Erste Group Bank AG

Thank you very much, operator, and also a very warm welcome to everybody who is listening in here from Vienna. And as usual, we will follow our conference call routine that you are used to.

The call will be hosted by Bernd Spalt, Chief Executive Officer of Erste Group; Stefan Dorfler, Chief Financial Officer of Erste Group; and Alexandra Habeler-Drabek, Chief Risk Officer of Erste Group. They will lead you through a brief presentation highlighting the major developments of the past year, which has been quite an interesting and challenging year.

And after that, they are ready to take your questions. And before handing over to Bernd Spalt, let me highlight Page 2, which contains the disclaimer on forward-looking statements in the presentation pack.

And with this, Bernd, please take it away.

Thank you very much, Thomas. Good morning, ladies and gentlemen.

Welcome also from my side to the earnings call year-end 2020 preliminary figures. Before I enter into the slides, let me say this, if we think back almost a year ago, when the pandemic hit the world, where everything was being shut down with the exception of critical infrastructure, we have had no idea whether this would turn into a global economic crisis, how long it would last, how well governments would respond, how quickly economies could open up and how quickly science would find a way to sort of deal with the health part of the crisis.

Now we're a year down the road. And I do think that if we look back in 2020, what we see is, we see figures which are, I think, very, very reassuring.

And we'll come to that later and also to the outcome later. But what I can say throughout the whole region of our business, economies held up well.

And whenever there was a chance for an even temporary opening up of the economy, the rebound was sharp. Now let me take you to Slide #4 of the presentation with the macroeconomic update.

Our reach in the CEE region is expected to rebound this year very significantly. So CEE, it is expected to grow at almost 4% this year after having contracted 4.2% last year.

So there is a very significant change in direction, what we see and what we forecast. And all in all, the contraction of last year has been a lot less severe than we have originally anticipated.

Even in the Q3 earnings call, we have been somewhat more conservative, somewhat more concerned when it comes to the overall development of 2020. And what you saw is that 2020 held up reasonably well, of course, different regions.

Countries which were more exposed to the services industries, countries which were more exposed to tourism, like Austria and Croatia, for example, saw a significant impact of these very harsh lockdowns. And you can basically say that winter season has not taken place this year.

It has not sort of worked. Hotels were kept closed.

Restaurants and bars and everything was kept closed. So I think this was basically a lost season in a way, but still do not forget that the fiscal packages, the sort of state programs which were implemented, where I don't know if they were efficient, but certainly, they were effective to an extent, that not only unemployment didn't rise significantly, but also there was no significant insolvency wave building up.

So far, yes, this crisis had a deep impact on all of our economies, and they contracted, but yes also the resilience of the business model and the resilience of the core activities have been strong. Now the economic activity after the first very harsh lockdown bottom out in April and then where we saw overall a slight opening up, and you see that in this CEE recovery index, which we publish weekly, which saw a steep drop in the first couple of weeks and which saw then a very strong rebound as people could go back to the coffee shops, to the bars, to the restaurants, to the shops themselves and consume again.

Now you see throughout the year, if you still follow that recovery index, that the trend has not been so positive throughout the year because, of course, as the colder season came, all of our governments have difficulties in responding well up to situation where infection rates would rise again. And none of them have had any kind of very smart responses when it comes to testing and tracing.

So this is why infection rates went up again and lockdowns came back and sort of put economies under pressure. I also think -- I will come to the outlook later, that it has not been forecasted and have not been hoped that within a very short period of time, not only 1 vaccine would be found by the scientific endeavors, but many, and that we look into a situation where the health situation as such can be solved if logistically out governments are up to sort of vaccinating our population and if the vaccines can deal with the mutation forms of the disease.

But I do think that there is a sort of very strong sign that 2021 will be a year of recovery as we approach the warm season of the year, we'll possibly be in a situation where a broad vaccination will be successful and no longer-term lockdowns will take place and where not only consumption will go back up, but also investments will return. And this in a context where the European Union has put together programs, which, I think, are incredibly helpful in the context of not only the green deal and digital transformation, but also when it comes to structural reforms, whether it's being pensions, whether it's being sort of generally the tax system.

So I think there are a lot of things, a lot of hope pods which we can look into. Now if you look at unemployment, still on Page 4, in the macroeconomic context.

Unemployment, we started the crisis with record low unemployment rates. All of the countries went basically into this crisis with full employment situation structures.

And with the exception of Austria, if I may say so, unemployment still is low in all of the countries. Also Austria is at okay levels, but it rose quite significantly, which is not a big surprise as the tourism industry is important.

And aside the short-term work schemes, also, of course, people got laid off. But generally, the situation of unemployment has been a lot more, how should I say, positive than I would have thought.

And Alexandra Habeler will talk about the moratoria and what kind of development we saw. But what I can say already now is everybody had his or her own guess on what happens if the moratoria end if people have to resume their payments.

And what we see as a couple of schemes have already run out for a couple of months. People can really deal well, whether they're private or on the corporate side, they can really deal well with their payment obligations.

They, throughout the moratoria, have put the money on the side and saved it. So they are, to a very, very large extent, not getting into liquidity squeeze now.

Now let me take you to Page 5 of the presentation. Business update, what's happening on the retail area.

That's quite an interesting experience, which we see. On the asset side, the demand for mortgage loans, demand for housing loans is going up very significantly.

So we see throughout the region, a very big demand for mortgage loans. We see lower demand, certainly, in a time where uncertainty rises for consumer loans.

Still okay, but it's going down, of course. And what the prominent behavior of the customers is, deposits are flowing in as if there was no tomorrow.

So we're still being sort of flooded with retail deposits, also corporate deposits are going up. But sort of a almost 10% rise in deposits is very, very significant at a time of a very high uncertainty.

I also think that if you look at core business, we hope that our asset management business would be successful and it was. We have predicted in our last Capital Markets Day, which was late 2019 that we've seen an excess liquidity situation, a desire of customers in a sort of negative interest rate environment to convert part of these savings into investments, and this is exactly what is happening even in the crisis itself.

So asset management business has done really well throughout the region. So fee business was good.

Also insurance products developed well at a time when there was a clear demand and desire for security for protection. So there's a big sort of bias towards being on the safe side, and this helps our strategic business proposition.

Now when it comes to the financial health advisory strategies which we have put on the road, I think that we have done a lot of things, especially in the Slovak Republic, when it comes to the further development of George. And speaking of George, we have done now the rollout of George in Hungary.

We already have more than 1 million clients in Romania. So we have continued our way of expansion of our platform throughout our countries.

When it comes to behavior of customers, digital versus physical, we mentioned and discussed last time that in the first part of the crisis, our customers moved almost exclusively to digital, while as soon as the economy was opening up, they returned to the branches. Now I still think that digital transformation, the deepening of the digital integration has made progress.

We're still reshaping our physical footprint as we go. So you can expect, except the savings banks that will probably will reduce throughout 2021 our physical footprint by around about 10% following the behavior of our customers.

So I think trends are continuing. Digital integration is growing, and the rollout of George is very successful.

Now on Page 6. I mentioned already the branch traffic and the digital client behaviors.

Digital sales themselves have increased significantly. The number of monthly log-ins per customer has also increased by 10%.

And cashless and mobile transactions are also on the rise. So I think what we have seen as a building up of a trend continues in the retail business.

And we see when it comes to customer perception, when it comes to customer experience and customer satisfaction, our rankings and our grades are increasing throughout the region. When I turn to Page 7, Corporate, what is happening there?

Again, I think it's impressive how well Corporate balance sheets and how well corporate business models hold up in these very uncertain times. Mind you, before crisis, Corporates have built up not only capital, but also liquidity positions.

So they went strong into this crisis crises, and they sort of could counterbalance a lot of these liquidity threats as they developed. They were also being helped by government programs.

So generally, these state programs of guarantees and also other schemes helped also short-time work programs helped and also the balance sheet strength pre-crisis helped a lot. What we see, and I think that is important in our debate and this is more forward looking.

If we assume that 2021 and beyond will be a year of growth, what we see is that already investment activities start to build up again, which is a strong sign of confidence. And secondly, also M&A ambitions and aspirations are on the rise.

Corporates are on the way to acquire sort of other corporates and deals -- deal pipeline is building up, which I think is a very good indicator, a leading indicator for a strong economic recovery. Capital markets is doing really well.

We have had a lot of mandated transactions in our markets business, with a total issuance of volume of €108 billion. And also, that's leading more to risk side, we do not see a, how shall I say, hysteric reaction on the drawdown of open lines for Corporates.

So there is enough, how shall I say, capacity and resilience on the corporate balance sheets to deal with uncertainties as we go. So drawdown behavior has not deteriorated significantly.

And SME business is still growing. And I think that's very comforting to see because it supports our core business still.

So overall, what we saw, yes, a very difficult year; yes, a year with a lot of unexpected turns, but core business holding up really, really well. And with that, I would like to hand over to our group CFO, Stefan Dorfler, on Page 8.

Thank you very much, Bernd. Good morning, everybody.

On the operating trends, I would like to start with volumes. Let me remind you that going into the year 2020 pre-crisis, we were setting the ambition and guidance level of mid-single-digit loan growth.

And honestly, there were times throughout 2020, and we were very skeptical whether we could get anywhere close to this level. Now if you look at the figures shown on Page 8, actually, adjusted for FX effect, the loan growth year-on-year has been around about 4.5%.

In the same moment, of course, one has to observe what this -- how this loan growth is put together. And it's fair to say that starting with a significant share, a very, very significant share of moratoria and guarantees in the second quarter and still holding up relatively strongly in the third quarter, we are now back to a strong majority of the growth and significant share in concrete terms around about €4 billion or 2.5%, really stemming from what we would say, real business growth.

It's always very difficult these days to distinguish in very much detail what is to be put in which corner. But as we saw from the slides on retail and corporate, we understand that there are certain areas of our business that have been accelerating in their growth numbers in 2020, and we are optimistic that this remains so in 2021 and going forward.

The overall volume of state guaranteed loans in moratoria is slightly north of €3 billion in the year-on-year comparison. Now what was a very significant development in the fourth quarter was the fact that the volume subject to COVID-19 matters declined drastically.

This was due to the fact that in numerous countries, the moratoria schemes have been expiring. And Alexandra will be talking about what this had -- what the effect on the respective risk components were.

I can take already where they were much more positive than we were originally anticipating. But back to volumes.

Another interesting aspect of the latest developments is that while, for a long time, throughout 2020, state guaranteed loans were pretty much an Austrian story. In the meanwhile, 1/3 of those €1.9 billion it's coming from activities in CEE countries.

We don't expect these activities to skyrocket, like you have it in some of the Western European countries, but still the countries, especially Czech Republic and Slovakia have been putting programs together that are able to support, especially bigger corporates if there is a need to do so. If I may ask you to turn to Page 9.

We can talk about the income and cost lines for a few minutes. NII, in this interest rate environment, of course, focus point, not only on euro side, but definitely also inside the bank.

And I would say it's fair to say that we are looking at a mixed picture presenting the figures to you today. On the one hand, we could increase, and I think this a success, we could increase net interest income year-on-year slightly, but still, ending up with €4.775 billion.

However, we see on a year-over-year comparison that the fourth quarter of 2020 has been weaker than the fourth quarter of 2019. The main reason for that of course is the interest rate -- the changed interest rate environment in some of our very strong countries, especially Czech Republic.

Now looking into the developments in 2021 and observing the first developments from our business colleagues, January and February, we are confident that we can grow our loan books further, that we are able to compensate the ongoing pressure on margins and the fierce competition by our strong market position and healthy loan growth. Still, we need to be cautious in our outlook on NII.

And that's why the expectation for the 2021 net interest income is set to a flattish development. A very positive development, I may say so, especially in the second half of 2020 was our fee income, where we expect -- where we experienced a harsh drop in the second quarter due to the first very radical lockdowns and actually economy coming to something like a standstill.

Our colleagues throughout all businesses have been enormously successful to work with our clients on their asset allocation as well as on all other areas of our services. And we have been achieving pretty much a flat result year-on-year 2019 to 2020 on net fee and commission income.

This is, I guess, a very remarkable result, especially given the fact that we had to swallow the impact on the SEPA regulation, as we always have been indicating to you. So basically, that's -- adjusted for that, it's basically a year-on-year flat result.

Is this overall satisfying? Of course, not.

We want to grow the fee business also in the income, and we are setting a clear ambition and target for the year 2021 to reembark, I would say, the path -- the growth path that we have been setting out at the Capital Markets Day in 2019. You remember we were indicating something like in the area of 4% year-on-year net fee income, commission income growth, and that's clearly the target again for the years to come.

A few words about trading and fair value result. Obviously, we had to take the hit in March and April 2020.

You all know what happened at that point in time in the financial market. But it's also fair to say that we have been recovering extremely well on the back of strong financial markets in the trading area as well as on our fair value portfolios.

So all in all, a weaker result on the trading and fair value side than in 2019, but positively contributing income line. And we expect actually these results to remain depending, of course, on developments on financial markets, but to remain a stable and positive contributor in the years to come.

Last, but not at all least, expenses. Again, here, a brief review on how we entered into the year 2020.

We entered the year into 2020 with an expectation of around about 2% to 3% cost increase year-on-year. So in other words, around about €100 million higher growth -- higher costs than 2019.

Now we present the result, which is €60 million lower in cost than 2019. So actually, a gap of €160 million compared to the original expectations.

Now you all know that a lot of that has been driven by COVID effects, including FX effects from slightly weakening CEE currencies. In the same moment, we have been communicating to you in various occasions that we are applying strict efficiency measures that also should have and will have a sustainable effect.

And my personal estimation based on all the information that we have been gathering throughout the countries and especially also in the Austrian hemisphere is that we believe that 1/3 of the cost reduction is expected to be sustainable, and we will be working through that in the upcoming years in order to support our overall operating performance. And with that, I hand over to Alexandra for the risk part.

Thank you, Stefan, and good morning, ladies and gentlemen. Being committed to proactive and forward-looking provisioning, we finished the year of the global pandemic with risk costs of 78 basis points.

In Q4, the risk costs amounted to €425 million, where a biggest part of roughly €170 million are coming from UTP reassessment exercise that we performed in Q4. Another roughly €100 million from the FLI update we performed by the end of the year.

Again, some stage overlays of €70 million and €80 million net provision from regular provisions. We -- again, also in Q4, we saw recoveries from written-off exposures of more than €30 million in the quarter, €145 million for the full year, which is approximately the level of 2019 and slightly above what we expected for 2020.

Up to now, and this includes also January, February, we saw no noticeable insolvencies induced by the crisis. As mentioned, these Stage 3 bookings in Q4 mainly are coming from this UTP assessment exercise, not from bankruptcies.

So what we see and what we can confirm, and I can also confirm from the risk side the various and very extensive state support measures so far do work. So based on the current development and the macro assumptions, we feel comfortable to specify our estimate for '21 risk costs to remain below 65 basis points.

What you can also see on Page 10 on the right-hand side at our Stage 2 share again increased quarter-on-quarter, and we expect that Stage 2 now has peaked with this 18.4% and will go down again in '21. Stage 3 also increased together with the POCI results and an NPL ratio of 2.7%, which brings me to the next slide to Page 11.

There, you can see on the right-hand chart, is 2.7%. And we still see a very strong coverage of close to 90%.

We expect NPA to increase in '21 and in '22. These 2 years, we still consider to be the peak years.

However, we expect the NPL ratio to stay between 3% and 4% in '21. Now a few on our post-moratoria experiences.

It has already been indicated by Bernd and by Stefan that not only the volume of moratoria participation has gone down significantly. So the decline quarter-on-quarter from €11.8 billion to €4.5 billion of active moratoria participation, which is really huge, but also the experience that we see.

So overall, no change in positive trends that we have already observed in the previous period. So only a very, very small number of clients exiting the moratoria need further support or have serious issues.

The vast majority of clients of more than 90% of these moratoria clients was returning to their repayment schedules without issues. A considerable part of the remaining roughly 9% could be timely restructured.

And the default rate of the post moratoria volumes of the total expired moratoria, which you can see, the €11.9 billion, is only 1%. On a cautious note, of course, the time elapsed since end of the moratoria is not very long yet but longer, so for example, in Czech Republic, more than 3 months.

And of course, there are still moratoria in place. And of course, we all know the crisis is not yet over.

However, the trend is very reassuring. When we switch to Page 12 and 13, a short view on our focus industries.

I will only -- I will limit myself to a few comments as the developments are broadly in line with our previous assessments. Automotive, as you know, our portfolio is dominated by OEMs and OESs.

The development in the crisis is overall better than expected. All plants are operating and profiting from the fact there is no industrial -- has been no industrial second lockdown.

A very strong rebound of the global production is expected for '21. And the large manufacturers also acting very fast with restructuring programs and cost-saving initiatives.

So overall, strong performance of our portfolio so far. Tourism, and Bernd Spalt has already commented on this.

A much more difficult situation and not limited anymore to international city and congress tourism and the airlines, but now also affecting the winter holiday season, which is very important in Austria. As Bernd has said, winter season '21 is de facto gone as Austria is still in a continued lockdown situation for hotels and leisure.

If there will be an opening around Easter remains to be seen. So it is even more important to focus on the existing and ongoing government support measures.

So this is quite a bit furlough fixed cost reimbursement, but there's also a very broad support in terms of compensation payments for either lost turnover. So for example, in November, this was up to 80% of the turnover.

In December, it was still 50%, and this here there is a different scheme in place, compensation payment for losses, which also reaches -- depending on the size of the company, can go up very high. Given these support measures and the very long amortization schemes that we have in this sector, we must not forget loans are usually 15 to 20 years of amortizing schedules.

So overall, we are confident that the vast majority in the tourism sector will be able to successfully bridge the time until the lockdown measures will be over. Now quick glance on commercial real estate.

Also here, no bad news, but a continuous positive trend. The portfolios proved to be very resilient throughout the crisis.

The negative impact even on the office market so far remained very limited, and in the retail market, of course, the footfall went down considerably during the lockdown period. However, we saw very strong rebound effect.

And given the comparatively short lockdown periods, we see very little need for payment deferrals. Consumer loans also here very short, very similar picture to what we have seen in the previous quarters.

So no noticeable difference in terms of moratoria usage or post-moratoria behavior of the clients. So also here, no specific concerns on this portfolio.

And with this, I hand back to Stefan Dorfler.

Thank you very much, Alexandra. I kindly ask you to turn to Page 14, where we are showing the year-on-year waterfall on our common equity Tier 1 Basel III fully loaded position.

And I can be reasonably short here. Year-on-year, we have been increasing this position by around about 50 basis points ending the year with 14.2% common equity Tier 1.

And since I'm sure in the -- that in the Q&A we will talk about dividends quite a lot, I want to mention as a second point what we are proposing to the general assembly taking place in May. We are proposing in full compliance with the ECB recommendation to pay out €0.50 per share for our 2020 profit for payment in May 2021.

On the back of roll forward net profit into 2020, we have additionally build a reserve of €1 per share for a potential payment should the ECB recommendation be withdrawn and of course, the profitability and capital performance allow that. We are expecting this discussion to become more tangible somewhere in the course of Q3, once the ECB has taken a clear position on the further approach after September 30, 2021.

And with that, I hand back to Bernd Spalt for the outlook.

Thank you very much, Stefan. I will be reasonably quick when wrapping it up and going directly into the outlook.

When it comes to the operating environment, I think the overall picture is the negatives in terms of development of GDP will turn into positives according to our forecast in all of the countries. So we expect also that this will, as a consequence, induce loan growth in the low to mid-single-digit area also throughout the region.

When it comes to business performance, we aim for positive jaws this year. This is not something which we, at that stage, firmly commit to, but we aim clearly for positive jaws.

In the context of while the loan growth will be here, NII will be probably flattish in this kind of interest rate and competitive situation. We still believe that this year, we will see rising fee rates, low to mid-single-digit rates.

And we will see also, of course, or hopefully, an improved fair value and trading result. So overall, positive jaws is what we aim for, for this year.

And when it comes to the risk side, and Alexandra has covered all of the areas, we have front-loaded a lot. We believe that if the forecast is correct of a recovery throughout the region that, yes, we'll still see elevated levels of cost of risk, but they will be lower than 2020 because we have done already a lot.

The NPL ratio will stay below 4%. And when it comes to capital position, Stefan also has covered that.

We expect common equity Tier 1 ratio to remain strong. And of course, it's anybody's case what the regulator will do in September this year.

They have announced or indicated that they might lift all of the restrictions. Nobody knows.

We have seen last year that it's impossible to predict. But if and when this decision is taken, we will also react on that when it comes to honoring our shareholders' expectations.

So common Tier 1 ratio target, which we have already introduced a while ago, stays with 13.5%. When it comes to profitability as a result to what I have said -- to what all of us have said is that in the context of revenue and cost development being positive and risk costs going down, our profitability is expected to be better than 2020.

And Stefan has said and I think that's very important to say that we reserved €1 per share for a potential dividend later on this year. Now there are clearly risks to all this, and you can read through that one core risk to this is underlying assumption for the whole economic forecast is that the vaccination strategy of the countries throughout the first 2 to 3 quarters of the year will be successful.

So this is what we believe in. This is, I think, what can be achievable, but this is also necessary for an economic recovery.

And this is the core risk to this outlook. Overall, I do think that what we all see on this presentation is that the region is strong.

The recovery has a lot of potential, and the business model holds up well. And with that, I would like to conclude the presentation and hand back to Thomas.

Yes, operator, we are ready to take the questions. Thank you.

Two questions from me, please. Firstly, on the capital, could you please provide us a bit more color behind the increase of risk-weighted assets in the quarter, what exactly was the driver there?

And in terms of your outlook for NII, could you please confirm what are the assumptions regarding the interest rate environment across your core countries behind [indiscernible]? And if there could be upside or downside if there are any changes in the interest rate environment, for example, in Czech Republic?

So I would take -- and I will start with the credit risk RWA. Yes, we saw an increase quarter-on-quarter by €3.5 billion, which is mainly driven by business effects, roughly €1.8 billion focus on SL business and the savings banks and also off-balance business.

And [indiscernible] effects in mainly parameter updates, also roughly €1.7 billion. And we had some migration effects, especially in Corporates.

So rating downgrades and also migrations to defaults then offsetting the updrift. For the full year, it was an increase of below €1 billion, mainly business growth, which then largely was offset by this year with fix that you know where we had a very strong relief from the SME supporting factor.

On the NII, I would first make a general comment. And then very briefly comment on what we saw the last, I would say, 10 days, 2 weeks, 3 weeks in the market as a whole, since this is obviously, also very much also triggering our attention.

So when it comes to Central Bank rates and key rates, I think there is a very strong consensus that nothing will happen in the euro area and pretty much for a long time. So we can take this off.

The other question, of course, is when and under what circumstances might the Czech National Bank take action and get back to upward sloping interest rate developments. Here, obviously, the fact that the pandemic in Czech Republic is really hitting the country very, very hard and in, I would say, in a revolving manner, is a certain risk of -- towards a delay of the plans of the Czech National Bank.

The underlying assumption, as I just described in the macro picture before, the underlying assumption still is that there is an underlying tight labor market. There is an underlying, I wouldn't call it an inflation risk, but a strong tendency for an environment, and the Czech National Bank has been very outspoken on that to get into a situation where they might be becoming a little bit more hawkish again.

Now when it comes to the business year 2021, honestly speaking, the likelihood that we will see an effect from the key rates in Czech Republic for the business year 2021 is relatively low because should -- even if the Czech National Bank should take action somewhere mid or late in Q3 or in Q4, the impact on 2021 might be limited. Still, of course, in the longer term, this is a major input factor, and we believe that there might be something ahead once the turnaround on the economy really takes place.

In the other countries, it's -- the situation is country-by-country a little bit different. I don't want to waste too much time.

But Hungary is definitely something to watch. We are very positive on Hungary.

Again, for this year, we see already strong figures from the first 2 years -- 2 months, sorry. And also the Hungarian National Bank is very keen on supporting the economic recovery also on the interest rate front.

Last but not least, to name one important country as well, in Romania, we do think that there might be maybe one more rate cut, but that should be it then since the National Bank always is protecting the FX component very much. And the long end, obviously, is a different story.

Yes, we see a significant sell-off in the bond markets in the last 2 weeks. Now I've been asked about this already this morning in interview, how we look at that.

Frankly speaking, it's really a little too early to say because we have seen throughout the last 5, 6, 7 years, several times the situation where rates were going up a little bit, let's say, 50, 70, 90 basis points. And then -- in the long end, I'm talking about.

And then very, very quickly, the -- all the liquidity was streaming in and the market was bought back to new record low yields. It remains to be seen whether it's different this time.

I think the American -- so the dollar market will maybe give us a certain direction in the next few weeks. And I'm sure that when we get together again, then for the first quarter results, we will have a little bit of a clearer picture whether this turnaround is sustainable.

We do not yet count on that in all our assumptions for the business year '21. For this, the latest development of the 2 weeks, 3 weeks is too short.

Thank you.

Just a quick follow-up on the risk-weighted asset dynamics, I think, of the explanation in terms of Q4. What are your expectations in terms of dynamics going forward in terms of the drivers?

For '21, I assume. Yes.

So outlook -- so our expectation for '21 on credit risk RWA, we expect a low single-digit increase, again, mainly driven by business growth rating migrations, again, some other downgrades and offset by migrations to default, but low single-digit growth on credit risk.

Operator, we are ready to take the next question.

Two questions from my side, please. First on fee income.

A good performance in Q4, and your '21 guidance looks on deadline a bit conservative, in particular, hopefully, payment fees come a big -- come back over the year. So wondering why it's only low single digit.

And what are the main moving parts that could move in one or the other direction? And secondly, on George, you mentioned, you will roll out two more countries completely this year.

Wondering then are you looking also potentially going into new markets with George, purely from a digital banking perspective?

Thank you very much for the question on fees. I was expecting that.

It's absolutely correct. Q4 was outstanding.

There are two reasons. One, is a sustainable one.

We have been really very successful in transferring, I would call it, some of our significant inflows on deposits into the asset management arena, so to say, to the better of our clients, obviously, and this is something we will certainly also do in the months and quarters and years to come. So this, you can -- if you want, extrapolate.

The other effect that took place in Q4 is a Q4 special, and that's based on the -- as you rightly observed, on the payment fees. If we achieve a certain threshold, we get premiums from our partners on the credit card side and so on.

So I give you a rough estimation. This is €50 million across the group, especially in Czech Republic, but also in Slovak Republic and Austria.

This has to be regarded as a one-off only taking place if we trigger certain levels. So in other words, this part, you have to clean the figures for if you compare them for the upcoming quarters.

And George will be covered by Bernd.

Yes. Thank you very much.

I think there's a very clear answer on that. We are incredibly proud and happy with our George rollout throughout our countries.

And this is covering sort of an offering to our retail customers. So this is making also use of a very big economic power of our customers throughout these countries where we really then also can capitalize and monetize on the investments which we make.

So the next logical step, and we're in the middle of it, and we're very serious on it, is we extend this offering to our SME and corporate customers. Again, throughout the region.

So this is the next logical step, again, making use not only of a technological offering, which, we think, has proved really, really well throughout the last couple of years, but also making use of our customer base. So no, we're not going into any kind of new country, where we don't have a customer population.

No, we're not offering anywhere anything like a pure online business, where we cannot see at that point in time where the economic justification could come from. What we do is building on the success of a platform, which we have offered to our retail population, to our corporate proportion.

And just a follow-up, it was €15 million, and structurally if the trend towards noncash payments persists, it could also happen in '21 and going forward, I assume.

Fully agree. This is, of course, our goal, but there is, of course, no guarantee year-by-year to achieve the threshold.

But in principle, this is something we aim to achieve every year and eagerly even more.

My first question is about jaws and your ambition to achieve positive jaws this year. Can you talk a bit about the drivers here.

It sounds like you are not counting on meaningful support from Czech rate hikes. So under what conditions do you think you would achieve positive jaws this year.

Second one is on NII. When you guide for stable NII for the full year, but in the near term, in the next couple of quarters, would you expect a slight decline in NII, which then you would recover in the second half of the year?

Or shall we consider Q4 is a kind of run rate for the next few quarters? And then finally, how do you see after being positioned for the stress test.

I seem to recall that in previous ECB stress test exercise, you saw a quite meaningful drawdown in the NII under the stressed scenarios. It would be useful to understand if you see any changes in the possible outcome.

So I take the NII and jaws question. And first, on NII, I think it's -- there are 2, 3 factors for 2021, for sure, that we have to take into account that on a quarter-quarter or monthly planning, but for you is on the reporting side quarterly, I would say, view.

1 needs to consider, and that's, for example, the fact that TLTRO III, where we are currently engaged in with €14 billion, and I can inform you that we will enter also the next take up with a couple of billion and increase by a few billion our position there. Obviously, in terms of how it is accounted for.

And as you know, it's depending on the volume achievement, that can be a significant one-off in 1 or the other quarter, depending on when we are able and allowed and at the end of the day, also obliged to book that. So this is a significant amount.

We're talking about a double-digit amount that could be happening here 1 quarter sooner or later. In terms of the growth and the development, I would say the growth itself on the loan book, we expect to be pretty much well spread across the year.

So we don't expect a spike here, a drop there. Obviously, as you rightly said, the interest rate environment also -- and let's not forget the FX development, as it was also the case in 2020, can have a significant impact on seasonality of the results.

Overall, I think our NII outlook and guidance is true for across the year. Now jaws, look, the one problem that we have, if I don't want to use the word problem, the one challenge that we have, that we had a very good result 2020 on the operating side.

So I think it's fair to say that the basis of 2,937 is a very, very big hurdle to outcome in 2021 and to improve with positive jaws further. And one basis to that will certainly be the fact that cost need to be under control in order to allow for a cost income ratio not growing and actually endangering a positive jaws.

In the same moment, as Bernd has perfectly been describing, all the expectations regarding economic recovery at the end of the day are also depending on how the pandemic develops into summer. So Gabor, honestly speaking, we're setting the ambition.

We are optimistic that we can get there. But based on the excellent operating result of 2020, it's not something that we would actually translate into a guidance.

So now I'll take your question on stress test. It was very specific on NII.

So let me start with this. As you know, the impact on NII, this is EBA methodology, yes?

And this methodology, we cannot change. And this is affecting not only us, but all retail banks with site deposits as there is a specific treatment of site deposits.

And -- but we will be able to explain and also the differences to real life. Overall, what makes us confident that also this stress test we will manage well is that according to the EBA methodology, the banks are asked to take into account already.

So we should assume that there are no longer moratorium in place and everything has already faded out. And as Erste Group has already a very high share of Stage 2 volumes in the EBA compliant quarter in 2020, we expect no significant impact on this.

In general, of course, it's too early to estimate any potential differences in the expected capital depletion for this year, EBA stress test exercise compared to the previous exercises. But as I said, we are confident that we'll manage also this stress test well and we will be able also to explain NII impacts.

Just some further clarifications on net interest income and then a question on costs. On net interest income, I'm interested in a few numbers vis-à-vis Q4.

You mentioned before the TLTRO. I just wanted to know if you left the rate of accrual in the quarter at 0.67 as it was in Q3 since the terms of the TLTRO have now changed.

Implicitly, on the -- based on the comments you made, I think you have left it unchanged, but I just would like the confirmation. Then I'd like to know how much the negative impact from modification losses was.

And specific to the Czech Republic, usually, you book a positive item related to the recharging of the contribution to the resolution fund in Q4. I'd like to know if that was the case also this year?

And if so, what was the amount? Then the second question is on cost outlook.

I don't know specifically for the banking sector in the various countries. But for the private sector in general, in CEE, if you look at what the various central banks are expecting, the salary drift is still pretty significant despite COVID.

So I just like some commentaries on what do you expect in the most -- in the larger countries vis-à-vis salary drift? And on your comment on the 10% reduction in the footprint, can you just repeat if that only apply to Erste Bank Oesterreich.

Was that what you said? It wasn't clear to me.

I'll take the last question first. The 10% was specifically addressed to all of our branches with the exception of the savings banks.

So it alludes to Erste Bank Oesterreich and all of our CEE subsidiaries in total.

And I'll the question on modification. Sorry, I didn't want to interrupt you.

Yes. I'll take the specific question on modification gains and losses.

As part of the risk cost for the full year, the net amount was €9.3 million. We had €24 million losses and €14.8 million gains, main contributors Hungary and then much smaller amounts, Czech Republic, Romania and Croatia.

Thank you very much, Alexandra, for that part. So that means on the NII side, the one thing that you asked for is TRTRO.

The answer is yes. So in other words, and I'm sure you're pointing to that, Andrea, is that if we should be successful to achieve the year-on-year loan growth, then there will be an additional income from that in the coming periods.

I did not fully hear, respectively, understand the question. It was something about resolution fund, Czech Republic, right?

Can you repeat that one more time?

Yes. In Q4, you usually charge the company a certain amount and you book it in NII and what you said last year is that this is related to making them pay for your contribution to the resolution fund.

That's what you said last year.

Thank you.

I want to know if there's something of that nature this year as well.

Absolutely, can confirm that one to one. We applied exactly the same procedure.

Thanks for clarifying. I just didn't understand it before.

We were applying it the same way, and we have been covering that exactly the same way with our business lines as the year before, with a very similar effect that many of our clients then actually pulled, respectively, did not leave the deposits with us and others were simply charged. The other question on cost is a very, very important and very tricky one, of course.

In the -- due to the pandemic, the underlying inflation, I would say, the inflation trend on wages is very much under control, if not delayed. This is completely right.

There is good news definitely for 2021. I can inform you also already officially that in Austria, the collective bargaining ended at inflation, which is insofar, very positive.

We're talking about 1.4% year-on-year increase. Since we have, of course, cautiously been budgeting slightly higher, so that will have a positive effect on our cost line in Austria.

In other countries, I know from our management boards, that they have a very good position in negotiating with the respective workers' council, respective employee representatives in order to keep for the year 2021 increases on the salaries under strict control. However, it's clear that should the economy recover, which, of course, is very positive on our income lines, this will certainly then increase the pressure again on cost lines and, in particular, wages later on this year and going into 2022.

But for 2021, I expect a positive effect out of that since the crisis is still dominating.

Johannes Thormann, HSBC. Three questions, if I may.

First of all, on your NPL scenario, you're guiding for 3% to 4% or an increase to 3% to 4%. What would be the drivers for the upper and lower end, respectively?

And secondly, on taxes, the usual question on tax rate in the next quarters and years. And of course, if you see a risk of rising banking taxes in your region, just to patch up the financial situation or if you see that the financial transaction tax is coming back, how do you see the Austrian government's political stance on this as some European countries cannot give up this stupid idea?

And last, but not least, on your branches. Just wondering -- you're going for a 10% reduction in this.

If we look at similar countries in Europe with a similar population size, banks have already cut their network much stronger. And you say George is such a powerful tool.

What would be needed to cut your branches in half, for example?

I would start with the NPL scenario. I mean, the corridor that we are giving is, in a way, quite, quite narrow given the current environment.

But in fact, the range, upwards and downwards, will depend on large cases coming in. So for the time being, we do not see any large case, which would raise specific concerns, also not when we are talking about the watchlist portfolio, but this will be decisive whether we will end up upper or lower end of the current expected range?

Maybe I will take, again, the braches question. We have been reducing our physical footprint over the last many years.

We continue to do so. Let me also say at the same time, we're not in a competition with anybody to reduce more than anybody else.

What we tried to do is that we try to understand our customers' behavior, and we're in a strong believer position that a hybrid approach at physical proximity plus the digital competence works. So we're not anywhere going to a situation where we see an online-only offering.

So I think we're pretty happy with the speed as we go because itself it's not a target. It's a function of where do our customers stand, what do they need?

And we will -- maybe we can follow that.

Would you want to take also the banking tax question?

Sure. Sure.

Sure. So on the banking tax, so far, knock on wood, we have not seen any kind of resumption of the discussion around banking tax in any of our countries.

I stick to what I've said last time in the earnings call for this quarter of last year, that it's not to be ruled out that this kind of stupid debate comes back on the table. Because as the crisis at some point in time will come to the end.

And as we sort of will find -- need to find ways out of this crisis that there will be possibility that redistribution discussions reemerge. My hope would be that we have more intelligent solutions to offer them banking taxes.

And specifically on the tax rate, Johannes, two comments. The one, the longer-term outlook, of course, always depending on the respective profitability situation in a certain year, remains completely unchanged.

So we've always been communicating a range in the area 22%, 23% of tax rate. There is no change to this guidance.

What happened in 2020, in particular, and we have been commenting on that each quarter. We had a change on the Austrian tax group insofar as there was a decreased recoverability of deferred tax assets and the P&L impairment of €58 million in full year 2020 compared to the write-up in 2019 triggered an impact on the Austrian Tax group.

So that was the main driver. Other drivers were some specific in Romania and other countries.

So if you remember, we had around half year, we were even expecting a rate in direction of 28%, 29%, now ending up at 25% is driven by the factors that I've been describing. However, going forward, we expect the range to be 22%, 23% on average over years.

And maybe just one more add on to the financial transaction tax, which you also touched upon. I'm quite happy to say that yesterday, our Minister of Finance in Austria has made a very specific statement on not having any kind of intention of financial transaction tax, so as to not weakening of our capital markets even further.

So I think that can be seen as a mildly positive sign. [Technical Difficulty].

Thomas here. I don't know how much you heard in terms of the answers from Bernd and Stefan.

Did you get everything you wanted or? Okay.

Let's continue. Operator, let's continue with Izabel Dobreva, please.

I'm not sure if you could hear any of my question earlier or whether I should repeat the whole thing.

No. We haven't heard anything, Izabel.

We were out for the last 4 minutes or so, 5 minutes.

Okay. So I have two questions for you.

One is on asset quality and one is of uses of capital. So firstly on the asset quality side.

When I look at your kind of balance sheet movements in the commentary around Stage 2 having peaked the coverage in NPL is relatively high, close to 90%. And the moratoria also performing relatively well when we look at the default rates.

So when I look at all of that against your guidance for cost of risk into next year, about 55 basis points. It looks a little bit conservative, I guess.

So my question is, what would be the lower bound in terms of where cost of risk could end up depending on the macro situation, of course. And also, if you could give us a little bit of color of where these loan losses are coming from the house by geography or by segment?

So that has been the first question. And then my follow-up was on M&A.

So when I look at your capital, of course, you have a sizable headroom to the SREP, but also to your own target. So could you give us an update on [Technical Difficulty].

Operator, can you hear us? Izabel?

I think that's a no. Operator, once again, can you hear us?

Okay. We are told that the audience can hear us, but obviously, the operator is gone.

So we'll go on mute for a second and hope to resume shortly.

Well, I think we were just cut off, Izabel's question...

On M&A. M&A and the asset quality.

Those two questions she had.

And Alexandra will start with the process of answering, and I hand back to her. Before that, I apologize for the technical difficulties.

Hello. I hope you can hear me.

Now to Izabel's question on asset quality. I fully understand that you would like to have a clearer picture on the lower band of our risk cost guidance, which, as it is very early in the year and is still a little bit -- it's still too early to specify more in detail, which will not surprise you.

But I'm pretty confident that in the upcoming months. So maybe already with the first quarter results, we can be more precise on this.

But we are very confident to be below 65%. And I think also our guidance on NPL ratio expectation to be between 3 and 4 for '21 is also showing this confidence.

On your question on in which segments we would see it, I would like to draw your attention to the Page 12, where we have the focused exposure, and where you can also see from the figures, the industries that are most hit. So this is not surprisingly tourism, passenger, transportation, also partially in the cyclical consumer goods production and this is also where we put a lot of our stage 2 overlays and where we expect that the risk costs will come from.

Capital M&A.

I didn't hear the full question on M&A. Could you rephrase the question, Izabel?

Yes, yes, of course. So the question was relatively straightforward.

If you could just refresh us on your latest thoughts on how you see yourself as the consolidator and you're viewing the M&A landscape?

Broadly unchanged. As you say, we're acting from a position of strength, we still live in bolt-on acquisition opportunities in all of our markets.

So we watch the markets. There will be opportunities as we see, and we will check whether or not they are fitting to our strategy and whether they are capital accretive and earnings accretive.

And we believe, there will be, throughout 2021, the one other opportunity coming up. So we still see ourselves as a consolidator.

I don't think that there will be major, major deals, transforming deals. But there will be nice bolt-on opportunities as we go.

Three questions, if I may. To get back one second on jaws, it's pretty clear to me that your guidance does not include anything particular on the rate side.

I was just wondering whether the positive jaws would stand also without trading revenues, first. Second, if the positive jaws on the cost side include some kind of normalization in travel, transport, marketing, all those costs that have been trashed down due to the pandemic in 2020.

And still on this topic, TLTRO is pretty explained well how you account for it. Does the positive jaws include the full benefit, the full 100 basis points instead of the 66 basis points?

Another question I have is in some of your previous comments, I might have taken wrongly, you mentioned some one-offs in fee income. Not clear to me if you mentioned €15 million, 1-5, or €50 million, 5-0.

Sorry, I didn't get it. If you can clarify that?

And the other question -- the other question I have is on the -- on Stage -- on NPL Stage 3. When you say 3% to 4%, should we take into account the 2.5% that you show in one of your initial slide as a starting point for 2020?

And when you state that Stage 2 has peaked at 18 point something percent of the loan book in 2020, is that due to the fact that you expect to move some of these things into Stage 3 and then could be eventually replenished again to move for migration from Stage 1 to Stage 2?

Riccardo, I will take the -- I'll try to take all the points on the operating side. So -- and expecting no interest rate hikes, yes, that's true.

There's nothing built into the -- into our assumptions in that direction path. Also, very importantly, there is also no further, if you want, deterioration on that side built in.

So obviously, no, Czech National Bank going into negative territory or dramatic rate cuts or even further massive interaction here from -- we mentioned from ECB side. So that's the neutral stance we take here.

Is the full TRTRO 3 expectation in? Yes, it is, but of course, only built on the volume they have been taking up and only rolling into the new additional volume coming up.

So there is a certain range of expected income from TLTRO III. It's an important factor.

But of course, given the overall Central Bank money, it's only 1 factor. One-offs, I repeat, is €15 million, not 50, would have been nice for Q4, but maybe a challenge later on.

Now it's €15 million. And on cost, you raised a very important point, and this gives me the opportunity also for all the other listeners to be a little bit more concrete in what we are aiming for on the cost side, assuming the recovery that has been described by us throughout the call.

We expect and target the cost in euro terms to be around flat compared to 2019. So obviously, we expect certain effects from COVID to go away.

And we all hope that we will be traveling a little bit more and this and that, but there should still be a dampening effect from the COVID environment, so that we try to keep the cost at a level of 2019. I give 1 warning signal what is always a massive impact factor, of course, is FX movements that can change the picture here and there a little bit of course throughout the year, but that's the principal target, if this helps.

And I think, Alexandra, you do the other part.

On your question on development of Stage 2. As I said and you repeated it correctly, we expect Stage 2 to hit peak by end of '20 and will go down in '21, roughly around below 15%.

Why do we see this decrease? First assumption is, you're correct, yes.

We expected some will move to Stage 3, but we also expect some releases on this front. We expect no significant move Stage 1, Stage 2 other than the normal business development.

Just one thing on -- again, on this. When I look at -- just to be precise, let me get back once again to the slide.

On Slide 10, Stage 3 is 2.5%. Now Alexandra, the 3%, 4%, does this speak with 2.5% when you say NPL.

Yes. I mean, POCI is 2.5% and 0.2%, it's up to the 2.7%.

But we do not expect a movement in POCI. So when we expect an increase to 3% to 4%, this would be an increase of Stage 3.

Okay. From, let's say, 2.5%/2.7%.

Okay. Okay.

Got it.

Just really one question on the loan growth outlook. In everything that you've said this morning, investment picking up, good performance in terms of post moratoria, precautionary savings, some idea of employment salaries rising, better-than-expected employment.

There's a lot of positives in what you're saying about the growth in 2021 and clearly a stronger macro background. So I wondered how colored your sort of bottom range of the loan growth forecast is due to the short-term pandemic issues that you are faced with as you're making these forecasts in Austria and the Czech Republic and Slovakia.

There's a lot of short-term quite bad news. But if you take that away, everything else and particularly the rebound that we saw in Q3 was really quite impressive, which suggests that there's a lot of elements of coiled springs within the economies in terms of demand looking forward, not to mention things like EU funds and so on.

So could you just sort of contextualize a little bit more where you're getting that sort of lower end of the range from? And what for you needs to happen for us to move more towards the mid-range than the bottom that you've been talking about this morning?

That would be helpful.

I'll try to take that, Alan. As difficult as this question is, but very generally, I try to allude to that.

We believe that quarter 1 and quarter 2 this year will be incredibly important to watch and observe when it comes to the success of the vaccination strategy in our countries. As you rightly observed, in the Slovak Republic, in Czech Republic, presently we're having a couple of difficult days and weeks, and numbers are not very encouraging.

However, we think that not only enough vaccine capacity will be available, but also the population will be ready and able to sort of accept the vaccination. And this will be seen in Q2/Q3 also in this year in the warm season, so that we will -- and this the backbone of this whole economic outlook.

We will go into a cold season of the year, where no significant lockdown strategy will be necessary anymore. I do not think that before there is clarity on that, we will see a massive pickup in investment behavior.

Yes, we see positive signs. Yes, we see -- we have seen also last year that once the economies are opening up, there are relatively robust and strong responses.

But I still think that, again, this year will probably not be a straight line up. It will be a year of recovery.

It will be a year, which is much better than 2020, but we will see a couple of setbacks on the road still. So I do think that low to mid single-digit growth rates on the loan side.

Anticipate a successful vaccination strategy with a couple of bumps on the road ahead.

Okay. Just a short housekeeping announcement.

We have another 10 minutes to go on this conference call. So I would ask everybody to ask short questions and my colleagues to provide short answers.

Just one follow-up on fees and asset management. Can you talk about your product offering in asset management and brokerage a little more in detail?

I'm asking because in some of the countries, we're seeing a visible shift from deposits into those more sophisticated products, such as brokerage and investing, et cetera, through Robinhood type brokerage platforms. How do you see the customer behavior so far shape in those traditionally more risk-reward countries such as Austria or Czech Republic?

And what are you doing in order to move those customers into the investing products, for example?

Well, let me take that very quickly. I think we've got a very broad offering on our asset management side for our retail population from our real estate funds to mutual funds.

What we see in the behavior in these ultra-low interest rate situations, what we see is a sort of monthly savings behavioral pattern, where sort of monthly sort of monies are being put to these funds as a savings strategy. So we have basically real estate plus mutual funds.

We've got a lot of offerings in the sustainability area, which is doing really well and attracts a lot of interest. So I think this is a segment which attracts a lot of clients' interest.

Okay. And just one very quick follow-up, if I may, on the cost side.

So you mentioned earlier that 1/3 of the cost reduction you delivered in 2020 will remain going forward. When you talk about the 10% branch reduction ex savings banks, would this be an optionality going forward, so basically an additional cost savings that we'll see on top of the maybe €20 million remaining cost savings that you delivered already in 2020?

I can take that very short. It's part of the whole scenery.

It's not this particular element that we are backing as such. It's something that has been commented by Bernd already, which is a natural part of the transformation going on around us, and is, of course, incorporated into all the elements of cost related to that.

So starting from PEREX leading into hard assets and so on. So it's simply a part of the overall equation, but not a particular cost measurement as such.

It's a transformation -- it's transformative environment.

Just a quick question on capital return to shareholders. Just wanted your latest thoughts on dividend versus buyback.

Certainly, you have a lot of excess capital above your target. I hear you about the M&A, but if you don't have any M&A opportunities that are material, would you start thinking about the buyback to return some of that excess capital, given that the number of banks that are now talking buybacks is definitely going up compared to where it was a year or two ago.

Yes, very quick question. It's an option.

It's something that we have been technically preparing for. It's not our option one.

We definitely want to distribute to the amount that we have been talking about today. In the same moment, we want to deploy our capital into growth, into growth, into growth.

That's the answer. But it's a technical option that we have been preparing for in-house.

We can and should there be no other reasonable and sensible way to deploy our capital, it's something that we could trigger at a certain point in time.

Sorry, if this was already discussed because I had trouble connecting. It's about the other result, especially in the Romanian and other Austria subsidiaries, that increased to a negative 90 -- €49 million in Romania and €25 million in Austria.

And the question is, what has been behind this increase and whether that was a one-off or whether that's not something sustainable, which we should expect to see more frequently going forward?

If I got you right, because the connection was not so good, you were asking about other operating results in Q4, right? And the effect in Romania?

Yes, Romania, other results.

Yes. So that's a one-off, and it is not a recurring, and it was mainly as you find on, I'm just looking for the right page, I think it's -- you find it on Page 36.

There's a description in detail. And it's mainly about tangible asset impairments that happened typically towards the end of the year.

Nothing that we would be repeating. Overall, obviously, the other operating result was much better 2020 than 2019 for the reason that the impacts, the negative impacts for the '20 -- from the year 2019, the Slovenská sporitelna could write-down and the savings -- the PPP problem in Romania did not repeat.

So overall, a significantly better other operating result 2020 than 2019.

Just very, very quick. Given the focus you put at the Capital Markets Day on assets under management, what is the amount of that at the end of 2020?

Maybe it's in the presentation. I haven't seen it, but in any case.

Again, the line was not so good, Riccardo. But I think you were asking about the overall investment front development and asset management, right?

Yes, exactly. Total amount at the end of 2020.

Correct.

Perfect. Perfect.

Thank you very much. So after a significant drop, as you can imagine, throughout the drops of the financial market in the second quarter, we have been recovering very, very well.

And the total actual number by the end of the year is €68 billion, which is a growth of €4 billion year-on-year compared to end of '18, where we were at the level of €58 billion. So it's constantly growing, of course, always subject to the -- to asset values throughout the year.

But €68.2 billion is the number by the end of the year, and we can provide a breakdown also by countries if you require.

No, that's okay. Just to have a rough idea.

This concludes this conference call. And I hand back to Bernd Spalt for final words.

Yes. Thank you very much, ladies and gentlemen, for your interest in this call.

Apologies again for the technical problems which we had. Thanks for your time here.

We will reconvene on the 30th of April for our earnings announcement of the first quarter of 2021. Stay healthy, stay safe.

Thank you very much. Goodbye.