Banco de Sabadell, S.A.

Cecilia Romero - Head of Investor Relations Jaime Guardiola - Chief Executive Officer Tomas Varela - Chief Financial Officer

Good morning, and welcome again to Sabadell's results webcast. My name is Cecilia Romero, and I'm Head of Investor Relations, and today we will be presenting our second quarter results.

As usual, we have with us today our management team, our CEO, Mr. Jaime Guardiola; and our CFO, Mr.

Tomás Varela. But before we start the presentation let me just remind you that you can actually submit questions to management that will be answer after the presentation throughout webcast interface.

And with this I pass it on to our CEO. Good morning Mr.

Guardiola, the floor is yours.

Good morning everybody and thank you for joining our webcast. As usual I will begin this present with the highlights of our performance in this quarter.

I will then discuss our profitability and commercial activity before handing over to Thomas who will discuss solvency, asset quality, and TSB results. Then both of us will respond to any questions that you may have.

So let's move on to second quarter highlights. I would like to start by saying that we are very satisfied with the continued strength shown by our banking business franchise.

Our group core banking business meaning net interest income plus commissions continued to gather momentum and it's up by 3.5% in the year including commissions growing above 7% for the group and 10% excluding TSB. Furthermore as you already know during 2017 we have announced two transactions.

First the sale of Sabadell United Bank in Florida, our bank in Florida and second the reinsurance of the individual life risk portfolio of BanSabadell Vida. At this point we can confirm that we will be using the capital gains from both transactions to further - the both transaction to further increase our NPA coverage with the objective of achieving a normalize cost of risk level earlier than initially planned.

Our NPA coverage will increase to 54% or 52% explore after these additional provisioning. And then is important to notice that this coverage level going forward, we are not expecting to incur any further losses in our stock of foreclose assets.

In 2018 we should be able to achieve a cost of risk of around 60 basis points for the group. Thomas will give you more details later on the presentation.

Also in this quarter, we have seen again a significant reduction of NPAs, year-to-date we have now reduced our problematic assets by around €1.2 billion, which means that our progress towards achieving our year-end target is better than planned. And finally, I also believe that it's important to highlight the Sabadell continues to exhibit the top solvency position when looking at our combined capital and provisioning level.

Our core equity Tier 1 fully loaded currently standard at 12.1% and 12.5% including the impact of the Sabadell United sale. We will now looking at the key developments in terms of profitability and efficiency.

The key driver of our profitability in the quarter was the strong performance of our core banking business this was reflected in our NII customers plate and evolution of our fees and commission, which improve once again quarter-on-quarter. And group cost savings have partially said the anticipated one off IT cost at TSB.

Looking at the quarterly income statement, I would like to highlight the very positive momentum of the Group's core business with NII growing by 1.3% in the quarter and fees and commissions increasing by 3.3%. As you can appreciate from our numbers, we much realize extraordinary trading income in this quarter, part of this additional income were generated as a result of the early settlement of the TSB's Mortgage Enhancement portfolio with Lloyds this transaction is financially neutral.

As this additional income is front loading profits which were - that we were expecting to receive over the second half of 2017 and 2018. We have included all the details of this transaction in the annex of this presentation.

If we continue moving down through the P&L, it's also important to highlight the payment of €51 million to the single resolution fund included in other operating results, both at group and ex-TSB level. This payment usually takes place in the second quarter and it backs the comparability of quarter-on-quarter profits.

As you may be aware the Group expense wage continues to be impacted by the one off in the TSB IT servicing cost page to Lloyds. Ex-TSB our underlying operating expenses were actually slightly down in the quarter.

Furthermore we have continued to follow this year's vision as we have the additional income to do, to do so. And finally overall Group profit increase by 8.6% quarter-on-quarter including the impact of FX.

In this slide you can see that year-to-date we are on track to meet our year-end profit guidance with a net profit for the Group standing at €450 million versus our target of €800 million for the full year. This implies 10% growth year-on-year excluding the impact of FX.

It's also worth noting that at the TSB level net profit and ex-TSB level, net profit is up by 37.8% in the year. We will now go into more detail and as usual we will provide you with a breakdown of salary and TSB results.

NII for the Group grew by 1.3% quarter-on-quarter and 2.4% year-on-year excluding the impact of FX. Ex-TSB and NII increased by 1.3% quarter-on-quarter and by 1.5% year-on-year.

This performance was driven by our commitment to pricing discipline and further reduction in our cost of funding. TSB NII also performed well increasing by 1.2% in the quarter driven by strong core mortgage volumes.

Well at the same time, Group customer spread maintain it's positive trend and continue to rise to 2.81% from 2.77% in a challenging and it has been done in a challenging interest rate environment. This rose was driven by a decrease of four basic points in the Group cost of customer forms and an increase of two basic points in customer yield ex-TSB this further demonstrates the strong profitability and the resilience of our core banking business.

In this slide you can also appreciate that net interest margin fell quarter-on-quarter and this was primarily due to a significant increase in our cash position at the Central Bank this quarter. As I explained earlier, our cost of funding was significantly decline in this quarter and this is mostly due to two reasons.

First, further reduction in contractual rates on term deposits with the back book down six basis points with the front book cost used to two basic points. This reduction was as a consequence of the re-pricing in the quarter of a significant volume of term deposits.

And second, the impact of €3 billion of costly wholesale funding that which mature late in the first quarter and brought out wholesale funding goes down by 30 basis points at the group level. Moving now to commissions, which also recorded the strong performance, a very strong performance growing by 3.3% quarter-on-quarter and by 7% year-on-year excluding the impact of FX.

And for some of the ex-TSB these increase is in total income from fees was even more remarkable, as it increased by 4.9% quarter-on-quarter and 10.4% year-on-year. This increase was seen across all categories and asset management fees performed particularly well in the quarter.

And it's also important to note that this is the largest quarter-on-quarter increase in fees ex-TSB that we have seen since the fourth quarter of 2014. Lastly TSB launch a campaign to accelerate the growth in PCAs, which has impacted income from fees as the higher aggregate of fees were paid in this quarter.

This campaign allows up to keep the share flow of PCAs over 6% that was the goal of TSB. Total operating expenses for the group remained stable in the quarter as expected, it is important also to know that Group costs were year-on-year due to the expected one off increase in TSB IT costs.

As I said before these additional increasing cost of TSB were partially offset in the quarter by a decrease in costs ex-TSB of 0.5% quarter-on-quarter and 1.1% year-on-year. At TSB level the small incremental costs in the quarter is due to an increase in personal costs.

We will now move on to commercial activity and digital transformation. Balance sheet momentum remains positive with performing loans growing by 2.3% quarter-on-quarter and by 4.5% year-on-year when adjusting for the early call of the TSB mortgage has been portfolio.

We also saw outstanding customer fund evolution with the strong growth inside accounts, reaching practically the figure of €100 billion this quarter. And at the same time of balance sheet fund show a very positive growth.

We continue to consolidate our market exchange spend, which we are also continue to lead and NPS rankings in corporate and SMEs. In addition, we remain focused on progressing our commercial and digital transformation, as a result, our digital customers increased by 7% year-to-date resulting in a total of 4.2 million digital customers.

And in this quarter we deploy new and improved versions our mobile bank of Sabadell and Sabadell wallet apps we continue implementing initiative to simplify processes and we increase the number of customers under our active management model. And finally also we launch new digital business hub in the service.

With regard to our balance sheet, on the asset side performing loans increased by 0.9% quarter-on-quarter for the group, 2.3% when adjusting if we adjust the early call of the mortgage enhancement portfolio, an increase by 0.7% for Sabadell ex-TSB. On the liability side, sight accounts grew by 4.1% quarter-on-quarter and balance sheet funds grew by 5.1% also quarter-on-quarter mainly backed by strong growth in mutual funds and management accounts - and managed accounts, sorry.

It's also worth highlighting that Bank of England funding grew by around €1.8 billion in the quarter. While focusing now in our lending activity, total performing loans ex-TSB grew by 0.7% percent in the quarter, mostly driven by the positive performance of the corporate and SMEs segments across products.

The negative net mortgage lending GAAP continue to close and we expected the recovery of the net mortgage volume growth by the beginning of 2018. With regard to placing, the front book remains stable with minimal decline for SMEs corporate and consumer loans and a recovery in the trend for mortgages.

In terms of market share, we have to continue to increase our year-on-year share across products for both companies and individuals. We have seen this effect in the last few quarters despite conservative pricing and we have been able to achieve this via our focus on providing value added services and our commitment to offering our customers the best possible experience.

And in the sense in fact regarding the customer experience and service quality, once again we hold the top position in the center net promoter score racking for large companies at SMEs and we are number two in personal banking. And finally in retail banking, we fell from third to fourth position mainly due to the branch crushes that we have done during the quarter and especially the last part of the quarter, yes previous to this qualification of the NPS.

And this also impacted our course rating, but in spite of this we continue to surplus the industry average and in any case we expect that these effects to be revert in the coming quarters. While moving on to commercial and digital transformation, you can see our key performance indicators in this slide.

Sabadell has increased the number of its digital and mobile customers by 7% year-to-date and we have achieved a high mobile NPS level of 55% that means 50 percentage points increase year-on-year. Regarding our distribution model 41% of our network branches are currently operating under the new model, also more than 274,000 clients are already enjoying our active management services enabling our customers to communicate with their relationship manager without having to visit the branch.

As you can see in this slide, this quarter we have continued to develop multiple digital and commercial transformation initiatives in our key areas of focus distribution model, simplification, digital offering and other driven processes. Lastly in June, we announced the launch of InnoCells, which is Banco Sabadell digital business hub, InnoCells is a new platform to help our institution embrace disruptive business models by collaborating with startups and corporations and making strategic digital investment.

Our first InnoCells initiative is Kelvin Atlas, the first real-time open data site in this Spanish banking sector, which provides updated information regarding commercial activity across cities in Spain. Well with this - I finish this part of the presentation and I'll hand over to Thomas that he will discuss about asset quality, solvency and TSB results with you.

Thank you, Jaime. Here are the highlights for solvency and asset quality, first of all the group NPR ratio continue to decrease to 5.49%.

We've had this capital gains this year from the sale of Sabadell United Bank and also the reason reinsurance agreement by BanSabadell Vida on its protection life portfolio. We will use this to further increase our NPA coverage to 54%, 52% excluding floors provisions and this will - we expect that we won't have further losses on - in the stock of our foreclose assets going forward.

And as a consequence we expect the Group cost of risk in 2018 to fall to see around 60 basis points. The reduction in our NPA stock has been in the first half of the year €1.2 billion, which is ahead of our plan target.

And if we take into account the combination of our capital position and our provisions coverage, the NPA stock we get comparatively positive ahead of our competitors or our peers in the industry in Spain and our capital CET1 fully-loaded ratio stands at the end of the quarter of 12.1%, 12.5% if we include the impact of their sale of Sabadell United Bank. And in this quarter we eventually obtain the investment grade rating by all the rating agencies.

Here is the CET1 position at the end of the first half, it's the facing ratio is 12.67% there is an impact here of the early call of the mortgage enhancement also the impact of our issuance of 81 during the quarter and also a reduction in RWAs. As I said, if we include that fully-loaded is 12.1% and if we take into account the effect of the sale of Sabadell United Bank this would get us to that 12% or will get us to the 12.5%.

The NPL ratio has continued to decline to 6.95% ex-TSB and 5.49% with TSB and if we - when we fully deconsolidate Sabadell United Bank ex-TSB this will be 7.16% and the coverage of NPLs stands after the sales of NPLs this quarter and the reduction of NPLs, which included sales, institutional sales couple of portfolios and before adding the proceeds of the capital gains it stands at 47.1%, ex-floors 51% taking into account the floors provisions. The reduction of the €1.2 billion in the year includes for the quarter a reduction of €653, out of which €602 million NPLs and €51 million are foreclose assets.

This gets the total amount of the portfolio to €17.5 billion at the end of the quarter. In terms of the evolution and composition of the stocks, we see on the upper left hand side that the reduction in the NPS has been more or less the same across the two blocks, so the past due of more than 90 days and non-past due NPLs, so the breakdown in percentage of these two blocks remains more or less the same.

On the right and right hand side we see that the composition of the kind of collaterals that are in behind the stock only have an 8% of land and the remaining collateralize NPLs collaterals are basically residential and commercial assets, so different from land. And the non-mortgage collateralizes part of the portfolio stands at 22% of it.

On the lower part of this slide we can see the composition made kind of asset, the asset class of our foreclose assets stock and we see also how the rotation of the portfolio shows that while in the inflows we have lower percentage of land and the most part of it is residential finished product and growth in progress. In sales the percentage of land is gets to 33% so we are selling land and therefore as a consequence on the right hand side of this lower part of the slide we can see how the weight of finished product and residential product is increasing and the weight of land is decreasing.

Intense of sales from Solvia, the quarter again to being a good delivery, if we give the seasonality of these sale patterns throughout the year usually, if we compare the second quarter of 2017 with the second quarter of 2016 we see how it increased actually, so the base continues to be good and increasing. This quarter we haven't had institutional sales for foreclose assets and worthwhile mentioning that the net discount above the provisions level, the coverage level for sales of this quarter has decreased to 3.7% compared to 6.3% for that for the whole 2016.

This 3.7% includes some - the last month June actually this is being a 0.9% of total discount above the provision level, the coverage level of these assets that were sold and three months out of the six months of the first half we've had actually positive results in the sales of residential finished product. So it means that in the percentage of the positive result in June actually was 2.5%, so it already shows a good trend even before the additional coverage that what we are planning to build using our capital gains in this first half of the year.

So hence our expectation that we won't have further losses on our - the sales of our foreclose assets going forward. As for our hotel platform, our wholly owned subsidiary that has built this hotel platforms in Spain with 14 on upscale hotels all of them in Spain with more than 3700 rooms.

We've made this mature with developed a very sound and strong franchise here we are planning on analyzing the [indiscernible] to invest and this one of the alternatives might be even a potential IPO which we are analyzing as part of all the different alternatives that we could have here. Here this is the breakdown of coverage that I already mentioned, only to highlight that in terms of again foreclose assets.

Even before building up additional coverage if we take into account all the write downs of the assets have suffered throughout their journey. The coverage would be now 58%.

And here is the analysis of how we will build additional coverage out of the capital gains in terms of NPL the coverage after building these additional provisions will stand at 49%, 52%, 52.9% actually if we take into account the provisions for floors and in terms of the foreclosed assets the coverage will get to 55%, so overall for the NPA stock 54% total coverage 52% if we don't take into account the provision for floors. On the lower right hand side we have the details of the two capital gains for Sabadell United Bank it's €410 million for the reinsurance agreement of the life portfolio of Sabadell it is €253.5 million net of taxes, which is actually €340 million gross, which is an actual amount that will be used for enhancing the coverage adding more provisions.

Here is analysis of where we stand in terms of the combined coverage compared with the other four banks in the top five in Spain. So the blue dot represents our position in terms of the coverage, the NPA coverage this 52% pro forma after using the capital gains.

And the dotted blue circles, show the theoretical position at which we would stand how we have the coverage, the NPA coverage of each of RTS in this chart. So in all the cases our capital would be above our competitors, so this means that we compare well in this combined coverage of NPAs and capital in the Spanish sector.

On the right hand side, we see that sensitivities of 100 basis points the sensitivity in terms of tradeoff between capital ratio and NPA coverage. So moving 100 basis points for us the capital ratio the CET1 fully-loaded represents an impact on coverage off 667 basis points.

As for TSB results, the highlights are that the trend, the trends continue to be a very positive balance sheet, the delivery on the franchise, customer lending on the balance sheet has been again very positive, the growth has been 3.6% quarter-on-quarter, and 16.6% year-on-year. Also the performance on Franchise NII has been again very solid increasing 3.86% quarter-on-quarter and 8.6% year-on-year.

Of course, we've seen this quarter the mortgage enhancement portfolio early call it's been returned to Lloyds after having delivered its purpose, so it's the impact has been that it's brought forward revenues, but overall the impact of these compare - as compared to having this portfolio remaining there until it's final runoff into 2018 it's been broadly neutral. In terms of customer deposit is again very positive growth 6.4% year-on-year, and we keep to continuously deliver our market share of 6% in this case over the 12 past months intense of new accounts switches in the United Kingdom.

The migration is on track, all the critical milestones have been met and our customers continue to recommend TSB with a NPAs of last 24 through the first half of the year 2017. In terms of the income statement only to highlight additionally to what I said in the highlights that the impact on the other operating income come from the early call of the mortgage enhancement portfolio that we see an operating expenses an increase of 1.6% in the quarter basically driven by FSCS, which happens to fall in this quarter.

And of course if we compare the net income with last year's the decrease is basically driven by the comparison because last year we had the one-off of capital gain that we got from the sale of Western Europe. Finally, it's we need to take into account impact on the P&L of 2017 of the increase of the cost of the agreement for the IT services from Lloyds that was embedded in the agreements with LVG from the beginning.

So this is driving the increase in cost for TSB this year in 2017 as anticipated and already communicated after migration this effect will be more than offset in the future. In terms of the balance sheet also we of course see here the increases that I already highlighted, but worth mentioning that during this first half TSB extended €4.1 billion of new mortgage loans as compared with an amount of €6.6 billion for the whole year last year.

So progress is north fall and just to both mentioning again that as a consequence of the migration plans with that tuned and managed the volumes of new lending mortgage new lending throughout the year to be a slightly decreased in the second half of the year so to avoid the excessive burden putting pressure on the process and therefore supporting the process of migration further. In terms of the evolution of the lending, we see here the effects of the early call of the mortgage enhancement and this is - this need to be taken into account.

But total customers in at the end of the first half grew more than to more than five million or 3.3% year-on-year customer deposits grew to 90 almost €30 billion at the end of the first half and customers of course 80% year-on-year an increase of 6.4%. Our lending book is of a very good quality 92% of it our mortgages with an average LTV of 45%.

At the end of that actually as it was at the end of last year and it's been for the whole life of TSB, but it's even more so our liquidity position is very robust and our CET1 ratio stands at the end of the quarter at 19.3%. Migration, as I said these going ahead well, our mobile app is already available for our customers more than 70,000 customers if already downloaded it.

There are continuously updated versions here we can see the features of the mobile app, I would only maybe highlight the feature of fingerprint logging, for enhanced ID security and also TSB the first bank in Europe to have announced a partnership with Samsung to integrate iris recognition. And Proteo4UK delivery itself the built is completed the three payment systems, CHAPS, faster payments, and BACS have been already tested life and payments have been made and completed successfully.

ATMs migration is in progress, training for employees, testing employees, operating bank accounts in Proteo4UK and rollout of a new IT equipment is life and going on. And also we are ahead in the testing phase did data rehearsals have been launched and are progressing and the process to migrate to the platform actually towards the end of 2017 it's life and going on track.

And that's all for me. Thank you.

Thank you very much Mr. Guardiola, Mr.

Varela. We will open now the floor for a round of questions.

And the first question goes to Mr. Guardiola.

Will you consider non-organic growth in the next 12 months?

Well. As we said, we presented the brand, that our priorities this year is to continue with the delivering our strategy of reducing NPAs and also to complete the - sorry, as I said that the what we presented to plan for the year our priorities this year, this year is to deliver in our strategy of reduction of NPAs and also to complete the technological immigration of TSB in the UK and in this sense we are absolutely focused in organic growth, and in our core markets and taking advantage of the good situation of the especially if the Spanish economy and that's what we are doing this year.

Thank you. And the next question goes to Mr.

Varela. What's your insurance plan for the rest of the year in the medium term?

Thank you, Cecilia. We've issued 81 in this second quarter.

The 50% of the bucket already filled, so in terms of 81 we are not thinking of anything in the short time. We are not in any rush.

We don't have plans to issue more Tier 2 in 2017. We don't know yet our real requirements, we expected to - we expect to know it later during the year.

So we could issue at a maximum of around €2 billion of senior norm preferred maybe.

Thank you. And the next question goes against to Tomas.

TSB seems to be decelerating this quarter. Well this impact the NII guidance for TSB?

No, it doesn't because, as I mentioned TSB has plans, there lot of new lending to happen in the first half of the year, and then gradually decrease throughout the second half of the year to facilitate and corrected progress on migration and operationally. And therefore this had already been taken into account in the guidance.

So the guidance stands and then after migration in the first half of 2018 again the new lending will recover the base.

Thank you. And now to regarding NPA reduction Tomas.

Have you communicated a specific FBA reduction plant to the ECV? Is there any specific case portion number that you're expected to reach in a certain timeframe?

No, there is no expected reduction or any targets or explicit expectations from the ECV, the SSM given our track record. Of course, there was at the end of last year beginning of this year, the issued guidance on how they expect banks in Europe to set up there a strategic plans for NPA reduction and their management policies for this and we've shared with them as we had previously our plans for reduction and the amount that we communicated are the ones that we already made public and disclosed in our interaction with the markets, but no a specific expectations from them not for this year or for the future.

Thank you very much. Now and then IFRS9, can you provide us with an update, I mean you've previously guided 50 basis points to 60 basis points.

Thus this is still hold?

Yes. This is still what we expect.

We are methodology includes our modest include lifelong metrics on losses the bulk of with this and introduce and include also variability of expected losses according to how old they as I said the NPL side in the stock. So we expect that significant part of this guidance is related to stage three, and we still think that the guidance is going to be 50 basis points to 60 basis points.

Thank you. And the next question that we have received is for Mr.

Guardiola. And it is regarding some of the Sabadell United Bank sale.

When would you be expecting to receive the approvals from the regulatory authorities?

Well, we have already received the regulatory authorizations, and in order to complete the closer transaction we are just spending on some simple administrative processes and we expect the closing very, very soon.

Thank you. Now to Mr.

Varela. You have increased your TFS funding over the quarter.

Have you reached full capacity?

No. At the end of June, the amount used by TSB it's been £4.6 billion.

This could be the capacity this could be increased to £5.5 billion.

Thank you very much. And again to Tomas.

Can you explain us little more detail why the net interest margin has falling on the quarter, and what is the outlook for the rest of the year?

Yes it has fallen, whilst our customer spread which is the main driver has increased as we have described in the presentation. The reason for this been a significant build of our liquidity position that we need to lend back to the ECV at a cost of 40 basis points.

This been as a result of the actually our strength in acquiring customer deposits and also given to the dynamics of the sector in Spain during the quarter. We expect this to, the impact of this to decrease throughout the year, but in any case actually which what this does is increasing our sensitivity to increases in the interest rates we had disclosed that basically intention of sensitivity an increase of 100 basis points in the rates after 12 months would have an impact of more than 20% in case that the pass through to customer deposits of these would be 0%, or 17% in case that they pass through it would be around 50%.

What this does actually if increasing this sensitivity going forward from this point onwards. But as I said the main driver for NIM is customer spread, it's increased, we expect this will continue to be so, which what this does actually is more than offsetting that trend towards compression in the ALCO portfolio contribution, and we think this is the main driver.

Thank you very much. And the next question makes mention of some news that we're yesterday on the press regarding non-performing loans portfolio sales to institutional investors.

Could you please elaborate a little the more on that?

We saw in the quarter our portfolio of €800 million of secure developer loans, most of them were covered by the asset protection scheme, and this reduce our portfolio of NPLs by €290 million. It also included some written off loans.

In addition, we sold our portfolio, which include €170 million of unsecure loans, which reduced our NPL stuck by €70 million. These portfolios were highly covered and also explain partially the reduction in NPL coverage in the quarter.

Thank you very much and given the number of transactions that we have had this quarter. And the next question actually is asking for some more guidance on the land likely revenue in any loss going forward from namely the Sabadell United sale, Banco Sabadell be the reinsurance and the TSB mortgaging has made portfolio in a €1 million.

Could you elaborate on that please?

Yeah. Sabadell United Bank contributed €50 million net income last year.

The Sabadell portfolio contribution was slightly more than €20 million per annum, but we need to take into account that this is our run-off portfolio, so going forward the contribution we expected was decreasing as time goes on. And mortgage enhancement in 2017 has delivered €61.7 million of which there €25 million are brought forward from 2018.

Thank you very much. And now regarding the fixed income portfolio, can you yield, can explain why has fallen by more than 50 basis points?

Well the amortization of extraordinary trading income at the end of the first quarter and at the beginning of the second quarter explains a reduction, combined with the fact that the new investments are matching that TLTRO, so they have lower duration and therefore relative lower yields, and actually on this segment of the portfolio the interest rate risk is minimal.

Thank you very much, Tomas. And the next question goes to Mr.

Guardiola. Could you please provide us with an update on the €800 million net profit guidance and as well how has this guide and be impacted by strong core revenue performance and what about Sabadell United Bank sale and BanSabadell Vida transaction, how does that impact our guidance?

Well, we are not changing our net profit guidance for the year. We are pleased to consider this transactions that we have announced give us headroom for maneuver and at the same time we are knowledge that market values provisions over and above capital, so that is our idea, not to changing our net guidance, net profit guidance for the year.

Thank you very much, Mr. Guardiola and thank you Mr.

Varela. It appears that there are no more questions.

So this brings our webcast to an end to the Investor Relations department we would like to remind you that we remain available to answer any additional questions. Have a good day.