Good morning and welcome to CaixaBank results presentation for the fourth quarter and the full-year 2025. We are joined today by our CEO, Gonzalo Gortázar, and by Matthias Bulach, our Chief Accounting, Management Control and Capital Officer, who also sits at the management committee.

Our CFO, Javier Pano, is temporarily away on sick leave, but he's recovering well and expected to return shortly. In terms of logistics, same as usual.

We plan to spend about 30 minutes with the presentation and about 45 minutes to 1 hour with the Q&A. The Q&A is live and you should have received instructions by email on how to participate.

Needless to say, my team and I will be at your full disposal after the call. Without further ado, Gonzalo, the floor is yours.

Thank you, Marta. Good morning, everybody.

Thanks for taking the time. I will start with the highlights as as it should be the case.

Very good year for us, I think. When I look back, it's probably the best year over the last 12, 13 years since the Great Financial Crisis.

It is because we're really seeing a very balanced growth in the activity. Obviously, NII has recovered from from June, and this quarter you see again a 1.5% growth.

When I see a balanced growth is really that we are seeing volumes pretty much at 7% both in the customer funds and on the lending side, well above what we were expecting for for this year, which was even at the time, you may remember when we presented the plan, it was seen as as on the sort of too optimistic side. In the end, fortunately, the economy has proved that actually that was possible.

We have beat our we have beat our targets with with some ease and not just because the economy is growing, also because we're gaining market share. Revenues from services are up as we say in line with improved guidance.

We started with low to mid single-digit growth for the year and and in the end we have that 5.4% with a strong fourth quarter. Asset quality has been a trend for some time now, but the fourth quarter has shown an acceleration in terms of the reduction of non-performing assets and cost of risk has ended up at these 22 basis points, no?

When you look at it, it's been sort of very round in terms of capital creation. Also fairly positive year is allowing us to set a dividend per share which is growing 15% and really establishing the payout at the upper limit of our 50 to 60% range.

Very complete, and it also feels a year that is is not just one-off, but is part of a trend and a year which we want to capitalize onto 2026, which has started, I'd say, in very with very good conditions and and basically continuation of what we have been seeing. Return on tangible equity at 17.5%.

With all what I've said, we obviously have reconsidered our targets for now next year, for 2027. I'm sure by this time now you're all familiar with the new targets, but I think it's important to reiterate which they are: return on tangible equity at 20% give or take, that's compared to the above 16% that we set a year ago.

It's obviously a remarkable one year, allowing us to increase 4 percentage points our guidance for return on tangible equity. For the average of the period now we expect it to be above 18%.

Obviously that's probably the headline, but the other important targets for us: cost-income from low 40s to high 30s; NII now seen €12.5 billion as the reference figure for 2027, which means a 4% annual growth versus the flat that we had said in November last year; revenue from services and costs in both cases we're maintaining our guidance, mid-single-digit growth for services and 4% area for for costs. Volume growth, we said 4% in in the case of lending and above 4% in the case of customer funds.

We're now rounding all that up to around 6% compared to that above 4%. Again, I think we have a pretty good traction here to be not necessarily just at or around 6%, but possibly slightly above that level.

Non-performing loans below 1.75% compared to below 2%, and most importantly, cost of risk, which we feel confident now can stay below the 25 basis points number compared to 30 basis points that we said a year ago. This is our revised ambition for 2027 or for the 3-year period.

In terms of capital, no real change. Same payout, 50 to 60.

Same capital targets of 11.5 to 12.5 and and the threshold for distribution, which for 2025 is 12.25%, and obviously we're clearly above that level. For 2026 and '27, it will stay at 12.5, no?

This is a revised ambition, I'd say. Strategy is very similar.

It's just that we can do more and we're obviously going to try to make it happen. Macro, we should be seeing, they may be public already, because I think it was expected at around 9:00, the GDP figure for Spain.

We are expecting 2.9% for this year, 2.1% for 2026. I have to say this is a relatively old projection and based on the on the most recent data, I think it's likely that this figure will be revised upwards, but that's subject to the information that we get on the full-year economy for Spain.

Portugal is is doing fairly well again with pretty strong dynamics also in the in the Portuguese case, we feel there's clearly some upside. In any case, since the pandemic, you see both Portugal and Spain as as very much leading growth in in the eurozone.

The factors behind that are are still there, no? Population growth, employment growth, we had 600,000 new jobs created last year, 2.8% growth in employment, pretty impressive.

Finally, the unemployment rate becoming a single-digit one, hopefully will continue to go that way, at least that's what we are seeing. An economy that is now powering ahead on the back of private consumption and and investment.

The domestic strength is pretty pretty relevant and and hence it also gives us some protection of international environment, which despite all the risk still doesn't look that bad either, no? High savings rates, growth in disposable income and a very low private sector leverage, which is still, as you see, 31 percentage points below the eurozone.

All of that gives us sort of room to grow, also comfort if or caution if at some point news are are not are not as good. The rate environment is obviously more positive than we had at a year or not a year end, because our strategic plan was based on September figures as you see there, but obviously the current yield curve is more attractive, is higher and steeper, and from that point of view it's obviously a tailwind for our NII, no?

I start saying growth and and a very strong year for us and compared to the previous decade, I would say. This is and this is why, when you look at clients, growing 390,000 in the year, look at market shares and there you have client penetration up to 40.4%, customer lending and customer deposits in both cases 14, 12 basis points growth in market share.

This is not huge growth, but with our size and also with our prudent approach, this is exactly the kind of market share gains that we're looking for. Savings insurance and then on the on the non-life on the life-risk, you can see 158 basis points market share gains.

On the non-life, we've also had very significant market share gains across the board really, in health, in motor and in in household, no? Payroll deposits, very important, also up 27 basis points.

It's not only what you can see on the right-hand side, which is volumes doing very well, close to sort of 7% area versus the 4 in general, no? Case-by-case, but I won't go through it because it's pretty visual for you.

It's not just volumes, it's also relative performance and market share that indicates that the organization is in really full shape with all engines working, no? imagin continues to be a key part of our growth strategy, particularly in terms of number of clients, clients that bank with imagin.

They're not clients that just do one or two specific transaction categories, but have imagin as their bank and you can see that because when you look at business, volume is actually fairly balanced and and ample. Transformation, I talk about growth, but transformation was the other pillar of our 3-year plan.

Obviously, it's a bit more difficult to measure. Growth is easier from that point of view, but just few highlights.

The new app, which we have deployed during the year actually gradually through small improvements rather than sort of a big one-off, and it's worked out very well because it hasn't created turmoil. The app is rated now number one in Spain, and that includes sort of established banks and and new entrants.

Makes us obviously very happy with that, but we need to continue and we are continue working daily to make sure we keep improving it. Some of the onboarding and digital sales numbers that you see there are are clearly results of that of that strategy.

AI, we are making major efforts in adopting AI throughout the organization. Every employee has access to AI tools, namely Copilot.

We have obviously developed use cases throughout the organization in all areas. I would just highlight that we have, I think, an important progress this year when we get all commercial managers through the Salesforce platform to access AI and that is going to lead one example to 75% reduction in the prep time for client interviews, which is obviously very significant productivity improvement.

The quality, the depth of the interviews will also be improved as we obviously have more information. I didn't want to go through a very long list of things we're doing because obviously this is affecting back office, it's affecting IT, client claims, client support, all all areas in the organization.

Some of this I think are going to bring results sooner. IT professionals, we remember in this transformation we wanted to internalize and insource many capabilities, and that's what we have been doing, expanding our digital capabilities during last year.

It's remarkable to have been able to hire 650 new IT professionals when there's obviously strong competition for talent. They like to come and work with us.

New solutions, you've seen the development of Facilitea Coches and on the car side, Facilitea Casa during this year. Both are, I think, very significant successes for us, working very well and some of the results you see there.

Financing for vehicles has increased 30% this year. We have developed this new portal with 1.6 million visits already.

The cashback that we launched just in November already has 1.3 million million clients. Certainly pretty pretty significant sort of development of of new solutions.

This is obviously something to continue for us. Lending growth 7% on the performing side.

As you can see, residential mortgages 6.5, consumer lending 12.4, business loans 7.6. Very strong growth across the board, very balanced.

That 7.6% is both in Spain and internationally, but Spain is up 5.5%, again, basically gaining market share and defending profitability across the across the sector. On the customer funds side, again, almost 7% growth, 6.8.

You can see that finally market effect has been positive, almost €10 billion, 9.7. Net inflows and growth of on-balance-sheet deposits have been very significant as well, no?

Again, outperforming, growing market share, and I'll get in some more detail, but obviously this is this is key strength and key attraction of our business going forward, no? Wealth management, we have grown net inflows almost 40%, lot of it mutual and pension funds, but also strong performance in in savings insurance with market share gains that I as I said as I said before.

Basically a business that keeps doing very well. The figure for AuM at the end of December is already 7% higher than the average AuM during the year.

Gives you an indication that we're clearly seeing good potential. The market in in January have been positive for certainly for our AuMs.

Protection insurance has been stellar, 13% growth and you can see that both life-risk with very strong mortgage market, but also with very strong MyBox Jubilación and and our sort of standalone life-risk products doing very well. Non-life is picked up to 11.7% as well.

Here you see on the on the right-hand side, precisely the gains in market share that I mentioned before in non-life, no? In life-risk, even more significant, but pretty pretty good outcome for the year, no?

The speed at which we continue to grow this business is is remarkable and obviously, as it adds quite a lot to our bottom line. With that, comment on shareholder value creation and and shareholder remuneration.

Earnings per share up 5%, dividend per share up 15%, round number €0.50 per share. Look at growth in book value per share and and dividends in in the year basically 16%.

Obviously on the on the share buyback front, we are not not not even half through the the seventh share buyback with €0.5 billion. Obviously, as our capital is at 12.56%, our threshold for 2025 is at 12.25, we have excess capital again to continue with this share buyback program, which as will will announce when it is formally approved by the ECB and and the board.

In the meantime, we still are at half time before we conclude our seventh share buyback. Distribution plan for next years stays the same.

The only difference is while the threshold for this year was 12.25 in capital, as because of the countercyclical buffer, it will move to 12.5 in 2026 and and beyond. That's my part, and with that, Matthias, floor is yours.

Thank you very much, Gonzalo. Good morning to everybody.

Today, it's up to me and to guide you through a little bit more of detail on the income statement and on the main caption of the of the balance sheet. Starting with income statement for fiscal year 2025, as Gonzalo said, €5.9 billion of net income, up 1.8% in the year, and actually checking on all the boxes of what was our guidance that we gave out and updated throughout the year 2025.

NII down 3.9%, in line with the minus 4% guidance; revenue from services in line with the mid-single-digit guidance, up 5.4%; expenses up exactly 5.0%, in line with the guidance; and cost of risk, we guided for below 25 basis points and we are closing with 22 basis points, clearly below below that guidance; with return on tangible equity standing at 17.5%, on the on the higher end of the around 17% guidance that we updated. Looking into Portugal, Portugal net income reported of €473 million on the back of very strong commercial dynamics.

Business volume up 7.5% and actually with a stronger dynamic than the group as a whole, gaining market shares across the products, but specifically on the liability side, on deposits and on savings insurance. Another year with strong market share gains, helping bringing down efficiency all the way to 42% on very solid levels.

Profitability up to 19.2%, also above overall group levels, and already a significant characteristic of of BPI with very strong asset quality, 1.5%, almost half of the sector average and with very strong coverage ratios. That is also taking into consideration by the rating agencies, which are uprating throughout the year or putting us in outlook positive in in BPI.

Moving to the typical quarterly income statement analysis, and we will be getting into the details of of some of the income lines. Obviously, NII up 1.5% in the quarter, another quarter of strong NII recovery.

Results from services, revenues from services with a very strong quarter, up 6.3% Q-on-Q and 4.7% year-on-year, both on the back of strong wealth management contribution, but this quarter specifically on protection insurance, which is up 7.5% on the on the quarter. The expenses line down on the quarter, 0.2%, to meet that 5% guidance on the fiscal year 2025, and net income pro forma, the accrual of the banking levy of 2024 of a linear accrual, up 5.5%.

Maybe a couple of comments here on the tax line. The tax levy on the on the banking industry, we registered €611 million throughout the entire year, which is a little bit higher than the 600 that initially we guided for, basically on the back of stronger performance both in NII and in fees, and you know that is the basis for the calculation of that of that levy.

On DTAs, we wrote up €171 million in the fourth quarter for a total of €420 million of DTA write-up throughout the year, basically given the better visibility and the full visibility that we had in the last quarter, both on pretax income for the year as well as on future profitability, which is the basis of those of those write-ups. A certain acceleration of the pace to an overall year of €420 million.

Going line by line, looking into NII, as I said, a strong quarter again and consolidating our recovery, leaving clearly behind the trough of NII in the second quarter of '25, up 1.5%. Still obviously impacted by client yields and loan yields, which are which are still reducing, but on a less on a less intensity, I would say, than the last quarters.

A fading impact from from client yields, compensated, more than compensated, both by a strong evolution of business volumes, both the asset and the liability side, as Gonzalo was pointing out, and an increase of the contribution of the ALCO of the ALCO to €45 million. We increased hedges on the quarter by almost €10 billion to stand at €68.4 billion, and the ALCO book was stable Q-on-Q to stand at €76 billion by the end of the by the end of the quarter.

Customer spread down by just 4 basis points to 302 basis points if we adjust for for hedges, and this is on the back of positive evolution of our client fund costs, which go down 2 basis points from 49 to 47 basis points, again ex ex-hedges. The reduction of the loan yield, as I said, is fading: 6 basis points down in the quarter to 349, that compares to 20 basis points down last quarter, clearly fading impact from negative loan rate resets.

Looking at the crown jewel of our balance sheet and hence the supporting factor of that NII evolution of our non-interest-bearing deposits, up €17 billion in the year, €2.2 billion in the quarter, with respect to, or in contrast to, interest-bearing deposits that are just up 5.6 over the year, 2.2 over the last over the last quarter. The total average share of interest-bearing deposits is stabilizing at around 27%, and that is at lower levels than we initially expected in the strategic plan, when we were guiding for around 30% of that of that share, which is now clearly stabilizing below those below those levels.

I would like to point out also the reduction of 10 basis points of our deposit costs in that in a quarter. I think this is remarkable, where the overnight rate actually was stable on average levels at in the quarter, and still the deposit cost is coming down.

That means that the 50% of indexed rates was pretty stable, but the other part, which is term deposits, we still have been able to reprice them down by almost 20 basis points, leading to this 10 basis points of reduction of overall cost. There's still some room of positive repricing downwards of our of our term deposit base.

Moving to revenue from services, as I said, a very strong quarter and very strong evolution year-on-year, focusing on the year-on-year, 5.4% up on the back of wealth management with 11% growth, protection insurance 4.8% up, and if we adjust for an extraordinary impact from BPI last year in 2024, that would be actually up 6.3%. Banking fees still subdued at 0.6%, but supported by CIB fees that are up actually 33% year-on-year on the full-year on the full-year number.

If we take only these driving forces in our growth engines, wealth management, protection and CIB revenues, actually that composition would be up almost by 11% year-on-year, putting a clear sign on the strength of our of our growth engines here. Costs, not much more to add to what was said already.

Q-on-Q stable, down by 0.2%. Cost-to-income remains at a very low levels and is now below 40% at 39.4, clearly below peer average in in European peers and also with a much stronger evolution over the last 5 years, outperforming the evolution of European peers by 10 percentage points, as you see on the down on the bottom right side of the of the page.

Moving to the balance sheet. Asset quality, very, very strong again in this quarter, down 20 basis points, our NPL ratio to 2.07%.

This is bringing forward actually by 2 years what was our target set in the strategic plan, where we wanted to be at around 2% by the end of 2027. We're bringing forward the completion of that target by approximately 2 years.

Nice reduction across all the segments, as you see on the bottom left part, there's no single segment, there's no single part of the portfolio actually that is not experiencing that positive evolution. Coverage up by 8 percentage points in the year to 77%, and remarkable that we are still holding €311 million of unassigned collective provisions.

That is down €30 million in the quarter and also in the year, as in the year-end, we've been assigning part of that provisions to specific provisions, but the bulk of it still available and still available to protect into into the future and into 2026 our cost of our cost of risk. Cost of risk down to 22 basis points in the in this last quarter, down from 24 basis points in Q3, and that is basically on the back of slightly lower seasonality this quarter of provisions than we experienced last year, and hence cost of risk standing at those 22 basis points, clearly below the 25 basis points that we that we guided for.

Liquidity, I think already very structurally a message here: very strong LCR above 200%, NSFR just below 150, loan-to-deposit stable at 87% as both loans and deposits are growing approximately at the same speed, and hence loan-to-deposit still very very comfortable, €226 billion of liquidity sources with very positive comparison to to peers and to peer levels, as well as a very strong and stable deposit base based on transactional retail deposits and with a very high percentage of them being insured by the Deposit Guarantee Fund. Moving typically to the annual review that we share on the MREL position, MREL standing at 28.18%, and that is 327 basis points or €8 billion of M-MDA buffer over requirement, mainly covered by subordinated MREL instruments.

Actually, subordinated subordinated MREL stands above the total MREL requirement. After a year of very intense activity in the markets, €9 billion of issuances across all the asset classes and 2/3 in euro, but 1/3 also in currencies that are not euro, specifically in in dollars.

We started 2026 already very successfully with a senior non-preferred issue combined with a tender offer, €1.25 billion of issue and 0.5 from the tender offer, and that is supported by the positive and strong view of our rating agencies, which similar to what I explained in Portugal, actually upgraded us throughout the year or put us in outlook positive as the case of of Fitch. Coming to capital, Gonzalo already went into into some detail: 12.56%, 13 basis points up in CET1 and clearly above this 12.25 threshold that is in place for the end of year 2025.

Capital accretion positive of 63 basis points, organic RWA increase just 5 basis points, and this is supported by three SRT transactions, significant risk transfer transactions, that we executed actually in this fourth quarter, impacting positively by just below 15 basis points on on that caption. Positive evolution supported by market activity.

Dividend accrual and AT1 coupons obviously then distracting 38 basis points. Markets and others coming down 8 basis points.

Here, as every fourth quarter, we are updating our operational risk RWA models. That is a yearly update, and that impacts also just below 15 basis points on that on that part.

That means that the remainder moving parts of this market and other bucket are slightly are slightly positive. On shareholder value creation distribution plan, nothing to add to what Gonzalo has been has been pointing out.

Fiscal year '26 guidance, you've seen that all this morning already. Gonzalo mentioned the 2027 view, and just to say that the 2026 view is fully consistent obviously in this journey towards 2027 targets.

NII expected to be above €11 billion, and that is bringing forward by 1 year the initial target that we had for the fiscal year 2027. Clearly on the way then to move up to that around €12.5 billion target for 2027.

Revenue from services up 5% within that mid-single-digit range that we also are envisioning for the entire 3-years horizon. Operating costs up by approximately 4.5% after a 5% increase in 2025, 4.5 in 2026 and clearly on track, and we reiterate our commitment and our guidance of 4% CAGR for the entire 3 years of the strategic plan horizon.

Cost of risk below 25 basis points on the back of that very strong asset quality, and return on tangible equity at around 18% to fulfill that around 18% average return on tangible equity over the 3-year horizon and the approximately 20% in 2027. On capital targets and distribution, nothing more to add.

This is all well known to you. With that, I think we are ready for questions.

Yes. Thank you, Matthias, and thank you, Gonzalo.

Operator, we are ready for Q&A, you can come in next question, please.

Hi, morning, all. It's Antonio from Bank of America.

A couple of questions from me, please. One on NII and one on use of capital.

Starting with NII, you're guiding to be around €12.5 billion in 2027 and you've added in the quarter almost €10 billion from structural hedges alone. Volumes are growing 6, 7% a year.

Just my question is what are the key assumptions you've made that drives your NII outlook here, particularly if you could talk about rate and volume assumptions, please? My second question is on use of capital.

You are at 12.56%, just above the new go-to level, and you've been paying 100% of your excess capital out in the form of share buybacks. With the balance sheet that's growing and then the returns that you're now making, you're guiding for 20% ROTE in '27, how should we think about sort of best use of capital for Caixa?

What's your appetite for additional buybacks here? Thank you.

Thank you, Antonio. Let me start with the second question, and I let Matthias address the NII in some detail.

There's nothing new about use of capital. You're seeing higher growth, which means obviously more capital that we can employ in the business.

As the business is targeting a 20% return on tangible equity, that's great news. Really, that's what we would like to see become.

I discussed this a year ago, become a compounder in terms of high ROTE and good growth. That's, I think, what would lead us to the best outcome for shareholders.

The reality is that as the growth is coming together with higher profitability, we still see the future as a scenario in which we can have a high dividend per share as this year in that 50 to 60% payout, grow the business and grow faster than that we were expecting at 6 rather than that at 4. Still, in our numbers, we continue to generate excess capital.

Obviously, one proof is that we already have excess capital at the end of 2025. There's sort of cash in the bank for further share buybacks already.

Going forward, we continue to see that, despite higher growth, we'll be generating excess capital between our targeted levels. Now we'll continue to monitor developments.

We are using slightly more intensively SRTs as well. Matthias mentioned that we had some positive impact in the fourth quarter, that will continue to be there.

No change in capital. This is higher growth, higher profitability, but also higher capital available for shareholders.

It looks too good, but it is really how we're seeing the business. It's a very strong conditions.

Matthias, NII, all yours.

Sure. Thank you very much, Antonio.

What are the main drivers behind what we see for NII evolution, both into 2026 and specifically beyond, no? I think, on the one hand, obviously it's volumes.

We guided now for an update of around 6% CAGR both on loans as well as on liabilities, up from that 4% guidance that we gave you back in the strategic plan's Investor Day. Now that obviously volume growth that we've seen already this year at around 7%, the guidance is for CAGR of 6%, and that means we're positioning volume growth both in 2026 and 2027 probably around 5% to 6%.

That is, I think, the main driving force behind our expectation for NII evolution over the next couple of years or even beyond. Secondly, obviously, rate evolution.

Rates has been a drag on our NII over the last quarters, obviously. We expect that drag actually to fade out over the next two quarters.

The loan yield resets should move into positive territory from the third quarter onwards of 2026, and hence still a certain drag over the next two quarters, compensating partially that volume effects that I was talking about. Then from the second half of 2026 onwards, and specifically into 2027 and I would say beyond into 2028, we see a clear positive evolution on the back of rates.

On the back of rates because, as there's a significant part of our portfolio which is actually on variable rates, and we do believe that we will be able and capable of controlling client fund costs, controlling and limiting growth of deposit costs, as we said, currently at 47 basis points. We believe actually those levels of year-end to be quite structural, which should be able, even though there might be some pressure from the index part of our deposits, we should be able to control that evolution of deposit costs over the next quarter.

I would say, if 47 basis points is our year-end number, we should be in the mid-40s probably during 2026 as the certain pressure that we might have from the index part, we should be able to control and to limit that both from still some repricing from the term deposit part, as well as increasing the share of or growing stronger in the non-interest-bearing deposit part than in the interest-bearing deposit part, and that should help us to control and to keep deposit costs down over the next quarters, and also actually to very nicely control that once rates are picking up. Volume effects, which are already occurring, and which we expect to keep on in that benign macroeconomic environment.

Rates should be picking up and helping us on that front. A small detail on what we see on the more quarterly evolution over the next few quarters.

We do expect NII 2026 actually on a quarterly level to grow year-on-year in each and any of the quarters, but there might be a certain reduction, a limited reduction in the Q1 NII respect to Q4, basically for some seasonal effects that typically happen in the first quarter. The first quarter tends to be somewhat weaker in terms of average fund balances, as January tends to be a clearly weaker month than December.

We do have 2 days less in the first quarter than we do have in the fourth quarter. Also there's more negative loan repricing actually in January.

There's a certain seasonality here, what we would expect is Q1 to fall slightly against Q4, but then picking up growth right after, and specifically accelerating growth into 20 second half of 2026 and obviously into 2027. On the back of all those, let's say, more business and external rates factors, we do have also significant idiosyncratic factors, let's say, that are based on the structure of our hedges.

Recall, and on page 30 of the webcast presentation you have got all the details, but recall that between the fourth quarter of '26 and the first quarter of '27, actually we do have around €15 billion of legacy deposit hedges that are maturing. They're maturing actually at negative rates, we would assume a rollover of that hedges at current market forward rates that would give us an uptake of about 2.5% on those €15 billion of legacy deposit hedges, and that is annualized around €400 million of NII boost that will be coming from this natural rollover of those hedges.

There's no external factor, that is pretty much already in our balance sheet, and it's a natural and automatic thing to happen. There's a clear boost for 2027 NII from that front.

On the other hand, we also disclose maturity profile of our ALCO book. Actually, in last year 2025, €6.5 billion already matured at 0% rates, and you have seen that our ALCO portfolio actually grew by €12 billion in 2025, so that is renewed and that generates obviously some support for the 2026 NII, as this is maturities from 2025, and once they are renewed, obviously they help in the year-on-year evolution into 2026.

That goes on. In 2026, there is €9 billion maturing at a 0.4% yield and there might be a reinvestment capacity of increasing that yield by 2.2 percentage points, generating €200 million of annualized NII through that 2026 maturities.

That goes on. In 2027, there's €8 billion maturing at 1.6% that would reinvested would lead to €100 million of annualized NII.

In 2028 also, there's €14 billion actually maturing at 1.1% that also would give €300 million of annualized NII support, no? From all those factors, both external factors, let's say business evolution, market rates, we feel very upbeat, specifically in 2027, as we are guiding for this €12.5 billion, as well as beyond looking into 2028.

Then there's those internal factors from the maturity of hedges, as well as from the ALCO book. We actually feel very strong in 2027, and we do feel similar also into 2028 based on all these factors that I was just explaining.

Thank you, Antonio. Operator, next question, please.

Thanks very much for the presentation and for taking my questions. I have two questions.

One is on the deposit growth. I'm coming a bit back on what you were commenting, Matthias.

Looking a bit more on the volume, you said 6% customer funds growing in the plan. If you could break that down between deposits and how do you think kind of interest-bearing and non-interest-bearing could grow into 2026 and '7, that would be very helpful.

A second one on credit quality. Asset quality has performed very strongly.

I think is the lowest fourth-Q gross inflows into NPLs in a decade. Your target of NPL is 1.75%, which, if we extrapolate a bit the trends that you have seen in 2025, probably it still is very conservative.

Just wanted to get a bit of your views about cost of risk, asset quality dynamics, so that to get a bit of comfort on the improvement of the 5 bps of cost of risk and how much generic overlays you have still. Thank you.

Thank you, Nacho. I'll take the second question as well.

Start with asset quality starts from the economy. The economy, I was saying that the GDP numbers were about to be published and in fact they have been.

Very strong fourth quarter for Spain, 0.8% growth quarter-on-quarter on GDP, to give you an idea, we were more in the 0.5% expectation. We knew, based on the numbers of the last few weeks, that this was going to be higher.

Clearly a very good number. There's been some revision of previous quarters, the overall growth has been 2.8%.

Most importantly is just looking at 2026, the outperformance of the fourth quarter already gives us, automatically, just if we don't change any other assumption, just the rebase of the fourth quarter would mean that growth would be 2.3%. Looking at the numbers, private consumption is up 1% quarter-on-quarter, gross fixed capital formation, investments basically, is up 2.2% in the quarter, exports are up 0.8%.

These are very very strong numbers, no? As long as the numbers continue to be there, there's absolutely no reason to think that we're going to have any negative surprise, eh?

Matthias mentioned, we have still this stock of non-assigned provisions above €300 million. Economy is doing well.

Our clients are less leveraged than ever. We do not see any problem in any part of sort of big broad categories, be mortgage or consumer segment.

The statistics for January on terms of asset quality make it the best January I remember. January is typically a bad month, the famous cuesta de enero as we say in Spanish.

That's reflected, and this year we're seeing a much lower impact than others. We internally have all the confidence that yes, that should make sense for us to be below 25 basis points.

We tend to be conservative, particularly in cost of risk, because there's an element of unpredictability on it, and you cannot rule out completely. Obviously, the international environment and whether we have a sort of a major crash in markets or some other big impact elsewhere that eventually feeds into the economy and hence changes things is always a possibility.

It seems an unlikely and in any case something where we have pretty good cushion. 1.75% may actually be conservative, I agree.

I think if the trend continues, we will go beyond that number fairly soon, eh? We're a conservative organization.

When giving guidance, we look at guidance and there's a very high percentage of cases where we have done better than guidance versus occasions that have happened where we didn't meet our guidance because something happened, no? I would be pretty confident on these numbers on cost of risk for the next years, as long as the economy stays where it is, which we have no indication that is changing from that position, no?

We're seeing on the opposite sort of stronger numbers.

Thank you very much, and good morning, Nacho. On deposit growth, I think we've been guiding for overall customer funds to be growing at around 6% now during the 3-year horizon versus the initial target that we have of around 4%, of which we said 3% of that would be customer deposits, no?

I think 2025 might be a quite good starting point when thinking about composition. Obviously we do still see significant upside on wealth management after 9.7% year-on-year growth in 2025, and we do see capacity to grow in deposits after this 5.3% growth in 2025 also.

We moved that target to now 6% overall, that means, as I said before, we might be somewhere around 5 to 6% on the overall customer fund, and the structure that we've seen in 2025, we expect that more or less to be also into 2026 and beyond. Having said that, we do see deposit growth now very clearly in the mid-single-digit zone for the strategic plan horizon, that is outperforming our initial target of above 3%.

Why? Because we do believe, and as Gonzalo was just pointing out on the macroeconomic evolution, we do still see a very strong disposable income growth, and savings rates actually remaining at high levels.

It is coming down slightly, but we still do see it at very high levels with respect to historical average. Loan growth is strong and that multiplies also into deposit growth in the sector, and hence gives us opportunities to keep on growing significantly here.

As you say, we have a focus on growing nicely the client base, 390,000 clients this year, and that obviously also gives capacity to grow in deposits from new clients, and that means in transactional deposits and not shifting around the savings of our existing clients, but actually growing into new client base and growing into transactional deposits, no? Thinking then about what is the part of non-interest-bearing with interest-bearing, I would say the current rate environment, which is stabilizing after the up and down over the last 3 years, stabilizing and with certain tendency to, in the forward rates, to increase, but clearly on a very gradual pace.

We would expect that actually non-interest-bearing deposits being rather stable, and I would say rather stable even in absolute terms, not necessarily in relative terms, obviously potentially growing slightly, but we would expect that the interest-bearing part actually clearly growing slower than the non-interest-bearing part, and hence we don't expect any shift from one to the other. As I said, growth should also come from new clients, new transactional relationships with our clients, and hence we see strength in the growth of that crown jewel of ours, which are the non-interest-bearing part.

Thank you, Nacho. Operator, next question, please.

Hello, good morning. Thank you very much for the presentation and taking my questions.

Two questions from me, please. The first one is on loan book growth.

Your peers mentioned that mortgage market is less attractive due to competition at the moment, and you seem to be growing about the market. Could you share your thoughts on why it is attractive for you and not the peers?

Then if you could also break down the upgraded loan growth target by segments, that would be very helpful. The second question is on capital, just wanted to hear your thoughts on the recent proposals by the ECB to simplify capital regulation for banks

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may have.

Max, we are not hearing you properly. Can you maybe take the cell phone a little bit away and repeat the question, because we lost you.

Is it better?

This is better, yeah.

Is it better?

Yes.

Yeah. Thank you.

Sorry. The first one is on loan growth.

Your peers mentioned that the mortgage market is less attractive due to competition, and you seem to be growing about the market. Could you share your thoughts on why it is attractive for you and not the peers?

Also, if you could break down the upgraded loan growth targets for the next 3 years, that would be super helpful. The second, just wanted to hear your thoughts on the recent proposals by the ECB to simplify regulation for banks in the eurozone.

Thank you.

Thank you, Max. I will start, and Matthias, you want to complement anything, you tell me.

On the mortgage market, I would say there's a very strong competition. There's always been 10 years ago, 5, 15, 20.

It has typically been more on the floating rate mortgages. The market has moved almost completely, but not completely, but to a large extent onto fixed rate mortgages.

That means that different players find it more or less attractive, I think depending on the structure of the balance sheet, their ALCO, their liabilities, the liquidity position. I'm just saying this is an important factor to keep in mind.

Whether it was floating or now on the fixed rate, we have obviously a very competitive margins. What we're doing, our share of new production is very much in line with our stock, around 25%, it's 26% the figures up to November in terms of share of new production versus a 25% stock.

That's why we're gaining 12 or 10 basis points in market share. It's basically we're maintaining our position.

I think that's reasonable for us. What you see is some players have been much more aggressive than others.

I think it has something to do with structural balance sheet. Then the other big factor, which obviously is also differentiating, is to what extent you cross-sell, because we know mortgages are now below funding costs after the various sort of subsidies that are given by banks, and on average, the market rates that have been given to the ECB, latest numbers I've seen in November is 2.4% for fixed rate mortgages, obviously below the swap rate.

That's after the bonifications for other kind of business that clients bring in. On that front, we obviously have an insurance business that is absolutely different from what others have.

I was just looking at the premiums on the non-life for our affiliate, Adeslas, is around €6 billion. You look at the numbers of our two main competitors, the premiums for non-life are around 600, eh?

It's not just a bit more than our fair share, it's 10 times more. That gives you an indication that once a client is in the universe Caixa, clients are more profitable and hence, when you incorporate that, you probably see that, both because of our funding position and our ability, given our sort of 36% market share in payrolls, our ability to hold long-term fixed rate assets, number one, and our ability to cross-sell, the market is moved to an area where we have a competitive advantage versus others.

Still, I think we're being very disciplined because, again, stock of back book and the market share in new lending is very much aligned, no? That's the background.

In terms of simplification, we're watching, and obviously would love to see moves from that point of view on simplification for banks. I think something is going to happen.

I'm afraid it may be less than we would have hoped for, and I think the progress we're seeing so far deals more with operational issues, which is great because it's going to lead us to sort of spend less time and maybe have less people sort of spending time on supervisory matters. That's good, but that's not really going to change the game.

I think sort of changing capital requirements is something that is unlikely. I personally don't find it desirable.

I think the current capital requirements, yes, are very ample and solid, and gives us, as a system, a great degree of stability, and I think that's good over the long term. What I think it's important is that they provide stability and that there's no doubt about capital levels going forward, because the current levels are more than enough, eh?

I think supervision needs to be simplified. We have 27 supervisors, and we're not one of the most complex financial institutions in Europe.

We're operating basically in the eurozone and mostly in two markets, no? Gives you a sense of complexity.

Some of that should be addressed. There's obviously progress, specifically on disclosure on topics affecting sustainability, on securitization, which is very likely.

I think the sort of development of instruments for savings and investment union, which is not exactly simplification, but it has a relationship with are also quite relevant. We'll have to watch and see, but this is I think going to take quite some time.

We may actually end up in a position that is not too far away from where we are now, barring sort of some as you say, operational matters. The other one, which I think is very important, is to stop in the flow or significantly slowing down the flow of new rules, Level 2, Level 3, which is obviously I think more of a concern and easier to stop, because it's more a political willingness to change the way future things are done.

To change the status quo is going to take time and may not be as significant as we would hope for.

If you allow me to complement Gonzalo, Max, good morning, on your question on breakdown by segments of that loan outlook that you are asking for. 2025, we grew 7% our performing loan basis, of which 6.5% was growth in mortgages, 12.4 in consumer lending and 7.6 in business lending, no?

Now we are guiding for a 6% CAGR over the horizon of the strategic plan and that implies somewhere between 5% and 6% for the remainder 2 years. Hence, let's say the adjustment you would have to make to the 2025 numbers, I would say the structure of 2025 is a reasonable one that you would be seeing also in the future.

As basically the main driving forces, macroeconomically speaking, as well as from the market, we still see them holding true also for 2025 for 2026 and 2027, no? Let's take the structure of 2025.

As Gonzalo said, we want to be active in business lending, specifically in SME lending. We want to be active and gaining market share in consumer lending and typically be more in line with the market and hence maintain our position for all the reasons that Gonzalo was commenting on mortgages, no?

That is more or less the structure that we had in 2025 and that is what we would be expecting in 2026. Why do we guide for slightly lower growth rates on business volume, even though macroeconomic performance is strong and keeps strong?

There is a certain reduction in the pace of growth, obviously, as Gonzalo said, 2.8% this year with the figures that were just published, and that might be slowing down slightly over the next 2 years, obviously. Together with that evolution of macroeconomic growth, obviously we see nominal GDP growth as an anchor point both for growth in assets and in liabilities.

This is why we are thinking that there might be a certain slowdown from 2025 levels, but then again, future will tell and obviously we will do all the best to do better than that, but this is what is our current view.

Thank you, Max. Next question, please.

Yes, hello, sir, and thank you for taking my questions. The first one is on fee income guidance that you are not changing, but wealth management and long-term savings volumes are growing ahead of expectations.

If you can explain what is the offset here, if it is again banking fees that you see weak trends or you can please elaborate on the fee income guidance, given that wealth management is ahead of expectations? A second is on the cost guidance that you have maintained also in the new plan.

I wonder if you are investing more in AI and in the technological transformation what you were anticipating at the beginning of the plan. What type of productivity gains shall we expect and when?

Thank you.

Thank you, Paco. I would say again, leaving fees for you, Matthias, if you agree.

On costs and AI, yes, this is a key factor for our investment program, which is going according to plan. In terms of the big numbers, we are reiterating costs in the OpEx, CapEx spent last year, this year, 2000 and 2027.

In terms of the efficiencies or the productivity that we expect here from AI, I think it's twofold. Most importantly, in a growing market and in an organization that is actually growing market share, it's going to allow us to have more revenues over the same platform, basically.

I think this is very, very important for us, eh? That's the main factor.

The second one, obviously it's on the cost base. We, and particularly when you look at sort of the engine room, I would say there are two places where we expect efficiencies.

One is IT and this is one where it's actually first we need to invest more also in terms of people, and with this Cosmos program, which is the whole sort of technology upgrade that we're doing. We now have over 2,000 people working full time on that, not some of them are internal, some of them are from partners and hence call it outsourcing.

This is going up, it's going to come down. We said at the time of the plan we would start with 6,000 people, of which basically 1,000 were internal IT employees and 5,000 external.

We expect by the end of 2030 to have reduced that to 4,000 people, but to have more people internally. We are basically insourcing, but the total FTE expense internal-external is going to come down.

This is something that you're going to start feeling really 2027 onwards, eh? Because in the meantime, what we need to do is, as we transform, have actually more resources.

Then there's operations as well, where we have a significant outsourcing and I think that's likely to come down, no? Those are the sort of big areas to look for.

Again, I'd say most of these efficiencies are coming into 2027 and beyond, that's why also you look at our implied guidance for 2027 is more in line guidance of growth in order to make the numbers is more aligned to the 3% number compared to the 4.5 that we're doing this year. That's because not only, but among other things, because we're having efficiencies already materialized in 2027 and obviously that should continue beyond.

Thank you. On fees, Paco, I think, obviously, as you said, we are very upbeat on wealth management fees coming from that caption, as we said actually in the strategic plan, mid- to high single-digit growth here.

2025 has started very, very strong and we do see strong growth also going to the future. As Gonzalo said, year-end balances in wealth management are 7% higher than average year balances of 2025, we do see a very good starting point also here into 2026 and beyond.

That means that yes, we are more cautious on banking fees, actually. Of our fee structure, of our banking fees, 20% more or less are CIB fees and 80% are recurring banking fees.

We said CIB has a very strong dynamics. We've been growing 33% year-on-year full year 2025, there's a very strong backwind and tailwind here.

Even though obviously those growth rates tend not to be sustainable, we do believe the levels are sustainable and we should be able to grow still from there, but obviously at a certain lower pace. That means that the drag we still do see coming from recurring banking fees, that 80% of fees, of which more or less half probably are in types of fees which are basically exposed to quite some competitive pressure, namely speaking about account maintenance fees, payments and transfer fees or credit card fees, which obviously in that competitive environment, in that profitability environment of a client relationship are under pressure because they are lower value-added services, no?

In that capture, obviously we still do believe that there is actually potential that these type of fees are still reducing over the next years, as competition will be fierce in that area and innovation in those areas obviously will also have an effect of bringing fees down. That should then be compensated, and this is our job, by the other part of the fees on other transactional services, security trading, foreign exchange or loan-related fees, where we do expect a positive evolution, obviously from the macroeconomic environment and from transactional increases.

There we do see a positive way to partially compensate that reduction in recurring banking fees.

Thank you, Paco. Operator, next question, please.

Thank you very much, Gonzalo and Matthias, for taking my questions. The first one is on deposits.

Obviously, the reduction in deposit costs is slowing, and in part is because obviously rates are stabilizing. Some competitors have extend their attractive campaigns.

How do you assess the current state of deposit competition in Spain, and are you seeing any incremental pressure from neobanks? My second question is just a follow-up on the fee question.

Could you remind us where are SRTs cost included within your fee line, and is an acceleration of SRTs making your view on banking fees more conservative, if included there, or is this not having a big impact? Thank you.

Thank you, Cecilia. On deposits, I would say no change.

We're not changing our strategy, and we are very comfortable about our position. We're not seeing any particular negative impact or difficult environment associated to neobanks.

On fees?

Yes, Cecilia, the SRT part is in the banking fees and hence, yes, there is a certain impact there. As we are speeding up, and as you have seen the fourth quarter SRT activity, there will be a certain drag also on banking fees, on other banking fees based on the SRT activity.

Actually, in Q4 '25, there was €12 million of impact, that is €5 million down year-on-year if you look at the quarterly data. In the full-year 2025, that was €36 million actually, €12 million more of fees paid on that caption.

Yes, that is generating obviously, as we're picking up activity here, a drag on banking fees.

Thank you, Cecilia. Operator, next question, please.

Hi. This is Sofie from Goldman Sachs.

Thanks a lot for taking my question. My first question would be on your customer margin, which came slightly below 300 basis points.

I know you talked quite extensively about kind of deposit costs and also lending rates, but how should we think about the customer margin? Is it fair to just assume that the 297 basis points is the trough, or could it kind of fall a little bit more in coming quarters?

Then my second question would be that 20% return on tangible equity that you guide for in 2027, is that sustainable to assume that will be the new run rate beyond 2027, '28, '29, considering volumes look good, you mentioned cost efficiency should start to kick in post kind of '26. How do you think about the longer-term return on tangible equity level?

Thank you.

Thank you, Sofie. On profitability, I think we said, and Matthias also mentioned, NII and others, we see environment continue to be fairly positive beyond 2027.

By definition, that should be positive for return on tangible equity, no? You're somehow asking about our next 3-year plan, and that's a bit too early for us to get into the detail.

To be honest, my sense is this is not just a level that is sustainable, the 20%, but it should be actually the level on which we start working towards further improvement in profitability. That's my qualitative sense based on all what I have seen, and obviously we also have a very positive view for 2028 in particular.

On customer margin, Matthias?

Yes, thank you very much, Sofie. Good morning.

On customer spread, I'm afraid to say that the 297 or 302, depending on whether it's with or without hedges, has not yet been the trough. As I said, customer deposit cost at 47 basis points might be rather stable, or we do see some potential here still for certain improvement, but probably a minor one.

Yes, we do still see negative loan yield repricing specifically into the first quarter and the first two quarters of this year, 2026. We would expect that to come down still slightly into the second quarter, but then we should be starting to see recovery and we still see the area of 300 basis points as our sustainable level once rates are picking up slightly over the next quarters.

Thank you, Sofie. Operator, next question, please.

Good morning. Thanks for taking my questions.

It's kind of a follow-up, one for you, Gonzalo, on the implied cost growth in 20 '27, looks like around 2.5%, and with the revenue growth, your cost-income is going to be in the mid-30s. Obviously you've laid out, both Matthias and yourself, how there's more to go for in '28.

The question is kind of should we be thinking that 30% cost-income ratio over time is possible? Or the bigger question is, at what point, Gonzalo, do you think that it's better to invest in the business because you think you might be missing out on growth or underinvestment?

Just help us to think how you're thinking about the business and the long-term potential in the new world. Second, on the 6% loan growth CAGR, I realize it's a touch lower in the outer years, but still above what Spain is growing, and of course there's some international growth there.

The question is, are you factoring further sort of market share gains or do you expecting the growth in the market to accelerate significantly, or a bit of both? Just a bit of sort of color on your market share expectations.

Thank you.

On the second one, market share, I'd say, yes, we are gaining market share now. We gained market share this year.

It's likely if we have a position that I think is very strong from a competitive point of view that that process will continue, and we aim to do that subject to appropriate risk and pricing decisions. If the profitability is not there, the risk criteria is not strictly enough, we will certainly not grow faster than the market.

We have seen that the market is very big and given our position, we can do that. I think there is clearly potential to see lending above nominal GDP, which is kind of the logical assumption to be made.

When we look at relative to our past and relative to Europe with 31 percentage points lower leverage of the private sector, and an economy that is clearly outperforming, you can see obviously some cycles there, no? I think 6% is reasonable.

Yes, it includes some market share gains. Again, when we talk about market share gains, we're talking about 10, 20 basis points generally.

This is the kind of market share gains that are consistent with good pricing decisions and good risk decisions, not something that is huge, no? In terms of the cost-income, I think it's important to say cost-income for us is an output, it's not a target by itself, no?

We now you look at our numbers and round numbers, we have 18% return on tangible equity this year, 40% cost-income, a bit below on the cost-income. Our aim is not to bring down the cost-income at all cost.

Our aim is to create value. Obviously, if we can do the same volume with lower cost-income, that's great.

Very often, if you just focus on bringing down the cost-income, you're not going to do investments at 18% return on tangible equity. Once you get to and many banks would dream in Europe, as you know well, Alvaro, to have a 40% cost-income.

Once you have a very profitable platform, you actually want to create value and that means growth. That may mean doing and taking business initiatives at 40% cost-income that create a lot of value, 18% return on tangible equity, but do not contribute to the objective of reducing further cost-income down to 30%.

Now as an output, if our strategy is successful and we continue to grow the business, the cost-income should continue to go down, eh? It's not going to be our target.

It's going to be a consequence of sort of management of revenues and costs to make sure that we produce sort of value when we make investments, eh? It will come down, but we're not targeting a given cost-income, we're targeting shareholder value creation.

If I may just remind you of the case of Banco Popular 25 years ago, they were managing for ratios and return on tangible equities and cost-income, and at some point, that doesn't make sense and we certainly going to be looking at NPV positive value decisions. That, if our strategy is successful, will lead to lower cost-income.

We'll see when and to what extent, no?

Thank you, Alvaro. Operator, next question, please.

Good morning. Thank you very much.

I've got two questions: one on the structural hedge and the other one on capital. On the structural hedge, you're adding receiver swaps, but you're reducing your holdings of sovereign bonds.

Can you explain the rationale of that, any worries on the sovereign debt market? Also what is behind keeping the sensitivity still at 7.5% versus the 5 you had at the beginning of the year?

If you could help us model how the ALCO portfolio size should expand going forward, that would be very helpful. Then on capital, two quick questions: what are you expecting in terms of RWA growth?

In the previous plan, you were growing more slowly than loans, I think it's 3% CAGR that you had at the time, now you've got 6% growth in performing loans, how RWA should grow? Just quickly on the buyback, have you already put forward a request to pay that surplus capital to the ECB and the board?

Thank you.

Thank you, Marta. On the second point, capital, we are not, and we made a policy out of it finally to say let's be consistently, we will not talk about when we do internal approvals and discussions with the ECB.

We'll just communicate to the market when we have it and it's formally approved by the ECB and the board. Absolutely no change in what we've been doing.

We're talking about the seventh, eighth share buyback now, and you know how we behave, that we're fairly quick, very disciplined. Look at other banks in Europe, they say, "This is our target," but then you look at the capital and it's way above that target.

It's a bit like an ATM, as soon as we generate the capital, we give it back. Don't worry about that is something we're going to continue.

RWA growth, obviously it's going to be a bit higher if lending grows at 6% than at 4%, and I'll let Matthias elaborate onto it.

Yes, thank you very much, Marta. As you said, we were guiding for 3% performing loan growth back in the Investor Day, and that translated into about 2% growth in RWAs.

Now we are guiding for 6% growth, and we do think that also helped by both the Basel IV impact that at the end of the day was more positive than we expected, as well as an uptake, most probably, in SRT activity, that we should be able to actually adjust that growth rate downwards and actually generate a sort of potential 2 percentage points gap between performing loan growth and RWA growth, helped by these two two factors, no? On sensitivity, we do feel quite comfortable in that 7.5% sensitivity that we're managing right now.

Recall that we're coming from the ranges of 20 to 30% back in 2021, when obviously rates were negative or very, very low, bringing that down to 5% last year, and now we are hovering around those 70 7.5% levels. In that environment where the ECB signals that the rate-cutting cycle may have come to an end and the market expects a certain increase from the current state.

The yield curve is actually pointing out to a steepening, we do think that that 7.5% level is a level that we feel comfortable with in an environment in which we obviously are exposed to macro risks both on the upside as well as on the downside. As to hedging strategy, we use both instruments, both ALCO book in order to invest and structural hedges.

This quarter, we've been using approximately €10 billion of structural hedges to hedge and to ensure this sensitivity of 7.5%, and that might change depending on the size of the books, depending on sensitivity, depending on opportunistic behavior also. If sovereign spreads we feel are at the level they should be and we feel investment opportunities, we might be using more longer maturity instruments such as adding to our ALCO portfolio and picking up some of that sovereign spread or being more in the shorter range of maturities, which we typically do with the deposit swaps, no?

I would say we will see in the future, we want to keep some flexibility here to be able to react to market circumstances as they unfold and no clear guidance at that point on to which part of the portfolio should be growing more or we would be using more.

Thank you, Marta. Operator, next question, please.

Hi. Good morning.

Thank you for taking my questions. I have two small ones actually, and one slightly more qualitative.

The numerical ones are if you can give us the NII in 2027 with no rate hikes. We have actually flat as a pancake type of yield curve.

The second one is if you can give us actually the percentage of natural attrition you have on your headcount every year. The qualitative one is on consumer lending, obviously growing quite strongly, 12% I think it is at the end of the year.

Mimic, if you want actually, the trends we're seeing on a sector basis. Does this raise any concern around asset quality about the kind of clients actually you're targeting, or you're still within pretty tight kind of risk standards with your own client base preapproved, like you have been doing the last 3, 5 years?

If there is any change in terms of the risk profile of the clients you are acquiring on consumer. Thank you.

Thank you, Nacho. Risk profile, no change, and asset quality, we keep our standards, and we're very comfortable with them.

That's perfectly consistent with good growth when you have such a large position and a lot of information with clients. Natural attrition for the headcount, I think we may actually want to come back to you.

Obviously, we want to make sure we give you the right number, is a small. NII?

Yes. NII 2027 actually is not largely dependent on interest rate hikes.

As I said, typically the repricing of the portfolio is somewhat backloaded. In the current interest rate curve, that increase that we are expecting slightly for 2026, but slowly and a little bit into 2027, actually would not have a significant impact on our €12.5 billion guidance, as then the interest rate hike is much more backloaded, and which much more positively affect 2028 and beyond, no?

I would see obviously that would have an impact, we would be below, most potentially, that 20 €12.5, but not far from guidance if interest stayed on current 2% deposit facility rate.

Thank you, Nacho. Operator, next question, please.

Hi, thank you for taking my question. You said consolidation will continue in Spain, and that you're not interested in moving abroad.

Can you elaborate on what you meant by that, and also, your positive considerations on the US as a market, what do you plan to do there? Thank you.

On the US as a market?

What you said last question, Andrea, we didn't hear it properly.

I also heard positive comments on the US. What do you plan to do there?

Yeah.

Yeah. Consolidation, very clear, no change.

We are not interested in consolidation. We have a very strong position in Spain, and we do not want to grow, and we do not need to fill any product areas through consolidation.

We want to grow organically. In Portugal, we have a great operation, we have a lower market share, but actually a business that is growing even faster than the Spanish one, we're very happy with what we have.

What we see is increased value creation by combining the engines and the way we do business between Spain and Portugal with the whole obviously autonomy that BPI has, because it's a great Portuguese, and it needs to stay as a Portuguese bank. We're not seeing value creation in cross-border.

To be honest, this is a sort of a discussion that takes very long time, but we don't see synergies. As we look for shareholder value creation, we do not think we're going to find it in cross-border M&A.

The US is certainly even further away for us from the point of view of M&A, absolutely no interest there. Still is a market where obviously we bank with many US companies that are mostly operating in Europe.

It's a market that we follow closely because its relevance for the whole world, no?

Thank you, Andrea. Operator, next question, please.

Hello. Good morning.

Thank you very much for taking my questions. I have two.

Firstly, on the NII guidance, I would like to ask if you could provide the assumption on the deposit hedge growth, and also this €10 billion of deposit hedges, could you remind me in which interest rate they have been acquired? Then my second question would be on the SRTs, if you could remind me what is the expected RWA benefit and the fee cost, please.

Thank you.

On deposit hedge growth, we don't give a specific guidance on what the volume is, but structurally thinking about what we should be doing is obviously we are adding, let's say, non-maturing deposits on our liability side, and by the way that we are adding those non-maturing deposits, we need a natural hedge on those, either through increase of the fixed mortgage portfolio, for example, or other fixed rate assets in the loan book. Or if that is not enough, then in order to manage the 7.5% sensitivity, obviously other types of instruments should be used, namely being either hedging our deposit base or investing into fixed rate assets, no?

Structurally I would be thinking about the evolution that you're putting into your model in terms of non-interest-bearing deposits, which is our fixed rate liability side, and then a combination of investing into fixed income assets both on the loan side as well as on either of the two instruments, fixed income portfolio on the ALCO book or structural hedges. On the interest rate acquired, we do disclose the detail of the information of the next actually 4 to 5 years of the maturities of the ones that we acquired.

You have a very detailed portfolio evolution of those. Obviously, in the moment we acquire, as I said before, we typically tend to invest a little bit more long term when it is ALCO book and fixed income portfolio, and a little bit more short term in duration when it comes to hedges, no?

You can see that in the differences of those maturity rates that we have in the page 30 of the disclosure.

On the SRTs, Matthias mentioned that before, but it's also in the presentation, it's minus €12 million in the fourth quarter and minus €36 million for the full-year '25, for the cost of SRTs in the fees. Thank you, Borja.

Next question, please, operator.

Good morning. Thank you very much for taking my question.

It was on costs, more specifically on your investments in digital. I think 1 year ago at the Investor Day, you were talking about €5 billion as total investment in digital over '25, '26, '27.

Could you remind us, please, what is the phasing of this in each of the 3 years and how should we think about investment in digital going forward, what is the run rate from 2028 onwards? Thank you.

Run rate from '28 onwards, we will obviously explain at the time. There's no decision made, but clearly the effort that we're doing with '25 to '27 is a special effort that is not something we're going to repeat or planning to repeat in '28-'30, no?

Again, specific numbers we need to wait. In terms of the breakdown of that investment, I think there's no change, no, from what we said, but Matthias, if you want.

Now

there's not a change in the breakdown or on the facing in of that. Obviously, there's a certain ramp-up phase when it comes to the investments in the first year in terms of incorporating the staff and incorporating the workforce that we wanted to incorporate, and this is obviously a facing.

On the other hand, there's a certain front-loading then with expenditure with our partners. I would say the most reasonable assumption is that in that 3-year horizon rather stable in terms of investment needs over these 3 years.

Okay. Thank you.

Operator, I believe we have time for one more question, please.

Hi, good morning. Thank you for taking my questions.

I have two follow-ups, please. The first question is on structural hedges.

On page 30 of the slides, you have this maturity profile. In the past few quarters, they were mainly added in the second quarter of '27 to the first quarter of '28, but this quarter you added significantly in 2029.

Just wondering if you can give me your thought process, why the change? The second one is on SRTs.

You previously guided €6 billion by 2027. I just wonder if you have any change of view there, given most of peers have ramped up activities there.

Thank you very much.

Starting with the second one on SRT, we guided for this €6 billion gross issuances by 2027, and as I said before, loan growth is stronger. We expect now 6% performing loan growth with respect to 4% that we expected in the strategic plan.

There will be an uptake, most probably, of volumes. We don't have a specific updated number on those, as we will be making that dependent on market conditions.

We want to be active in that market, but we also want to be very sure that we well manage maturities, that we well manage the reinvestment risk of those, and obviously that we, to some extent, don't go crazy about it in the sense of adding too much reinvestment risk in our CET1 capital ratio, no? Yes, expect us to be more active in that market, expect us to add some billions on that target, but not excessively neither, no?

On structural hedges, as I discussed before, we are typically taking those decisions to a certain extent on a operational basis each quarter, when we see what is the interest rate curve environment. We are updating our business volume forecasts obviously into that 12- to 24-month horizon to which we are managing our sensitivities.

Then depending on the structure of the curve, depending on the structure of the sovereign spreads, we are managing that more on an opportunistic basic. There's no such as a very predefined strategy rather than, as I said, on the long tail of the curve, we tend to be in fixed income instruments, and for the rather short term, we tend to be in deposit hedges.

Then we will be deciding quarter by quarter depending on business outlook and market conditions.

Thank you, Lento. That's all we had time for today, and anyone left at the queue, IR team will contact them later.

Thank you all for joining us. Thank you, Gonzalo.

Thank you, Matthias. Bye-bye, all the best.

Thank you very much.

Thank you very much.