Komercni Banka As

Welcome from Koneczny Barka. Thank you for sharing your time with us. Again, this time it is the 31st of July 2025 today and we are going to discuss the second quarter of 2025. Please note that this call is being recorded. Our speakers today will be Jan Michalka, Chairman of the Management Board and CEO of Komerský Banka, Ježiš Perolovic, Chief Financial Officer and Didier Collin, Chief Risk Officer. And standing by and ready to answer your questions for them are Margu Simson, Chief Digital Officer, Miroslav Hirschel, Head of Retail Banking and Katarína Korucová, Head of CodeThread and Investment Banking. As always we will begin with the presentation of results which will be followed by a questions and answer session. During the presentation part Please, we would appreciate if you could keep your microphone muted and all participants will be on listen-only mode. So that's for the housekeeping and now let me ask the CBO Jani Falka to begin the presentation.

Thank you. Hello everyone, thank you for being with us.

It's my pleasure together with my colleagues to lead you through the presentation and obviously we are very much looking forward for the questions. Let me kick off with the opening page by saying that we are coming to the market with probably unexpectedly high level of increase of the bottom line. And I think that we need to provide a bit of comments on how did we get there, as we are mainly counting with release of provisions as one of the contributors to the Q2 results. Having said that, Komeční is being built on rock-solid balance sheets, very strong on the side of capital, very strong on the side of the quality of our assets, and pretty solid growth in the commercial activities across all the relevant segments. Konechny was growing not only on that side, but also by number of clients. We have 47,000 more heading towards 1.8 million for the bank. KB Plus, as a new application, is already taking care of 1.3. million clients, out of which approximately 1 million are the migrated clients from the old world to the new world. For the entire group, heavy group in Czech Republic and Slovakia, it's 2.2 million clients. Loans were growing by 4.3% on year-over-year basis, quarter-over-quarter by 1.2%. One of the main contributors here were mortgages and housing loans. provided either from the mortgage loan production or the housing loans as they are defined for the building savings company Modra Piramida. Deposits were slightly down, 2.6%. We don't like it. We have taken active measures for turning the trend into positive numbers. One of the first signs which we like and we hope is the beginning of of the new trend is the growth of current accounts by 1.8% on year-over-year basis. Where we are remaining strong is the activity with clients on the side of investment into asset center management outside the balance sheet of the bank, which in our case is mainly the joint solutions with Amundi. or insurance products provided by the joint venture with and the pension schemes by 100% owned subsidiary of a pension company of KB. So here we are going by 8% on year-over-year basis, 2.5 by quarter-over-quarter. Inside this category, the mutual funds were growing by double the hit, 14.2% on year-over-year basis. All that translated into the results is the group net income for second quarter, 4.6 billion, is by 30.6% higher on year-over-year basis. Translated into net profit per share, it's 24.48%. Cost of income nicely compressed, deeply below 50%, so 45.7. And ROE bringing back to the market is close to 15%. First half of the year, again, very strong growth of the bottom line, 8.8 billion by almost 39%, 46.54 CZK per share. Cost to income, 48%, and ROE, 14.4. Slightly adjusted under the assumption if it was linearized. Balance sheet and capital, as I have already mentioned, very strong position, 18.6% of the total capital ratio, 17.7 to 1. 17.7% to 1. Loss to deposits, slightly up, but still in the very safe territory of 83.5%. and both the short-term and long-term liquidity high over the, above the prescribed levels. Komechny Banka was recognized by Visa as the number one sustainable bank. It goes hand-in-hand with the ESG Group Alert by World Best Bank for ESG by Euromoney. And our colleague from the Board of Directors, Vicka Chaubova, was recognized as number one woman in payments by Visa Awards for 2024. Let me invite you for the next page, which is describing the current status of transformation of Komerční banka. The new digital bank will be done very soon for retail, so all the technological systems are up and running with very solid stability. We have 1.3 million users already inside, out of which 1 million migrated from the old world to the new world. So we have approximately 600,000 clients ahead of us as far as retail is concerned, and we want to be finished at the end of this year. We have very promising statistics coming back to us from the usage of KB+, which is the name of the application, which is between number one and number two most downloaded banking or financial applications in the country. Also, thanks to the fact that the migrated clients we will need to have it available for functioning with KDE. We have put in place significant simplifications all over the place. Processes, all the procedures, how we are creating the software, how we are creating the development of new products, moving completely to 100% digital communication available with clients, etc., etc., which is also bringing very significant cost benefits from all these aspects. You may have noticed that cost management is one of the strongest disciplines, not only for the previous quarter, but If you allow me, I will take it as a signature discipline for KB on a longer term basis. What will be the next steps? As I have already mentioned, completion of individual client migration in 2025, continuing with entrepreneurs, physical persons and entrepreneurs, legal persons down the road, 2026, 2027, and we will search for means whether we can potentially accelerate it. leveraging for the upsell and cross-sell opportunities on the new technologies because not only the statistics of stability and increasing net promoter score but also statistics of having digital channel as a full-fledged sales channel are actually promising and we would like to take out the entire burden from our people who are running the bank on a daily basis and selling products, the entire burden of being in two parallel systems and being busy with the migrations and concentrate fully towards the service and sales mainly of our products towards clients in 2006 and on. So we are expecting the NPI contribution stemming from that, sustaining or increasing NTF levels. As time goes, with each and every additional usage of the application, clients are happier after the little stress which they might have with migration from the old to the new wall. So on that front, we will push all the buttons related to organic growth for 2026 and on. We will continue investing into modernization of technologies, obviously, and further strengthen the competitive positioning of commercial bankers in the era of digital banking, or if you allow me, universal banking with strong digital background. We have also included a couple of deals. One of them is pretty important for us. This is the 100% acquisition of guests. Can you please, can you go back, yeah. Yeah, this one. So, where we were acquiring 49.9% currently being the only owner of this beautiful equipment finance company. A little bit low importance but still worth to mention is the disposal of 24.8% of KG stake in Roger, which is a digital factoring platform to Orbea, which will bring this company to the international markets as an expert for factoring financing in in Europe, and disposal down the road, envisaged disposal of the minority stake in Abrex, which is the, sorry, not disposal, but acquisition of 4% of Abrex from the founders of Abrex, which is a very, I would say, successful crowdfunding investment platform. Let's move to next page. Now let me zoom on macroeco. We are lucky that we are making our business in stable country on a growing trajectory, which is not given in the current environment. The country is growing on on GDP in second quarter 2025 moderately by 0.2, quarter over quarter by 2.4%, mainly driven by the consumption and investments of households. Weightage went up by 6.7% in first quarter. Obviously, this is the season for adjusting the salaries and when all the collective negotiations are being finalized in the first quarter. The unemployment rate remains very low, 2.8%, and we have, as you know, in the country, we have more or less a bit of structural issue of unavailability of working power. The consumer price inflation is inside the corridor of tolerance by Czech National Bank, being in June in 2.9% year-over-year increase. Czech National Bank remains at 3.5%. We are now very cautiously reading their comments before the next meeting. where they might be reacting on that front. The corona has been stronger by 13th of June by 0.9% towards Euro and by 8.5% towards USD, which is a bit volatile nowadays in the season of concluding the political elections. agreements over tariffs between United States of America and Europe. We are patiently waiting for the written form and the finalization of these negotiations, even though the overall impact towards the GDP in Czech Republic is still expected, accordingly to our macroeco theme, below 1% rather in the territory of 0.5% than higher. What is probably worth to mention here is that we are stemming from very healthy conditions of public finance, which is the public finance balance is minus 2.2 or 2.3 respectively between 24 and 26. expected and with very low overall indebtedness towards GDP in the territory of 46 to 47 percent, which is qualifying us among the healthiest countries as far as the public finances concerned. Let's move to the next page, please. And we are already coming to the business development. loans are up by 4.3%, mainly driven by mortgages and housing loans, as I have already mentioned. But also, hand in hand with that, this is the business loans for our corporate clients, which are growing by 5.1%. Commercially, has grown also the consumer lending part of loans by moderate 2.2%. When we dive deeper into corporate lending, it was mainly driven by financing of the local economy. We are also happy with guest contribution by 0.5% growth. A little bit less happy with 1.7% of the growth of that financing of SMEs, which is also a bit of... indicator where are the potential gaps which we can which we can which not only can but which we are addressing and which we are focusing on next page please here you see that KB incorporate financing was all over the place public sector private sector some of our some of those clients which are listed here were provided by financing which helped them to really go through like transformative projects for their companies and we are keen to continue playing our role here as one of the strongest corporate financiers for check clients in the corporate world but also on the side of public sector. Let me invite you to the next page which is dedicated to deposits. Slightly down, we are not happy with the trend We are doing our best to reverse it. You might have noticed we have a pretty strong campaign currently on attracting more money to saving accounts and term deposits in order to stop the decrease. On the side of current accounts, we hope it's the beginning of a new trend, the moderate growth of 1.8%. It's very important to be back into positive territory, especially in this non-paid type of deposits. Even between quarters, even between first and second quarter, the dynamics of the declines were slowed down, attracted by this trend of increasing current accounts. Speaking about building savings, we are not completely panicking here because we are falling down hand in hand with the market. So it sounds nominally high number, nonetheless critical things what is happening on the markets. Asset under management outside the bank, driven mainly by mutual funds, which are growing by double digit, 14.2%, followed by moderately growing insurance products, insurance investment products, and the pension schemes oscillating long-term around zero. The sales of mutual funds is continuing in a very strong drop sale We are working intensively on the composition of the investments in order to invite our clients to more like longer-term solutions. Next page is already dedicated to our CFO, so I'm handing over to Jiri Staro. Thank you.

Thank you, Jan. Indeed, this is a very strong financial performance in the first half of this year. The highest positive contribution is coming from significantly increased cost of risk, that roughly 1.6 billion CZK per year, reflecting, as mentioned by Jan, the superior quality of our loan portfolio. And no doubt, we are going to comment on this later in deeper detail. The quarter dynamics is traditionally visible on the right upper chart. So quarter worth was growing by a strong 10%. year-on-year even more, by almost one third, again strongly influenced, among others, by POSCO3s. Anyway, we can now get ESCOs transposed directly into the strong capability indicators, as shown at the bottom left. So, ROTE is at the level of 16.6, and ROE If we move to the balance sheet, it accelerates it as well, i.e. 0.6%. On the liability side, the client deposit remains more or less fairish. The growth on the liability side is driven mainly by AMO due to banks doing by On the asset side, frequent practice and growth of the client loans was complemented with the placement of the liquidity surplus into the check galleys, growing by almost 40 billion CZK. The growth in this category was visible mainly in the second half of the year. Let's move to main categories, accounting categories. So let's start with the net interest income. So here to say that despite the doubling of non-interest growing mandatory reserves since the beginning of the year, January the 1st this year, six months NIR is growing by 5% year-on-year. It's right up the chart. It's supported mainly by NIRs on the deposits, junking by 7% year-on-year. Main reason behind is improved structure as was already commented by Amos. Here at year-on-year the evolution income from the loans was up by 2 percentage points and here it was driven mainly by volumes while the spread remains comparable. So, in terms of quarter of quarter perspective and the right bottom chart, NII remains basically sluggish, where basically all categories growing, but the income from the investment banking, to say it is not as much undervalued on our investment banking guide, but the change of the structure of the income In terms of net interest margin, it is both year on year and quarter over quarter. By the end of the year we are expecting a slight rise due to continuing improvements in the structure of the deposits. This is bringing me to the CSAM commission. So the CSAM commission is growing strongly during the past almost 5% and here the champions are kind of obvious. fees from Prostel growing by 13% following dynamic sales. And that, of course, grows of the outstanding as well. Of non-bank fund management as was commented already by Jan. And second, super high dynamics of the income from the specialized financial services. That's the grey part in the chart. The grant is mainly to our CIB clients and also PRACE clients. So that's mainly loan syndications, paid funds, financial structures products, etc, etc. From Twolter perspective, there is a decline, minus 6.5%, mainly influenced by, let's call it, base assets. Why? In Q1 this year, the There was above-average income from the specialized financial services, as I was commenting right now, but I suppose that in Q2 we generated a bit below the run rate performance in this category. Other categories of these conditions are rather growing. In Q2, it's mainly the evolving transactions piece and the ancestral sources. Let's move to the finance operations. So, year-on-year growing also dynamically by strong almost 12%, influenced positively mainly by capital markets operation growing by very strong 2% year-on-year. Specifically, here the Q3 and Q4 last year were the super-sector strong, supported by decent interest rate dating activity. reflecting the silencing volumes and the rate shift. If we move to the quarter-over-quarter evolution of the bottom chart, the income is basically sluggish, quarter-over-quarter, whereas there is a slight increase, like around 2 percentage points, where both categories are growing at a similar pace. Capital markets were hit by unstable global economic backdrop that led to fluctuations in client activity during previous two quarters. Here we hear one comment for the net gains on Hedbeck from payments. The comment is related for Q3, for upcoming quarter. Our expectation is that this category will jump again due to the seasonal increase of main cast payments, both domestic and foreign. It is always the case, and you can see this also in the right chart, in the evolution Q2 and Q3. And the last slide before passing towards QB is related to OPEX. So, costs are traditionally very much under control. OPEX going down by almost 4% year-on-year. Of course, decline in the regular pre-charges helps, but even without this effect, the cost would not go up. If you go into structure in a bit deeper detail, personal costs down minus 1% each point. and here are basically two factors of each other. So, as close to the annual increase, starting from April this year, by an average of 2.5%, at the same time it was more than offset by the decrease of number of the employees, you know, by almost 5%, which is further evidence of the efficiency of of the group is continuing to increase. In terms of giant, I would say there are no specific items for regular sharing. The overall sharing is minus 6% and it went across the board. I also recommend that regulatory funds are doing the Q2 one. So just one cross-category. growing with depreciation and amortization growing by 10%. But still the message is the same. It is clarifying main investments in digitization of the bank. Jan was commenting earlier, beginning of this presentation. Close quarter over quarter, Bolton chart declining heavily. It's by 10%. On the other hand, there is an exciting career As you might know, the bank is obliged to book a lot of charges, mainly reduction fund charges, already in Q1. Cost-income ratio, as was mentioned, and I'm commenting yesterday, is recliminized. It's at 6.9%, proving again the increase of the efficiency of the bank, of the group. year-over-year it is improving by 3 percentage points and I can only now indicate that the improving trend is going to continue even further. So that's it for now and now I'm passing the torch to Vijay. Vijay, please go ahead.

Thank you, Jerzy. Good morning everyone. Regarding asset quality, I will walk you through the traditional three main topics. The first one, which is not represented on this slide, is a brief update on the evolution of our default rates during the second quarter. For the S&P portfolio, we continue to witness a contraction of our default rate, so it's actually turning to the long-term average following the peak we had sometime last year. We also continue to record some moderate contraction for the consumer lending portfolio. And we have our two near-zero default rate portfolios, which are the mortgage loan portfolio and the large corporate portfolio. So there is no change, continued strong level of resilience. Going a little bit the other way, but without any cause for concern, was our small business planning portfolio, whose default rate increased a bit in the second quarter, but still at levels that are well within the gross margin for that particular portfolio. So that's for the default rate. Now, when looking at the composition of our loan book by IFRS 9 classification, In fact, there has been quite a material shift in the second quarter following the reversal of our post-inflation overlay assigned to the mortgage-owned portfolio, which was planned and announced to you in the previous quarter. And so this explains most of this decrease you can see on the screen from nearly 120 slightly below 90 billion CZK. And this is the main evolution. The S3 category continues to marginally decrease, but nothing really spectacular here. And in fact, completely consistent with the observed default rate, which I just commented briefly on a minute ago. So the third and last point for this slide is the resulting metrics which we report, i.e. lower S2 ratio from 14% in the first quarter down to around 10% in the second quarter. a stable NPL or S3 ratio now being slightly below 2% and a stable 4 vision coverage ratio for defaulted exposure that continued to fluctuate around the level of 45% which puts us very much in line with the original level for that particular metric. So that's for the asset policy. Going on to the next slide, which gives you the overview of our cost of risk for the second quarter. For the second quarter, we booked a level of cost of risk slightly above a net release of half a billion. have been in fact as two main components. 500 or slightly below 500, we will check on 479 exactly in net reversal coming from the corporate portfolio and this being justified or explained mainly by some partial net reversal of our And the second element is the one you see on the slide, which is for slightly below 50 million Cheq1 in net releases coming from the Reset Portfolio. And here, this is the net result from what I just mentioned before, which is the reversal of the mortgage-owned Portfolio overlay for something in the range of 200 million cheque rounds, partially upset by some provision creations, reflecting in fact the usual mix of new defaults at a low intensity level and some standard quarterly high track 9 adjustments. So this is for the quarter view and the semester view is very similar at 22 basis points in the negative territory and in fact here you have The three main components which are familiar to you, one was the release of some client individual reserves in the first quarter, which we commented at the beginning of May. Then we did these partial releases of some portfolio reserves on the non-defaulted corporate portfolio in the second quarter. smaller ISM is the one I just mentioned, which is the release of this so-called post-inflation overlay related to the mortgage loan portfolio and well in line with the resilience of that particular portfolio. So this is what gives you this low point of minus 22 bits for the first semester. And in that context, we decided to readjust or to revise our year-end guidance at a level taking into account this Q2 evolution, as well as the planned starter releases for the second half of the year for the retail and take-up portfolios. So this will take us at a level around, if not below, zero bits for the full year. And on that, I will now hand over back to you, Yossi.

Thank you. Thank you DBS. Let's move to the capital.

Well, just briefly, the current capital request is still very strong despite the fact that we are creating provisions as you know for 100% dividend payment. As of end of June, it's at 18.6%, i.e. slightly down yesterday, but slightly means in this case only 14 basis points, so we are very negligible. All in all, it means that we are like 200 basis points above the regulatory minimum. It is just at the upper edge of our best management buffer. One command tool of very great density is basically yesterday's space of very comparable levels, i.e. 36.6%. And the last slide of the presentation is focusing traditionally on the outlook. So basically, we are not changing the 2025 The first one is there is a slight postponing in the expected monetary policy era of CMD. More completely, now CMD is expected to cut two-week growth rate gradually to 3% terminal rate by the third half of 2026. The previous guidance was by the end of 2025. In terms of growth, it is relevant and valid both for the banking market and KB, business outlook, and both loans and deposits. Still, the expectation is mid-singular digits, so basically no changes. So, the second change is the downgrade of the revenues. Now what we are saying is that revenue is going to grow as low to mid single digits. Three months ago we were saying mid single digits and the main reason behind it is a bit of a gap or slowdown in net interest income and also net fees and commissions. On the other hand, the management of the bank decided to put together some extra effort on OPEX side and here we are upgrading the guidance to the decline of cost at the mid single digit rate. Three months ago it was low to mid single digit. Keeping the credit risk, as it was commented by Biggie, in terms of the potential of the guidance, there are no changes, so it's mainly about geopolitical conflicts. So that's all for now, and I'm returning the watch to the studio. Thank you.

Thanks to all presenters. In the next part of today's meeting we will be happy to answer your questions. Let me remind you that this meeting is being recorded. If you have a question please click on the icon with a raised hand at the upper part of your screen and then please wait to be called. If you are connected through a telephone then I will invite you to ask your question later on. Our first question is coming from Rob Prozar from Pekka UDP. Rob, please go ahead.

Good morning, everyone. Thank you for the presentation. I have one question on the fees development. I think this line has been a little bit disappointing. As I understand, you are offering flat fee packages to customers deciding to join the new online platform of the bank. But this in effect, as I understand, is changing the profile of the food business going forward as this could be now less sensitive or insensitive at all to the positive potential positive volume effect. So this is my question. key business character, I mean, elasticity to the volume of the underlying business has changed going forward, so that now a higher share of fees would not be responsive to, say, transactional deposits and other volumes, and the main drivers would just shift to capital markets and cross-selling segments of the key business. Thank you.

Jerko, would it be okay if I start answering by retail part of the area, if I may? Sure. I think we are touching quite important point and we paid a lot of attention to this conversion. You may remember that we were the last bank on the Czech market asking clients to pay fees, maintenance fees for any current account. And it was not an easy position for a few years, so we took the opportunity of building a new bank as something where we can change the fee policy. And it's true that an important part of our clients does not pay anything for the current account as such, for the simple one. On the other hand, if you look at the structure of fees, we succeeded to convert the original portfolio of accounts into the new one without losing any fees. So even after we migrate, the fees are slightly higher than it was before, because there are higher tariffs that are paid to compensate for the loss that we incurred on those tariffs that are free of charge. This is one point, so it has to be the manner to that difficult or sensitive point without any off. On the other hand, it would be inevitable anyway, because the position of a bank which charges everyone for even a simple current account was just not sustainable in long term.

If I am giving you an understandable answer now.

Yes, indeed, but what does it imply for the future growth of the fee business? Is there still competition from fintech, which is going to put a lid on the fee, especially retail fees? I mean, how would you assess, were there, say, three-year targets on the fees? Is it more lower single-digit or higher single-digit? Thank you.

For lower or higher competition, I may recommend the predictions, but in terms of substance, what I am saying is that we are not perfectly competitive in terms of pricing for day-to-day banking products. First point. Second, we didn't lose anything in the conversion process to the new banks. And the third one, we will not be able to increase the unit price. This is not possible in this market, but while growing the number of clients, we should grow the number of fees. Speaking about the day-to-day banking part of the business.

Right, got it. And with the growing number of transactions, will it positively still affect the fee business going forward as well?

On retail, no. And this is not the case for any single bank on the market, because transactions for retail clients are just not charged. This did appear on the market this very much some time ago. We were the last moving on, among the others.

I can't compliment to Hercules and I have to comment, respond rightly to Piotr. Maybe it's important to understand that so far, migratory-migrated clients are market-wide, and not-migratory parts of them selected the basic packages with lower fee charges. For the time being, we are already in the migration of affluent clients and escrows and edits approved for all the time. they necessarily are selecting their better, i.e. higher packages. That's one comment. The other comment is the question of guidance for the years to come in retail fees. So it will be the F2D range makes the split too high. Not the average fee from the customer is expected to increase. Thank you.

That's clear. If I may, one last point. Do you envisage at any point also a shift in the key business for the corporate lines to a more flat-based piece as opposed to volume-based piece?

I would definitely pick up on a lot of those components. There is a very direct correlation between the volumes, because it's on corporate side, mainly on specialized services from the financial operations and here definitely we need volumes. So very clear correlation, yes.

Thank you so much. Thank you.

So once again, if you have questions, please use the right hand button. And if you would like to ask your question via telephone, please unmute yourself by pressing star and six usually and then ask your question directly.

Our next question comes from Martin from UBS.

Good morning, and thank you very much for the presentation. Two questions, please. The first one would be on new lending or lending growth, and specifically on corporate lending. So it seems like in the second quarter, growth was mostly driven by working capital finance, which I would think is somewhat lower margin, and short-term duration as well. What can you tell us about demand in the pipeline in investment type of loans and in more structural, longer-based recovery in corporate volumes, perhaps in the second half or ahead of time next year as well? That's the first question. The second question would be on costs. Clearly, there's a very clear trajectory of inputting efficiency on that side and net cost takeout. I think, Yezhi, you mentioned that you expect these improving trends to continue in costs as well. Can you be more specific, be it in actual terms or in terms of cost-income ratios, particularly for financial year 2026.

Thank you.

To answer the questions concerning the lending horizons incorporated, we do not have any significant stress concerning the pipeline. The pipeline is there. The thing we need to work on, and this is actually one of the first steps of my mission, is to be able to deliver on the pipeline in a reasonable amount of time. This is particularly true for the SME segment, where we are now evaluating the results of a pilot of a more industrial approach to the approvals. with the aim to increase or to shorten time periods on the credit process. On the large court, we also see a handful of really nice transactions being materialized in the short term. For the second quarter in particular, We were trying to equip ourselves with more appropriate sizing of various factorial limits, which were a little bit limiting our growth in the large corks during the second quarter. This being done, we believe that the second half of the year in the large cork segment will be much fruitful producing so far.

I will focus on the second question, which was about costs, improving efficiencies, etc.

So, yes, you are right, the efficiency is improving. I think guys issued a guidance that for full year 2025, we are targeting cost income at the level of 4%. Why? Basically, we are delivering as committed during 2020, during the announcement of the TV 2025 passages, the measures listed at that time, so we are according to the plans releasing of the employees as the efficiency is increasing for all, so it's going end to end, etc., etc., etc. digital sales increased significantly on top of my head from 10% by 50% to more than 50% right now, which is allowing us also to close branches. So the original target was 200 branches at the end of 2025. It's already the case, we are at 185 and So to conclude, at the end of this year, around 44% cost-income ratio. For 2025, you know that we are guiding TZLIS during Q3-Q4 result presentation, but I can at least indicate the direction. So in terms of stocks, we are expecting to have them sluggish, plus-minus. on the top line, we are expecting a jump in revenues, benefiting from the completed transformations as a side. Thank you.

If I may just, if I may to amend a few sentences on both points, and thank you for this question. As far as corporate financing is concerned, you have taken rather forward-looking position. So having said that, we are in a pretty heavy preparation stage of public investment into infrastructure of all kinds. So you can imagine energy sector, you can imagine the public infrastructure for railways and roads. Here Commerční is in very intensive discussion with all the relevant counterparts about the future investment and here we believe that it will multiply somehow also the investments stemming from private sectors. So we want to play our role in that. And sorry for taking a bit maybe longer, even longer forward-looking view, because when you look back, the level of uncertainty, the level of delayed decisions on investment, mainly in the mid-caps, but not only, was pretty visible. So together with Katarina, I remain rather positive on the pipeline here. ignoring consciously the fact that we have few really super active large corporations in the country which are expanding to abroad and making fantastic M&A deals in our countries and in all in all of these important projects KB together with SG Group plays a role of either first line of the syndication or first line of the syndication plus advisory role. Speaking about cost, it's not coming randomly. It's a result of very hard work which we have been conducting between 2020 and today. You may have recalled that back in 2020 when announcing the main assumptions regarding transformation program of KB, we were pretty severe on the side of cost savings and cost savings across the bank, front offices, middle office, back office. combined with the heavy investment into digitization. Now we are in one of the advanced stages, if not the very final stage of this story, taking also the benefits on the side of cost. So it's very hard, it's very bold, but it's not coming out of the blue. It's a long-term trend, which is bringing this result as we speak.

Thank you. Thank you very much, Claudia. Thank you. Once again, please use the hand button or ask your question directly by unmuting yourself. I'll call it a few more seconds to ask your question, if there is any. We don't seem to have any further questions, so I would like to ask Theo for his concluding remark today. Okay, thank you very much.

It seems that the presentation which we have delivered is self-explanatory and combined with the reports you have received in the morning, you have enough information. So, in between, we are obviously ready to answer any of your questions which you do ask on bilateral basis. Speaking about the results, we are obviously aware that beating the expectations of bottom line is very good. The creation of value for the shareholders is simply there, but we are also aware the composition how we get there was not completely optimal. Let me say that the first class asset quality, which is translated into this releases of provisions and extremely low level of of cost of risk combined with very strong balance sheet from both capital and liquidity point of view amended by very strict cost management delivered by the management of this bank is creating our underlying pillars for attacking the market once we have all the retail clients migrated into the new digital banks. i.e. beginning of 2026, where the whole system will be fully equipped by all the functionalities which we are planning. Speaking about more like social or societal point of view. Today we are having Didier last time amongst us. So I wanted to thank Didier for his seven years of very hard work on the site of risk management. He will be replaced by Ann Zukuchkowski. I'm just referring to our recent official statement. Ann will join us 1st of September. And we are very much looking forward for this new member of the team. Speaking about new members of the team, today it was the premier for Katarzyna Kurucowa. She did very well. Thank you for your reaction on the corporate financing question. And also, Katarzyna, I wish you all the best. And I'm very much looking forward for the further cooperation. So thank you, everyone, once again. Enjoy the rest of the day. And thank you on behalf of Commercially Banker Management. for your trust vis-à-vis our bank. We stay at your disposal potentially for the questions.

Thank you. Thank you all. This has concluded the meeting. She cannot disconnect. Thank you. Goodbye. Goodbye. Goodbye.