Turkiye Vakiflar Bankasi TAO

IST:VAKBN.E

Earnings Call Transcript 2021-Q3

[Operator]

Ladies and gentlemen, welcome to the VakifBank Audio Webcast Third Quarter 2021 Earnings Results Conference Call and Webcast. Thank you very much for standing by. [Operator Instructions] And to participate in our written Q&A, just to have your question into the Ask a question text area and then click the submit button. With that, I will now hand you over to your host, Mr. Ali Tahan. He's the Head of International Banking and Investor Relations at VakifBank. Mr. Tahan, the floor is yours.

[Ali Tahan, executive]

Thank you. Thank you, Rob. Good afternoon, everybody, and welcome to earnings presentation of third quarter of VakifBank 2021. Without losing any time, I will directly jump to the presentation as usual.

On the first page, in terms of net income, this quarter, our quarterly net income came at TRY 767.4 million, which is up by 16.2% compared to a quarter ago. And this number of TRY 767 million is also above on the market expectation average numbers. And with that number in third quarter, since the beginning of the year, 9-month cumulative net income of the bank increased to almost TRY 2.2 billion. One of the important highlights of the quarter related to profitability is related to core banking revenues -- core banking revenues, consisting of net interest income and net fee and commission income materialized at almost TRY 5.9 billion, which is up by 39% up compared to second quarter.

And on top of that, we also have a good performance on preprovisioning profit. Our preprovisioning profit is up by 142% on a Q-on-Q basis from TRY 805 million to almost TRY 2 billion. And it shows that we continue to have a very conservative approach in terms of provisioning. And as a result of that, dividend touched our preprovisioning, we are still keeping our TRY 1.4 billion preprovisions untouched in our balance sheet. And on top of that, NPL cash coverage ratio, despite write-off, we will discuss in detail soon, despite a sizable write-off amount, still, we end up EBIT above 78% in [indiscernible] coverage ratio. And as a result of the total NPL coverage ratio further increased to 126%.

On Page 3, you can see the key highlights of the quarter. In terms of the balance sheet growth this quarter, we hedged a total loan growth of 4.2% Q-on-Q and total loan amount reached to TRY 478 billion. In terms of the currency breakdown, quality in the lending activity was mainly coming from Turkish lira site. Turkish lira loans were up by 5.3% Q-on-Q and 13% year-on-year. And this quarter, unlike first half of the year, hard currency loans in dollar terms were muted. We had a very slight contraction in our hard currency lending in quarterly terms, which is down by 0.6%.

Another important key highlight of the quarter was related to high-quality core banking revenues consisting of net interest income and net fee and commission income. As we discussed, it was up by almost 9% Q-on-Q reached to TRY 5.9 billion and within the revenue breakdown, the share of core banking revenues further increased to 82%. Another good news and another important key highlights of the quarter was on the net interest margin side. In line with our guidance and expectations, we started to see more visible improvement in our third quarter financials.

Quarterly net interest margin increased almost 90 basis points from 2% to 2.9% earlier. And the good thing is we expect even accelerated net interest margin improvement will be much more visible in the final quarter of the year, mainly because of 2 factors. One of them is related to additional CPI linker income support. We expect almost TRY 3.8 billion intake income from CPI linker portfolio just in 1 quarter period of time. And on top of that, in line with the decline over policy rate of Central Bank of Turkey compared to the beginning of the year and compared to the third quarter. Even we expect there will be substantial contraction also in our Turkish lira cost of deposit as well as swap costs. And therefore, by far, Q4 net interest margin will be the strongest period of the year.

Apart from those 3 items, similar to first half of the year, we continue to perform a very disciplined cost management. Total OpEx is up by 12.2%, which is below the annual CPI. And in terms of the breakdown of OpEx, HR cost is up by 11.2% year-over-year and non-HR cost is up by 12.9% again year-over-year. On the NPL side, despite TRY 828 million write-off without any P&L impact because both the principal amount of TRY 28 million as well as 100% provisioning for such loan and TL portfolio, letting off from our balance sheet, it was a move simply to clarify and clear our balance sheet. But under normal conditions, after such sizable write-off, our NPL coverage ratios were supposed to be lower than what we are reporting in general. But dividends we got from our provisions, dividends we got from our consolidated approach, therefore, we continue to have strong coverage ratios. NPL cash coverage ratio still came at above than 78% and total NPL coverage ratio further increased to 126%. One final point related to key highlights of the cost that was related to liquidity ratios, strong liquidity ratios are maintained. Total ICR as of September end came at 132%. And on top of that, we were even much more comfortable on the hard currency liquidity side, mainly because of the totalization on the onshore deposit market and hard currency ICR ratio came at 373% as of September.

I am just moving to Page 5 in the presentation just to provide a much more detailed information related to net interest margin. As of September end, cumulative net interest margin in the first 9 months of the year came to 2.3%. It was less than 2% above June, and it increased by almost 24 basis points in just one quarter period of time. And thanks to additional support factors, we expect we will be closing year of 2021 in line with our expectation in terms of net interest margin guidance. The numbers as of June end, we were expecting full year net interest margin will be slightly lower than 3% earlier. And with the very strong Q4 in terms of net interest margin components, we understand that this guidance will be met without any problem.

At the right-hand side of below chart, you can see detailed information related to CPI linkers, given the fact that October inflation is announced. Now it is certain of interest income how much we will be booking as of fourth quarter. In this Q4, we will be looking above than TRY 3.8 billion interest income, which is almost TRY 1.2 billion higher as of September, as of third quarter. Given the fact that in the third quarter of the year, we were using one of the most conservative and lowest CPI estimate for the year-end. It was 16.45% as of that numbers and it was one of the more conservative one for this very strong conservative CPI estimate in the first 3 quarters of the year and it will enable us to enjoy very higher interest income within Q4.

On top of that, I just want to take your attention to one final important point on the CPI linker portfolio. If you look at also the amount of CPI portfolio, you can see that deliberately, since the beginning of the year, we are accumulating more and more CPI portfolio. Our CPI portfolio was around TRY 43 billion in the beginning of the year. Each and every quarter, we further accumulated our CPI portfolio amount. And as of today, our CPI portfolio almost reached to TRY 53 billion.

On next page, Page 6, you can see the core banking clearance. We already discussed about that. And therefore, for the sake of the time and patent stage.

On Page 7, you can see the detailed information related to fee and commission income. Our fee and commission income -- net fee and commission income is up by 10.4% Q-on-Q. At first 9 months, cumulative fee and commission income is up by almost 18% year-over-year. And as of September, we are even higher than our last guidance on the fee income. Remember, as of June end, we gave guidance, low teens full fee income growth. However, we even had a better key performance above third quarter. Therefore, as of September and on a cumulative basis, we have almost 18% annual net fee and commission income growth.

On the right-hand side of the below chart, you can also see the breakdown of sources via payment system, cash loss and noncash flows, especially this quarter. Quarterly fee income was supported by noncash-related fees, which is up by 9%. And in terms of the annual growth, the most visible contribution can be tenant systems. And as a result of this relatively accelerated improvement in our fee income, fee-related KPIs continue to improve and fee to OpEx products increased to 46.4% as of September, which was slightly above than 44% adoption. And those ratios are also improving in a positive trend.

The last page I would like to mention on the P&L is related to OpEx side, disciplined cost management in place without any exception. Our total OpEx growth came at more than 12%. And if I ever understand, it is one of the lowest OpEx cost within the peer group Bank of Turkey. And in terms of the breakdown, both HR cost and non-HR cost increase are also under control. HR cost increase is on a cumulative basis, up by 11.2% and non-HR cost increase is up by almost 13%. Both numbers are also below the annual inflation figures.

On Page 9, we can move to the balance sheet. This quarter, we have around 5.3% Turkish lira lending growth, and we had a slight contraction in dollar terms on hard currency lending growth. And in terms of the portfolio breakdown, we had 4.2% semi-quarterly lending growth. We had 3.9% corporate and commercial lending growth, and we had 4.6% retail quarterly lending growth. And in this sense, we can say that the quarter in the Turkish lira lending quote was also based on between the portfolios coming from both SME, retail, corporate and commercial language.

On Page 10, you can see more detailed information related to lending portfolio. The only point at this stage, I would like to take your attention is related to further collection out of CGF portfolio, total CGF portfolio came down to less than TRY 44 billion. Remember a quarter ago, it was above TRY 50 billion. So therefore, both from retail CGF portfolio as well from nonretail CGF portfolio. We continue to collect a sizable amount of principals, and it is also going in good shape.

In terms of the composition of CGF loans, the composition is much more similar to what we had as of June, almost 50% of them are coming from SME lending. 44% is coming from corporate and commercial lending and less than the remaining 14% is coming from the retail portfolio.

On Page 11, we can see asset quality related ratios and numbers. Our NPL ratio, this quarter, came down to 3.47% which was 3.66% a quarter ago. Of course, the write-off amount of TRY 828 million, also high NPL ratio to come down. If we wouldn't have such NPL write-off, our NPL ratio would be flattish on a quarterly basis. There wouldn't be any change in our NPL ratio. And on top of that, by the beginning of Q4, there will be some normalization in the NPL definition rather than counting 180 days, they will be counting 90 days for any loan to become NPL. And the BRSA forbearance measures also creates around 60 basis points impact in our NPL ratio. In [indiscernible] today, if we are fully using the regular NPL definition, our NPL ratio would be 60 basis points higher than what we are reporting.

In terms of the Stage 2, this quarter, our Stage 2 ratio increased to 8.7% from 8.2% earlier. We had 50 basis points increase in our Stage 2, especially we had one midsized commercial company under restructured parts within our Stage 2. It became Stage 2 as of third quarter. We already restructured it by taking additional collateral. And it is a company operating in proven industry. And as a result of this, we see increase in our restructured and total Stage 2 portfolio, and that was the main driver of increase in our Stage 2 ratio.

The last point related to asset quality is related to net cost of risk. Net cost of risk of the quarter came at 74 basis points, which is substantially higher compared to what we had in the first half of the year. And as a result of that, cumulative 9-month net cost of risk further increased to 22 basis points earlier. And at the right-hand side below chart, you can see also the numbers we are using when we are reaching to this, 22 basis points net cost of risk.

On Page 12, you can see the composition of deposits and deposit costs. This quarter, our quarterly deposit growth is up by 7.7% in total. In terms of currency breakdown, we had 7.8% increase in our Turkish lira deposit portfolio. And on top of that, we also have around 4.3% increase in our FC deposits portfolio. The share of demand deposits increased slightly to 22%. And in terms of the currency breakdown, we are still having a ballast composition. 52% are coming from partial recovery and the remaining 48% are coming from the hard currency deposits. And the composition of the deposit via customers classification is also stable. Around 2% is coming from retail deposits, around 16% coming from state deposit and the remaining 46% mainly coming from SME and corporate and commercial deposits.

On next page, you can see external funding side, which is extremely well diversified as usual. Similar to overall trend on the Turkish banking sector as well as global [indiscernible] sustainable and sustainable related funding, transaction are at the center of our funding transactions.

The number as of April, we did the first sustainable syndication loan, and we are also on the market for the renewal of [indiscernible] syndication deal, which is the second syndication deal of the year, similar to [indiscernible]. It will also be a sustainability need. So that by the end of 2021, all of the syndication loan facilities of VakifBank similar to prior tiers will be sustainable. And on top of that, in the [indiscernible] September, we also had a very successful sustainable eurobond issue, which is the second sustainable eurobond issuance of VakifBank with the amount of $500 million. As such issues total sustainable new bond issuance of the VakifBank further increased to TRY 1.25 billion, and that number speaks itself. As of today, it is the highest amount of sustainable eurobond issue among Turkish banks in Turkey, and the first sustainable eurobond issuance, which we did by December 2020. Also got the award of FI bond deal of the year in bonds and loans via the [indiscernible] investors and all related parties. As of September, we have around $14 billion international funding. Out of this TRY 4 billion will be redeemed in a year's period of time and remaining above the $10 billion are long stated, which is above 1 year final maturity.

On the next slide, you can also see the capital ratios. Our total CAR Q2 came down to 14.26% as of September, mainly because of the currency depreciation impact. And in line with that, we also have contraction in our Tier 1 and CET1 ratios. Tier 1 and CET1 ratios came down to 12.39% and 9.88% expecting as of September. And we also put, as always, in a very transparent manner, our solvency ratios without BRSA forbearance measures just next week.

At the last page, I would like to take your attention related to sustainable banking approach. As you know, VakifBank is one of the most active bank on sustainable banking site. And we are also glad to inform you our ESG risk rating scores further improved to 19.8%, which is under low risk category. And as far as we know, debt rating itself is [indiscernible] best commercial bank of Turkey. For the sake of the time, I don't want to go through the details of Appendix pages. Thank you very much for listening to me. And let me leave the floor to Rob again to move to Q&A. Thank you, very much.

[Operator]

[Operator Instructions] All right. We have a question here from a caller. Yes, indeed, I believe it's Mr. Harun [indiscernible] . Please go ahead, sir. Do you have a question? Okay. Apparently not. Right. So question here from [indiscernible] from BGC Partners. Do you have a question for Mr. Tahan? [Operator Instructions]

Okay. Mr. Tahan, we don't seem to have any more -- or any audio your questions at the stage -- we do. We do. Here we go. No, we don't. Right. This is Cihan Saraoglu. I hope I'm saying your name correctly, from HSBC. Do you have a question?

[Cihan Saraoglu, analyst]

Yes. Thank you very much. Can you hear me?

[Operator]

Yes. Go ahead.

[Cihan Saraoglu, analyst]

I have 2 quick questions. One is about your operating expenses, which [Technical Difficulty]

[Operator]

We apologize for that. Let's see if we can get him back. He's gone right off. All right, if you could just -- you can ring back shortly. So there we go, ladies and gentlemen. It's one of those technical days. We are experiencing some technical difficulties. [Operator Instructions]

Perhaps we can get that gentleman back. All right. So you there, sir? Please go ahead. Okay. All right. I think Mr. Tahan, maybe we can -- while that is all getting sorted out, perhaps we can kick off with some -- if we have any written questions, we can come back to the audio questions.

[Ali Tahan, executive]

Sure. Sure, Rob. Actually, we have 2 written questions. One of time is related to sensitivity to analyze both the depreciation of Turkish lira on capital side. [indiscernible] from the [indiscernible] partner seen the impact of [indiscernible] depreciation on Turkish lira in our [indiscernible] . This is also something we put in our presentation, but not in the form of 10% depreciation, but these depict that the [indiscernible] every time sent on [indiscernible] today Turkish lira dollar price is 9.7. If it goes to 9.8, then every $0.10 increase has around 4 basis points negative impact in our volume ratios. This is the first question.

The second question is coming from Valentina Stoykova from Barclays. Her first question is, can you please give us more color on the provision versus how sustainable this trend is? [indiscernible] do you see cost of risk going forward in Q4 and 2022? Thank you very much for this question, Valentina, Actually, in terms of the net cost of risk, as of September, it was very higher compared to what we had in the first half of the year. We had a negative net cost of risk in the first half of the year. But the conservative side, we continued to have more provision in third quarter. And therefore, as of September end, it came at 22 basis points in the first 9 months of the year in average.

For Q4, I believe it will be a similar trend compared to third quarter, as of third quarter only, it was 74 basis points. So it will be another similar quarter without giving up some provisioning. We will continue to put more provisions especially for stage 2 and NPL portfolio. Therefore, as of June end, we were guiding less than 50 basis net cost of risk for the full year of 2021, But with the expectation of a similar trend in Q4 compared to Q3, we may say that the average net cost of risk will be hovering around 40 basis points [indiscernible] for this year.

For next year, I mean, the budget discussions not started yet. Let us first discuss this internally. And once we have initial budget feedback from our related head of dispositions, of course, we will also provide our expectation for next year.

Valentina also had a second question. She is asking, can you also share your views on how you see 2022 shaping up with regards to loan growth, margins, asset quality, profitability?

Actually, I think for VakifBank, the most challenging part was the full 2020 and first half of 2021 in terms of profitability and net interest margin. We started to see improvement in third quarter, but more and more strong profitability improvement will be much more visible in Q4, both in terms of P&L as well as in terms of net interest margin. Maybe in Q4, profitability and P&L amount of VakifBank will be even close to what we did in the first 3 quarters of the year. So in this sense, you can understand how Q4 will be different than the first 3 quarters of the year. And as a result of that, we are still sticking to our guidance of high single-digit average ROE for the full year.

And as of September end, on a cumulative basis, our average ROE is moving around 6%. But still, for the full year, we believe that high-single digit, like 9%, average ROE can still be doable, thanks to a very strong Q4 2021. And by looking at from this angle, we understand that we will be starting the year of 2022 with a very good level of net interest margin because the pricing gap already fulfilled and additional cost of funding decline is putting our cost spread extremely strong position compared to what we had in the first 3 quarters of the year.

So therefore, especially from net interest margin point of view, it will be a very good start to the year. In this sense, after correction year of 2021, for next year, we are much more optimistic. I mean, this year, there was a divergence between state banks and private banks in terms of profitability. But for next year, we believe there will be some normalization. We will be catching up to our normal performance and normal profitability. So the budget is not ready yet again, but in our base case scenario, just as a preliminary idea, we can say that we are extremely optimistic for net interest margin as well as for profitability. But again, the budget process will be completed by the end of December. And once it is ready, we will be discussing the expectations for next year more in detail.

And for the last question of Valentina, how much hard currency liquidity do you have in third quarter versus TRY 14 billion international wholesale funding? As of now, we have almost $7 billion short-dated free FX liquidity. This is actually why we have such secure FX RCI ratio actually. And most of them are part of Central Bank of Turkey. And our short-dated redemptions up to 1 year is $4 billion. So as of today, we have much more ample hard currency clear liquidity to cover $4 billion short-based redemptions.

And her last question is related to expectations for Eurobond issuance, both [indiscernible] ESG versus [indiscernible] in the near term. On individual final discussion, but as a preliminary idea, I can say that for next year, we have both redemptions of senior and subordinated debt. We had a redemption of $500 million senior Eurobond in the month of April 2022. And on top of that, we have a total redemption of $900 million [indiscernible] both old style and new style in November 2022. This was also under discussion. But as of today, preliminarily, we can say that, we will continue to be active on the [indiscernible] side for next year. As you know, VakifBank is an active player on eurobond issuance side. For next year, given the redemption profile under normal conditions, if investor appetite is that if market conditions are supportive, these may still consider Eurobond issuances.

To the extent possible, we would like it to be ESG [indiscernible]. We are also working on different projects at the moment. But in terms of the senior those who have sub debt, I don't personally expect we will be looking to Q2 sub debt in dollars. But probably for liquidity purposes, we may be looking for senior dollar Eurobond issuances for 2022.

And we have one more additional question from Valentina. Her last question is, do you have any plans to start reporting Scope 3 emissions that include loan admission portfolio emissions? Can you please give out any timeframe regarding this reporting? Actually in the beginning of this week, we had an internal meeting with our top management on this issue. So in this sense, this question is extremely timely, Valentina. Thank you very much for asking this question. We now decided to establish a separate team, separate department within our credit risk management team just to be focusing on this area. And to do this in a short period of time, hopefully by the end of 2022 debt reporting, which is further expanding to Scope 3 will also be available for all investors and for all stakeholders.

We also have one more question, interesting question from [indiscernible] from BBVA Asset Management. Actually, [indiscernible] has 2 questions. How do -- his first question is, how do you see the margin trend quarter-by-quarter next year?

Very frankly speaking, [indiscernible], this is also under discussion. But the good thing is, replacing debt all at full speed, unless we don't end up with a sizable and dramatic price rate hike in the macro front, I think especially Turkish lira cost of [indiscernible] will be in a very positive trend during the entire quarter of 2022. In terms of trend-wise speaking in our base-case scenario, we are much more optimistic for Turkish lira cost of [indiscernible] next year. And in this year, so far, security yields and a fixed cost to debt [indiscernible] those supporting the net interest margin side, but Turkish lira cost of debt were under pressure because of the repricing gap. But given the fact that this replacing debt is over, each and every quarter, especially with the cost of farming declining, Turkish lira fight, that will be sizable improvement into our Turkish lira cost of debt.

But as of today, quarterly evolution not available even for us. For the second question, following low OpEx growth in 2021, how do we see the OpEx growth next year? Thanks [indiscernible] thanks to you and the team. Thank you very much also for this question [indiscernible]. I mean, cost discipline is one of the key [indiscernible] of our top management, especially this year is very crucial because we were passing through relatively difficult periods because of the pressure of the net interest margin. And this disciplined cost environment enabled us to produce some ROE. But under normal conditions for next year, OpEx growth should be much or less in line with this CPI effect. As we know traditionally, our OpEx growth almost, always comes slightly above than the CPI effect. Over the years, we can say that average OpEx growth is like CPI plus 2% or 3%. But this year, it's not exceptional. I believe with normalization on the profitability for next year, there should be also some normalization on the OpEx side.

And as a preliminary idea again, for next year, we can say that it will be slightly above the CPI effect.

And the last question on the written part is coming from [indiscernible]. Are we looking at a further sustainable bond issuance in full year 2022 or in the latest indication [indiscernible] bond issue probably we are [indiscernible] for next year?

Thank you very much, Dan. Actually, the budget for next year is not ready. But given the fact that we are very upskilled bank on sustainability front, we would like to increase the share of sustainability funding and green assets in our balance sheet. In other words, this year is related to funding and this ESG-related OpEx, we have a strong appetite to increase the amount and issuance of those products in our balance sheet. And by the end of 2021, entire syndication loan facility will be sustainable. And for next year, we'll try to keep it [indiscernible]. And to the extent possible, we would like to turn our external funding debt to the ESG-linked format. It will not be hopefully limited to only sustainable linked syndications.

To the extent possible, we will be looking for sustainable linked other funding tools, including repo, including Eurobond issuance, including all possible ideas. That will be our motivation, it will be our intention. But again, we will be sharing more detail once the budget for next year is ready, which will hopefully will be available by the beginning of December.

Rob, actually, we don't have any questions on the written side. If there is any on the audio side, we can continue with that.

[Operator]

Thank you, Mr. Tahan. Yes, indeed, we're going to return to Mr. Cihan Saraoglu from HSBC. We have got him back. If you could go ahead with your questions, sir.

[Cihan Saraoglu, analyst]

Hello. Can you hear me now?

[Abdi Ustunsalih, executive]

Yes, we can hear you.

[Cihan Saraoglu, analyst]

Apologies, probably you have already answered my questions, I got cut off. But my question was about, first, HR expenses, why they are so much below inflation? And second is, since you are going to have this very strong NII in the final quarter, would you consider to put some provisions and increase your provision coverage? And again, sorry for duplicate questions.

[Ali Tahan, executive]

No problem. Thank you very much, Cihan. Actually, with the first question, we had some systematic change in our wage system by the end of second quarter. And in line with that, HR cost increase came lower than inflation itself. But overall OpEx side, I mean, especially given the difficult period of Q4 2020 and first half of 2021, because of the main pressure over net interest margin and profitability as top management, the top that they should be much more sensitive and careful in terms of cost management.

Therefore, these are paying additional focus on disciplined cost management. But a couple of minutes ago, we also discussed about the OpEx trend next year. I believe [indiscernible] bank OpEx growth for this year was exceptional, under normal conditions, if you look at from a longer-term perspective, our OpEx growth should be above that CPI. It should be CPI plus something, CPI plus 2 or CPI plus 3. And given the fact that base case scenario, at least in terms of current life, there should be normalization of the net interest margin trend as well as rate front. So in line with that normalization, I believe OpEx and cost growth will also be coming back to normal, a bit above CPI number for next year. But in this fiscal year of 2021, both HR cost and non-HR cost deliberately was below CPI.

For the second question, I mean, indeed, NII will be very strong. It will be strong because of additional support from CPI linkers, and it will be strong because of the expected substantially lower cost of finance decline as well as [indiscernible] cost decline. So therefore, Q4 NII will be way stronger than what we had in the first 3 quarters of the year. But still, it will be a contrast manner will be reflected to bottom line. [indiscernible] why we are still stick to our high single-digit ROE guidance for the full year, even though in the first 3 quarters of the year, we had 6% average ROE. Still, we expect for the full year, high single-digit ROE, which refers to 9% earlier, in average, will be achievable. So in this path, most of the improvement in net interest income to the most possible side will be reflected to bottom line in Q4 so that early guidance will be fulfilled. On the provisioning side, we are already very conservative. But if needed, without any hesitant, we may also put more provisioning, especially for problematic Stage 2 and Stage 3 portfolio as always. I hope those answers are -- those explanations are answering your questions.

[Operator]

Mr. Tahan, we don't seem to have any more audio questions. If you have any more written questions.

[Ali Tahan, executive]

Actually, no, thank you very much for today's organization, Rob. And thank you very much, everybody, for joining to today's presentation and Q&A session. Looking forward to seeing you in the shortest possible period of time. Thank you very much.

[Operator]

Thank you very much. Thank you, Mr. Tahan, and thank you, ladies and gentlemen. I believe that concludes today's webcast call. We thank you for your participation. You may now disconnect.