Thank you, operator. Also from my side, a very good morning to all of you from the headquarters of KBC in Brussels and welcome to the KBC conference call.

Today is Tuesday, May the 12th, 2026, and we are hosting the conference call on the first quarter results of KBC. As usual, we have Johan Thijs, Group CEO with us, as well as Group CFO Bartel Puelinckx, and they will both elaborate on the results.

As such, it's my pleasure to give the floor to our CEO Johan Thijs, who will quickly run you through the presentation.

Thank you very much, Kurt, and also from my side, a warm welcome on the announcement of the first quarter results of 2026. Despite the fact that we have been working in a very rough environment, the geopolitical turmoil was not creating the best environment for financial institutions, despite of that turmoil, the results in the first quarter were excellent, with a return on tangible equity of 16%, totaling €575 million over the quarter.

This €575 million is posted after paying €549 million bank taxes. Now, it is quite reassuring to once again then see that the machine has been firing on all cylinders, and that means that all countries have been contributed, and that the bank-insurance diversification has worked very well.

Let me start with indicating customer loans and customer deposits, a strong growth on the lending side, with a very strong 1.6% increase over the quarter, but also customer money inflows totaling €5.4 billion in this quarter. We have seen consequently then, as well, a strong increase of the net interest income, which was then also completely covered by the non-net interest income, totaling net fee and commission and insurance income.

Net fee and commission income, strong growth driven by strong performance on the sales side of direct client moneys, but also on the insurance side, we have seen a strong performance on the non-life side and on the life side. In terms of the volatility is clearly see that reflected in our financial income of our instruments and financial income at fair value, and that is totaling again a strong growth on the total income side.

On the let's say outgoing moneys, we do see first of all that the lending book in terms of its quality has performed very well, with a very good credit cost ratio standing at like-for-like basis 15 basis points, which is well below the 25-30 basis points. We also saw a very good combined ratio with 84%, and we did in that perspective also see that costs are under control, be it that you need to be aware that this is the first quarter where we integrate 365 and Business Lease into our numbers.

We'll come back to that in more detail. Solvency position both on the bank side and the insurance side remains solid with respectively a CET1 ratio of 14.4% and a Solvency II ratio of 231%, and you also know that on the AGM last week, it was decided to pay out the €4.1 dividend, which will be paid out on the 20th of May.

Let me go immediately into the detail. On the next slide, you can see actually the split-up in essence between our interest-bearing income and our non-interest-bearing income.

The split-up over the period was hovering around 50%, which is also the case for this quarter. This quarter it is 51/49%, which is pretty much in line as what we have seen on the previous quarters and years.

In terms of where we are with the technology and the evolution of the innovation side in KBC, well, it is performing again on a very strong level. We have seen further increase of the usage of Kate, that is now reaching 6.1 million of our customers which are using Kate on a regular basis.

That also means that Kate is answering their questions. We have two versions of Kate out now.

In Belgium, since the, let's say, end of last year, we have launched a full large language model-driven Kate, we call it Kate 2.0, which has a autonomy rate of roughly 80%. This quarter a little bit lower, has to do with customers asking more and more questions, questions which are not yet at this stage fully straight-through process, and when they're not straight-through process, we don't consider this to be a provided answer according to our standards.

In the Central European countries, we still have the older version of Kate 1.0. The new version will be rolled out in the course of '26.

We do see Czech Republic at 69%, but other countries like Hungary, Bulgaria stand at an autonomy of 75%. All of that has led to the further gains which we do on the productivity side.

To say something, when we look only on the commercial side, then Kate is doing the job of roughly 400 people. If we look at how many leads are converted by Kate, then we speak about 420,000 sales over the last 12 months.

For good understanding, we see now three consecutive quarters an increase of those converted leads in driven by Kate. Last but not least, what also is happening when Kate is answering questions, processes are fully automated, which means that also back office processes are automated.

We don't take them into the number of 400, in essence, Kate is doing the work of much more than the 400 people I was earlier referring about. On the next page, you see the other positions which we have on the sustainability side and how others are judging us in terms of innovation, but I will not dwell too much upon that.

Let me go to the one-offs. There are multiple one-offs this quarter.

In this quarter, after the approval of the AGM on the matter, we have booked the one-off bonus for our staff. The one-off bonus is totaling €23 million ultimately, which also means that that will be part of our costs.

For good understanding, this was not part of our cost guidance for the simple reason that the decision had to be taken by the AGM. Also what we do see is in Hungary quite a series of one-offs.

The first one is linked to an correction on the subsidized loans where an interpretation was not followed by the authorities. The correction totaled €10 million.

More significantly is that we won a legal case against those Hungarian authorities, which ultimately delivered €33 million in positive. Last definitely not least is that the Hungarian authorities introduced a new windfall tax, on top of the previous one, for a whopping €134 million, which completely changes the picture in the first quarter where those majority of taxes are booked.

In terms of total amounts, we now stand after taxes as €121 million exceptionals, one-offs, which clearly more than what we have seen the same quarter last year and definitely also much more than what we have seen on previous quarter. Let me now go into the building blocks, first starting with net interest income.

Net interest income as such is up 4% on the quarter and 18% on the year. Of course, this is significantly influenced by the absorption of 365.bank and Business Lease.

For good understanding, when I'm going to say further in this presentation 365.bank, I always mean the combination of the two. The integration of both entities have triggered that strong increase.

If you would exclude them, then we would see an increase of 2% on the quarter and 15% on the year, which actually means that underlying, our net interest income has been performing very well. In that perspective, to give you an idea, if we exclude 365 and Business Lease, we have a strong performance of our commercial transformation results, which is benefiting further from the reinvestment yields, and then also the fact that the volumes have been on the current account, saving accounts have been continuously flowing in and in that perspective are prolonging our strategy.

In terms of the lending income, also a slight increase. We do see, in that perspective, of course, also the influence of the integration of 365.

Even if you would exclude that M&A part, then we do see an increase of our lending income, which is driven by 1.6% quarter-on-quarter growth, which is very strong, translated over the year, it means that we do see a growth of roughly 7%, to be precise, 6.6%, which is indeed, despite the political turmoil, a very good result. Part of that is offset by margin pressure.

We do see margin pressure on certain products. It is a bit of a mixed picture, not all products we do see the margin going down, on the contrary, but in essence, all in all, I would say commercial margins are still under pressure over the countries as a whole.

Lending income slightly up, given the combination of the two. We do also see that some other parts are indeed also increasing, and they are only offset by two negative things.

In essence, the number of days are lower than on the previous quarter, which has a negative impact of €17 million, and we do also see that the inflation-linked bonds have quarter-on-quarter delivered a difference of €17 million. As inflation is on the rise.

The calculation of those inflation-linked bonds is always on the inflation of 2 months ago, which means the delay factor plays against us, but we will recuperate that in the course of the year. Therefore, going forward, the inflation-linked bonds result full year will be guided for €30 million to €40 million.

Also a negative offside is the €10 million I was earlier referring to in Hungary. How is that translated in net interest margins?

Margins are up significantly, now total 217 basis points. This is obviously influenced by the things I just mentioned.

I have to add that also, for instance, the MRR in Bulgaria has a positive uptake in this quarter. If you would leave out 365.bank, even then margins would be growing to 214 basis points.

On the remainder of the page, you can see the split-up of the total loans. We have also seen a growth of 1% on the quarter for the mortgages, totaling 6% over the year.

In terms of volumes on the deposit side, positive 2% up on the quarter, 5% up on the year, but I think it's better and easier, more easier to explain that on using the next slide on page 8, where you can clearly see, if you exclude the foreign branches and you exclude the FX effect, that we do have an increase of deposits inflow, or let me say it differently, we do see have an increase of customer money inflows of €5.4 billion. Now what is the split-up of that €5.4 billion?

Well, €1.6 billion is linked to again a very strong net sale on the asset management product side, mutual funds totaling €1.6 billion, which actually means that roughly €3.8 billion is linked to, let's call it, customer deposits. Current accounts, saving accounts totaling €1.3 billion positive, and term deposits do see an increase of €2.4 billion.

Now, of course, this number is also influenced by the acquisition of 365.bank. If we would exclude 365.bank, well, then the number 5.4 will become €1.9 billion net core money customer money inflow.

Now, if you translate that in a different way, the 1.6 remains the same on the mutual fund business, which actually says that what we do see is saving accounts are unchanged, 0.6, but current accounts, we do see a clear shift from current accounts to term deposits, which is different than what we saw in the previous quarters. The reason behind that is actually linked to two countries, in essence, Belgium and Czech Republic, and this has to do with two completely different things.

Because of the war, because of the turmoil on the financial markets, we did see a pickup of the interest rates, and therefore, in private banking Belgium, some of the customers have actually split up their investments on two sides. Part of the money were shifted into asset management products, other part of the money were locked in into term deposits, we're talking about €0.7 billion, which was an anticipation on the fact that if the war is a short-lived one, then interest rates would come down again, and therefore, locking it in for a year does make sense.

The other country where we see the effect of outflowing current accounts is Slovakia, which is linked to a certain extent the retail bond which was issued in the quarter, and then a purely seasonal effect, which is linked to tax payments by micro SMEs in Slovakia. Last but not least, also in Belgium, we saw a seasonal effect, that is corporate accounts, which is traditional going down every year in the first quarter, but normally picks up in the course of the year.

All in all, customer moneys have been continuously inflowing, and that in that perspective is creating the still solid base going forward. In terms of fee and commission income, I already mentioned that we have seen a strong sale, well, that's also translated overall in the net fee and commission in total, up 1% on the quarter and up 6% on the year.

If you would exclude 365.bank, well, then, of course, you have a little bit different numbers, -2 on the quarter, +3 on the year. Where does it come from?

We have seen strong sales, which is indeed €1.6 billion, quite an achievement. If you compare that with the record of last year, it's only slightly down, so that is, despite the war, is an excellent result.

Also we see the same more or less in the gross sales. Also in gross sales, we have the second-highest first quarter ever realized in 2026.

Which means that the asset management services fees increased by 1%, but also that the entry fees went up as well. Bank services went up with 1%, which is in essence due to fees linked on the credit side, but also fees which were linked to our securities trading platform like Bolero and Patria, Bolero in Belgium, Patria in Czech Republic.

To just give you an indication, the number of transactions in Bolero in the first quarters were 26% up compared with the same quarter last year. For good understanding, quarter 1 2025 was a record high.

We do so also see that sorry, I made a mistake, the 26 is about customers, it's not about transactions, about transactions is 13% up. What you also have to bear in mind, that is in this quarter, we also deducted for the first time the SRT costs, contributing in -€6 million to this fee and commission income.

In terms of assets under management, well, obviously the negative sentiment on the financial market have put down the assets under management on it's roughly 2% on the total 4.5 billion, and it is only partly compensated by the net inflow of the 1.6 billion euro, which I reflected upon earlier. Small add-on on the net sales, we also saw again a strong performance on the regular investment plans, let's say the stable solid base of the net sales.

It is totaling €450 million, which is also again translated in a further increase of the number of regular investment plans, increase with 9% over the year. In terms of non-life insurance business, already mentioned that was having a strong growth of 7%.

This is triggered by all countries. Belgium has having a growth, a more mature market, at 6%, where we do see growths of double-digit in Czech Republic, Bulgaria, and 9% in Hungary.

In terms of the quality, 84% combined ratio, which is an excellent result. This is true for all countries.

Small caveat, we do have extra windfall taxes or windfall taxes in Hungary. If we would exclude those windfall taxes in Hungary, the combined ratio there stands at 93%, but also most countries are having combined ratios below even 80%.

Life sales side super strong. You can make the comparison on the previous quarter, which was indeed a record high, but even that quarter was beaten with the 9% growth.

If you compare it with the same quarter last year, which is traditionally a very strong quarter, well, 15% up, and that is quite a striking result. The split-up between the products is 36% guaranteed interest product, whereas unit-linked is 58, and the remainder is in the hybrid products.

In terms of the financial instruments at fair value, we do see a negative evolution here of €96 million compared with previous quarter. That has to do, of course, with the volatility in the markets.

We do see the impact of a negative impact of the increased interest rates, and the rest is linked to the hedge accounting ineffectiveness. On the dealing room, we also saw, because of the turbulence, negative evolution there of roughly €26 million, which the sum of the two combined actually explains more than the 96 I was earlier referring to.

Net other income was up significantly, as you can see, €89 million, which is actually much better than the normal run rate of let's say roughly €50 million. That has to do with two things in essence.

The contribution of Business Lease, which is in for the first time, it's €7 million, but also the fact that we won a legal case, net €29 million is here in the result, and that was already mentioned earlier with the exceptional results. If you would exclude both of them, then we are closer to the run rate, a little bit higher, 10% higher, with €56 million.

What about operating expenses? This quarter, of course, is completely different than the previous quarter because of the bank taxes, but let me start with the real costs, that is the operating expenses, €1,214 million, which is, compared to previous quarter, down €10 million, despite the fact that we included in this quarter €23 million of one-offs, and despite the fact that in this quarter also €30 million is included because of 365.

More sense does make to make the comparison with previous year same quarter. Then we do see an increase, but also here, be aware there are one-offs which you need to make the distinction between the consolidation of the different underlying assets.

As I said, 365 is included this year, and then also the one-off bonus is included, and you have an FX effect of roughly €13 million. What about cost/income?

It's 41%, which indicates already that we have been able to keep our costs well under control. As a matter of fact, if you do a comparison on a like-for-like basis between quarter 1 last year and quarter 1 this year, then we do see an increase of 3.7%, which is slightly higher than the guided 3.4%, but this is 100% due to timing differences, we take into account already some costs in the first quarter where the benefits are only going to be seen in the course of 2026.

As a matter of fact, we are perfectly online with our planned cost evolution in this quarter. In terms of bank taxes, well, bank taxes are at a level of €549 million, which is significantly higher than last year, and this is due to, in essence, two effects.

We see an increase of the windfall taxes in Hungary. They added €134 million.

If you compare it with previous quarter, that is an increase of €81 million. In total, if you take into account some SRF contributions and a financial transaction levy, we end up at €87 million.

In terms of the Belgian situation, well, the deposit guarantee scheme in Belgium was fully filled up, so that contribution fell to zero, but the difference was for more than 50% filled up by the Belgian government by additional national taxes, bringing the total to a positive evolution of €67 million. In total, bank taxes up are 13.

We do expect by year-end to pay €724 million of taxes, and the split-up of the 549 over the different countries and what that means in opex, you can see on slide 13. Let me go immediately to asset impairments.

We do have in total €165 million of impairments, which are actually split up in two parts. First is the business-as-usual impairments, what is the quality of the underlying lending book.

Well, €89 million compares to €76 million, which means that you do see an increase of €13 million. There is a small but: in 89 is included 365 for €11 million, and on top of that, we also took a further provision on the non-performing loans exposure of €16 million.

The reason why I'm mentioning that is by taking that €16 million, you will have a positive impact on your CET1, and it's, of course, a voluntary choice. If you would exclude that €27 million, actually the business-as-usual impairments are better than what we have seen in previous quarter, but also better what we have seen in the same quarter on previous year.

Quality-wise, it is actually a good quarter. We also see that in the PD shifts in this quarter, which are actually pretty stable, which is also translated in the impaired loans ratio of 1.8%.

For those who are more familiar with the EBA definition, we now stand at 148 basis points, which is substantially better than the European average of 180 or the European median of 170 basis points. Another way to reflect the underlying quality of the lending book is the credit cost ratio like-for-like basis, well, that stands at 15 basis points, which is perfectly comparable with the 13 of last year and the 16 the year before, and that's definitely much better than the longer-term average or the guidance which we gave, 25-30 basis points.

What else? We added, given the very difficult situation out there, a conservatism extra to what we already had as a buffer.

The previous buffer was €100 million. We now decided, given that turbulence in the Middle East, that management overlay is indeed added to the tune of €72 million.

€3 million was extra added because of the previous buffer. In total, we do add €75 million.

What is particular about this buffer is that it is 1-to-1 linked to the IRB shortfall, and therefore, this buffer actually adds to the CET1 ratio 4 basis points extra positive. Total buffer at the end of this quarter, €175 million.

With the evolution of the conflict in the Middle East as we have seen it, with the evolution also of the situation in Ukraine, we do not expect to touch the €72 million management overlay in the remaining part of this year. Which is then translated to page 15, where we do give you some more detail on our exposure to the Middle East, which is very limited to only 0.2% of our outstanding loan book.

The same can be said about vulnerable sectors. Given the conflict in the Middle East, KBC already in the past was anticipating potential issues, and therefore was scrutinizing those portfolios, but to give you an idea, actually we do have limited exposures on those sectors which might be vulnerable, amongst others oil and gas, amongst others automotive, amongst others chemicals, aviation, and software, you can clearly see that the exposures which we have are very limited.

We are talking about max 2.4% in automotive, but most of those exposures are smaller than 1% of our outstanding loan book. In terms of, and that's just a confirmation of what we said on previous occasions, previous quarter, private credit, hardly any exposure.

Private equity limited to less than 0.5% of our lending book. Let me go immediately into the capital ratio.

The build-up of capital is definitely triggered by the net result and the upstreaming of the dividend of the insurance company. We also added the goodwill and the intangibles of 365.bank to the tune of €260 million, which actually brings capital to 19.3.

In terms of the risk-weighted assets, obviously the integration of 365.bank and Business Lease have added risk-weighted assets to this, this is €2.5 billion rounded. All the rest is, in essence, the vast majority that is explained by volume increases, the strong loan growth triggers the increase of the €1.5 billion.

All the rest is explained by model changes and also higher risk-weighted asset counterparty risk. Totaling 134.5 billion of risk-weighted assets, bringing the capital ratio to 14.4%.

Let me remind you that KBC always includes in its CET1 ratio fully loaded the phased-in of Basel IV. If you would exclude that, the ratio would stand at 14.54%.

In terms of the M-DNA position, we have a OCR 10.9%, which gives us a buffer of 3.5%. If we include the shortfall, which can be financed with CET1 on AT1 and Tier 2, the MDA level stands at 11.13%, giving us a buffer of more than 4.4 of roughly €4.4 billion.

The leverage ratio stands at 5.6%. The Solvency ratio already mentioned 231, let me repeat as well, LCR and the NSFR respectively 139 and 100 and 159, 135.

Then in terms of guidance, in essence, we never give new guidances in the first quarter, also given the turbulence today. It's extremely difficult to give any sensible comments on, for instance, net interest income what it will be.

Multiple scenarios are still possible. The guidance which you see on page 18, sorry, it's page 19, is unchanged.

The only remark I would like to make is that be aware that we included €23 million costs, which were previously not part of the guidance given the fact that the decision is only taken in 2026. In wrap-up, it's a pretty good quarter, a lot of things are moving on, but business-wise, the machine has been firing on all cylinders, and I'll give back the floor to Kurt, who will guide us through your questions.

Thank you, Johan. The floor is now open for questions.

Please restrict the number of questions to two to allow for a maximum number of people to raise questions. Thank you.

Good morning. Thank you for taking my questions.

I have two on net interest income. I hear you that you don't want to upgrade the guidance already given the uncertainty.

However, the NII result was solid. There is very good deposit and loan growth.

I would assume we get an upgrade in Q2, and I don't know if you agree and if you can quantify the upside if the rate curve stays where it is. Then secondly, slide 8 surprised me a little bit, because it's different from what you had mentioned before, and I think before you mentioned that KBC was assuming a deposit mix shift towards current and savings, and this quarter we see the opposite.

What are you seeing quarter-to-date in Q2? Is this trend towards term continuing, or in fact, it is reversing towards your assumption?

Does it make sense for banks to increase the cost in term deposits if the rate hikes are expected to be temporary? Thanks.

Thanks, Giulia, for your questions. I will take the first one, and actually your question is a disguised way to ask for guidance update.

Let me highlight why we are not giving you an update. The war in the Middle East is creating a lot of volatility, as we all know, and depending on the outcome of that conflict, is it short-lived or long-lived, it will fundamentally change the numbers and definitely also the situation for all financial institutions.

Let me highlight in brief what we have in mind. We still think that this war is a short-lived one, which means, let's say, 2 months, 3 months, max 4 months, and then a ceasefire will be there, which intrinsically, according to the statements of the senior politicians on both sides of the conflict, are today already stating.

If it is a short-lived war, then we are in the situation which you see today. There is a slightly lower GDP growth.

In Europe, the predictions are 0.4, 0.5 points percent lower GDP growth, but still it is good. In that environment, in the first quarter, we published a 1.6% lending growth, we are quite good in dealing with that kind of situation.

What is also far more important is that inflation is going up, this is what we see in this quarter, but if it is short-lived, the assumption is that it will not last. In '27, we will definitely have a normalizedly roughly around 2% inflation position.

As a consequence, the central banks will look through the inflation and will not start to hike, which is different as what the forwards today are saying. Forwards still are assuming three rate hikes before the end of 2026.

Therefore, also in our net interest income, you will have a positive impact on certain things, which you already saw in this quarter. We will have a positive upside on our inflation-linked bonds, which is not calculated in this quarter.

We will have the slowdown of the shifts of current and savings account to term deposits, which are part of this quarter, because interest rates will not go down and customers have anticipated, because of the war, the longer-term interest rates which were given in this quarter, so that shift will go down. Indeed, as you indicated, this is something which you have not seen in quarter 3 and 4, where there was no war, for good understanding, what we see now when there is a war, that this is happening.

Also in other parts of the P&L, it will have an impact. If we would now on the other hand a long-lived conflict, well, then it's completely different.

Then you will see inflation going much higher, probably central banks will anticipate with rate hikes, and then we probably come closer to the forward rates. When the forward rates are materializing, we see a completely different picture on net interest income side.

You probably will see also interest rates on other products increasing, given the fact that interest rates are on the rise, and you will have clearly higher inflation, therefore higher inflation-linked bonds. It's completely different to say what it is.

We will have a better view on that in the weeks to come, which means in the second quarter, and we clearly give you some insight where we will be at quarter 2. To wrap it up, if you listen carefully to what I said, I agree with your position that the current guidance which we have given is very conservative.

Then good morning also from my side to everyone. Giulia, your second question, the shift from CASA to term deposits, now seems to be halted and turned around, but let me give you some exact numbers.

Indeed, when you look at the slides related to the direct customer or core customer money, that you see €2.4 billion increase in the term deposits, but out of those €2.4 billion, €1.4 billion comes from 365 in Slovakia, you should deduct that. Secondly, we see some indeed shift, as Johan was explaining, in Belgium, in private banking, from current accounts to the term deposits for the reasons explained, but this is only in Belgium.

In the Czech Republic actually we continue to see a shift the other way around. That is then a net impact of €0.8 billion, and then basically we also see some increase in term deposits, but mainly driven in Slovakia by the corporates, where we had a campaign on term deposits for the corporates to attract additional deposits, so that's in total €2.4 billion.

Is this going to continue? Actually, as Johan has been explaining, depends a bit of course on the duration of the war.

If indeed the situation in the Middle East lasts longer, as we have already been indicating openly, that this is likely also going to indeed trigger back a shift from current accounts and savings accounts to term deposits, but when the war is short-lived, we do not believe that this is going to be continued going forward.

Thanks.

Good morning. Thank you for taking my questions.

My first one, sticking with NII, wanted to dwell a bit more on the moving parts of NII and how it progresses for the remaining quarters. I see in first quarter we had both positives and negatives.

Dealing room NII, if I have to look at positives, was elevated. Do you see risks of this reversing?

On the other hand, if I account for negatives like inflation-linked bonds, lower day count, overall, I see underlying first quarter annualized run rate closer to €6.9 billion. Consensus is around 6.8.

If you could comment on how to think about the NII progression in the remaining quarters, it would be helpful. You had previously shared +€50 million NII sensitivity for a 25 basis points rise in interest rates.

Just wanted to check if this has changed. Second, on asset quality, you've already added €75 million to your ECL buffers.

Oil prices have remained elevated. I appreciate this is not 2022 where the risks were higher for Europe, but there we saw ECL buffers continuously added in all the quarters, generally wanted to understand the risks of further additions to ECL buffers and more broadly on asset quality trends in the wake of current geopolitical risks.

Thank you.

Thank you, Sharath, for your question. I will take the first one.

It's a bit a continuation of what I said earlier to Giulia's question, but if you go in the moving parts, on net interest income, intrinsically it's very simple. Roughly 90% of all net interest income is built by two parameters, and that is the transformation result and the lending income.

Now, on the transformation result, Bartel just highlighted what is crucial in that perspective, that is customer deposits inflow. As he highlighted, well, that is at least stable, but it is in reality growing, and therefore the positions which we take and have been taken can be continued, which actually means that transformation results are going to increase not only in this quarter, as they did on the previous x quarters, but also in the future quarters.

We do anticipate that not only for '26, but also for '27, '28, we will see further continuation of that transformation result to go up, and when I'm saying '28, I'm saying at least '28. Now, what is crucial to understand, that is the 90 or the roughly 90% of net interest income built up transformation result and lending income, the really moving part is the transformation result, what is to a lesser extent the case for the lending income.

If you see the differences quarter-on-quarter, far more important transformation result than lending income. On lending income, it's very straightforward, two things are crucial: volume on one side, margin on the other side.

Let me start with volumes. We had a very strong quarter in published quarter 1, 1.6% growth, but the good news is that if we look at the pipeline, it's quite strong from the commercial SME side going forward.

In Belgium, and in Czech Republic, as a matter of fact, in all countries, except to a certain extent Hungary, we do have a very strong commercial banking pipeline filled. The 1.6% I do not see as an exception.

We guided for 5% currently with the evolution which we see, we are above that, and also given the fact that we have been rolling this off in a period where uncertainty was key given the conflicts which are ongoing, we are quite confident that the 5% will be reached by us going forward. What about margins then?

We continue to play the game of pushing up the margins in a sound and commercial way. Sound way means acceptable for customers, commercial way means we take also into account our market share.

Where we do see a drop in our market share, for instance, which happened in the first quarter '26 in Belgium where we're pushing up the margins on the mortgage side, the market was not following, we just adapt the situation, which means that by the end of the quarter, we restored our market shares again. This is how it works.

I would say depends a little bit on the market, and in that perspective, I do not expect that we will see a major uplift in the commercial margins. The product of the two would actually means that we will see a further continuation of what we have seen in quarter 1 of this year.

Let's then discuss the remaining parts. You mentioned dealing room income.

Let's face it, dealing in room income has a positive contribution, of course, but let's face it, it is only roughly 3% of our total net interest income. Even if you have their changes, which are what, €3 million, €5 million, it is not going to shift the needle on net interest income.

The same can be said on, for instance, cash management, we don't necessarily always mention that, but cash management is a positive contribution, but it's more an adjustment rather than a fundamental influence. You also mentioned inflation-linked bonds, that's quite crucial.

In this quarter, it is negative, but we do expect the inflation-linked bonds total for the year to be at roughly €30 million to €40 million, so that is an adjustment compared to this quarter in total of, let's say, roughly between €40 million and €50 million. The same can be said also if you want to extrapolate quarter 1, be careful, number of days are different, has a negative impact, and also be careful there are a negative one-off in this quarter on the Hungarian side.

All in all, we do see that the pickup of the net interest income over the last quarters and last years is going to be continued going forward, and therefore I said what I said to Giulia as well, the €6.725 billion guidance is on the conservative side, and we will give you an update in quarter 2. The last thing you mentioned was the parallel shift of 25%, already on earlier occasions Sorry, of course, 25 basis points.

25%, that would be a nightmare. But 25 basis points, we already said on earlier occasions that the impact would be roughly €60 million.

Be careful, parallel shift is a parallel shift, we don't see that in reality, and the short end and the long end move in different directions, and we have more flattening of the curve, but in that perspective, no change in our guidance.

Good morning, Sharath. As far as your second question is concerned related to the ECL buffer, which we indeed increased of €175 million with what I would call a one-off fixed management overlay.

This is bringing indeed the total buffer to €175 million, which is roughly 60% of the provisions or impairments that we have as a business-as-usual on the year, and we feel comfortable with that. Going forward, we do not anticipate that, as I said, it's a fixed one, we do not anticipate to further increase that.

What I can say as well, as Johan has been highlighting as well, this is also helping us to reduce the IRB shortfall. The impact of that is 4 basis points.

Now, for the time being, also as far as your question is concerned, what is the outlook, of course, there what we see is today we are, particularly in Belgium, in what we call the review season, that means that we are incorporating in our PDs the 2025 corporate results. What we see is today the PDs are stable, but we do expect potentially a slight increase in the Stage 1 and Stage 2 as a result of these integration of the 2025, but this is more a normalization than a structural deterioration.

We do not believe or think that there will be a structural deterioration, of course, unless the war continues for a very long period of time, because of course companies are suffering. If the war is certainly lived, then basically we do not expect a structural deterioration.

It's rather a normalization, and therefore we maintain the guidance of well below the 25 to 30 basis points.

Thank you.

Morning, and thank you very much for taking my question. I'm going to give you a break from the net interest income and ask about Kate.

Thank you for your comments on the autonomy decrease in Belgium at the beginning. I want to actually shift focus to the Czech Republic where, if you compare the first quarter of last year to the first quarter of this year, I believe your autonomy rate went down something like 5%.

If I could just understand what's driving that. Is it people are asking more difficult questions or is it or is it something else?

My second question is on the amount of leads generated by Kate. It's increased to 420,000 this quarter from I believe 398,000 the quarter the quarter before in the last 12 months, which implies a quite substantial step-up sort of in the quarterly run rate relative to a year ago.

If you can just talk about what you see as the latest developments there. Thank you.

Thanks, Shrey. Sorry, we just were discussing because there was a little blip in the line, we could not understand a part of your second question.

Anyway, in terms of the first question about Kate and then more particular Czech Republic, well, indeed there is a fundamental difference in the autonomy, and let me define again autonomy, it's quite crucial. Autonomy means that if you ask a question to Kate, Kate provides you not only the answer, but if the answer entails a product, she also delivers the product without any human being interfering.

What we call straight-through processing is a particular parameter which is judged upon when we are calculating the autonomy. In Belgium, the autonomy is hovering around 80%.

Czech Republic, which is Kate 1.0, not the full LLM Kate, that autonomy is now what was it, 67%, which is indeed down compared to previous quarter. Now, how come?

Actually it's true for both countries, because also in Belgium, the autonomy was slightly down. It has to do with the type of questions customers are asking to Kate, because first of all, more and more usage is made of Kate.

We do see an increase of 11% compared to previous year on the usage of Kate. That is first thing.

Secondly, when they start using it, the NPS score is very high, which means there are much more customers using it, they're much more satisfied, and as you already indicated in your question, they start to ask questions beyond the traditional stuff. If it is not foreseen in the solutions which we have that they are straight-through process, we can provide an answer, but we do not provide the product.

For example, when customers are asking for overdrafts or for particular products which are potentially linked to fraudulent actions, we do not of course provide the answers, and we do not provide the solutions. In that perspective, we do not count them in the autonomy.

Czech Republic is now in the process of rolling out its Kate 2.0, is already rolled out to internal staff, and the aim is to roll it out to customers by mid of this year. We do hope to see that indeed the autonomy is increasing there as well.

In other Central European countries, Kate 2.0 will be rolled out in the course of end of 2026, early 2027. Their autonomy currently stands at 75% to 77%.

As far as your second question is concerned related to the strong increase of the leads from indeed 398,000 to 420,000, this is mainly driven by Belgium and to some extent also the Czech Republic, and this is entirely driven also by the stronger conversion ratio, which has increased from 13% to 14%. What does that mean?

That it's a whole process. You start up with a pick-up ratio, then you have the contact-to-pick-up ratio, which means the relationship manager contacts the client, then you of course have the sales talk, which leads to the contact ratio, and then subsequently the final conclusion of that, which is indeed the total conversion ratio.

Now, one of the reasons why it has significantly picked up also compared to particularly the last quarter and the quarter 3 is mainly also because in Belgium we had also the maturity of the term deposits, which of course also forced our sales force to pay attention to that. That is have an impact on a slower conversion ratio in the last two quarters.

The serious pickup now is 14%, leading indeed to a significant increase on the conversion ratio of in total 420,000, and we expect that to increase further and further also for the reasons that Johan explained before.

Understood. Thank you very much.

Morning, and thank you for taking my questions. My first one, just on Hungary net interest income in the first quarter, even excluding all the one-offs, the €10 million negative and the €4 million positive, and excluding FX, net interest income looks flat quarter-on-quarter.

I just want to understand why this was, because the slides point to a higher commercial transformation result and a growing balance sheet quarter-on-quarter. Are you seeing increased competition in Hungary, and what does the competitive landscape look like there?

Secondly on Czech, the loans are growing a lot faster than deposits, and that's been the case for some quarters now. Do you think this is a sustainable strategy, and why do you not become more aggressive on deposit growth going forward?

If you're just able to quantify the impact on net interest income from a Czech rate hike if that were to be one.

Thank you. Hi, Namita.

Thank you for your questions. Let me take the first one.

Indeed, in Hungary, we do see a couple of one-offs, which are resulting in a slight influence of roughly €6 million on the net interest income side. As you pointed out, indeed, the net interest income is evolving positively, but is not at the same pace growing as in the rest of the group.

Now, in terms of the building blocks, well, here we do see the same pattern as in the group, commercial transformation result is performing better, which also means that on the other elements, there is compensating effect. The compensating effect has to do with the fact that, and I mentioned that earlier, that, for instance, the growth on the corporate side in Hungary is below our expectation.

This has to do with different elements which are part of the Hungarian domain, and that is, of course, the elections, which were creating some nervousness and also in terms of the appetite for investments of the business developments, they were subdued. In that perspective, the explanation is actually pretty straightforward.

What is the expectation going forward? On the short term, I know that there are huge expectations regarding the Hungarian government, but honestly, I think that the Hungarian government will need some time before they start to build up the transition which everybody is expecting from Orbán policy, let's call it like that, to a more Europe-oriented policy.

In the short term, and we know that there are two deadlines on the freeing up the European budgets, the European subsidies. There is a very short-term target, and there is one in August.

I think the August target to free up European subsidies for Hungary is more realistic than the upcoming one in I think it is in this month, in May. That might trigger, of course, a further economic development and consequently further loan growth.

Yes, it is flattish now, but the outlook is at least when you take into account the European subsidies more positive.

Good morning, Namita. On your question on the Czech Republic, basically indeed we have seen quite strong loan growth, stronger than the growth of the deposit base, but bear in mind that the loan-to-deposit ratio in the Czech Republic today still stands at 82%.

This is something that obviously we monitor closely, and further efforts will be taken within this respect. Bear in mind as well that we have been somewhat reducing the external rates on the saving accounts, notwithstanding that basically our market share has remained quite stable.

Also there, the net inflow is quite positive in deposits, which is indeed a growth of 0.5% quarter-on-quarter, but still 2.2% year-on-year. As far as your question is concerned on the sensitivity in the Czech Republic, well, a parallel shift of 25 basis points in the Czech Republic has only a very minor impact of more or less €3 million.

That's helpful. Thank you.

Yes, hi. Good morning, and thank you for taking my questions.

The first one is on the two acquisitions that you have done, 365 and Business Lease. How do the contributions in the first quarter compare to your planning or expectations, please?

The second one is just a clarification on dividend accruals. What was the ratio that you accrued in the first quarter?

Thank you.

Thank you, Amit, for your question. Let me take the first one.

We guided for 365 and Business Lease, the detail is in the quarter announcement of quarter 4 2025, actually we guided for this year net interest income of €157 million, €104 million non-net interest income, and then that totals €261 million as total income. This is full year, for good understanding.

Opex €156 million and cost/income ratio of 59.8%. When you translate that on a quarterly basis, well, you will have €39 million expectation net interest income, 26 on non-NII, and then €65 million totaling income, on the opex side, €39 million.

Then you have the full split-up. Where are we in reality?

We are €37 million on the net interest income, if you combine that with Business Lease is more or less 38, it's let's say €1 million lower than forecasted. The non-NII is also €1 million lower, it's €25 million, which brings the total income at roughly €2 million lower than what it was.

On the opex side, on the other hand, the reality was €32 million, which is €7 million better than what it was. Ultimately, P&L-wise, it gives you a bit better result.

Cost/income ratio stands at 51.6%. Hereby you have the full detail.

Then

as far as your second question is concerned, Amit, related to dividend accruals, actually we always accrue 50% in the first, second, and third quarter, and then obviously in the fourth quarter, we accrue in line with the final dividend decision.

Thank you.

Thank you, operator. This sums it up for this call then.

Thank you for attendance, and enjoy the rest of the day. Bye-bye.