Thank you, Drew. Good afternoon, everyone.

Thank you for joining us today to review FAB's financial performance for the first quarter of 2026. The Group's financial results were announced this morning pre-market, and all related disclosures are currently available on the Investor Relations section of our corporate website as well as on our app.

Today's call is hosted by our senior management team, represented by our Group Chief Financial Officer, Lars Kramer, and our Group Chief Risk Officer, Chris Jaques. They will be answering your questions at the end of this short presentation.

With that, I would now hand over to Lars for the presentation.

Thanks, Sofia. Hi, everyone.

I'm pleased to present FAB's financial results for the first quarter of 2026, and as usual, I'll go through the slides quite quickly and hopefully have sufficient time for plenty of Q&A. Starting with slide number four and our key highlights.

We delivered another solid quarter in Q1 '26, demonstrating resilience amid a period of heightened regional tensions and elevated market volatility during March. Our operating income rose 6% year-on-year to 9.34 billion dirhams, reflecting strong business volumes, well-managed margins, as well as diversified income streams.

Net profit was 5.01 billion dirhams, and this was down 2% year-on-year, predominantly reflecting management overlays in response to the evolving external environment. Group RoTE was at 17.8%, above our medium-term guidance.

We saw robust business momentum. Loans and advances as well as customer deposits were up 8% and 4% year-to-date respectively, while our total assets exceeded $400 billion for the very first time.

We've executed a comprehensive set of actions since the onset of regional tensions, thus ensuring continued operational resilience and business continuity. Importantly, we've maintained a robust balance sheet, as well as across liquidity, capital, and asset quality.

We'll cover this in more detail in subsequent slides. Overall, we believe that our differentiated strengths position us well to navigate the current environment and to emerge actually even stronger as conditions normalize.

Turning to slide five, we think it's worth highlighting the resilience framework underpinning our Q1 performance, as well as our broader ability to perform through the cycle. As mentioned earlier, we maintain a strong balance sheet.

Capital and liquidity metrics remained well above regulatory requirements, with Group CET1 at 12.8% and liquidity coverage ratio at 145%. Ahead of the market disruption, we raised $2.3 billion equivalent of senior wholesale funding year-to-date, which positions us well from a funding capacity perspective.

We've also called our $750 million AT1 in late March, signaling confidence in our capital trajectory. Turning to credit risk and asset quality, we inherently present a conservative asset mix with a relatively low 45% loan-to-asset ratio, supported by a well-diversified loan book, which is roughly a third of which is to governments and public sector entities, alongside a high-quality investment portfolio, with a significant proportion being investment grade or above.

Asset quality indicators remain solid, with the Group's NPL ratio further improving to 2.1%. This is underpinned by strong provision buffers, with cash provision coverage at 110%, rising to 164% when collateral value is taken into account.

In addition, we hold a further 4.38 billion dirhams of collective impairment reserves in equity. This is in line with the UAE Central Bank requirements and also provides an additional layer of loss absorption capacity.

Last but not least, operational continuity remained a top priority for the Group. Our enterprisewide resilience and business continuity frameworks enabled us to maintain service delivery across the franchise despite limited disruption to certain digital channels.

Throughout the period, cyber and operational risk monitoring was further strengthened, and we've also established a data center off-shoring strategy to enhance the continuity of critical systems. Overall, the Group's structural resilience is reflected in our credit profile, with FAB rated AA- or equivalent by all three major rating agencies, which is the strongest combined credit rating among MENA banks and one of the strongest globally.

Turning now to slide six, our Q1 performance demonstrates disciplined execution of our strategic priorities and is underpinned by consistent focus on supporting our clients. Revenues grew across all divisions, supported by sustained business momentum and strong client engagement.

The international franchise remained a key differentiator, contributing 24% to Group revenue, while providing access to diversified funding sources and supporting cross-border client activity. On AI, the focus is increasingly on scaled adoption and measurable outcomes.

Agentic AI deployment is progressing across the organization, supporting meaningful gains in efficiency and productivity of up to 20% across a broad range of processes. We have made clear progress on data foundations, while also continuing to strengthen the ecosystem partnerships, including through new initiatives, such as the AG Agentathon with key partners Microsoft and Pre-Sight.

Finally, sustainable finance remains an area where FAB continues to lead with real tangible impact. We've helped facilitate 389 billion dirhams worth in sustainable and transition financing, and that's reaching 78% of our 2030 target, whilst still maintaining leading ESG credentials.

Turning to slide eight, this summarizes our Q1 '26 performance. Our operating income grew 6% year-on-year to 9.34 billion dirhams, driven by a 12% year-on-year growth in net interest income, and this was supported by balance sheet growth as well as resilient margins.

While non-interest income was softer, primarily reflecting prevailing market conditions. With operating expenses well managed, this translated into a 5% increase in operating profit, both year-on-year and quarter-on-quarter.

Net impairment charges were 1.1 billion dirhams for the quarter, including a management overlay of 300 million dirhams in response to evolving market conditions. As a result, Group net profit was 5.01 billion dirhams, 2% lower year-on-year, yet this was up 3% when excluding the management overlay.

As mentioned earlier, our capital and liquidity position remains strong and well above regulatory requirements. Turning to the next slide, which shows the breadth of our revenue momentum across businesses as well as geographies and income sources.

Investment Banking and Markets delivered a strong quarter, with operating income up 10% year-on-year to 3.25 billion dirhams. Client engagement remained robust, with lending and deposits both up over 20% year-to-date.

We've also maintained our top-tier MENA league table positions, and Global Markets performed well despite the heightened volatility. Wholesale Banking also delivered strong growth, with operating income at 18% up to 1.71 billion dirhams, and this reflects the strength of our integrated franchise and disciplined origination, with lending up 8% year-to-date across our priority sectors and corridors.

In Personal Banking, Wealth and Privilege Client Banking, operating income grew 1% year-on-year to 3.23 billion dirhams, and this was off a particularly strong Q1 last year. Volumes continued to build steadily, with loans up 1% and deposits up 3%, and retail AUMs up 27% year-on-year.

Consistent with our liability-led strategy, our retail CASA balances increased by 28 billion dirhams year-on-year, or 17%. Geographically, our international franchise contributed 24% of Group revenue, and this was up 18% from a year ago, supported by broad-based momentum across all of our key markets.

Overall, the income mix remains well balanced, with non-funded income at 40% of Group revenue, highlighting our diversified and capital-light earnings profile. Moving on to slide 10 and our net interest income and margins.

The net interest income reached 5.6 billion dirhams in Q1, and this was up 12% year-on-year and 11% sequentially, and marking a new high for the Group. This was supported by robust business volumes and well-managed margins, with the Q1 Group NIM at 1.95%, which is 20 basis points higher quarter-on-quarter.

The sequential NIM expansion was driven by several contributing factors, and these include our disciplined balance sheet and treasury management, targeted repricing across both assets and liabilities, a reduction in lower-yielding placements, and a higher interest in suspense recovery, which collectively, and all of these collectively supported our asset yields. These positives were partially offset by some pressure on CASA margins, while the impact from rate cuts was around 4 basis points.

Our quarter 1 '26 also benefited from stronger market-related NII, and this can be volatile quarter-to-quarter. While NII is expected to moderate from Q1 levels, we continue to expect Group NIM to be in the 180 to 190 range for the full year.

Our interest rate sensitivity remains broadly unchanged, and with a 25 basis point movement in rates still estimated to impact the bottom line by approximately 200 million dirhams, and this is assuming no offsetting management actions. Turning to the next slide, the non-interest income stood at 3.72 billion dirhams, and this is lower by 2% year-on-year and by 7% sequentially, and this represents 40% of the Group's operating income.

Starting with FX and other investment income and looking at the various components, our trading franchise performed strongly, and this was up 4% year-on-year and 61% quarter-on-quarter, very clearly demonstrating our ability to capture opportunities in a more volatile as well as dislocated marketplace. This was offset by a moderation in Global Market sales income, primarily due to softer client risk appetite, especially more complex and larger structured transactions, while our treasury and other income was impacted by unrealized mark-to-market fair value movements on our equity portfolio.

What's interesting is this has started to reverse in April. Moving to our fees and commissions, which grew by 21% year-on-year and 14% sequentially to 1.46 billion dirhams, marking a new quarterly high for the Group.

Growth was broadly based, led by a 41% increase in loan-related fees, as well as resilient trade-related fees, and continued momentum in other areas, including advisory as well as asset management. Looking at slide 12, our operating expenses were 2.1 billion dirhams in Q1 '26, and this was up 7% year-on-year, but 1% lower sequentially.

Staff costs rose by 4%, driven by targeted hiring, as well as expanded AI specialist capabilities, and this is as we continue to build the skills required to support our transformation at scale. Depreciation and IT costs were up 5% on continued investment in digital platforms and infrastructure.

Our Group cost-to-income ratio remained at a leading level of 22.6%, highlighting robust operational efficiency and continued cost discipline. Turning now to our balance sheet, we delivered strong momentum in the first quarter, with gross loans and advances increasing by 52 billion dirhams, and this was driven by healthy origination across the entire franchise.

Our growth was broad-based across our various counterparties. Banks represented the largest contributor, and this was up by 31 billion dirhams, reflecting short-term trade-related lending, and this is a portfolio that we typically build early in the year and manage down at year-end for capital optimization purposes.

All other counterparties contributed positively, demonstrating continued momentum, even against a more complex backdrop. On the funding side, customer deposits grew by 30 billion to 871 billion dirhams.

During the period, we saw strong dirham inflows from our government and public sector clients, which helped offset some US dollar-denominated outflows, and this is a typical pattern during periods of volatility. On slide 14, as we've mentioned earlier, our balance sheet represents or presents a defensive profile with a conservative asset mix: a 45% loan-to-asset ratio, a high-quality investment portfolio at 19%, and cash and central bank balances also at 19%.

This mix supports liquidity, flexibility, as well as resilience across market conditions. Our portfolio quality is one of clear strength.

Our loan book is well diversified by economic sector, with no single sector representing over 15%, and government and public sector exposure at 28% anchors the portfolio with high-quality counterparties. Geographically, our international loans represent 24% of the portfolio, with the majority outside the GCC.

Turning to slide 15, our liquidity profile remains a core strength of the franchise. The Group liquidity coverage ratio stood at 145% at the end of March, and this is well above regulatory requirements, and a clear reflection of our disciplined approach to liquidity management and the quality of our liquid asset buffer.

Customer deposits represent 65% of total liabilities, and this is underpinned by a well-diversified funding base. Government and public sector deposits account for 34%, while corporate deposits represent 49%, and personal and retail deposits come in at 17%.

This gives us a diversified as well as resilient mix across the various segments. Customer deposits grew 4% year-to-date, driven by fixed deposits, with CASA balances moderating at 44% of the total.

Geographically, 78% of the deposit base is UAE-led, while international balances are largely outside the GCC. With our AA- credit rating continuing to differentiate us by supporting our ability to attract as well as retain high-quality deposits from diversified sources and across market cycles.

Turning now to page 16, on asset quality, and as we said earlier, the gross NPL ratio improved further to 2.1%, which is an all-time low for the Group, and this is underpinned by sustained portfolio quality as well as 110% provision coverage. This includes 300 million dirhams worth of management overlay to reflect a more cautious outlook.

In terms of our approach, this was driven by a recalibration of scenario weightings, with the downside scenario now at 50% from 30% previously, with no change to underlying scenario parameters. As a result, net impairment charges were at 1.1 billion dirhams for the quarter, and this comes in at a cost of risk of 67 basis points, which reduces to 48 basis points when excluding this 300 million overlay.

As shown on the bottom right, our Q1 '26 cost of risk remains well below COVID peak levels, reflecting the underlying quality of our book. Turning to the next slide, the Group's capital position remains strong and well above regulatory minimums, with our CET1 coming in at 12.8%.

During the quarter, capital generation from earnings was 69 basis points. This was offset by RWA growth of 92 basis points and a further 30 basis points from other movements, and these were largely reflecting the widening of credit spreads on our HQLA portfolio.

This should reverse once market conditions normalize. Worth noting, the RWA growth was primarily driven by credit risk RWA, and this was mainly from the short-term trade lending that I mentioned earlier, which carries higher risk weights, but is also expected to unwind by year-end.

Looking at the next slide, the external environment has clearly become more complex in the recent week or two months, with geopolitical risk weighing on sentiment, and the conflict-driven volatility affecting various sectors, including hospitality, trade, logistics, and energy markets. At the same time, the structural foundations of the UAE and the wider GCC remain firmly intact, supported by robust sovereign balance sheets, solid banking sector fundamentals, as well as proactive policy frameworks.

Against this backdrop, we remain constructive, with a clear focus on client engagement, disciplined risk management, as well as capital allocation and execution. Now turning to slide 20 and our guidance, we've updated our macro assumptions for 2026.

Our current in-house view now assumes an average oil price of around $83 a barrel, and this is against the $60 previously, and this reflects the recent disruption to global oil supply as well as demand; a UAE real GDP growth of around 4.2%, compared with our 5.6% previously, and this is on the back of an expected slowdown in both oil and non-oil economic growth; and interest rates are expected to remain on hold, and this is versus our earlier assumption of up to 50 basis points of cuts. These macro assumptions are based on the expectation that regional tensions will ease by early to mid-Q2.

Should this be delayed, we retain the flexibility to revise our forecasts and to adjust our outlook as conditions evolve. This takes us to our financial guidance for 2026, and as you can see, we haven't changed our guidance metrics for now, as we believe it's more prudent to reassess them at the half-year, which is also consistent with our standard practice.

Beyond the near term, the trajectory will ultimately depend on the shape and pace of the recovery. We'd expect the second quarter to more fully reflect the lagged impact of the recent developments, particularly in terms of client demand and activity.

While it remains too early to quantify all the various dynamics with precision, what does continue to stand out is the underlying strength of our franchise, especially in periods of stress, as demonstrated by our track record, and reflected in our medium-term through-the-cycle RoTE guidance of above 16%. To wrap up, we delivered a solid Q1 performance.

Our balance sheet fundamentals remain robust. We enter this period from a position of strength, and we will remain prudent as well as agile and focused on delivering sustainable returns throughout the cycle.

With that, I hand us back to the operator, and I'm available for Q&A.

Thank you. Congratulations on the resilience of the results.

First question, please, is could you talk a little bit about the momentum that you saw in March and April relative to the start of the quarter as it relates to sort of things like loans, deposits, and non-interest income? The second question is about your CET1 level.

As you highlighted, it's comfortably above the regulatory minimums, which were eased a little bit post the crisis. In absolute terms, they've come down a little.

Have you got any optimization plans which might push that back up above 13%? Assuming that the tensions ease in the middle of the second quarter, I think as you referenced, would you still be confident about maintaining the cash dividend?

Thank you.

John, hi. I think resilience is a good—I mean really and this is something that our business model has clearly demonstrated for a series or through a series of crises, right, is is is the resilience.

We expect to see the same through this particular one. Maybe on the dividend one first.

It really is far too early to comment on dividend, we will generally, we come back on dividends in Q4, and at the moment, I'd like to stick to that in terms of projection. If I look at the momentum in the business, what was very clear is we came into this year with very strong momentum.

When I see what what we had in terms of business and deals done and, it doesn't matter what dimension you're looking at, the January and February months were, far stronger than the equivalent period last year. Clearly, the March start of the war did have an impact, but still in March, we saw the momentum of our pipeline.

Loans always are negotiated, over a 2, 3-month window, so that pipeline continued to feed through in March. The clear number, as I highlighted in the earlier sort of intro, was the the build-up of the trade receivables.

That is that is something which we deliberately do at the start of each year, it's really a very seasonal pattern. These are short-dated sort of trade loans that run for anywhere between 3, 6, 9 months, most of them run off by the end of the year.

The This similarly on deposits, what we saw was strong January, February, and then in March, what what was very evident was on international deposits there was some pull back, dollar US dollar deposits. Interestingly enough, as we sit here now, actually we are sitting at higher deposit levels today than we had pre the war starting.

Yes, there was some volatility in March, but actually, over the last let's say 6 weeks, we've actually seen specifically our dirham flows increasing and our dollar positions actually coming back to pre-war levels. What I would say on deposits is maybe you are seeing a little bit of term term change in deposits.

People are not necessarily rolling off all their fixed deposits or rolling over all their fixed deposits. They are maybe putting stuff into CASA.

Clearly the one thing that is—this is not necessarily deposit, but it is liability-related—is that the primary markets at the moment for us in terms of CD and CP issuance, we're not issuing into that market, so that is something which we'll see towards the tail end of Q2 whether things do normalize a bit more. In terms of the non-interest income, again here what we have is and, the the pattern of I would almost say resilience because on non-interest income, if I look at the levels that we were able to print with this backdrop that we're in, pretty much are at the same levels as Q1 of last year, which was actually quite a strong quarter for us.

I think we are only about 100 million lower overall than Q1 last year. Again, this demonstrates that even with a severe situation, and and again, this particular component clearly gets impacted quite significantly by mark-to-market movements as you saw in in terms of our treasury and other line, for example.

That's really where you see the equity impact on mark-to-market. That comes through very quickly, unrealized.

It also comes back as things normalize, again, we started seeing some nice pull back in in April already. The the other area of NII that was impacted was actually on the what I—and I did call it out in the intro as well.

It's I would differentiate our Global Market franchise between really the sort of core vanilla FX-driven, interest-rate-derivative-driven flow which we do with our Wholesale Banking customers, a few institutionals, and that flow actually continued even through March. In in a way that is that isn't—well, that is intuitive because clearly with with more volatility, people are looking to hedge.

What came off though was the more sort of sophisticated, bigger-ticket, complex sort of structured derivatives that we also do with with institutional clients. Again, and we've spoken about this before, when you have an environment of extreme risk, it tends to put people in terms of decision-making onto the onto the side of, doing doing trades.

That's what we saw here. Those sorts of trades just were not happening.

I think that's probably the biggest explanation in terms of the flows of the Global Markets franchise. Interestingly enough, you saw on the Global Markets sort of more the trading element where we had an extremely strong quarter.

Again, this demonstrates the underlying capability of actually having having that capability inside the bank to, take advantage of any volatility. We really did.

We were able to take some good positions, even to to run some some good hedges, and you saw the solid result. The the flows on the more traditional products, the NII on the more traditional products, again the loan momentum continued to feed through into strong fees.

You saw trade flows actually continue. They were impacted a bit in March, and we see some more impact in April.

On the advisory, actually, surprisingly, roughly at the same levels as as quarter 1 a year ago, but this is another area where you do see customer behaviors in terms of extreme stress. Clearly the the level of IPOs or debt issuances, they do tend to come off, but that's again the opportunity for the rest of the year is they also tend to come back on strongly when you do get back into a more normal situation.

Now you're asking about the capital, and I think the flows that I was mentioning earlier actually do feed into this capital as well. One of the key elements, the trade flows, if you look at the level of that trade financing, short-dated flows, that roughly eats about 40 basis points of CET1, so that will pull back over the year.

Then if you look at the mark-to-market impacts, and really what I'm looking at here are the the impacts on available-for-sale, which goes through OCI, and there's also some foreign currency translation impact. This is another roughly 30 to 40 basis points of impact, which is an unrealized impact, which again was pulling back.

Those are some of the key drivers, I think, that will turn this number around. We do talk about operating on a sort of average basis at around 13.5% pre-dividend, looking at those added back, we are above that 13.5% level.

Generally, we continue to optimize the balance sheet anyway. We're always looking at ways of optimizing the RWA, depending on where things go.

We always have the opportunity also in terms of looking at both our market risk-weighted assets as well as credit risk-weighted assets in terms of production volumes. That is another area where we can sort of manage the manage the situation.

Very comprehensive. Thanks, Lars.

Hi, sorry. Can you hear me now?

Shabbir, hi. Just taking the last one because that's very connected to the question that John was just asking.

That institutional lending is basically the trade loans that we do, it's very much short-dated, within the year, and roughly about 30 billion, which was positioned primarily in January and February. Now that will pull off by the end of the year, and if you then link that back to the capital pick up, it'll pick up the capital by about 40 basis points.

Now on the growth outlook for the rest of the book, clearly what you've seen is we have pulled back our expectation on GDP. Now we've pulled it back by about 1, 1.2% points to sort of 4, 4.5%.

This is definitely something that influences the loan growth, right? I suppose the underpinning point is we do still expect a pretty healthy GDP growth, and again, the shape of the recovery will determine how quickly and when this growth comes, but there will be a pull back, a positive bounce back sometime during the year.

The split in terms of international and domestic, here generally our UAE business is 80% of our franchise and our international business is 20% of the franchise. Really in terms of growth, that should also reflect our future growth, especially throughout this year, that sort of split.

We clearly are very focused as well on supporting our customers in the UAE because this is clearly the region that is the most impacted, this is where our focus is, and we're working hand-in-hand with our customers, and this goes across the board. The other thing that clearly happens within any sort of crisis is you take a very keen focus on your risk.

You take a very keen focus on your pricing. As I mentioned earlier, we are still maintaining the 16% RoTE through the cycle measure for ourselves, and that really still continues to dictate our internal discipline when it comes to how we allocate our capital.

In the end, that will be a very big determinant in where we grow our loans. I think one of the big things is there are always going to be opportunities off the back of any crisis, we are going to be seeing those pockets of opportunities of potentially new business that we didn't anticipate, and those will start to manifest in the next three quarters, and we'll keep our powder dry for that as well.

Got it. Thank you so much.

Yes, hi. Can you hear me now?

My second question is that the weakness that we've seen in your FX and derivatives business in Q1, it looks to have come from lines that in the past you've described as somewhat more sustainable, but these clearly have reflected a drop in the first quarter. It would be very helpful if you can please offer some insights into what contributed to this weakness, especially as it seems like the weakness seems to be coming from the flow business.

Your closest peer here, they reported a strength in the first quarter primarily driven by this line, it's becoming a bit difficult to draw some meaningful parallels for us on how to think of the evolution as we go into the future quarters. My third and final question is, I know the intention of the franchise remains that you want to see roughly about say close to around 50% of the total revenues come from the non-interest side going into the medium term.

Would you say that you'd continue to remain on track for achieving that target, or progressing towards that target for the rest of this year? Thank you so much.

Naresh. Look, on the trade, it's not conflict-related.

Okay? We positioned it in January and February, and actually the reason that it's higher than last year is a very clear reflection in terms of that business momentum I was talking about earlier that was carrying through from the tail end of last year.

Big increase in trade flows generally, and we were on the financing end for our customers there. I don't expect this to be increasing for the rest of the year.

Actually, we will continue to see the regular pattern. Clearly one of the impacted areas anyway is trade flow, I would expect that to be dampened just merely by the situation that we're living in at the moment.

The FX and derivatives, here I would say clearly we're not in normal times. Also in normal times, the flow business has various levels of complexity.

As I was trying to explain earlier, what we have here is a very sort of vanilla type of flow activity, whether it's FX flows or whether it's interest rate swap cross-currency flows. If you look at that, the flows actually and the volumes actually grew year-on-year.

Really the growth year-on-year was anywhere between 20% to 50%, depending on which segment I look at, whether it's corporate or institutional or just generally the core flows. What we also do have, and I think that's one of our advantages again having the operating model that we do have and having the desks that we do have under the umbrella of Global Markets is as well as our customer franchise, and then we really are talking from the most sophisticated institutionals and funds and governments, international as well as local, there's a lot of complex structured trading that does go on.

Very much this is something which in a normal volatility, and we saw this I think a little bit also when we had the Trump tariffs last year, we saw that there was a difference between normal volatility, which tends to be really good for our franchise, and extreme volatility, because extreme volatility, which is again, we saw it with Trump tariffs for about a month, we're seeing it now again, that tends to take off deals that have any sort of complexity or structuring to them, because those take longer to negotiate. They also tend to come back again when things normalize.

I think that's the differentiation when you look at the Global Markets and you look at the flow business. It's differentiating as well between the underlying customers and the complexity of the product inside that flow.

The other question on the medium-term sort of split between interest and non-interest, I would say yes, the 50% is still a medium-term, and it will remain a medium-term ambition. I think it was never going to be necessarily just a straight-line path upwards, right?

You're always going to have some volatility around the level. We've been fluctuating anywhere between 35% and 50% over the last few years, but what has been clearly improving has been the repeatability and the resilience, and I would say the sort of fee and franchise component of this segment.

That will continue. I think the other area that will start bolstering that, of course, again in a more normalized environment, is the build-out of our asset management franchise.

You've seen how strongly our AUMs have grown, both on the retail as well as on the institutional, and continuing to build out our wealth franchise. Now these are all things that lead to stronger fees.

The direction of travel, medium term, is still to the 50/50.

Got it. Thank you so much, Lars.

Appreciate it.

Hi, thanks, Lars. Thanks for taking my question.

Rahul Bajaj from Citi. Two questions from my side, please.

The first one, on the sequential NIM expansion, and you talked about earlier several reasons for the margins looking good in first quarter. I just wanted to understand, are there elements of one-off in this kind of NIM expansion, probably the interest in suspense recoveries, and if you can please help us quantify what was the contribution of interest in suspense so that we can kind of think about the underlying sort of run rate of NIM trends in 1Q?

That would be useful. That's my first question.

My second question is around the deposit flows. If I understand correctly, you mentioned earlier that we're now sitting at AED deposit levels higher than say 27th of February, and US dollar deposit levels similar to the 27th of February levels.

I just wanted to understand, does this include the government and public sector inflows that you saw during the first quarter or those deposits which came from the public sector have gone out and they have been replaced by corporate/retail deposits in the course of the April month? Just wanted to understand what is driving deposits going back to sort of pre-crisis level.

Thank you.

Rahul, hi. On the NIM expansion, I would say clearly from our side the long-term resilience that we demonstrate, I think that is something that we actually work very hard on.

There's a lot of dynamic hedging that goes on, our Treasury and ALM function looks at things over to try protect the NIM really on a through-the-cycle basis. You've seen how our NIM has performed both sort of in an up-rate cycle and a down-rate cycle.

Now at the moment up until I guess the tail end of last year, we've seen the rates coming off quite strongly, and that has also fed through in terms of our lower cost of funding. I think that's one thing we do benefit from in terms of our deposit profile is clearly because we are still more institutional and corporate and government, we tend to be able to benefit a lot faster in terms of that beta pass-through on our cost of funding, and that is helpful and it is structural.

It's not so much a one-off component. What I think is also helpful at the moment is that for the last quarter, we've also been on a bit of a rates higher for longer mode, and that has even firmed up over the last I guess few weeks since this conflict has started, whereby we're not looking more maybe even towards the rates up-bias.

Now clearly that also helps us when it comes to asset repricing, and some of that is already manifested at the moment in the NIM. If you ask me, one-off, and that's why I gave the range earlier of a NIM throughout the year, sort of what we would look at for the full year, a range of about 180 to 190.

Now it can fluctuate around. It can bounce around within that range, I would say.

Key one-offs, maybe in the Q1, something like 7 or 8 basis points of one-offs. There was some interest in suspense recoveries.

We have some volatile money market placements, which depending on the size of those placements, they're at very low NIM, can have an impact. If we were to do more of those, for example, in the second quarter, you could get some impact on the NIM.

The first quarter happened to be we took quite a lot of that off, so that was helpful. I'd say 7 or 8 basis points, basically.

On deposit flows, the two biggest dynamics that I saw was on the initial US dollar, where I would say we sort of saw about a 3% to 5% impact, and that tends to be more on the international holdings. It was quite across the board.

It was US, it was Europe, it was Asia. Pretty expected, nothing too unexpected and well within our sort of model tolerances or liquidity tolerances or funding tolerances.

The other dynamic that we saw, as I say, was the switch from fixed deposits probably to CASA in terms of term structure. Where maybe for the first month of March, we saw some outflows, really in the month of April, it's been quite a strong dirham-based inflow with dollars sort of returning a bit more to normal.

What we would normally have expected is, seasonality-wise, April would be quite a strong month and that's in terms of even more international inflows, and that's maybe what we're not seeing.

Got it. Thanks, Lars.

Hi, thank you for taking my question. This is Jitendra from Al Ramz Capital.

Probably you have covered most of the points, but let me get your thoughts spread maybe on the guidance. You have kept the full-year guidance unchanged despite some changes in your macro assumptions.

Just want to understand what would it take for you to revise your guidance downward probably? Is there a specific trigger, whether it's conflict duration, or probably real estate stress, or maybe NPL migration or stage migration?

Would Q2 be the natural checkpoint for that decision? That will be my first question.

Probably maybe let me check on second maybe on the effective tax rate. It came slightly lower at around 18% in 1Q, could you just help me understand what drove this slightly higher tax rate, and what's the expected run rate for 2026?

Thank you.

Jitendra, hi. Guidance, again generally, even in the most normal of times, I don't like changing guidance in the first quarter.

Now in abnormal times, where literally Q1 we've seen pretty much one month of insight into the impact of the conflict, that is a very short window to start extrapolating for an entire year. Also, as I mentioned earlier, we were helped by the momentum that still carried through from the first 2 months.

What we really would want to see is what April, May, and June do. I think you're right, duration is going to be probably one of the key distinguishing points, because that will determine, do we have a bit of a V-shaped recovery, do we have a U-shaped recovery, are we in an L shape?

I really do expect that over the next 2 months, we will get a lot more clarity on that. Therefore Q2, yes, would be a natural point, and actually is also the point where in prior years where we have revised guidance.

I think you'll remember last year we revised our loan growth expectation guidance in Q2 as well. Effective tax rate, that was the question, right?

Look, the effective tax rate, we've spoken in the past that what we do try and manage is to have that rate, and bearing in mind we operate in 20 countries across the globe that all have very different tax rates. We try to, in a way, optimize that tax rate at somewhere below 20%.

That's really for us we are comfortable at that level. Now the 18% is up, and I think this is again just proves the point, because where does that step-up come from?

It actually comes from the increase in income from our Egyptian franchise in Q1, which was actually driven by quite a big step-up in a positive income coming from the devaluation of the Egyptian pound, where we actually benefited from that because we carry a lot of our capital in dollars. Clearly Egypt has a much higher tax rate, so that's the main contributing factor for the step-up since the year-end.

Understood. Thank you so much.

Hi, can you hear me?

Xinyu, thank you for the question. It's Chris, let me respond on the cost of risk and the management overlay.

You're right. We've calibrated that by changing the weights of the scenarios.

Really at the moment that's based on us taking a prudent approach with the level of uncertainty that we are seeing ahead of us and also the lack of consistency into what I would call the macro forecasts. To be very clear, it's not what we're seeing within the portfolio.

We're not seeing really any material degradation across retail or corporate and wholesale portfolios. This is taking a prudent approach, and that is the decision on the overlay now, which is a management decision and judgment-based.

We will review that in Q2, and we will see, and I think as Lars has been talking earlier on the call, we expect to get greater clarity in terms of the real outlook on the uncertainty in Q2. Also as well, credit tends to work on a lag, we will also have much better visibility in terms of our portfolio and our client behavior as well by the end of Q2.

We very much would expect to update at the end of the period.

Thank you.

Thank you, Drew, and thank you all for joining us today. As always, please don't hesitate to reach out directly if you have any follow-up questions.

We know it's a very busy day for you today, I would also like to highlight that our Investor Relations website has an AI-enabled search tool, please feel free to use it in case you want to query either our performance this quarter or across prior periods. Thanks again for your continued engagement, and we look forward to continuing the dialogue.

Take care.