Good morning, ladies and gentlemen, welcome to the Commerzbank AG conference call. Please note that this call is being transmitted as well as recorded by audio webcast and will subsequently be made available for replay in the Internet. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following Manfred Knof's 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. 2022 was a very good year for Commerzbank. We delivered what we promised, and the financials turned out even better than we expected. Despite all uncertainties around, we look positively into 2023. In other words, Commerzbank is back, and there's still a lot of value potential we will tackle. Let me provide you with my view on 2022 and the priorities ahead before Bettina walks you through the financials. With a net result of EUR 1.4 billion, we have more than tripled our result of 2021. Fueled by rising rates, this is the best result for more than 10 years. At the same time, our loan book has proven to be resilient. Far, we have not seen any meaningful fallout from the economic downturn, and for 2023, we have a good cushion with our top-level adjustment of roughly EUR 500 million. This is also reflected in our very comfortable capital ratio of 14.1%, well above our target range. This superior financial performance is complemented by good progress in our transformation. The restructuring part of our transformation is fully on schedule. Roughly 90% of the gross reduction of 10,000 FTEs is already locked in, and the remaining execution risk is limited. The original target number of 450 branches in Germany has been reached and will close another 50 this year. I would like to point out that this painful exercise has been accomplished seamlessly based on a broad alignment of all stakeholders. Very important going forward, we have successfully set up our new and lean business model in PSBC as well as in our Corporate Clients division. All together, as released to the market yesterday, the strong performance in 2022 allows us to propose a capital distribution to our shareholders with a payout ratio of 30%. In concrete terms, after AT1 coupons, the proposed payout translate into EUR 0.20 dividend per share and the first EUR 122 million share buyback program. Let me spend a few words on the intended share buyback program. As a board of managing directors, we are convinced that our strategy will continue to create material value in the years to come. We are all shareholders of Commerzbank and believe in the ultimate potential of our business model to earn cost of capital. The size of the intended program is obviously not large, but it's a first step into the buyback space and the respective capital distribution to shareholders. With this in mind, let me share you with my priorities for 2023. First of all, it's about speed. We have been fast in the restructuring. We need to maintain this path going forward. The how can we do it faster question will definitely remain on my first list for management meetings. The second point on my agenda is focus on customer business and revenues. To leverage our client base in the new business setup is absolutely key. I will come to that in a minute. That said, the right to play for Commerzbank requires unchained strict cost discipline. Only if additional revenues kick in will I be willing to sign off investments based on our targeted cost income ratio. This is the third bullet point on my list. Number four is further tangible progress in our ESG journey. I will get back to this in a minute with an extra slide. Let me now elaborate a bit on the fifth point, increase attractiveness for staff. It has been tough for our teams during the restructuring. Up to 1/3 of the jobs in Germany have been cut. Obviously, this has had an impact on morale. Going forward, the tailwinds from our strong performance provide us with a great opportunity for improvement. Increased variable compensation is one part, and having the business set up in place is clearly important to our staff. Also, the re-entering of the DAX is a strong positive for everybody in the bank. Based on these ingredients, it is a number one priority for our new Head of HR, Sabine Mlnarsky, to increase attractiveness of Commerzbank for our staff. Becoming an employer of choice is increasingly important to attract talent in the labor market. Let me now shed some more light on the key priority customer business. As I've said, the new business model is in place, and now it is all about client business in the new model. Unlocking the revenue potential, especially from affluent and wealthy clients, is key to our success. It is good to see our relationship managers being busy with their start of the year advisory meetings. Excellent advice and good service are main drivers to limit churn and to help our clients to adapt to the new business model. This will be complemented with an ongoing digital enhancement of our client offerings and processes. Regarding our international setup in Corporate Clients, we need to adjust to client needs in view of changing trade flows. This includes the closure of another three locations in 2023. Also, as I already said in November, new rep offices, for example, in Jordan and Morocco. Last on least, RWA efficiency remains of high priority in order to optimize capital deployment. In the last two years, we've already reduced the share of RWAs in the low-yielding client bucket from 34- 26%. In 2023, we want to keep it at 26%. This is a challenge because it requires strong efforts to counter negative effects from the RWA models and potential rating migrations against the backdrop of a mild recession. On ESG, we have made significant progress and will continue to do so in 2023. SBTi steering of our portfolio towards our carbon emission reduction targets is obviously the most prominent driver to become net zero by 2050. Another important and tangible topic is sustainable finance volume. In 2022, we have mobilized EUR 246 billion of sustainable products in order to support our clients on their transformation path. With that, we are well above our target of EUR 207 billion. This year we want to reach EUR 257 billion as the next milestone towards our target of EUR 300 billion in 2025. Let me conclude with my key takeaways before I hand over to Bettina for the financials. First, we have delivered a strong financial performance and plan for a 30% payout to shareholders. Second, we have successfully delivered on the restructuring so far and have set clear priorities for 2023 with focus on profitable customer business. Third, we are targeting a 2023 net result well above 2022 and are committed to capital return with a new payout ratio of 50%. Now over to you, Bettina. Thank you, Manfred, good morning also from my side. I will now walk you through the financials of the quarter. As Manfred said, we have made very good progress in 2022, reaching our key financial targets. As promised, we plan to pay out 30% of our net result after AT1 coupons. We have earned an operating result of EUR 2.1 billion and a net result of EUR 1.4 billion, despite burdens of more than EUR 1 billion in Poland. The ROTE has reached 4.9%, a big step towards our target of more than 7.3% in 2024. This success is based on strongly increased revenues, mainly thanks to higher NII and ongoing cost management. This has led to a cost income ratio of 69%, also a significant improvement on the way to our target of 60% in 2024. The risk result came in at EUR 876 million. It confirms the quality of our loan book as it includes the effects from Russia and only benefits from EUR 41 million of net top-level adjustment consumption. We retain a EUR 482 million top-level adjustment into 2023. Finally, in 2023, we start with a CET1 ratio of 14.1%, comfortably above the MDA. This gives us a significant buffer for any potential effects of the expected mild recession. Our comfortable capital base will also allow us to continue our planned capital return. We aim to increase the payout ratio to 50% for 2023. On slide 10, you see the full year view. It again confirms that we have improved in almost all key financial indicators, even compensating the burdens in Poland. The exceptional revenue items on slide 11 are largely canceling each other out. Benefits from the TLTRO are offset by valuation effects and burdens from credit holidays in Poland. On a net basis, we have burdens of EUR 38 million in Q4 and EUR 52 million for the year. This leads to the underlying revenues, starting with the commission income on page 12. In 2022, Corporate Clients has increased its underlying net commission income by 6%, with each quarter being above the respective quarter of the previous year. In contrast, PSPC Germany NCI has come down every quarter in 2022. This is due to the securities business that has seen lower transaction numbers from clients and is also affected by the lower value of securities in customer accounts. For 2023, we are currently planning with a group NCI at the level of 2022, assuming a stabilization of the securities business of PSBC in a less adverse market environment. To NII and slide 13. The trajectory of NII in 2022 has been impressive, driven by higher central bank rates which help the deposit businesses. For the whole year, it has been 36% above 2021. In Q4, the increase in underlying NII was particularly pronounced as there were several euro rate hikes, while the deposit beta was still very low and the contribution from the loan business largely stable. On the next slide, I will cover the expected developments in 2023, which will continue to be dynamic. Let's first start with our assumptions and sensitivities to give you a clear picture of our base case and the upside potential. The key drivers are interest rate levels and the development of the deposit beta. The base case for our planning was built on the rates assumptions of Consensus Economics from December last year. With the 20 to 25 basis points average EUR deposit rate in 2023, this is outdated. With the current ECB rate already above and the ECB expected to raise rates further at the next meeting. The 3% five-year swap rate is closer to current market expectations. In Poland, the expectation is for a more or less flat development of interest rates. For the deposit beta, we plan with a substantial increase. For Germany, our base case assumption is an average beta of 30% in 2023. December's beta was 10%, and we had around 15% in January. Our assumption could be conservative, but some increase of the deposit beta in 2023 is clearly inevitable and strongly dependent on competitive behavior in the German market. So far, mainly neobanks and neo-brokers have started to offer higher rates on deposits. Established banks have tended to offer higher rates only for new deposits and moderate rates for existing deposits. However, throughout the year, some change in behavior is to be expected. For mBank in Poland, we also applied a higher beta. It reflects the lagging increase of customer rates after the sharp rate hikes last year. This had already started last year and should continue in 2023. With these assumptions and an expected slight reduction in loan volumes, our base case scenario is an NII of more than EUR 6.5 billion in 2023. This is roughly equivalent to 4x the Q4 NII, adjusted for an increase in the beta by around 20 percentage points and around EUR 100 million higher funding costs. With the latest actions and announcements of the ECB, it is however safe to assume that NII will be well above the base case of EUR 6.5 billion. In the upside scenario, we have applied the forward rate from the end of January and assumed an average deposit beta in Germany that is 5 percentage points lower. These changes and assumptions add EUR 600 million to NII, and the total NII could easily reach EUR 7.1 billion. Acknowledging the potential upsides, we stick to our prudent base assumption of well above EUR 6.5 billion NII in our internal planning. We keep pressure on cost discipline and on our cost income ratio steering. With that in mind, let's move to cost on slide 15. With active cost management, we have lowered our operating costs in 2022 despite headwinds from inflation and ongoing investments. In contrast, compulsory contributions are significantly higher than last year. In total, costs are slightly above our target of EUR 6.4 billion. This is due to variable compensations, which we have raised in line with the very positive development of our operating result. When excluding mBank and the increased variable compensation, we have reduced operating expenses by nearly 10%. In 2023, we will maintain our focus on active cost management with a clear target to further reduce our cost base. Given that part of the increase in compulsory contributions were extraordinary burdens in Poland, we assume that there will be some relief in 2023. The next two slides detail the risk result. The cost of risk on loans has increased slightly to 33 basis points for the year 2022. In Q4, the risk result of PSBC has been driven by additions to the TLA. In Corporate Clients, the driver has been a few single cases, in particular Russia-related. We have fully used and released the remaining Russia TLA in line with the de-risking of this portfolio. Without the direct impact from Russia, the 2022 cost of risk on loans is only 19 basis points. This is proof of the high credit quality of our portfolio. We continue to see a very strong resilience of our customers and a low level of defaults. Based on this resilience, on a net basis, we had to use only EUR 18 million of our top-level adjustment in Q4. For the financial year, the net usage of the TLA was EUR 41 million. For 2023, we plan for a mild recession and potential disruptions to economic activity. For this environment, we maintain a top-level adjustment of EUR 482 million for expected secondary effects like supply chain disruptions or effects from higher energy prices. The majority of the TLA remains allocated to CC with EUR 284 million. EUR 189 million are available to cover risk in PSBC. Having covered the key drivers, I will now quickly touch on group results and the tax rate. We have increased our return on tangible equity to 4.9%, a significant improvement on our way to more than 7.3% in 2024. Sorry. The cost-income ratio has improved by more than 10 percentage points to 69%. Both lower costs and higher revenues have driven these improvements, with the biggest driver being interest income. Other income largely affects the legal provisions for Swiss franc mortgages in Poland and charges taken for office space that is no longer needed. It is strongly negative with minus EUR 249 million in Q4 and minus EUR 715 million for the financial year. Concerning the tax rate, in Q4, we could benefit from deferred tax asset valuation adjustments on the back of a better outlook, leading to a positive tax result. For the financial year, the tax rate is 31%, basically at our normalized level. The two big extraordinary effects we had this year are largely offsetting each other. On the one hand, we had the burdens in Poland and compulsory contributions that are not fully tax deductible. On the other hand, we had positive effect from DTA. In 2023, we expect a similar tax rate as in 2022, assuming no significant burdens at mBank. The next slides cover the operating segments, starting with Private and Small-Business Customers. The securities volume has recovered towards the end of the quarter due to higher equity markets. The positive development of the markets would be clearly beneficial for the business. The total mortgage volumes have slightly increased, but new business has further declined in Q4. Unless there is a recovery in new business, the back books should start to reduce in 2023. The deposit business has seen continued inflows. Far, there has been no material passing on of rates to customer. We have started to offer interest of 25 to 30 basis points for call money, and some competitors are offering teaser products to attract new customers and deposits. We will carefully adjust our pricing to market conditions and expect an increase of deposit beta over time, mainly from a switch from sight deposits to term or call deposits. This brings me to the performance of PSBC on page 20 and 21. PSBC Germany's private and small business customers units have increased revenues, mainly from deposits due to higher rates. At the same time, commission income has decreased and the operating result has decreased in the quarter. This is however mainly due to two factors which are not directly related to the underlying performance of the customer business in Q4. These are higher risk result, which is driven by the increase of the TLA in anticipation of a recession in 2023 and variable compensation. Accrual for variable compensation had so far been centrally kept in Others in consolidation and has been allocated to the segments in Q4. Looking at the financial year, PSBC Germany has increased the operating result by 43% and improved the cost income ratio to just under 70%. mBank managed to earn a record result of EUR 301 million in Q4 when excluding the additional provisions booked for Swiss franc mortgages and credit holidays. This is proof of the strength of the underlying business and revenue growth of mBank. With the increased provisions for Swiss franc mortgages, mBank has a solid coverage ratio of 54%. However, the final costs from the Swiss franc mortgages are not yet clear, and further burdens imposed by the Polish government cannot be ruled out in 2023. The next two slides cover Corporate Clients. In Corporate Clients, active portfolio and RWA efficiency management continues. Average RWA efficiency has increased further to 6.1%. Corporate Clients will continue to focus on efficiency. However, there could be a slowdown of the improvement in 2023 as we have higher RWA from the partial switch of the standard approach for RWA and potential effects from a recession on ratings. Volumes in the loan business are lower compared to the Q3. This is mainly driven by the US dollar. Deposit volumes are seasonally lower over the year-end, and we have seen an increase in deposit beta as some sight deposits were shifted to term or call deposits. Corporate clients' operating result is based on good revenues from the customer business, mainly better NII, but also strong commercial income and a good contribution from the capital markets business. Especially the commodities and interest rate businesses were strong in Q4. The pre-provision results almost doubled year-on-year. As in PSBC, there has been an increase in the risk result, mainly single cases, and total costs have down compared to 2021. The increase in Q4 is due to variable compensation. Compared to 2021, the operating result increased by more than 60% and the cost income ratio reached 60%. A quick look at Others on consolidation. Others in consolidation report a flat operating result of minus EUR 8 million in the quarter and a small profit of EUR 33 million for the year. In 2023, we also expect Others in consolidation to have a relatively low contribution to the results, with the caveat that valuation effects cannot be forecasted. Group risk-weighted assets have been reduced by EUR 6 billion. The main driver has been credit risk RWA. These reflect movements in the US dollar, but also reductions in securities business and a securitization in mBank. Market risk RWA benefit from a reduced regulatory multiplier, while operational risk RWA are increasing in line with the regulatory rules which base the RWA on the development of the revenues, which improved compared to previous periods. Capital has decreased slightly as a positive net result was offset by currency effects and increased regulatory deductions. In total, this had led to the improvement of the CET1 ratio to 14.1% and the buffer to MDA to 466 basis points. As the countercyclical and sector-specific buffers become effective this month, the buffer to MDA will reduce to around 400 basis points on a pro forma basis. Still a strong starting point for 2023. Now to our outlook for 2023 on slide 26. Our outlook is based on the assumption of a mild recession and no significant additional burdens in mBank. For the financial year, we expect commission income on previous year's level and interest income well above EUR 6.5 billion, with a clear trend towards the upside scenario of EUR 7.1 billion. We aim to lower our expenses to EUR 6.3 billion in 2023. Our key steering metric is the cost-income ratio. We reach a cost-income ratio of 69% in 2022. In 2023, we will progress further towards our 2024 target of 60%. The risk result is expected to come in below EUR 900 million, assuming usage of the TLA. Further, we expect a CET1 ratio around 14%, and we expect a net result well above 2022 and target a payout ratio of 50% in line with our capital return policy. Thank you very much for your attention, and Manfred and I are now very happy to take your questions. Ladies and gentlemen, if you would like to ask a question, please press nine star on your telephone keypad. If you would like to withdraw your question, press nine star again. I'll repeat one more time. Please press star key to ask a question. The first questions are coming in. The first question is asked by Mr. Benjamin Goy of Deutsche Bank. Please go ahead, sir. Yes. Hi, good morning. Thank you for the updated net interest income guidance, but I was still wondering, because when you annualize the impact in Q4 on a clean number, you get to almost EUR 7.5 billion. So wondering, even at the high-end EUR 7.1 billion, what is the negative impact from here? Then secondly, you mentioned you're more profitable than basically in the last 10, 15 years. Yes, your capital ratio is higher also, and the buffer is higher than you had any time before. So I was wondering why you need a capital ratio of 14% in this environment, and whether you would reconsider maybe a second buyback throughout the year in case macro concerns subside. Thank you. Yeah. Thank you, Benjamin. The NII, and this is why we also try to explain that indeed, if you would take the Q4 NII, it would reach a much higher number. Keep in mind that the deposit beta was only 10% in December. It was nearly zero in September and or in October and November, meaning that the Q4 is just not comparable with the deposit beta, which we expect for the full year of 2023, because apparently we also need to think about our customers, and they want to have a certain share of the positive interest rate environment. That's why we adjusted it. We adjusted it and increased the deposit beta to 30%. If you then also deduct higher funding costs, as I said, then you come to a lower number. Again, what I said, our EUR 6.5 billion number is based on the 2.25% assumption for 2023, which is no longer valid. Therefore it's fair to add automatically the EUR 300 million, which we have laid out on this page and on this interest rate scenario page. The second thing is a little bit of what you believe. I mean, we started January at 15%. Do you believe that we reach on average a 30% deposit beta for the year? If you do that, then you probably stick to something around EUR 6.8-6.9. If you believe that, no, on average it will be lower, you probably are much nearer to the EUR 7.1 billion, which we have shown. On the capital ratio, and yes, I mean, We had one similar result in the last 10 years, and that was in 2010. It was exactly, I would say, the same net income. It was EUR 1,430, so EUR 5 million less. We have shown this year, there has been nothing before and after. The last higher result was before the financial crisis, I think, in 2007. We have come a long way. We have, I mean, we have been now through a very, very severe transformation program, and we're still in it. I also joined the bank in 2014, where we still had some concerns about our capital ratio. We feel really comfortable in the moment with the buffers. We have also made it clear that we now will start to, yeah, participate our shareholders by, yeah, a higher capital return than they have seen clearly over the past years. We feel comfortable with the 30%, as we have announced. We take the 50%, and everything else will very much depend on our progress and the numbers. We will see over the year how everything is developing. Okay. Thank you. The next questioner is Kian Abouhossein of JP Morgan. Your line is open. Yeah. First of all, congratulations to those strong results. I have two questions. The first one is related to 2024 NII. Your target used to be or is still, I guess, I assume it's changed EUR 6.3 billion. Wondering if you could discuss that a little bit in terms of in light of the upgraded NII guidance that you have given, how we should think about NII in 2024 and the sensitivity that you assume. The second question is on cost income, which clearly, as you highlight, is more the focus for 2023. You have a target of 60% by 2024. You're increasing your NII guidance for 2023. I wonder if you get to over EUR 7 billion of NII, should we think about 60% cost income even potentially in this year? Thank you. Thank you, Kian. On 2024 NII, I mean, the environment is so volatile. Just take 23, the numbers which we now have laid out have nothing to do with the multi-year planning which we have done last year. We already increased the numbers for our budget, 2023. We based them on the consensus of December, we all know this is already outdated again. We again created the upside potential. I mean, for 2024, it all depends on competitor behavior, interest rate development, what happens with the deposit beta at the very end. If you assume that there is no change in deposit beta and the forward rate materialize, then we will definitely continue to benefit from the reinvestments of the model deposits. You can assume that what we have laid out in the Q3 on NII for 2024 is far too conservative. I really would like to see a little bit how the next months are developing, and then we will definitely also give an update on 2024. I assume you can take the 2023 guidance already. If you also believe that interest rate levels at least stay stable, if not even increasing further, you know what to do on 2024. On the cost income ratio, I mean, we target the 60% for 2024. Clearly, it all depends on where we end up in our upside scenario. Yeah, I would also assume that we are more closer to the 60% than to the 69% in 2023. Thank you. Next, we have Mr. Stuart Graham of Autonomous Research LLP. Your line is open. Morning. Congratulations on the buyback, champagne moment, I think. I had two questions, please. Firstly, on costs. On slide 29, you missed on your FTE headcount reduction. You were targeting 4,300, you did 3,665. Why was that? The second question was on capital return. A 50% payout ratio for 2023 earnings will likely be EUR 1 billion of payout. I add that to the EUR 370 million you've just announced. That gives me EUR 1.4 billion, and you've got one year to go in 2024 if you're gonna achieve your EUR 3 billion-EUR 5 billion goal. I can see how you can do the EUR 3 billion, but I can't see how you're gonna do the EUR 5 billion. How are you gonna do the EUR 5 billion? Because a 50% payout ratio just isn't gonna get you there. Thank you. On cost, yes. I mean, we said that already, and during the Q3 that with respect to the FTE, headcount reduction is net slower because we basically accelerated our build-up of IT capabilities in the Nearshore center. We also slowed down a little bit the reduction of staff on the private client side because we have seen that we probably have been with some measures faster than our clients, and that we really need to make sure that we have enough people in private clients to minimize the churn. That's the whole reasoning. Contracts are signed, but we also said that you will probably see a little bit of reduction in the net FTE reduction, just simply by the fact that we do a little bit more of internalization on the one side. We also have some additional requirements with respect to cybersecurity compliance and all the stuff, which we need to take into account. That doesn't change anything on our cost steering. On the payout ratio point, it's the right calculation. I can only say that we always said that, I mean, we stick to our capital return policy. There we have laid out that for the first year would show the 30%, which we now do, that in the subsequent years we would, basically, target the 50%, which we also laid out. There is a sentence in the capital return policy subject to further successful execution of Strategy 2024 and a regulatory approval. Share buybacks can be considered as part of the payout ratio or as an additional payment. That's where we are. I would say, we stick to what we have done in the past. We deliver, and then we talk about further steps. Bettina, mathematically, if you want to do the EUR 5 billion, there has to be another big buyback in the H2 of 2023. Is that mathematically that's correct, yeah? Yeah, I mean, it all depends on how we do it. I mean, first of all, we really need to show now also that we deliver what we have promised also for 2023. We now do our first share buyback. Let's do that first, and then we take it from there. Okay. Thank you. Next up is Borja Ramirez of Citigroup. Please go ahead. Hello. Good morning. Thank you very much for taking my questions. I have two quick questions related to deposits. The first one is regarding the deposit beta guidance of 40% for 2023. Could you please provide details on what you expect for household and for corporate deposits? My second question would be, what do you expect for deposit evolution in Germany going forward? Where do you expect the competition to come from? Thank you. On the deposit beta, this is clearly a blend of Corporate Clients and private clients. You can assume that deposit beta on the Corporate Client side is higher than on the private client side. It has been at least in historic terms, which is the basis we only have. Our assumption is that we will continue with the standard that we do not pay on sight deposits for private clients. There will be a shift from sight deposits to call and term money on the private client side. We have also partly seen that on the Corporate Client side. With respect to the deposit development, I think it's fair to say that it's probably a stable, if at all, a small growth in deposits which you can expect for 2023. Next we have Johannes Thormann of HSBC. Please go ahead. Good morning, everybody. Johannes Thormann. Two questions from my side, please. First of all, on your operating costs, as you said, you rather focus on a cost income ratio steering. How likely is it we get above the EUR 6.3 billion, especially looking at the slowdown headcount reduction? Probably also how likely is it you meet your 2024 target? Secondly, just on the sight deposits and the term deposits, you currently have a 70/30% mix in TSBC. Do you expect this more to move to a 50/50 ratio? What is your underlying thinking? Probably last but not least, on the risk costs, another question. The EUR 900 million guidance, including till your top level adjustment usage, what is the driver for this? Do you expect more corporate defaults, or does this come from retail? Just help me thinking. Thank you. On the operating costs, the 6.3 is what we steer and be ensured that we will do everything to show the 6.3. However, I mean, we don't know what's happening on the compulsory contributions side. We had some unpleasant surprises here last year, 2022. If we have again unpleasant surprises, this will be very difficult to balance out at least on the cost side, then the revenue side would be leveraged. The second thing is also on variable compensation. If we see an tremendous increase in the operating results and better than we expected, as we have also seen in 2022, then also to keep up motivation of staff and also related to the incentive models which we have, we will see an increase in variable compensation. Besides that, I can assure you in the performance dialogues Manfred and I do, the cost discipline is an important element of the whole thing. On the sight deposit thing, I'm not sure that I got the question right. I think you were asking whether we would go from 1/3, 2/3 to something around 50%, 50%. Probably that is too much. I mean, we would expect further shift from sight deposits to term or call money, but not so much. The last point on the risk result, I mean, what is included here is really the mild recession of -0.5%. That's specifically the top-level adjustment, for example, in private clients is very much related to UCAS or smaller business clients within private clients and then on the corporate client side. Apparently, the sentiment is improving day by day, which is as a consequence, it might be that this risk result guidance is a little bit too conservative. Okay. Thank you. Next, we have Mr. Jeremy Sigee of BNP Paribas Exane. Please go ahead. Thank you. Good morning. Firstly, a follow-up on that last question, please. The guidance for loan loss provisions in the year, you say, assumes usage of the TLA. I wonder what you had in mind, whether you meant a tiny bit of usage as you did in 2022, or complete usage of the whole buffer, or something in between. That was sort of what I just wanted to clarify on the first question. Then secondly, I wonder if I could follow up. You made a comment about moderating staff reductions in retail to minimize customer churn, franchise damage. I just wondered where we are on that. We're clearly quite a long way through the restructuring, and I just wonder how you think about any remaining franchise risk from the restructuring, or are we sort of past the worst of that now? I do the question on restructuring. We are actually faster than what we've expected in the transformation of the Private Clients business. We started with the 12 advisory centers a year ahead of plan, therefore we needed some more staff. Churn is far less than what we have expected. We're fully on plan in the development. I think we feel very comfortable with the setup right now, with 400 branches in Germany, 12 advisory centers, and a good combination of comdirect and Commerzbank. We have reached here our final model, and we're very happy with the setup now. Is that risk finished? Is that risk finished now, the churn risk? You never know how you can never say it's finished. I mean, there are a lot of customers who don't have the branch anymore, so because they have more distance, and we are now in the middle of the process of offering them also digital and in-call and outcall provide service provider. Usually after closing a branch, it takes up to 24 months in order to see whether it's stabilized or not. So far, we are doing a lot better than we've expected, but we remain cautious. Okay. Thank you. We still have churn included in our revenue assumptions for 2023 and 2024. That's important to note. On the top-level adjustment, I mean, that's a key question, right? You can think about everything. I mean, 900+ 500, I think we all agree that would be kinda high number. It all depends also on our outlook for 2024, because, I mean, clearly you would keep top-level adjustment in some form or other if you believe that still there could be something in 2024, might be not necessary. That one is really fluctuating. We made this smaller than 900 for a purpose. It's not smaller equal, but it's smaller than 900, and there's a reason for that. Okay. Thank you. Next, we have Mr. Tobias Lukesch of Kepler Cheuvreux. Your line is open. Yes, good morning. Two questions on my side as well, please. Firstly, I would like to touch on net fair value result. Is there a potential guidance you can give for the next quarters, potentially also the outlook for the year you have? I mean, it's a quite fluctuating number basically that you have there. Secondly, on the capital side, maybe you could elaborate a bit on the effects of the quarter one ratio development, mainly concerning RWA changes, basically, and also regulatory changes that you see to the quarter one ratio requirements, both in 2023 and 2024. Thank you. Okay. Tobias, you rightfully said that net fair value is very volatile. A prediction is so tough that we stay away from it for a good reason because it's really hard to predict. On the capital ratio side, we expect, and that is a little bit in line with our risk result guidance, that if you have a risk result in a mild recession, then you also have to plan for potential weighting migrations and therefore an RWA inflation. That is embedded in this around 14% guidance for this year. Means that if we don't see the recession and we don't see the rating migrations, then pretty much also the RWA develop, sorry, differently. That's one side. On the regulatory side, there's not too much to expect this year. A little bit, some things on the internal model review. Clearly, I mean, we have the ambition and Manfred said that in his speech, that we will put a lot of focus on customer business and growth. There should be also a decent growth with respect to RWAs specifically coming from our Corporate Clients side. Thank you. The next questioner is Mr. Riccardo Rovere of Mediobanca. Your line is open. Thanks, thanks for taking my questions. three or four, if I may, sorry. First of all, on NII, when you provide your guidance of 6.5, 7.1, what happens to TLTRO? Is it supposed to be zero? The EUR 90 million that we have seen in Q4 should be eliminated completely. The second question I have is on DTAs. You have a right back year of taxation, so your probability test is telling you that you will be more profitable, and you can claim back something that I imagine was off-balance sheet. The amount of DTAs that you have off-balance sheet, at least, from what I recall from the annual report 2021, is just enormous, theoretically. Can you share any thought on this? This is capital, not on day one, but on day two, when you start using those DTAs. Should we expect this to continue? The other question I have is on DPS and the buyback. I'm a bit surprised to see that 1/3 is a buyback because the capital of the bank seems to be strong enough to pay everything in cash. You know, cash once cash gets out, it never gets back, while a buyback can be initiated, must be executed, shares have to be canceled, must be approved, or can be somehow terminated before. It's a little, I personally find a little less shareholder-friendly than cash DPS. I just want to better understand why did you decide to go for it, for not for full cash DPS when you start from 40, more than 14% capital? The last question I have is, can you give us an idea what is the LTV of the mortgage portfolio in Germany in PSBC? Thanks. Okay, Riccardo. Lots of questions. I try to answer them quickly. On NII, no TLTRO. We never planned it, and it's also not included in our guidance, so it's zero for 2023 and 2024. Second, on DTA, I mean, yes, I mean, that is a tax accounting thing which we have to follow, the better the planning, then you have to activate things like that. We are fully activated. We feel comfortable on that one. On the 30% buyback, or not 30% buyback, the share of buyback and the 30% payout, why have we not just decided on straight dividend? First of all, I mean, we are fully convinced that our stock price is undervalued, and therefore it makes a lot of sense to use also this instrument. We got clear also signaling that it would be well perceived by our investors. It's rather seen as a pilot because as you rightfully say, we need to get the approvals and stuff like that. The request is out to ECB and the Finanzagentur, and we are pretty hopeful that we will get within the next three months hopefully positive answer. We think it's just important, and you see it also, I mean, with our peers to have a good mixture and so we just try it out. On the LTV, I mean, we have a new business. We have something about around 80% is the LTV on average for new business. We always said that we have been very conservative on the mortgage business and continues like that. Right. Thanks. Thank you very much. Next we have Chris Hallam of Goldman Sachs International. Please go ahead. Yeah. Morning, everybody, and thanks for taking my questions. Just a few quick ones. First, on slide 30, you're expecting a mild recession in Germany this year. Are you able to help us understand how the EUR 900 million risk results might change if Germany does end up avoiding a recession? Second, on the 50% payout ratio for 2023, is that set in stone, or is there a reasonable chance you may want to come back later in the year and adjust that higher? Lastly, just on NII, again on slide 14, is the way I should read that we're already at peak NII? Because in your prepared remarks, you mentioned 2023 expectations reflect annualized performance, adjusting for deposit betas and higher funding costs. In the answer to Kian's questions earlier, Kian's question earlier, you said you'd expect to continue to benefit from model deposits in 2024, but I'm unsure whether you mean up year over year or just maintaining the high level? Okay, good. I mean, on the mild recession, what does it mean for the smaller than EUR 900 million? It clearly will go down. If you assume what is our normalized in normal times, what is our risk result, which we assume that is around, is our credit portfolio, it's around EUR 600 million-EUR 700 million. That's a fair assumption. Then that is without taking into account that we still have a top-level adjustment out there of more, nearly EUR 500 million, right? Normally you would say EUR 600 million-EUR 700 million you would need in a normal year. The second one, the 50% set in stone. I mean, this is our capital return policy, and we stick to that. We will see how things are developing over the year, and then we will get back to all of you. On three, have we seen the peak in 2023? If I would get your question correct, I wouldn't say no, because we said that it's very similar to the negative interest rate environment where we have seen the negative rates eating into our portfolio over time, and something similar is now also happening. I mean, this strong increase, sharp increase which we have seen in the Q4 is probably not something we can repeat. We still believe that as long as interest rate environment stays stable and deposit beta is not going in the complete wrong direction, we will see continuous improvement of NII. Very clear. Thanks very much. Next, we have Amit Goel of Barclays. Please go ahead. Hi. Thank you. I have two questions. One, I guess more of a clarification, because I guess it was asked a couple of times. In terms of the cost guidance for 2023, and the commentary about cost income ratio versus the 6.3% aim, if NII turns out to be EUR 7.1 billion, should I expect the cost number or part of that incremental benefit to be reinvested? And/or should I think about say the 6.3% with a kind of EUR 6.8 billion-EUR 6.9 billion NII? Is it just the NII bit just drops through and they're two kind of independent kind of variables? The second question just relates, there are some other income bits and pieces which were slightly adverse in Q4. Just curious if there's anything to be aware of for 2023 in that line. Thank you. I start with other income. What was driving the other income in 2022, that was clearly the main driver, number one was Swiss franc loan provisions. We had in the Q4 a larger amount for no longer used leased office space. We also had in the Q4, the latter one is probably not something which we will repeat this year. We also had a negative effect by the sale of the Hungarian unit in there. That is also something which will not be repeated. On the Swiss franc loan side, I would need a crystal ball to know whether there will be more to come or not. That one is difficult to predict and clearly is dependent on the development of the situation in Poland. On your EUR 6.3 billion question. I mean, the EUR 6.3 billion is our cost target, and that is which we steer. However, as I said, if the operating result is becoming much better, then there is a automatic consequence that, for example, the variable compensation will be also higher. That could be one effect. The other effect is always our beloved compulsory contributions, which could get or could be different than we have planned for. I mean, clearly, the flexibility which we currently have is that, if we have a very good investment case and with very good investment case, I mean a very good payback ratio and stuff like that, then we will consider that. For the time being, we really, stick to the cost target. Got it. You know, if for example, just to follow up, revenues are, let's say, EUR 100 million better, do you think about it in terms of, you know, you would potentially spend up to 60% of that, or would it be 30%, or how do you think about that potential for additional investments? Is it? Well If it's about. I mean, the clear message to our colleagues is that the cost income ratio for new investments must be much better than the average cost income ratio of the bank. Otherwise, it's not a good payback ratio and not a good case. As I said, I mean, this one we will follow up on in the next quarters. For me, in the moment, the 6.3 is the one which we have on our steering list, to say it like that. Okay. Thank you. In the interest of time, we have room for one last question, and the last question comes from Daniele Brupbacher of UBS. The floor is yours. Yeah. Good morning. Thank you. You said you would expect the loan book overall to be down a bit in 2023. Can you give us a bit more specific guidance for mBank, German PSBC and Corporate Clients? Apologies for going back to that peak NII question. I still struggle to model that, given, yeah, certain drivers there. If you were to plug in your assumptions, the 30% beta forward curves on the interest rate side, loan book slightly down, flat-ish or so, when would you expect to see the peak on NII? You said not in 2023, but is it 2024? Can you be a bit more specific around the model deposits? That was always very key, and that changes over time. Can you just describe a bit your positioning there at the moment? Thank you. Thank you, Daniele. On the loan book, the decline was very much related to the private client side. On the Corporate Clients side, we would not expect a reduction. But on the private client side, it has a lot to do what we see currently on the mortgage business and the consumer loan business, and that is true for Germany but also for Poland, that the activity has decreased quite significantly. It's a question when this will turn around. We don't see that basically in the first half of this year. And on peak NII, I mean, our average, the average duration of the modeling is five years. You can assume that if the interest rate level stays constant and also the beta stays constant, then you will see over the next five years, positive, out of today's interest rate environment. Thank you. Thank you. Yeah. Thank you very much for all your questions, your interest. Yeah, we're looking forward to answer your follow-up questions in our meetings to come. We meet each other in meetings and conferences, so thanks again for today and looking forward to meeting you all soon. Thank you very much. Bye-bye.