Ladies and gentlemen, welcome to the Julius Bär Q&A on Interim Management Statement for the first four months of 2025. I am Sandra, the course co-operator. I would like to remind you that all participants are in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing Star and 1 on your telephone. For operator assistance, please press Star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Alexander van Leeuwen, Head of Investor Relations. Please go ahead, sir. Good morning, and welcome to this Q&A call with CEO Stefan Bollinger and CFO Evie Kostakis. The reference document for this call is the Interim Management Statement, or IMS, for the first four months of 2025, which was published as a media release last night. As stated in the media release, the IMS is, as usual, based on unaudited management accounts, and the numerical information provided in the IMS is based on non-IFRS alternative performance measures. For that, I also refer to the alternative performance measures section at the end of the release. Before we start the Q&A session, we would like to point you to the usual cautionary statement at the end of the IMS. That cautionary statement also applies to the information provided verbally in this Q&A session. We aim to end the call at 8:45 Swiss time, 7:45 London time, and with that in mind, we would like to ask you to limit yourself to one question, please, so that other analysts also get a chance to ask their questions. It is my pleasure to hand over to Stefan Bollinger, CEO of Julius Bär. Good morning. Thank you all for making yourselves available on such short notice. We brought this call forward by one trading day given the circumstances of some news flow yesterday evening in order to be fully transparent and address any market concerns. Just to be clear, even though the IMS was published earlier, it is absolutely the same that we want to publish tomorrow without any change in content. Before we go into Q&A with Evie and myself, just three remarks. First, in terms of legacy issues, our team and I are totally committed to address and resolve them. You, of course, want to know where we are in the review process of our credit book. Fact is, we are still in the process of reviewing. We started the review after Ivan Ivanic arrived in February. Ivan has a strong track record in risk management during his close to three decades across London, Singapore, Zurich, and other locations in various risk functions, including CRO of UBS Asia. While the review is ongoing, based on our findings to date, we do not expect to uncover additional material idiosyncratic risks that could lead to significant credit losses. I'm personally fully committed to be transparent and to update you accordingly. Second, let me make some comments about the changes in the setup and leadership of the risk functions. This is the result of a review we have conducted since January and aimed at simplifying governance and increased accountability, and at the same time, create a clear distinction between risk, compliance, and legal functions. We're looking forward to welcoming Ivan at the executive board as our new Chief Risk Officer. Third, let me reiterate that I'm highly confident in the potential of our business model, our client franchise, and our financial health. With this, let me hand over to Evie for her take on the IMS, and we then move to Q&A. Thank you. Thank you, Stefan, and good morning, everyone. I will keep my comments brief. Further to what Stefan said, I would like to highlight the strong improvement in gross margin to 87 basis points on an underlying basis, which in turn drove our cost-to-income ratio on an underlying basis down to 66% and the underlying pre-tax margin to 29 basis points. Despite the impact of the credit provisions, our CET1 capital ratio improved to 15.2%. Please bear in mind that at the end of the year, CHF 1.7 billion of risk-weighted assets will roll off. On a look-through basis, our CET1 capital would now be at 16.3%. I'm sure you're keen to ask some questions, so with that, let's open it up for Q&A. We will now begin the question-and-answer session. Anyone who wishes to ask a question or make a comment may press star and one on the telephone. You will hear a tone to confirm that you've entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to disable the loudspeaker mode while asking a question. Anyone with a question may press star and one at this time. Our first question comes from Anke Reingen from RBC. Please go ahead. Yeah, thank you for taking my question. Just on the net new money running below the 3%, can you highlight any trends in there? Previously, you guided to the 3% net new money growth this year because you would also run through another risk review. With this still ongoing, should the net new money run continue to run below the 3%? Thank you. Thanks a lot, Anke, and good morning. As you know, net new money can be quite volatile month to month. We think from today's standpoint that the 3% continues to be the appropriate guidance for 2025. The de-risking that we referenced in the February call is progressing more or less on a linear basis throughout the year, so it's not front-loaded. However, please note that the de-risking was just one of the reasons for the 3% net new money growth guidance for the year. Other topics that we mentioned were the intensification of low-performer management and the lack of preconditions to see releveraging kick in in earnest. In fact, if you look at the yield curve shape and you look at the one-month and five-year spread, it was positive 10 basis points at the beginning of the year, and now it's inverted negatively to 33 basis points. I think that explains a little bit why we're cautious on calling a start to releveraging. The net new money print for the first four months of the year is annualizing at 2.5%. We had about CHF 0.4 billion of deleveraging the first four months, so if you exclude that deleveraging, we're annualizing at 2.7%. I think we're edging up to the 3% guidance we gave at the beginning of the year. Thank you. The next question comes from Amit Ranjan from JPMorgan. Please go ahead. Yes, hi, good morning. Thank you for taking my question. If you can indicate where you are in the process of this credit portfolio review, is it nearly complete, halfway there, any indication would be helpful? If I can get a breakdown of the CHF 130 million, any split you can provide between the provisioning for private debt exposure and the mortgages? Was it a concentrated portfolio of mortgages? Please. Thank you. Thank you, Amit. Good morning. We have been conducting a screening and a deep dive review of our largest exposure, specifically focusing on non-owner-occupied property loans in the double-digit millions. The analysis is nearing completion, with a significant majority already having been finalized. Based on the findings to date, as Stefan said in his opening remarks, we do not expect to uncover any additional material idiosyncratic risks that could lead to significant credit losses. I would say that the analysis that we have done so far provides us with confidence in the quality of the total mortgage book. In terms of the breakdown, we do not disclose this in the IMS, but you will see the changes in the loan loss allowances in our H1 report when it is published in Note 9, which discloses credit quality. Finally, in terms of the exposure, I can confirm that these provisions were spread across several clients in the mortgage book and the remainder of the private debt book, which we've wound down significantly and had scheduled. The next question comes from Ben Caven- Roberts from Goldman Sachs. Please go ahead. Morning. Thanks very much for the time and taking the questions. I'd just like to ask about costs. They seem to be tracking actually pretty healthily with the 66% underlying cost-to-income ratio. Is there anything on the cost side that should not be run-rated from here? Thank you. Thanks, Ben. Yes, the underlying cost-income ratio is 66%, which is obviously a good print. However, I mean, this is primarily driven by the gross margin, which was elevated on an underlying basis, 87 basis points driven by activity-driven income. On the cost side, we are executing at pace on the CHF 110 million cost takeout that we announced in February on the occasion of the full-year results. At that point in time, we had mentioned that we would do CHF 55 million of cost to achieve these CHF 110 million. So far, we've done CHF 19 million, so there's more to come. I would expect the cost-income ratio to trend upwards by year-end. The next question comes from Jeremy Sigee from BNP Paribas. Please go ahead. Morning. Thank you. Just a quick one. Just following up on the client de-risking, I just wondered where we are in that process. Are we done with that, or is that a continuing thing? Hey, Jeremy. Good morning. As I said, I think de-risking is progressing on a linear basis, and you will see some more of it during the year, but we expect inflows to compensate for that. It's just this year? It's a one-year thing? Yes. Yeah. Thank you. The next question comes from Giulia Aurora Miotto from Morgan Stanley. Please go ahead. Hi, good morning. I wanted to ask a question on the gross margins, please. So 87 is quite an improvement driven by activity, but April was quite exceptional in terms of liberation, etc. How sustainable is that? Have you seen that continuing in May, or you have seen a step down? Thank you. Thank you, Giulia. Yes, 87 is a good underlying print. 37 basis points of that recurring, that's pretty stable. The interest-driven income at 21, just a little bit over 21, 21 and a half, in fact, is, I think, within our guidance that we said we gave at the full-year result. Activity-driven, which is really what's powering up the underlying gross margin at 28 basis points, broken down by 10 basis points from brokerage and commissions and 17 basis points from trading income. Indeed, post-liberation day, we benefited from increased client activity. The average daily VIX was at 32 during April, and in May, it's come down to the 20s. We have seen a bit of a slowdown. If you think about brokerage and the underlying driver of that, it's loosely correlated with stock exchange volumes. If you look at April versus what we've seen in May, it's down double- digits. Yes, we do expect that to come down. Thanks. The next question comes from Hubert Lam from Bank of America. Please go ahead. Hi, good morning. Thanks for taking my questions. Just a question around the loan losses that you reported. Just wondering if you have any conversations with FINMA. Just wondering, does this do you think would this hurt your case with FINMA that more losses are coming through, and would they look at you maybe a bit more prudently in terms of the current investigation and potential for capital returns and what the right capital level is? Thank you. Thanks, Hubert. The credit details we've reported are primarily related to the undertaking of the, or the extension, if you will, of the review of the non-Lombard credit portfolio. As you know, last year, we did an extensive review of the private debt book, which we've unwound at pace, followed by a review of the structured Lombard portfolio. I think the FINMA report is a separate matter. We obviously continue to cooperate fully with our regulator on a continuous basis. I don't want to comment more with respect to our regulator. As we have said in the past, we believe it's prudent to await the completion of the FINMA review and focus in 2025 on completing all the remediation measures that we've announced before embedding any share buyback assumptions into our capital planning. This is also aligned with our regulator. Thank you. The next question comes from Mate Nemes from UBS. Please go ahead. Good morning. Thank you for taking the questions. Just one on net new money. Just relating to the 3% guidance, can you update us how the low-performer management is progressing, and can you comment on CRO churn? What have you seen in the first four months and what to expect for the remainder of the year? Thank you. Thanks, Mate. I would say that in terms of the mix of the contribution between RMs on business case and seasoned RMs, we're actually pretty pleased with the development. We have about 26% of our population of RMs on business case, and they brought in about $2.4 billion, with the remainder coming from the seasoned RM population, including from our intermediaries business. In terms of RMs, we have continued hiring at pace. On a gross basis, we hired 35 relationship managers year to date. As you know, with the sale of Brazil, we've consolidated about 20 RMs. They've left the platform. Additionally, due to the low-performer management, we've lost some more RMs, so the net decrease is 29. However, what I want to say is that our hiring pipeline looks pretty good. We're quite pleased with it. I can't tell you where we'll land at year-end, but we're definitely bringing on high-quality talent to the platform. Good. Thank you. As a reminder, if you wish to register for a question, please press star followed by one. The next question comes from Stefan Stalmann from Autonomous Research. Please go ahead. Good morning. Thank you very much for hosting the call. I wanted to ask, please, you mentioned in the release that the review of the loan book and the decision to take credit risk provisions was somehow linked to the nature of the wealth management relationship, and I do not quite get how the two are linked. Related to that, does it mean that you are potentially changing your risk appetite going forward and maybe run off certain additional parts of your loan book as a result of this review? Thank you very much. Hi, Stefan. Thank you for the question. As we've said in the past, we are refocusing our lending activities in our core wealth manager business, sticking to our knitting, so Lombard lending and mortgages. We want to refocus our lending efforts on clients that have a significant portion of their wealth managed already by us, and that's what we mean by saying we want to focus on core wealth management business. In terms of the risk appetite, I don't believe this will have an impact on our credit penetration going forward. As you know, we have taken a step back to reassess and refine our approach in the last 18 months. We've changed the composition of the credit committee, of the executive board, to ensure a clear separation from credit origination. We've revised our credit policies and approval processes. We've introduced a much more granular limit framework, including enhanced total counterparty exposure limits and single obligor limits. As Stefan noted in his opening remarks, to strengthen further the credit governance, we have appointed a highly qualified new Chief Credit Officer and Head of Financial Risk Control who has extensive experience in credit management. I think all of this as a package will bring a fresh perspective to our lending activities. Thank you. The last question comes from Michael Klein from ZKB. Please go ahead. Thank you. Yes, good morning. I just had a question on the change to the structure of the management. I read you're consolidating the legal functions. You're creating a separate compliance function. What's the motivation behind it, and should we be expecting further changes in terms of the structure? Thank you. Good morning and thanks for the question. Look, from my point of view, it is the best practice to have risk and the compliance and legal function separate. As I said in my opening remark, it will create clear accountability, and in my view, the compliance and the credit functions have quite distinct separate skill sets, and I think we're going to create a more focused and more efficient risk management operation as a result of that. If you look back in our history, it's really important to me personally that we have clear accountability around credit risk, and then on the other hand, AML, FCC, and KYC type of risks, and I think this new structure will address this. We have a follow-up question from Anke Reingen from RBC. Please go ahead. Yeah. Thank you for taking my follow-up question. I just wanted to follow up on your comment on interest-related margins. I guess the sensitivity you provide would suggest it's sort of like flatish, just all wouldn't change if rates move. So do you see other headwinds from, I guess, lower margin loan goals, and how should that trend in the course of the year given, yeah, the rate cuts across different regions? Thank you very much. Thanks, Anke. Look, I think you'll recall in the full-year results we said that we believe that the upper bound for interest-driven income is 22 basis points. We printed 21.5. Obviously, NII was lower, but we have to look at it in totality because FX swap income was much higher, right? We haven't seen dramatic shifts in the balance sheet since then. The ECB has delivered three rate cuts, SNB's down to 25, so you've seen some migration of Swiss franc deposits from call and term back into current account, but that doesn't impact NII so much. On the dollar, rates have kept stubbornly steady, and we've seen just a tiny bit of shift from further shift from current account into call and term, but a tiny amount. I think we still feel reasonably comfortable with 22 being the upper bound for this year. Thank you. The next question comes from Dubey Krishnendra from Barclays. Please go ahead. Hi. Thanks for taking my question. Thanks for hosting the call. I just have a question on the private debt book, actually. What has precisely changed now versus the last review that you've taken, which led to more provisioning? An aligned question, I guess, on the Bloomberg CEO was highlighting there could be a recovery on the previous private debt loans. Is there any update on that? Thanks a lot. On the private debt book, like I said, we're quite pleased with the wind down. It's happened faster than we anticipated, and we're now less than 200. In fact, I think the gross exposure is less than 170 as we speak. We took some further provisions in the remainder of the private debt book as a result of, number one, a more uncertain macroeconomic backdrop and potentially market risk appetite. Number two, applying a more prudent criteria with respect to credit quality, including potentially changing individual borrower circumstances. I think that accounts for basically the provisions we've taken on the remainder of the private debt book. Now, with respect to the recovery efforts, which are ongoing on the largest private debt case from 2023, I do not want to comment on timing or quantum magnitude, but I can say that we are making progress. We have a follow-up question from Jeremy Sigee from BNP Paribas. Please go ahead. Thank you. I just wanted to ask what else we need to be ready for in terms of other kind of one-off charges, either in the half-year results or in the strategy update. From what you've said, it sounds like the credit review probably won't cause more charges in the foreseeable future. I just wondered, are there other reviews underway that we need to keep in mind? I guess there's a possibility of restructuring or investment costs. I just wondered, what should we be ready for looking forward? Thanks, Jeremy. That's a tricky question. Yes, I really am. I mean, I guess one part of it is, is there anything else being reviewed? Is there any other kind of review underway that could cause something that we were not expecting? Look, Jeremy, I'm in this seat less than five months. We have a new chairman in the seat not even five weeks, and so naturally, we're reviewing our governance, our structure, our portfolio. I can tell you for now that our focus will be on our core wealth management franchise going forward, and that's in the context that we're reviewing all our activities. Okay. Thanks very much. Ladies and gentlemen, that was the last question. Back over to the management for any closing remarks. Thank you. Before we conclude, let me just highlight again the strategy update. It will take place Tuesday, June 3rd, in central London. Given how much I'm in the seat and our new Chairman, Noel Quinn, is with us, you should expect that on one hand, we'll update on our activities since January and what we are doing to address some pressure points. Simultaneously, we initiated the strategic review process and will update you on that. Just to highlight again, for those of you attending in person, you will have the opportunity to meet the entire Executive Board as well as the Global Wealth Management Committee team and ask them questions over an informal lunch that will be straight after the update. Thank you, and see you on June 3rd. Have a good day. Ladies and gentlemen, the conference is now over. Thank you for choosing [audio distortion], and thank you for participating in the conference. You may now disconnect your lines. Goodbye. Goodbye.