Hoist Finance AB (publ)

Thank you very much. Good morning everyone and welcome to this Hoist Finance Earnings Call for the third quarter. I'm Harry Branjes, CEO of Hoist Finance and next to me I have Christian Valentin, our CFO. And in the room today we also have Karin Tike, our Chief Coms and Investor Relations Officer who joined us just before the Q2 report. As usual, before we dive into the report, I just want to talk a little bit about who we at Hoist Finance are and what we are. And I think in short, 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. We therefore have a different regulatory environment than most of our peers and we also have a different funding model. As you know, our main source of funds, some 75% savings accounts from the public. We have savings accounts in Sweden, Germany, Netherlands, Poland. We recently opened up Austria and Ireland and in the UK. Allowing us to match our currencies between the asset and the liability side. The remaining 30% of our funds comes from bonds of different character that we've balanced and make sure that we have a sort of reliable access to the debt markets. So this gives us a considerable funding cost advantage compared to the industry. And of course, this status also gives us stability and benefits going forward. Now many peers in this situation are now going capital lighter focusing on third party servicing. We are and we want to be capital heavy. We have the setup, the access and the balance sheet for it. And now as you have all seen, so on the 30th of September, the Swedish FSA, Finansins Bakrunen published a legal position providing guidance on weights that should be applied to deposits taken in via digital platforms when calculating LCR and NSFR. Now we use digital platforms for our savings accounts offerings outside Sweden. You can use digital providers in many different ways. We do not use any services that aggregate deposits or broker deposits. And we do individual KYC on each and every one of our savings customers. So based on how we use our digital platforms, we do not see that we need to make any adjustments to the way we report LCR and NSFR as a result of the legal position. Now we have initiated a dialogue with the Swedish FSA and it is constructive and ongoing. Now regardless how you count LCR and NSFR, we are above regulatory limits and we are a good way to meeting our financial goals regardless of scenario. We will still target more than 15% ROE, 15% EPS growth and a CT1 ratio of 2.3 to 3.3 percentage points above regulatory requirements. So with that, now let me take you to the key highlights of the third quarter. So as you've seen, Profit Before Tax came in at 369 million sek. We made a larger positive revaluation in Poland and we've taken costs for large transaction that in the end didn't happen. So if you adjust for those positives and negatives, we think a reasonable representation of the underlying business would be some 314 million sek for the quarter. Christian will take you through the bridge later in this presentation. Return on equity came in at a strong 16%. Now even lower by a high tax rate for the quarter. As we communicated in Q1, we have restructured some of the daughter companies in the group and the tax effect has come through now in Q3. On investments, very strong quarter, record quarter in fact for Forrest Finance. We closed portfolio investments of 4.3 billion sek with a very good geographical spread. And before the questions come in, no, this is not the new normal level. As we buy larger and larger portfolios, the volumes get lumpy between the quarters as we previously communicated. We still see significant activity on the market as we are now one third into Q4. And just last night, I had the privilege of signing off our first transaction in Portugal. Medium sized transaction that we are very enthusiastic about. Now so far during 2024, we've invested 8.7 billion sek, bringing the total book value to 29.9 billion, just shy of 30 after a growth of 25% quarter on quarter. We still see fewer participants in the auctions and we see new consortiums forming around Europe, sometimes opportunistically, deal by deal and sometimes strategically. Now we at Hoist, as we previously communicated, are also open to co-investing with partners, especially if it gives us access to new volume or in cases of really large transactions. We have an ambition to grow our portfolio to some 36 billion sek by the end of 2026. We do that through combining our internal capabilities with outsourcing partners. We expect direct costs to grow in line with portfolio growth and indirect costs to grow slower. This operating leverage we can see again now in this third quarter, where the portfolio grows 25% and profit before tax grows 31%. Now the operating leverage is less pronounced this quarter as most of the portfolio growth was booked at the end of the quarter. But if you look at this on a year to date basis, you'll see the trend more clearly and Christian will take you through this in more detail later in the presentation. Collection performance solid at 102. Q3 is always seasonally slower, but this year it seemed like Europe refused to come back from holidays. It was a slower Q3 than usual. However, this gave our business units time to focus on onboarding this record amount of new portfolios that we acquired. So in the end it worked out quite well for us. We expect collection performance to bounce back up in Q4. We got a ratings hike from Moody's, very happy about that, moving us one notch higher up in the investment grade bracket. We see this of course as a great confirmation from an external source of the way we manage our balance sheet and our risk management in general. We were active in the bond markets during Q3 and we issued a senior unsecured or senior preferred for about 1.45 billion SEC and then also a senior non-preferred, a first for hoist finance at attractive pricing. Our capital and liquidity position remains strong. The high investment volume brought the CET1 ratio to more normal levels than before, still well above our internal limits and significantly above regulatory limits. Now looking at liquidity, it's possibly even stronger. As we are building up to SDR, we're also building up our liquidity reserve and it is now 15 billion SEC, a little bit more than 15 billion SEC. Basically half of our MPL portfolio value. So all in all, very happy with this solid third quarter. Now I will hand over to Christian to take you through the quarter in more detail.

Over to you. Thank you Harry. Good morning everyone. Q3 was a really strong quarter for us and we had record investments and solid returns on top of that. So we had invested 4.3 billion in the quarter. We saw that ROE was above 16%. The year to date ROE is above 18% and we are good, we're all well on track to beat the financial target that we have for the year on 15% plus. If you look at the P&L overall, we have strong growth across all key metrics. We have 33% interest income and that's driven by the larger books, so 25%. And given that the interest income is growing quicker than the book growth, that indicates that the pricing that we've done is really supportive. So we've been seeing higher returns than we did a year ago and two years ago. So it's highly supportive pricing in the market currently for us. If you look at the collection performance, it's continued to be stable and strong. It's 102% for the quarter and year to date it's roughly 104%. It was a slight drop over the vacation months and this is normal. This happened last year as well and we see as Harry pointed out things bouncing back to more of the steady state in Q4 as well. Cost growth has been 14% versus the 25% portfolio growth. And I'll get back to the underlying growth of the book in a later page for earnings before taxes bridge to see the like for like growth year over year. Net profit 257 million and that led to the 16% ROE. And we look at for the full year, we expect a effective tax rate of 22 to 24%. As mentioned, this was the highest quarterly volumes on record with 4.3 billion during the quarter. And this is leading to a book value of 29.9 billion, so almost 30 billion. This will likely lead to the highest year in hoist history for the full year. And we have invested across most markets, mostly in Spain, France and Italy. That's where we've seen the largest volumes, but this has been across many of our geographies in Europe. The pricing has been really supportive and if you look at the last two years return levels, we haven't seen these returns since pre-2015 levels, which is highly encouraging. During the last three years, two-thirds of the book has been, the last two years, two-thirds of books have been invested. So we have essentially repriced the asset side the last three years, which is great because we have moved into a new interest rate environment. We are not deviating from our risk profile that we want, so it's all granular risk. We have no single risk exposure, which is relevant to the size of the book. It is still only roughly 20 million, the largest exposure we have in the group. And that's compared with almost 30 billion of total book value. So we've been really disciplined and this year in Q3 we had a really strong investment quarter. Last year we had a slightly weaker one when things didn't go fully our way and this quarter we've seen that we've been managing to win all of the opportunities that we almost wanted. When we look forward into Q4, we have a strong outlook. We believe that it's continuing to be a really supportive market. And seasonally Q4 tends to be the strongest of the year. We don't see a level of 4 billion, however we do see a strong quarter. The last few years we've been working very actively to diversify the book across geographies and assets. And now we see that we have a nice mix across geographies. There's no country above 20 percent. If you look back a few years we saw that Italy had a weight of 25 percent. Now we have almost, let's say, four between 15 and 20 percent, which is exactly where we want to be. And on the secured side we keep growing the share of the secured book. So now it's 34 percent. It's been hovering for a while around 30 percent. This is not a goal in itself, but we do want the diversification effect between assets as well. We are very pleased that we are now, which is classified under the region, however this is not reflected in Q3 numbers because this is happening in Q4. We're really pleased that we have now entered into Portugal as a new market. And we look forward to having coverage of the full Aberian Peninsula. This is a page that we also presented on our Capital Markets Day a month or so ago. And it is updated for Q3 numbers. And in this you can see that our growth journey is very well on track. And this is combined with attractive risk and attractive return, which is really, really pleasing. We've been really focused on getting the right returns and almost always looking for this granular risk that we really like, backed by consumer or a clear asset side. You can see that we wanted to grow starting end of 2021 with 18 billion to the end of 26. And we are 66 percent on the way of that. So 66 percent of the 18 billion growth we have now achieved in Q3, 24. And this is taking us to 83 percent of the 36 billion overall goal, which is encouraging to us. And we are not growing at the expense of profitability. We are very disciplined. So it is a good situation where we see right risk and return and also very sound and healthy growth. You can also see in the geographies, for example, in Q3, 24, it's a really nice mix between the different markets in Europe. We have now new markets. If you compare with two years ago, Sweden, Portugal and a few others, this leads to a larger pool of deals. And we have taken on really strong people that are leading the new markets. We're very pleased with the expansion to new markets in Europe. These are core markets. They're very close to home and they make a lot of sense to enter. Here we're trying to give you a view of the underlying profitability in quarter over quarter. So we have seen a robust underlying performance and the key message is at the center of this page. So the 59 percent underlying earnings before tax growth. And this is the 197 to the 314. We have on the left and on the right items that you could call more non-recurring in nature. So starting from the left, last year we had a 282 EBT and we had a joint venture income, which we do not have anymore. We don't have that joint venture anymore. And then we also had non-financial transactions in the P&L. And clearly we did rejuvenation, which ended last year at this time. And that led us to, if you will normalize for these numbers, 197 million underlying EBT in Q3, 23. The book has grown and also the profitability of the book has grown. And that leads to the growth to 314 million. And then we have a positive revaluation in Q3. I think we're slightly unfair to ourselves. This is part of the core business. We do see that our healthy book will lead to or potentially could lead to revaluations as well. And this is what we see here as well. This is a Polish revaluation. It's one of our best performing markets currently. And when we have such strong collection performance, it's also necessary at some point to take positive revaluations. We don't see that this will impact collection performance in any way. We see that this will continue very strongly. So this is a really strong addition from the healthy book. Then the minus 22 is a project cost that we had for an investment project that we cancelled during the quarter. So we take that as well in this quarter. And that leads to the reported number of 369 for the quarter. Now zooming out slightly to year to date. So January to the end of September, the year to date numbers look equally strong in our view. So we've been growing the portfolio book value by 25% year over year. That has led to operating income growing by 27%. It's driven by repricing growth of the book and also the underlying health of the book, which adds collection performance above management expectations or management forecasts. We are continuously incredibly focused on cost discipline. And that has resulted in that the underlying indirect costs, so the central cost, the asset management team, IT has been very stable year over year. So we're not growing that in any significant manner. If you look at the numbers, we have some slight growth, but that's largely driven by this 22 million of project costs that I pointed out on the previous page. Direct cost on the other hand grows with the book and this is where we get the operating leverage. So the total cost base is not growing in line with the book. It's only the direct cost base that does that. So total cost grows slower than operating income and that gives operating leverage and profit growth of 37% year over year in the reported numbers. Looking at the capital, we have clearly deployed capital in new investments during the quarter. It's a record investment quarter. That said, we still have a very strong capital position. We're significantly above regulatory requirements and also above our own target range that we have set out. And this enables continued high investment capacity, which we intend to use. It is a really attractive investment market currently and we see a lot of attractive investment opportunities going forward as well. An update on the SDR and liquidity. So we have a strong buildup of liquidity. So NSFR is long-term liquidity and LCR is short-term liquidity. So the buildup of liquidity overall to qualify to become a specialized debt restructuring is ongoing. We see that the liquidity portfolio have more than doubled last 12 months, which is 7 to 15 billion SEC. And this is in relation to the MPL portfolio of 29.9 billion. So it's an exceptionally strong liquidity position that we have currently. This is exactly in line with our role in society, that we should be very stable and predictable in terms of being there in ups and downs in the economic cycles. Net stable funding ratio is increasing in line with the plan to meet SDR requirements of 130%. So now we're at 128% and we see that we are increasing steadily and in line with what we wanted and thought. The liquidity coverage ratio is exceptionally strong. You don't see really how strong in the 750%. It's already there strong, but that's an average of the last year on LCR. NSFR is more of a quarterly spot rate because it's long-term, but the short-term we use as per the template from EBA, a yearly average. So if you only look at the CO3 number, we have almost 1200% of LCR, which is incredibly strong if you compare that with 100% regulatory requirements. We're really pleased to note during the quarter that Moody's upgraded us to BAA2, so one notch up in the investment grade bracket. We are the only investment grade rated company in the industry. We were also very active issuing market funding in the quarter, so 1.65 billion SEC. We have a very stable funding base. It now consists of 77% of the funding overall. And we are in the market, as some of you might have noted this morning, with a four-year floating rate note seen on preferred 500 million. We're testing that market now after the Q3 report. Now I'm handing back to Harry again to sum things up before we go into Q&A.

Thank you very much, Christian. Thank you all for listening in today. And before we open up, for questions, then just let me add some final commentaries. So our goal is to become the leading investor and manager of non-performing loans to consumers and SMEs. And this is not some lofty goal or vision statement on the PowerPoint. This is our sincere ambition, and we are working very, very hard to make that happen. Now with the whole industry repositioning, substantial changes are happening across Europe. Actors are trying to find their optimal positions. We have found our position, a capital-heavy institution with solid industry experience and track record. Investing in MPOs is a long-term business. Portfolios generate cash flows for 10, 15, 20 years, and this is also the way we are building up voice finance. We will gradually grow our portfolio from a quarter to quarter. It can be a bit lumpy, but we will constantly keep looking at the returns so that the back book will support us in good times and in bad going forward with sensible investments, solid loan management, and an iron grip on the balance sheet. We strive to deliver increasing shareholder value for many years to come. And with that, thank you for listening, and let's open up for questions.

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 six on your telephone keypad. The next question comes from Ermin Kerik from Carnegie. Please go ahead.

Good morning. Thanks for the presentation and for taking my questions. Maybe the first one would be on this kind of clarification from the FSA. Thanks for the caller you gave initially, but how confident do you feel about your kind of interpretation that it's only if you have kind of aggregation or brokerage by a platform that you should have an impact?

Well, thank you, Ermin, for the question. Well, we feel very confident about that interpretation.

Okay, that's super clear. Thanks. Ben, could you give us any indication to how much you've signed so far in Q4? You've done that in the last few quarters. And so continuation on that a little bit. I mean, if you have such a high win ratio currently, do you consider it to be even more opportunistic and increase the return requirements further when you're pricing? And maybe lastly, given the very strong market activity, very attractive returns, why do a dividend deduction at all? Why not say we'll wait for dividends until the market stabilizes at a lower level? Because currently this is a land grab which Hoist is very well positioned to benefit from.

Yes, so well, if we start with the dividend deduction, I think, well, it is a board decision and of course we have a policy that we are sticking to. Any decision on that will of course be communicated later. With regards to Q4, yes, we usually, well, the activity is very high. Typically what we communicate is from signed deals. So we have a number of transactions that are one but not signed yet. And that's why we haven't given out numbers of that. The number of signed deals is like half a billion or something like that. But we expect that to tick up as the quarter passes. And in terms of investment strategy, yes, we had a high win rating Q3. And if we compare it to last year, we had almost similar pipeline, maybe a little bit smaller, but a very large pipeline in the quarter. We placed bids on IRRs that are lower than what we, than the IRRs that we bid on this quarter. Last year we walked away with very little. This year, even on higher IRRs, we landed a number of deals. So I think for quarter four, I mean, we will always be looking at the returns. We will be, we are always selecting in our investments. We don't go shooting with a, what do you say, shotgun. It's more pinpoint. And so we'll see what comes out of Q4. But the activity is out there and we are selective and very disciplined going through here.

And I can just add to on the returns. I mean, that we are seeing very attractive returns. So we want to invest steadily. And I think given there's such a strong market, we do expect that it will be a record year in terms of volumes. And also with that said, it's not at the expense. On the contrary, it's actually higher than what we expected for the year in terms of returns. So we're very happy to deploy more capital than what we initially might have thought this year because of both the granular risk that we're bringing on and also the higher returns than expected.

Excellent. Then if I may, just one last question on the collection performance. Have you seen any uptick, you know, now early October or so that's giving you confidence that it would step up even though Q3 was still on a good level, but that it would step up as you expect for Q4?

The short answer is yes, we have seen an uptick. We haven't finalized the number. October is not over yet. But yes, we have seen an uptick.

And also to add to that, we have a central team that is doing a fantastic job of creating transparency on both the health, so the quality of the book, and also the collection performance. And we track this with quite both details, meaning bottom up models, and also from different perspectives. It's the classical way of Excel and now I forget the name of the system that we use, but Tableau based. More machine learning and AI and RISC does their own analysis from a second line perspective. And all of these point to both collection performance as we see it in October and also these models are indicating that we will get back on what we see as a more ongoing basis and not during vacation time, so to speak.

Okay, that's great. Thank you very much.

Thank you.

The next question comes from Gustav Larsson from Arctic Securities. Please go ahead.

Good morning and thank you for taking my question. Just a follow up there from Ermin on portfolio pricing and competition. Do you see less competition in auctions in the sheer number of bidders this year compared to last and in relation to this and peers going for capital light business models? Is this a structural shift that leads to higher competition on servicing as well and that would potentially make use of third parties in servicing more attractive for you?

Thank you Gustav for the question. Well yes, I think we do see fewer bidders per auction typically and we do see this combination of new consortia's being formed with let's say industry player plus financial player. We see the American funds actively entering Europe and then typically together with an industry player. Now from our point of view, from a seller's point of view, it is typically easier to sell to a single bidder than to a consortium especially if you have consortia's that are related by both European and US regulations. So for us we think this is a sort of positive development and where this leads on the capital light side going forward I guess we'll just have to see. We see that there is a strong interest of course from our peers around Europe to collaborate with us on servicing and you know it's a great setup for us to be able to either combine that with our internal capabilities or fully outsource to one or more players in the market and basically we use these options differently in different markets depending on what we feel is the best mix.

We also see when more financially driven players are entering back into the purchasing together with industrial players that the financial discipline tends to be higher so they have more outspoken hurdle rates when it comes to returns which we think is beneficial for the market overall.

Okay thank you very much. One question on operating leverage. Thank you for the time you spent on this but how should we think about operating leverage as you grow the book towards your target of 36 billion. If we look at profit before tax adjustments for one of them this quarter and just for the rejuvenation program last year the portfolio is growing more than profit underlying. Is the operating leverage we should expect based on fixed cost? Can you improve collection efficiency or do you see any other benefits just from sheer scale?

I think the profit is increasing higher quicker than the book. I mean given that we are repricing and we'll start by growing the book and then on top of it we are repricing so we have better returns now than we would be used to have so that's driving the net or the interest income and then we're also seeing we're working very actively with the funding mix and that is more or less as expected I would say and the collection performance of the health of the book adds then to operating income which tends to grow quicker as well over time and then the costs we are very focused on keeping those down and those two combinations meaning costs growing slower than the top line leads to the profit is then being levered up by this as well and we see that this will continue and clearly as we grow then we won't be able to keep the indirect cost flat for forever but we do try to do that as long as we can and we see that the underlying indirect costs currently is flat. We have a lot of cost in Europe where we only have 70 people here in Sweden and the rest is sitting out in Europe so mostly in Euro and the SEC has been depreciating against you over the last few years so FX is not favoring that comparison as we are booking all our reports in the SEC so overall we see that the operating leverage is playing to our favor meaning that the profits will grow quicker than the book. I

can just do a short follow-up on that so as we communicated before we insourced our IT which is part of the indirect central cost and had a saving about 40 million a year on that. This has basically enabled us to finance a growth in the investment team considering I mean with all this activity out in the market and new markets coming in etc basically the insourcing of the IT maintenance has basically financed the opportunity to address more portfolios which is a great way of allocating the internal costs.

Also I would add to that actually that we believe that having it insourced is the right way of doing it and also the cheaper way of doing it so we're trying to do things in the right way with high quality clearly and the right cost level.

Okay thank you one last from me then I read in the report here that for every one billion SEC added to the portfolio now you're adding half a billion to the liquidity portfolio. Is this the current level you are doing to reach net stable funding of 130 percent in the short term here or is this the sustained level we should expect going forward in relation to NSFR and the STR designation?

I think if you do the math then the 50 percent liquidity buffer versus the MPL portfolio is roughly right that's where we land in the new world of STR so to speak. So it is an incredibly stable entity and I think there's some now with the risk of coming slightly technical we call our assets MPLs. They're very different than what the originating banks have on their balance sheets so we buy them at the massive discount so on average more than 90 percent so it's not the same risk profile MPLs over MPLs and in NSFR you have a weighting on MPLs which is more correlated to the original risk not the risk that we carry so we believe that we are both having a really stable and predictable asset side because this credit risk has been materialized and that's not reflected in the NSFR measure so we do believe that we're having a really really high liquidity and probably if you would ask us the true underlying risk it's probably too high I would say but that is the the price of becoming an STR and it is a really supportive way of dealing with the banking regulation and serving the banks within the role that we have.

Thank you very much that was all from me.

Excellent thank

you. The next question comes from Marcus Sandgren from Kepler Chuvriaks. Please go ahead.

Yeah thanks morning everyone and congrats to a good result. Now I was just thinking and coming back to Ermin's question so when you talk about growth portfolio growth what is the are you limited by capital or is it more internal what you can what you can choose? What do you basically is that is that what makes you not increasing your your portfolio growth target and yeah I had a couple of more questions but if you start with that please.

Good morning Marcus and thank you for the question so we've just deployed 4.3 billion but no I think there is a market out there the market is very strong and so there is a lot for sale. We are addressing that market to the best of our abilities at the right return levels. It is you know buying portfolios at the wrong price is not difficult so we but getting them at the right return so that they will support you for the next 15 years. I think that is that is the trick and that is what we are that is what we are very very disciplined looking at so I think we will continue to deploy roughly around the pace we're at at the moment we think depending on the market conditions and what is out there but we have no target to deploy for deployments sake so I think that's that I think is the yeah the general position here

and I think we clearly make sure that what we buy we can on board in orderly and in a good way and having a a mixed low management model so to speak with having the strategic low management internally and being able to if relevant leverage partners that makes us more nimble and agile in this as well which is one of the key points by setting this operating model up.

Okay thanks and then secondly I was thinking about the impairment gains you're making it seems like you you're making I mean they come in steadily basically in 2023 and 2024 while before it was much lower or even negative is that because you're you're being more prudent now when you book portfolios or is it just coincidences that it has happened on the portfolio that you have acquired?

I would say that it's absolutely no coincidence that's the starting point I think there's two things to this right so when we buy portfolios since inception we have an expectation of the cash that will come in through repayments and that expectations on average since inception we have beaten by eight percent so we believe that we are very strong at evaluating and forecasting the cash flows that we see coming in from the the portfolios that we buy so that's the starting point and then clearly things change and we get better market change regulation change etc so you need to take a look at the current performance in all of those portfolios as well and that's the management of the book and we've been really carefully managing the book the last three years to make sure that we have a higher degree of overperforming portfolios than underperforming portfolios and given that we have more overperforming portfolios in the book than underperforming that's what we call the positive tilt and what I tend to a healthy book that gives us a stable and predictable collection performance which statistically should lead to that people beat our management forecast because we have a larger share of overperforming books so I think this is and this is the the work that has been ongoing and we've been very actively both investing at the right price levels and the right risk cleaning out the risk that we don't want in the balance sheet so we we've gotten rid of we had a slightly larger exposures those we have sold because we're not really focused on those we won't have granular statistical risk in the book which is exactly what we have now and then at the right times right returns we buy and then we try to manage that very conservatively which leads to a really long-term and healthy performance in our view

okay very good and then lastly is there any basil four effects we should be aware of coming in in q1 next quarter or next year

no I think the I mean the clearly regulation changing and we're adapting the largest largest impact will clearly be from str so so that's the major driver of of how regulation is impacting us

yeah okay thank you

thank

you

there are no more questions at this time so I hand the conference back to the speakers for any closing comments

so thank you all very much now we see we have questions also coming in via text or via the screen and I don't I don't think you can see those right so and so from Robert dinic we have do you have any guidance regarding the timeline for the nfr nsfr discussion with the fsa no this is an ongoing dialogue and it is you know as we say it is constructive and I think that's it is a dialogue so we'll keep it that way simply should we move to the next one uh there

was a question also around if we don't scenarios and in if we if we would apply this actually selling targets of the legal opinion if we would still be above 100% yes we would be absolutely be above 100% we would also meet our financial target of 15 plus percent in all the stories that we have done

and then there is a question from thor what is the behind issuing senior non-preferred bonds compared to what you have issued in the past I will hand this one over to Christian

yes and the rationale is that we want I mean starting from the top we want the well diversified and balanced funding mix and this is one way of working with the capital stack which we think is productive it's not many smaller banks that does this but we believe that it's the right way forward for us to have this part of the funding mix

all right what else do we have there anything there at the bottom no okay that's

moderator I think we have covered most of the the questions that we can see it's slightly difficult to follow on the screen actually but I think we answered all of the questions that I can see

yeah and to pair thank you for a great quarter that's all I have to say thank you very much we will keep working hard and thank you all for listening we wish you a lovely rest of