Good day, welcome to the FAB Q1 2021 earnings call and webcast. Today's conference is being recorded. This call is for analysts and investors only. The call is not for media, and all media are instructed to disconnect now. At this time, I would like to turn the conference to Waleed Mohsin. Please go ahead. Thank you much. Good day, everyone, and Ramadan Kareem. It's my pleasure to welcome you to FAB's Q1 earnings call and webcast, co-hosted by Goldman Sachs. On today's call, we're extremely pleased to be joined by Hana Al Rostamani, the Group CEO, and James Burdett, Group CFO. Without any further delays, I will pass on the call to Sofia El Boury, Head of Investor Relations. Thank you. Thank you very much, Waleed. Good afternoon, everyone. Thank you for joining us today to review FAB's financial performance for the first quarter of 2021. This webcast is hosted by FAB senior management team, represented by Hana Al Rostamani, Group CEO; James Burdett, Group CFO; Pradeep Rana, Group Chief Risk Officer; Shirish Bhide, our Group Head of Corporate and Commercial Banking; and Rajesh Deshpande, our Group Chief Credit Officer. Before we get started, a quick reminder that today's presentation and all of our financial disclosures for Q1 2021 are currently available on the dedicated investor relations section of our corporate website, as well as on the FAB IR app. After the presentation, our senior management team will be answering all your questions. With that said, I'll pass it on to our Group CEO, Hana Al Rostamani, for opening remarks. Thank you, Sofia, good afternoon, everybody, and welcome to First Abu Dhabi Bank results call for the first quarter of 2021. I'm pleased to be speaking with you today for the first time as FAB's Group CEO. I'm excited to be leading a great team, a great bank with a promising future and opportunities ahead. I'll take you through a summary of the first quarter performance. We have a strong bank with unique competitive strength that has demonstrated resilience over the last 12 months, committed to supporting our customers and communities in the markets we operate in while achieving superior returns. I believe that we are in very strong position to pursue our growth and transformation journey, unlocking new opportunities for our clients and delivering superior and sustainable shareholder value. We have strong regional presence, strong balance sheet, and great talent to take us for a growth story in the future. Looking at Q1 results, we achieved a resilient performance, and group net profit in the first quarter of 2021 was at AED 2.5 billion, up 3% year-on-year, and a group revenue of AED 4.4 billion and a return on tangible equity at 12.8%. Looking at our operating environment in the first quarter, the increased cases of COVID in the year softened the pace of recovery, and our CIB pipeline is materializing slower than expected, which has impacted the business momentum. A wide range of indicators support our positive medium-term outlook, with the UAE leading globally in terms of the vaccine rollout. We have today 9 million doses of COVID vaccine administered to date. The pickup in the oil prices is a strong business confidence, and it's improving, and the resumption of key activities is taking place and signs of stabilization in the real estate market. We expect this to translate into a pickup in activity in the second half of the year if these trends are sustained. The UAE actions continue to be decisive in response to the pandemic and the support of the economy recovery through a range of initiatives and reforms. The UAE Central Bank Targeted Economic Support Scheme, which includes zero cost funding scheme, is one of these many supportive actions, which now has been extended until mid-2022. Despite the challenges of the quarter, we maintained a robust foundation with strong liquidity and funding ratios, a solid capital position, a resilient asset quality. We're confident we are in a strong position as the UAE economy turns and grows. Against this backdrop, there are certain strategic priorities we've been focusing on, and I'm clearly pleased to report that management has continued to deliver against these strategic priorities. For the first quarter, we successfully completed the strategic milestone is designed to unlock value for our shareholders through the establishment of this agile, independent business focusing on technology, data, and customer relationships, and of course, shape the future in the regional payment industry. The second strategic priority is getting closer to finalizing our acquisition with Bank Audi Egypt. This marks our first international acquisition. We've been present in Egypt since 1975. Of course, Egypt is rapidly growing. The trade links are also growing between the UAE and Egypt. High expected GDP growth, and of course, Egypt is strategically important market for us. We've appointed the senior leadership team, and we will be starting the integration process expected to be completed by 2022. We also continue to make good progress against our sustainability agenda, environmental, social, and governance factors set to become more deeply embedded across the organization. We are on track to finalize our ESG roadmap in the course of this year, and we continue to lead the market for green financing, leading green bond issuer regionally and globally with our total green bonds outstanding now crossing a $1 billion mark. While we continue to optimize our property portfolio, our focus is enhancing the group risk-adjusted returns and translate it to the further rundown of our non-strategic assets. We continue to focus on digitization and investing in digital technology to make our business much simpler, more efficient in order for us to better meet our customer needs and evolving needs. We continue to improve on the self-service capabilities, automate key services, driving innovations in the payment space, offering pioneering solutions to the CIB businesses. At the same time, continue to build a world-class technology foundation moving forward on our cloud technology strategy, banking platform, and among these other initiatives. As we move forward, we're firmly laying the foundation of our long-term success. We have thoroughly reviewed the full customer value chain of products and services across all businesses, and we have realigned in order to build on our service model and product proposition to drive greater specialization and a competitive advantage. On the corporate and commercial, better services to understand the large corporate, the SME, and build a strong momentum and service a larger client base. On the investment banking, looking at the large corporates and all the government-related entities, and really bringing in specialization in terms of products, being a strategic advisor. On the consumer banking side, looking at the full range of products and services and continue to deliver digital capabilities and build a strong market share. Of course, on the private banking side, really offer our clients comprehensive suite of global wealth solutions, and provide them access to different markets through our hubs in the UAE and Geneva, in Singapore, Paris, and London, and Riyadh. As the business and service delivery model go hand in hand, we are also looking at streamlining technologies, data analytics, and AI operation and administration. We ensure that there is a seamless delivery of our offerings. There's a better organizational agility, and offer a distinct and superior customer experience to our clients. Focusing on customer segmentation on the clients and what do we deliver for our clients and making sure that we are aligned internally in terms of the operations and technology to really position us and give us a competitive advantage when we deliver to our clients. We are confident these changes will help us firmly establish FAB at the forefront in the market and enhance, as I said, our competitive advantage, unlock opportunities, and help us continue deliver superior and sustainable shareholder returns. In summary, I'm excited about the opportunity that lie ahead for all of us, and I'm confident that we are all well-positioned to strengthen our competitive advantage and achieve our ambitions. Thank you very much, and I'll hand over to James for the financial performance review. Thank you, Hana. Good afternoon, everybody. Ramadan Kareem. Thank you to Waleed and Goldman Sachs for hosting today. As per usual, I'll go through the slide deck pretty quickly, and then we've got time for Q&A at the end of the session with most of the executive committee present to answer your questions. Starting off with slide eight of the investor deck. As Hana's already mentioned, I think the performance was very resilient against a slowly improving economy. The first quarter profit you can see there was just under AED 2.5 billion, which is up 3% year-on-year. The top part of page eight just shows you the bridge between Q1 2020 and Q1 2021. Clearly, the biggest impact for us was the reduction in operating revenue, mainly as a result of the Fed rate cuts, which as you know, happened in April last year, so weren't reflected in Q1 2020 results. That was just over AED 400 million for us in terms of negative revenue headwinds, and it was offset by growth mainly in CIB and mainly in global markets, which was up 32% year-on-year. We also had some one-offs through property gains as we continue to optimize the property portfolio. Operating costs improved 3% year-on-year. Clearly, we took action post-COVID in response to the revenue headwinds. You can see that coming through Q1, sorry, prior comparative period. Most importantly, you can see lower net impairment charges, which were AED 268 million, or 36% lower than the first quarter last year, which was mainly due to the COVID overlay we took of the first quarter last year of AED 185 million. Just looking at the chart at the bottom right-hand side of page eight, clearly you can see a reduction in Q1 2021 profits over the fourth quarter. The fourth quarter, as you know, we had a number of one-offs, notably the sale of the legacy FGB license to ADQ. Also some interest in suspense that didn't recur in the first quarter, and also a couple of property deals. Drilling into the performance of CIB on page nine. This was a very good result for us, operating profit up 19% year-on-year. You can see the bridge shows it very clearly. GCF revenue was up. We had strong fee generation, so growing 3% over prior comparative period. GTB revenue down considerably. You can see there, down AED 259 million, again, mainly due to the Fed rate cuts in our GTB business on CASA. That said, it's important to note that CASA, for us, is at a record high of AED 250 billion for the first time, and up 53% year-on-year in the GTB business. Most notable, 180 new cash mandates won in the first quarter, which was significant. Global markets, as you would expect, up considerably, 32% year-on-year, driven by trading performance and benefiting from our positions against market volatility. Other revenue is just the property gains that we talked about earlier. Clearly, lower impairments flowed through into the CIB business versus first quarter last year because of the overlay, and you can see net profit was up 21%. Loan reduction, you can see there in the first quarter, over the fourth quarter, was mainly due to a small runoff in some of our GRE and public sector entity positions. On a year-on-year basis, we are down a little bit, but that's mainly due to the tactical actions we took to reduce the low yielding trade FI portfolio of about AED 10 billion year-on-year. Turning to slide 10 on the personal banking. Personal banking profits impacted by COVID, clearly down 16% year-on-year. Net Interest Income down mainly on the back of the Fed rate cuts. The Non-Interest Income down considerably as we get less fee activity coming through on the back of a subdued market. That said, our activity levels are improving. You can see the loans and deposits are roughly flat year-on-year. Deposits are up 9% year-on-year. Just to give you some activity levels, and show that these are improving, our personal loans are up 5% over prior comparative period. Mortgage is up 2%, cards up 15%. It's just we're not getting the fee-related revenue on the back of those acquisitions. As the economy begins to recover, we are expecting this pipeline and this growth to start feeding through into the revenue line. As Hana's already mentioned, there's a number of strategic initiatives that we delivered in that space, most notably carving out Magnati, the new payments company. Turning to page 11, which just gives you the full view of the balance sheet. You can see most notably, deposits up considerably Q-on-Q. As I mentioned before, most of that growth is in the corporate bank. Most of it relating to CASA, 180 new mandates, which is a record high. As you know, when and as the Fed rates begin to climb, that will be a significant tailwind for us. In terms of loans, I’ve already mentioned down 1% year-on-year and 2% Q-on-Q. Year-on-year, again, was mainly the rundown of our tactical portfolio that was mainly FI trade related, was low yield, it was a tactical move on our behalf. Q-on-Q, we have some GRE runoff. That said, we think the pipeline still remains very healthy, particularly in the GRE and public sector entity and government space. We do believe we can hit the mid to high single digit balance sheet or loan growth that we put out to the market. Liquidity remains strong. The liquidity coverage ratio at 140%. In terms of term funding, we've already issued AED 3.3 billion over targeted AED 4 billion of longer-term debt across a range of different issuances, all at very economic spreads for us. Turning to slide 12 on asset quality. Cost of risk significantly lower in the first quarter 2021 due to the COVID overlay that happened in the first quarter of 2020. You can see the cost of risk at 51 basis points, significantly below guidance of 100 basis points. We are maintaining that guidance to be conservative given the uncertainties that lie ahead. Looking at the right-hand side of slide 12, you can see the NPLs are flat at just over AED 15 billion, and the NPL ratio is stable at 4%, but coverage improving to 96%. On slide 13, our capital adequacy has improved considerably over the first quarter last year. We've gone to 13.7% versus 12.1% in the prior period. As you know, the prior period was materially impacted by the AFS losses we sustained on our investment portfolios as credit spreads blew out in response to COVID. That's substantial entirely come back as of date, that's the main driver of the improvement to 13.7%. I'd also point out 49 basis points of organic profit generation coming through. As we said before, we are trying to improve return on equity. We are focused on deploying our balance sheet efficiently, you can see the bottom part of slide 13, our return on risk-weighted assets stable at just under 2%, 1.99, down a little bit over the full year because of some of the one-offs that came through. Nevertheless, a good result in the circumstances. Slide 14 drills into a little bit more detail on net interest income. You can see net interest income of just under AED 2.7 billion is down 13% year-on-year, almost entirely due to the Fed rate cuts. In terms of net interest income Q-on-Q, the main difference between fourth quarter 2020 and the first quarter 2021 was interest in suspense releases in the fourth quarter. NIM itself, at 1.47%, is down 44 basis points year-on-year, almost entirely due to the Fed rate cuts. In Q-on-Q, it's down 14 basis points or 18 basis points rather, due to interest in suspense not recurring in the first quarter 2021. The full year estimate for margin is between 1.5%-1.6%. Turning to non-interest income on slide 15. Total non-funds income of AED 1.7 billion is up 14% year-on-year. Fees and commissions, however, is down 21% year-on-year, mainly in personal banking, partially or mostly related to credit cards, as we see less activity in the markets are yet to recover. In terms of FX and investment income, we're up 12%, mainly on the back of client flow and trading activity in global markets. Other income in the first quarter represents the property deal we talked about earlier. On slide 16, costs improved 3% year-on-year. They're up 4% Q1-Q, mainly relating to depreciation uptick. As we said, we continue to invest in our digital proposition and our customer journeys, which will yield productivity and revenue gains in the future. The costs in the first quarter are up slightly because of the integration costs relating to our acquisition of Bank Audi in Egypt, which as you know, will conclude sometime in the second quarter in terms of consolidating into our accounts, and represents significant upside for us. To wrap up the last two slides with guidance. We're maintaining our guidance, most notably cost of risk below 100 basis points. We acknowledge that's conservative, and we may revisit it at the half year. The provision coverage we're committed to keeping above 90 basis points, and the core Equity Tier 1, most importantly at 13.5%. The cost income ratio, we're confident of keeping below 30%, and we are committed to mid-single digit or mid to high single digit loan growth. On the back of what we think will be a slowly recovering economy. We expect GDP to go from negative to positive this year. That's supported by higher oil prices. We can see our pipeline remains very healthy. We have the M&A piece coming through in Egypt, and that's just under AED 1 billion of sustainable revenue for us that'll come through in the future years. To wrap up a solid quarter, we expect the recovery to flow through into our balance sheet in the ensuing quarters. We have a sound strategy. We have a track record of execution and we are confident we can grow our risk-adjusted returns, to support a healthy dividend for our shareholders. As Hana mentioned earlier, we are in the process of doing a three-year strategic plan, which we will follow up with a market or an investor day at some point further in the year once we've concluded that process. With that, I'll hand over to you for Q&A. Thank you. Thank you. If you would like to ask a question, please press star one on your telephone keypad. Please ensure the mute function on your phone is switched off to allow your signal to reach our equipment. If you find your question has been answered, you may remove yourself from the queue by pressing star two. Again, please press star one to ask a question. We will take the first question from Rahul Bajaj from Citi. Please go ahead. Hi. Thank you. Thanks for taking my question. This is Rahul Bajaj from Citigroup. I have three quick questions, actually, if I may, please. The first one, you mentioned about the second half 2021 pipeline, and it appears very strong. I just wanted to understand, what gives you that confidence that you think that the second half pipeline will justify the way you are probably expecting? Closer to that, in the second quarter, right now, should we expect the same GRE rundown, which we had in the first quarter to continue, and then an uplift in the second half? Trying to get the shape of the recovery over the next few quarters. That's my first question. The second one is on the capital slide. There's a mention about the capital impact of the Egypt acquisition and the new Basel III requirements. Just wanted to understand what these individually are and what kind of capital hit or benefits we should bake into our numbers going forward. Related to this, on Egypt, I think you mentioned second quarter consolidation, if I'm not mistaken. Just wanted to understand the timing there and basically when should we start consolidating Egypt into our models? My final question is on Magnati. I just want to understand the whole spin-off exercise which took place early this month. What is the medium to long-term implication when you say unlocking shareholder value? What is your thinking around the future course of Magnati? Are you planning to go the Emirates NBD way, and maybe list the entity at some stage, or are you looking for international PE investors? What is your thinking around Magnati over the next three to five years? Thank you. Thank you, Rahul, for your very detailed questions. Yes, we think the pipeline will start dripping through in the second quarter. We're seeing that a number of pipeline deals have been approved, yet to be drawn down. We expect the main pickup to happen in the second half as we've guided. F rom your perspective, big picture, we expect to finish the year between mid to high single digit loan growth. We're confident of achieving that. To your question on capital, we've got a huge investment portfolio in our global markets and treasury space. When the spreads blew out on the back of the COVID pandemic, we lost, I think it was about 180 basis points or somewhere within that vicinity. That steadily came back as credit spreads tightened throughout the year. That's the main reason for the change in the Common Equity Tier 1 improving over the first quarter. Your question on Egypt, yes, we expect to conclude the deal in the second quarter and start consolidating. The capital impact for that will be 45 basis points. The approximate profitability of that deal is around AED 300 million pre-synergies. Obviously, it's going to take us some time to integrate Egypt into the full system that the bank has. In terms of Magnati, yes, it's exciting for us. The payment space is hot, as you know. There's a lot of investment going into that. We believe that spinning it off will help us be more agile, be more nimble, progressive around in the digital space that we need to invest in. Eventually, it may lead to strategic investors and really pushing the agenda of the payment space for us. We're quite excited by that. Thanks, James. A quick follow-up on the first answer, James, if I may please. When you say mid to high single digits sort of volume growth, does that include Egypt acquisition or excluding that? Yeah, that includes the acquisition as well. Sofia El Boury, just to correct me, your question around the Common Equity Tier 1 was around the regulatory impact. Yes, there are some regulatory headwinds potentially on the horizon, but I think from our perspective, the timing and the magnitude of that's still unclear, as the banks are still discussing this with the central bank. Clearly the central bank is still in the mode of not tightening, but helping the economy prosper, as evidenced by the fact that the TESS was extended. Got it. Thank you. Thanks so much. The next question comes from Kate Carpenter from Morgan Stanley. Hi. Thank you for taking the question. Just a quick follow-up question on the Bank Audi acquisition. You mentioned there could be some incremental integration costs going forward. Just wondering if you could provide a bit more color around that over the next few quarters. On the optimization of FAB's property portfolio, how should we think about that going further? Is there further scope for further property sale gains? Is it on a more ad hoc basis? Thank you. Yes. Thank you for that question. Yes, on Bank Audi, we expect the integration cost to start running up. We are estimating at this stage approximately AED 100 million of OpEx to integrate the two banks. There will obviously be some CapEx that will be amortized over whatever life we choose, depending on the system that we roll out. It is a good deal for us, and we have already said on a standalone basis, it is ROE accretive. We have also said that is before synergies. Obviously we expect to have synergies as well. Sorry, I missed your second question. Just on the property portfolio optimization initiative, is there a further scope for potential property sale gains in the future? How should we think about those sales going forward? Is it more on a strategic ad hoc basis, or is it something ratable that we should be incorporating into our numbers? We're committed to continuing to optimize our property portfolio. Our investment portfolio, we're looking to continue to sell down and essentially reduce those balances and focus on the business of banking. In terms of our own occupancy, yes, there's been a paradigm shift in the way people operate. We are looking at the working from home policy, and where that will end up will dictate our own rental costs, because obviously there's some synergies to be made there, and we're working through hot desking and various other things as a result of that. Net-net, yes, you can expect some further gains on the property side as we execute deals. You can probably expect further reductions in rental costs as we start to formalize our working from home policy and structuring our business around that. Thank you. The next question comes from Naresh Bilandani from JP Morgan. Hi, everyone. It's Naresh from JP Morgan. Thanks for the presentation. I just have one question, please. Can you please just confirm if there were any material credit transactions that affected your first quarter impairment charge? Put bluntly, I'm just keen to know if the Abu Dhabi Airports guarantee invocation and the underlying exposure that you have to Aabar Investments PJS via that guarantee caused any movements that may not be repeated in the second quarter, and if impairment charges could drop further as we move on from here into the future quarters. Maybe I'm just being too bullish here, but if you can throw some light on that would be super helpful. Thank you. Hi Naresh, Shirish. I think your first question was there any significant impairment in quarter one that came to the numbers? The answer is no, there wasn't any. Obviously, we won't comment on any specifics around the airport news article that was in the public domain. Suffice to say that we've done our own analysis of the situation and remain confident of having covered our own position, looking at the various scenarios and the way they're likely to play out. We see no risk from a FAB point of view that comes out of that transaction. That's probably all I can say at this stage. For the remainder of 2021, we don't see any material impact on the impairment front from any significant credit at this stage. Thanks. Thank you. We will now take the next question from Atabek Islamov. Please go ahead. Thank you. I wanted to ask you a question about your strategy in Egypt. What are your plans there? Do you want to recapitalize Bank Audi once you complete the acquisition? Is the strategy about gaining market share? If you can elaborate on that will be very useful. Secondly, we know that First Abu Dhabi Bank is known for fairly volatile deposits. You may have unexpected inflows and outflows during the quarters. It also looks like this deposit volatility kind of impacts your NII, which was the case in the first quarter of this year, given that you place all these deposits, a big bulk of them, in cash with the central banks. Is there a way you can manage this deposit volatility so your Net Interest Income line would be more stable and predictable? One would have expected that the impact of low interest rates should have already passed, in my opinion. If you can comment on this, that'll be very useful. I think that's pretty much it in terms of questions. Thank you. Thank you. In terms of Egypt, we believe it's a big market. It's got a substantial nominal GDP. It's growing. It's relatively underbanked. We've had a presence there for a number of years. Bringing these two banks together and successfully integrating them essentially doubles our scale. We have, we believe, significant synergies and massive ability to grow in that space because of the close affinity between the two countries. As Hana mentioned, the trade flows between the two countries and the FDI flows. Yes, we're very optimistic about Egypt. As a major market, it makes sense that we diversify away just from the UAE, and Egypt is a great return market, so we're looking to grow there. In terms of your question around deposits. The deposits come in, and because they are government deposits and therefore subject to volatility, we only behavioralize a relatively small portion of it for longer-term liquidity, which means the short-term balances get placed with the Fed or the ECB. What it simply means is when the deposits come in or go out, all that happens is the balances with the ECB or the Fed go up or down. In terms of NIM, it doesn't make much difference except for the mathematical calculation because the balance sheet footings go up or down. These deposits we make a spread on. There's no capital associated with them and there's essentially no liquidity cost. They're good for us, good business for us, and we make a small turn on it. In terms of your question, you thought the Fed rate cuts will have passed. Well, all we're doing is comparing first quarter 2020, where there were no Fed rate cuts against the first quarter 2021, where obviously there were rate cuts. That's the reason we quoted that in our discussion showing the net profit bridge. Q-on-Q, as I've said, was mainly related to interest in suspense, significant interest in suspense, which was really a one-off that wasn't repeated in the first quarter this year. As you know, there's always interest in suspense releases and they happen haphazardly depending on our success in terms of restructuring and working out NPLs with clients. We do expect more to come this year, but we don't provide guidance on that. Thank you. Just one follow-up question. You mentioned earlier that you expect the loan growth to improve for the rest of 2021. Do you think that improvement will lead to better net interest income? Shall we expect a sequential growth in NII as well as your loan growth improves in 2021? The net interest margin we've guided is 1.5 to roughly 1.6%, and that includes everything and what we're anticipating for the full year. In terms of net interest income itself, yes, it'll grow as we grow the balance sheet. We're expecting the balance sheet to grow in subsequent quarters based on what we anticipate will be a recovery, but also the recovery in the market. Yes, the fee income will flow through on the back of that. Thank you. That's all from me. We will now take the next question from Harshjit Oza from International Securities. Hello, everyone. Thanks for the presentation. I have three remaining questions as some of my questions are already answered. Firstly, can you provide more color on the properties related gains? What is the approximate size of your non-strategic assets that you are looking to enhance your adjusted return? Second question is, have you seen or do you expect any competition from digital banks impacting the personal banking segment? Finally, are you looking at any M&A opportunity in the home market? These are my questions. You weren't that clear, Harshjit, I think your first question was around property and non-strategic assets. The balances from memory, I'll get Sofia to check this, was about AED 8 billion in terms of property. Yes, we're slowly unwinding those positions. In terms of competition from digital banks, the reality is that there's been a lot of announcements, but there's not been a lot of action on the ground. Really, it hasn't impacted our business to date. The main driver of the reduction in fee income in the personal bank is really just the lack of activity. We expect that activity to start picking up, for example, in credit cards as people start to travel and spend again. In terms of M&A, we're always looking at deals. As you know, getting a deal across the line has got to be in line with strategy, got to be ROE accretive, and it's a very difficult thing to achieve. We're looking. We're open to ideas, but there's nothing concrete at this point. Okay, thanks. James, you mentioned that you will be revising the cost of risk guidance towards the second quarter? Yeah, I think it's premature to change the guidance in the first quarter. We still have a lot to work through. There's still a bit of uncertainty in the market. We know we're being conservative. We will potentially look to revise guidance at the next results announcement, depending on how we see things picking up or whatever the case may be. I think it's right to be conservative. Historically, we've only changed guidance in the middle of the year anyway. Okay. Thank you. We will now take the next question from Amit Mamtani from Goldman Sachs. Hi. Good afternoon. Thank you for the call. You mentioned you plan to move into the 1.5%-1.6% range for margins for the full year. Does this include the Egypt consolidation, which is a higher NIM business? Can you please discuss the drivers behind the AED 683 million FX loss in OCI? Finally, my last question is can you please provide some color behind the increase in TESS utilization and payment deferrals? Thank you. Yeah. The calculation does include the Egypt acquisition, but the Egypt acquisition doesn't really move the needle. Your second question, I think, was on what foreign exchange swaps and their movement through OCI? Yes. Yeah, that's just part of the normal course of business where our global markets team, usually on the back of client flow, but also some proprietary positions, are positioning for some movements in foreign exchange rates and the relative interest rates. It's nothing. I wouldn't call it out specifically. Your last question, I'll pass over to Shirish. The answer on the TESS front, the question that you asked. If you look at our TESS balances, they've been coming off steadily based on a general trend of improvement in the economy. We've not seen any significant requests. What you've really seen is just the business-as-usual activity where the TESS team now permits you to even extend new facilities towards working capital support or other forms of support, financial support to companies that are coming out of the COVID-related stress. Since that can also be captured under the TESS program, we see instances where companies have now put together their revised business plans in line with revised projections. Facilities that go towards supporting these kind of working capital needs are captured under this facility as well. It's just that. There's nothing notable that changed on that front. Thank you. That's clear. Thanks. We will now take the next question from Hootan Yazhari from Bank of America. Hi there, all. Quite a lot was made of the digitization strategy for the bank going forward. Obviously, a key area of focus for a lot of banks at the moment. You also were mentioning about the forthcoming strategy outlook. What I want to see ahead of that is what are you thinking regarding your cost position? Obviously, you alluded to potential drops in rentals costs. We saw some pullback in staff costs and the like there. Looking forward with this digital spend ahead, are we going to be able to see the same sort of cost-to-income ratio going forward, or are you going to start to see some pressures there, particularly, as you mentioned, with some integration costs, et cetera, coming through from the Egyptian business? The next question I have is regarding asset quality. Obviously, with the extension of the TESS program, and you addressed some of this in the previous answer, but what I'm trying to understand is, are you now feeling that there's scope for further recoveries, which could in turn keep your net cost of risk down going forward from here? Does the extension of the TESS program have very little impact on your view on recoveries? Thank you. Yes. Thank you. Yes, we are investing heavily in digital, and we're doing it for two or three real reasons. One is there's a cost efficiency play as you automate end-to-end processes and take humans out of the equation, and therefore costs. There's also a revenue productivity play because you get superior information about the customer, and the salespeople tell me that the revenue productivity jumps considerably when you've got that superior information. Lastly, it automates end-to-end processes, therefore provides a much more seamless and less error-prone process from a customer perspective, so you get the Net Promoter Score improvements. Your question around costs. Yes, those saves will eventually feed into the profit and loss of the bank. We're also in the process of setting up an offshoring hub in India, where we do see a considerable arbitrage on some of those operations. Yes, there are some rental savings we're looking at. On top of all that, we're constantly evaluating where our resources are in terms of costs, to make sure we're putting headcount in the right places. In terms of guidance, we said below 30% this year, but clearly, strategically, we'll be targeting a much better range than that. For your question on asset quality, I'll again pass it to you, Shirish. I think, the way I'll answer that is if you look at our I think the FAB's resilient risk profile has already, I think, been demonstrated adequately. We've been discussing this quarter on quarter, and you can see from the debt utilization and subsequent repayments and the various credit risk metrics. I think our constant positioning that our FAB, the portfolio risk profile, remains extremely resilient and targeted at the right sectors. That, I think, that's coming through pretty clearly. As green shoots appear in the economy, and based on what Hana said earlier and James has said through his presentation as well, as long as the economy continues to recover, we only see improved prospects and therefore a very stable cost of risk scenario. Like James said earlier, we will come to that in quarter two based on what we see at that point in time. Thank you. Yes. Thank you. What I was trying to understand, James, on the cost side was, where are you in your digitization journey? Are you at the beginning of a big wave of expenditure, or you're halfway through, or the majority of the big costs are now behind you? Just very keen to understand where we are in that. Obviously, that has implications on the amount of capital you're putting on the balance sheet, and your cost in depreciating assets and whatever else. Just very keen to understand where you are in that journey, and if you can even quantify what your expectation of spend on digitization in the coming years would be very helpful. Yeah. B anks need to have a continuous spend around this digital space because things are evolving so quickly. If you sort of think back historically, and I just say this to provide some historical context for you. We merged the two banks. That was back at the end of 2018. We spent most of 2019 fixing the teething issues that came from the integration, and there was still a lot of post-integration work that we had to do. We really only started embarking on our digital journey, call it in 2019, because all resources previously were going into integration. Yes, we do have a big budget on this, and it's an evolving journey, and we're nowhere near being done. We make sure that the spend that we're putting into it is significantly ROE accretive. We expect to garner significant benefits. As to where we are in the digital journey, I couldn't even begin to guess where we are. Is it halfway? It's hard to say because they're constantly adjusting, and at the same time, the goalposts are moving. W e constantly reevaluate, and the journey continues. Thank you. As there are no further questions, I will hand over to Sofia for closing remarks. Thank you. Thank you, operator. Thank you, Waleed. Thank you, everyone. Thank you for participating in this call. If you have any further questions, please don't hesitate to channel them directly to me or to the IR team. Thank you, everyone. Stay safe. Speak soon, and thank you again for joining this call. Thank you. That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect