Ladies and gentlemen, welcome to the Q3 2024 Fixed Income Conference Call and live webcast. I'm Sandra, the Chorus Call operator. I would like to remind you that all participants have been 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 One on your telephone. For operator assistance, please press Star and Zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Philipp Teuchner, Investor Relations. Please go ahead, sir. Good afternoon or good morning, and thank you all for joining us today. On the call, our Group Treasurer, Richard Stewart, will take us through some fixed income-specific topics. For the subsequent Q&A session, we also have our CFO, James von Moltke, with us to answer your questions. The slides that accompany the topics are available for download from our website at db.com. After the presentation, we will be happy to take your questions. Before we get started, I just want to remind you that the presentation may contain forward-looking statements which may not develop as we currently expect. Therefore, please take note of the precautionary warning at the end of our materials. With that, let me hand over to Richard. Thank you, Philipp, and welcome from me. Our third quarter and nine-month results show our ongoing strong operating performance, further reinforcing our confidence in our 2024 ambitions and 2025 financial targets. Disciplined execution of our Global Hausb ank strategy is driving steadily improving performance and operating leverage. Pre-provision profit grew by 17% year on year to EUR 7 billion in the first nine months, with operating leverage of 5%, both excluding the Postbank takeover litigation-related impact. Growth was driven by both revenue momentum and cost discipline. Nine-month revenues grew 3% year on year, with around 75% of revenues coming from more predictable income streams. Reported non-interest revenues were up 14% year on year, with continued strong growth in commissions and fee income of 9%. This demonstrates that our strategy of growing our capital light businesses is paying off. At the same time, net interest income in our key banking book segments remained stable and better than we anticipated at the beginning of the year. We remain focused on expense discipline, keeping our adjusted cost to EUR 15.1 billion, or EUR 5 billion per quarter, as we continue to offset inflation while allowing for investments by delivering savings through our operational efficiency program. Our cost-income ratio, excluding Postbank litigation-related impacts, improved to 69% from 73% year on year. Now let's look at the franchise achievements across our businesses on Slide three. The Corporate Bank increased the number of deals won with multinational clients by 18% compared to the first nine months of the prior year. We also had strong momentum in commissions and fee income, which grew by 5% across all regions. In the Investment Bank, we increased activity so far this year with our priority institutional clients by 11%, demonstrating the ongoing commitment and focus of our business and coverage teams in supporting our clients. The Private Bank sees further momentum, with 27 billion EUR of net inflows and grew non-interest revenues by 5% year on year, driven by higher margin products and volumes across both client segments. Asset Management grew assets under management by 67 billion EUR year to date to 963 billion EUR. This was boosted by continued strong inflows into our diverse product suite, which will support future revenues. Now let me turn to our progress against our strategic objectives on Slide 4. Our third quarter results demonstrate our continued progress across all three pillars of our Global Hausbank strategy. Starting with revenue growth, our well-diversified and complementary business mix has delivered a compound annual growth rate of 5.6% since 2021, in line with our upgraded target range, and we expect it to increase from here. For the remainder of the year, we anticipate continued momentum in commissions and fee income, driven by ongoing high client engagement and our franchise strength, while NII remains stable. This gives us full confidence in reaching our revenue ambition of EUR 30 billion for the full year 2024, providing a strong step off into 2025. Moving to costs, we continue to deliver on our operational efficiency program. Having completed measures, we've delivered or expected gross savings of EUR1.7 billion, almost 70% of our target, with around EUR1.5 billion in savings already realized. We have made further progress on workforce reductions, including 600 FTEs in the third quarter, bringing the total number to more than 90% for the 2024 year-end target. The achieved progress to date and efficiencies still in the pipeline will support our adjusted cost run rate for the remainder of 2024 and further reductions in 2025 to meet our objective of around EUR 20 billion in non-interest expenses, while continuing to invest in business growth, technology and controls. Lastly, we delivered a further benefit equal to a EUR 3 billion RWA reduction in the third quarter, driven by data and process improvements. This brings total RWA reductions from capital efficiency measures to EUR 22 billion, which puts us in sight of our end 2025 target range of EUR 25 billion-EUR 30 billion more than one year early. We expect to achieve further reductions from securitizations as well as data and process enhancements, and we continue to work on finding further incremental optimization opportunities to exceed our target. Let's now turn to provision for credit losses on slide five. This quarter's provision for credit losses was EUR 494 million, equivalent to 41 basis points of average loans. Stage 1 and 2 provisions were on a moderate level as various portfolio effects largely offset increases from softer macroeconomic forecasts and overlay recalibrations in the third quarter. Stage 3 provisions increased sequentially to EUR 482 million, mainly driven by the Private Bank, including transitional Postbank integration effects. Let me now take you through some additional detail on our provisions on slide six. This year, we faced several headwinds which negatively impacted provisions and our full year guidance, but which we do not expect to persist into 2025 at all, or in the same magnitude, depending on the item. First, the transitional effects from the Postbank integration led to longer than expected impacts across our internal collection and recovery processes. We expect these to fade over the coming quarters. Second, we have been dealing with two relatively fast-paced larger corporate events, impacting year-to-date provisions at a level unusual compared to historical standards. However, the pre-tax impact was mitigated by around 70% as these loans benefited from credit concentration hedging. And lastly, our full year commercial real estate provision run rate has been at a significantly higher level, but has now substantially declined quarter on quarter, as envisaged. We continue to see more signs of stabilization, which supports our confidence in a gradual reduction in future provisions. We also see broadly stable developments in our domestic market, as outlined on page 22 in the appendix. Our EUR 220 billion German loan book is low risk and well diversified across businesses, and 70% of the portfolio is either collateralized or supported by financial guarantees. We also have more than EUR 12 billion in hedges. More than three quarters of the book is in the Private Bank, of which 90% consists of low-risk German retail mortgages. Our corporate loan book is well diversified and of high quality. Exposure is predominantly to multinational corporates and midcaps, with almost 70% of loans rated investment grade. In summary, our portfolio is holding up well. Adjusting our reported gross provisions for offsetting effects from recoveries through hedging, which are captured as revenues, our pro forma year-to-date net provisions would have been around 34 basis points. We continue to expect sequential reduction in provisions towards more normalized levels as we go into 2025. Moving now to the development in our loan and deposit books over the quarter on slide 7. All figures in the commentary are adjusted for FX effects. Overall, loans have remained stable during the third quarter. Within that, targeted growth in FICC financing has continued, driven by new client origination and the acquisition of a collateralized loan portfolio. While client demand in the Corporate Bank remains muted, we see further net reductions in mortgage products in line with our strategy in the Private Bank. Our well-diversified deposit book increased by EUR 15 billion compared to the last quarter. This growth has been most pronounced in the Corporate Bank, with inflows of EUR 11 billion, partially supported by further temporary client accommodation activities. In line with previous guidance, we expect Corporate Bank deposits to normalize again to first half of 2024 levels by year-end. In the appendix, we provide further granularity around the quality of our loan and deposit portfolio. Let us now have a look at our net interest income on slide eight. We remain well-positioned to continue delivering strong net interest income over the coming years, and we will cover the drivers of that over the next pages. NII across our key banking book segments was EUR 3.2 billion, and our trajectory continues to outperform our guidance from earlier in the year. The Corporate Bank benefited from higher deposit volumes and low margin expansion, offsetting expected beta convergence, although reported NII includes lower levels of CLO recoveries than in the prior quarter. Private Bank was stable sequentially, reflecting ongoing strength in deposit revenues. The group number, reflecting accounting effects, increased by approximately EUR 300 million compared to the previous quarter to EUR 3.3 billion. This effect was offset by a decrease in non-interest revenues and has no overall revenue impact to the group. Our base case remains that our quarterly run rate will continue to be broadly stable, and we reiterate that we expect full-year banking book NII to remain in line with the EUR 13.1 billion reported in 2023. This is despite absorbing a headwind of around EUR 150 million versus 2023 for the discontinuation of the minimum reserve remuneration. We will provide a more detailed update on expected volume and margin developments for 2025 and beyond in the next quarterly call. Turning to slide 9, we can see that our hedging strategy has positioned us well for a declining rate environment. The numbers on the slide are based on the market implied forward curves as per the end of September. Our hedge portfolio stabilizes our net income by extending the tenor of interest rate risk, but it also protects us against a drop in interest rates, and to that end, we have increased the notional of our hedge portfolio over the last 12 to 18 months in response to the slower than expected rise in deposit betas. The weighted average maturity of our hedges is around five years. Based on current forward rates, we expect the income from the hedge book to grow by EUR 300-400 million each year as we roll maturing hedges. As such, we expect the hedge portfolio to provide a long-term tailwind to our revenues at current forward rates. With respect to 2025, more than 90% of the income is already locked in with existing positions. Now looking at page 10, we can see the impact of our risk management strategy in the NII sensitivity to changes in rates. The low sensitivity implies that shifts in the yield curve would have limited impact on our reported NII, and any impact would increase slowly over time, given the duration of our hedge book. We have a relatively low NII sensitivity and therefore expect to be well-positioned to deliver stable NII through the remainder of the rate cycle. Turning to capital on slide 11. Our third quarter Common Equity Tier 1 ratio came in at 13.8%... 30 basis points higher compared to the previous quarter. The increase was largely driven by CET1 capital, reflecting strong earnings net of deductions and approximately EUR 790 million or 22 basis point positive effect from the adoption of the Article 468 CRR transitional rule for unrealized gains and losses. Risk-weighted assets increased for market risk and credit risk. The credit risk RWA increase was driven by model impacts and business growth, mostly offset by reductions from capital efficiency measures. Lower operational risk RWA was driven by the partial release of the Postbank takeover litigation provision. Our capital ratios remain well above regulatory requirements, as shown on slide 12. The CET1 MDA buffer now stands at 261 basis points or EUR 9 billion of CET1 capital. This is 31 basis points higher quarter on quarter, reflecting the increase of our CET1 ratio. The buffer to the total capital requirement increased by 9 basis points and now stands at 287 basis points. The increase was primarily driven by the higher CET1 ratio, which was partially offset by lower Tier 2 capital. The reduction in Tier 2 capital is a result of using IFRS carrying amounts as the measurement basis, replacing paid-in amounts, reflecting latest EBA guidance. Moving to slide 13. At the end of the third quarter, our leverage ratio was 4.6%, flat sequentially, as higher leverage exposure for securities financing transactions and trading assets driven by client activities offset an increase in Tier 1 capital in line with the CET1 capital development. We continue to operate with a significant loss-absorbing capacity, well above all requirements, as shown on slide 14. The MREL surplus, our most binding constraint, increased by 4 billion EUR and now stands at 21 billion EUR at the end of the quarter. The increase reflects higher MREL supply from new senior non-preferred issuance, while higher CET1 capital was offset by lower Tier 2 capital, reflecting the change in the measurement basis following the latest EBA guidance. Our surplus thus remains at a comfortable level, which continues to provide us with the flexibility to pause issuing new eligible liabilities instruments for approximately one year. On slide 15, we highlight the development of our key liquidity metrics. With a daily average liquidity coverage ratio of 137% during the quarter, we operated with a sound liquidity position. The quarter-end stock of EUR 230 billion of HQLA, of which we continue to hold about 95% in cash and Level 1 securities, increased over the quarter and is mainly driven by the deposit growth in the Corporate Bank. Our spot liquidity coverage ratio was materially unchanged at 135%, representing a surplus above the regulatory minimum of EUR 60 billion. The increase in HQLA was broadly offset by an increase in net cash outflows. The net stable funding ratio was also unchanged at 122% and reflects the stability of our funding base, more than two-thirds of the group's stable funding sources coming from deposits. The surplus above regulatory requirements increased slightly to EUR 112 billion. Moving now to our issuance plan on slide 16. Our credit spreads developed well quarter on quarter, particularly in the capital space, where we've seen a double-digit spread compression and an outperformance versus our peers. Since the last fixed income call at the end of July, we have issued a little over EUR 3 billion, taking our year-to-date total to EUR 16 billion, largely completing our plan for the year. The quarter-on-quarter change was mainly driven by the $2.5 billion senior non-preferred dual tranche transaction in September. This transaction was well received by investors, and the order book was more than five times oversubscribed, representing one of our largest dollar order books for such a transaction. Regarding our 2025 issuance plan, it is too early to provide precise guidance. However, we expect something similar to 2024 activities. Depending on market conditions, we may consider pre-funding some of the 2025 requirements in the fourth quarter. To reiterate on our intentions regarding potential calls for our Tier 1 instruments in 2025, we take these decisions based on several factors, including capital demand, refinancing levels versus reset, potential FX effects, as well as market expectations. It is worth noting that this may result in different decisions based on the features of each individual bond, and that all call decisions require prior regulatory approval. As mentioned previously, you can expect us to take a decision close to the call date in 2025. Before going to your questions, let me conclude with a summary on slide 17. Our ongoing performance demonstrates the successful execution of our strategy. Our revenue trajectory remains on track to 30 billion EUR for the year on the path to our goal of 32 billion EUR in twenty twenty-five. We expect to further reduce our adjusted cost run rate close to 4.9 billion EUR in the coming quarters to allow us to achieve around 20 billion EUR of non-interest expenses in twenty twenty-five. The reduction should come through a combination of ongoing cost discipline and benefits from our efficiency and tactical measures. We expect reported provision for credit losses for 2024 to land us around EUR 1.8 billion, higher than our prior guidance, but we continue to expect an amelioration which will follow next year as the transitory headwinds we have called out will pass, leading towards more normalized levels. Our issuance plan for the year is largely complete, and we may consider opportunistic pre-funding of our 2025 requirements this quarter. Our full focus remains on the execution of our own strategy. With that, let us turn to your questions. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to use only handsets and eventually turn off the volume of the webcast. Anyone with a question may press star and one at this time. Our first question comes from Lee Street from Citigroup. Please go ahead. Thank you. Hello, good afternoon, all. I have three questions, please. Firstly, could you just clarify your NII path for twenty twenty-five and just sort of explain that in the context of the rate sensitivity that you show on your slides? Secondly, do you believe that the proposed CMDI deposit preference proposal might risk creating systemic risk for banks as derivative liabilities will only be pari passu with preferred seniors, and therefore, you know, could make counterparties a bit more skittish in times of market volatility? And then finally, on the AT1 topic that you raised, as it relates to, you know, potential FX, you know, losses, when you look at calls, should we just be thinking about, you know, the absolute sort of level of those, you know, potential losses and then comparing that versus the, you know, the actual levels of spreads and worth thinking about the economics in that way? Those would be my three questions. Thank you very much. Thanks, Lee, and welcome and thanks for joining. I'll take, I guess, all three questions, I think. James has joined me in the room, so he might pipe up for a few of the responses. But taking into consideration your first question. So yeah, this is a topic which kind of came up on the equity call yesterday in a few different ways. So let me try and pull together the various elements and give you an overview. Firstly, to the base case outlook for 2025, as I was saying in my earlier remarks, we're exceeding our guidance for 2024 and now expect to end the year flat to our 2023 print, which was EUR 13.1 billion across the key banking book segments. For the Private Bank, we believe we've just passed the low point in the NII run rate. So from next quarter, we will see an ongoing increase as the structural hedges roll over, we keep originating a high quality lending front book. On the Corporate Bank side, we expect the bottom to be in the next quarter. Next year, we will see loan margins expand and deposit volumes grow. And as James said yesterday on the call, we also have some specific dollar hedges which carry negatively at the moment, but mature before the end of the year. And then to completeness, you know, I think financing businesses, we have grown our loan portfolio this quarter, both with new client business as well as a portfolio acquisition. And we intend to keep growing this business over time as part of our strategic plan, and that will, of course, deliver some incremental NII to the top line. All of that comes together to give us a fairly significant tailwind into 2025. Yesterday, Christian was guiding to an all-in sequential improvement around EUR 500 million, which is a reasonable guide. And given where we are in our, you know, in our, our sort of planning cycle right now, we'll give more precise guidance to the numbers and drivers with our fourth quarter results. And then when we talk about sensitivity, you know, we have significantly hedged our exposure to interest rates in 2024 and in 2025, as you can see from the slides. And what you can see is the hedge portfolio is carrying currently an average yield of 1.2%. But within that, we have historical hedges at much lower rates, which will kind of roll off next year and subsequent years. As we do, we will then replace, you know, roughly around sort of 10% of the book, give or take, on an annual basis at the sort of the current market rates, which, you know, you can see the market implied rates we have on the, on there, which is significantly higher than the rates that the hedges are going to be rolling off. And that kind of gives us the additional rollover benefit that you can see in the slides and, you know, the sort of dark blue line tells you the NII, which is locked in, and then the blue line is really that sort of the benefits of that rollover, depending on where market implied rates are. But, you know, as long as they're above the hedges that roll off, that'll be a positive for us. And so because of this hedging, we just have very little remaining exposure to short-term rates. And so the increase, you know, sort of the market policy rates moving is not going to have an input on our outlook for 2025. And so that gives you a bit of a flavor. And then even if rates were to go below 1%, for example, at some point, you know, we sort of get into the sort of margin compression area for us as well as for other banks, then we have some option strategies in place to mitigate that impact as well. So hopefully that answers your question on the NII. Question two was around CMDI. It's a good question. I think the way we're thinking about it is, I mean, first of all, it's still legislation which isn't going to come into play until 2026 at the earliest. So I guess still room to work through. As you know, it's all from a senior preferred perspective, which I guess is one piece of the capital structure which could be impacted by this, then we have, you know, limited exposure there. You know, we don't have any deposits in our MREL stack. And, you know, at the moment, from what we can see, some of the, you know, in terms of the language, the, like, the council and the parliament's text diverge to an extent as well. So I think there's still going to be more to play out here in terms of what the final text lands at. And then in terms of derivatives, you know, there is an ability of the SRB to exclude them from the bail-in to avoid systemic issues or an inability to conduct an appropriate valuation. And so, yeah, we are cognizant of it, but I don't think it's going to be material for our business. I guess as things become clearer from the proposals, as they sort of become more finalized and firmer, then, yeah, we'll be able to update you in terms of what the implications will be for us. Then in terms of AT1 pricing, you know, as you learn and think about the calls, so as you rightly said, we have three calls next year, still ways off for a couple of them, six months, then one year for the other. Yeah, what we're, you know, how we think about that, you know, that kind of to call or not call strategy is kind of actually, you know, part of our planning process we have right now. But, in terms of pricing of that, you know, it is a, just as, as you kind of laid out, in terms of the, you know, how we, you know, think about replacement values, how we think about the kind of credit spreads, how we think about, you know, the sort of historical FX balances on sort of the non-euro AT1s, all of which kind of come into, you know, our overall decision making, in its entirety. All right. I took quite a lot of time. Thank you very much for those answers. Very clear and helpful. The next question comes from Sumit Sarkar from Barclays. Please go ahead. Hi. Thanks for doing the call. I had two questions. The first one, when you mentioned credit provisions, you highlighted that there was a mitigation of around 70% on the corporate events due to credit concentration hedging. Could you elaborate a bit more on this? Is it related to SRTs and where are you getting the benefit as in revenues? So if you could kind of expand on that, that's question one. And the second question, you also mentioned that the reduction of Tier 2 capital of around 21-22 basis points and that was because of the EBA guidelines change from the monitoring report. Again, if you could elaborate on what the change was, and did it only affect the Tier 2 part of the capital stack? And, you know, does it affect your go-forward issuance strategy in any way, or how you account for the debt, et cetera? So how do you... Is there any steps you can take to respond to this change? Those would be my two questions. Thank you. So thanks for the question. It's James. I'll take the first part. Yes, you're right. I mean, these, the credit protection for the, you know, particular items we've called out this year, is typically in the form of funded CLOs. And the accounting that is the best we can achieve for that is that, we essentially gross up credit loss provisions, and the benefit of credit protection that the CLOs provide comes back in revenues. There are, I would say, to add to that, some credit protection structures where the accounting is more friendly, in other words, nets inside the CLP line. But for these specific protection structures, there is this, I'll call it a geography asymmetry that takes place. So it's like, you know, and other SRT structures, not always possible to get it all in the CLP line. Understood. Yeah. So, I guess on the Tier 2 piece, first of all, there's no impact to AT1 regulatory capital from this guidance, given IFRS already classifies AT1 as equity instruments. And then in terms of the Tier 2 piece, it's more just a change in approach from the sort of the... Rather than reflecting in capital, the proceeds amounts at origination, you just have to reflect the IFRS carrying amounts. And so that's kind of what's what kind of driver we change for in reporting this quarter. But we do, you know, I guess there was a follow-up question, which was we don't expect to offset this reduction with further Tier 2 issuances, if that was your question. Uh, yeah. Yeah. And so you don't expect to do. And it doesn't affect your senior non-preferred tranche, that doesn't come into the same purview? Sorry, I didn't quite understand the question. Can you repeat it? Yeah, I was just asking if that change on the measurement of Tier 2 is just to the Tier 2, and I understand not AT1s, but does it impact senior non-preferred and senior preferred or that is- Yeah, correct. There's no impact. So yeah, there's only impact on senior non-preferred or senior preferred. Understood. Thank you. Thank you. The next question comes from Ibrahim Saeed from JPMorgan. Please go ahead. We are not able to hear you. Maybe your line is on mute. Hello, can you hear me now? Yes, we can hear you now. Ah, all right. Go ahead, Ibrahim. Thanks for all your comments. Appreciate all the color you've given around the AT1. I just had one question there. In looking at, you said you mentioned that, you know, all the factors that play into the, you know, the call decisions for each of the different bonds that are coming up for call. Would the fact that any individual bond is coming up for its first call versus a bond that's, let's say, skipped a call late previously, does that also factor into your decision process? Well, I'll answer the question slightly different way. So I think the features of all our instruments we kind of is something we're cognizant of, but it's kind of you know, the sort of that sort of documentation nuance, I think, is not something we ascribe you know, significant difference to. We become more interested in, I guess, the sort of the overall market reaction or market perception of our actions around the call and doing something in a transparent and you know, and rational way, you know, taking into account all of our shareholders. So that could be how I would think about the answer to your question. All right. Thank you. The next question comes from Robert Smalley from Verition. Please go ahead. Hi. Hi, Philipp, Richard, and James. Thanks for doing the call. Just a couple of quick questions and follow-ups on CRE and the German economy. Clear that you're now in the back end of the CRE restructuring. Could you give us some sense of... And I know deals are unique, but could you give us some sense of restructurings and what kind of write-downs you're taking and what the structures of the deals are? And once you've done this, geography of the exposure, does it go back into performing what's left? And also, have you given yourself the opportunity to make some recoveries if possible? That's on CRE. On the German economy, we're continuing to see slow growth slash recession type of numbers. Number one, are you seeing weakness in services as well as you are in manufacturing? Two, is this manifesting itself in other portfolios, like your high net worth portfolio, et cetera? And then three, is your forecast driving some of the model-driven reserving that you've done, or model-driven provisioning that you've done in the quarter? Thanks. Hi, Robert. It's James. Thank you for the questions. I'll try to be as brief as possible. The CRE, typically, the modifications involve the sponsors adding equity into the structure in exchange for the banks offering concessions in the rollover or extension or refinancing of the credit. So that is the typical path. I mean, there are certainly instances where it becomes real estate owned if the sponsors step away. And there are instances where the banks are asked to do a little bit less, just because it's there isn't a, you know, an alignment of interests based on the value of the portfolio or the property. Most of what we're taking today in the provisions, as it was last quarter, remains incremental valuation adjustments on already defaulted loans rather than new defaults. And that's been, again, an indicator that has underscored some of our sort of confidence about the direction of travel. Obviously, we look to a time when there won't be valuation adjustments anymore on the defaulted portfolio either, and we think that that will come. Are we positioned for recovery? Sure. I mean, obviously, some of the, these are in Stage 3 life of loan numbers, and if the properties improve because of lease activity or maybe a sale of the property and it gets refinanced into other hands, that can certainly produce recoveries. But of course, we look to, again, book lifetime loan losses with a weighted average assessment of the likelihood of certain outcomes. Loans that go through modification don't all become performing right away, although they obviously. Often they will graduate from Stage 3 back to Stage 2, and then in time performing if they're sort of operating with no concerns in terms of ability to pay and valuation. So in line with the German economy, you're right, slow growth. We had been hopeful that the German economy would turn the corner already in the second half of this year, and that seems to be not materializing. You're asking about the service sector. I think the service sector is still growing, the last statistics I've looked at. There has been some strength in the service sector, offset by weakness in manufacturing. Building trades and real estate too, like our observations, appears to have found a floor. And I mean, if it's recovering, it's recovering slowly, but it's no longer the drag that it's been to GDP growth over the past several years. I guess the one other thing to point out is that employment, while it's ticked up, unemployment rather, ticked up ever so slightly, it's still at relatively good levels and on a historic comparison, and I think the market is still tight rather than loose in terms of of labor conditions. Has it fed to high net worth? No, I don't see a great deal of connection between those two, the German economy and the quality of our high net worth portfolios. Obviously, it can have an impact on collateral values, and so changes in the market, including real estate, but by and large, the health of our high net worth sort of client base and portfolios are linked to their own circumstances, commercial and private circumstances. We do, in many of these portfolios, mark to model, much less in Stage 3. So I think the answer to your question is, there can be recoveries for sure, as-... As exposures roll back from Stage 3 and become performing again, the modeled and also Stage 2 for that matter, up to Stage 1, the modeled credit loss allowances can be released back into earnings. As you've seen in some of our statistics, you know, we do think there are, and we call this out particularly in the in related to the Postbank sort of collections disruptions. We do think some of those exposures that are now recorded in Stage 3 will roll back to stages two and one, and the relatively modest modeled portfolio allowance that has been built would come back into earnings. Hope that covers everything, Robert. That's, that's very helpful. Thanks again. Thank you. The next question comes from Dan David from Autonomous Research. Please go ahead. Good afternoon, all. Congratulations on the results, and thanks for taking my questions. Just got a couple of topics I wanna cover, and unfortunately, they've been mentioned already, but they're just slightly different angles. The first one is just on CRE. I think on the equity core, you might have mentioned that you are looking to be a seller of a CRE portfolio. Is it right to assume some of the Stage 3 top-up was related to getting the marks in line with what you need to have to be able to sell? And can you just talk about the prospects here? How do you see the market? Do you think you'll be able to offload that portfolio in, say, a year's time, or, and how do you see yourself going forward? Is there potentially more sales coming? That's just on CRE. The second kind of topic is on AT1 calls, and apologies for going there again, but clearly it's the focus of the market. So if I look at the bonds that are callable in April, the 7.5 is trading to call and the 4.789 is not, or partially not. Is that the right way the market should be looking at it? And I know you've talked about FX, but is LIBOR an impact on how you see those calls as well, and what you've done with the resets? And then finally, I guess you mentioned that there's really strong demand for your name in primary. So I'm trying to work out what's stopping you from doing an LME and printing an AT1 at the moment. So if you could print, let's say one hundred basis points within the reset, would you see that as economic? Thanks. So James, I'll take the CRE sale question and then leave Richard to speak about the AT1. We put that portfolio into the market in early August. And it's... I mean, subject to pricing and other terms, it would be our intention to transact on it. It's approaching EUR 1 billion. It's obviously higher in dollars. It's, I think it's about $1 billion, a little less in euros. We have received bids, and so in these things, you work through the bids and the bid packages, if you like. And so we have marked to the bid levels or where we think we can execute based on the bids. That caused us to take about 23 million in CLPs in the quarter. So the number that I think is 68 of CLPs in U.S. CRE in the third quarter includes the $23 million, you know, mark to market, if you like, that is there. All things equal, we would intend to execute and close that transaction in the fourth quarter. I don't see at the moment a strong kind of need or interest in pursuing additional sales, but I couldn't rule it out. We'll see over time. This has been, I think, mostly predicated on testing the market and also the capital relief that we get from unloading the $1 billion of loans outstanding. Incidentally, one thing I mentioned on yesterday's call, you didn't ask, but was of that amount, about a third, a little bit more than a third of the total portfolio was Stage 3. So the mark is of a mix of the portfolio. Yeah. Thanks, James. So yeah, thanks, Dan. So yes, the AT1 question. And yeah, it's obviously a topic as you rightly say, the investors are strictly focusing on. But I think your market observations, you know, are, you know, obviously just I can't really comment on the market per se, but I think, you know, just from the coupon and the reset levels, which for the existing bonds, you know, callable in April, then, you know, that's sort of the pricing, the pricing approach kind of, you know, reflects those different coupons essentially, which are out there. So I think that's perfectly reasonable. In terms of, you know, liability management, look, it's a useful tool. We've obviously seen our peers do that to sort of reduce carry costs. Yeah, that's something we consider and we have done it in the past. Wouldn't rule it out, but at the same time, yeah, it's something which we're still working through in terms of our own planning process at the moment. So it's just, unfortunately, a little bit too early for us to comment on our AT1 strategy right now. Thanks, both. The next question comes from Ibrahim Radi from Lazard. Please go ahead. Yes, good afternoon. Can you hear me? Yes. Yes. Okay. Thank you for taking my question. I'm sorry for coming back on the AT1 calls. My question, again, is on the economics of that call. How do you balance between, you know, economics on a transaction-by-transaction basis versus, you know, funding costs on the whole cap stack? And number two, regarding these economics, how much does investor expectations weigh? Because as investors, our expectation is that the three AT1 should be called on the first call date. Thank you. ... Yes. So look, I think the investor expectations, I think, is very clear. That's something I hear on a very regular basis. And yeah, cognizant of the kind of market expectations and behavior of peers as well. Yeah, for us, you know, we think about you know, in the first phase on a deal-by-deal basis in terms of the economics, in terms of what makes sense for us. We're, of course, well aware of the investor sensitivity around that. You know, if not to call, you know, we have done it in a prior life. And so, when we kind of, you know, reasonable expectation about what that would mean for the overall stack. But, you know, we have to think about all our stakeholders, and that includes both debt and equity investors, as well as other parties. So yeah. So in general, appreciate you sending that sort of response which doesn't really give you too much guidance, but at the same time, yeah, as I've been saying on the last few calls that we've had on this topic, you know, we're still refining that AT1 strategy, and it's just not appropriate to sort of go into too much detail right now. Okay, thank you. The next question comes from Louisa Myles from Morgan Stanley. Please go ahead. Hi there. Good afternoon. Just two quick questions from me. You'll be pleased to know neither of them are on the AT1. I just want to ask about the Tier 2, actually, and, you know, whether you're kind of thinking about optimizing your capital stack a little bit more, because I noticed that, you know, you've got a little bit of room on the Tier 2 bucket. So good to understand your thoughts on that. And then just finally, what about M&A? I mean, is there anything that you're thinking about in terms of areas of the business where you want to bolster operations? Just to give us a little bit of a reminder on that, please, that'd be great. Sure. So I think in terms of the capital stack, look, I think we're feeling pretty good about the overall shape of things. Obviously, we kind of think about the AT1 bucket and the Tier 2 bucket together. I think both have effective uses. I think on the AT1 side, we just kind of there we saw just internal demand for leverage, which kind of makes it more. It sort of have a sort of slight heavier weighting to a... towards AT1s. But overall, we're kind of we're pretty happy with the shape of the stack for our purposes, and again, from a loss absorbing capital perspective and how we think about M&A overall. So yeah. So, yeah, I think we're right to point out in terms of bucketing, but when we think about the AT1 and Tier 2 buckets in total and the kind of needs of the business that we have, then we kind of think it's appropriate for right now. And then on M&A, in terms of larger, you know, combinations, you know, we get asked this question a lot because of events over the course of a quarter. And we've been very clear about just being 100% focused on executing our strategy. And so, you know, hopefully, those messages have been received. On what you'd call smaller bolt-on type transactions, we've always... we never ruled that out. But in fairness, we've been pretty focused, as I... you know, beyond the larger sort of mergers, on our own strategy. We've looked from time to time, and as you've seen, the newest transaction was the first of, you know, expansionary transaction in many years. As I say, I won't rule out that other opportunities like that come up in time. But it is not the focus of this management team, given how much we still need to deliver, looking into twenty twenty-five. Thanks. Thank you, Louise. We have a follow-up question from Lee Street from Citigroup. Please go ahead. Hi. Just a quick technical one. On the 789 million benefit, 20 basis points under Article 468, how long do you keep that benefit for, please? I haven't... How long does it stay on the reg cap? It's a transitory rule, so it reverses it in January 2026. But remember, Lee, whatever amount of unrealized loss is still present, you know, on 01/01/2026, it gets reversed into the ratio, right? So that'll change based on interest rates and also kind of portfolio runoff and what have you. So it's not a static number. Yeah. Actually, it might be a day out. Sorry, Lee, actually, I might be a day out, so it might not be first of January 2026. It might be the end of December 2025. So that's a difference for you. Okay. All good. Yeah. For sure. That's right. For sure. Ladies and gentlemen, that was the last question. Back over to Mr. Teuchner for any closing remarks. Thank you, Sandra, and just to finish up, thank you all for joining us today. You know where the IR team is if you have any further questions, and we look forward to talking to you soon again. Goodbye. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.