The conference is now being recorded. Good morning, ladies and gentlemen, and welcome to the Commerzbank AG conference call. Please note that this call is being transmitted as well as recorded via audio webcast and will subsequently be made available for replay on the internet. At this time, all participants have been placed on a listen-only mode, and the floor will be open for questions following Manfred Knof and Bettina Orlopp's presentation. Let me now turn the floor over to our CEO, Manfred Knof. Good morning and welcome to our earnings call for the first quarter of 2022. Two weeks ago, we had to pre-release our very good financial figures with an ad hoc statement. It's not easy to talk about financial success while many people in Ukraine suffer from the war. We experience a turning point in history, and its implications are hard to assess. This applies both to politics and business. It's our job to assess risks and professionally manage our bank. Of course, to move forward with the execution of our strategy. Q1 is a convincing proof for the progress we have made. We reached a strong operating profit despite provisions due to Russia. The strong delivery in Q1 is driven by a 12% increase in revenues, which has pushed the pre-provision profit to EUR 1 billion in just one quarter. On the risk side, we have prudently built additional provisions. We have increased our top-level adjustment by roughly EUR 200 million to more than EUR 700 million. With this, we should be well prepared for potential credit defaults from the pandemic and the war. Despite these extra provisions, we have reached a slightly increased operating profit, also thanks to our ongoing cost efforts. Costs are on target and came in with a cost-to-income ratio of 64% in the first quarter. Bottom line, we more than doubled our net income to EUR 298 million and a stable and comfortable CET1 ratio of 13.5%. Before we take a look at the strategy implementation progress, I would like to update you on our Russian exposure. Since mid-February, we have reduced our net exposure by 36% down to EUR 1.2 billion, which are generally short term and well contained. With our book provisions, we cover, as of today, almost 50% of the Russia exposure. Regarding our Russian subsidiary, Eurasia holds domestic ruble deposits of EUR 300 million at the Russian Central Bank and clearing house. The further risk also arises from the equity in Eurasia. This stood at almost EUR 300 million, but more than 50% of it is already deducted from CET1 capital. We will further continue to reduce the exposures. Equally important, we will continue to support our clients in compliance with all sanctions. This is at the moment one of our most important tasks as a client-focused bank, especially in the German Mittelstand. Now let me move on with the transformation progress in the first quarter. In PSBC, we achieved further milestones, especially in the digitalization and product space. As a new feature of our mobile banking app, we have launched a digitalized consumer loan. In an end-to-end mobile process, private customers can take on a loan to buy, for example, cars, laptops or vacation trips. This function is already available on Android. iOS will follow still this month. Furthermore, the team has implemented the digital account opening. New private customers can now easily download our banking app and jump directly into the account opening process. On products, we have added important offerings for our wealthy clients as well as for our retail customers. In private and wealth management, we have successfully launched a new portfolio management product that is managed on our own by 50 experts in our chief investment office. In the first weeks since launch, we have already inflows of around EUR 300 million. In March, we have introduced a new investment management solution for retail customers called Money Mate. In cooperation with Allianz Global Investors, Money Mate has been developed as an easy-to-use and very transparent product that is attractive especially for first-time investors. Both products apply strict sustainability criteria and support the green transformation. In corporate clients, we have made further progress in the development of our direct bank. We started the pilot with 1,000 clients at the end of last year. Currently, we are migrating another 2,000 Mittelstand clients towards a total of 3,000 in the second quarter, well on our way towards our target of 6,000 clients by the end of this year. At the same time, we have overhauled the digital user interface towards a new design with all relevant services. A good example for such services are powers of attorney that can be set up and deleted online. Regarding our new organizational setup of the group, we have already selected and announced all managers at all levels of the organization. Currently, we are in the final assignment process for all employees. This is also a further step in the execution of our redundancy program. Moreover, we have further built up our advisory centers in PSBC. In Q1, the number of targeted client contacts via calls and mails more than doubled compared to last year when the staff were still in the branch. This proof of concept is also supported by the high application rate of branch staff to work in an advisory center. Prioritized applications make up for 90% of the future jobs in the advisory centers. On sustainability, we have already reached a sustainable business volume of EUR 101 billion at the end of Q1. This is well on track towards our year-end target of EUR 207 billion. To remind you, large parts of the business volume represents flow figures that start from zero every year. Details can be found in the respective slide in the appendix. Regarding TCFD, we have aligned our non-financial report to the requirements of the task force. Going forward, we will step by step further enhance our disclosure on climate. Our team in Corporate Clients has introduced sustainable loans for the Mittelstand. The conditions of the loan depends on the client's compliance with agreed sustainability targets. Let me close with the key takeaways before I hand over to Bettina for the financials. First, we have delivered a strong financial performance across all segments in Q1. Very good client business has supported the strong increase in revenues. Second, our transformation progress is on track in all segments. Although I don't see any stumbling blocks, the transformation still requires absolute focus and massive efforts of the whole team. Third, we are confident to reach our 2022 target of more than EUR 1 billion in net result. Of course, the outlook comes with uncertainties due to the war, the pandemic, supply chain issues, and inflation. Furthermore, the current proposals in Poland to soften the impact on customers from increased rates are obviously not helpful for the banking system. Nevertheless, we reaffirm our intention to pay a dividend for 2022 and have accrued for a 30% payout ratio in the first quarter. Now over to you, Bettina. Thank you, Manfred, and good morning from my side. As Manfred already stated, we had a very good start into 2022. The pre-provision profit has increased by 47% year-on-year, driven by higher underlying revenues. In particular, net interest income is up 21%. The biggest contributor has been mBank. Net commission income has also been very strong. With costs in line with target, the cost-to-income ratio reached 64%. While we do not expect the full year cost-to-income ratio to be already on this level, it clearly shows that we are on the right track to improve underlying profitability. The risk result is influenced by our booking for expected effects from Russia and reached EUR 464 million. A significant part of this is due to the creation of a further top-level adjustment. In total, we now have EUR 713 million of top-level adjustments available to cover potential effects. Overall, this leads to a very solid operating result of EUR 544 million and a net result of EUR 298 million. As announced, we have started to accrue for a 30% dividend. Our capital remains strong. The CET1 ratio of 13.5% and the buffer to MDA of 410 basis points give us a comfortable starting point to grow the business, cover potential risks, and return capital to shareholders. Now let's briefly look at slide 8. Year-on-year, we improved in all key indicators except for the risk result, which would also have improved without the effects from Russia. On page 9, we list the exceptional revenue items. There were few exceptional items in the quarter, with the only noteworthy being the EUR 45 million benefits from the TLTRO. This leads to the underlying revenues, starting with the commission income on page 10. Net commission income has improved with all business segments performing well. Corporate Clients had a good first quarter benefiting from healthy volumes and payment transactions and the FX business. Going forward, we expect this to return to the level of the previous quarters. PSBC Germany also had a strong securities business in Q1. We therefore expect the next quarters to be somewhat lower, similar to the development seen last year. Also, future churn could have an impact. mBank also had a solid transactional business in the quarter, which was further supported by one-off fees. This leads us to NII and slide 11. Underlying NII has been up EUR 151 million from the previous quarter. This is driven by mBank, which has benefited from the increase of interest rates in Poland. The reference rate currently is 525 basis points and expected to continue going up. So far, the deposit beta has been modest, with the vast majority of customer deposits below or up to 100 basis points for retail clients. With further rate rises, increased beta is to be expected. Higher rates will remain beneficial and mBank's Q1 NII is likely to be a good proxy for the next quarters. However, the Polish Prime Minister has made some proposals reacting to rising rates and their impact on consumers. The legislation process has been started, but it's too early to give a concrete assessment of potential impacts. In Germany, NII and PSBC and Corporate Clients was up slightly compared to Q4 last year. NII from both loans and deposits further increased. In addition to the extension of deposit pricing, the higher ten-year rates have led to better contributions from deposit models. In Q1, NII from model deposits increased by around EUR 10 million year-on-year. If the forward curve at the end of the quarter is realized, we would expect to have up to EUR 100 million higher NII from deposits compared to the previous year. This leads us to the next slide with the medium-term outlook for NII based on the current forward rates. We have updated our Q4 disclosure on the potential impact of the forward curve on NII from deposits. At the end of Q1, the forward curve indicates that the euro deposit rate will be positive from 2023 and that the ten-year yield will have further increased. Based on this scenario, the structure of our interest income from deposits would change. We would no longer be charged negative rates on deposits at the ECB and would in turn no longer charge negative rates to our customers. Further, we could invest our model deposits at even higher rates. In 2023, this will result in around EUR 700 million higher NII compared to 2021, increasing further to EUR 1 billion in 2024. This scenario calculation is based on the assumption of constant deposit volume and composition and no deposit beta after leaving the negative rates environment. However, once rates move significantly into positive territory, some customer reaction and deposit beta are to be expected. There could also be smaller potential effects on the SSI, which are not considered in the simulation. Having looked at NCI and NII, I will focus on the fair value result and other income on slide 13. The underlying fair value result improved to EUR 336 million and other income to EUR 69 million in the quarter. Corporate Clients contributed to the improved fair value result with a strong capital markets business. In others in consolidation, we have valuation effects from interest rate hedges and foreign currency funding transactions for the commercial business. They lead to a better fair value and an improved hedge result. We also had some positive effects from balance sheet management in other income. This was partially offset by provisions of EUR 41 million for Swiss franc loans at mBank. As last year, we expect the Q1 fair value result and other income to partially reverse in the next quarters. Concerning the tax rate, this was elevated in the first quarter with around 38%. This is a bit lower than what was expected when we pre-announced our results. The slight improvement is related to the submission of tax filings. We do not expect this tax rate to be representative for the full year. From today's perspective, a normalized tax rate around 30% is likely. Let's move to slide 14 and the cost development. By facing headwinds from higher inflation, we are on track for our 2022 cost target of EUR 6.3 billion. Staff expenses are on the level of the previous year, with lower expenses due to headcount reductions being offset by higher accruals for variable compensation. In the second half of 2022, there will be a wage increase of 3% for our pay scale workers. We have factored this into our cost planning and targeting. Administrative expenses are reduced by lower consulting fees. We also save on occupancy costs following branch closures. This will decrease further as we close more branches later in the year. Higher energy prices and other inflationary effects could so far be compensated by cost management measures. While we reduce our operating expenses, the regulators continue to increase the burden from compulsory contributions. The European bank levy has again been increased substantially. In Q2 last year, we have started to use payment commitments to partially mitigate these increases. In Q1, these reduced the burden of compulsory contributions by EUR 51 million and therefore the year-on-year increase is only EUR 11 million. For the full year, we currently expect total compulsory contributions of around EUR 500 million. Let's move to slide 15 at the risk result. The base risk result was only EUR 104 million in Q1. On top of this, we have EUR 159 million resulting from Russia-related rating changes at a prudent EUR 334 million top-level adjustment for future expected effects from Russia. Conversely, we could release EUR 133 million from our COVID TLA. This brings the overall risk result to EUR 464 million and the TLA to EUR 713 million. The majority of the TLA bookings are from the Corporate Clients business with smaller effects than others in consolidation and PSBC. On slide 16, we have an overview of the non-performing exposures and the cost of risk. Russia-related effects increase our stage two provisions and also elevate the cost of risk on loans to 69 basis points. As we have pre-provisioned with the booking of the TLA, the reported cost of risk should come down over the next quarters. The quality of our book is clearly reflected in the default portfolio, which was further reduced. The NPE ratio improved to 0.8%. In the appendix, we disclose the risk result by stage. The coverage ratio for stage three has been increased further to more than 50%. Stage two has a coverage of 2.3% before the TLA of EUR 713 million, which is mostly for stage two exposures. Let's carry on with the operating segments starting with private and small business customers on the next two slides. Mortgage volumes continued to increase in the quarter at a steady pace and as planned. The securities business has also developed well and attracted inflows of EUR 3 billion net new money in the quarter. However, the overall volume of securities under custody came down due to the market moves. We expect the securities business to remain strong. Given increased market volatility, the volume growth we have seen in 2021 is unlikely to continue into 2022. In the deposit business, we have again made good progress. We managed to increase the volume of priced deposits further to EUR 22 billion. This helps to stabilize NII until rates increase. In Q1, deposit pricing contributed EUR 24 million to revenues. This brings me to the performance of PSBC on page 18. PSBC reached an operating result of EUR 403 million, driven by increased revenues from all business units. The biggest contributor was mBank, with strong interest and commission income more than offsetting CHF 41 million provisions for Swiss franc loans. The German operations also increased underlying revenues, mainly from better NII. Revenue churn has again been low, and the net 67,000 customers lost in the first quarter did not generate much revenue. Nevertheless, for 2022, we continue to prudently plan with higher churn. Customers of closed branches might exit with a time gap, especially following further branch closures later in the year. Now let's move to Corporate Clients on the next two slides. In Corporate Clients, we have continued our active portfolio and RWA efficiency management. The segment maintained loan volumes while increasing average RWA efficiency to 5.4%. As mentioned on our capital markets day, we expect some RWA inflation from regulatory model changes in Corporate Clients later in the year. This will be a drag on RWA efficiency, but will subsequently be compensated. In the deposit business, we had strongly decreased volumes at the end of Q4 2021. Throughout the first quarter, we again increased volumes to EUR 90 billion. We have maintained disciplined pricing of deposits, keeping the average deposit charge at around 55 basis points. For Q1, interest income from deposit pricing has added up to around EUR 68 million. We continue to actively manage the deposits and expect to maintain the revenue on the level of 2021 from deposit pricing, assuming no rate increases. Customer revenues have improved significantly in the quarter, leading to an 82% jump in the pre-provision result year-on-year. The improvement in revenues comes from all customer groups and in all line items. This is a proof of the good development of the customer business across the product groups. As in PSBC, the effect of churn has been modest this quarter. The planned reductions in the business with non-strategic foreign customers was offset by more business with target customers. RWA have been stable quarter-on-quarter despite effects from Russia-related rating downgrades. These were offset by the reduction of undrawn credit lines. However, the Russia-related increase of the risk result has led to a small loss in the quarter. As mentioned, these are additions to stage two. They include the prudent increase of the top-level adjustment of Corporate Clients to a total of EUR 567 million that can be used to cover future credit costs. Let's move to slide 21 and the development of others and consolidation. The operating result of EUR 148 million in others and consolidation is to a significant degree from our hedges and foreign currency funding transactions for the commercial book. The rising euro interest rate curve and increased volatility led to realization gains of interest rate hedges. Furthermore, basis effects of cross currency swaps used to refinance commercial business in foreign currencies have moved in our favor. Smaller positive contributions came from balance sheet management. We also had a EUR 45 million TLTRO benefit reported in exceptional items. We will have a final benefit in the same amount from the TLTRO in the next quarter. The increase in the risk result is partially offsetting the improved revenues. The increase is mainly due to the write-off of one legacy position and Russia-related effects. The good performance in the first quarter benefited from valuation effects. For the full year, we currently expect a roughly balanced operating result. Let's move to slide 22 and the risk-weighted assets. RWA has been stable compared to the previous quarter. Increases from the Russian rating downgrades have been offset by measures like the reduction of open and unused credit lines and the securitization at mBank. As mentioned already in February, we are still in discussion with the ECB on moving some of our credit exposures to the standardized approach. We hope that this will be approved in the next quarter. We do not anticipate a net change of RWA from this, but there could be an increase of RWA in the Corporate Clients segment that should be largely offset by reductions in other segments. CET1 capital has slightly decreased this quarter. Capital accretion from the net profit after dividend and AT1 accrual and from the yearly redemption of pension fund plan assets were positive effects. These were more than offset by other comprehensive income, largely from investments in the treasury investment and liquidity reserve portfolio, and increased prudent valuation for market price uncertainty due to the January high market volatility. This has led to a slight reduction of the CET1 ratio to 13.5%. This compares to 9.4% of the MDA. To wrap up the financials of the quarter, the underlying business has developed very well with a significant increase in revenues and pre-provision profit. We have prudently increased our top level adjustment to EUR 713 million to cover potential future effects resulting from risks like Russia or supply chain issues. We have accrued for a dividend as planned and we have a strong CET1 ratio. Based on the assumptions that there will be no extraordinary provisions from Swiss franc loans in 2022 and that effects from Russia will remain contained, we confirm our outlook for 2022. We expect underlying interest and commission income to increase driven by higher NII and mBank from rate increases in Poland. We target costs of EUR 6.3 billion. The risk result is expected to come in below EUR 700 million assuming usage of the TLA. Further, we expect the CET1 ratio above 13%, and we expect a net result of more than EUR 1 billion. Last but not least, we intend to propose a dividend with a payout ratio of 30% of the net result after AT1 coupon payments for the business year 2022. Clearly provided that the transformation progresses as planned. Thank you very much for your attention and Manfred and I are now very happy to take your questions. Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press nine followed by the star key on your telephone keypad. Once you have entered nine star, you will hear an automatic confirmation from our system. I will then announce you by name when we take your question. Once again, the combination is nine followed by the star key. To withdraw your question, please press nine star again. Please stay on the line while we wait for the first question for today. I repeat, the combination is nine followed by star on your telephone keypad. I repeat, if you haven't already done so, the combination is nine followed by the star key on your telephone keypad. Well, it seems that there are no questions. I mean, we are positively surprised that that means that our numbers are crystal clear. We are happy to give you another chance to write questions to us. Otherwise, we will move on and take it from there. If you like, I can close the question and answer here on my side and restart it just to check to see if everything's coming through. Once again, participants, please, if you would like to raise a question, please press nine followed by the star key on your telephone keypad. It seems that we have a technical problem because there are attempts with Nine Star. Okay. If it's okay with you, then I would read out. Yeah. Who is asking the question. It's not a positive surprise, so apparently technical problems. Can you clarify that and fix that? Otherwise, I would say we ask the analyst to just give the question in, and we repeat the question for the time being until the technical problems are solved and take it from there. Okay. Shall I go ahead with the first question and read out who it is for you? Yes, please. Great. Thanks. First up, we have Benjamin Goy, who's calling from Deutsche Bank. Yes. Hi, good morning. I don't think you get away that easily. It was more technical issue. Two questions. First, on a potential recession in Germany and second on interest rate sensitivity. Maybe you can share on the first question some thoughts around the potential recession in Germany, in particular when Russia stops the gas. Just to put it in context, I know no two recessions are the same, but in 2020, the German economy shrank by almost 5%, so it was very significant and you booked EUR 1.7 billion of loan losses. Now this time you have EUR 700 million of top level adjustments. Is that something at least as a proxy to you? And the second question is on the interest rate sensitivity. We saw the first major banks increasing the deposit or the threshold for deposit charging. I was just wondering, in your rate sensitivity, is it safe to say that the real sweet spot for Commerzbank is once we are at 0 basis points and moving in towards 100 basis points, or is there already a significant impact for the first 50 basis points leaving the negative territory? Thank you. Yeah. Benjamin, let me start and then I hand over to Bettina. I mean, our outlook really depends that we still have a growing economy in Europe and in Germany, even if it's on a slower rate right now. If there would be a total gas stop, then I think everybody has to rerate the figures and not only us. I mean, that's clear. It's clearly our outlook based on the assumption that there will be no extraordinary provisions from Swiss franc, and then the effects from Russia will remain contained. Therefore, we confirm our outlook and if there would be a total gas stop, then everybody has to run new numbers, not only us. Keep in mind that in the loan loss provisions we booked in 2020, there was also to a large extent a top level adjustment included, which we haven't used so far. The first EUR 133 million we basically wrote down again this quarter. Nevertheless, it gives you a good first indication. On the interest rate sensitivity, I mean, what we have done also on this chart where we always show our sensitivity with respect to the actual forward rates, we clearly assume that we would react accordingly. When the ECB is lowering by 25 basis points, we would definitely also lower the deposit facility rate in the direction of our clients. That's also assumed in the numbers which you see. The EUR 700, for example, for 2023 is a net number, assuming that we would not see any revenues from deposit facility fees in 2023. It's also important to state that in our case, I mean, the private client side, we have increased the deposit pricing, but still it's a small share. It's small part of our private clients population, which is really affected by that. It's a different story on the corporate client side. We always stated that very clearly. If the ECB reacts, we will also react. Understood. Thank you. Thank you. The next question comes from Stuart Graham, who is calling from Autonomous Research. Over to you. Hi. Thank you for taking my question. I had two. The first one is a follow-up on the recessionary question. I guess it's for Mr. Knof. I mean, you talk to lots of German corporate customers. How would you characterize their behavior? Do you see them battening down for a recession, or are they assuming we don't get a recession in Germany? That's question one. Then my second question is on the restructuring. You didn't shut any branches in Q1, and you even added a few staff in PSBC Germany, but you say the restructuring's on plan. What are the timelines for shutting those 100 branches this year? Which quarter does that happen? And also shedding the extra 1,300 staff in PSBC Germany this year. Thank you. Yeah, Stuart. On the recession, when I'm talking to the German corporates, I mean, they also feel that they all can handle the Russian situation as of now. This will definitely have an effect, but will not lead to a recession overall. If the war is contained at the moment and is not any spillover effect or not a gas stop, then everybody feels this effect can be handled. Therefore, they still believe there will be a slight growth in the German and European economy. Of course, there are a number of uncertainties around this. At the moment, everybody is clear that under the Russia-Ukraine situation in the moment as of now, and that is the assumption under which we have also our outlook. Of course, we don't know how the war will develop, and we don't know if there will be even further impact. As of now, I can tell you that they are less bullish, but they still believe there will be a slight growth. Just on that, I mean, if there was a sudden stop on the gas, is it your assumption that the German government would provide support measures because essentially? Yes. This is a political decision. It's nothing that the corporates have done wrong per se. Absolutely. I mean, if there would be a total gas stop and then we would assume the German government to step in. Okay. On your second question, Stuart, good catch. Indeed, we have seen an increase on the PSBC side that's due to the fact that in PSBC, we also have the mBank numbers in there. mBank increased their FTEs in the first quarter. Traditionally, the reduction is happening over the years, specifically because the branch closures are about to start. We will most likely see the larger effects of staff reduction in Private Clients Germany in the second half of the year. A little similar story on the central function side, where you also have a slight increase, which is due to the fact that we are still increasing our IT specialists in our digital centers in Sofia, and also the further reduction which will happen is happening in the second half of 2022. Besides everything is developing according to plan. Great. Thank you for taking my questions. Thank you. The next question for today comes from Jeremy Sigee, who's calling from BNP Paribas. Over to you. Morning. Thank you very much. Two questions please, sort of both on credit quality. I wanted to continue the discussion about fallout from Russia, because I think certainly outside Germany, there's a very strong expectation that the gas will be stopped or there's a significant risk of it, and also the disruption to supply chains, will be a reality for a period of time. I just wanted to go back to that question about how much adaptation you're seeing among your corporate clients. You know, are they already making changes in how they operate to be able to cope with some of those pressures that many people think will come? Or are they largely assuming that the German government will make it okay? That's my first question. My second question is, in your guidance, you're saying you expect the risk result below EUR 700 million, assuming usage of the top level adjustment. I just wondered how you would think about drawing down that TLA at the end of this year, as opposed to the need to actually potentially even build a TLA if pressures remain. Yeah, Jeremy, let me start with your first question. I mean, what we're seeing is that the German corporates, they are diversifying and they're changing the strategy. Of course, also the German government is changing their strategy. It's simply not possible that from one day to the another, they can switch the coin and say, "Okay, well, no gas will be no further necessary." I mean, we see huge efforts of other energy suppliers and a change in the strategy. The corporates are also following. That is just absolutely clear. It's just a process which will take time. Germany as a country has reduced the dependency on Russian gas. It will take some time, and that's what we're seeing. It's absolutely clear that there is a process by the German government and the German corporates to diversify and go in a different direction. Are they expecting that it will be difficult? Yes. They're still that the economy is strong enough and will be able to cope it. As I said, if there will be an immediate gas stop and combined with other supply chain, and then I think everybody has a new situation. Yeah. Jeremy, on the risk result, I mean, we started the year with the EUR 500 TLA and the guidance of a risk result below EUR 700. Expectations at the beginning of the year were clearly that we would end up probably even below the EUR 700, given that we would use some of the TLA or just write it down, et cetera. We thought that it would be just a very normal risk year. It now proves that this is not a normal risk year. What we basically have with the guidance, we have less than EUR 700 + EUR 500, which adds up in total, if you go to the maximum that we would use, EUR 1.2 billion, as a risk result from which we would book EUR 700 or less, and everything between EUR 700 and EUR 1.2 billion, I think is something which could happen in this year. It means that, assuming that the situation stays as it is, it's very tough to say how much we will make use of the TLA, at least at the moment. Okay. Thank you. Thank you. The next question for today comes from Hugo Cruz, who's calling from KBW. Please go ahead. Hi. Thank you very much. Three questions from me. First, on your NII sensitivity, you mentioned that the numbers that you've published do not assume any deposit betas once ECB rate goes positive, but obviously there could be something. I was just wondering if you could give some color there, at what point you think you could start to pass the rates to customers. Is it above 50 basis points positive ECB rate? Is it above 1%? What's your feeling there? The second question is around the NF, net fair value result. I think you said the gains this quarter could partially reverse over the next quarters. If you could clarify this comment, and especially if you could give guidance for the full year, it would be very helpful. Third question on the Russian exposure, you have a net exposure of EUR 1.2 billion, which I think is before provisions. Can you clarify the total amount of provisions against this exposure and also the amount of RWAs allocated to this exposure? Thank you. Okay, let me start with the NII sensitivity. I mean, it's clearly you will not see any deposit beta until we turn into positive territory. Our assumption would be that you would not see any deposit beta until you reach something around 100 basis points or so. However, we all know that very much dependent on the competitor situation or what competitors are doing. I think we all hope for a certain price discipline also in Germany, given that we are anyhow not known for most favorable margin situations, but we will see. If you take current forward rates, it just assumes that we will turn into positive in 2023, and I think therefore the assumption which we now have with no deposit beta is a good one. If the forward rates even increase further, then we should probably also would take into account some deposit beta. You see those in Poland. I mean, they're at 525 now and deposit beta is around 100 basis points less. That will, however, also change in the coming weeks, I'm pretty sure. On the second one, the net fair value result, indeed we thought that. I mean, you have seen that also, if you look at the numbers last year, we had a very strong first quarter and then we even had some negative quarters subsequently. Given a market volatility, et cetera, that can certainly happen. We are rather cautious on that. That's also the reason why we guide on the NII and NCI specifically and less on the fair value result and other income. If we wanna have a guidance, I would say that probably a slight positive result on that one is likely, but definitely not at the level which we have seen in Q1, because we stay very cautious on that, and also we know that in other income, there are also things like the Swiss franc booking of EUR 41 million in this quarter, et cetera, come in as negative effects. That's why we are a little bit less clear on the guidance there. On the Russian exposure, the EUR 1.2 billion is a net number indeed. The provisioning was in total now EUR 500 million. It's the EUR 159 million because of the rating migration and then the EUR 334 million for the top-level adjustment. That adds up to EUR 500 million, and that you have to put into perspective to the EUR 1.2 billion on the RWA side of it. The Eurasia here. We have to check. Yeah. We probably have to deliver that afterwards because we are not totally sure what the right number is because we just have here an Eurasia number. We will deliver that later. Thank you. Thank you. The next question for today comes from Amit Goel, who's calling from Barclays. Please go ahead. Hi. Thank you. Two questions from me. One on, again, related to the asset quality. Just curious if you can give a bit more color in terms of how you calibrate the top-level adjustment. You know, the EUR 334 for Russia, how do you come up with EUR 334? What are the variables within that? And is that then just for the direct Russian exposure? It doesn't cover the kind of second or third order effect. Then the second question, just in terms of the incremental mBank NII contribution, just what your thoughts are on what the potential impact is on some of the kind of Polish government cost of living measures and what that could be. Thank you. Thank you. On the asset quality and the EUR 334 million, we have done a similar exercise as we have done already during the corona pandemic, where we did an asset portfolio review basically on a name-by-name basis. That's all Russia-related, so it's direct Russian exposure. We went through the portfolio, took into account macro assumptions plus also the evaluation of the relationship managers, et cetera, and basically took some I would say conservative assumption on what could happen. That's basically the background of the EUR 334 million. On the NII contribution of mBank, I mean, this is why we are so cautious because in the moment everybody believes that the interest rates will further increase. We are not increasing our guidance on the NII because we believe that there will be counter effects, and some might be also by the moratoria proposed by the Prime Minister or also by the fund. In the moment, it's still very tough to evaluate the effects. Given that we have seen now the first quarter and even in the quarter we saw some interest rate increases, we feel pretty comfortable that the Q1 NII for mBank is a good proxy for the complete year, quarter by quarter, despite the announcements of the Prime Minister. Okay. Thank you. Thank you. The next question in the line comes from Johannes Thormann, who's calling from HSBC. Please go ahead. Good morning, everybody. Johannes Thormann, HSBC. Three questions from my side, please. First of all, you said your guidance is valid unless you see an extra burden from Polish FX mortgages. How much would that be? What would be your normal expectations in the next quarters from this topic, as you on the one hand have a high provision relatively to the exposure, but a low one to the cases? Secondly, what is driving the higher compulsory contributions in 2022 versus last year? Is this only coming from Poland or are there effects from European pots? Last but not least, I'm struggling to understand your scenario on page 12 of the presentation with the EUR 700 million impact on the NII, where it's roughly shared or not much, but relatively equal, at least between PSBC and Corporate Clients. Whereas if you look at the unpriced deposits, 90% are with PSBC and only 10% with Corporate Clients. I'm struggling with how you have calculated this because I would expect a much higher lift on PSBC level. Thank you. Okay. I start. First of all, I mean, we now have seen a EUR 41 million booking for Swiss franc this quarter. I mean, I would say, we can absorb such a number also in the next quarters, and that would not be extraordinary from my perspective. It must be much higher that I would see that as extraordinary. Also, I have to say that, I mean, we do the review every quarter, and our expectation is always that this is now enough because otherwise we would always book also more. That is clear. The second one on the higher compulsory contributions, it's partly mBank, but in limited part, so Polish compulsory contributions, it's more the European bank levy, and that's because of the increasing deposits which we have seen. Given that, there has been no cap or something like that in there, and that's the main reason for the increase. On the third one, the split of corporate clients and private clients. It's, I mean, basically, you also have to keep in mind our distribution of our deposits. We have approximately 25% where we basically just forward the rates. We do not have any interest rate sensitivity. 25% are short-term, where you see an immediate effect and 50%, and that holds true for also parts of private clients. 50% are more medium- to long-term models, and there you see the effects coming in over time. Okay, thank you. Thank you. The next question in the line is from Izabel Dobreva, who's calling from Morgan Stanley. Please go ahead. Hello, good morning, and thank you for taking my questions. Firstly, I had a follow-up on NII and the degree to which you can benefit from higher rates in the Euro curve already this year. I see that in your guidance, you've given us an update, but could you quantify the benefits already in 2022 from the replicating portfolio? Presumably, you've had some maturities already which are getting reinvested at higher swap rates. If you could quantify that tailwind for this year, that would be helpful. I had a question on provisions. To come back to the TLAs, I've seen the top-ups for Russia, but it seems like the TLAs for COVID were released by around EUR 130 million. Could you elaborate on what drove this? What makes you confident enough at this stage to be releasing macro overlays in this point in time? Do you consider the two pots of Russia TLA and COVID overlay to be fundable, and not necessarily allocated to different exposures? In regard to your first question, the impact this year is around EUR 100 million if forward rates stay as we had it by the end of the quarter. It has been EUR 10 million this quarter, and we assume that the effect could be EUR 100 million in this year, assuming that the forward curve of end of March is coming to play. On the second one on the TLA, indeed, we did a release on the COVID one, and that's very much also due to the fact that there are some industries which were heavily impacted by COVID pandemic. Think about travel industry, et cetera, which are clearly now in a recovery status. We believe that it's no longer necessary. I mean, in the moment, we have a clear differentiation between the two pots, I would say, between the Russia TLA and COVID TLA. However, I mean, it's also clear specifically now on the COVID TLA that is all related now also to second and third round effects like supply chain difficulties and so on. There probably it will be at a certain point tough to differentiate whether you have the supply chain difficulties because of the war or because of COVID. Over time, it will be very difficult to differentiate. I now have the number for Russia on the RWA, it's EUR 2.6 billion. That was a previous question. Sorry, Izabel, I hijacked your questions and answers now for that one. Finished. I just learned that Izabel, you was our last person to ask a question. Thank you very much for your interest, your questions, and happy to hear you again next quarter. Thank you very much. The conference is no longer being recorded.