30 to 40 basis points. Latest calculations show that it will be rather 50 to 60. We may have to give you some, not you, but we have to give some of that back in 2026, depending on the development on the market risk part of Basel IV, if this is introduced on time as currently scheduled. But it's fair to say that this looks uncertain from today's point of view. And with this, I hand back to Peter for the outlook.

Thanks, Stefan. I'm on page 29 now. Let me share a couple of additional thoughts on 2025 with you. A quarter ago, we provided you with the first idea about 2025 by setting a return on changeable equity target of about 15%. This target is confirmed. I also explained how we want to get there. In this respect, there are also no material changes either. If anything, the performance of fourth quarter, with volume and top line momentum being strong, raised our level of confidence that our assumptions for a quarter ago are still realistic. Namely, that based on somewhat better economic backdrop compared to 2024, loan growth of about 5% should again be achievable. This will help us to keep net interest income stable despite the 2024 print exceeding expectations significantly and interest rates coming down further. We see continued strong potential for fee growth, but with lower inflation adjustments in payment services, year-on-year growth will likely slow down to mid-single digits. We forecast operating expenses to also increase by about 5%. mainly due to investments into strategic initiatives that should yield top-line and cost benefits in the future. This means that while operating result is expected to remain strong in 2025, we will probably see a small temporary drop in our efficiency ratios to just shy of 50% from current historical record levels of costs. Risk costs are forecasted at about 25 basis points, as credit risk performance in CEE is said to remain excellent. Other operating results may be impacted by an announced increase in the Austrian banking tax, but then again we had some one-offs in this line item in 2024, so possibly this effect could be absorbed without a year-on-year deterioration. Let's wait and see. And assuming a similar tax rate as in 2024, this should bring us into the 15% zone of return on tangible equity. As regards planned redistribution, Stefan and I have already said everything that is relevant to the topic. We believe that this is a very robust and at the same time prudent guidance which we are more than happy to review and upgrade during the course of the year should things turn out better than currently expected. And this, ladies and gentlemen, concludes our presentation remarks. Thanks for your attention. We are now ready to take your questions.

Thank you, sir. Ladies and gentlemen, if you wish to ask a question at this time, please signal by pressing star 1 on your telephone keypad. If you find that your question has already been answered, you may remove yourself from the queue by pressing star 2. And please make sure the mute function on your phone is switched off to allow your signal to reach our equipment. Again, it is star 1 to ask a question. And our first question is from Gulnara Sykutlova from Morgan Stanley. Please go ahead.

Hi, good morning. Thank you very much for taking my questions. So my first question is on M&A. If you were to consider M&A opportunities, what are the key criteria in terms of strategic fit, but also, importantly, the financial returns for Airsta to consider a transaction? Do you have an ROE threshold in mind while looking at the opportunities? and which business areas or regions would be of the most interest to you. And the second question on geopolitics, what is your view on the latest geopolitical developments when it comes to Russia, Ukraine, and how does the situation could affect your business? What is your view on the way that things have been evolving lately, and is it more positive, negative, or neutral for Erste? Thank you.

Maybe I take the first question about M&A. So there's a number of metrics that are relevant for us, some financial, some business-related. I mean, among the financial ones, earnings as well as capital accretion within a reasonable timeframe rank top, while on the business side our ability to expand our customer base is key. So in terms of process, we will assess each case individually rather than following a strict rule book. But, of course, much will depend on what assets are actually available. When it comes to your second question about the situation between Russia and Ukraine, I mean, in general, If there will be a kind of agreement between Russia and the United States and partially Europe, of course, I think it should be positive for the overall region, because then I think it's very obvious that Also European Union will be willing to support rebuilding of Ukraine, which should in fact have kind of positive kind of impact, especially on countries like Romania, partially Czech Republic from my perspective. Of course, it's a little bit too early to judge. But I think what you've seen over the last weeks is the tonality changed completely. And I think we can, over the next months, expect that there will be some kind of agreement between Russia and Ukraine.

Thank you.

Thank you. We will now move to our next question from Nate Nemes from UBS. Please go ahead.

Nate Nemes Yes, good morning, and thanks for taking my questions. The first question is on long growth and your long growth expectations. Could you talk about the expected change in drivers of long growth in 2025? It seems like in Q4 you saw some improvement, both in retail and in corporate, and I think certain countries are clearly growing quite fast. And even in Austria, there has been an uptick. So I'm just wondering, what prevents you from being a bit more optimistic on growth given the strong Q4 momentum and maybe just maybe some improvement in geopolitics and sentiment in the region? That's the first question. The second question is on NII and rate assumptions. If you could just confirm what your terminal ECB deposit rate expectation is. And And if you can update us on the NII sensitivity relative to that terminal deposit rate. And in the last question, if I may, Stefan, you alluded to perhaps some further details on your expectations on regulatory charges and bank levies in 2025. Could you detail the expectations here? Thank you.

May I start with the loan growth question? What we saw last year, this peak up in the second half of 2024, this is something which we also believe in 2025, but we are slightly more positive compared to 2024, especially in the mortgage area. So when you look at consumer loan growth, we are strong in Croatia, Romania, Slovakia and the Czech Republic. I think this is a reflection of a positive outlook to the future in these countries. And when you look at the GDP growth which is forecast in these countries, it's obvious that the mood in these countries is more positive than compared to Austria. And I think you are all aware that in Austria we have never been extremely strong in consumer lending. When it comes to mortgage lending, I think there is a very clear correlation with a decrease in interest rates. and real estate valuations have been coming slightly down in some of our countries and so therefore you saw the pick up in Czech Republic and especially Austria. We will run some initiatives to improve our mortgage lending capabilities also in Croatia because we believe that there is a market opportunity And when it comes to Austria and Czech Republic, so what we experienced over the last two months, so market demand is still very strong. And we see absolutely no reason for the rest of the year that this will change. So it's exactly as Stefan mentioned in his presentation, so you know us, we are always a little bit cautious when it comes to our guidance, but we are also willing to change if we see over the course of the year that things will develop a little bit better, then we of course will be willing to update our guidance. On the corporate side, I think it's fair to say that what we have seen in the fourth quarter was very much related to real estate slash commercial commercial real estate and demand in the SME area in most of our countries is still lagging behind. It's a little bit too early to come up with an assumption how SME lending will develop in this year. And with this, I would hand over to Stefan when it comes to NIH.

Thank you. So, very concretely, Mate, our expectation as of today for the end of the year ECB key rate is 2%. I will add for your information also our expectations for our most important CE countries. In Czech Republic, we would assume three or three and a quarter, depending on the further development of inflation. I get to that. And in Romania, we would expect that later on in the year, the Romanian national bank will cut from the current 650 level somewhere towards 550 to 650. That's our assumption. Now, obviously, and I'm sure we all are following that very closely. Inflation in some of our geographies, some of the countries has just experienced an uptick again, some of which is base effects, some of which is driven by, so to say, the expiry of certain subsidies from the past. And last but not least, There are also measures, budgetary measures, which have an impact. VAT increases here or there, taxes and so on. So it's very, very important to watch closely the further development month by month of inflation because that will influence the central bank activities for sure. And it could be here or there some surprises. Also, let's not forget that the tariffs once introduced, in what level ever it will be, might have an impact. So, cut the long story short, all of those are moving parts that we are closely watching. Nonetheless, I think, and I mentioned it as detailed as I could on NII, we think that the supporting factors are at least as big as the, so to say, negative ones, so that we, on this very high level, and you know that 7.5 is way above what we expected earlier in the year for 24, can again be achieved, maybe even overachieved over the year 2025. Let's see. Bank Labies, thanks for pointing to it. Yes, the reason is very simple. It seems that after five months of long discussions, we will get a new government in Austria. And unfortunately, there is an element of a Bank Labie Incorporated. There's nothing that would surprise us. We had it out there on the headlines for many, many months. We have been Discussing it with the decision makers, obviously, it's our view that those measures do not really bring value for anyone ultimately. However, I can also inform you in the same moment that the dimension that we are aware of as of today is very much digestible, and it's definitely fully incorporated in all of our guidances. So that's very important for everyone to understand. Nothing of that will change what we have said in our presentation. Thank you.

Thank you very much.

Thank you. Now take our next question from Gabor Kiminy from Autonomous Research. Please go ahead.

Morning. Another question on NII, please. On the flat outlook for this year, I understand you prefer to err on the side of caution at this stage, but this implies a decline in the NII run rate relative to Q4. Could you talk about your assumption on the fixed-rate asset rollovers, please? What sort of NII tailwind shall we model from rolling over your securities and fixed-rate loans? over the course of this year. And I'm not sure you commented on that, but can you elaborate on how the rate sensitivity declined to 200 million from 100 basis point interest rate moves? And just finally on the buybacks. Can you perhaps walk us through the timeline here for the approval and the execution? And is this all we should model for this year, which you proposed just now? Or do you see scope to potentially do more buybacks later this year? Thank you.

All right, Gabo, I tried to go question by question. So let me start with the sensitivity. Thanks for pointing back to that. It gives me opportunity to be more detailed. Look, you remember we came from 500, 300, whatever. We are now at 200 net. But, honestly speaking, and this was always our aim, we discussed it in many, many rounds, as you remember, It was always our aim to put ourselves more or less to neutral. I would say after adjusting for non-majority-owned savings banks, we have a neutral positioning now on the balance sheet for interest rates. That's it. And even if you say 100, this or that direction, that's given the overall dimension quite neutral. And this was what we aimed for, given that we expect rather cuts still than hikes. And I think we have done a quite good job there on the bed engine management side to manoeuvre through the year 2024. Now, the other thing is, look, conservative, not conservative, we can discuss this for hours. I do not fully agree, to be honest, because if you look at where we have been discussing the year 2024, and again, we have the base of 7.5, and if you look at the run rate, that you were referring to, I would, honestly speaking, not expect that in Q1 we can beat Q4. So your assumption that if we, so to say, extrapolate the 1.9, what was it, 1.930-something over the full year, yes, you would end up with a higher figure, but that's not the assumption that will be the run rate. Let's not forget that Q4 is also... a very day-rich quarter and so on and so forth. So I'm sure you have built all of that into your model. I would not be unhappy if at the end of the year you are right and we will beat it again, but for the moment we feel absolutely confident that this is a solid and also ambitious guidance. Then the other question in terms of return on fixed assets, we assume currently something in the area of 250 to 300 million of uptick from that side. And that's exactly what you can build into your assumptions on that end. Obviously, as I mentioned already before, there are some countermeasures, not measures, but counter-effects on central bank interest and variable loans. And then I think your question around the buyback was the timing. So as we mentioned, we have applied for the For the buyback, obviously it's in the discretion of the ECB when to give us green light. We would typically assume that this will happen somewhere around in the late second quarter or so, given the experience from the last couple of times, and then we would immediately start with execution. Let's not forget that liquidity in the stock is not huge, especially since we have been reducing the share count with the former two share buybacks. So the ambition is definitely to finalize this intended share buyback by the end of the year. But I wouldn't give you a guarantee today because if the approval arrives very late, then this might be a challenge. let's say, base case approval somewhere in the late second quarter and execution still this year, but with a certain room for, let me say, adjustment given the facts I was mentioning.

Very helpful.

Thanks, Stefan.

Thank you. Our next question is from Johannes Thorman from HSBC. Please go ahead.

Morning, everybody. Johannes Thorman, HSBC. Three questions from my side, please. First of all, on your operating expense guidance of up 5 percent, could you break those 5 percent down into the, yeah, what you call inflationary impact on Rwanda Bank and the future investments? And especially also, could you please talk about the investments you're doing, what we should expect and what impact? this could have in the midterm. Your comments have been so far rather small and unspecific. Secondly, on your NPL increase to 2.6%, and it's really interesting that years ago, Austria was always the better part with lower NPLs, and now we have Czechia, Slovakia, and Hungary with lower NPLs in the Austrian business. What has been driving this, and in Can Austria come down again? What are the drivers for the increases in the NPLs except for real estate? Is there anything else? And last but not least, you target a capital ratio of 14% or above 14%, which was already upgraded from 13.5%. Now you still have 15.1% even adjusted for the share buyback, which is still at least a billion. excess capital. How do you want to use this or could you envisage even a higher payout ratio at some point if this continues that we build up capital that you could even say at one point we do a year with 100% payout? Thank you.

So, thank you, Johannes, for your questions. Let me start maybe with the cost question, of course, also with support from Stefan. So our cost forecast for 5%, you know, I would say something like 3%, 3.5% is sort of the regularly kind of inflationary trend, and 1.5% to up to 2% are related to what we call strategic initiatives. What we tried to achieve is not to put all costs of strategic initiatives on the table in a way that when you look at especially IT cost development over the last two to three years, which was anyhow very much driven by kind of inflationary pressure, which led to an automatic increase in our IT costs. We really want to take care not to overdo it in terms of cost increase when it comes to spendings on IT. So we try to put a little bit more costs into our strategic initiatives but also try to shift around from existing budgets to new strategic initiatives. To your question what you can expect from strategic initiatives in the mid-term, There is a lot of it related to the retail business, mainly related to digital advice and asset management, which should further support our ambitious targets when it comes to fee growth. Well, I think as we already consistently mentioned that we see a huge opportunity in terms of asset management in all of our countries. So the penetration compared to other countries in our region is still on a relatively low level, although we have seen a very much growing trend over the last years, especially in countries like Hungary, Czech Republic, Romania, Slovakia. And it's definitely a strategic goal to further improve our footprint when it comes to asset management. There are different levels when it comes to it. On the one hand, we have to improve our accessibility for our clients to get in touch with us when it comes to asset management, what we did and what we rolled out in a silent launch in the Czech Republic. is a new version of George when it comes to asset management, which we call George Invest, which will be rolled out in Austria in around March, April, and then other countries will follow. Besides that, we will put new pricing schemes in place to be more transparent. because it's very clear that we have to take care not to lose the next generation of younger clients which are interested in asset management and where we see a very positive trend in the market over the last years and it's very clear that we have to compare ourselves with new entries to the market like trade republics, K-Laboral, you name it. Last point when it comes to asset management, of course we will also broaden our product universe offering also passively managed products and maybe also worth to mention of course that we are also willing to invest in kind of M&A opportunities when it comes to asset management, as we already did with two transactions in 2024. Besides asset management and increasing our footprint, which should definitely lead to higher fee income over the next years, We will also invest in our digital banking in terms of offering digital advice, which definitely should lead to a higher share of wallet when it comes to our retail portfolio. And so asset management and digital advice are the key topics when it comes to increasing revenues. When it comes to cost side, we are also investing over the next two years in end-to-end digitalization of our mid and back office, which should definitely have the beginning of 2026 positive impacts on our cost line. With that, I would hand over to Alexandra about your question related to risk-cost development between Central and Eastern Europe and Austria.

Yeah, thank you for the question, Johannes, on the topic of NPL increase. And in fact, in your question, the answer was already included spot on. See risk profile, excellent. And for the first time, not only... lower and better the NPL profile than in Austria, but also really objectively at a super, super excellent level. You were asking for the drivers, was it real estate? And it's a very clear answer, it was real estate in Austria. And let me maybe point to page 43 of our presentation in the Annex, where you can see where the real estate, you should know this slide, it has been included also in the previous quarters, But there you can see pretty clear where is the residential real estate exposure booked, and this is mainly in Austria in the savings banks. And that's why you see the current troubles and also partially crisis of the residential real estate segment in Austria mirrored in these figures. Other than that, automotive, there is some, the one or the other, let's say the one more prominent case also from the automotive sector, but overall there we do not see any structural deterioration so far. So summing it up, it is residential real estate in Austria, mainly booked in the savings banks, discontinued since a few quarters. And to your question, can this come down again? Definitely it can come down again and it will come down again. What is the issue with real estate NPLs? They are more sticky than others. It takes longer to work them out. It takes longer to sell the apartments. But other than that, I'm confident that we will again see excellent levels also in Austria going forward.

I think Johannes also has still a question on capital. and regarding, so to say, further distribution plans and so on. I think we have been very consistent and very reliable on our outlooks and forecasts in that respect. So that's the first thing that is extremely important to us, that we deliver on what we indicate. So in that sense, your assumption, can you say something today about your, let's say, plan delivery, what you were indirectly asking for of 2025? profits plus, so to say, than the consequent overall excess capital. I cannot, but what I can definitely assure you is that we will look very thoroughly into the respective options. And we will also be very clear-minded on the fact that if we have the privilege of seeing a CET1 trending higher, and this is what I indicated before, we expect that even after all this distribution that we have communicated today of 65% of the 2024, Profit, dividend plus the intended share by combined. We will land, as you rightly assume, north of 15 and then we'll grow further from there. We will definitely look at our dividend accrual and we will, of course, with half year, then first time indicate what we are considering there in the payout. It's too early to say, but everything that we always said still holds, meaning we don't set the management target to sale then 10%, 10, 20, 30, 40% above it. That's not the goal. Maybe one just remark that every one of you knows, it's just worth mentioning. We have now clearly applied and aiming the share price still. It's obvious that at share price levels of 1.2, 1.3 times book, That's not such a no-brainer anymore as 0.8 or 0.9, especially when you then compare it to other options that may arise. So that's something that's, of course, also very important to consider. But for now, the decisions have been taken. What happens in the next couple of months is clear, and then we'll take it from there. Thank you very much.

Thank you. We will now move to our next question from Ben Meyer from KBW. Please go ahead.

Hi, good morning. Thanks for taking my question. I have two. I was wondering if you could please provide a breakdown of the NII by country for this year. That would be helpful. And then just returning to capital, yeah, it remains well above target, particularly after the 2004 bump you're expecting. I was wondering what your current thinking is on Poland, and would you look at a bank or a target particularly geared to a certain area, either consumer or more towards SMEs? Thank you.

Just, Ben, may I ask you to specify more? You asked something like NRI by country. Backward looking, forward looking, what's the point?

Forward looking, please. It's the evolution for this year by country, the expected evolution.

I believe will happen for the year 2025 over 2024. That's kind of the question, right?

Yes, please.

Okay, so I keep it very short. We believe that the core group overall, that's including the Austrian part of Oeste, will outperform the Sparkassen for the simple reason that the Sparkassen will further see a slightly declining, and I think a bit of 150 to 200 roughly for 2025 over 2021. That means if we are achieving a Fletish NI, that consequently means the same amount is up on the core group, as you want to say. And then the split between CE and Austria, I'm clearly more optimistic for the non-Euro countries, where we will see, let me say, a better mix of asset and liability side. but nothing really tremendous. If you look at, and I said it in my presentation, if you look at the performance in 2024, some of the countries where we definitely wouldn't have expected, we're holding up very well in the NAI for country-specific reasons and local loan growth. So, in a nutshell, Austria will still be underperforming on pure NAI side in 2025 versus CE, but on the specific country levels, I cannot be too much more detailed at this point in time. Second question was on Basel IV, if I'm right. So the reason why we jump up is very simple, that we have, let me say, let me put it in this wording, we have a model environment, I'm not qualifying it now, that simply triggers on the Radian Q1, and we always knew that, a relief on the credit risk RWAs. We have a certain burden on the operational risk RWAs, But this is by far less than the relief on the credit risk RWAs. And what we lately identified is that the relief is even a little bit more by around 20 basis points or so than we originally expected. That's the jump. So to say, if you want, the capital, December 31st of 2024, jumping to January 1st, 2025, sees this relief in RWAs. And that's what I wanted to say. The other thing is then, of course, the question whether and when exactly the FRDP... um so to say regulation kicks in you know that this has been delayed there were a lot of discussions around it the current official stance of the regulator is that this will be introduced january 1st 2026 if we build on those numbers we will we would lose again a certain part of this relief but as you probably know there are big discussions on on all kinds of european levels whether this regulation will be implemented this way so should it come in less severe or not even in the form currently planned then we would keep this relief on the capital front. I think that's what you wanted to talk about, right?

And just your current thoughts on Poland, please.

For that, I hand over to Peter. I think the question was what kind of banks we are looking at. Look, this is very simple. We are like always looking for the structure that fits into the business logic that Erste has, Peter already described. that something that is not accretive in terms of profitability is not of interest for us. That's anyway clear, but also it has to be a good business fit. So we definitely would not look, because I think you asked the kind of whether we would look at the monoliner, purely consumer lending or someone purely in investment banking. So the answer is no. We would definitely look at the typical broad, let me say in terms of business model, broad operation that fits into our current franchise.

Thank you very much. And our next question is from Ricardo Rodere from Mediobanca. Please go ahead.

Good morning, everybody. Thanks for taking my questions. A follow-up, again, on capital, because I think what Johannes asked a few minutes ago is more than legitimate information. Starting from 15.1, and then you add these, if I understood it correctly, 50 to 60 basis points related to Basel IV, again, you end up day one, you know, on 1st of January. 2025, closer to 16 than to 15. Now, Stefan, in Q3, you stated if you have a target of 14%, of around 14%, you cannot run the bank, you know, systematically at around 16. But this is exactly what's happening at the moment, you know, and even without considering the capital production in 2025. So what I want to understand here is what is... the commitment of the bank to bring this number down, or are we doomed to wait for M&A forever, waiting for an enemy that over the past couple of years has never come? Just wanted to better understand what is your thinking around this, and still related to I mean, you are ramping up back to 700. It was 500 before. The dividend is up, but much less, 0.25 euro per share. Why is that, considering the share price has gone up fairly significantly? And last thing, given that the buyback drains liquidity, as you clearly stated before, the Can we say that this is maybe the last one? And from now on, you know, the capital return is going to be mainly cash? Because I doubt you want to. One of the ultimate of your goal is to, let's say, to drain liquidity as much as possible from the market. And then I have a question for Alexandra. In your guidance of 25 basis points, Is tariff somehow included? How is that accounted for? And related to that, how can you decide from day one that you will be using 190 million of FLIs in 2025? How can this be decided right at the beginning of the year? This is just a kind of curiosity, if I may. Thanks.

Ricardo, I will take the technical part of your question and thanks for picking it up. If you look at the volumes and you can look at the Vienna Stock Exchange and platforms combined and then excluding, including, especially what is typically done, exclude the auction and so on. you will see that in a fair execution, something around about a billion is a realistic limit on an annual basis. Of course, always subject to a change in liquidity, but that's a realistic assumption. And in that respect, you're right. We simply cannot, unless you would really go for a very, very weird interpretation of a buyback, you can go to two or whatever. And for the strategic part, I hand over to Peter.

answering your question if this would be the last year, of course not. I mean, this is very much depending on what we see in terms of opportunities over the next months to come. I think it's a little bit unfair to blame us for not having done any kind of M&A transaction over the last years because I think the sentiment changed dramatically over the last months in a way that, you know, in 2023 it was the first year where banks were trading so to say, above their returns were above cost of capital. So I think there has been seen a change in the market situation when it comes to potential M&A activities. But again, although maybe the 700 million don't fulfill or expectations, I think there are some technical arguments related to it, and it's definitely not seen by us in a way that we will keep over excess capital forever.

I take over, and I would start with the one part of your question, Ricardo, on the 190 million. Of course, you're right. We cannot be certain on day one, and we are not. This is the expectation. These figures come out of model and methodology. And we just, as always, we want to be as transparent as possible. So this is our current expectation. And also in the previous year when you for sure recall that we have been always communicating our expectation. It then turned out to be a little bit different, but as you rightly mentioned, one cannot be sure this is the result of model and methodology. On your second question, on the roughly 25 basis points, if potential tariffs are included, Implicitly, yes. Our region as Europe is currently facing external challenges and this includes the impact of political decisions such as also the tariff policies that you have mentioned. So on this question, yes, this is included.

Okay, that's clear. If I may get back one second on capital. But at the very end of the day, Do you prefer to run the bank at 16% or a number closer to 14% common equity? If I may. or somewhere in between?

Ricardo, subject to requirements changing around us and as we indicated and we looked at, there's currently no major shifts, there is one or the other country shift and this and that, but that shouldn't change the picture dramatically for the foreseeable future. The answer is definitely at the levels where we have the management target now. Right? So that means 14 and a certain caution above it. Of course, you should not say that 14.01, 14.02, but we know we have the FX volatility and things like that. But a certain caution doesn't mean, as Peter perfectly explained, doesn't mean a percentage point or more. So, yes, we have a task to do there. There's no doubt about it. Just that we clarify that there is no disagreement with your view. It's just also very clear that things are moving quite quickly by the quarter, to say the least. And therefore, obviously, we have discussions with you, with the market, and we completely appreciate the expectations. We have learned a lot in these discussions with all of you. I think we have delivered quite a good report. a good, I would say, decisions and executions. I really believe so. That's at least also the feedback for many. But on the other hand, of course, we have other stakeholders that are also talking to us, not to forget the regulator. We are fulfilling all the regulatory... requirements with comfort. But at the end of the day, we have all sides to discuss with. So the answer is very clear. The expectations are understood. The expectations are well understood and also fully respected. And we are trying to run the bank as it is now at the area of management target plus a small caution. And that's definitely something where we want to get back to in a proper way. Thank you.

Yeah, thanks. Okay, very understandable. Thanks a lot for the answer.

Thank you. As a reminder, to ask a question, please signal by pressing star 1. And our next question is from Prashendra Dubey from Barclays. Please go ahead.

Hi. Hi. Hope you can hear me well. And thanks for taking my questions. I have three, actually. First one is on, thanks for the NI and the fee guidance. I just wanted to understand the other income guidance and what should we expect? Not for this year. I think you have guided that it should remain at a similar level. What should we look at that for a guidance into 26 and a year further? If I remember correctly, you talked about trading income around 50 to 70 million per quarter and the other income around 50 to 60 million. So that would lead somewhere between 120 to 140 for a quarter. And I think if I analyze it, I think that gets to a number which is similar in the line. So that's the first question. How should I think about it? Second question is around your MDA requirement, I think. I see the MDA requirement for next year is 11.55. And I guess if I remember correctly, it goes to 12% for 26%. Could you talk about what would lead to that increase in 2026? And the last question from my side is on the cost of risk. I believe the cost of risk, if I exclude the 190 million, which Ricardo just asked about, I think it's around 35 basis points. That's, I think, above your lower range of your through-the-cycle cost of risk, which is 30 to 50 basis point. How should I think about your cost of risk for through-the-cycle and for future years? Not for 25, maybe for 26 and 27. Thank you.

Thanks, Krishnendra. I think the first question was around other operating results, and I can be very straightforward here. If, and this is the current assumption, if the nature of the banking tax is as such that we would be booking it in other operating results, as is currently the case, the only exception is Slovakia, where it's a pure add-on to the corporate tax. There we have it in the tax line. We would not assume any kind of material uptick in the overall outer operating result for the simple reason that we have seen counterbalancing effects here and there in this similar dimension. And you know that in 23, especially, less so in 24, we had other items which are easily in that range. So I would not build too much of an uptick in as long as there is no substantial change in the current plans.

On your question on cost of risk, yes, this is right. The guidance of 25 basis points includes the expected, I'm not sure, but an expected relief from FLI, which would bring us slightly above our lower range of our historic risk cost of 30 to 50. Still, we are in a, and I think Peter was it who phrased it, the economic outlook is far from exciting, and this is particularly true for Austria. So overall, we are in a difficult environment, in particular in Austria. And given this, I'm still confident and I would not change what I'm aiming for through the cycle risk costs and through the cycle risk costs should remain well below my target is even well below the 30 basis points going forward.

And we looked at it in the meanwhile. You were asking also about the P2G requirements and so on. And the assumption as of today is that we will see an updrift of around about 25 basis points, which is a sum of a couple of counter-cycle buffer adjustments in C. Just to give you a little bit of a feeling. the sensitivities are as follows. Depending on the size of the operation in Central Eastern Europe, you have, so to say, a push-through impact to the group, which is, of course, depending on the size. So, for example, the Czech situation is such that if you have a 50 basis points increase, if you had one, there is none, but in case there was one, it would relate to a 10 basis points impact on the group level. And then, accordingly, substantially smaller, around about a half increase for Slovakia and Romania and even less for the other countries. That's the logic of the impact and that also triggers the 25 basis points P2G increase that you have probably been referring to. Thank you.

Yeah, sure. Thanks a lot. Thank you. And we have a follow-up question from Benoit Petrarc from Captextra Pro. Please go ahead.

uh yes uh good morning so two questions on that side uh the first one would be on the on the share buyback i was just curious to understand what topics you typically discuss with the regulator currently when you can request what rule on the on the share buyback uh with your ct1 ratio i will i would assume the approval process is quite uh quite fast but you mentioned a name of uh as a guidance to start a buyback um i was curious if the information of the ukraine world will also help pcb to be faster on the on the exposed bank um and then the the second one will be on the past two ways um so and i related uh i just miss you you have some chance for the 25 uh dragons in the night how much pressure would you expect and i was wondering if you could verify if you uh keep assuming deposit rates uh cuts uh in 25 and whether that will be a need to support uh

Okay, Benoit, I tried to grab all that you have been asking for. So, look, of course, I cannot speak in any form on behalf of the regulator in this concrete case, the GSD respectively, representing the ECB and what kind of things they look at in the approval. We have had a very straightforward process, but it takes its time. So, definitely, I cannot comment on that further. We do not have any signs. from the colleagues who we speak to there that they would not improve it. But in the same moment, that's completely in their discretion. I kindly ask you for understanding that I cannot comment on that. And on the NII, yes, I think if I got the question right, you're perfectly right that everything that we have, so to say, in the cards for the interest rate development, be it in the Eurozone or be it in Central and Eastern Europe, is perfectly in the range where we think that our business model works very nicely. We are not at all concerned, neither to the upside, obviously, at the moment, nor to the downside. And I would say something that is closer to one, one and a half, and then triggering certain challenges regarding deposit repricing, as you rightly assume, that would be maybe then endangering here or there some NI developments and assumptions. But we are far away from that. And we don't see that for the next at least 12, rather 8 into 24 months coming. Thank you. Thank you.

Thank you. And we have a follow-up question from Riccardo Rovere from Mediobanca. Please go ahead.

Oh, thanks, thanks. Very quickly, the impact that you had is not exactly as a result, but provisions in Austria on assets and liabilities at a marketized cost, I think it was around 60 to 70 million this quarter. Is anything one-off in that? And the other question I have, I was looking at your website, and if I remember correctly, the last capital market that you had is dated to 2019. Do you have any plan eventually to update the market and what might be your strategy at some point? Thanks.

I think we were asking about the other operating result losses, so to say. This was purely from Bond. Maybe I was not clear enough in my description. In the Q4, totaling for the full year 2024, 91 million euros that spread across a couple of jurisdictions. But yes, you're right, the lion's share of that was in Austria, i.e. Holding and Czech Republic, if this is what you were talking about, Riccardo.

I think, yeah, I mean, I think so. But is this one-off? Can we say it's one-off?

Look, it depends very much on the interest rate level. This only makes sense if you have investment opportunities that pay better off on NRI going forward. Otherwise, you wouldn't do that. So the last question. Two years, this was a very, very attractive opportunity. Of course, always within the range of size that we are allowed to and that we are complying with all, so to say, respective accounting requirements and so on and so forth. But I mean, now with a little bit lower interest rate levels, it's going to be less attractive. So I would currently not expect something in that dimension for the year. But for the year 2025, I will keep you updated. It's nothing special. It's housekeeping, I would call it.

Okay, so it's, let's say, maybe not by nature, it's not a one-off by nature, but by magnitude it is.

That's the right description. That's the right description, yes. Okay, okay, okay, okay.

And on updating the market strategy and so on, is there any plan to do that?

I think this is a very fair comment, to be honest. You're right. We should update it. Okay, okay, thanks.

Thank you. And it appears there are currently no further questions at this time. With this, I'd like to hand the call back over to Peter Bosik for closing remarks. Over to you, sir.

Thank you all again for attending this call, taking your time. And we will come back to you latest on the 30th of April. Thank you so much.

Thank you. This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.