Bper Banca SpA

MIL:BPE

Earnings Call Transcript 2018-Q3

[Operator]

Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the BPER Third Quarter 2018 Consolidated Results Conference Call. [Operator Instructions]

At this time, I would like to turn the conference over to Mr. Alessandro Vandelli, CEO of BPER. Please go ahead, sir.

[Alessandro Vandelli, executive]

Thank you. Good evening, ladies and gentlemen, and thank you for joining this conference call today about the 9 months 2018 results of BPER Group. This is Alessandro Vandelli, CEO, and I'm here with Roberto Ferrari, CFO; Alessandro Simonazzi, Head of Planning and Control; and Gilberto Borghi, Investor Relations Manager.

As the introduction to this conference call, I'd like to point out 3 main points, try to keep my comments as short as I can in order to give you enough time for the Q&A session.

Please go to the executive summary of the presentation on Page 5 available on our website.

The first key point is capital resiliency, anticipating what you can find on this slide about capital because I think it is useful. We have demonstrated to be able to manage capital in a very effective way even during a period of financial turmoil. This is due to, we can say, wide diversification of the accounting allocation strategy. Our Common Equity Tier 1 ratio fully phased increased to 12%, about 40 bps higher than Q2 level 11.6%.

The Common Equity Tier 1 phased in came at 14.8% (sic) [ 14.7% ], again, higher than the one at the end of June 2018 and well above the SREP level 8.125% for 2018, as you know.

How were we able to support this, to be supporting capital? You are probably familiar with the story about the increased retained earnings, first of all through higher profitability, then RWA efficiency and finally, wise managing of the financial portfolio.

In these days, being able to increase the capital solidity, and moreover of this magnitude, means that we are doing a good job.

The second main point is profitability. We realized a 9-month NPE net profit of about EUR 358 million, more than double the result of the same period of 2017. What are the main factors, essentially 3. Positive trend in commissions plus 6.1% year-on-year; second, trading including a capital gain realized in Q1; and cost of credit in significant reduction to 45 basis points annualized 9 months 2018 from 112 million in 2017.

Q3 net profit came at EUR 50 million, in my opinion, it must be considered a good number given that this number includes IDGF ordinary contribution of EUR 23 million. We are demonstrating a good level of ability in generating profit and then building capital.

The third key point is asset quality. I'd like to underline that we keep focusing on the NPE strategy target, delivering what we promised. We go through NPE details a bit later, and wait, here, I want to mention the achievement realized that we had today with the closing of the second bad loan securitization after the 4Mori Sardegna closed last June.

We finalized the securitization program according to the scale of the plan, including in our broader NPE strategy 2018, 2020. BPER bad loan securitization of EUR 1.9 billion will enable us to reach an NPE growth ratio pro forma on September figure of 14.4%.

Between 2016 and 2018, we grow the gross NPE ratio from 23.5% to about 14%. A significant drop of almost 10 percentage points, maintaining a very sound level of capital. I consider this a great achievement of our group and a very good starting point to do even better in the coming years.

Now let's go quickly into the analysis of the 9 months NPE results, leaving enough time for the Q&A session at the end of the presentation.

On Page 7, we can appreciate the growth of total funding at EUR 92.5 billion, both in direct and indirect and Bancassurance bucket. This means the ability, first to manage closely the mix of funding sources on direct funding, both retail and institutional. And secondly, increase the asset under management at Bancassurance sector, which now accounts for about 45% of the total.

On Slide 8, we show a breakdown of our direct funding which comes at EUR 51.2 billion in September '18. Customer funding weighed for 89% and only about 11% is institutional. Customer funding comes at EUR 45.4 billion, up versus both the beginning of the year and June, showing a further increase in current accounts and sight deposits, only partially offset by a decrease of retail bonds and CDs. We are still working to decrease certain forms of institutional funding which are particularly expensive. And at the same time, we are focusing on switching direct funding in favor of indirect one. Retail outstanding bonds are declining.

Finally, I would like to draw your attention to the wide level of flexibility in managing our group's funding strategy due to the very low retail bond maturities in 2018, only EUR 1 billion of covered bonds in October this year. Already [ for funding with ] a successful issue of EUR 500 million of covered bonds in July, which was well received by investors, and we have no maturity in 2019. I think that in this challenging environment, it is particularly positive.

Page 9, this is one of the sector we care most about and we were -- and where we are doing an excellent job. Assets under management stocks exceeded for the first time EUR 20 billion, despite divestments, the recent financial market turmoil, showing our ability to drive the growth of that important segment. Bancassurance stock has grown fairly, plus 1.3% year-to-date, and 1.8% since June. And now we are very close to EUR 5 billion. Despite market trends in Q2 and Q3, net asset under management inflows were EUR 1 billion in the 9 months.

Moving on to page 10. You see the trend of customer loans. We noticed a slight decrease in Q3 by 0.3% versus Q2, that we consider substantially a positive result given the current worsening economic environment in Italy and our focus on asset quality.

Moreover, mortgages showed an increase by 1% versus Q2. You can see that the recent trend is continuing even considering the bad loan securitization 4Mori Sardegna in June for EUR 0.9 billion. Overall, we note some positive signals coming from credit demand, even though it's too early to say if it would be sustainable in the coming quarters given the current economic situation.

In Q3, you still see the decline of the NPE stock, about which we are going to go into details later. The quality of the performance book is still improving as shown by the rating in the top right box. The high-risk bucket is declining quite significantly, reaching 4.1% in the 9 months and more than halved in the last 4 years.

Let's go to Page 11. You can see the asset quality further improvement. You can see the strong decrease of the gross NPE stock well below EUR 9 billion or minus EUR 1.7 billion since the beginning of 2018. The gross ratio stands at 17.3%, down by 2.6 percentage point from 19.9% of January '18. The net NPE ratio now is at 8.3%, falling from 9.2% in January '18.

The focus here is to confirm the high quality job we are doing in delivering our NPE strategy. After the bad loan securitization 4Mori Sardegna in June, yesterday we finalized the BPER Banca bad loan securitization for a gross book value of EUR 1.9 billion. We consider this to be a successful deal. It's important to highlight that after the consolidations of the portfolio, we expect in Q4, the NPE gross ratio performance on 9-month figures is 14.4%. So between 2015 and 2018, we were able to decrease the NPE ratio from 23.5% to about 14%, with a drop of almost 10 percentage points for now delivered.

From here, we are convinced that we are able to improve further. NPE coverage is still high at 56.7%, and unlikely to pay improved further to 42.2%. Good news is also coming from the Texas ratio, now down to 94%.

Moving on to Page 12, after the big improvement between 2016 and 2017, also confirming in the first part of this year with a default rate of 1.9%, we can expect further improvements in the coming quarters. Bad loans recovery rate reaches about 6%, demonstrating that our servicing platform BPER Credit Management plan is a very efficient machine and it is doing an excellent job and playing an important role within our overall NPE Strategy.

Page 13. The securities portfolio slightly increased in Q3 versus Q2, due by diversification into core Europe bonds. The long-term trend of reducing the Italian government bond ratio on top of that is continuous and now the Italian government stands at 7.8%, down from 10.9% in 2014. The overall exposure to the domestic risk is almost half versus 2014.

Currently, only 45.3% of the securities portfolio is invested in Italian issuers, both govies and other assets. Italian govies account for 33.4% of the securities portfolio. Our target is to reduce it even further.

Now we can move on to profit and loss figures on Page 15. As you know, 9-month figures are not comparable to 2017, was because of a change in the scope of the consolidation due to the new [ Carife ] division.

On this slide, the most important figure is the net profit in the 9 months which reached EUR 358 million. We can really be satisfied of this achievement, is explained in particular by the very positive trend in net commissions, the net profit from financial activities and a significant reduction of the cost of risk.

But now I'd like to go into more detail. Let's go on to Page 16. NII performance seems to stabilize when considered net of the IFRS 9 reclassification effect.

Looking ahead to Q4, the NII position should benefit from an expected increase of volumes as well as an improvement in spreads, helped by a decrease of the cost of funding to the maturity of EUR 1 billion covered bond in October.

On Page 17, we can show the very positive performance of net commission, up by 6.1% year-on-year. Going into more details, on commission, we see that the growth is supported mainly by the assets under management plus 15.1% (sic) [ 15.7% ]; at Bancassurance, plus 36.9% year-on-year; recording also a positive increase of traditional fees plus 0.5% year-on-year. I consider the Q3 figures a good result given the usual seasonality.

On Page 18, operating income has been supported by trading income in the period, plus EUR 190.9 million including the realized gains on bonds in Q1, and then we must add a EUR 13.8 million of dividends.

Moving forward on Page 19, the two 9 months' periods are not comparable due to the different [ structures ].

Q3 operating costs decreased by 10.1% quarter-on-quarter, mainly due to the staff cost seasonality of the quarter. Then also it shows lower administrative costs versus Q2, we know that the cost reduction is one of the main priorities of the group and we are committed to working hard on it.

Cost of credit, on Page 20. Here, we continue to have a very important reduction as expected [ substantially. ] Loan loss provisions came at EUR 155.2 million or 45 bps annualized. This is a confirmation of the expected trend. The improvement of the cost of risk is one of the main contributors to profitability in 2018 currently with the asset quality improvement. I can confirm our conservative guideline of around 50 basis points for this year.

Page 22, our liquidity position is solid, thanks to the growth of the total eligible assets by 8.6% since the beginning of the year to EUR 17.3 billion.

Along with a bucket of unencumbered eligible assets of EUR 4.5 billion and asset liquidity of EUR 3.2 billion made by deposits with the ECB. Both LCR and NSFR ratios stand above 100%.

We have referenced to the capital position on Page 23, we're showing Q3 a significant increase of the Common Equity Tier 1 ratio, fully phased by about 40 bps to 12% versus 11.6% in Q2.

I think this is a remarkable result, and particularly in light of the challenging economic and market environment. It's a demonstration of our ability in capital management and of the great attention we put on the solidity of the capital position. The main part of the increase is due to 2 factors. First, the RWA reduction related to credit and market risk. And second, notable level of retained earnings, net of pro forma dividend.

The negative impact due to the reduction of the overall fair value other comprehensive income reserves is only 9 basis points.

Now in conclusion, let me highlight the key final messages on Page 25.

In a very challenging economic financial environment, we have been able to increase our Common Equity Tier 1 by about 40 bps to 12%. We are, in a few words, very resilient and committed to maintaining a solid, capital base. Second, it must be recognized that we are the delivering on asset quality in line with our NPE strategy. Consider the consolidation of AQUI portfolio between 2015 and 2018, we have been able to reduce our gross NPE ratio from 23.5% to about 14% pro forma -- by almost 10 percentage points. While doing this, we are maintaining a sound level of capital. And from here, we are going to further improve our asset quality.

So we have demonstrated the ability to reach better profitability level, supported in particular by the reduction of the cost of risk and the positive trend in commissions.

I thank you all for your time and attention. Now we are ready to start the Q&A session and take your questions. Thank you. Thank you very much.

[Operator]

[Operator Instructions] The first question is from Jean Neuez with Goldman Sachs.

[Jean-Francois Neuez, analyst]

I just wanted to ask because this year, we've had low level of cost of risk to start with and it's slowly reverted to what is looking more like a more normal level. I just wanted to know whether you would be -- share your view as to what we are looking at for the rest of the year and maybe next year on the cost of risk, given the level of volatility that there has been on the up-and-down side recently? And secondly, over the last few weeks, I think I saw a comment from Unipol that they were confident that Unipol Banca could be a good partner for BPER Banca. And I just wanted to know whether you would be able to share views on that.

[Alessandro Vandelli, executive]

Okay. First of all, thank you very much for your questions. And about the first point about the cost of risk. First of all, we are really satisfied for the 45 basis point of cost of risk annualized 9 months 2018. Our expectation is to confirm our guideline or the cost of risk at the end of the year, between 50 and 60 basis points. This is, let me say, a good [ assumption ] but anyway, we can confirm this is our expectations. And we think also that this level, around 50, 60 basis points, is probably at the normalized level coming year. And after our strong cleanup and also the better quality of the bonds portfolio, as I tried to explain during my presentation. About Unipol Banca, I want to express my view in wider terms and not on specific options or targets. It's simply that BPER Group has a stronger focus on all opportunity of growth, both internal and external, but there are 2 important elements. First of all, it's important to create value for the shareholders, obviously. And the second point is that our priority remains the derisking of the strategy. So all the opportunities are analyzed from this point of view -- creates value for shareholders and in line with the risk strategy. Said this -- on the market, there are different options. Now the focus, as I said before, is derisking. Thank you.

[Operator]

The next question is from Riccardo Rovere with Mediobanca.

[Riccardo Rovere, analyst]

A couple of questions, if I may. The first one is, again on derisking. Now you have completed the one in Banco di Sardegna, yesterday you have announced the EUR 2 billion in the old BPER. If I remember correctly, your original derisking plan still sees another EUR 1 billion to be carried out in 2019 or 2020. I was wondering whether the EUR 1 billion left is everything. Or do you expect to do more to get closer and closer to the 10% kind of magic threshold maybe before the end of 2019? Do you think this is possible? If I remember correctly, you marked down to market EUR 6 billion of bad loans at the time of IFRS 9 first-time adoption, if I remember correctly, and you're planning to sell 4 or 4.5, if I remember correctly.

[Alessandro Vandelli, executive]

Thank you very much, Riccardo, for your questions. Let me express first of all our full satisfaction for what we were able to complete this year because in 6 months' time, we completed the first securitization on Banco di Sardegna and now we are closing the second one on BPER and probably at the end of November or beginning of December, we will have the recognition of the second portfolio. And you remember right, this is the first step, around EUR 3 billion of disposal through securitization. But we have another important bucket, around EUR 1 billion, EUR 2 billion of more bad loans portfolio, with a very high coverage. So let me say that we are positive. And now, for the first time, probably it is more what we completed in the past compared with what we expect to do in the near future. And I repeat, I think that on the back of the one EUR 6 billion with very high coverage, it's possible to select the other portfolio to reduce the -- our NPE gross ratio. About the target, I confirm -- I do confirm that we want to go below 10% as fast as possible. We said that this target was a, last conference, for 2021. We are sure to be able to reach before then the 2021, I don't know 2019, but anyway we expect another growth during 2019 because we are already working on another portfolio.

[Riccardo Rovere, analyst]

Just to be sure I understand it correctly. You have a markdown to market, EUR 6 billion. EUR 3 billion have already gone. The original plan was going for another EUR 1 billion. And did I understand it correctly that you could have another EUR 1.2 billion of gross NPLs with very high coverage, that you might think about selling on top of the EUR 3 billion and on top of the EUR 1 billion residual out of the EUR 4 billion of the original plan? Am I getting it right?

[Alessandro Vandelli, executive]

What we -- well we tried to explain when we completed the asset provisioning at the beginning of the year it was that we have EUR 6 billion selected with high coverage, amount with EUR 6 billion with, [ as it were, ] something around EUR 4.5 billion with high probability of disposal. So we completed EUR 1.5 billion to complete in the coming months. What I said is that probably we have something more close to EUR 2 billion more. So EUR 0.5 billion in itself compared with EUR 4.5 billion originally expressed. So 3 already completed. We are working now on a portfolio of EUR 1 billion, so we expect to understand what is possible to do, and then we think we'll have another EUR 1 billion for other disposals.

[Operator]

[Operator Instructions] Your next question is from Hugo Cruz with KBW.

[Hugo Cruz, analyst]

I have 3 questions. One, I don't understand the CET1 improvement. You talk about the bond portfolio, but the way I see it, all the improvement was on RWAs. So the only way the CET improved, that I would assume is more model-related, so if you could explain? And then on inflows, so when -- gross NPL inflows, when I compare 9-month '18 and 9-month '17, and I took out the first half, actually it looks like there was a big increase in inflow year-on-year, I came to the Q-on-Q, but year-on-year certainly that seems to be the case, so what was driving this? And then there was the expectation there was going to be an Investor Day, press I think speculated could be perhaps still right at the end of the year? I mean, can you give us a date or your thoughts on that?

[Alessandro Vandelli, executive]

Okay. Thank you very much for your questions. And first of all, about the Common Equity Tier 1, and I'll hand you to Roberto, our CFO, to enter into the details of the different elements that push up our Common Equity Tier 1 to 12%. Go ahead, Roberto.

[Roberto Ferrari, executive]

On Common Equity Tier 1 and risk-weighted assets relief, actually we have around 30, 29 basis points to be correct. One part is for EUR 150 million on market risk. That is mainly due to a disposal of ABS and our redemption of a CDO, that had a very high density of risk-weighted asset. That was 1,000 -- risk-weighted asset density was 1,250. So actually we had the very important relief to our redemption of our CDO and a disposal of ABS. On the securities portfolio, we sold covered bonds mainly from Canada and Australia that are very high-quality covered bonds. But in our case, as we use [ scope rating ], we had 100% risk weighting. So we have around EUR 300 million relief on securities risk-weighted assets. And on lending, we have another EUR 300 million relief due to the different composition of our lending. So we had more mortgages, retail mortgages with low density of risk-weighted assets and also we have the impact of the GACS, the guarantee by the government on the 4Mori.

[Alessandro Vandelli, executive]

About your second question and in particular, on the net NP inflows, let me say first of all, that what is important is that we are confirming the strong drop between the level of 2015, 2016 at the level of 2017, 2018. In terms of the default rate 9 month '17 and '18 are at the same level of 1.9%. So this, in the second draft period 2018, in the last part of this period, we have some big ticket in the construction that has this effect on the size of the inflows. For the last part of the year, we are positive and we think that it's possible to add to the effect or the disposal of AQUI and so the 14.4% of NPE gross ratio, some positive effect coming from default rate [ 2018 ] and also on the recovery rate managed by our BPER Credit Management company. The last point is about the Investor Day. And I think you refer to our business plan. And let me express where we are today. We have already completed a large part of the activity for our new business plan, and let me express, we are particularly satisfied for all of these activities. But we try to understand if it's correct in this current uncertainty on the market, this business plan's so important to BPER Group. And also because there are some uncertainties also about many important elements related to the budget flow of Italy. So we try to understand if it's possible to have more clear view on these points. Said this, I express that I don't want to wait much time, so let me say, probably, at the beginning of the year, it's possible that we decided to have the Investor Day to present to the market. So let me say not more than 3 months and we'll be on the market for the business plan.

[Operator]

Next question is from Giovanni Razzoli with Equita.

[Giovanni Razzoli, analyst]

A clarification on the outlook for the Common Equity Tier 1 which was, as you pointed out, very, very strong in the Q3. I was wondering if you can share with us what could be, all else being equal, the positive impact from the GACS on the last securities -- on the last NPL disposal that you have just announced. And if I remember correctly, is there also other impacts from the rolling of the IRB models to other portfolio in terms of credit risk. So what could be the positive impact additional in the Q4?

[Alessandro Vandelli, executive]

About the second element that you mentioned, I confirm that we are still waiting for the alignment of the CR Bra, our control bank in [ Piedmont ] of the portfolio of this company. We expect now only to have the confirmation by this week. And we expect to have by the end of the year. Let me express that the impact of this alignment will be something around 10, 15 basis point of Common Equity Tier 1. On the other point, Roberto?

[Roberto Ferrari, executive]

Actually, we are still working on the number, but it should be between EUR 100 million and EUR 150 million of capital relief through the GACS on the second securitization.

[Giovanni Razzoli, analyst]

So it's going to be a very major impact, right?

[Roberto Ferrari, executive]

Sorry?

[Giovanni Razzoli, analyst]

So it's a major impact, EUR 100 million of capital is...

[Roberto Ferrari, executive]

No, no, no of capital relief --no sorry, capital relief, of risk-weighted asset relief, it's my fault, sorry.

[Operator]

Next question is from Ignacio Cerezo with UBS.

[Ignacio Cerezo Olmos, analyst]

Three questions from me. If you can give us some clarity on the tax rate actually going forward, and if you can incorporate any comments from your best approximation of what new government initiatives here? The second one is whether, given the coverage you have on the UTP exposures, you would consider selling UTP over sofferenze accelerate the derisking? And the third one, if you can give us a figure in terms of the net interest income you think you're going to lose as a result of the EUR 1.9 billion securitization from yesterday?

[Alessandro Vandelli, executive]

Okay. Thank you very much for your questions. And first of all, let me say, I will take, first of all, the UTP, only to stress that we have, I think, a good level of coverage that also with the increase in last quarter of more than 42%. And we are analyzing the opportunity to work on a fund disposal of UTP. Today, we have already complete or we are analyzing some opportunity on single name, and so we are working on different single name and probably we are positive on some of these negotiations. On the other side, we think that it's possible to see also in the near future, some portfolio of unlikely to pay. We have completed a first [ management ] of our portfolio. There is an important bucket with significant real estate collateral and we see this is an opportunity to work on the disposal of this other element. About the tax rate, let me say, only the first element then, I ask you -- our CFO to express other -- this year, as you see, we are, today, around 6% of the tax rate, more or less. And we confirmed by the end of the year that our tax rate will be below 10%. This was what we expressed also in the last conference call. We confirm it. We have also room to control the level of tax rate in the coming year and I would like to ask Roberto to specify some elements on this side.

[Roberto Ferrari, executive]

On the future tax rate it is very difficult to answer because as you know better than me, it depends on the fiscal framework where in Italy it's changing, also through the new intervention by the government. So I would prefer not to answer on that. What we can say, we still have at the end of the year, we still have past losses for more than EUR 1 billion then we'll generate DTA in the future of around EUR 350 million, we will benefit of those DTA in the future onwards.

[Alessandro Vandelli, executive]

Finally, speaking about the NII. First of all, in the third Q, looking at the -- you asked [ 49 ] pro forma for -- after some quarters we saw a stabilization of the level of NII, this is, I remind you, it's clearly important, and we expect to see in the fourth quarter, a positive trend due to 2 factors. First of all, in the last quarter of the year, traditionally we have an increase in the volumes of loans and this is one effect. The second one is probably a reduction of the cost of funding. Also because in October, there was the expiring of the covered bond with a high level of -- it was around 2.7...

[Roberto Ferrari, executive]

2.7.

[Alessandro Vandelli, executive]

2 7. And so the effect on the last quarter will be at quality. Thinking about the future, so in 2019 and also in the near future, obviously, I think that it's important to understand what could be the impact coming from the volume. This is important. We are working in a different area, in particular in the consumer credit, we feel the only other way, the very important spread today in Italy, only to give you an idea, in the sector, to the spread is not far from 6%. So we are working to increase this -- the amount of this area to sustain positively the NII in 2019. So at the end, positive for the last quarter of the year and we saw the stabilization and a little bit increase. But obviously also for 2019.

[Operator]

The next question is a follow-up from Riccardo Rovere with Mediobanca.

[Riccardo Rovere, analyst]

With regard to the securitization that you have announced yesterday. Do you think it is more correct to see the amount of junior mezzanine and senior notes that the SPV will issue against EUR 1.9 billion or against the EUR 2.1 billion, so did you sell it at 30% of the gross book value or did you sell it at 32% of gross book value?

[Alessandro Vandelli, executive]

So we sold at 32% of the gross book value. That is EUR 1.9 billion. So the structure is related to this level of price. So we have, as you probably saw in the press release yesterday, around EUR 53 million of mezzanine notes and around EUR 10 million, EUR 11 million of junior notes. And last part is a senior note. Let me say that we are particularly satisfied of the structure of the deal where it was possible to have an important portion of senior notes in order to this -- you know, we retain after the GACS in the balance sheet of BPER Group, so without any risk-weighted assets.

[Riccardo Rovere, analyst]

Okay. Okay. And you think using the GACS is still a convenient way to consolidate NPLs despite the likely rising in the CDS of the basket underlying the GACS?

[Alessandro Vandelli, executive]

Well, obviously the price of the GACS is increasing, i.e. it's important to understand that today, the price is related to the average of 2 months and not 6 months as it was in the last version of GACS, so this is a negative impact and more cost for the securitization. But anyway, I think, it's still the better, the more convenient way to complete the disposal. Let me say what is important is to analyze the characteristic of the portfolio. And typically, as you can see, we must have an important portion of a secure portfolio, in the case of BPER it was around 60%. In the case of Banco di Sardegna, something less, [ that's ] 50%. So what is important here is to understand if the composition of portfolio is good for a securitization. On the other hand, you can have probably the opportunity to sell the smaller portfolio but to a specialized buyer. For example, in the market, there is someone specializing in single ticket, or small ticket portfolio or single name and so on. There isn't only one strategy but different strategy for different portfolio of bad loans. Until now, I think that the securitization with GACS, there is a premium on the price.

[Operator]

[Operator Instructions] Mr. Vandelli, gentlemen, there are no more questions registered at this time.

[Alessandro Vandelli, executive]

Okay. So no closing remarks. Just thank you very much for the attention, and have a good evening, and see you soon. Bye-bye then. Thank you very much.

[Operator]

Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephone, thank you.