Bankinter SA

MAD:BKT

Earnings Call Transcript 2018-Q2

[David Lopez, Director IR]

Good morning, everyone, and welcome to Bankinter First Half 2018 Results Presentation. As usual, our CFO, Gloria Hernández, will guide you through the main highlights of the results today.

[Gloria Hernández García]

Thank you, David, and good morning and welcome to our half year results presentation for 2018.The financial information on this semester was posted on the website of the CNMV a few minutes ago prior to the market opening. All related documents can also be found at this time on the Bankinter corporate website.Here is a summary of the main indicators from the last 6 months compared with last year. Our loan book growth intensified in the last quarter despite the constantly shrinking domestic market. Our gross operating income continued to grow at a steady pace, even though the second quarter, as you know, bore SRF contribution expenses.Here it's important to remember that some lines in last year's P&L were re-written to standardize the accounting method for extraordinary revenues from Portugal for both years so they would be comparable.Our NPL ratio continued on a downward trend, decreasing by almost 50 basis points in the last 12 months to 3.25%. Net profit amounted to EUR 261 million, an 8% increase from a year ago. Lastly, our CET 1 fully-loaded capital ratio stood at 11.55%, in line with our guidance. And our ROE remained above 13%, which was also an improvement on last year.As usual, we will first look at our performance in the last 6 months and the quarter alone, then review our quality of assets, to end with a summary of the half year performance of our various strategic business lines.If we look at our half year income statement line by line, we can see a continuation of very positive trends in earnings. Our net interest income grew by almost 7% with respect to the first 6 months of 2017 and our net fee income was up by more than 7%.Regarding net interest income, I should point out that since January this year most extraordinary revenues from recovered NPLs in Portugal previously recognized as net interest income are now recorded under provisions in accordance with new IFRS 9 rules.To make possible the comparison, EUR 22 million in half year income from 2017 recorded as NII are now being re-written under NPL provisions, where they are -- they also have a significant positive effect as we shall see further on. Therefore, in a comparable basis, as shown in the table, net interest income grew by 7% in the last 6 months and remained steady in the quarter despite higher extraordinary revenues from Portugal in the previous quarter. For this, we can reaffirm our mid- to low single-digit guidance for the year.As we will see, this is due to the expected increase in lending and our resilient customer margin. Half year fees grew by over 7%, in line with our high-single digit target for the end of the year and improving on last quarter's fees by 6.3%.Other operating income grew by 21% with respect to the same period last year, mainly due to the solid performance of our insurance, LDA. Quarter-on-quarter, however, it fell due to SRF payments made last quarter.Our gains on financial transactions continued to be very low, especially this last year contributing only EUR 10 million to earnings, 45% less than in the previous quarter. All in all, our gross operating income amounted to EUR 977 million, up 8.5% from 2017 and with better quality as the weight from extraordinary revenues decreased.As for our transformation and operating cost, they grew at slightly under 7%, driven by Línea Directa as in the first quarter to boost premium growth.At this point we maintain our mid-single digit guidance across the group for the end of the year. Despite this growth, our positive revenue performance helped our half year operating profit to grow by more than 10% with respect to 2017.Lastly, loan loss provisions and other contingencies, including losses on sold assets in the last semester amounted to EUR 116 million, up 18% from a year ago. This increase reflects our efforts to strengthen coverage for future contingencies, mostly for multicurrency loans, which afforded us our excellent operating profit in the period and will continue to a lesser extent in the coming quarters.As we will see later, it is important to note that the cost of risk of our banking operations continue to hit record lows. Ultimately, our half year net profit at EUR 261 million grew by 8.4% with respect to 2017 and it is well in line with our targets for the year.The graph on the right reveals our net profit over the last 5 6 month periods, where we can see year-on-year improvement, with the only expectation of the first half of 2016 due to the impact of the badwill from our acquisition in Portugal.Now we'll go to the quarter income statement. If we compare our performance in this quarter with the same quarter last year, we can see overall that the entire top part of the account referring to income has performed very well, exceeding even our expectations at the beginning of the year.Our net interest income growing at around 5% remained very resilient despite the interest rate environment that shows no signs of change. Our fee income also stayed solid, undeterred by increasing market volatility thanks to our franchise effective business tone.The line of other income and expenses demonstrates the positive performance of our insurer, Linea Directa, even though our regulatory cost, mainly SRF contribution, have increased by more than 26%. In this same line, financial fees for new mortgagees and certain corporate lending are also recorded, both showing a good tone.With all this, we got a gross operating income that grew by 8% with respect to the same quarter last year strictly on the back of our recurrent business since our gains on financial transactions continued to contribute very little.The bottom part of the account requires a more in-depth explanation. On the one hand, even though we can't see it in the total, we reclassified EUR 30 million from NPL provisions to legal provisions during the quarter. This recla did not affect the group's earnings or net worth, but was done to properly identify the risk associated with certain loans subject to legal proceeding, particularly multicurrency loans.On the other hand, capitalizing on our positive revenue performance over the last 6 months, we enhanced our provision buffer to handle this type of legal contingencies, for which this line in the account shows such a high increase.With regard to the cost of risk, even if we adjust it for the reclassified provisions, it remains very contained as we will see in further detail under the asset quality section.Lastly, our pretax profit and net profit outperformed related figures from the same quarter the year before.The group's loan book continued to grow by EUR 2.6 billion or 5% year-on-year. In Spain, where the sector had shrunk by 2.5% as of May 2018, we added EUR 2 billion in new loans. In Portugal, the loan book increased by 12%, that is over EUR 600 million.Last quarter, the group performed particularly well in new lending, growing almost EUR 1.7 billion mostly in corporate lending and consumer finance. It is worth mentioning that our mortgages book increased in the last 6 months unlike other listed banks in Spain.As for our retail deposits, they have grown by somewhat more than EUR 3.3 billion or 7% in 12 months and in both geographies, clearly outperforming the sector in Spain.Now if we look closely at our improving net interest income, despite the unfavorable interest rate environment, it grew in Spain for another quarter, while Portugal contributed EUR 3 million less due to fewer extraordinary revenues from recovered NPLs. Further on, we will analyze our recurrent net interest income figures in Portugal, which continued on a positive trend.Our positive net interest income performance was also due to the increase in our customer margin. The yield on loans remained steady in the quarter mostly due to our stronger asset mix and our cost of funds dropped by as much as 6 basis points.With regard to our ALCO portfolio, its size and composition did not change significantly with respect to last March, maintaining its very stable contribution to the group's net interest income.Unrealized gains remained over EUR 400 million with a small impact due to the increase in the market volatility during the period. Nevertheless, an important portion is in the amortized cost portfolio, which has no impact on the capital ratio. The other portion related to the available-for-sale portfolio has reduced 19 basis points our CET 1 ratio in the period, but more than offset by the 52 basis points of the IFRS 9 first implementation.The other line of income that has performed very well is our fee income, up by over 7% year-on-year and representing 23% of our gross operating income. The largest contributor is still asset management, driven by our strong performance in private and personal banking.Payment and collection fees were also noteworthy in terms of their growth and importance to our earnings, especially with regard to corporate banking transactions. Lastly, our insurance sales fees grew by over 7%. The fees that were more sensitive to market's volatility were equity and FX fees, with a slight reduction in this quarter. If we trust that market volatility will subside in the second half of the year, we can maintain our mid- to high single-digit guidance on fees for all 2018.In other income and operating expenses, we should note the contribution from LDA's insurance margin, up by almost 14%, driven by the sustained growth in premiums. This quarter, we also felt the increasingly negative impact of regulatory charges, particularly SRF costs, but however they are amply offset by other income relating to financing fees or new mortgages and corporate loans, which have performed very well in Spain and Portugal, and by the fewer expenses paid to consumer finance intermediaries in business that we have discontinued such as car financing. As a result, this line increased by 21% in the last 6 months.In the graph of the right, we have the contribution of our revenue streams from -- to gross operating income. 56% of our total income was net interest income. Fees and commissions contributed 23%, with 18% from other revenues, including Linea Directa, and only 3% from gains on financial transactions. This indicates good diversification to counter the persistent extremely low interest rate environment.In relation to transformation or operating costs, we separated those concerning banking operations from those relating to Linea Directa as their performance is very dissimilar. Whilst Linea Directa's costs grew by double digits as in the previous quarter, banking cost grew more restrainedly and fell by EUR 1 million with respect to the previous quarter. Moderation in the growth of cost along with the good performance of revenues allowed our cost-to-income to improve by 100 basis points in the semester.Regarding our cost of risk, as mentioned earlier, our EUR 30 million in provisions reclassified from insolvency to legal provisions had a positive impact on it. Minus this effect, it could have been very similar to last quarter's figure. Our cost of risk as of June totaled EUR 33 million, 62% less than a year ago. This has allowed us to be conservative when recognizing provisions for future legal contingencies. Group's cost of risk for the last 12 months stands at 15 basis points.Lastly, our ROE grew year-on-year both in our banking business as well as in our extraordinarily profitable insurance business, with ROEs consistently above 35%. Bankinter continues to deliver one of the best ROEs among its peers and clearly above its cost of equity.Let's now go over our management of credit risk, liquidity risk and capital. Our nonperforming loans continued to fall quarter-on-quarter in both Spain and Portugal. In Spain, our NPL ratio is below 3% for the first time since 2010 and in Portugal its already at 6.5% from 7.8% a year ago.NPA's provisions amounted to EUR 1.17 billion, up 7.7% from December, due in part to the implementation of IFRS 9 in the first quarter. Our provision coverage continued to be at levels similar to other peers and for NPL coverage including generic provisions levels are appropriate.As for foreclosed assets, coverage is well above the average discount on sold assets as we will see in a minute. Beforehand, let's review our foreclosed asset portfolio, which has shrunk by 22% since June 2017. We still sell these assets throughout our commercial network. Total sales in the last 12 months amounted to EUR 200 million, 40% of the total stock. The average discount rate is around 36%, well below our provision coverage rate, with a minimal impact on earnings.Our fully-loaded capital ratio was 11.55% at the end of June, 9 basis points more than in December 2017. The decrease since March 2018 stems from the great increase in the loan book during the quarter and the drop in unrealized gains in our available-for-sale portfolio that have reduced the 52 basis points contribution after IFRS 9 implementation to a net positive of 33 basis points.Compared with December, this negative impacts were offset by our organic capital generation and the still positive impact of IFRS 9 implementation. Both our total capital ratio and our leverage ratio remained fairly stable with respect to previous quarters.Balance sheet increases in both loans and deposits ultimately lead to a better funding gap, that is the difference between our customer loans and deposits, and is now back to nearly EUR 4 billion in total. In Portugal, it is also decreasing. Thus, our loan-to-deposit ratio strengthened once again, reaching the highest level in recent years.The maturity structure of our wholesale funding has not changed, with amounts that can be easily assumed over the next 2 years. We have no future issues planned at the moment since our liquidity buffer is still very high and improving. Any future issues would be in modest amounts and always in line with any MREL requirements we are given.Now we'll look at our most significant customer business indicators in the last 6 months. We'll start with the contribution of each unit to gross operating income. Corporate banking and commercial banking provided jointly 60% of recurrent income in almost equal measure. Our insurance business contributed a very stable 21%, followed by our consumer lending business with 10%, and finally Bankinter Portugal still at 7%. Lastly, our non-customer business, trading, ALCO and orders, contributed only 5% to our total income.So the largest contributor to gross operating income, corporate banking, remains on the same growth trend from 2010. Its loan book now amounts to EUR 24 billion, up by more than 7% year-on-year in both Portugal and Spain.Furthermore in Spain, the sector continues to shrink, having done so at a rate of 6.3% from May 2017 to May 2018. This is surely worsened by certain competitors' sales of NPL portfolios.Over half of our corporate loan book consists of loans to large-sized enterprises, which account for 36% of year-on-year growth, whilst the rest is made of loans to medium-sized enterprises, with 43% of the total increase, and finally small and medium enterprises, with the remaining 21% of annual growth.Our improved asset mix lets us conserve our average asset yields despite increasing competition in all segments. Our corporate relationship business saw significant growth in international trade finance, which now represents over 26% of the segment's income.A similar trend is taking place in our collateral business with corporate customers, where the fees and net interest income from related service increased double-digits with respect to the first half of 2017. Corporate banking continues to develop product and services that help forge high value-added and long-lasting relationships.In our private banking, managed wealth grew by 9% year-on-year, including the negative market effect. The net new money attained since December represented a 28% increase from a year ago. More significantly, we are collecting value-added fee income already on 43% of all our managed assets.In personal banking, customer assets grew by 8% year-on-year with EUR 900 million in net new money during the first half of this year. Our delegated and advised assets grew at higher rates, 43%, and our mutual funds managed grew by 13%.In commercial banking, the first half of the year went very well in terms of our 2 main products. On the one hand, our payroll accounts up 21%, and on the other, new mortgages up 17% from the same quarter last year, outperforming the market and holding our market share in new mortgages to 5.8% in April this year.Our balance sheet funds show double-digit growth in investment funds and almost double digit in pension funds year-on-year. We still have more third-party funds than own funds sold to customers. Our mix of funds continues to increase in more value-added funds, which improves our average fee intake.Now we will review half year figures from our subsidiary, Linea Directa, which has been performing very well year-to-date, reaching a market share in motor insurance of 7.5% and 2.9% in home insurance. New policies and premiums continued to increase at the same pace as in the first quarter, especially in home insurance due to cross-selling. Nonetheless, motor insurance premium grew more than double the market growth rate in Spain.Linea Directa's combined ratio continues to outperform that of prominent insurers in the market, standing well below 90%. Its claim ratio slightly worsened in the quarter, although it continues to outperform the sector average by 700 basis points. And finally, its expense ratio went unchanged. Furthermore, so far the sale of its first 9,000 health insurance policies under the Vivaz brand name did not have a negative impact on its combined ratio.Lastly, if we look at half year results, its net profit increased by 15%, thanks to growth in premiums, with the technical insurance result growing at a solid 13% despite rising operating cost. This helps us to maintain both LDA's high solvency ratio of 220% and high ROE of 38%.In consumer finance, lending continued to grow as well as ALCO's customer portfolio, which exceeded EUR 1,200,000, while still maintaining very acceptable credit quality ratios.NPL's coverage reached 113%. Despite the downward pressure on the risk-adjusted return due to increasing competition, it is important to remember that between 35% to 40% of our business is conducted with Bankinter customers in the form of credit cards and personal loans with much better risk quality and somewhat lower spreads.The consumer loan portfolio for card purchases and others does not exceed 5% and personal loans to non-Bankinter customers make up only 10% of new loans. Furthermore, Portugal's consumer business makes up already 7% of its total portfolio.Lastly, I'll go over figures from Bankinter Portugal. Balance sheet growth is in line with our expectation. Portugal's loan book increased by a very remarkable 12%, with a high concentration in new loans to corporates, growing by 45%.In commercial banking, both new mortgages and consumer lending grew by 5%. Balance sheet funds, mostly unit link and mutual funds, grew at a sound 16%.As for its earnings, a considerable growth in all income lines and better cost control can be appreciated. Recovered NPLs freed up credit provisions, which increased with respect to last year. As a result, Bankinter Portugal earned a pretax profit of EUR 31 million, 66% more than last year.To analyze recurrent business growth in Portugal, here we have a quarterly breakdown of its performance in recurrent net interest income and fee income, which are up by more than 25% with respect to the same quarter last year.On the other hand, its cost show more contained growth at a year-on-year rate of 5%. Its pretax profit, more volatile due to NPL recoveries, will likely amply surpass last year's figures despite the fewer extraordinary recoveries.And finally, in this last slide you have a brief recap of what we have seen already, highlighting our half year profit, our high ROE and capital ratio, our increased recurring income from business operations and all that with a very low NPL ratio.Thank you very much, and I can now answer any questions you have.

[David Lopez, Director IR]

Thank you, Gloria. Let's start with the Q&A. The first question we have received is volume growth. Whether you can elaborate on the pattern we have seen in lending growth in the quarter and what we expect for the rest of this year?

[Gloria Hernández García]

Okay. Thank you, David. Well, as you have seen in the presentation, the balance sheet has continued to grow. The annual rate has been a remarkable 7%. Concerning the loan book, the growth was 5% with respect to the same month last year, June last year, in an industry that continued to shrink by 2.5%. So it's a very remarkable performance. The growth is very well diversified, but it's mostly in corporates, consumer lending and in Spain as well as in Portugal. Starting by the consumer lending growth, as you have seen in the total banking activity the growth was 7% in the period, EUR 1.6 billion. But looking at the different geographies, in Spain the growth was 3% in an industry going down by 6.3%. So very well. And EUR 1 billion considering the growth since December. In Portugal, the growth was a stunning 45% year-on-year, and that means a growth of EUR 350 million more or less since December. So again a very good performance. Consumer finance continued to increase the loan book, 6% quarterly, but 42% year-on-year. This figure is 35% more or less in Bankinter customers. So we are not worried at all on the high -- on this high rate because it's a very sound growth. Mortgages continued to grow. The new production -- the book has maintained stable, but the new production has been EUR 715 million in the quarter over the same period last year. So that means 17% of growth. So it's also again a very good performance. So when looking at the diversification, no big or no concentration in specific names. It's very granular this kind of growth. And it has to do clearly with some positive seasonality that we have always in the -- at the end of the second quarter. I don't know if you want me to continue on other sides of the balance sheet or this is enough?

[David Lopez, Director IR]

Well, the questions were mainly related with the performance...

[Gloria Hernández García]

The loan book.

[David Lopez, Director IR]

Of the long book, yes.

[Gloria Hernández García]

Perfect.

[David Lopez, Director IR]

Okay, let's move now to the P&L items. For example, let's start with NII. Again, questions on the guidance for the remaining of the year and the behavior of the client margins also.

[Gloria Hernández García]

Okay. First of all, concerning the guidance. Taking into account the resilience of our recurrent domestic business and the robustness of our Portuguese franchise, we at this point stick to our guidance of low- to mid-single digit for the year for the total banking group. In terms of the customer margin, it maintains very stable, although in the quarter it has reduced by 1 basis point or something like that. When looking at the year, the performance has been positive, has improved by 4 basis points. So I think that the customer margin will stay more or less stable because the spread in the loans maintain certain stability, more in corporate loans than in mortgages, where the competition is a little bit higher or more intense coming from some competitors than in the rest of -- sorry, and in the retail cost, we will continue seeing a small decrease in cost, but very, very reduced, perhaps 1 or 2 basis points. So that means that the customer margin will stay more or less stable in the future.

[David Lopez, Director IR]

Okay, thank you. Also, some questions on the guidance for fee income.

[Gloria Hernández García]

Okay. The fee income has continued to grow very well despite the high volatility in the market. We have been able to offset the volatility or the negative impact of the volatility in those lines of this item more related to the market with more commercial activity in business transactions with our corporate customers and with international trade finance. And that's why we -- at this point whenever the markets improve their current tone or at least record some stability, we are able to maintain our guidance of mid- to high single-digit growth for the whole year.

[David Lopez, Director IR]

Okay, thank you. Can you probably remind us of the -- what shall we expect from the cost evolution in the coming quarters?

[Gloria Hernández García]

Okay. As you have seen in the presentation, we -- the growth in cost is showing very asymmetrical performance. On the one hand, we have the banking business cost growing at only 3% -- and this growth is related to the growing commercial activity in Bankinter consumer finance; we have seen this before -- and in our group's digital projects. We are involved in a lot of digital projects that need to invest in some developments. Although some of these expenses will -- are not in the current P&L because are activated. Part of them are in the cost line. This is the banking business. On the other hand, we have the insurance business, where cost grew at 13%, which is really a high rate. But 2 things. First is, this rate is 2 percentage point less than the previous quarter, so the situation is improving. And second point, this growth is related with 2 different questions or 2 different points. The first is the fact that we have introduced a new business line and this means that you have to spend or to invest some money at the beginning before starting to get the revenues of this new business line. And second, the fact that we are being very good in terms of selling new policies, and to do that, you have to invest in marketing, customer acquisition cost and in sales force. And that's the reason why the costs in Línea Directa are growing by this 2 digits rate. But looking at the rest of the year, what we are focusing is the efficiency, the cost-to-income ratio. And you have seen in one slide that the cost-to-income continued to be best in place -- best in class, sorry, 46%, that means 240 basis points less than a year ago, particularly due to the good behavior of Portugal cost-to-income. And finally, looking at final or the whole year, we maintain our mid-single digit trend for -- as a guidance.

[David Lopez, Director IR]

Okay, clear. Still on the P&L, we're getting questions on the trends that we have seen in the cost of risk and the provision lines. Whether you can explain again on that part?

[Gloria Hernández García]

Well, first of all, cost of risk continued to improve quarter-on-quarter. Now, looking at our -- the last 12 months, the cost of risk is 15 basis points, so well below the average of the banking sector in Spain. I understand that it's difficult to understand the figures of this quarter because of this reclassification. I remember the numbers. In the quarter, we have reclassified EUR 30 million from impairments to other provisions. This has to do with the fact that some loans -- multicurrency loans were previously provisioned in the line of impairments. But as soon as the customer or the client or the borrower has presented a suit against Bankinter, we have to reclassify this provision from the line of impairments to the line of legal provisions, because it becomes a legal question, a legal issue. So even excluding this reclassification, the cost of risk in the quarter had been 21 basis points. So we're in line with previous quarters, a little bit better than previous quarters and continuing the trend of gradual reduction in cost of risk. So looking at long-term or medium-loan and long-term, we would say that our average cost of risk is more or less -- or around 30 basis points. I don't know if you want something else or...

[David Lopez, Director IR]

No, just further questions on what's your view on this possible [indiscernible] ligation risk of Bankinter.

[Gloria Hernández García]

Okay. Well, as you know, litigation risk has become a source of cost for the banking industry in general and all Spanish banks are involved in this issue. We're not an exception, although we are exposed to a much lesser extent given our customer profile. But in any case, our claims are mainly related to Lehman bonds, to interest rate hedges and more recently to FX-denominated mortgages. Recent Spanish supreme court rulings made it clear that banks are not always liable for products sold in the past. And regarding those products that concern us, court rulings are very much based on case by case basis and particularly on how transparent the selling process to customers was. Anyway, although the supreme court ruling concerning multicurrency loans was not related to Bankinter and the specificities of the loan affected by the ruling have nothing to do with the loans that we sold, it's certain that some courts in first instance are being more inclined to rule against the banks in these products, worsening our success rate. We continue to defend our position because we consider that in most cases we have sold well, following the profile of our clients. But at the same time, we are conscious of this contingency and that's the reason why we have increased our provisions to strength our coverage for future contingencies, capitalizing on the good performance of our operating profit since December. As a result of that, total expected losses are now covered as of today. This trend will continue to a lesser extent in the coming quarters. Finally, I have to say that all this process is logically in line with our external auditors and the regulator.

[David Lopez, Director IR]

Okay, thank you. Now let's move to capital. Can you comment or elaborate a little bit on the performance of capital in the quarter? We have some negative impacts from loan growth and mark-to-market of the bond portfolio.

[Gloria Hernández García]

Okay. Well, in the presentation we have shown the evolution from December, the 6-month evolution. Because the quarter evolution shows a lot of volatility, as we anticipated to you last quarter. Why? Because from the 1st of January we decided to reclassify our loan portfolio and more or less 2/3 of it is now in the available-for-sale subject to market volatility, because we have to do the mark-to-market every quarter. In March, the unrealized gains were at its highest level in history probably. And that's the reason why the ratio in March went up to 12% level, which we anticipated was to be temporary or transitory. Now at this quarter, we have come back to the 11.5%, 11.6%, which is more in line with our guidance and with the underlying trends. In the quarter what has happened, the business has continued to increase our organic capital creation and at the same time the growth in risk-weighted assets have subtracted some basis points, particularly -- not particularly -- in Spain as well as in Portugal. And finally, the ALCO portfolio has subtracted around 19 basis points from the -- I think it's from January. But the increase in the capital ratio because of the unrealized capital gains was 53 basis points in January. This 19 basis points subtracted from this amount means that the capital -- the ALCO portfolio continued to imply 33 basis points percent in our ratio. Apart from this, I have to say that 1/3 of the unrealized capital gains are -- now sit on the amortized cost portfolio. And looking at the amounts that we have in there in terms of unrealized capital gains, the impact in capital ratio -- not registered, but they are unrealized gains in any case, the impact would be or would have been 40 basis points. So this is something that is in our cushion -- not recognized in the capital ratio yet, but it's in our balance sheet.

[David Lopez, Director IR]

Okay. One final question on capital. What shall we expect the guidance to be for CET 1 fully-loaded ratio?

[Gloria Hernández García]

Well, our guidance continues to be the same, between 11% to 11.5%.

[David Lopez, Director IR]

Okay, thank you. A couple of question on M&A. We have seen some recent news about our interest for a possible deal. Can you comment on that?

[Gloria Hernández García]

Well, as you can imagine, I have to be very prudent because of market regulations. But what I can say is that Bankinter has always been scanning the market for new opportunities. This is not news for you. In this sense as we announced with an ad hoc last week, we are analyzing some of the businesses of this entity, EVO, but yet we have not taken any decision on it. That's all I can say. In any case, having said that, I remember you that we have always said regarding M&A that whatever we do it must fit within our strategy, our corporate culture, our DNA, first point. And second, it must be affordable given our size, without potentially changing the characteristics of Bankinter that have always differentiated us from our peers.

[David Lopez, Director IR]

Okay. And last question [ Fiona ] is asking on this issue of tax on banks, whether you have any comments there?

[Gloria Hernández García]

Well, all I can say is that the -- well, the public pensions problem is a general problem in society and we don't really understand why a single sector must solve it, especially when it is already being -- this sector is being penalized by a number of special charges. I remind you that banks are the only sector paying 30% in the corporate income tax rate, so we are already paying an extra 5% on every yearly tax account with respect to other companies in Spain. And that's a lot of money. In the case of Bankinter, Bankinter has paid EUR 45 million since 2015 as a result of this charge. Second, the banking sector must contribute to the SRF and DGF every year to avoid future banking crises and Bankinter's contribution to both funds will amount to around EUR 65 million this year. So it's another charge, a special charge for the sector. And finally, in my view, there is no point in speculating about the impact of a tax that has not yet been and may never be defined.

[David Lopez, Director IR]

Thank you so much, Gloria. Thank you, everyone, for joining us. That was all from us. The Investor Relation team is now available to take any further questions you might have. Thank you. Goodbye.

[Gloria Hernández García]

Thank you, David.