Raiffeisen Bk Intl Ag Ord

Good afternoon ladies and gentlemen and welcome to the preliminary results 2025 conference call of Reifus & Bank International. Today's conference is being recorded. At this time I'd like to turn the conference over to Mr. Johann Strobl, Chief Executive Officer. Please go ahead sir.

Good afternoon ladies and gentlemen. Thank you for joining us today. We are happy to report a good set of results for the fourth quarter. and all in all a very satisfactory full year 2025. We finished the year with a consolidated profit excluding Russia of 1 billion 443 million euros and the return on equity of 10.6% slightly ahead of our guidance. The business year 2025 was again impacted by litigation provisions in Poland or so to a lesser extent than in previous years, and we expect further improvements here in 2026 and beyond. When we look at the future of the group and what it is capable of achieving, as we include Russia and the legacy portfolio in Poland, what we see is a bank that achieved a 13.4% ROE in 2025. We are confident that the underlying business model is strong, that the balance sheet is healthy and well capitalized, and that we are ready to grow for years to come. We finished the business year 2025 with 6% loan growth in line with our guidance. And while the first two quarters were slow, we are encouraged by the momentum that has built up in the second half of the year. We start 2026 in full swing with a solid C to one ratio Improving liquidity costs and most importantly good demand from our customers. Moving to slide 6, we are happy to share with you the dividend proposal for 2025. With Euro 1.6 per share, we would like to see our shareholders participate in the good results of the past year. Please note that this is of course subject to the audited figures and will be voted on at our annual shareholder meeting on April 9th. RBI Supervisory Board has also announced changes to the Board of Management in 2026. First of all, Michael Hellerer will replace me as CEO from the 1st of July. Michael knows RBI inside and out. He has previously helped the role of CFO at RBI and prior to that headed our asset management business. As for me, I will be turning 67, and with my mandate expiring in February next year, I am happy to hand over at this time. RBI is in great shape and ready for growth, and I am excited to see what the future holds. The Supervisory Board has also appointed Camilla Makhmudova as CFO and member of the Board of Management since January 1st. Camilla has been with RBI for over 20 years and most recently was our CFO in the Czech Republic. Prior to that, she led our Intel M&A and Corporate Development Department. Finally, the Supervisory Board has also appointed Rainer Schnabel to the Board of Management effective of March 1st, where he will be responsible for corporate and investment banking products and solutions. For the past few years, Rainer was the CEO of our Bosnian subsidiary and prior to that, CEO of our asset manager. In the coming weeks and months, I expect you will get the chance to meet this accomplished new leadership team, and I'm certain that you will be as excited as I am about our future. Moving to the next slide, where we can show the good progress in the rundown of our Russian business. First of all, in terms of loans to customers, we finished the year having reached the targets that were set. Going forward, there are no new targets, but more importantly, all the measures and restrictions that we have implemented will remain in full force. This goes for our loans, for payments, for deposit collections, for liquidity investments and so on. Accordingly, you can expect the rundown to continue, and we will continue to update our regulators and investors on the progress. You can see how this rundown, which started on the 1 of the war and accelerated in 2024, has transformed the balance sheet in Russia. As of year end, there was nearly 30% more equity than loans on the balance sheet. The loan-to-deposit ratio is now below 30%, and the LCR above 500%. While the rundown remains our base case scenario, we do continue to explore transactions with interested parties. So far, we have not been able to identify a structure which meets the requirements of the local authorities, but we will not give up. And on the litigation side, I'm sure you are aware that a second court decision in December in Russia led to a further 339 million penalty to be paid by a Russian subsidiary. This penalty can be added to the value of our claim for damages in Austria, now equivalent to 2.4 billion euros. And as to the Austrian claim and court proceedings, there is little I can say today. We have not filed it yet, but we will absolutely do so at the time of our choosing. The other option which is to see our claim for damages satisfied in the next EU sanction package remains in discussion. I do not want to exaggerate the likelihood of this here today, as it remains unlikely even though this would be in everyone's interest, not least of which our European partners. Let us now move to the next slide, the quarterly developments starting with the main revenue trends on slide 8. Net interest income is broadly stable quarter and quarter and up slightly year on year. With some modest interest rate headwinds throughout the year and a large part of the loan growth coming later in the year, we are satisfied with the stable development. More interesting, however, is our outlook for 2026. For one, these interest rate headwinds should become more neutral. or possible even Dern Supportive. And more importantly, the good momentum in the loan growth is visible from the very beginning of the year and contributes to an expected 5% or so NII improvement this year. Fee income continued to tick up nicely in Q4 and we finished the year just over 2 billion euros, up 8.5% versus 2024. Looking ahead, our initial guidance for 2026 is around 2.1 billion. On slide 9, we show the balance sheet development and this is encouraging. I have mentioned the good loan growth and it is always good to see that it is being driven by key markets, including Czech Republic, Slovakia and Romania. In mortgages specifically, we also see good progress in Hungary, where retail expansion is important to our business mix. More importantly, corporate business in GC&M has picked up nicely and the pipeline for 2026 looks equally promising. On the liability side, we see further deposit inflows and notably mid-single-digit growth in retail deposits in our network units. Slide 10. I'd be sure liquidity ratio remains solid across the group, including, of course, in each of our key markets. and in head office. Turning to slide 12. RCT1 ratio assuming a worst case scenario in Russia with 15.5% at year end, we slightly exceed our guidance. I should also draw your attention to an increase in the Russian op risk RWAs with January 1st. You may recall from previous presentations that in our worst-case scenario we do not assume immediate derecognition of the OPRISC RWA stemming from the Russia business. The reason for this is that OPRISC is calculated on the group, fully consolidated basis and not booked at the individual unit level. This means that if any part of the business is sold, our deconsolidated The relief on the corresponding OPRISC RWAs is not immediate. In 2025, we had agreed with our regulator to cap the Russian OPRISC, which was retained in this price book zero scenario. This agreement expired at year end, and from January, we are to recognize the full 3.9 billion RWAs. The effect of this increase is around 29 basis point, meaning that our CT1, excluding Russia, is at 15.2 with January 1st. On the right hand of the slide you will see our capital stack also under the worst case scenario in Russia. The 81 bucket does not reflect the note which was issued in January and where we added 150 million to our 81 stack. All else equal. On the next slide, 13, our C to 1 ratio guidance for 2026, always under the assumption of reverse case in Russia. No surprises here. We continue to steer the bank to around 15% and above. Now let's jump to slide 15, the MREL and funding plans. On MREL, first of all, with the start of the year, we have a subordination requirement of 26.71%. Considering the own funds in our 81 capital stack, this new subordination requirement does not change our issuance plans. We have also issued a few senior non-preferred in previous years, which add to the buffer here. I mentioned a moment ago The other Emerald needs which you see here for 2026 across our countries are expected to be covered domestically. Moving now to slide 16 and 17. On the following slides we have shared our macro update which I will let you go through at your leisure. Let's turn to our 2026 outlook on slide 18 and starting with core revenues. We expect 4-5% improvements in NII and fees and a similar impact on the OPEC side. We aim for a small improvement in cost-income ratio next year to around 52.5. The initial guidance on risk cost is around 35 basis points and Hannes will share his thinking later on. We expect loan growth to continue in line with the positive trends that we have seen in the past few quarters and target 7% growth in 2026. As mentioned, we expect RCT1 ratio excluding Russia to remain above 15%. For the group excluding Russia, we expect a stable ROE around 10.5%. On the one hand, we expect improvements in the operating results. and fewer litigation costs on the Polish legacy portfolio. This, however, is largely offset by larger bank levies and windfall taxes, as well as the denormalization of the risk costs. When we look to the future of the group, excluding both Russia and Poland, and illustrate it here with the yellow line, we expect to be closer to 12.5%. In this case, the improvements in operating income are not enough to offset the announced increases in bank leverage and the high assumed risk costs. Going forward, however, we continue to expect that the core of the group will sustainably earn 13% and above. And with that, allow me to hand over to Hannes.

Thank you very much, Jeroen. Good afternoon, ladies and gentlemen, and thank you for spending your Friday afternoon with us here today. I guess You have seen the numbers, and I will keep it short. We finished the business year 2025 with risk costs of €192 million, down €95 million from a year ago. In basis points, this is a provision ratio of 20 basis points for full year 2025, which I'm happy to report is inside our guidance. Overall, we remain very satisfied with the quality of our portfolio and our non-performing exposure ratio is at record lows. We continue to make good progress on our workout strategy, as you can see with the further drop in MPE volumes. Beyond MPEs, the grant and the performing book are healthy and we continue our proactive workout strategy. In Q4, we released the overlays which we have built up in Russia. The bank is so well capitalized and the loan book has shrunk so much that the overlays have become redundant. In the core of the group, we have made minor adjustments leading to around 45 million euros of releases in Q3 versus Q4. Going into 2026, we still have 413 million euros of overlays available to us, equal to more than a one year's worth of standardized risk costs. Riskless guidance for 2026 is around 35 basis points, which, as you know, always includes a degree of prudency this early in the year. I do not need to remind you of the geopolitical turbulences that we have witnessed in 2025 and since the start of the year, which also led us to start the year with a modicum of caution in our riskless guidance. Away from asset quality, let me touch briefly on Poland, where the trend is clearly improving, and where we believe that the worst of the litigation provisions are behind us. The inflow of new Swiss francs claims continues to decline, while the inflow of euro claims has stabilized. Uncertainties remain, not least coming from the draft law, which aims to accelerate settlements and court proceedings. For 2026, we assume somewhere between Thank you, gentlemen. Ladies and gentlemen, we may now start the Q&A session. If you wish to ask a question today, you will need to press star 1 on your telephone keypad. Please ensure that the mute function on your telephone is turned off.

or we will not receive your signal. Once again, if you wish to ask a question, you will need to press star 1. If for any reason you need to remove yourself from the queue, you can do so by pressing star 2. We will pause for a moment in order to allow a queue to assemble. And our first question comes from Benoit Petrecue with Kepler Capital. Please go ahead.

Yes, Benoit Petrecue from Kepler. Good afternoon. I've got a couple of questions. So the first one will be on the net interest income, looking at your guidance and also your loan growth guidance. It looks like you still expect net interest margin to remain relatively stable in 26 and therefore an eye to be mainly driven by volume growth. We see some key rate cuts in 26. So I wanted to check with you if If the margin pressure will be indeed relatively limited as per your forecast in 26. The second question is on the operational risk in Russia. I was wondering if it's purely a mechanical process or is there any rational behind or any discussions with the regulator? Do they fear any operational risk from Russia or is there any discussions on that item or is this pure The number three will be on M&A and I think you commented on the fact that you might be looking into Romania. Just wondering if you could update us on your M&A appetite now that clearly the group is focusing on his own future. And then finally on the bank levies, we have a big step up in 26 in Hungary. And I was wondering if your first look on this is that it's going to be a one-off item, i.e. recovering in 27, or you assume a kind of stable high bank levies going forward also in 27, 28? Thank you.

Thank you for your questions, and I start with the NRI guidance. I mean, you're definitely right. I mean, when you look at the Q4, you might maybe need some one or two adjustments to get the run rate of the Q4. So there was a minor one-off of minus 7 million in Czechia. If you add this as part of the run rate, and if you then consider that you have... At the very end of the quarter, the loan book was really building up. Then probably the run rate is closer to 1 billion 70. And if you analyze this, okay, here we assumed and also to some extent stable net interest margin to 4.3. or maybe a touch less and then you have a 7% growth again with a net interest margin range of around 2.3 or so and you achieve this 4.4 billion. I think the rate cuts are partly still covered by these model books and by investments. On the other hand, I see your point that If competition moves more and more to price topics as well, which is of this point in time, I do not expect at a very intensive level, then it could be that there is some pressure on that as well. But as of now, we are optimistic on that.

Hannes? Johann and colleagues, the question regarding the op risk on Russia. You know that there has been quite some adjustment on the CRR3 and therefore we're using the regular op-risk approach within the CRR approach where you have two main components. The one is the operating income and you have seen the numbers and also of course which must be partly incorporated are legal provisions. So means, RASPERA1 and 2 are also now included in the 2025 WA basis. Thanks for the questions.

So then coming to your M&A appetite here, I hope you understand that I will not comment on recent rumors, but what I confirm is that we have in some markets interest and would appreciate to participate and also be successful when we participate and the countries are well known, so it's... Romania is on this list. I always said Hungary is quite difficult because of the competition one might expect. Slovakia, it's not a must, but still could be of interest. Serbia, we achieved something, but still, yeah, in the past I also said that, yeah, Gratia may be difficult, but it would help the development of our bank for sure. Czechia is in these days very expensive, but it would be good for our development here. So it would depend on the structure. To your question, to your last question about Hungary, difficult to say. I have no indication that it will continue also in 2027. and I hope it's as I expect. So only 26. Thank you. Thank you.

And our next question is by Ben May here with KBW. Please go ahead.

Thank you for taking my question. I just have a couple. That's just from the check on I, which was down a lot. I think you mentioned there was a one-off negative. I think we're able to give a bit more color What was that one-off? The loan growth guidance appears quite conservative given you're already delivering no place to 60% ex-Russia and you're seeing essentially a positive turnaround occurring in Austria, Salvatore Niedertus, Simpsons, Costa Rica. Has that just been prudent at the beginning of the year or do you expect to slow down your wider C footprints? And then I was just hoping you could give any guidance on the overlay usage in 2026. That would just be helpful to kind of frame that. Thank you.

Well, I may start with your question on the overlay releases. I think, you know, what I have said in my statement, 35 basis points is the guidance what we may use for the regular business, so not, you know, just the running business. If things were really terrorist turns are, we would also be tempted to make use of the overlays which are being available to us. and a big part of overlays is anyway to be attributed to our Ukrainian operations and that's the way how we think about using and making use of our overlays. Thanks for the question.

To your tech question, this was a sort of reclassification between trading result and net interest income. So this is to the small amounts. Yeah, unfortunate, but I think with this correction, we see the right number. So I think if you then add the 7 million, as I said, when answering a question before, you then get a better understanding of the run rate also in Czechia. Now to your second question, the loan growth guidance of 7% seems conservative. Indeed, we have mixed signals, so we see some long growth forecasts for the overall market, which is even below the 7% from research. On the other hand, I can confirm that given the pace what we had so far, It's strong. On the other hand, if you go a little bit deeper than, for example, in Slovakia, you have seen an enormous, an enormous growth in mortgages. And here the question is to what extent is this somehow front-loaded or how shall I say, the demand came strongly in, questionable here, if it continues so The one or the other market might be below this 7% and then in combination. So if it would be a little bit more, we will be happy and celebrate. But I think the seven is to be achieved. Thank you.

Thank you. And our next question is by Monty Nemes with UBS. Please go ahead.

Thank you for the presentation. I have two questions, please. The first one would be a follow-up on the risk-cause guidance of 35 basis point 426. Hannes, would you mind elaborating on the drivers of this and then perhaps shedding some light on the conservative assumptions going into this guidance? Where do you feel you've been conservative when issuing this guidance? The next question is on loan growth and particularly in group corporates and markets. I was just wondering if you could talk a little bit about what sort of loan growth you're seeing in the business and what is your expectation? Thank you again for giving me the opportunity to talk about the risk-cost guidance for 2026.

I'm pretty sure you can recall that when we talk about standardized risk costs, we talk a level of around about 40-45 basis points. So this would be a through the cycle risk cost guidance. So what made us coming in a slightly a bit lower with 35 basis points, On the one hand side, as you can see in our macroeconomic outlook, we see many countries that the macroeconomic environment is getting better. First thing. Second thing, a big part of our portfolio is also being built up on a retail portfolio. And of course, a very, very strong employment rate. It is a very low unemployment rate in our market is very much supporting a very robust credit Long Growth, and secondly, also a really benign risk-cost development in the mortgage business anyway, but even more so also on consumer lending. Then we see good demand on consumer lending and some investment needs and ask for money. We have €430 million of overlays. We have €10 billion of significant risk transfers outstanding. And yes, as you said, if all things John Sauer and if I would be terrible wrong with my 35 basis points, we still have our overlay pool available. Hopefully this gives some hints what was the thinking and the mechanics how we came to the 35 basis points. And yes, you're right, we again came in slightly below risk cost guidance for the year end, but I also gave you the reason. One of them was that we released our overlays in Russia and I was giving the background. Having more capital than loans outstanding, we felt that this is an appropriate time to release the overlay in Russia. Johann?

Okay, now to the GCM. What type of business would we expect also for 2026? So we have I have to state, you are aware of it, but let me state it, that GCM is not only Austrian large corporate, but this is our international portfolio, and this comes partly from Austrian customers, partly from customers being in the Western countries, so not necessarily in our core markets, but with a relationship to our markets, and finally the international customers in the countries here we usually support and we split the so if there is a local take take check if one has a big demand in one of these loans then part of it we take also here and the areas what we do this can be project finance we are very proud of something i mean it still In Bosnia, there's an energy part. So it goes throughout the range. I think all of all quite healthy business. Yeah, quite a lot of competition. And if there would more come, I would be very happy. So what gives you some numbers, what I touched before, I think in corporate if the overall the markets where we aim can achieve from market research we wouldn't expect more than some four to five percent we are optimistic that and this is built also on the pipeline what we have or what we are closing to be in the business what we book here so in the GC&M At the level we have, we see some markets in corporate where we see in our books where we hope for an increase, which is Czechia, which would be very important. And then also maybe Croatia. Okay, it's not big, but it will improve. And Romania. Romania has been strong in the recent years. I mean, you didn't ask for retail, but let me share some flavor as well. So I think that in the smaller countries, you still could expect a double-digit loan growth, and in the others, 8%, 9% like this. And if we achieve that, then the combination will be 7%, and if we are lucky, a little bit more. Thank you for your question.

Thank you very much.

Thank you. And our next question is by Gabor Kemeny with Autonomous Research. Please go ahead.

Hello. Thank you for your thoughts so far. I have a question on your ROE guidance, please. You are guiding 12.5% core, excluding any Polish three-strand charges. Can you give us a sense of what you expect to drive The other question I had was a technicality on the ROE guidance. I see on page 37 that you assume 13.3 billion of average equity for 2026. I believe you'll end 25 Equity call was 13.8 so if you could elaborate on this why you assume less than that and the other the final question would be if you could give us an update on russian litigation please and what is the the likelihood of a recurrence of the of the litigation provisions in in the current quarters thank you

Okay, so let me start with the guidance and where do we expect, what are the drivers for 2026, if I may start with this. Yeah, if we achieved the net interest income as I have outlined, then this could be positive for our RE maybe by 1.5%. and then the others relatively small fee and commission income 0.6 net trading income which was more or less zero coming in 2025 coming from credit spread and the one or the other topic we assume that these negative effects will not reoccur and then we would be back at around 60 what we usually should have so 0.5 So if you add these up, you might come to 2.7 improvement. We also, I mentioned it, have OPEX increase by 45%, so minus 1.2%, something like this. Other results improving by 0.6. Governmental measures, minus 0.5. And then I have the normalization, what Hannes talked about, impairment losses, which might be minus 1.5, 1.4, sorry. So a little bit more income taxes probably. And yeah, then we would be at... I would have explained, I guess, the developments, what you would expect. And as I said, in the coming years, 27, 28, maybe the one or the other headwind comes from the extra bank tax. We'll see. Of course, here, Korsos is... Good attitude, but take an example, as example Austria, there was a tax increase from 23 to 70 something, so up 50. This was at least till now limited for two years. So 25, 26, if they keep and we are aware they have Thank you very much. Thank you. and finally we see further improvement in the GDP growth in 27 and beyond and maybe even that then the cycle in some great degree cycle in some countries might still go on in 27 but in others it might even turn around. So a combination of what we have. Now to your Quite difficult question and here I can I come back to this a little bit later to see that the average it's a give me a few moments that I find my here I would have a look to my notes before that I would come to the other question which is further litigation and penalties in Russia in the coming quarters That's very difficult to answer for one reason. And the reason is I was negatively, very negatively surprised by the second Rosperia litigation and penalties. And this is really a very negative development in Russia in that area because the first litigation, at least from my view, covered everything. So coming back again with a second litigation, okay, there had been some reasoning which a judge might accept, economically it's impossible. That's the negative signal. The positives are that this second litigation is the only one which we have seen where we say, okay, it's difficult to explain. Anything else so far did not happen, so this gives us some hope in the balanced view. Now to the equity. It's calculated on 26 budget numbers and did not fully include the year end and OCI effect. So you are right that We will redo this and give in the course of the time some more detailed information.

I promise to. Thank you, Johann.

Thank you. Our next question comes from Ricardo Rovary with Mediobingo. Please go ahead.

Thanks. Thanks for taking my case. The first one is that the RNAi guidance 26 is up versus 25, about 5%. The blood growth is 7%, so it looks like you embed some margin pressure. Now, we've been talking about margin pressure for quite a long time. It has never really come through. I wonder, I was wondering why all of a sudden, given the rate environment, providing the rate environment, And the second question I have is how much of your time, managerial time, now is devoted to dealing with Russia after 40 years? Does it take a good part of your working day? Just to be curious on that, thanks.

Yeah, indeed. Indeed, when we talk about margin pressure, I think it's very different from market to market. But what you see is everyone is going for additional customers. We did so. One way to achieve this is by whatever offer you can have in mobile banking whatsoever. Another way I think we have been successful is your liabilities part, so offering nice term deposit whatsoever. This can be at significantly competitive levels and this is the type of margin pressure what we see. And the other is in the mortgage business. So we have been very successful. Sometimes in some markets it happens that then for one, two, three quarters it's really, really difficult. This comes and goes. So there is no long-term strategy what we see from competitors, but it's adjusted. And here when we talk about margin pressure, there is always the uncertainty. Is it just one who has more appetite and... Keep the others cool or are they defending? So this is the core of questions what we have when we talk about... It's more about when I talk about margin pressure, so we have the two elements. The one is if the central bank rates go down, then of course everything what is on the current accounts is under pressure. and here it depends then on the model books what we have and the investment books and more the timing. Still here in 26 we have a positive impact still from earlier hatchings and therefore I was not so much worried about these developments for 2026. And as I said, the other is in coming from these topics of competition. We'll see. And to your second question, management time spent on Russia, it's nowadays mainly me when we talk about potential transactions. and of course to some extent then Hannes has been responsible for compliance issues now and then there come topics but it has reduced significantly compared to earlier years so I dare to say it's fairly stable in 2025 for we didn't have any Any questions from authorities on the business? So all these, which are also time consuming, has diminished significantly. So not big time anymore. Thank you.

Thank you, Johann. If I may get back one second to your competitive pressure statement. Why... Competitive pressure in 2026 should be more as a burden than it has been in 2025. I mean, with the 7% loan growth that you project, it sounds like the pie seems to be large enough, you know, for For many banks operating in those countries. So I was wondering why all of a sudden in 2026 the competition should be heavy at the AT&T so far. I mean, margins at the very end of the day were kind of stable since before.

Ricardo, you are fully right. If the pie grows by 7%, then I should not be concerned at all. I have seen the one or the other research where I was rather thinking of maybe 5%. And then it would mean that we continue to get market share. I mean, the good thing about Raiffeisen is the good thing and the not so good thing. The good thing is that in the big markets, Our market share is not that huge. So increasing our market share is not too much painful to others. But you're right. If we see this 7%, 8% growth all over the markets in the long book, then no need for any margin pressure. So here I agree with you.

Very clear. Thank you.

Our next question comes from Krishinda Dubey with Barclays. Please go ahead.

Thanks for taking my questions. I think I have three. To start with just on Hungary, I guess there was this big negative in the trading. So how should I think about this in terms of the rate cuts or no rate cuts that's going to happen in Hungary? That's the first. Second question is around the dividend payout. I believe the payout this year is around 40%. And then I guess you have a bigger range, which is 20 to 50%. So for the future years, how should we think about the payout and And aligning to the ROE question, just trying to understand when you're trying to guide to greater than 13% ROE, does that have inbuilt some M&A or like reduction of capital via buyback or anything or is primarily like outside the scope? And the last one is on just on the M&A, just staying on the M&A bit, I guess you had in last five years, you had two acquisitions. Thank you for your questions. I probably did not fully get your questions around Hungary. Was it just to confirm, was it again on this increased bank tax or I didn't get your first question? No, no. On the trading part, like the negative was bigger this quarter and so they're just trying to understand like on the trading result it was a bigger negative compared to the year or the first three quarters of what was driving it.

No, I understand. There is, this is a valuation issue and And it comes from what the Hungarian calls baby loan, so this is a sort of subsidized loan where the banks had to take over the part of the subsidies which came from the state and this led to a reduction of the profitability of this product which had to be considered in the valuation and therefore so it's not trading what you presume from the typical capital markets trading or so but it's evaluation from this loan book the baby loans. To your second question, the dividend payout, we are close to the 40% this year, and if we assume that maybe this for 26 you would keep this or so, then you might go up slightly. A couple of more cents might be possible. I mean, our current thinking is we will see over time that when we, It's too early to say now, but probably when we talk about the Q1, we might have deducted a dividend of 1.8 something, so prorata, but look, it's still January, so a little bit early to speak about this. In the... All the targets what we give are without any impact on M&A. So it's pure organic what we have. And yeah, what we could say is in the recent M&A activities what we did in Serbia and in Czechia, we could take out a considerable part of it. So you always say some will be depending on the 50%, maybe even more, depending on the overlap in the branches, and so a couple of things. But you could, if it's like, it's quite similar to what we have in the The second part is there are also some positive synergies so what we would also like acquisition is it's what we have found in the last few months it was very inspiring for the organization so the organization itself Thank you for your questions. Thank you. And our next question. You can go ahead, sorry. No, go ahead.

I was just I was just asking about this the the impact that you highlighted on on on the operas card every way uh like earlier if you would if you would deconsolidate it would go away so does that mean if you if you think sorry yeah yeah sorry so you you were talking about the deconsolidation of Russia and when will we lose the the was this your question the operational risk

RWA's. So as Hannes tried to answer it's in the let's say first or base case we have to assume that it's a very formal process which over a period of three years it's reduced. We have currently a significant amount to this. Now just consider this From 2.6 to 3.9, so this 1.3 adds the 30 basis points, so you can easily figure out what it means, but it means also that over three years the CT1 ratio, which is now decreased in January 1st from 15.5 to 15.2, should every year, like for like, increase by these 30 basis points over three years. If the regulator would be generous, he could grant us also within one year, but we report the very cautious one.

Thank you. Thanks a lot.

Thank you. We'll go next to Benoit Petricu with Kepler Capital.

Just to follow up on two questions, actually. First on Hungary, the elections there, I mean, what do you expect? And could that change also your view on the local business, depending on the outcome? I mean, is that a catalyst, you think, for 26, for FBI or not? And then just on Rasperia, the court case, what is your strategy and why are you waiting now to file a claim? And how long you will take to take a decision there? Thank you.

Yeah, I'm, to your first question, I'm not a political expert, so I read, of course, I read and we have many sources which say the outcome might be close or there might be a change or not a change whatsoever. I think what, I don't know what could be the difference is that maybe EU funds would flow easier if a regime change would come. We'll see. But our view is quite apolitical and we, as we want to term there, and we, of course, we always adjust to the situation, but it would not, it does not change overall the direction. As I said earlier, for Hungary it's important that we grow our retail business. I believe we have a good corporate business and the mix could be a little bit more to the side of retail. This dates back that for years we were, I dare to say, underperforming. I think we more and more fixed these issues. Recently we have found Some very attractive offers for our customers. What is also important when we talk loan business, we're back in mortgages where we hadn't been there for a long period of time. Thank you very much. Thank you very much. would then at the end of the day change the windfall taxes and whatever we have. This is always to be seen then later on. Yeah, I think that's currently the bad situation in Europe that banks are used to compensate for too much spending from governments. To your second question, the strategy and why we are waiting to file the claim. Look, the point is like this. There are two different views on this claim. And let me start with the Rosperia one, the Russian one. From the Rosperia perspective, they say you have received the claim on the shares. And from Russian perspective, you have even received the shares. And for that reason, don't sue us. Neither in Austria nor somewhere else. You have the shares. And if you're not able to get the shares, talk to your government, to Brussels whatsoever, but don't sue us. Because if you sue us, we might perceive this that you want more. You have the shares and you want more. Now the challenge is to find an understanding that we do not want more, just the compensation for the claim. And as we are not able to solve this with, as I said in my in-going statement now, we need to file a lawsuit. Now, I don't know if we can reach an understanding with Rasperia, which would take off the risk of an anti-suit injunction, what we currently face in Russia, or not. We have three years' time. Definitely if we neither get the unfrozen nor the agreement, the understanding with Raspere, then okay, I would recommend to my successor to file. So there is no reason to give up. The question is only can we get compensation for the damage without taking the risk of more damage or is it, yeah. But we will, at some point in time, we will have to file a lawsuit if Brussels does not defreeze these shares. Thank you.

Thank you.

Thank you. We'll take our next question from Simon Nellis with Citi. Please go ahead.

Hi, thanks for the opportunity. Actually, one of my questions was around the Raspberry case, so I got an answer there. But actually, I'd be interested in, Any thoughts on the outlook for Russian earnings going forward? I know it's not something you tend to do, but there's obviously a portion of the market that thinks peace might occur and this business will have value in the future. So any kind of broad brushed comments you can make on the outlook? And I guess related to that, are you looking to kind of further reduce the exposure going forward and by how much?

Yeah, so when we talk about Russia, look at the balance sheet what we have. So we don't grant new loans, so there is a runoff. The corporate portfolio, the runoff was around, I think, 90% or so. So there is small amounts there. And then you have the mortgage business, which is running off as well, but at the... According to the repayment schedule, there is for the time being no reason for the customers to early repay. The mortgages were granted in a rate environment which was significantly lower than what we have now. So these are fixed.

One moment, ladies and gentlemen. We have lost our feed line. One moment. And we are reconnected. Go ahead, sir.

Thank you. Sir Simon, I was, I don't know when I dropped out, but coming back to your question and with the first part, I try to be shorter, so we have to run off of the loan book. From there, less and less will come. So the main earning comes from the money which is The surplus liquidity as well as the equity which both are placed with the central bank and of course with the declining interest rates the revenues will decline. The second part is, and this is a little bit more difficult to forecast, you see that we make still some money in trading, so from the FX business And here this comes with international payments and as we are restrictive there as well, it's a question of time to what extent we are perceived still as a partner in that field. But I would say the bigger part comes from what you see as a future interest, key interest rate from the central bank and we still would expect some outflow in deposits which might also reduce the surplus liquidity which is placed at the central bank. So declining revenues with mainly driven by the key rate reduction. That's helpful. Thank you. Yeah, sorry, the second was the future outlook of Russia. I mean, it depends purely on two things, I would say. Peace in Ukraine. This would be very important. And for us the most important part, the second part, is then what is the position of the Europeans. Because you see, we have all these restrictions from the European authorities and It's unclear to what extent the Europeans will adjust. I think if there is peace, the rest of the world definitely will adjust relatively fast. Europeans come to see. Thank you.

Thank you for all your questions. If you have any more, please remember to press star 1 on your telephone keypad to place your question. The mute function on your telephone needs to be turned off so we can get your signal. Thank you all to the participants for your time, your interest. Thank you very much. Goodbye. Have a good afternoon. Bye-bye. You may now disconnect.