Hoist Finance AB (publ)

Welcome to Hoist Finance Earnings Hall now for the second quarter, 2024. I am Harry Branius, CEO of Hoist Finance. And with me here as usual, healthy this time, I have Christian Valentin, our CFO. And together today, we'll take you through the results and highlights of the second quarter. And it has been a very busy quarter with deliveries on many, many fronts. But before we do that, just like in the last few quarters, I just want to repeat for any new joiners the message about what we at Hoist Finance are about. So we are a performing financial institution working with non-performing loans. We are different compared to other peers in the industry. Hoist Finance is a regulated credit market institution supervised by the Swedish FSA. And as such, we have a different regulatory environment and a different funding model than most of our peers. Our main funding source, some 70%, is coming from savings accounts from the public. We have savings customers in Sweden, Germany, the Netherlands, and in Poland, allowing us to match currencies between assets and liabilities. The remaining 30% of our funding comes from various bonds that we hold to ensure a balanced funding mix and reliable access to the debt markets. Now, this mix gives us a considerable funding cost advantage compared to the rest of the industry. And our regulated status also, of course, comes with a relatively high fixed cost, which is why we want to grow our portfolio. So we have a strategy to grow the portfolio to 36 billion SEC by the end of 2026. We believe we are on good track to achieve that. And of course we would keep our cost base aligned to that trend. So we would see basically direct costs row in line with portfolio growth and indirect costs grow slower. Now this operating leverage, we can see again in this second quarter, We see the portfolio growing 13 percent, underlying income 27 and underlying costs 9. Now, many peers are going capital lighter and focusing on third party servicing. We are and we want to remain capital heavy. We have the setup, the access and the balance sheet for it. Now, as we announced yesterday evening, in a flurry of press releases, apologies for that, the Board of Directors of Hoist Finance have decided to now fully pursue the status as Specialized Debt Restructurer, another clear differentiation compared to Peers. With this status, we'll become an even more attractive partner for banks and financial institutions who are looking to address their NPL-related issues, The new regulation or the new status will be available from the 1st of January 2025, and we will start preparations basically as of today. Now, we also want to reiterate our financial targets. They will not change due to this status. We will still target above 15% return on equity, 15% EPS growth, and a CET1 ratio of 2.3 to 3. 0.3 percentage points of our regulatory requirements. So with that, let me go into Q2. So, as you may have seen, the profit before tax came in at 383 million SEK. Very, very strong result. Now, we have sold assets in Germany and Italy, as is our strategy, and the profit from that sale is about 150 million SEK. Now, as part of that, we also took restructuring costs in both those markets, and then we've done some further restructuring in the Netherlands, in Belgium, and in Cyprus as well. So adjusting for both positives and negatives, we think a fair representation of how the underlying business is doing is around 320 million SEK for the quarter. Christian will take you through the bridge later in this presentation. Return on equity came in at a strong 18%. And if we do the same adjustments as above, or as I just mentioned, return on equity would be then underlying around 15%, which is in line with our core financial target. On the investment side, we closed 2.2 billion in the quarter, a lot of activity in the secondary market in the quarter. We extended our strategic partnership with Lowell to Germany by acquiring a large part of their portfolio there. We also did investments together with Vesting Finance, part of Arrow Group in the Netherlands. But we also bought our first primary market portfolio in Sweden from one of the large banks, which we are very, very happy about. And with this, we've now invested above 2 billion SEK per quarter, three quarters in a row. and we expect this to continue also into the next quarter considering we've already signed portfolios of approximately 2 billion SEC in addition post quarter closing. This time all on the primary market and we see a good pipeline for the rest of the year. Now we will try to close all these transactions in Q3 but sometimes things slide a month. So the pipeline remains strong. It is repricing. Christian will take you through the development of our net interest margin in a few minutes where this will become evident. Now, in general, in the marketplace, we see fewer participants, some new constellations in the auctions out there. Industry peers are teaming up with financial co-investors, sometimes opportunistically, sometimes strategically. Now, we at Hoist Finance are also interested and active in the co-investment space with partners, especially if it gives us access to new volume or risk sharing in larger transactions. Now, sort of linking that to the SDR, we've always had those three options of managing the backstop, et cetera, before. The SDR gives us independence. Co-investment means structuring new vehicles, separate governance, maybe double underwriting, et cetera. So with the SDR status, this will mean a significant simplification of our business model going forward. and it will become even easier for a bank or a financial institution to collaborate with us. Now, on collections or operations, our collection performance came in at 106%, just like last quarter. Now, last presentation, I said that Q1 was unusually strong and that this is not the new normal. I will make that same statement again. This is not the new normal. It is a very strong performance, and it comes from across the organization. And we see, albeit early, signs of these improvement programs that we are running in multiple countries showing good results so far. And on the operational improvements, we have now also completed the IT insourcing and it has been done with minimal disturbance to the business. We now have an internal team of approximately 50 engineers closely monitoring our infrastructure. And as a side note, we were not impacted by this CrowdStrike incident at all. Now on further restructuring, right? So in Germany, we adjusted the organization down significantly and we've made changes to our collection strategies. In the Netherlands, as I mentioned, we outsourced our operational loan management to Vesting Finance, part of Arrow. And at the same time, we bought a share of their portfolio in the Netherlands. Very happy with that collaboration. In Belgium, we did a similar move. We've transferred staff and operational loan management to Intrum. Also happy with that collaboration. And through these changes, we believe we are strengthening our position as as an investor in the region and overall Europe. As announced yesterday, the board of directors have decided on launching a share repurchase program of maximum 100 million SEK up until the end of September. And yes, I think with that, I will hand over to Christian to take us through the numbers.

Thank you, Harry. Good morning, everyone. So we had a really strong cue to fueled by both strategic initiatives as highlighted by Harry and also continued robust underlying operational performance. Net profit was 274 million, and we had 18% ROE for the quarter. And this is a result of continued focused work coming together from the last three years of rejuvenation and investments. So we are beating our own expectations on plan currently, which is really encouraging. And we have a really high pace of improvement work ongoing, both during the quarter and up to this point. So we have a few extraordinary income and cost items which is leading to an overall net benefit and I will come back to this. We have a bridge later in the presentation to outline this improvement work versus the underlying performance that we see from the MPL business. So overall, it was a strong investment number in the quarter. We invested 2.2 billion SEK during the quarter. This is the third consecutive quarter that we do this, and we see that this is continuing. We have signed to date to 2 billion. So if you look at our long-term target, the 36 billion book that we want to have at the end of 26, we see that this pace is in line with that target. On top of it, the repricing is continuing. I will speak a little bit more about this on a subsequent page. So we are investing at attractive returns and we're also very price disciplined doing this. So we're in a good market where we see that there's a good volume. We can invest at attractive prices and we see that the underlying returns are going up for us, both in the front book and then in the average book. If you look at the underlying P&L for the quarter, it's a strong growth year over year across the P&L. The top line, so net interest income, is driven by repricing and the book value growth, so the credit portfolio growth. That is leading to a 30% net interest income growth for a quarter over quarter, so year over year. We see that the interest expense is plateauing for us. So it has not come down significantly, but we see that it's plateauing on the level and we expect it to gradually come down as interest rates continue in our expectations to come down as well. The interest income is also supporting a lower than expected net funding costs. And all in all, this is driving a 24% net interest income growth. If you compare that with the book value growth of 13%, then you see the real benefit of the repricing in the market and the pricing discipline that we've been having. And this is the last two quarters. We are seeing that the REIT pricing is compensating more than the increase in funding costs, which is really encouraging because this will clearly contribute to the profit growth that we can see in this quarter as well. We hope that this will continue. So below net interest income, we continue to see that our healthy portfolio and asset management strategy is paying off. We have a collection performance of 106% during the quarter, which was the same as Q1. We also have an Italian and German back book sales contributing to other income. And that all leads to a total operating income of 34% growth. If you look at the total cost, it's held back by last year's rejuvenation and also the ongoing continuous improvements work. So underlying, we're growing the direct cost base by 9% versus 13% book value growth. So slightly slower than the overall growth of the book. And then the underlying indirect cost is growing by 2%. And that's taking out this extraordinary cost that I will show in the bridge in the coming pages. So overall, we have an operational scale or leverage, as we call it, boosting profits. So we go from a year ago, 161 million of profit to 274 million of net profit in this quarter. And this delivers a robust Q2 ROE of 18% overall. With regards to portfolio acquisitions, we had a strong start in the first year and we've been picking up pace since. So this is the third consecutive quarter that we have invested above 2 billion. And we have signed, as mentioned, 2 billion to date in Q2, so this is continuing over the summer. And normally Q3 is a slightly slower quarter given vacations, but this year we've been As a contrast to last year, we've been winning a few larger transactions, and this is clearly helping this number. Overall, if you add up these quarters, we have 6.3 billion signed and closed year to date. And in Q2, as Harry mentioned, we had our first primary deal sold from one of the larger Swedish banks in Sweden completed, which is really encouraging. So we're establishing ourselves more and more in the Nordic market. We have strengthened our strategic partnership with Lowell in Germany and then in the UK. So it's a continued really productive partnership with them. The volumes are healthy and we're also seeing that the prices we are paying are also healthy. So the repricing is continuing. We saw during the last year that the secured asset class was repricing more than the unsecured. We now see that the unsecured is also repricing. And we believe that this is a result of larger servicing platforms needs to be fed, as we call it. And now I think the funding cost for the industries is reaching a point where we have to see this repricing unsecured as well. We certainly have been seeing that in our deals that we have been winning. So if you compare with 2021 front book pricing, so the new investments we did in 21 versus the investments we've done now in 2024, the front book pricing is up 70%, which is really healthy versus three years ago. So this is a view on the strong Q2. So it's both fueled by strategic initiatives and a robust underlying operational performance. This is a bridge, bridging earnings before tax and ROE between these two strategic initiatives and the underlying operational performance. So we would like to help you to understand the change work and then the underlying MPL businesses, how they are performing. So one important takeaway is that the overall of this is net positive. And this is reflecting a aim that we have in everything we do with the great value. So all the change we want to do, we want it to be net positive. We're really proud of the team's strong track record of doing this. We've been doing it the last few years and we continue to see this. We're clearly not counting on that difficult restructurings, improvements, etc. Always will yield a positive result. But we've been lucky, talented enough to see that during the past few years. And we're really proud of the team's performance in this. So this quarter, well, we see that this is business as usual. So we will always look at the book and be active asset managers, as we call it. We will always continue to try to improve in all the markets or in the institution overall. However, this quarter was unusually large items. So we wanted to explain it. And we don't think that this will be recurring normally at this size. So it will be much smaller than this. So this is the reason why we highlighted on this bridge. And we haven't in the results in the report labeled them as items affecting comparability as we see them as business as usual. However, we want to highlight the size of them. So we have in this quarter executed asset sales in Italy and Germany, combined with continued efficiency improvements across several markets, and that is resulting in a net gain of 105 million in the quarter. So you see the asset sales in Italy and Germany contributing 150 million. And then you see the restructuring cost in the markets that Harry mentioned. So Italy, Germany, where we've been improving operations. And then we've been updating the operating model in Belgium and the Netherlands and in Cyprus. And overall, the net benefit of this is 105 million. So in Benne we've been transferring staff and outsourcing the operational loan management. So we're much more flexible in our operating model now in the Benne region. We've also been concluding the IT insourcing. It's one of the things that I am incredibly impressed how the IT team has done. So we've been taking 100 external staff and we're now covering it with 50 internal staff. We have had no real issues. It's been smooth sailing. And we've done it with the implementation cost of 30 million overall this half year, not the 50 million that we guided for in Q3 and Q1. So in this quarter, it's 25 million. So we had 5 million in Q1. And the savings remain the same from this work. So it's annualized saving of 40 million, which is in line. We saw a few millions of this coming through in Q2, and the full benefit will then gradually, on an annualized basis, come in Q3. And then we had one-offs for strategic work of 20 million during the quarter. We looked at a very large transaction, which we did not conclude, as we didn't see it as sufficiently attractive. That cost some money, which we don't see that we will do every quarter. We also have looked at, we have restructured some of the internal legal structure, and that has also cost some money that we don't see recurring going forward. So overall, we saw a strong Q2, which was then fueled by these asset disposals and netted with the restructuring. It was a net 105 million benefit. And then we've taken a few non-recurring costs during the quarter, all of all with 18% ROE for the quarter and then 15% ROE for the underlying MPL business performance, which is in line with our financial target. So with this page we want to show you a little bit the key line items in the P&L. We have a strong headline investment number with the book value growth year over year with 13% and this yields a strong growth year over year across the P&L. So you see the headline operating income growth of 34%. The underlying, if you deduct the items that we were discussing on the previous page, the underlying number is 27%. Then repricing, as you can see on this page, is compensated more than an increase in funding cost. Then the healthy portfolio and that's the management strategy is paying off. And the collection performance of 106% is adding to this number. So total costs were held back by last year's urbanization and the continuous improvements work. So the underlying number is 9% growth versus the 13% book value growth. And then the underlying indirect cost is 2%, which is in line with how we want this to develop. So we want to keep that as flat as we can over the years. So all of this leads to a 115% headline profit before tax growth and then the underlying adjusting for these extraordinary items 78% up. We wanted to give you an update what the specialized debt restructure will mean. The banking package was published in the EU official journal during June and this includes specialized debt restructures, SDRs as we call it. The key feature in this is that this status includes an exemption from the backstop regulation. In other words, there's no need for SDR to deduct any capital for purchased non-performing loans. The regulator has put this in place in our understanding to stimulate the secondary MPL markets by adding a stable market participant to the buy side in these markets. So what that means for us is that our core purpose and business is no longer impacted by backstop regulation or will not be when we when we in the first of Jan 25. So this also means that we don't have a need to leverage suboptimal more complex structures to deal with the backstop issues. So securitization or co-invest. and these structures can be used as a strategic product instead which can create a lot of value when we work with partner banks which do need to deduct capital for the backstop. So we believe that this is overall a recognition of the value of specialized banks like Hoist brings to society. We are a banking regulated entity so we live with the same high regulation versus consumers versus capital and all of the things that keep the banking system healthy. And then this is a specialization and we can help the banking sector by becoming an SDR. And overall, this is a simplified business model, as Harry pointed out. It's more cost efficient and it gives us full independence and control of our own destiny. To obtain the regulatory status of becoming an SDR you need to meet several criteria. We've added an appendix in this presentation for the full text and our assessment is that we can meet all of these criteria. The key impact to us will be the 130% NSFR requirement. That's what we've been trying to illustrate on this page. This is performer numbers and illustrations so it's merely indicative at this point. We've taken the So in the chart, you see two bar charts. So one is Q2 pro forma, and this is based on the MPL portfolio and then the liquidity buffer. And then there's a small other assets there as well. So the MPL portfolio clearly doesn't change. That's the underlying business. The 130% NSFR drives a larger liquidity portfolio, so larger liquidity buffer. We've used the 135% here as an illustration. We're not quite clear where we will land. It's not unlikely that we will land at 135, but we're updating all the ICLEP work given the board's decision yesterday to pursue this status, and we will land in new limits during Q3. So we'll revert to this. When we increase the liquidity buffer, we will fund it by 80% deposits and 20% market funding, give or take. And we believe that this will add net funding costs of 70 million per year, so annualized. And in 2024, it will be around 20 million in a build-up phase to the 130%. In the liquidity buffer we will invest into the same type of instruments so this is low risk in line with our risk appetite. What I would like to underline which is important that the full year outlook that we've guided for so the 15% ROE remains and I also would like to highlight that And the STR is the best solution to deal with the backstop in every respect. So it's both most cost efficient. It is then adding to better ROE over time. It allows flexibility and growth. And it's the lowest risk because it is a regulatory status. So we haven't priced this in our financial plans and our estimations beyond 24 until now. So this adds value for us in our plans. It also adds comfort and strength to our guidance to meet our target for the year. If you look at the book, we are investing in new portfolios at attractive ROEs, IRRs. So as I mentioned, the IRR has gone up 70 percent in the front book since 2021. And overall, the average portfolio IRR is up 40% since 2021. That's a much higher yield in book now than it were a few years ago. We continue to focus on developing a diversified book, as you can see on the right. We have moved so the larger markets are more balanced now. We have four markets that are hovering, give or take 20%. We have introduced new markets, the Nordics over the last year. We see that the secured asset class is stable at 29%. And most importantly, I think we believe we have a very healthy portfolio. So we manage it with the aim to deliver stable and predictable performance. And currently we have a, which we've had over the last, years a positive tilt in the book and this is our own internal lingo to to label that we have materially more over perform with portfolios than underperforming portfolios and this gives us the opportunity to deal with issues when they arise and Overall, we believe we have a low credit risk in the portfolio. So it's votes very granular and it's in a very healthy place so overall we see materially more upside than downside in this and And you can see it in the collection performance the last quarters. And as we touched on in previous quarters, past performance in this business is a strong indicator for future performance as well. So we have good hope that this healthy collection performance will continue. You see the capitalization on the left, so we're still above where we have our target, which is a really healthy place to be and in good markets. We have plenty of purchasing power to invest. You'll see on the right hand side, the liquidity service is larger than the average size that we have had it over the last year. This is driven from unusually high term deposit redemptions now during the summer. And then a few large deals that are being funded in July and in Q3. So that drove the liquidity buffer to be slightly higher. And clearly with us now aiming to become an SDR, we will see the liquidity reserve growing over the next six months. With regards to funding, you can see on the right hand side that the funding cost on average is plateauing. We think that it will gradually creep downwards if the interest rate curve that we see in the market continues to materialize. We've been benefiting from this plateauing in the market funding that we have and also by the positive development that we've seen in the business. So our pricing in new bonds and in taps as we call it from existing bonds has been becoming more and more attractive for us which is really encouraging. Now when we go into a second half of the year where we will raise more funding to meet the 130% NSFR requirement for an SDR. We continue to see that the funding base is very stable and it's increasingly competitive still. And the deposit base is made up by 73% of, or the funding base is made up 73% on deposits. So it's still very much a deposit driven funding model.

Yes, thank you, Christian. And thank you all for listening in. Before we open up for questions, I just wanted to add some final commentary here. So, due to the SDR decision yesterday, that we want to pursue that, we will be active in the debt markets now during autumn. both in Euro and SEC currencies. We will therefore, or we will host a capital markets update or capital markets day on the 12th of September. And we are hoping to see as many of you as possible there. We will try to give you a more detailed view on the SDR topic and sort of the trajectory for Hoist and the market going forward as a whole. now uh investing in mpls is is a long-term business portfolios generate cash flows for 10 to 15 years and this is also the way we are building up hoist finance now we'll strive to gradually grow our total portfolio constantly keeping a close look at the returns with sensible investments solid loan management and an iron grip on the balance sheet We strive to deliver increasing shareholder value in the years to come. With that, I think it's time to open up for questions. Do we press anything here?

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key five.

6 on your telephone keypad the next question comes from a card strand from Nadia please go ahead hi everyone and good morning let's start with the question on the general market outlook you commented that you have seen a sort of an improvement in primary deals that you've closed so far in the quarter. Could you comment on both the primary and secondary market, what you see in the outlook ahead?

Well, I think we've stated that we see a solid pipeline and it looks very strong for Q3 and Q4. It is, I would say, broad-based. We see it in Germany, in the UK, in France, in Italy. Spain has been very active for some time. And, well, in the Nordics, there's also significant activity. So now the primary market looks, let's say, more active in the second half of the year, as usual, I should say, than we saw in the first half.

And also you commented that you have closed deals for around 2 billion so far in Q3. Would you say that this is an indication of a significantly higher run rate compared to previous quarters or is it lumpy within a quarter, so to say?

I think we signed, we haven't closed yet. So it's a difference because sometimes closing slips into the next quarter, but we've expected most of these clearly will be, if not all, will be closed in Q3 as well. But just a minor comment on that one. And then the, now I lost the questions.

Sorry, Rikard, can you repeat it? No, it would say that it's an indication of a higher run rate, which we've seen so far in Q3.

I think it's a lumpy business between quarters. So last summer we were bidding on a few larger transactions that we did not win. And then now we're seeing that we are pricing in a very disciplined way. And then this year it's been falling our way, so to speak. We see a very strong pipeline and it's difficult to say if it's just winning a few or if it's just a stronger market. We are certainly seeing a stronger pipeline.

Moving on then to the collection performance where you continue to see performance above your expectations. How sustainable is this? How far into the future can you see when you say that you have a positive tilt also going forward?

We want to manage the book to be providing stable and predictable performance. So that's underlying what we're trying to achieve. And as long as we have a stable a positive tilt in the book that allows us to do that. So the first two quarters of this year has been very strong. So while we cannot promise that that will continue, we see that the collection performance above 100% will absolutely continue as long as we have this positive tilt. We don't see any indication of that changing. On the contrary, it is very stable and a healthy book that we have.

Thanks. And then two of the announcements that you sent out yesterday, starting off with the buybacks of 100 million for the quarter. How would you see the, or I know it's a board question, but how would you see the discussions regarding the balance between continued buybacks in relation to restating an annual dividend? What are the considerations that the board is taking?

I think we have to pause that question until our capital markets update. I think it's better suited for that forum. We have a strong commitment, clearly as a firm, that includes the board and ourselves, to create a lot of shareholder value. And in which form this will take in more exact, we would like to revert in that capital market update.

Understood. And then the last one, just a detailed question there on the increased liquidity reserves that you expect going forward. As I read it in the presentation, you expect it to create 70 million of additional funding costs per year, but this is a gross or net number. I guess the excessive liquidity will also generate some higher NII.

Yes, and I think it's important to say that this is the most cost efficient solution, so to speak. There's plenty of benefits with the SDR, so a simpler organization, more control, independence. And on the cost side, if you focus on that for one second, it is a better cost profile than any other solution that we have ready off the shelf, so to speak. So this adds value to the outlook beyond 2024. And that said, this is a net cost to answer your specific question.

Okay. Thank you very much. Wishing you a great summer.

Thank you, Richard. Likewise. And also, I think it's worthwhile repeating on that last question that the financial targets remain exactly the same. So there's absolutely no change there.

The next question comes from Ermin Kerik from Carnegie. Please go ahead.

Thanks for the presentation and for taking my questions. Maybe to start off, to continue on Rickard's questions. I mean, in the presentation, you're showing that you would need about $6 billion roughly of additional liquidity. You currently have a funding cost of about 4%. And IBO rates are, I don't know, They've been around 4%, but let's call it 3.5%. That would still only put a gap between the liquidity you would earn and what you're paying for the funding of 50 basis points. That would be 30 million, not 70 million. Are you just being very conservative or am I missing anything here?

I think we try to be realistic and conservative so we can deliver what we promise. The 70 million is based on 140% NSFR to begin with. So it's not the 135 that we show on the page. That's one part of it. And then we see that a liquidity buffer will always carry a negative carry to it. So there will always be a cost on the net basis. So that's our current estimate how much it will cost. And then we clearly will try to beat this estimate.

You already have some securitizations done from before. Is it possible to redeem those early? Because I suppose that would be more efficient for you when you have an SDR status.

I think generally, we can speak generally about it, I would say. In many securitizations, as a market feature, there are call features once the nodes become a certain size. And clearly, when we would get to those sort of levels, then we would review those securitizations, because I think the structures are quite complex. So we would prefer not to build more of those. And then these will clearly come to an end at some point.

Great. Moving over to cost, how should we think about the starting base for costs from Q3? Would it be correct to, I mean, if we look at the slide you showed with the different one-offs and transitory items, that would be around 90 million. And then you've guided for about 40 million in savings from the IT insourcing per annum. So would it be correct to have a starting point for Q3 costs being about 100 million lower than Q2 then on a reported basis?

I think the cost that we have on the page with the bridge, they are non-recurring. And then the IT savings, I would believe that we saw some, because this is a gradual phasing, because we replaced external staff with internal staff. And that clearly, when it's coming to an end, some savings were coming into Q2. I don't have the number for how much we actually saw in Q2, but on an annualized basis, it will be 40 million. would say that the majority of those 40 million on an analyzed basis will hit Q3.

Okay great and then on other income even excluding for the 150 million gain from the investing portfolios it's still rather high at 25 million is there anything else in there that's non-recurring?

we are on a continuous basis reviewing the book just to keep it healthy so there's the slight up and down evaluations on the margin and both in q1 and q2 we have a positive addition on these movements so to speak so the slight positive revelation on the book and if we have a a healthy book that will not be unlikely that that we will see that from time to time going forward as well

Sorry, but just maybe I'm missing something. Doesn't revaluation go on impairment gains and losses?

Yes, they do. So we have summarized them in the presentation. It's other incomes. We summarize it into one line. And then in the report, it's more broken out.

But I was thinking in the report, if I follow the reporting structure in the report, there you get to that you have 25 million of other income after impermanence and losses and after adjusting for the divestment in Germany.

So other income also includes, I'm not exactly sure where you look, but other income also includes servicing revenue. We have a small servicing business in Italy.

that's where that lens okay great that's all for me thank you thank you there are no more phone questions at this time so I hand the conference back to the speakers for any written questions and closing comments

Thank you. So we're now trying to familiarize ourselves with this system here. We don't see any written messages. So in that case, thank you all very, very much for calling in now during the holiday period and listening in to this call and for the great questions. We will hope to see you all as many as possible on the capital markets update in September and wish everybody a fantastic holiday until then.

Thank you so much for today and wishing you a continued nice summer. Thank you very much.