Alior Bank SA

WSE:ALR

Earnings Call Transcript 2023-Q1

[Dominik Prokop, executive]

Good morning. Welcome Investor Relations. I would like to welcome all of you to this results conference after the first quarter 2023. As always during our conferences the first part will consist of our results and major trends behind those results, and this will be presented by good, Grzegorz Olszewski, VP of the Board; Radomir Gibala, VP of the Board's CFO; as well as Tomasz Miklas, VP [indiscernible].

And then the second part will discussed or will be devoted to Q&A. But before I give the floor to the first speaker, I would like to remind you that you can ask your questions already during the presentation. Thank you. And thanks to some of your questions that you post will be able to smoothly go into Q&A, use the chat and Grzegorz over to you.

[Grzegorz Olszewski, executive]

Thank you so much Dominik. Good morning ladies and gentlemen, welcome to our results conference for Q1. I believe that the results this is something you've already seen, you already managed to acquaint yourself with and I will just tell you about some of the directions that we're following, how we're going to shape our future, and how we're going to try and shape and manage or result into the future.

When it comes to our results, it's mostly adjusted by the borrower support fund plus we also created additional provisions for the credit moratoria. This is something that's outside of our control. So we created the provision, the reserve, and it seems that, that this will be keep when it comes to provisions. But well, the credit moratoria has been going on for quite a while already.

So we believe that what we've already estimated here with this provision should basically even cover everything that's going to come up. Our interest result mostly comes from interest rates and our -- Well, our commissions related results grew 9% year-on-year. And in our strategy, we will also focus on improving customer relations so that our customers can use our payment cards more often, so that they can use BLIK to pay more often so that they, for example, use some short-term loans so that we get more fees and commissions and improve our customer relations.

What we've been stressing for many quarters now, and we've been trying to explain this to you and present it as one of our strategic goals is improvement of the quality of our assets. And we've been doing it for quite a while successfully.

Our NPL 9.8%, which is a very good result. And of course, as part of our strategy, we assumed that it would be less than 10%. And given the market and given this economic slowdown that we've been dealing with, we believe that it's a very decent results, and we'll continue to work actively on the business side, on the risk side as well to make sure that the quality of our assets only improves.

Our costs are well under control. ROE very high when you look at it. And indeed, if we generate good results or capital base will be, of course, better and better, and we'll continue to maintain our indicators equity-related indicators under control.

And hopefully, this year will be even better than the previous ones. The results that we are presenting to you today are absolutely necessary in the sense that the sector, this bank generating good results.

This is absolutely key for the banking sector, so that our economic growth can sort of go back, so we can go back on the path of economic growth included thanks to different sectors, including the banking sector, also thanks to the energy transformation in this country.

So it's very good to see stable profits, stable results because now we can use this period to enhance, strengthen the health of the banking sector. Alior Bank does not have a Swiss Franc denominated loan portfolio, which for us is an opportunity. So we can offer extended lending. So our performing loans despite from pressure coming from interest rates, we've managed to maintain it at the same level.

And further on, I will show you the volume of our nonperforming loans and actually this indicator has fallen, which is really important from the point of view of the quality of our portfolio. When it comes to our results in the business customer segment, very good results. We are supporting businesses. We deliver funding quicker, we curve credit risk, and we've become more competitive.

Our sales channels are getting better and better, and we are very selective when it comes to larger loans so that we can have -- we can have our share in consortium kind of funding wherever we feel it makes sense from the point of view of our ROE.

When it comes to NPL, not only in the retail sector, we have been, of course, trying to lower NPL in the retail sector for years in terms of business customers in terms of the enterprise sector. It's not that easy to lower NPL, but we've managed to go a long way. Thanks to our risk department and of course, everyone on the business side because they've been building -- actively building a good quality portfolio.

It's good to know -- It makes sense to know that we have a good standing among developers. We are #2 according to the Polish Real Estate Developers Union for swift decision time for good customer service. So it seems that even though there have been some difficulties and people have been less interested in buying residential units or they simply couldn't get a loan.

So they've postponed their residential needs but these needs have been accumulating and I would say the interest is going to pick up in the coming quarters. So now let's move on to some numbers. Let's look at credit limits for SMEs. Year-on-year, we've posted growth of nearly 60%, asset balance over 10%.

When it comes to the micro segment and in the micro business segment, we have not been as aggressive due to the economic downturn always hitting micro businesses first. We were very careful in Q1, we mostly focus on rebuilding our volumes, and we've managed to do that successfully.

So when the economic situation improves, when cost pressure lets up a little bit, I believe that the micro enterprise segment will continue to be attractive for us. So we're not letting it go, of course. But first of all, we're focusing on small and medium enterprises to grow our decent volumes. When we look at our credit limits in regular service, we see very good dynamic.

So this transformation is really important for us, creating a very good, solid asset base, and so that we can actually transfer or replicate what we've already done with retail customers in the enterprise sector. And of course, I think it's very important for you when you look at our assets to see a significant growth in terms of assets in the business customer sector but it's always about quality.

So we're very selective, and we're selling mostly to preferred industries. The industry is based on which we want to build and grow our portfolio. So all these factors actually bring us closer to building a versatile bank with a healthy portfolio. In order for this to happen, we, of course, need to better understand our customers.

We need to get them to use our products more and more because then it helps our -- as curb our portfolio risk and of course, it increases our commissions. So our approach, and we've adjusted our approach recently, we have introduced some changes leading to a better dynamic in customer relations in Q1 compared to Q1 last year. We will continue -- So for example, one of our services is called Bank Connect, and it illustrates very well how you can build good relations between the bank and its customers. So we will continue in this [indiscernible].

And let me also point out where this growth comes from. We are taking over some of the activities from our sales force, and we try to automate our customer service and our bankers have more time to devote to customers who need that.

We also automate risk-related processes and now 20% more decisions are taken automatically in the small and medium enterprise sector, and we will continue. Of course, we will keep it up in the coming quarters. We have secured funding. We have enough skills and competencies to take this technological leap in the business customer sector.

We have been very active and actively acquiring new customers in our campaigns. We were pointing out the main benefits of our offer. We have a number of marketing campaigns going across many channels. We're promoting our services, products for enterprises and businesses, which is a big change of direction that brought us partially at least those great results.

When it comes to retail customers, and the retail segments, really -- what makes us very happy is the way we've been selling our consumer finance loans. The growth has been 30% year-on-year. But when it comes to loan sales in remote channels, 50%, which is a very good indicator, which goes to show how actively we have been acquiring customers into our online banking and our mobile app.

This is very important for us and our growth is over 20%. And transactions, the number of transactions is growing. So people are not just logging on for the sake of logging on, but they are actually performing various transactions, thus making their [Technical Difficulty] very healthy.

Last week, we received the -- an award from the world leaders in banking and insurance, and we have been selected as the most innovative bank for last year, which makes us immensely happy and we owe it to many implementations.

We were one of the first ones to implement innovative solutions, both in retail and business sectors. And we have earned the image of a trendsetter. So now again, moving on to numbers. Let me show you our perspective.

So sale of mortgage loans. It's at quite a low level, and we're expecting that the second half -- well, after the new 2% interest rate loan that will sort of boost the market and we'll see more volume. We'll be ready for that, of course. Our offer is ready.

And of course, much will depend on all the formalities from the point of view of the Polish National Investment Bank, BGK, but we'll be ready to roll out this loan -- those mortgage loans very quickly because this is our opportunity.

As I said, we are very selective. We're going to look for opportunities to build a nice asset base of mortgage loans. So now let's talk about cash loans. We have been working on remote channels. We will continue to work on our processes to improve our processes to be as much as possible.

Omni channel compared to Q1 last year. Definitely our cash loan is on the rise, which, of course, when we compare Q4 last year to Q1, we've seen we managed to reverse the declining trend because in the last month, there was less demand in cash loans -- for cash loans, but we're rebounding.

So hopefully, together with our work on process efficiency will lead to good sales. And of course, as always, we're interested in high quality of our portfolio.

Sales of quarter rates. I think that's something you might be interested in. While in the first quarter, we have sold less of those loans than in the previous quarters. It's very simple. We did not participate in this kind of price raise. We decided that from the perspective of profitability is pointless.

Well, of course, focused on these more profitable areas like sales of cash loans. We think that the market is going to normalize. If it comes to [indiscernible], it will be still present but not as much as in first quarter of this year.

Very important that prospective durability of relation with the client from the perspective of portfolio quality. We've got more clients with systematic payments. I would like to put your attention to the use of so-called VAS, payments for highways. This is a growth of at least 60% that shows us that this application is well perceived.

The clients use VAS uses that we use. It's about 40% of growth. Growth of transfer is about 40%. This is the increase of clients about 40%. This is a good dynamic we want to keep up with. We have this growth well developed from the perspective of the branches and channels.

As we're also educating the clients for the use of those. We have also focused on the comparability on the use of preparation products that will answer the interest of entrepreneurs. So we'll be able to provide financing. We see that as a business chance opportunity. That's what we focus on -- that was focused on in the first quarter.

We would like the -- also like this self-investment funds among others, this Alior fund which is responsible and following the needs which is responsible fund from the perspective of investment strategy that realizes to acquire well results, very important is a place of work, building a modern working culture.

That's one of the key things is opening Alior University. Also the aspect of sustainability, signing up concluding the agreement with [indiscernible] that has strengthened the eastern side of Poland, which was I think was a lot -- which have -- which was affected strongly by the war in the Ukraine.

We want also to use the potential of universities to regions and to use proper educational programs to acquire talents to work in Alior Bank. This university is also the development of workers, reskilling, which is financed, but not by not many companies in Poland.

This is a great opportunity for people who hasn't yet worked in the different areas using own resources or the people who know the bank can develop themselves in the technological area.

Modern workplaces also help on our project. The familiars of our banks who promote health among men and women because vital because I'm sure that engage workers who feel well in our -- in the working place, a better financial results.

If it comes to innovation, one of our key projects we focused on and which we developed. There's lots of talking about charity. We've got our own InfoNina, which efficiently leads next talks and tries to solve the problems for our clients.

In connection with mobile banking. Telephone contact is very important for our customers and the clients who use our mobile app who have any question about our bank, the most frequent -- the channel was the tough on contact. There's a possibility for shortening this tax by automatizing them.

Try to do this. And we also try to grow the assets are making time of waiting longer. We don't want to do this because that's worse for our clients. So we've got our InfoNina, which we will develop further the innovation area is very [Technical Difficulty].

We work on the work on the services of ours for this short service among the individual clients. In the second part of the year, this prospect from our side will be implemented, mostly based on the Alior Pay, which we are about to share for everyone in the next half of the year.

Also to those who do not yet have a relation in other bank provision results and commission results also shows a high quality of exchange. It comes to the broker balance. We've had a second place. We moved from the 9th place.

A lot of awards in the first quarter. This is, of course, due to hard work of all the Alior workers. Slowly coming to an end, we have been -- we put out of pressure on well on gaming. And that's what makes us one of the best-known bank among the young people.

This is because we are in gaming. We use modern ways of communication, and we reach this group. We still continue our participation in key gaming events to make the young clients aware of our presence, which will surely affect our long-term relation with clients.

So very well results dynamic upward trend if it comes to the cash loans with a higher profitability than the rate loan... Still lead consequent risk policy...

[Tomasz Miklas, executive]

Thank you very much. So our actions made in the first quarter and after the first quarter, we can again say that our results were very good.

And if it comes to the capital area, Tier 1, 14, 26, 561 points over the denomination levels. TCR factor 15, 36, 407 points. So it gives us 2.2 billion over those minimums in the short-term factor 109, long-term factor of 135.

If it comes to the cost of risk of Alior Bank in the first quarter core growth 161 in a similar level from the previous level 157. We also communicated with the guidance level 9 of prospective iteration of such risks.

We do not see those risks to materialize. Our balance shows out of resilience for the current situation in the market. I think those risks may occur in this year, but we look optimistically into the future if the situation won't change.

And the next publication will be ready to update our guidance. Consequently reduced 9 and 6% at the end of the first quarter. Combined of 400 points in perspective, 2 years. We are not about to change our perspective here.

We want to reduce this factor as much as we as possible as we look at certain factors in certain areas. In each quarter, there was a certain growth from the perspective of business clients by 300 basis points from the last year.

So as you can see, in every quarter, there is an upward trend. We've been great on [indiscernible] NPL level, and there is a situation by 6% from last year. And on the group 3, 65% also on the business lines on the same levels.

Cost of risk in each quarter, 161 in this quarter, 157 in the previous quarter. As you can see, after a certain growth in the half of last year since 3 quarters despite the situation is very complicated and definitely not macroeconomic.

We can see the stabilization and these levels are more good. In the sector of individual client, we can see by a certain growth in the half of last year. You can see even better situation. In the segment of business client, very good results basis on our result historic results.

Summing up if it comes to the risk profile of other bank, we've got very strong and getting better situation and the capital situation consequently upgrade the situation of risk from quarter-to-quarter. That's even from me. Thank you very much. Radek, I passed to you.

[Radomir Gibala, executive]

Good morning, ladies and gentlemen, some key information we had here a few comments from me, starting from the balance of profit and loss. Net result PLN 306 million for the first quarter of 2023.

After correcting, which we decided to implement because of the credit moratoria. That would be PLN 375 million. After that correction, it is PLN 11 million growth tender in [indiscernible] stable level of notifying the credit material.

And our opinion that, that should exceed this reserve for this year. If it comes to this correction, as we observed the standpoint that hasn't been less, but has kept on the same level. I think we succeeded.

If it comes to the result, as you can see in this factor part of the table, as Grzegorz already mentioned, very good, very good revenue on the capital level realized becomes the capital that we already have for the 31st of March.

As it was already mentioned, we still want to build base versus our aim in a strategical perspective, which is about 13%. We should expect that in the perspective of the whole year. It won't be such a big quote but I think that plus 13% or more than capital cost right now.

We think -- of course, [indiscernible] as we keep the -- the market environment in this formula we have right now. I think this is the aim, which is surely to be achieved. As I mentioned, those some basic amounts they pay on that are on the next slide, I will move forward. So starting from the -- as you can see in the left up...

Revenue has been stabilizing as we have already indicated or assets and interest on our assets is being re-estimated, and we have noticed some stabilization. So for 2, 3 quarters, we have been repeating that net interest margin has been plateauing right now, it's 5.86%.

But I would like to focus for a little bit on what's even more significant because it shapes the future, namely cost of funding and interest income between the first and the second quarter, look at the dotted line, there was a very quick trajectory of increased rate hikes.

So between the first and the second quarter, there was a little bit of a turbulence. And then in the coming quarters, situation has been stabilizing. And again, we're cautious. However, we are optimistic in giving you this message, namely interest rates when it comes to deposits and well acquiring funds for -- from customers.

When we're talking about interest rates, they have been stabilized or may even be declining. So that's factor number one that is making us optimistic. Secondly, there is the hedging effect. So the IRS portfolio has been -- has been, let's say, subject to amortization, so will not feel the negative effects of it.

And thirdly, we've been seeing migration, customers migrating from current accounts to deposits. In our case, it's around 30%. So it so the market forces are still in play. We will see what comes out. But... Well, there is a less -- well, the growth of -- or the increase of cost of funding is not as dynamic.

And well, when it comes to our cost of funding, it's at a very high level. So I would say we have reached its peak. So we expect that it would be remaining more or less on the same level for the quarters to come.

When it comes to loans to deposit or loan to depo is… well, over 80%. This is good news. And just like my colleague Grzegorz said generally loan that market, the credit market has plateaued. So for us, it's a good result that 80% of our deposits are actually working in the form of loans.

So again, looking further into our results, Commissions and fees, we are happy to see this year-on-year, quarter-to-quarter. Year-on-year, its 1-digit growth, 9%, which is mostly driven by better results of CX transactions, 23%. And the rest of this result is also resulting from seasonality.

So I would say, in other segments, the situation is similar, the same except for maybe brokerage to commissions. We see some moves made by our competitors. We're also looking at our chart of fees and commissions and trying to look for balance between competitiveness and of course, our desire to influence our costs.

So moving on. Costs. As we have mentioned before, we have been as sticking to our guidance, namely average annual inflation rate. Of course, there was a one-off extraordinary reserve or provision towards the bank guarantee funds and restructuring fund, PLN 57.5 million. It's a provision for now, and we're expecting a similar amount, and you will see that in the quarter for the first half of this year. And when it comes to some additional -- some additional data, definitely, wages are growing.

So the cost of wages is growing 9% year-on-year and it seems that it's very much on trend. This is what we see all around. And all the matter costs that we're talking about here, of course, are logistical costs, building infrastructure, maintenance costs, of course, higher utility bills, higher prices of security services and of course, cost of marketing or IT have been growing as well.

Let me just give you a small adjustment, especially that not all the costs have been, let's say, launched both on the OpEx and the CapEx side. So in the quarters to come, we will continue to update you, and we will show you how we are going to get to our cruising altitude, as I call it, when it comes to our costs.

But again, you should not expect any significant variation -- anything more significant than their level of average annual inflation rate. So the main financial targets as you were -- as we were presenting our strategy 2 months ago with a horizon 2024. We have annualized our ROE level after 1 year.

So we are maintaining this goal, both in 1-year and 2-year perspectives when it comes to cost to income, things might be changing a little bit. I've mentioned some of our strategic initiatives and the launching of some of our expenditures. Tomek, my colleague told you about our equity. We have very satisfactory levels, and we have quite a significant cushion.

TCR in Note 3 you will find you will read that subject to financial supervision authority approval, we have counted our results for last year as into our equity. So as of the 31st of December, the number has grown to 16% and then the IFRS was reconcile 9 -- so at 9%, so we finished at a level of 15.4%.

When it comes to credit risk definitely, my colleague, Tomek, I think, exhausted the topic. Cost of risk being at this level in such a demanding environment as well as NPL being 1 digit. This is very good.

So now we would like to thank you for your attention, and we're waiting for your questions -- thank you so much. I see that there's a number of questions coming in.

[Dominik Prokop, executive]

Your equity situation is very good. So assuming that you'll maintain it across -- or throughout 2023, is there a chance that the Board would recommend dividends to be paid out as soon as in 2024?

[Grzegorz Olszewski, executive]

According to our strategy, our ability to pay out dividend will have been reached after our strategy has been achieved towards the end or at the end of 2024.

So as for now, we're not deciding on anything, especially that there are still some potential risks ahead of us. But as I said, we have to rebuild our base so that we are able to grow off of it. So for now, no decisions have been made, especially the 2023 is still ongoing.

[Dominik Prokop, executive]

The following question is what are your expectations from the BNPL and deferred payments?

[Grzegorz Olszewski, executive]

Well, it's a very good question. We have been communicating certain things to you, and you were wondering like how much we were going to make on it because you want to illustrate that and reflect that in your models.

Well, in the second half of this year, we want to deliver this service to all of our customers plus to our prospects or potential customers. And of course, depending on which month we're going to launch it, hopefully, is going to be sooner than later, closer to the first half of this year.

Well, the volumes that we expect to see are like a few dozen millions and we want to acquire thousands of customers. But we want to build this portfolio again in a deliberate, measured way so that it's like something that complements our offer, our offer of payment cards, loans and so on and so on.

Also, you need to remember that, unfortunately, the banking sector has it more difficult to deliver such a service because it's much more heavily regulated than typical lenders who are not banks.

So when it comes to this form of financing, we are very cautious. Of course, this means some hiccups for customers, but I would say it makes sense for the banking sector companies to offer BNPL.

So several dozen million at the end of the year and several dozen thousand customers.

[Dominik Prokop, executive]

Right. So do you need MREL instruments? Do you have to issue EUR 1 billion to comply with the regulations by the banking guarantee fund?

[Grzegorz Olszewski, executive]

Well, given a great result last year and the current quarter, our demand is, let's say, lower than we communicated before. So we are planning to issue some instruments but at a lower level. We're going to go to the domestic market with it, maybe even before the holiday season -- the summer holiday season.

[Dominik Prokop, executive]

Selling CF customer finance loan. It's gone down. Is it because of lower demand? Or is it because you're tightening your policy?

[Grzegorz Olszewski, executive]

I've already talked about it and mentioned this in the first part of my presentation. Well, demand may have declined a little bit when it comes to consumer finance loans but for us to maintain our business model and to be selective about it.

In the second quarter, we assume that we'll go back to the volumes that you are used to seeing from us especially that we have some advantages technological advantages, so we don't want to engage in a price competition or a price war.

[Dominik Prokop, executive]

The following question have you analyzed their exposure to office real estate and commercial real estate, especially that there are risks related to this segment. In the states in Europe as well.

[Grzegorz Olszewski, executive]

Of course, we've been analyzing this all the time. So we take a portfolio approach. We analyze different parts of our portfolio. And every customer over PLN 3 billion is being reviewed individually their financial standing and their outlook.

For now, we don't see any heightened risks to our portfolio in commercial real estate. And it's been reflected in the results that we've presented. So NPL in the business customer segment and our cost of risk reflects that.

[Dominik Prokop, executive]

What is the gross value of your portfolio of residential -- of mortgage loans and compared to Swiss Franc-denominated mortgage loans as of the end of the first quarter 2023.

[Grzegorz Olszewski, executive]

So when it comes to the value in our balance sheet as we look at it, well, loans that are, let's say, at risk, I would say 1.9 billion. The most critical portfolio is one denominated in Swiss francs. And to us, it's -- in our case, its PLN 130 million before reserves before provisions have been launched PLN 106 million, that's the balance. But as we said after Q4, we have 50% of it is covered by provisions.

[Dominik Prokop, executive]

Following question. In Q1 2023, you have seen a slight increase of NPL in retail loans. So do you see any similar risk for mortgage loans or CF?

[Tomasz Miklas, executive]

We don't see that in the first half, we saw some -- last year, we saw some increase. But actually, the last quarters, have actually seen improvement of our cost of risk. So the slight growth, 0.1% in NPL quarter-to-quarter that's natural, given the size of our portfolio, it's not alarming at all. We haven't seen anything alarming.

[Dominik Prokop, executive]

Thank you so much Tomek. Another question. What is your outlook on NII and NIM factors and the personnel costs and operational costs in the next quarter of 2023?

[Grzegorz Olszewski, executive]

I talked about it a bit on the side to sum up if it comes to net interest margin. Let's assume some kind of variation if it were between 5 7, 5 9. That's what we expect to report in the next quarters.

Once more the main factors that determine this result is, first of all, the financing costs and the premium base means and vacation rates to the deposit portfolio. In our case, this is a [indiscernible] before we assume growth this year, of course, apart from onetime events, this growth on a level of average yearly inflation.

[Dominik Prokop, executive]

Another next question which is actual guidance for risk costs in 2023?

[Tomasz Miklas, executive]

Well, basically, I answered that question during the presentation. It comes to the guidance 1 9, we assume that there will be some risks connected to the economic situation. Right now, we do not see them occur.

What we expect and as we maintain this conservatism, let's say, they may occur in the second half of the year. We don't change this guidance. But the next publication, if the situation won't change, we will show you the updated guidance.

[Dominik Prokop, executive]

Thank you very much, Tomek. Next question -- so the upward trend in the mortgage loans was lower than in the previous year. What's the reason? Can we see a better upward trend in the next quarters?

[Grzegorz Olszewski, executive]

Right now, there's still the movements that do not really evaluate from the trend. We expect very rapid improvement in the second half of the year. And when it comes to the volumes of mortgage loans.

So right now, nothing very important from the perspective of the policy of the bank has not happened apart from the fact that, of course, this kind of policy of price adjustment, we had to do it due to the challenge coming from the transfer from [indiscernible] and maybe we are reflecting that a little bit earlier than in the rest of the bank.

But I think this adjustment of level is right now happening with all the banks. So I think this may be a factor of something that something that would really strongly affect this apart. I don't think that there thing where we'll have the selective approach, and we'll see the growth in mortgage loans.

[Dominik Prokop, executive]

Next question. When can we expect interim in the commission loans as the level will stay stable?

[Radomir Gibala, executive]

Coming from the perspective of our portfolio, as I've been talking just trying to change from one contract to -- at other rates. So we're talking about the first quarter.

Right now, we may more say about the results between 20 million and 40 million. I'm taking for the next quarter. That's, of course, only assumptions are the final results, which will be, of course, dependent on the level of rates and profitability rate and the long-term transactions.

[Dominik Prokop, executive]

Thank you very much, Radek. Well, in the first quarter of 2023 was the sale of NPL portfolio?

[Grzegorz Olszewski, executive]

No, we did not realize that in the first quarter.

[Dominik Prokop, executive]

Can we observe growth of applications for the credit moratoria?

[Grzegorz Olszewski, executive]

It is not a bigger but stable, just like with our rates and assumptions. It was just stable. That's why we decided to enlarge the reserve and the participation rate.

[Dominik Prokop, executive]

Can we assume the whole year that the dynamics of payments and provisions does noted in the first quarter on the 2023? Is it possible to be kept stable?

[Grzegorz Olszewski, executive]

We will, of course, do everything to prepare the best compromise between the confidences in the profitability. We'll try to do as much as we can, but the base scenario is -- the level is about EUR 200 million per quarter.

[Dominik Prokop, executive]

And next question, how big were the raises of salaries? And when did they happen? We can see this growth year-from-year on the level of about 10%. Is that actually the situation?

[Grzegorz Olszewski, executive]

This growth reflects what we have in balance. I mean the profit loss balance, the overall activities. It is difficult to say that these were certain months. This trend is reflected in the bank activity throughout the whole last year. So -- and thought on that's how it looks in every year.

[Dominik Prokop, executive]

And next question was MREL. Do you assume a lack of realization of MREL aims and what may happen if such go will happen?

[Grzegorz Olszewski, executive]

Of course, we do not assume such situation. We treat the situation very seriously. As I said previously, our need was less so. We are about to fulfill the same in this year.

[Dominik Prokop, executive]

We -- these were all the questions. Thank you very much for the presentation. Thank you very much for your answers. I would like to invite you to the contact with certain [indiscernible] with all the questions you may have.

Thank you very much.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]