Erste Group Bank Ag S/Adr

Guten Tag und herzlich willkommen. Good morning, Cordial. Welcome, ladies and gentlemen, to our press conference on the annual results 2025. The results will be presented by the CEO, Peter Bossek, Alexandra Havel-Adrave, RISCA manager and CFO, Stefan Dörfler. We will start with the presentations right now and afterwards the gentleman and the lady will be available for questions.

Good morning and hi everyone, thanks for coming. You are all running on a tight schedule so we really appreciate that you are here with us today. So now when we look back to 2025, there are two important dimensions to remember. So let's start with dimension number one, the acquisition in Poland. So that meant a lot of work for us, of course. And we've reached a fantastic result in the end. And the second dimension to remember and bear in mind, the strength of the existing group, which has actually enabled us to acquire the Santander Bank Poland. We have really been successful in the past 20 years to develop the business model. We did it step by step and so we've really grown strong especially when it's about creating capital because we have a balanced approach. We have a conservative business mix that our work is based on that provides us with stability and we've been successful and strong standing in all the markets we operate in. We also have an influence on the market so it's not just about meeting demands but also adapting demands. So now when we look at the details and when we get to the figures so the loans have really grown and of course also the interest income has grown. We'll hear more about that from Stefan later on. But when we take a look at the loans, we have grown by 6.4% as compared to the previous year. And in all other countries, we saw a higher growth as compared to Austria. That's also down to the fact that the business development there was better. But even in Austria, we have seen an increase by 3.3%. And I think that's quite a positive signal for the future. So we will see a comeback, a slight comeback also as regards the Austrian economy. And, of course, things will improve this year again. Another thing we have been successful with is the connection between the growth of our loans and the deposits. When it gets to the deposits, we have seen an overall growth of 6.7%. In Austria, we have seen a slight dip of deposits under 10% because when you're part of a savings bank, you know, that's quite weird. But generally speaking, when you look at the economy, that's something positive. That's a positive signal because when people save less, they will consume more. They invest in the economy more. And that provides us with a better forecast for the future. So when you see a slight dip in the deposit ratio, that's nothing bad in general, just to bear in mind. Another thing to mention, and that's not an aside, And this really means a huge success. So our colleagues in equity and deposit management, more than 300 transactions with a total volume of more than 200 billion. So this is something we are really proud of. So that provides us with a lot of opportunities in the future too. Now moving on to the individual countries we operate in. Because it's of high importance to us that you understand what's going on in our regional markets. So let me provide you with an overview and let's start with the Czech Republic. So the economic development in the Czech Republic has been quite sensational in the past two decades. So really going strong, highly stable, generally speaking. So we see an increase of 2-3% year on year, so it's really fantastic. field for doing business for us, has been the largest part within our group and will be an important player in the future too. And when you look back, so a decade ago we started with George in Austria, Innovation in Austria, and now we are In the beautiful situation that innovation has become an important factor in all the countries that we operate in, with new functionalities, with new updates. So in 2025 we've seen new rollouts. So AI George, for example, a digital assistant to increase the usability, to strengthen the functionality of the app. And we have actually received positive feedback and we're going to go for the rollout also in the other countries in 2026. And when it gets to the asset management, George Invest, we already started in the Czech Republic and moving on then to Austria. So, I think it's really great that each and everyone is involved. That's a strong push as regards AI. And when it gets to our net income, the Czech Republic has had the strongest impact so far. Now, moving on to Austria. It has already been communicated that we started cooperation with a startup as regards quantum computing and quantum security. In Austria, we have a Nobel Laureate. Let's not forget about that. So there's a strong impact from the Austrian field of science to become quantum secure with our transactions. And, of course, we're highly interested to closely cooperate with research in that regard because that will strengthen our infrastructure and our way of doing business. Otherwise, Erste Bank Austria has also seen a hike in housing, financing, So two years ago, you know, we saw a lot of discussions, but we've seen a pickup on the market in Austria, and so we've also been successful in this regard. So let me add to George Investor. I already mentioned it. Our target group, our audience, has grown younger. So 63% of the users are under the age of 35, and it's a really strong trend that we've been following here today. So the younger generation starts much earlier with regards to asset management, to take an interest in asset management and of course has an impact on our way of doing business. And of course we also provide consultation, we provide services, we provide advice. and in the future we need guidance to understand what to do depending on the developments of the market. This is how we can make a difference as compared to the new brokers on the market. Now moving on to Slovakia. As regards the opening of accounts, we have seen new regulations on the market which could especially for small-scale businesses. So we saw more than 75,000 new openings of accounts. So Peter Kotyl, the CEO, left us. He had been with us for more than three decades. Fantastic work. It is with great delight that Michaela Bauer will become the new CEO starting next week. And we're also highly delighted that Slavoj Zeman will become the new CFO. He's been closely cooperating with Stefan. We will miss him in our working context, but of course it is a great delight that he will become the new CFO for Now moving down south to Romania. Legally speaking a lot has been going on in Romania in recent years. So in 2025. They introduced George Junior, so reaching out to kids and teens. Of course, everything will be under the control of adults, of their parents, but this is how we can increase financial literacy as regards children and teens. Romania has also been highly successful. So for example, we have seen an emission and generally speaking, Romania has been highly successful. Now moving on to Croatia. Croatia seems to be quite small. But when it gets to doing banking business, really successful. We have a stable team at work there, closely connected to the business field there, and the corporate business has developed strong, also as regards housing, financing. And for the first time in 2025, the governor of the Croatian National Bank will also become a vice president of the European Union. And I think that's of importance to understand. That will also have an impact, a positive impact, and that's a positive signal. And so let me really congratulate Vujicic in that regard. Because, of course, the focus will change as regards this particular region. When it gets to digitalization, we've also been highly successful in Croatia, especially when it's about corporate business. Now, moving back north, Hungary has always been strong when it's about securities, so the last one and a half decades. So they've gained quite some experience in that regard and we've been successful to improve our security savings plans and increase them by 55% and we also see a pickup hike as regards the loans. we've seen an increasing demand as regards the loans and also the deposits have increased, so quite successful. Now moving on to Serbia, so that's the last country to mention here, the last country for the rollout of George, and an interesting thing to mention here as regards Serbia, actually the corporate business has grown stronger than the retail business you know in all other countries it's different so this is a particular situation that we've been facing in Serbia now moving up north to Poland on January 9th we have had the closings of the new acquisitions what I'm referring to really fantastic work of a small team highly skilled team so when we started with the negotiations and the complete transfer the closing you know down to earth keeping the ball low very focused and you know a lot of work had to be done before the closing so that's a big wow from my side so congrats great work so of course in the next two years there will be a lot of integration work to be done you know we will have to mainstream the IT systems we have to shut down IT systems that our colleagues in Poland have used in connection to Spain. That means a lot of work, so we have a clear understanding of where we are heading and a strong team that will also be able to manage this work. So the extraordinary general meeting also secured the name change, the new brand, so Erste Bank Polska will be the new name. We've seen a lot of preparatory work and during the second quarter of this year we'll see the rebranding, quite exciting work, because as it has not been known so far, it's an unknown brand and you only have one chance, so we have to stay focused in that regard. We have 485 branches to rebrand, we have a lot of advertising media, we have a lot of cash dispensers. That means a lot of work but also a huge opportunity to find our place in the Polish market and I'm looking forward to the campaigns that we're going to run and when we introduce you to them as the next steps. So during the first quarter We will have a first consultation that we're going to provide you with. And of course, we'll work on the integration of the new IT system. And now let me hand it over to Stefan. Thank you so much, Peter. Ladies and gentlemen, good morning. A warm welcome also from my side. Thanks for being here, for joining us. Before I'm going to tell you about the latest figures, the figures on 2025, let me put you in the picture and start with a frame. Peter already touched on it. So, we have seen constant growth, not only of Erste Bank, but also of the economies in the countries we operate in. And that's the pacemaker for the European economy. That sets the rhythm. And I know the things that you write, and we always discuss competition, and that provides for a strong competition in this context. So Central and Eastern Europe, Central Europe will play an important part, either to keep things stable, to be a stable competitor, or to regain competitiveness on the market. And Poland, you know, as a major player, will have an important word to say, of course. So now let's get to the results. Peter Buczek already touched on several dimensions in that regard. We work in close cooperation, not only with the people, but also with the economies of the countries we operate in. And profits and loss statement looks really good and was quite better than we expected. So, for example, the interest income has increased quite a lot. So the main driver in that regard is of course the hike in loans, in loan business, also the increase in our customer business, asset management and so on and so forth. And also the interest rate of course had an important part to play in that regard. We have had a stable business model that we developed in all these countries. How do we see the figures as regards 2025? The figures are slightly different from country to country, not only as regards growth, but also the interest income. So in Slovakia, the Czech Republic, the structure is quite different. For example, in Slovakia, the housing loans provide us with a positive structure. It's a Euro country. You might think, you know, there are a lot of challenges as we saw them in Austria in this interesting environment. But as regards to housing loans in Slovakia, they have fixed rates in Slovakia. And now we've seen a hike as regards interest. And in the Czech Republic, we saw a fantastic increase. growth on the market. So in the analyst call, we already shared that in combination with the published subsidiary, we will get to a higher level as regards the interest income, the earnings So we are referring to dimensions of more than 11 billion euros in the consolidated view. Not all of you will actually get to a net income, so we have nearly 50% of the published bank now, but of course that takes us to quite a higher level. as regards Europe and that will provide us with back wins for doing future business and to become more successful as regards the financing of our customers' businesses. Now moving on to the fees and commissions. We've also seen an increase here. That's our second driver to mention for us. Very important as regards our earnings, as regards our income. And we've been highly successful. So it is with great delight that we've been successful exactly in the areas. that we had put in strategic focus, starting with the payment services. Of course, inflation has helped a lot in that regard. I think you understand, because that's all based on indices. But we've also seen an increase in volume, then moving on to security transactions. So especially when you think of the security savings plans, Peter already mentioned it, we have seen it roll out in all markets we operate in. That's something classic. And that's the most important part for our customers, you know, because we've been highly successful and we really were able to participate our customers. And there's another thing still to mention. So a segment that you haven't been that successful with has seen a pick-up in in partnership with our insurance partner, BIT, because insurance brokerage has also picked up year on year quite a lot by 22 million. You know, highly diversified market in Central and Eastern Europe. Also, of course, in Austria we started on a small scale. But now really insurance brokerage has become also an important driver for us and we will see an increase in the future. I'm sure of that. So in synopsis, we have seen an increase in operational income of 4.3%, up to 11 billion, nearly 12 billion. without the polish ban which will only become part of the figures during the first quarter of 2026 now moving on to the expenditure to the costs so one first thought that i wanted to share with you and we've seen that in the last two or three years and I think you understand you have to spend money to earn money. That's a given. That's an adage. That's something to understand moving into the future. Technologically speaking, to increase our portfolio, but also as regards the development of our staff. So in order to be successful in the future, we need to invest in different dimensions. Technologically speaking, we have to invest into process optimization and other fields of work. And that will mean profit in the future. We'll become more efficient, of course, but also when it's about the service to our customers. But, of course, that costs something. And now let me provide you with concrete figures, something tangible. So our operational expenditure, our operational costs has increased by $304 million. That means an increase of 5.8%. So 304 million for 5.8%. Of course, that also includes the integration costs. We didn't have the closing in 2025, but a lot of preparatory work had to be done, and that's already part of the costs here. And we're really satisfied with our guidance. We have stayed in line with our guidance, and the market understood that. So we invest into the future. And when the costs rise, that will provide us with opportunities in the future for doing business. Now moving on to the outlook, we already communicated that to the capital market. and Peter Bostic already touched on it, integration of Azdebanka Polska will mean more expenditure, 200 up to 250 million. This is what we thought of and I think we stay in line with the guidance in that regard. So that means 180 million as regards our Polish subsidiary and also including the work in Vienna. But generally speaking, I think we will see a dip in inflation, even in Austria. You know, when you look into your faces, well, even in Austria, I think because we've been the outlier in that regard, we were the worst, reaching nearly 4%. Percentage points, well that really was crazy now in January, they announced 2%. So we've seen a change here, which takes us to the European average, and that will be of help as regards our costs. And Eastern Europe, of course, will be better in that regard. So think of it, better efficiency, lower costs based on a downturn in inflation rates, And 3%, I think, is quite realistic as our guidance as a cost increase. But there's one thing we need. We have to manage risk. Take it away, Alexandra. Thank you, Stefan.

Risk. There is nothing new as far as risk is concerned, and this is really good news. Maybe you listened to the analyst's call today. It was the 27th analysis call since I'm a chief risk officer, and this was the first one where there was no question relating to the risk profile of our group. This is good. What is risk all about? It's about stability and predictability. For our customers, we are a strong and predictable partner and want to remain so in future, and We also have a responsibility to our investors who want to have a reliable partner as well. Here you see that the risk costs in 2025 were approximately like 2024. So what do we show? We show basis points. One basis point, 21 basis points are 0.21% of our loan portfolio, and this is the risk costs that we have to book. So this is not a mere coincidence, especially in an environment that is constantly changing. It is the result of joint work, consistent work, and targeted work also as far as lending standards are concerned, and also an expression of our stable business, which was already mentioned by Peter and Stefan at the beginning of their presentations. So we have a solid risk result, and we expect it to remain solid. And this takes me to the outlook for 2026. In 2026, the Polish bank will have been integrated. The level of risk at the Polish market is slightly higher, but has been shown a stable reduction year on year. And Erste Bank Polska has lower than 40 basis points in 2025, and this is an excellent result. And including Poland, we expect risk costs of approximately 25 to 30 basis points. Without Poland, for the old Erste Group, we would expect 20 to 25 basis points. So, again, a very stable situation. This stability is also reflected in non-performing loans. The NPL ratio amounted to 2.4% in 2025. It slightly decreased. As far as the outlook for 2026 is concerned, we expect stable figures and NPL ratio of approximately 2.5%, including the Polish portfolio. So with and without the Polish portfolio, we expect approximately 2.4%. Let's have a look at the individual countries. You know the Austrian general situation, which is also reflected in the risk costs and the NPOs. The majority of NPO and risk cost is caused by Austria. This started in 2023. had its climax in 2024, and in the previous year, 2025, the situation slightly improved. We have hoped for a more radical turnaround but going forward we expect an improvement of the situation in Austria. We have a stable risk profile, we have a stable deposit portfolio and this shows one thing very clearly. We are open for business and we are looking forward to new business and to contribute to the growth of our region.

Thank you. Thank you so much. Now we've touched on all dimensions that provide for an explanation why we have reached the result that we have reached. So it has never been as true as in recent years and that's our strategic approach. That's our focus. Our core business is what makes us successful. It's our core business and we have a strong dialogue also with our Polish colleagues. They have the same vibes. That's an important aspect and Peter you've already mentioned it. Our Polish colleagues, that means a perfect fit. Their philosophy, their vibes, their reporting, the way how they have been operating. That's a customer bank. Closely connected to their customers. closely connected to corporate business. That wouldn't have been the case as regards all the options that we looked into. So our profile has really been strengthened and it's not just about earnings but also the image on the market. So that will have a strong impact and we will be able to be successful in the future as well. So allow me to add something. So to the other business, apart from the core business. So that has been highly successful. Because actually we have seen losses in recent years up to 500 million euros based on banking levies. So in 2025 we only had 160 million in that regard because we've seen special effects. For example, the sale of the current headquarters you know, our Czech colleagues will move to a new headquarters. They are currently constructing a similar campus as we have here in Vienna. It will still take two more years, but the current headquarters have already been sold off, so that's a special effect on our profit and loss statement. Then we've also seen resolutions of provisions of reserves, that depended on legal issues and that has a positive effect also on our capital. Now, the 50 that you see here, that's the difference from the year before to 2025. You'll be provided with detailed figures in that regard. In 2025, in total, now, There are different names for that, but there are banking levels, new banking levels. So 372 million euros, that means a huge increase by 52%, a year-on-year increase by 52%. You know, there's nothing to add here. What did I mention here? Now, when you look at the net profit, of course, that has an impact. That comes on top of everyday life. It's not just the corporate income tax, but when you think of these special banking levels. And before the Polish acquisition, we had to pay 1.1 billion euros. So we're talking about huge figures, aren't we? And of course, that also had an impact on our net results. We have seen an increase and reached a level of 3.5 billion euros. So... So I think it's important to mention without the special effects, without the one-off effects, so our core performance would take us to 3.3 billion euros. That's something to understand. Not 3.5, but 3.3 would be a realistic figure without the one-off effects. Another important issue to mention here, and we already heard about it in your introduction, Peter, so in 2025 and that's not a word that i often use i'm really proud of that we have had the full support of our customer business and this is what you can see as regards the loans the increase of loans and We've seen an efficient, substantial build-up of capital and this allowed us for the entry into the Polish market. You won't find that many examples. So it was not to the detriment of our loan business. Acquisition on the one hand and increasing our loan business on the other hand. So a big shout out. to all our colleagues in all countries, in all fields of business. I really want to give it up for you. This wouldn't be possible if we wouldn't be able to act in concert. And what's the result now? The result is a CET1 ratio, which we've never seen before and perhaps won't see in the future again, because that's the ratio before consolidating the Polish acquisition so that takes us to roughly 4 percentage points of consolidation which will happen during the first quarter and we'll meet again after the second quarter and then we'll see the realistic figure but still What a high figure, what a wonderful figure in this regard, our CET1 ratio. So in 2025, of course, we had to reduce the dividend. We will produce a dividend per share of 75 cents per euro. So per share, this is what we're going to propose to the board and the supervisory executive board. But of course the acquisition will make us profitable in the future and in 2026 the dividends will rise again. That's a given and that will be communicated after the second quarter. Of course, you know, for 2025 we cannot distribute or we have to distribute lower dividends. That's understood. Now moving on to the forecast for 2026. There's no need to go into detail, but let me touch upon the most important thing. Line number one, we will increase our loan business. And in the right column, you have been provided with our figures, inclusive the Polish acquisition, which will take us to roughly... So we started with 230 billion euros. 30 billion euros in Poland and then our increase will take us to 285 billion euros. So from 230 plus 30 in Poland and then the increase will take us to 285. So here we see a momentum. There's no need to go into detail here, I've already mentioned it, but the most important thing to bear in mind here is that including the Polish bank, In Poland, we have a slightly increased risk level that has to do with the margins, that has to do with the loan mix that we see there, but you have to put it into perspective. So the risks on the one hand, and when you talk about 25 or 30 basis points, of course that will take us to profits. So these risk costs that will help us to increase our capital. Let me close it out by telling you that 2025 meant a huge success. So we're really glad about that. So let's be glad for 10 to 15 minutes and then move on to 2026 and start business again from scratch. So thank you so much. Just to close it out. I think you understand in Central and Eastern Europe we are operating in an environment which is quite different as compared to the rest of Europe as regards growth rates. So of course that provides us with really a fantastic environment for doing business. But this positive development is not a given, and we want to transfer it also to Austria. That should also have a positive impact on Austria, and we want to reach beyond. And we already communicated that in our analyst call. So when we see the first impact of the new German infrastructure, Just to remember, the decisions were taken in autumn 2024, the new budgeting, so the impact will come soon. But then we said, well, you have to wait. Let's be patient. And now we actually took it out of our plans, of our guidance, because there's nothing that you can see. So growth starts in your head and then you will have to act and as long as there are no actions you have to be patient. Now getting back to Austria. Austria will be able to grow. We have seen small plants sprouting. We have to become more ambitious. So Chancellor darker, you know, already mentioned it. So our economic growth should be actually bigger as has been forecast. So 1% of growth won't be enough in that regard. And of course, Austria runs on a tight budget. That has to be done quickly because we have to look ahead. It can't happen year after year to run on tight budgets. That has to come quickly. So, including our Polish acquisition, we have 285 billion euros of loans, we have a strong capital base, our own equity, and the things that we experience in Central and Eastern Europe, the vibes that we see, we want to also transport them to the rest of Europe. geopolitically speaking and also the way how people, politicians, communicate that could have a negative impact. Things have changed. We see a new world but that also meant that Europe actually has woken up and we have to be more self-issued in that regard, you know. Growth starts in your head and then you have to act. So I'm really proud that I have the best team and that's the sentence I want to close it out with.

Now let's continue with your questions. If you have a question, please raise your hand and wait until I call you. Please use the microphone before asking your question so that the colleagues that are listening to our event online can hear your question. And if you have a question and are listening online, I will read the question.

So first question. As regards Hungary and the elections, you know, Hungary is going to the country, they will have elections. Will it become more difficult for foreign banks? I think that's a classic situation. They're going to the country, it's the elections, let's wait for what happens after the elections. Of course, there's a lot going on, you know, things seem critical, but we have to keep the ball low.

Next question, Madeleine Schromer. I have a question relating to CET1. Is there any outlook including Poland?

Yes, we have a forecast for Poland. So at the end of the year you have seen that we have reached the level of 19.34 and today's call acknowledged that the framework for the first consolidation and we are We already set the frame in May 2025 as regards the base points. So during the first quarter, we won't have the final balance, but we will be able to get precise figures where we are. So I think all of you know, we communicated that for 2026, we want to reach a level of 14.26. So a bit higher than the 14%, which were based on the regulations that we have to adhere to, but we will reach much higher. That's understood. So 15, I'm not sure whether we'll reach 15%.

percentage points as a ratio I also have a question relating to the NPL ratio how many banks or savings banks have an NPL above 5% leaving aside the savings banks no bank in our group has an NPL ratio of more than 5% In the third quarter, Romania was slightly higher, and we went down to lower than 3% in Romania as well. And there is only a small number of savings banks that have an NPL ratio of 5%, but all of them are trying to get down the NPL ratio and to reduce non-performing loans. And we are very successful in doing that. Recoveries of previously written off loans amounted to 1.5 billion euros last year. This is 5% more than the previous year, and a lot of it is coming from Austria, and this means that the non-performing loan portfolio is actively... directed so next question ECB European Central Bank what about the test is it a test that is carried out by the bank and not demanded by the ECB and I'd like to know about the risk that you see you mean geopolitical stress test that is a high number of stress tests and we are talking about the geopolitical stress test When it comes to liquidity, we have a high frequency. Then we have a comprehensive stress test, a holistic stress test, a reverse stress test. And then we have the ECB stress test every other year and a specific stress test. ESG, we had a specific stress test, and now we have a sheer political risk stress test.

Is this all completely up?

We are asked to develop a scenario that creates hard impact on capital. And people expect us to include our risk factors and to pass the test, so to speak. The result is not so interesting because there is a target value that you're trying to achieve. And this is less interesting as the EVA stress test, but we focus on how we will be able to react to risks. We have several teams that are involved in stress tests, and we have a very high quality of stress tests. So... Is the ECB too lazy to demand such tests? So we use stress tests internally and for risk management. I would not be happy of having ECB doing that because stress tests help us in our risks.

So that's positive and, you know, I'm not forced to answer like that.

Mr. Lutze, Mr. Kainz.

Thank you. Two quick questions from my side as regards the granting of loans. Mr. Pasek, you mentioned the deposits decreased in Austria. Do you also have a figure as regards the loans and the increase? I'm not sure. 3.3%. So on the third slide, you have given it per country. So in Austria, the loans have increased by 3.3%. Can you tell us what fields of doing business we see the increase of loans? So a thing that we can see in all countries, something that we've seen in all countries. So starting in 2024, the demand has been increasing as regards financing, as regards loans. That has also to do with a decrease in interest. And moving to Austria... So, sometimes it takes quite long, you know, to establish something, to do business, when it's about permits, when it's about grants. In Austria, we see that the market has been slightly improving. It takes some time. So as regards to consumers and housing financing, we have seen a real increase. And as regards corporate business, it's the large corporations where we see a rise in demands for loans. Small and medium-scale business growth. For example, in the Czech Republic we've seen an increase, not in Austria. And in Austria we've seen high inflation rates. We still have expectations as regards red tape, doing away with red tape. I already mentioned, you know, sometimes it takes quite long to get the permit, construction permit, for example. So here we really need a push. The Australian government will have to take action in that regard to reduce bureaucracy when they discuss the next budgets. It should also be possible to quicker depreciate assets that will improve things. And of course that means hiring more people. The labour market and so on and so forth will improve as well. So there would be room for manoeuvre within the next 10 years. Is this what you're saying? I hope it will happen earlier. Of course, I can't tell the government what to do, so it's just something I'm thinking of, you know, a piece of advice. Mr. Posh? Thank you so much. So, the Austrian regulatory body for financing sees the retail market quite critical, and the exposure in that regard, Alexandra already mentioned. So the market is really in a difficult situation, but let's take a look at the big picture. Let me put you in the big picture. So actually we've been quite successful because the interest rates were very, very low, which meant a lot of people invested into the retail market. Well, that has a long-standing tradition in Austria. And that even happened before we saw the low interest rates. But then we saw a real boost. And three, four years ago, actually based on their plans, corporate business was able to sell. And that was not in line with the demands of the consumers. so we have a long tradition as regards social housing so sixty percent actually were covered by social housing before we saw the change of interest rates now that has changed and not each and every one can buy a flat with forty square meters an apartment with forty square meters costing seven hundred thousand euros especially when you think of the younger generation so We see a change in the market, but the things that have been built with high costs, that's something that has to be sold off. And, you know, these are the non-performing loans. Some of them could be recovered. The banks have been quite patient in that regard, waiting, waiting for that sell-off. And sometimes you have to accept it's not possible, you know. And you have to write it off or manage it away, this kind of issue. And the market will take two more years because it needs a lot of planning in that regard. So each and every one is aware of it. All Austrian banks try to handle that quite well. And, of course, you know, the regulatory body in Austria has to see things critical. That's their job.

This is what I told you before. It started at the end of 2023. So commercial developers of housing concentrated in the Viennese region contributed to the increase of the MPO ratio. We had a recovery in 2024-25 and we expect it for 2026. Mr. Vince, please.

Mr. Borsig, you mentioned that there's a positive forecast for Austria, but you also mentioned that the new German budget plans won't have an immediate impact. And also the Austrian government announced a lot, but we haven't seen action. So why do you see things positive for the near future in Austria? And the nine... 0.1% for the dividend ratio. So will we see a hike in 2026? What can you tell us about that? So I'm quite optimistic. And that's based on the fact that Austria has everything to grow. We have strong education and training in Austria. So all the prerequisites. We have intelligent people in Austria, skilled laborers. And banking is a good example. We are in the vanguard. Research, the university in Innsbruck or in Vienna, Anton Taylor, Nobel laureate, research, we are very strong in that regard. So let's not forget about the good things that we have. So we can't look back and just look into errors. And let me... also say something positive about our government. Well, they could have moved quicker and the budget deficit should go away quickly. But, you know, it's the economy, it's the people, the shakers and movers in the business world to change things. It's not just the government. And let's not be pessimistic. And 1% can't be enough of growth. No. So we have to be more ambitious about You know, we don't tell you that a CT1 ratio of 12% would be great. No. You have to reach higher. And, of course, we will provide strong support in that regard to move into the right direction. Well, on the other hand, of course, the regulations are also something to adhere to. But apart from that, still, we are very ambitious. Yeah, that's a good point in question. And let me respond by saying... And... It should really make sense. There are three things that I want to share with you. Item number one. Of course, I could hide and say, well, at the moment there's nothing we can tell you about the next dividend. And there are no concrete figures that I could provide you with. And that's two things. And we at Estibank, that's something we stand for. A lot of the topics that have been touched upon by the regulatory bodies, they make sense as regards liquidity, the equity ratio, risk, and so on and so forth. It all makes sense. But to put that into practice, that's something else, you know, to put it to action. And it also fits your question as regards the dividend. Yeah, that was a one-off for 2025. based on originating with the acquisition of the new Polish player in order to strengthen our CET1 ratio. And I already used these words in the analyst call. Let me repeat, let me quote myself in that regard, because that tells a lot, I guess. We will have the capacity to return to... the level that we had before 2025. We will be able to return, okay? That's a clear-cut and straightforward policy. We will be attractive in that regard. We will return to the same level. And there will be a share buyback that will depend on the rate of the shares on the market. That's no fixture. But this answer also provides you with something. There's no need for a must, but, and that's the third part that I wanted to share with you. If there are other extremely attractive opportunities for making use of our capital, because we don't know what will happen in the near future, but if there's something attractive coming up, of course we will have to be able to respond. And this is what makes us strong. Peter Boszik, Alexandra, and myself, we are deeply convinced. And this is something we share with a lot of our colleagues. We've become more self-assured. We have grown strong, you know. When it gets to controlling, when it gets to risk, when it gets to finance, we have a lot of intelligent people with us in order to think about new acquisitions, in order to think about our developments in the future. We will keep the ball low. We will be focused. But still, we're a strong player on the market, and we think ahead. So what could we do? to strengthen our path of growth within Central and Eastern Europe. On the one hand, of course, we have our main driver, customer business, our core business on the one hand, And, of course, we have to manage risks. We have to be clever with our investments. And then let me move on to the third opportunity, an organic growth, okay? That's something we have to bear in mind. So what's the message now? Will we be able to pay the same dividends as we had before 2025? Yes. Is it our plan? Yes. But if something attractive will happen on the market, extremely attractive, something that can be explained to the market, so let's keep that option on the table too.

Let me continue with an online question. Mr. Brkna from Telex in Hungary.

Since then, the Hungarian ruling party has launched a media campaign against Ercebank. What do you think about this case? Have you ever met anything like this in other countries? I think it's very obvious that we don't like it. Madeline, you had the next question?

So system buffers for commercial property are increased. What effect does that have? I don't know it by heart. So it is limited to Austria. Non-profit housing is excluded. It's not dramatically high.

I don't have the ticket here with me, but roughly so in Austria has been something significant. something of importance so and with respect to austria and this business segment when we analyze it so that will mean a reduction will make it more difficult for the market in this segment to increase your business because it won't be in line with the expected returns but with reference to our group won't have a major impact, but of course we can provide you with the figures in detail. It won't be difficult for us. We calculated that. It's there in our actual sheets. So we understand that the regulatory bodies and the capital buffers, well, that's actually a look to the past. You know, when the crisis has already ended, telling us that we will have to increase our equity, well, this is what happens. And when you think of European banking, so the European Central Bank does its business, and their framework should be enough. And, you know, the buffers that we need, the reserves that we need as regards to our equity, our capital, we shouldn't increase that after each crisis that much.

I have two questions relating to Poland. You said we have integration costs in the amount of 280 million. And we also like to hear something about the synergy potentials.

The integration costs were a bit lower. What about synergies? $180 million. And we already booked part of it in the first quarter. So that takes us roughly to $250 million and $180 million for 2026. uh integration costs of course there are other costs there will be other expenditure in in poland including the rebranding peter already touched upon it so cost synergies the classic potential there's nothing in in poland because we'd have anything in poland when you think of mergers that would be something different you know when you have a revenue synergy that happens if you want to call it something like that But the existing entities with the new Polish entity and the new cooperation with our colleagues at Santander, of course, that will have an impact, that will have synergetic impacts, an impact on the revenue side. But classic synergetic effect, no, that won't happen because we don't merge anything in Poland.

And another question is that growth is created in the head. Do we also have maybe some growth opportunities due to the vicinity of Ukraine?

Well, in Ukraine, there's something under development. So 34 countries actually meet in Vienna today as far as I'm informed. The coordinators of... restructuring fund for Ukraine. Austria will also have a say there and provide an input. Perhaps that's a bit early to think about what we can do here. That's under development. We can't see the end of the war. We can't see peace coming at this particular moment. We have a situation where the United States still dominate negotiations and it wouldn't come as a surprise if the United States would cover a huge part of the reconstruction in Ukraine. Now when you think about raw materials and we've seen negotiations in that regard, there would be business and also as regards infrastructure, Austrian construction companies or Polish or Czech construction companies could reach out with a helping hand. The Austrian coordinator Mr. Anson Gruber tries to find out about financial instruments that could be used in the future and Austria should send a signal in that regard, but that would happen at the level of politics, doing politics and the Austrian National Bank. But it's a bit early, you know, to have great hope in that regard, unfortunately, I have to say.

Next question is an online question, also relating to Ungarn. Reinald Klemer, question to Mr. Bosek. Do you expect further attacks of Mr. Orban in the course of the election campaigns, and do they have an effect on your business?

No, we haven't seen any kind of impact. I've already mentioned it. Hungary is going to the country. They will have elections. We are not a political party. We care about our customers. We have a strong standing on the market. There hasn't been an impact.

Next question is to you, Stefan. what do you think which country could be interested for a further acquisition?

Well, now, we're skating away on the thin ice. When you open the door in that regard, there will be concrete questions. I thought so. Well, we have growth opportunities in existing countries, the countries we already operate in, organically speaking, but also inorganically speaking. So, perhaps in Poland, perhaps in the Czech Republic, perhaps in other countries that we operate in. So there are opportunities. I'm looking to pieces. Actually, we hold a lot of meetings. I think there's no other country beyond that. That's something I can say. But strategically speaking, and that would also be a response to offer here, an answer to offer, we also... have a strong focus on Central and Eastern Europe. Strategically speaking, we've discussed that a lot. So one and a half, two years ago, our focus will be on Central and Eastern Europe. And I'd also like to add the effect of the Austrian regulatory decision. So in June 2026, From 1%, we will see an increase, but nobody knows what will happen in 2027. So there will have to be taken decisions in the future, but it will be a one-digit basic point increase. And we discussed that with the Austrian regulatory body of the financial market, how that could be applied to Austria. So if everything remains the same and everything will happen as has been communicated on the market, that will take us to seven, eight basis points.

I don't see any further questions here in the room or any further online questions. If there are no further questions... I would like to excuse to the online listeners for having coughed. And otherwise, I and my team will be available to you if there is anything that hasn't been said so far.

Thank you so much.