Hello. Good afternoon. Good morning, ladies and gentlemen. Welcome from Komercní banka. Thank you for sharing your time with us today. It is the 30th of April 2025, and we are going to discuss the results of Komercní banka Group for the first quarter of 2025. Please note that this call is being recorded and I have just started the recording. Our speakers today will be Jan Juchelka, Chairman of the Board of Directors and CEO of Komercní banka; Jiri Sperl, Chief Financial Officer; and Didier Colin, Chief Risk Officer. And standing by in case you have questions for them are Jitka Haubová, Chief Operating Officer; Margus Simson, Chief Digital Officer; Miroslav Hirsl, Head of Retail Banking; and David Formanek, Head of Corporate and Investment Banking. As always, we will begin with the presentation of results, which will be followed by a questions-answer session. [Operator Instructions] Now let me ask the CEO, Jan Juchelka, to begin the presentation, please.

All right. Ladies and gentlemen, welcome to the presentation of Q1 results for Komercní banka Group. Together with my colleagues, we are keen to lead you through the presentation and answer your questions afterwards. The highlights of the first quarter are the following. Komercní has continued fulfilling its role in Czech economy. We were growing not only the number of clients, which was by 60,000 to the current level of 1.7 million, together with ongoing migration of clients from old technological stack to the new technological stack, but also we continue supporting the needs of our clients in the field of financing. The loans were growing by almost 3% on year-over-year comparison. Housing loans by almost 55% compared with the first quarter of 2024. And then having also good news on the side of deposits, where despite the fact that they were stable or slightly below, then the growth was realized on the side of current accounts, which is giving us back not only liquidity, but also NII. The mutual funds were growing by double-digit growth more or less traditionally, but we want to bring this dynamism back to the levels which we are used to in the previous quarters. So no complacent -- no space for complacency here, whereas the other assets under management, such as pension schemes and life insurance reserves were growing -- were at 0 or in slightly negative territory. The total capital ratio, i.e., the balance sheet was at the level of 18.7%, core Tier 1 17.7%, loan-to-deposit ratio 81.9% and both long-term and short-term liquidity ratios at more than satisfactory levels. So on that side, the balance sheet remains very, very strong. Speaking about P&L, so the translation into P&L is we are bringing to our shareholders one of the strongest, if not the strongest first quarter in the history of bank -- of our bank and bringing CZK 4.2 billion of group net income, which is almost 50% higher on year-over-year comparison. Earnings per share are lending at the level of CZK 22.17 per share. Cost of risk, which was one of the contributors into this result is in negative territory, 22 bps, thanks to the release of provisions. Cost to income lending slightly above 50% of reported numbers would be 47.2% should IFRIC remains reenergized. ROE 13%, 13.7% under the fulfillment of the same condition. So let me move to the next page, which is the macro echo. Czech Republic remains, let's say, a growing country, even though in rather mediocre intervals or mediocre, mediocre scope. In Q4, the GDP was up by 0.7% and Q-on-Q basis and 1.8% year-over-year, mainly supported by the activities of households and government consumption. Wages were up by 7.2%, which means also that there was a growth of real wages by 4.2%, Hence, the households bringing to the market more economic activity. Unemployment compressed still below -- sorry, below 3% at a level of 2.7% as of February 2025. The inflation at the same level, 2.7% on a year-over-year basis in March. and Czech National Bank remains at the level of 3.75% with the short-term repo rate. Czech koruna, 25 per euro, stronger by 0.9%, 23.21 vis-a-vis U.S. dollar. The market rates 3 months SIBOR 3.72%, down by 20 bps year-to-date, 10 years IRS at 3.78%, down by 2 bps and 5 years IRS 3.56 minus 10 bps year-to-date. The Czech 10 years, 4.29%, slightly up by 7 bps on as of year-to-date. What is pretty nicely self-explanatory part of this page is the right-hand bottom side where our colleagues have displayed the composition of Czech exports by sector and composition of Czech exports by country, where we see that the logic and deliveries and contributions of our industries is mainly in the field of motor vehicles and having Germany/European Union as the main trading partner for the direct connections or direct exchange. United States being at the level of 2.9% of our exports. One should remain in the context of hectic discussions around -- and decisions around tariffs that there are also indirect exports to the United States through Germany mainly. Yes. So we can move probably to next page and see the business performance. Growth -- gross loans to clients were growing by 2.9%. As I mentioned already, driven mainly by housing loans, both KB mortgages and loans from Modrá Pyramida went up by 54.5% compared to the first quarter of '24 and by 6% compared to Q4 2024. So which is reminding us the old good times where all the mortgage production is going at full speed -- and after the transformation of Modrá Pyramida, who is now the only and sole provider of housing loans that we have our ambitions also in the commercial side of the origination of new mortgages. Group lending, in general, 2.9% up. The parts below the housing loans is showing pretty let's say, nice contribution of small businesses and corporate, whereas the SGEF is bringing us somehow to lower levels as we used to be, and we believe that the leasing financing will be going up as the year will go. Group, yes. So this is the picture. Sorry, I confused you maybe a little bit, 2.6% corporate clients, 0.7% small businesses and SGEF, I stick to what I mentioned, 2.1%. So we would rather see that above 5% growth, and we believe that SGEF will go back to these levels. So, next page is showing our contribution to remarkable transactions in the financing of our corporate clients. So you can see at Page #9, please. I don't see the page moving. Yes, 9, on back, yes, this one. We were active all over the place, all over the segments, all over the sectors, including municipalities. We have picked up one green financing to accolade, which is one of the largest clients in the real estate development. Next page is showing us the developments on deposit side. The deposits are slightly down, even though, as I mentioned, the composition of current accounts chipping in almost 5% growth is, let's say, bringing back the hope that the trend of growing current accounts volumes will be continuing. And the term and saving accounts are down by 6.3%. Our traditional strength, which is investments and investment products, up by 8.1%. The main contributor being Amundi and private banking. The other 2 main contributors, life insurance reserves and client assets under management in KB Pension company are slightly below -- slightly in the negative territory. So here, probably I should stop myself and hand over to Jiri Sperl, our CFO, for the financial performance.

Thank you, Jan. Good afternoon. Indeed, financial-wise, the group generated a very solid quarter at the level of CZK 4.2 billion, as mentioned already by Jan, i.e., almost by 50% year-on-year. I can confirm that it is the best first quarter in the history of the group. At the same time, it is fair to add that the result was positively influenced by first release of the provisions and also by a decrease of the regulatory charges. As said, in absolute terms, cost of risk and regulatory charges contributed the most year-on-year as visualized on the waterfall chart on the left-hand side, cost of risk by almost CZK 1 billion on regulatory charges almost CZK 400 million. Of course, no surprise that this positively also to the profitability indicators, Jan mentioning in [indiscernible], I will add a lot return on tangible equity, which is growing even more to the level of 15.5% IFRIC 21 adjusted. The quarter-on-quarter, we went a bit down, which is, however, given more by the base effect than anything else. We were mentioning three months ago that the Q4 last year was one of the best quarters in the history of the group. Let's move to the balance sheet, please. So balance sheet total assets went a bit down year-on-year. It's by minus 1.8%. There is a slight recovery quarter-over-quarter, but less than expected to be frank and influenced by a slowdown in the deposits mainly, as Jan was already commenting. On asset side, quarter-over-quarter perspective, the loans basically stayed flattish, while the liquidity surplus was placed mainly into repo with the Central Bank, gummies, Czech gummies investments are basically flattish. And this is bringing me to net interest income category. So -- it was growing year-on-year by 2 percentage points, supported both by income from loans, plus 4% and income from deposit, plus 6%, while both other NII and NII from IB went a bit down. The correction in quarter over-quarter perspective is almost solely influenced by doubling of the minimum obligatory reserves that started as of January 1 this year. That are, as you might know, noninterest bearing -- so at that time, we were quantifying the impact and the yearly impact was quantified at the level of roughly CZK 800 million. So the quarterly impact is roughly at the level of CZK 200 million. To say without this impact, NII would have grown slightly, but still less than 1 percentage point. It, of course, also transports into NIM, net interest margin that is very much comparable both quarter-over-quarter and year-on-year and lending for Q1 at the level of [indiscernible]. Let's move to the fees and commissions. Fees and commissions remain still one of the drivers of the growth year-on-year growing still double digit by very strong 11.2 percentage points with 2 very clear drivers. First one, it is fees coming from the specialized financial services. And I should say, another super strong quarter, adding more than CZK 0.5 billion mainly due to continuing of bond issuance, loan syndication. There is a growth in income from the private banking, et cetera, et cetera. And the second driver is a very good quarter in the area of fees from cross-selling following the sales of the nonbank assets under management, as mentioned by Jan, and this category is growing year-on-year by 11%. From a quarterly perspective, there is a correction down, not a big surprise. Here, I can say that it's mainly influenced by the extraordinarily high Q4 2024 as we were commenting on that roughly 3 months ago. Still, however, above the, to say, run rate, so a good in this quarter. Financial operations, please. So financial operations are growing -- or income from financial operations are growing by roughly 12% on a year-on-year basis with both components, key components growing and contributing dynamically. So it's the case of capital markets, plus 15% and also FX from the structural book growing by 9%. As usual, I would like to add that the blue part is much more stable. So we very much appreciate. On a quarter-over-quarter perspective, there is a slight drop. I mean, the overall financial operations income, which is rather of seasonal nature. In absolute terms, more than CZK 900 million is still above our run rate. And the results of Q3 and Q4 last year was rather extraordinary. OpEx, please. OpEx was going down by 4.4%, influenced mainly by, first, lower regulatory charges, but also other categories are pretty under control. Let's go briefly through all of them. So personnel expenses are growing by plus 4% due to the increase of the base salaries roughly 1 year ago. But at the same time, we are reporting that the number of the employees is lower year-on-year by more than 4%, exactly in line with our plan. In terms of GEF going relatively significantly down minus 4%. And here, the savings go basically across the board. I was already touching regulatory funds. So here, it is like around CZK 370 million down. And according to our expectation, this is kind of a new normal in terms of resolution fund charges and deposit insurance fund charges because the fund is already filled. And finally, depreciation and amortization still growing double digit, which should not be normally surprised because still in the middle of the transformation. So it is a kind of mirror of activation of the assets, mainly from NDB, New Digital Bank. Probably one comment to the bottom right chart on the bottom right chart, -- it's true that quarter-over-quarter costs are going a bit up, up around 5%. But to say, if we adjust by regulatory charges, which have to be booked in Q1, also quarter-over-quarter costs would go a bit down. So even the trend is visible here. So that's all from me now and passing forward to Didier. Please, Didier, go ahead.

Thank you, Jiri. Good morning -- good afternoon, everyone. So turning to the overview of our asset quality for the first quarter. We continue to experience a good level of resilience with notably 2 developments, one being the reduction or the contraction of our 12-month default rate for the SME portfolio following some peaks we had in the last 2 years. So levels returning to our near through-the-cycle range for the SME portfolio, which is good. The second one is that we continue to witness some contraction in the same indicator, 12-month default rate for our unsecured retail portfolios, namely consumer finance and small business lending. And of course, at the same time, the mortgage loan and the large corporate portfolio continue to be at very low level when it comes to default rate. If you translate this into the IFRS 9 reclassification of our loan book in the first quarter, we've seen some moderate improvement. And in particular, when it comes to the Stage 2 category, which contracted by a little bit over CZK 5 billion. And in fact, this contraction is the simple reflection of a couple of material one-off situations on our mortgage on our corporate segment with 2 client situations significantly improving in the first quarter. And for the rest, maybe the point that I keep reminding you every quarter is that we continue to see a very low level of intensity when it comes to loan migration dynamics between the S1 and S2 portfolios, which is another sign of the resilience of our loan book. This level of migration being very stable between CZK 10 billion and CZK 15 billion going both ways. So compared to the size of the loan book, a very low level. Taking a quick look at the NPL exposure Q-on-Q, it remained very stable. And in fact, we had a very low level of migration into the NPL part of our portfolio. So all this give you this contained level of our key metrics, the S2 ratio that slightly contracted below the level of 14%. The NPL ratio, which was stable at 2% and the provision coverage that we report for the NPL portfolio also stable within the 40% to 45% range, which is a comfortable level, taking into account the fact that we do not reflect here the value of our collaterals. So this is for the asset quality. And if we go to the next slide, we see its translation in terms of the evolution of our cost of risk. So for the first quarter, recorded at CZK 0.5 billion in net reversal, which is made of 3 main components. The first one is this reversal, which we had announced to you in the last 2 quarters on -- for one of our corporate clients generating near CZK 1.1 billion in provision reversal. So that's the first one. The second one, which is also in terms of positive development is the level of net creation generated by our retail portfolio exposures, which was slightly above CZK 100 million, which is materially below the quarterly average of the last 2, 3 years, which is more in the range of CZK 200 million. And the third point is that we booked CZK 0.5 billion temporary reserve. This in anticipation of the upcoming update of our macroeconomic scenario. under the IFRS 9 standard, reflecting the recent tariff announcement. And this CZK 0.5 billion temporary reserve, in fact, was very simply estimated based on an expected 25 bps increase of our probability of default for the corporate segment. And this reserve will be "recycled" once we have the upcoming or the next version of our macroeconomic scenarios, which will be sometime next month. So this is for the main component of our cost of risk figure for the first quarter. A brief comment on the overlay reserves, which we created in 2022. So for the first quarter, we kept them stable at a level of CZK 2.2 billion. And as we communicated to you in the previous quarter, we will start our release phase, which is expected, in fact, to kick in this quarter and continue through the second semester with the planned reversal of its retail component, which is for an amount in the range of CZK 700 million. And to conclude on this cost of risk overview, we've decided to update or precise our year-end for 2025 cost of risk outlook, which is now guided in the range of 0 to 10 basis points, closer to 0, i.e., a range that is well below our through-the-cycle cost of risk level. And this takes into account 2 or 3 drivers. One is obviously the one I just mentioned, which is the planned reversal of our retail overlay reserve. The second one is an assumption in terms of stable default rate across all segments and product portfolios under our central scenario, macroeconomic scenario. And we've also added a bit of add-on of reserves, reflecting some possible increase in any credit or losses that we could incur coming from digital -- or the digitalization of the bank and through digital fraud risk just to be on the safe side. And that gives you this -- the main drivers behind this guidance, again, which is within the range of 0 to 10 basis points for 2025 year-end and again, closer to the 0 level. And on this, I'm going to hand over back to you, Jiri.

Thank you, Didier. Well, the capital adequacy is still very strong at the level of 18.7%. Quarter-over-quarter, it is almost the same, i.e., still around 210 basis points above the minimum requirement and even above our management buffer, which is 50 to 200 basis points. Probably here, it is worth to stop for a second. March is the first publishing date when we are reporting under the new method under the new standard, i.e. CRR3 or otherwise called like Basel IV. And from the waterfall chart, you can see that the first adoption impact is more or less neutral when the positive impact coming from the credit risk-weighted assets that added like plus 44 basis points into capital adequacy, it was offset by a negative impact on the risk-weighted assets side by almost the same figure by 43 basis points. So -- this was not a surprise. We are expecting kind of a neutral impact. Still what is ahead of us is the impact into the market risk-weighted assets, which are expected probably next year. And they are going to be, as indicated before, still positive. Not surprisingly, also MREL adequacy is safely above the requirements. And for you, also in 2025, we do not plan to go for another subject/SNP, senior non-preferred instruments, as we simply don't need it. And final slide of the presentation is the outlook. Yes. So there is -- there are some changes, but not too many in macro. Jan already was touching at the beginning of this presentation. So growth of the economy is expected at 1.5% in 2025, inflation around 2%. Rates still expected to continue going down, lending at 3% -- and here is a slight change because 3 months ago, we are saying by the mid of the year. So now we are, let's say, extending the time by the end of the year. So we are expecting on a quarterly basis that CNB is going to go down by 25 basis points. In terms of market growth, there are no changes. So both lending and deposits are expected to grow by mid-single digit. For KB, and that's given the slowdown in Q1 this year, we are a bit downgrading the growth, which basically goes across the board. The overall growth on the loans side is still at mid-single digit, but now we rather at the kind of lower edge of mid-single digit. Deposits due to the same reasons, we downgraded from high single -- same reasons, I mean, a bit slowdown in Q1 this year. We downgraded from high single digit to mid-single-digit growth. Having said that, we also adjusted KB financial outlook on revenue side down from high single digit to mid-single digit. And mainly it is on NII front due to the lower-than-expected growth of deposits in Q1 and the quarters to come. And this is going to be followed by lower OpEx than expected and even guided 3 months ago. 3 months ago, we are guiding low single digit down, now low to mid-single digit down. And that's thanks to continuing simplification, optimization of branch network, decrease in staff number by approximately 500 by the end of the year. And also -- and I was touching that before, a lower contribution to the resolution fund charge. Credit risk skipping, Didier already informed you. So finishing with potential risks, they remain completely the same, just we added one, which is disruption of international trade due to protect. So that's all. And now I'm returning calls to the studio. Thank you.

Thank you. Thanks to all the presenters. In the next part of today's meeting, we will be happy to answer your questions. Let me remind you that this meeting is being recorded. [Operator Instructions] So our first question comes from the line of Joan [indiscernible] from ODDO Bank.

I just have one question on the outlook. Sorry. I have just one question on outlook on fees. I think it previously said like growth, but now it's stable. Is it correct or I missed something maybe in the last guidance?

Yes. I can take this one. You are correct. It is -- current guidance is stable. And what you can see behind mainly is the fact that we are expecting a bit slower dynamism of the sale of, let's say, equity funds, equity mutual funds due to uncertainties on the markets recently, right? So as these products are generating very attractive fees that has been transposed into our downgrade -- a slight downgrade of the fees and commissions.

Okay. And you take also the reported one because there were some one-offs in Q4 on the fee side, but you take the reporting as a base for the guidance, right?

Yes.

Okay. Okay. And maybe I have just one -- I'm not sure whether I get it correctly, the components of the 0 to 10 basis points risk cost guidance, there were like 2, 3 points. If maybe you can repeat, that would be my last question.

So in fact, I will give you the first 2 ones, which are from a material point of view, the one to keep in mind, which is what I summarized regarding the adjustments of our covenants to manage overlay. So in the rest of the year, so Q2 and the second semester, provided that we continue to see the improvement that we've seen for the retail portfolios, which is more than likely, we will reverse the 2022 reserves for its retail component. So it's more or less in the range of CZK 700 million. That's number one. And number two is that, we made the assumption that default rate would be at the same level as last year, so 2024 for all product and segment portfolios, which is a reasonable assumption to make within our central macroeconomic scenario.

[Operator Instructions] So our next question comes from Delphine Lee from JPMorgan.

Actually, I just have 2 quick ones. So just on -- first of all, on the lending volumes. So mid-single digit and you're talking about the low end, you are assuming, I guess, an acceleration of the lending volumes in coming quarters. Just wanted to get a little bit your level of confidence and if you can elaborate a little bit about that? And then the second question is on costs. Clearly, it's very helpful to see sort of like a bigger decline this year. Just wondering sort of what should we expect for '26 onwards? What kind of cost trend should we expect?

I will start with the answer to the first question and probably my business lines colleagues will complete me. So well, how we are confident -- we are confident let's probably touch the main products that are behind us. So we are very confident in terms of mortgage loans. Simply, the demand is still super high. The sales are expected to increase further. The same consumer loans, here, we downgraded a bit from high single digit to mid. But still, the demand is also relatively convincing. So here, we are also fully confident. In terms of corporate, to say, for the time being, there is a very rich pipeline that according to our opinion, should offset potential impact of tariffs. But if you are asking for the level of confidence for corporate, for me, the lowest confidence is right at this point, i.e., corporate because simply, there is a risk that companies are going to postpone or delay their investments, et cetera, et cetera. But I don't know whether some of my colleagues would like to complete me.

Maybe just to say that on the retail side, mortgages are 60% above the last year's production, but it doesn't immediately translate into the outstanding volumes because this is like standard structure of production. It's not just refinancing of these things that come immediately. It's full scope reconstructions, constructions, everything. So it will come to the outstanding balance, but it will take time and the growth will continue. So I'm pretty much confident on the retail side.

Just to complement for the corporate part. So what we see is now a bit, let's say, bigger appetite of the corporates to discuss some investment financing opportunities and also the working capital lines are being drawn more than it used to be some time ago. So these are, let's say, 2 actual elements, what's happening in this landscape.

And the other question was on the cost side, and more concretely in 2026. So as I was mentioning for this year, we are expecting a low to mid-single-digit decline -- and for 2026, usually, we are not guiding the years to come, but it is expected that the costs in 2026 will not -- or will stay basically flattish versus the decreased base we are targeting in 2025, so around flat.

The next question comes from Martin [indiscernible] from UBS.

A question on the NII outlook. Obviously, you slightly revised your guidance down on that front. Can I just ask, is that mainly the function of somewhat lower confidence in corporate lending growth, i.e., loan to the volume picture or perhaps the net interest margin maybe through deposit competition, maybe through lower loan spreads also play a role here? And just on that related topic, if you could talk a little bit about deposit competition and the pace of expected shifts from here onwards in the deposit mix?

Okay. I will take the first one. So NII outlook, almost a reason for the slowdown. And now I'm skipping let's say, changes minimum obligatory reserves, but our volumes, almost nothing else. We believe that the volumes recover as part of our guidance. In terms of income from the deposits, Jan was touching at the very beginning, a positive piece of information that it improved. I mean the ratio of unpaid versus total slightly improved. And I'm not benchmarking with Q4 2024 because that's kind of extraordinary. Always Q4 is a bit different. But if you have a look on the, let's say, evolution of this ratio, unpaid versus total, I remember that 1 year ago, it was around 52%, then it went a bit up. And for the time being, at the end of Q1 this year, it is already 56%. But the point is that the change of the structure happened relatively late. So you still do not see full impact of that in Q1 results, but this should recover in the quarters to come.

[Operator Instructions]

I think, there was still a question about the competitive landscape in deposits.

That's right. Yes. Sorry, sorry. Okay. So yes, please go ahead.

You mean competition is still the answer is in the air. So I may start on retail side by saying 2 things. First one, we stick to our, I would say, general principle approach saying we pay a fair price. So we don't aggressively compete on the pricing side of deposits. It's not the way we would like to attract clients. So we definitely see -- some of our competitors paying more. On the other hand, we believe we are quite reasonably balanced at this moment. This is the first thing. Second one, usually volatile times play in favor of banking deposits, and we can see it already a bit. And third one, volatile times and decreasing interest rates play in favor of current accounts outstanding balances. So this is where my optimism will be probably stemming from if this brief nutshell answer is enough for you.

[Operator Instructions] Our next question comes from the line of Mathews Shane from WhiteOak Capital.

Just to better understand the corporate loan growth guidance as well. When we talk to clients, are they, let's say, initially hesitant at this point in time to invest? What is the actual, let's say, demand, I mean, because you talked about some demand you're seeing from clients, but are they, let's say, willing to forego it for until they get more certainty on the environment and how it's changing. So I just want to better understand the rail ground interactions you are seeing and whether we are being more conservative just in line of how, let's say, the environment has changed?

Maybe I start to give you a kind of short comment or reflection of the -- from the clients. So generally speaking, last year, the companies were more hesitating about pursuing their investment plans. And this year, they are rather more active despite all the geopolitical uncertainties. Maybe a favorable factor or element is also decreasing interest rates and basically interest rates more or less according to the expectations, hitting the, I would say, medium-term levels and the companies are just ready to pursue some investments. Some of them are necessary from a technological or life cycle point of view as well. So this is the current situation. We do not record a kind of increased level of uncertainty because the level of uncertainty is anyway high already for some time. Not sure, if would like to also add for retail or is that complete answer?

No. Yes. That's it. I just wanted to ask about the call.

Okay. I see. Okay. So yes, let me propose waiting a few seconds if you have another question. Probably on -- if I may just fill the moment of silence coming back to the corporate lending. both Martin and Matthew ask for the same. What is probably not fully, let's say, reflected on our assumptions for 2025 is the level of public investments, which might create additional space for private investment too and give some anchor to corporate clients, including large corporations, including midsized companies. I'm speaking mainly about potential new investments into infrastructure, be it energy, be it transportation type of infra. So on that side, we are -- as Czech Banking Association is in pretty lively discussion with the government, and there might be some inputs or inputs is coming from the side. So that might a little bit elevate the bar for opportunities on corporate finance.

And our next question comes from the line of [indiscernible],

I just wanted to understand how you think about related levers of, let's say, CET1, AT1 issuances and dividend payouts. Philosophically, how do you think about whether -- when to issue AT1s, if at all you do? Or generally, as a concept, would you not like to do so? The reason I'm asking is, let's say, over the last few years, you've been paying 100% payouts and that has, of course, been reducing the CET1 ratio. And at some point, you might reach a point where you would say, I don't want to reduce the capital ratios anymore. At which point would you like to optimize the way you hold capital between common equity Tier 1 and AT1s? Just what is the long-term thinking around it?

Should I take it, Jan? Okay. So Well, question. Number one was, are we going to consider to issue AT1. Actually, not really because after some considerations, it's very clear that this would not work efficiently and this would lead to the kind of double taxation on KB side and the investor side. That's first. Second, you are right, 2025 is third year in a row when we paid or we announced to the market to pay, which is the case for 2025, 100% of the capital. At the same time, we would like to grow sufficiently, which will consume a relevant part of the newly generated capital. And the last point is for the time being as a matter of policy of the bank, we do not guide dividends beyond the year we are operating. At the same time, I can repeat here that once there is a surplus of the capital, we are not going to sit on it and we will return to the shareholders.

And our next question comes from the line of [indiscernible].

Let me apologize. I was not here. So maybe this question was I'm not sure. I wanted to ask about the dividend policy of the KB due to 2024 or 2023 was a policy, I think, 40% holding, 60% divide to shareholders. Then it was risen to 100%. And I wanted to ask how do you see the future policy of the dividends until maybe 2026, 2027?

Okay. I don't know when you joined the meeting, but it was exactly the point of the previous question. So let me very briefly summarize the answer. We do not guide the dividend policy beyond the year we are operating. First, we will be more concrete during Q1 -- during Q4 presentation results in February 2026. This is one thing. Once there is a surplus, we tend to return it to the shareholders. That's second. And third point is maybe just to explain why we paid 3 consecutive years, so 100% subject to validation, but it was very much focus on the capital management discipline. And what you can see behind is very high level of our almost complete KB Group is running under IRB. We are preparing IRB for other components of the group, which could be Slovakia, which could be GAE, et cetera, et cetera. That's one point. Other point, we redirected kind of allocation of the capital into the retail loans that are kind of -- that are capital less intensive. We are considering to go direct more originate to distribute, et cetera, et cetera, right? So that's why we were able to pay 100% still the kind of standard normalized dividend policy is whatever between 60 to 70. I would like to pass. Thank you.

Thank you for the questions and for the answers. It seems we do not have any further questions in the queue. So let me hand back to the CEO, Jan Juchelka for the concluding remarks.

All right. Thank you very much for being with us. We are thrilled to continue our hard work to deliver the next quarter and the main aspects of 2025 according to what we are debating here with you. I wanted to thank you for your trust and work you are dedicating to covering KB shares. Also thanking to my colleagues who presented or answered your questions and including the Investor Relations team for preparing all of this. Thank you very much, and see you at latest at the occasion of the second quarter results presentation. Thank you. Enjoy today.

Thank you very much. This has concluded the presentation. You can now disconnect.

Thank you. Bye-bye.

Bye. Bye.