Commerzbank (CRZBF) 6 Aug 222022 Q2 Earnings call transcript

Good morning, everyone, and welcome to our earnings call. In challenging times, the team has made a good job in the transformation of the bank and delivered a decent financial performance. With an operating profit of €1.3 billion, the first half of the year has been very successful.

Our customer business has been strong across all client groups from the Mittelstand consumers. Together with first benefits from rising rates, this has led to a large increase in revenues by 20%. we remain further cost on time, strategy in reduction same and execution track the have steps made our measures. At with our inflation increases. have our we to that pressure But acknowledge cost from base the on

ensure in However, we our past strong of profit to reach will six the more XXXX. months, transformation. on €X of our of the outlook a management Based to strict our results success cost stick and billion the we than confirm net

this takes credit of ago, Polish account the The As holidays from weeks preannounced the the the for into additional burdens provide holidays credit expense three system. consumers at relief mBank. at banking Polish granted by parliament

release, our out As will pointed measure. press we legal action consider with against unusual this

the to The year, clearly and clouds. positive a of beneficial. bright the half spots see second Eurozone transition we environment the rate in is into Looking

most However, no environment development. ahead. most well natural GDP is the for and mBank. question supply. and in year, the have assumed have Overall, supply full we loans outlook difficult gas the economic and the provisions natural deterioration are Swiss material in we shortage our about additional In we pressing for very wake Furthermore, further no for challenges in gas potential the of assumed potential franc prepared

underpin me this Let with just X figures.

points First, at which MDA. above basis our stands XXX ratio CETX is XX.X%,

robust XX this the have end we model at and our strategy. to have permanently transformation in ensure target increase and will to the remote trends number set focus of loan advisory be made for level Most and this and already in year. six ratio X remote rate we any And have good with small our XX% we up And year, digital advisory XX/X Germany. million our confident have that we can of of the our months if reached all our progress adjustment provisions. we rather is by million available us advice year, me fully small in on All towards centers top-level customers. centers branches with XXX of potential the branches serve recessionary And to November footprint, loss customers. service to the a operational improved handle profitability the customer Second, stock with leads physical XXX started some further the business and our centers have fully In of advice of private first business makes excellent this closed the we reduce on PSBC, credit capacity shall manage income even channels. pilot run a in third, our business the advisory To in losses, To track. all, have ratio bank. and cost of €XXX recently, we and

Regarding PSBC, digital our sales online portal, approach. we successfully and have stringent a channels advisory relaunched in applying

been has XXXX, next For the Mittelstand full model model. Corporate progress accomplished will operational will of our of made of in X,XXX business follow implementation we year. the X,XXX setup also QX. have In our of future by clients. end end to direct successfully bank significant we The the clients until the The clients Clients, the have with migration X,XXX coverage

further the contributes well reduction our trade this focus to Regarding to an important network, year. preparation corridors four of advanced by is in we bank. are business, a This the streamlining end complexity our of in necessary the close and of the the long locations international international to German step

as Reduction to infrastructure. a our of in in IT geopolitical also changes trading situation. our constantly footprint And Looking the our ahead, trade we example. priority our international due will is serves review reflect complexity highest very to good currents

applications I'm another They are XX that our annual German our all decommissioned asked transformation, before and also milestones reflected important our this target and trading. for have will finance in already XX%. These a their fundamental of have client the glad to XX corporate us in follow the And transformation, survey set scores and have proof is This Mittelstand we clients up reached We to supporting journey. banks Commerzbank on our house are magazine. X increased has as points overall in the and by for of Germany. even corporate strong #X very score franchise. last about customers good the bank This year. also compared is #X percentage house a to in relationship bank middle

of the leave end on cuts the in of in Now let's staff next who contract include progress the at are look These the program. From signed years. job the we gross payroll locked well basis, have at QX. X,XXX a which to our redundancy off as already employees have as quickly overall XX,XXX two already

are and fix further effort by end the will to this of We cuts levers job remaining making month of year. contracted increase the by the every month number

Let's goal intensive another to topic, for all in transparency road our have €XXX set COX very we At net-zero that by our to possible transformation on approach path to of as our around most July, measurement SBTi for for the have sustainability framework. become second and public sectors. defines XXXX we the contribute sustainable early XXXX, carry map mobilizing by new billion our dialogue serves sustainability. the sustainability products greatest on of presented sustainable ESG clearly our with our important clear a And XXXX. our It future. It to provides targets

a targets. the All framework very reflect of commitment but ambitious strong to necessary absolutely them in are described in detail and

In in single ECB our nice sense, basic green test in past, steps is stress this position very already would made we have transformation. significant I have good. the And has said climate been results it the names. the hence, for disclosed As if

deep dive you me into the with for the before the for over half let key financials. to the takeaways year Now provide my Bettina first hand I of

year. performance of First, first we strong financial a delivered in the half the

with Commerzbank. of model we transformation business of track the fully the Second, on are

Third, we prepared arising well future macro are challenges environment. from for potential very the

Swiss the and clearly payments. I more provisions earn dividend to the our economy for and over €X today's to the in confirm outlook perspective, development from forward further billion Looking the to franc can, than now And with and in resume Bettina. caveat loans of mBank, XXXX on you,

additional and Thank operating driver you, of year-on-year. Manfred, improved from businesses side. Yes, interest to which €X.X Nevertheless, at net and our contributions higher €XXX are our of well of up second income, my is have the the in This the management in underlying million. our operating of have quarter. in the and than €XXX anticipated. XX% is that business. clearly revenues in originally also second profitability The visible This cost Poland compulsory good improved result XX% revenues, has proof ratio improved This includes in a morning come clear for is the performed been especially income million brought have main active the result billion. Costs the expenses quarter.

result maintain well for The of at the cost only we loan it in to income will decisions been book the in performing possible in headwinds Therefore, the not and second from year, However, revenue strong will risk full come face cost €XXX be half government year. quarter. ratio in The the has million. the the Poland.

uncertainties next thanks the that cover used points, defaults, the Russian we And we strengthens €XXX comfortable to million have in position to XX.X%. remaining economic good the use While outlook. adjustment we a of basis CETX still given level our buffer to quarter. result, can some to in MDA our ratio current have unclear to This improved top our the XXX

Slides exceptional and had quarter financial the Now look noting. XX. indicators, including worth in X the of all TLTRO let's revenue have X are In improved exceptional brief There in QX, Year-on-year, items. items we the €XX benefit million. we at of a a benefit also key

to year We in provisions have Germany Repayments cover to judgment segments effects income commission of performing XX. originally put starting slightly commission to the revenue, are on in well. improved year-on-year released of the last has lower on with the we the with be This than pricing leads year. the business all expected Page to underlying last also some Net income anticipated. customers place

than strong expected, the it is lower As very quarter. first

reach next have full same Also, year have be in not around net we seen XXXX. last the Therefore, expected the income commission the challenging impact. level level market could an to year. the environment, we Given expect churn to future quarter as the is

on Now the interest NII continuing back Slide and has performance rising from up of to thanks €XX million to XX. been quarter, of Underlying the underlying improved the rates. trend NII mBank, previous

increased drag However, credit a resulting NII burden has The holidays the be is QX quarter-on-quarter. government introduce for on decided in mortgage Germany, and also In PSBC revenues. will holders. significant booked Polish to

PSBC. have As higher usual, QX, we of in seen repayments early mortgages in

for of a offset next obviously with these negative on the and over positive led the the effects we now the X rates of benefit longer largely rates decision time. a this to internal that redemptions. to us customers. in potential corresponding the deposit leads on is the is rate slide of to others the for positive step are closeouts. with Treasury no offset interest in benefit the As market and were forward our at partially The This of impact has ECB a rate This in positive accrued early rates, raise economic fact effect realized The group market The PSBC anticipated below the by is deposit NII. to charge the has loans time consolidation. deposits.

from expected see the additional ECB higher we than the around this further, increases €XXX If years. further last benefits NII materialize, deposits in year. rate year's raise the million that coming will continues rates to be Assuming should

accounts, we accounts However, by of towards above the to predicted to market, out transfers as benefit see X% and as expect go some rates us. interest-bearing current the for reducing

a more zero banking were customer the of time predict were But that system. customers first rate reaction customers the in large a the for their history, environment with interest on the could to to rates on time in deposits. hard regarding is be we for negative period considerable be behavior overall well interest it of deposits, will and negative future conscious it and As confronted

into priced of scenario, deposits, scenario price the around these for not higher corresponding benefits will will NII our we have actual retail prepared customers corporate priced the better average, around XXXX, deposit depend finding It after beta be we XX%. And actual how NII In pass portfolio for deposit the €XXX interest a you on sensitive than in deposit in XXXX is point customers the in an assume XXXX. give around €XXX XX% beta XXXX. customers. And accounts, across interest assumed year. The this beta. of Page would and rate illustrates shifts is around million rates by on million sensitivity, deposit we XX. X in The to potential further deposit the conservatively percentage the that To beta we With for to NII improve deposit would for the €XX and volumes, on and if and NII uncertainties customer impression the to our lower, per behavior. income assume whole million mind, the

therefore Slide XX. very competitors We key Having drivers, our will focus customer on behavior to clear revenue with a at our closely on let's margins. move monitor looked and cost

our external headwinds to management in usage Despite our consultants expenses and expenses reducing below well on ongoing are as of with continued reduction operating QX, XXXX. goal to reach We for headcount cost in inflation, The contributed. branch operating €X.X track our measures closures we as have billion. from HX lower

We to have partially a of the be to net pay had million burden to around This In million not in contributions These Poland. €XX fund. burdens contributions contribute our on billion. again also QX. offset XXXX fund, projections in additional to distressed but million be the by a compulsory the will €X.X reduced increase to anticipated might protection the by guarantee cost been deposit However, expect QX, basis. required borrower €XXX scheme to institutional increased new €XX we

originally income cost the better ratio be will thanks to than planned, However, higher revenues.

in mind year, to contributions €XXX be year, million around million increase. started nearly million please compared For of the use to year. that €XXX not payment last we they we a currently would last compulsory total higher had keep even And expect commitments full €XXX

in now by to Let's slowdown. We top The and top we top-level risk which economic million, million risk Russia-related chain Russia, low energy a result have quality. is our could million. €XXX million prices XX at we €XXX this, largely Russian result Slide level be move of anticipated million covering base direct the result. reflecting On covered €XX had potential It defaults, asset effects adjustment had only €XXX from Net, remaining risk of a from an QX. our adjustment. was disruptions, good of elevated supply €XXX

a XX, review Russian supply during we reduction Russia. The fallout remains a of increase the to If natural current exposures from cost will at basis the XX cost of or have the risk and on low not On significant deliveries our complete and potential Slide the gas of TLA TLA of nonperforming level, the points the stop overview of in So from gas an we QX. the includes reduced loans QX. risk.

repayments exposure actively to Our the Russia is This our quarter. down the net also further has during exposure defaults. but further to been billion. reductions By is reduced and mid-July, due €X

continue business new existing strategy our customers. We while no of our supporting

that is income. first and the to NII in lower already, Swiss first with effects the Other at likely group Poland. Having the and full reversal This overview the will income fair significantly strong this very From mainly of touch largely tax NCI value today's were tax fair half. the other a XX% provisions first result around quarter. Concerning mortgages perspective, partial quickly value is on result was year. quarter. covered franc is by level the carry in the for of I driven in Let's valuation in XX. the operating rate Slide rate, The is than this on on due for

million result €X net target track of in year. for €XXX first billion the of are more the half, we to With our reach the on than

has slides. impacted Customers by with on securities and business markets, operating securities Business X carry next segments, by Private the billion. Let's been reducing €XX The starting lower volumes the with Small net on

volumes we income be effect trading in side, volumes to negative but to new lower bright by next quarter. net the inflows €X.X is billion on this compensated slightly continue the On in Mortgage increased quarter. the have attract of unlikely Nevertheless, quarters, volumes. money a commission have will

deposit in we again longer deposit an million In billion. contributed have progress In rates, increasing Given the good made of expect the interest higher the business, mortgage for of level deposits year. no €X pricing time, for revenues. the QX, rest to of volumes increase net last the volume €XX the we by

have from stopped our charging July customers X. We retail

come to so continue. on commission environment probably one-off the the on do me mortgage rates XX where and not we supported it not business now revenue on churn. is of will higher close-out performance moderate focus operating of transitioning this has materialize benefits Our further on rate million, follower its far. current the to expect million. benefit as The improved described for In to income better lower. is PSBC cost €XXX be rates. time some passing be when XX. result The close-out The from this to with and early is in months but comes positive one-off to contributed €XXX which churn our take have to from There costs higher best the ratio is experienced has also strategy likely quarters, trend will the late brings next improvement been only increase stance PSBC and Page next repayments This crucial to positive rises. German The by lower business from and revenues and year-on-year. repeated, a positive the the rates, be securities will effect will from income be dependent revenues

and number our the reached are remote now being target range have centers ramped up. We advisory

thanks have picture increase closed rates in who to to different branches all Poland. strongly mBank mBank. advisory will react continued see to You at customers how has higher to this. reassigned is are centers The revenues,

revenue be offsetting both compulsory burdens absorbed, next will and holidays mortgages loss therefore, a improvement. contributions side have at mBank, revenue on for on cost raised quarter. credit quarter, the for the In additional third to contributions. in However, substantially compulsory the have partially side the the the the further been time, same expects with

will also Swiss to mortgages for provisioning review might auditor adjustments. our our model lead that We with franc together

likely this not burdens, imposed politically group significantly the the to will With mBank year. contribute result

Corporate have the average In Mittelstand RWA in our move on management. on to Clients, are Corporate to an deposit efficiency Pricing we next volumes grown active the slides. let's Clients we efficiency we increased management. have €XXX RWA last million two our portfolio X.X%. Known Now the continued year on back the applied discipline from had income pricing business, around level half. year-end in had and has been first volumes we the maintained, before interest In deposit

ratio, has rates segment its With end in in the in performance. customer this have Corporate start have the Revenues banking quarterly has improved as In ECB's The Clients when rate pricing. to year-on-year. million, QX. XX% will Therefore, the cost of operating an in again Corporate effect good benefit to in Clients improved at deposit reached also will FX result Germany and been PSBC capital X, territory. in transaction which we contributed positive segments strong With income Costs best modest came manifested since markets churn €XXX deposit meaningfully was all XXXX, particular, down. are itself only quarter. only

year, of while second year be the economic should lower costs For the half burdened cloud expect year's profitability last level. the at by revenues help outlook, to we to keep

very for of consolidation. Slide of the move million and partial €XX QX to This XX the revenues positive to close-out consolidation back quarter-on-quarter. in compensation Let's operating swing of repayments loss reflects is development others mortgages result due the in lower and early to others and fair and PSBC. of The value the

QX. a Less funding hedges result of the effects degree the fair fair the hedges came book. reminder, for currency our and in value interest commercial reduced positive in valuation significant As value to positive transactions from a QX result foreign the

business currency has in QX, reversed. effects our in which now cross-currency refinance swaps foreign in had commercial moved of favor basis Additionally, to used

result. or a expect continue For the operating full we balanced year, negative slightly to

in €XXX been The mainly million risk-weighted the and stable to adjustments This offset in reflects and the quarter. in previous model IRB effect of anticipated the Slide the of brings increase RWA. repair. result has Let's been a credit with There XX capital ratio CETX already RWA move has context has RWA. assets. is increase compared to the XX.X%. risk an by lower of been This to market CETX due to net

outlook sorry, to XX. our for our XXXX -- outlook Slide to now on Now 'XX for

This, on as half year. Our the based large effects. from extraordinary is energy-related the Swiss be loans second provisions in that franc outlook will and the particular, well as Russia there no of concerns assumption effects in

the we year the burdens for year, financial last by NII. underlying will from operating higher expenses. revenues For driven be expect overall stick than our Revenue despite target Poland. to higher growth We

to XX%. ratio Poland I XXXX result and to €X.X and provisions year cost to development payout compulsory environment you to coupon questions. result CETX happy and dividend the is result payments with of the And to risk in for the the intend in very in economic Thank your Swiss XX% of mBank. subject we million, a business And we the franc now of for propose of nearly we come a assuming €XXX much Manfred improved are last billion, usage at lead of a ratio. very continue net well take income attention, an €X around ATX after your of clearly least, -- subject Additional above The not net a expect more contributions target expect TLA. than total cost but to however, ratio the billion. Further, expected

quite Bank. few We questions first the a Deutsche have Goy [Operator of Benjamin questioner is received Mr. and Instructions]

Two questions, please.

quantify relevant wondering are around risk bit addition the of talking? Can your those What's how gas you And secondly, customers. in XX,XXX customers. was review are the guidance? shortages. little what I revenue you just First, of we really times primary numbers you many mentioned then lost in to a maybe TLA

Thank you, Benjamin.

So adjustments, interim on top the you read a level we so have also can there. in the statement report, it

number some to of cost of will This level lost million governance we it translates €XXX gas number two, So is yes, that's adjustments. be indeed, XX measures, assume one. And we XX,XXX of top assuming €XXX that book that around a points something roughly And there stop basis is there of would clients. into million We risk. supply.

that However, revenues. we seen really haven't the in

a So the euro number. loss very in was revenues single low digit million

So neglectable. basically

is, The out early. for Yes. in of… terms guess And I was does churn follow-up significant obvious of it your which loss what then guidance revenue quite still mean

we in I something medium-sized that half, assume one. the we true. revenue seen first euro we in That's expected see number would double-digit that that. I million like haven't churn. mean Apparently,

a -- running, centers center For to on, we We number. other starting are said, up but lag. the branch clients now now reacting small full how number the are, euro September are on will and reacting They will because The we I are key I how year, around we the start they ramped with as million currently is advisory pilot have question and respect the react always up. time from clients restructuring the something expected mean see to ones the target with and are the that. already three-digit

the it's we not full anticipated. originally we So tell, see a than too will there to early churn likelihood is but that

Dobreva we Izabel Stanley. Ms. have Morgan Next, of

to last great. but confirm first run guidance but quarter, upside basis, today, wanted were And quarter, the that this of which by my rates question deposit with XXXX. NII it sensitivity math, it I NII you if same are able like give that was it up be on billion. beta and But to XX% looks it that betas XXXX, million is wanted over assuming deposit the last if upside to versus I this would guidance NII the the to assumption beta. same us on €X.X slides the compares your adjust put there and changing deposit clarify the and actually to how just In I assumptions is this your But On of no that is XX%. XXXX. €X says for guidance billion, €XXX to is to the My

in from arrive X% betas until reach you low tipping Now would Because past have point my and the seen to second beta question stay experience, to expect quite is on that to again we XX%. how we think we XX% other I the geographies. assumption deposit

But wondering how risk So you to And costs. in context, do then see that sound was you last high. any did does is question to quite my that. to XX% the XX% the I on assumption? arrive And upside

gas of you basis year gas overlay of million bit from and I points you arrived €XXX year the it if next €XXX how out your use about little expand for that your this cutoff then What what to up cost cost cutoff, risk. book XX a to So guess number? for another was works million process at and on that just Could you assumptions? are your a

Okay. I so in good beta Izabel, we include on to wanted yes, -- that given changed on spots the I start indeed, deposit the to -- mean, the NII, calculation. we model

So assume would given exactly approach that rates, the last you double forward same the quarters of done take would see we development have as in the a can you if you sensitivity.

billion So right be your €X.X would number. exactly the

see would in substantially we basis XXX also you last mean, But and that €X even above. rates than the billion. higher I reach time's points So

know. beta to be basis for that's is blend XX And would it don't deposit points simply Clients there beta question. be Private now mean will the I XX one Corporate thing to for Clients. a a include is Corporate in that assume thought that much put some we basis So a and we points, And concerning Clients prudent key it. we We Private and lower higher Clients. the into

over you you sensitivity cetera, behavior, only the what And behavior, will really see the next number. the So also see months why is. assumption, et and is an we the we customer gave it competitors' is

we million. just that you X talk Take points about €XXX have If percentage assume million. that's point lower. X €XX lower, really, We percentage already

there's volatility -- there. some in it's So quite

remember guidance. on you comfortable some most too you rather surprises. But I'm we lower time prudent But And there and to compare say the I I'd could €XXX So book say, let's is on only prudent, in number the provide our as the you are a cost if €XXX clear. prudent. with know, a feel, to if approach last really we very we very end would million, it the of stop, is more the mean quarter. be X.X of million gas risk, to

That's the place. on minus the we scenario So measures where the But in They would X.X% we GDP that that. the a again, assumption would in assume portfolio some third observe government see will there And one we quarter. we a see review. also XXXX. already are especially in based, are in situation, of also a assumptions that put would basically key assume

will is it on and developing. the things how the And much way XX% quarter So then be third very great. say the see not are to I'd

hopefully, rather to yes, it's of to But gas around something supply XX%. So return will early we a tell. too

Mr. HSBC. have we Next, Johannes of Thormann

Johannes Thormann, HSBC.

Some questions as from my side well.

additional payments plan First much salary be That headcount can then of my or much then How increased rental you your all, pressure cost first increases have? have guidance. being branches how costs? And branch on you you offset would versus additional from And mitigate seen your via by the cost closures? much how additional landlords you how do question.

mortgage Second, business.

And [indiscernible] to margin we have the about see you you last I what future growth, heavily. drop but seen further assume pressure. actually You in weeks have know don't quite

some bit in again business. a new easing I'm I see would -- the So

So what's And behind [deposit] see like that. follow-up one your to I'd beta. thinking on the

that? been high retail of have Just wondering to share which to a is bit current with deposits account beta. Why high not at all. such your a and surprised have deposit pricing I'm sensitive

-- the rental cost increases very on guidance, long-term because mean, we Yes, on contracts. see don't the really I we have actually,

comfortable most the mean, fully cost because guidance compensate side we we see to come. years it I on not XXXX, problem. that the see clearly, will already side, really to of effects, kind the So we some keep cost possible. We feel but to next additional the be increases. also And where salary observe likely on the will not rather before, measures this in there be really is the as that for energy I said

will positive also, rather see side, side, the I So increases. the flip revenue we mean, the

are So the not the here. target additional measures. important need what we I because important But a that our time is then leads of developing clearly, increase and stick that XX% us, implement income the on we the we and planned, as slight here for that to we currently is one. see is then have being, XXXX, ratio that for target, to also message probably revenues And even which think XX% ROTE in promised cost we the to most also cost see if target can

had On the I'd in net the business, we of a slight margin a bit lower increase again, volume quarter, I than say, second mortgage little mean, average. indeed, at, the

now, slowdown of business recovering mortgage is margin the a in but for Our year. be the also we there will second believe that half

overall, [indiscernible]. see situation development yes, do increase, very accounts, comfortable problem have we see really there. flattish in in And so the simply a on as And negative we assumption. So current environment, retail or need a It's time we the a expect XX is But mean, long to the have negative reacting. I we how XX to are to then said, points slightly not rate blend. that an this even been indeed. moment, is rather clients basis really an just

are we how will the retail anyhow the months So deposit a And really side. much coming we see assume much how movement lower in client will and see. clients on the reacting beta rest, we

Stuart of Graham Mr. have Research. Autonomous we Next,

I please. had two,

that's in actually seen this The second a stages in the is with billion the €X.X first be X you would but And say I €X.X And into help? have question. the more where U.S. about extra pessimistic goes on back view? the switch-off is take deposit help. first billion billion That's the it think government caused recession, the interim without betas behaviors changed gas How from €X.X you which government much conservative talk question Have to an report, and just then X. you again. scenario, then one you also competitors later scenario any in to

So right results, if to X Stage €X.X confirm, of else terms in just just billion is €X.X U.S. it? in then enters X of X. recession, an it's a about also the billion whatever way on stages extra And specific to thinking and that

Okay.

very, being seen mean, in moment, have a have on not deposit quick I and competitors of the no, very in stuff mean, So really behavior. I beta, that. change we like announcements we seen some

believe and will countries, as as we likelihood additional the which we year. yet And deposit also in know. reference XXXX, as because for it assumed, where much, above don't beta now -- just how with are said, given XX beta assumed statements that don't no we by middle of about But see benefits points are the for still rate next just And that be cetera. there, et deposit assumption that the XXX at of We we really there end we expecting, other million, is beta points €XXX have seen we that in for at politicians we having assume levels we we example, of deposit Poland Nothing basis is increasing. the here. what have are year, the see simply public the basis

will time such. So show as

I think expectations with shown have the we the presentation, in analyst defined we of lower clearly. have number the end our which

in really XXXX for have X.X% the everything. with minus development covered the On GDP stop we part, scenario, this gas second

our lot shouldn't the to would to that I number I Clients. with liquidity is tough that. can situation like very because be proven do be thing. feel And very I that even question comfortable situation and they and very clearly, you follow why pandemic, in respect right? be hard to which have predict, programs, to be measures to scheme Corporate helpful support also have the really because we mean, can't very true a gas I KfW mean if then these still no Same is a So is to touch mean, reason measures be for and higher, stuff that that during They if imagine not there will government it's a and speak there any that very it's holds like their supportive. like not but have proven in corona I place the stop. now government things the efficient also there see

And the figure billion GBPX.X gave? on the angle, you U.S.

with we mean, -- I we Germany Well, in also would Eurozone. here, that's see concentrating also report, our concentrating we more I is which more described is the and covered. are given our model, business are this -- And interim scenario mean, on

of more Paribas. of Mr. Sigee BNP questioner couple is a questions. next have Jeremy We The

actually small A couple for me. questions detailed quite of

just one was first The NII point. the on

of very on expect If we on sort you deposits. no You could talk obviously, a us longer short-term through mentioned, charging just what basis, XQ? in

away. falls that So

save deposits You at on ECB.

parts in wondered talk quantify just know the I expect what through So moving to could we you us if that -- so XQ.

So sorry, I question that's sort mBank. very manage other short just to was on of term, the but our And expectations. had then

how quarters. point expecting, much Slide You could XX. quantify on I the you wondered flagged of you in XX, Page just expectation mentioned you're the that subsequent if burden further

for on year. So last than mean, before. year, higher expect this NII development that I the said clearly We we NII

that higher can there, currently which not You yet. one, million is €X.XXX at rates say benefit And out sticks I fully from the would the is in billion. take baked in this the consensus, €XXX which

I So what serve to is segments, the you. as for that the I'm also QX good think, I come. mean, QX, is guidance That say much give to can NII. the would That's rate started. I said, XX would guidance on due just as And looking by clients. million a book. holidays the has to that's now the Page that, to and program otherwise, first a quarters million to very I of €XXX the loss expect we results And is. XX%. on for mBank, be mBank, This on dependent we acceptance assuming expect, in XX% The €XXX credit

is have distressed for book and we in second know contribution then €XX is fund point rate million that acceptance the QX overall the the a addition. compulsory So we And how accordingly. borrower in will

currently What also what the the WIBOR is in that We institutional already our will Swiss IPS we booked discussion be have Poland. also how And developing. what is I know €XX topic, said a simply do scheme. just review. result not we protection the don't know in for And which will model is of have we the thing is million franc

current And has francs we'll provisions see at stands €XXX for We have Swiss in whether on million. a new Current look on this provisioning. a and our an impact that auditor yes, we QX. have will

Abouhossein Mr. of comes from question Next Kian JPMorgan.

and could just The if and first the asset is, Mittelstand mortgage back book talk side work. briefly spreads about the on versus new one you

is going back question second just provisions. the The to

of you're points we're scenario, that in GDP years you plus and roughly. normalized -- provisions X stressed XX basis sorry, Germany negative kind gas assuming XX considering of talking -- XX Now about

scenario. without. just How the So government around come industries? if point XX starting bottom-up assume that government discussion you bit Can to back more XX And XX, could flash you to the just around get you your the in especially I has without that intervention out intervention. also, maybe extra? a little been

get we comfortability net your if of understanding declining. about magnitude. a a coverage And X So we is, How just just can lastly, coverage usage measure? an is versus should of Slide and the XX on TLA us think what bit you growth give around in Stage that

volatility industries is stable. pretty mortgage asking been seen overall, asset ones. side we side, the and have So stable spread you but I GDP the rather actually mean, have some On on for. are the

you we in the industries. include appendix, the always look If

that we it's believe think delivery mean, a August. without help is I a of first in think be that can where the where industries to case always X stock, that now and include government we beginning with gas measures. on mean, as I I put Russian of minus And find there if to We say very, et Stage see it's also the I stable. now which most in have the defaults. every worth I over really quite -- decreased. I which development, situation mean, situation. at tough week took We is done into And you chance full a mean, And convinced already which our has you measures yes, are will XXXX pandemic. exposed This ratio all, exposure, And always -- account industries the the exposed. natural we say to most appendix there's stop, why such, I the a government page very But with also negative we the in are mean, we government a to always this you I or our scenario there And manage X.X% we have is also we will be there I the X.X%, cetera, will are included for gas NPE that can is of we a measures also already at that. some would have the winter. the think gas only the mean, during one, corona Russian current see look given

€XXX because but the have slowdown clearly of specifically environment. million exposure, with comfortable also problems, Russian chain this coverage energy also adjustment pretty economic also out top and of feel delivery level there we the we covering So topics still the some

XX €XXX just clarify, And million €XXX on to the is stress months, million, I over the scenario. assume,

we a say recession, at €XXX to in X.X% the and I a scenario. gas is million deep minus importantly a the €XXX would complete is The -- XXXX. recession. really stress deep if which is total Pardon. million That's This GDP really see followed very by stop

be to months, XX Sorry, over right? clear, just over That's it's Year-end XX months? 'XX?

Yes, Yes. yes.

Cheuvreux. Lukesch Kepler have Mr. we of Tobias Next,

Also three please. questions,

waiting more CapEx you IT projects. is this going on is and secondly, quickly next XX, months? wondering, information how and that lastly, reversal quickly difficulties And of HSBC chance of your further default, defaults kind the Or the there I of basically XX the elaborate last with see? basically of any maybe bigger this maybe basically develop spending. year-end? had over you of on outsourcing developing First i.e., can booking some is forward? people talking about. in any you still for on there, there Could the on we Russia mean, the I mean, way project of you're will the just type I was currently problems tax until that a year. cleared is And elaborate past,

Yes.

here line. to all it's mean, Russia. in investments of net exposure are reduced the can I we on say that the group billion. think is what €X.X I cash and This clear ECA I have

development. And Additionally, deposits our see FX it's of ruble company exposure, with compliant I easy continuously of if I being all -- all there due increase million. sanctioned program. Russian if this domestic we sovereign is the is that going mean, holds regulations. working the to you you rate of not are sovereign an And €XXX that think ask our how on we're reduction But forward, only

this IT customers tax on fully some are projects, majority, have we board. customers project for swing getting back we overall from with IT all that of late the working the the finish we're to very hard confirmation. true HSBC think are with On the it. I in But and received It's

Okay.

if how default may I touch And more of really possible? Russia. coming? a this no Is about was type Is kind reversal that -- Or just that? covenant I done? around I here. of impact should So on again is think mean we mean, bridge? that My not quantifiable the money a that. the this question on potentially is cash is

see Payment also sum, but how mean, it and next be the because sanction I we'll partly, environment things it on, in on the depends as are developing month. always, recovered could again,

Next question comes from Mr. of Riccardo Mediobanca. Rovere

if may. four, or I Three

on you're first The all, during are question this of for First forward that in back curve mid-July. deposit the that Izabel, providing numbers again, on get say the I today call to the to slide beta. you from want based

on if correctly, May, was supposed curve I imagine. would remember seen in it previous I forward the guidance While suppose, was, I

And of didn't you moratoria, number FX? the becoming then to same, changing XXXX. in mentioned then whether then headache country present be a BCR, contribution around. an Is on of I Private model need is more you control kind the what like not? that as of provisions us to Or before, But the a is just two [indiscernible] this going And finance IPS, review should or I So becoming be if compulsory Poland, of the if your you're you stuff same realized what second Can way mentioned a it's income an the have and on used million to a me terms to got considering this I correctly. is of liability. on a again, question is more target it that, average rather given for you average you the to for on call, stay just €XXX cost to comparable also And to contributions the mentioned technically Then to charge XX%, Because possible the and of number that. kind Are from else related costs, you -- happening a mBank, numbers XX% terms two contributions kind the a no months, single Poland. it during they provided keep in you goes U.S. that that out that have sell you and like turn right. of forward is then not I understood it assumptions becoming, question every Corporate happen clear, the was if curves moving, question how a nothing clustered changes years, to whether in two to. two. wanted Commerzbank, that seen on as you Poland clients? other Poland, have if and often provide Clients. beta list clear Poland for I is point it even there 'XX the given your anything given move, compulsory for The seems and The question, correctly, an packed of meantime, XX? in because again, a the of to or maybe two, than the it's absolute go in than in has second to probably I And at maybe you more are be deposit mean some mentioned up past have got mind down that is day? what's it of

was patience be going of wondering, anything to I if on So is things? -- your over is these all when

number Then on Good. start question, I then with mBank. comes Manfred the

you the in this XXXX our based again, the the we repeat in first comparable I At used exact -- last we have if of the June. if end of the to then scenario forward but taken just if used led an billion end time, on average beta, on that quarter. so July, one probably just by assumptions to So of it's And deposit -- quarter, we March, calculations correctly. towards we me, recall additional take the €X which to I of would take same would just revenues

So billion, €X.X no billion of the €X you deposit Instead see billion, would approximately. beta. €X.X

assumption. the overall So that's on

the a to On XX% the deposit is betas, indeed blend. XX%

target set what expect So on Private deposit Corporate and it's very has of question And expect always higher beta Clients stone. and lower On your us. very Clients, a Clients. mean, the for Private a been is I a for XX% for Clients cost-to-income a mixture for yes. we for ratio in Corporate and important much we deposit ratio, cost-to-income much beta

not there expect you 'XX. expect it if make a I prerequisite the €XXX really not the XXXX So for [RTE] expect. is the And headwind for change that obviously, is to do our our the earn the levy. X%. important will some see you also it what more 'XX and bank mean, target didn't we we Poland, related on more, for reach year-on-year for also coming only and is but of to also capital also is of our to number, didn't comparison, majority we didn't Poland now number, on the XXXX It's shareholders, because contribution the from compulsory European we million target which because an expect cost definitely than side, and

assume the the levy contribution something over would level, any reached the that additional down repeated. then I need in at given 'XX should be then now IPS probably distressed only and you bank European I growth. side, to be be 'XX fund conservative And come between least significantly fund increases for to compulsory should hand its So see targeted something 'XX. any contributions it that 'XX down not should you like Manfred. to would and expect on On borrower comes because and the

of years, mean, Yes. innovative in important the state very to Thanks. doubt is strong banks as and no the digital has bank. is past brand the And I Europe. the Group. clearly that there's about of this one Commerzbank have the in for mean, in also mBank most we a mBank been -- I in yes, very And growth

government, it's a credit with the against are those. we and the the but with mBank, need so yes, the other it's also framework yes, by of steps legal we why and operative that's a happy consider you And performance Polish the taken environment. situation, difficult very true -- holidays legal And measures that good of

On the non-investable. Polish the other hand, it's that clear market absolutely is

But we we therefore, good banks, and going because the in focusing for see is important bank. one Poland can law European that measures we are so can innovative And are and what the do And what which bank of is taking most are that's we I with And backdrop on banks. not those here. it's believe now that's a I say and think strong the is we think all not the okay of measures. mBank why

Anke of from comes question Reingen next the And RBC.

please. questions, Two

situation not a similar not might provisions million And think are your you supporting Like versus €XXX is mean, be it's so to you supporting million. economy in so you sustainable that talk had First, Is difference and efforts with only the you question basically so] more? million corporates be energy bit respect to to it's on yet, economies. balance the about place then the report, your how be a to coal the crisis that up -- shut-off to a the government security? might you where more impact. to €XXX better back support sustainability. the financing? or TLA? gas, How shooting structurally there a transition do would Or financial come on of obviously, the gas the sorry the And sustainable €XXX million scenario a secondly, [how €XXX different so I within about the just the

we forget, not gas your Anke, should is on we stop the the buffer. out adjustment for there, million mean, scenario, €XXX indeed, second question. So the we I -- And government of have difference that, as support. a, thanks top a still have level natural assume also we thing

So things. we two have

then would we things adding to And over on that. hand than you are Manfred two together, now the… more things I €X about which talking have like So for billion, the

Yes. Thank you.

any think are there's I transformation here doing have what we very are changes clear reason economy to And that And and actual presented ESG, makes which we have any in this change green and put ambitions and doing. that. on that very more framework of in no transformation what on I we want. And to environment, difficult our to and therefore, are of we the a think no of I the we mean clear it follow need not our framework, we we strategy, has of changed clear unfortunately, the to and economy table, make war a even our transformed situation we the just there's our economy. on is really on what the the our are not bank. And

room have Cruz we Mr. of which for And more Hugo question, one KBW. from comes

a Actually, few sorry, questions. I have

understand scenario, more. process the gas On to I a thought wanted bit just your

about if First all, you're you in about worried is of situation. everyone XQ, gas the And worried parts release TLA this why of did situation? the gas

scenario. your have you RWAs mean you subsidiary with tell if and clear deal And to probably big of this million? the expect the stress in And of in then it's well? payout that's the it one-offs for I the book it? expect would plans to million as this do all not what group? million. the Poland, the of you you in know give dividend have amount for the amount you shutdown, Russia, upfront impact op-risk in on your So the will you €XXX see €XXX what It's equity reserve what do to €XXX just to Second, a gas scenario, million increase time? TLA with me over a there. book us But target? finally, Russian a you your Then on Will then these how we to the guidance. split €XXX currency can So an actually

any level for adjustment used adjustments So top didn't default. on the top-level parts in of the scenario, Russian-related We gas QX. on we release Russian

again the we to clear the definition did a other. the was supply gas Board taking That's And into also chain economic little away stops with also energy -- stop, targeted we see then, something, a a that whenever problems, a a do in pandemic And of gas that and only you really least would sure. that then book adjustment book how what more not reference a mean that? this be for bit the clearly, So quarter, see yes, also we would If development. slowdown so accounting and decision it will to but picked prices, of too would top-level how February developing then rest we in the by And for I May. corona of level tell Supervisory each top from adjustment then. of we booking. would need a in clearly after then at I dividend buffer. because it's what with to then everything see AGM full as and would That's And is numbers on else early decided up happens Board. the we situation, the finally, is it mean, dividend standard by depends comes, the

close The €XXX higher was Russian was it's due in is the million then currency you me whenever the it entity, development. -- look the currently we in negative believe to And still the €XXX So amount we quarter, we around numbers. that after million. our million. had equity a billion. reserve asked have let the for of the now we will will €XXX It €X you, have a And we remind see one-off moment, ruble first where

therefore, again has rather -- development So developed positively. that

the Poland? the an RWAs increase you expect of And op-risk in one-offs Sorry. because op-risk, do in all

Sorry.

we one. last the No, forgot I Sorry, don't.

We op-risk Our not that. expect different. is do model now

follow-ups, like confirm Bettina, if for side. take billion can much. say that, would are the much still your something looking questions. see And would forward that. as ready And all kind the will I it's do outlook are the and you to to and here are €X is questions. yes, I bank in some of to we very very the follow-up Thank you I And and a that difficult, our to Even outlook. have Yes, government talk think believe if like yes, And we there and then to thank usual, if myself even team just there, yes, also the difficult your to optimistic some resilient. manage meetings. stick we things we you