Good morning, welcome everyone to BBVA's Second Quarter 2023 Results Presentation. As in previous quarters, I'm joined today by Onur Genç, our CEO, and Rafael Salinas, BBVA CFO. They will discuss quarterly figures, then we will open the line to receive your questions. Thank you very much for your participation. Now, I turn it over to Onur. Thank you, Patricia. Good morning to everyone. Welcome, and thank you for joining our Q2 2023 results audio webcast. Before going into the presentation, as you already know, yesterday, we have announced that Rafa, who's sitting next to me here, after more than three decades, three decades of a brilliant career, career at BBVA, he's gonna be leaving his CFO position and executive responsibilities as of September 1st. Rafa has been clearly one of the very important contributors to the success of BBVA. He will continue to be connected with the bank in non-executive responsibilities. Before we start, I want to extend my heartfelt congratulations to Rafa in his last results presentation, and I think that's a positive. No, Rafa? Very good. In terms of the results, let me start with Slide 3. On the left-hand side of the slide, you can see our net attributable profit reaching EUR 2.032 billion. I would like to highlight that we are posting another record of quarterly result, results, passing for the first time, for the first time, the EUR 2 billion mark. That is also 11% above the results of the same quarter of last year. These results bring our earnings per share up to EUR 0.33, 13% YoY growth, a higher growth rate than the one of net attributable profit due to the share buy, buyback programs that we have been executing. The graph on the right-hand side of the slide, it shows our capital ratio at 12.99, above our target range and well above our regulatory requirements. Page 4, our tangible book value per share, plus dividends. It continues the outstanding evolution of previous quarters, with a 15% increase year-over-year, 2.3% growth in the quarter only. Regarding profitability, on the right-hand side, we continue to improve our excellent profitability metrics, reaching, in the first half of the year, 16.9% in ROTE and 16.2% in ROE. These are being the highest figures of the last 10 years. With these figures, we remain clearly one of the most profitable European banks, and we keep advancing on this every quarter. Moving to Slide 5 and focusing on the second quarter results, this is the summarized P&L, and you see the year-over-year comparisons here, especially the second column from the left in the table. What stands out is the impressive 38.8% YoY increase in gross income, 54.6% growth in operating income, which then obviously explain the net attributable profit growth of 35.3% in constant euros, excluding the non-recurring impacts. In terms of the quarterly evolution, on the right-most columns on the table, net attributable profit increased both in constant and current terms, 30.5% and 10% respectively, versus the 1st quarter of this year, quarter-over-quarter evolution. Slide 6, this is the first half, the six months. Again, comparing 2023 versus the same period of last year. Once again, I would highlight the positive gross income evolution, 35.2% growth in constant euros, led by the increase in NII, 39%. Also, great fee income performance, different from our competitors, growing 13%. All in, the strong gross income growth, coupled with the positive jaws and also the solid underlying risk metrics, it leads to an outstanding recurrent net attributable profit of EUR 3.9 billion, and excluding non-recurring impacts, this implies 35% growth in constant euros and 23% in current euros the first 6 months. Slide 7, some light into the revenues breakdown and quarterly evolution. We very much like the trends here. We call them the chimeneas in, in, in Spanish. They are good trends, very good trends. As you can see, Net Interest Income growing strongly, 38% versus last year, 9.4% compared to last quarter. Solid activity growth, clearly, but also to a larger extent, customer spread improvements. Second, the positive evolution of net fees and commissions, increasing 11% YoY and 7.9% versus last quarter. Again, payments, asset management, transactional businesses, all of them helping here in a major way. Net trading income is driven by the evolution in global markets and the FX hedges that we do. All in all, excellent growth in gross income, the one at the bottom on the right, 39% YoY growth and 15.6% QoQ growth in gross income. Moving to Slide 8, let me focus a bit more on Spain and Mexico. Also, also highlighting our conviction of continued revenue growth in the coming quarters in those two core geographies. On the left side of the slide, you can see the strong loan growth in the most profitable segments in both Spain and Mexico. In both Spain and Mexico, you see very healthy growth in the key portfolios that we have. On the second block from the left, you see the ongoing improvement in the customer spreads for both countries. In the case of Spain, it has increased during the last year to 3.12 now, for Mexico, customer spreads, they continue to increase in a gradual but very consistent manner, reaching 11.93 this last quarter. As a result, you can see the strong NII growth year-over-year in both countries, second block from the right. You see that 51% growth year-over-year in Spain and 24% growth in Mexico in constant EUR. Regarding the slight quarter-over-quarter NII decline in Mexico, I also saw some notes from some of you on this. It's a reflection of two things, basically. It's a very deliberate thing that we have been doing. First, we are promoting off-balance-sheet customer funds as an alternative to time deposits, as such, boosting fee income while containing the deposit costs. Second, as again, you can see in the appendix of our presentation as well, we do have a larger ALCO book in Mexico, locking in higher rates for longer in anticipation of a lower rates scenario. We have been doing this. As a result, this strategy, which we believe has brought a lot of value to us in the quarter and beyond, but this strategy implied higher wholesale funding costs in the quarter. Having said all of this, as you can see in the slide, sound underlying trends in core drivers for Mexico's NII activity and customer spread, and as a result, we expect to continue growing NII and our core revenues in the coming quarters in Mexico. Finally, on the right-hand side of the slide, coupled also with the strong underlying trends in payments, and as I just mentioned, net positive inflows to off-balance-sheet products in both countries, it is leading to higher asset management fees, and as a result, you can see the fee revenue growth quarter-over-quarter, very healthy in both countries. Slide 9 we continue showing positive jaws at the group level. Good performance of gross income obviously is helping, 35.2%, as we mentioned, while the costs are growing 21.6%, mainly due to the impact of high inflation countries. On the right-hand side of the slide, you can see our efficiency ratio, which shows an outstanding, in our view, outstanding improvement to 42% from 46.7% of last year, and we clearly remain as one of the most efficient European banks out there. Slide 10. In this page, you can see that the asset quality metrics, they are within guidance, and they show stability in a context of sound activity growth and higher interest rates. First, on the left-hand side of the page, our cost of risk, it decreases slightly to 104 basis points and remains in line with our expectations of cost of risk, around 100 points in 2023. Our NPL ratio is at 3.4% on the right-hand side, slightly higher quarter-over-quarter, while decreasing obviously versus the same period of last year, and the coverage ratio on the same chart remains at 80%. Slide 11 on capital. Our CET1, as of June, remains at a very sound level and well above our SREP requirement and our own internal target. Turning to the waterfall in the page, the main impacts of the quarter are, first, very obvious on the page, but 58 basis points on the results generation. Second, again, on the waterfall, I'm, I'm running from left to right, the dividend accrual and the AT1 coupon payments, all in detracting 31 basis points. Third, 26 basis points due to our RWA's growth. More than half, more than half of this, 14 basis points, was in Mexico. All of this growth, all of this growth, as you can imagine, will result in even more capital generation in the coming quarters. Lastly, a bucket of others of - 15 basis points. This bucket is more negative than usual this quarter, mainly, mainly due to the exceptional Turkish lira devaluation. The direct impact from the significant, this 26% quarterly depreciation of Turkish lira, as we have guided you last time, the direct impact was limited: 4 basis points. Why? Because we have done a significant hedging here before the elections. That strategy worked, we did save capital as compared to an otherwise very low hedge scenario. However, these hedges, they come at a cost, which in the last months has been particularly high and volatile in Turkey, as you can imagine. The cost of the hedges, plus the reversal of the mark-to-market gains of those hedges that we have booked in the first quarter, has led in total to 13 basis points, rather idiosyncratic, I would call, quarterly impact in our CET1 ratio. Combined with the direct impact, the total 17 basis points, total impact due to Turkish lira devaluation, basically. Having passed this significant devaluation, we now returned back to normal hedging levels in July, as you can see beyond this, apart from this, the rest of the impacts of this bucket roughly offset each other. Finally, at the bottom of the page, as we announced this morning, you see our plan to do an extraordinary share buyback program of EUR 1 billion, subject to regulatory approvals, obviously. In the last 2 years, in the form of dividends and share buybacks, we have already returned EUR 8.2 billion to our shareholders. We have underscored our commitment many times in these calls and beyond to profitable growth and attractive remuneration to our shareholders, again, many, many times before. In our view, this is yet again another representation of our delivery and of our consistency in delivering our messages as well. This program, as the name says, is an extraordinary distribution and is therefore not included in the scope of the ordinary distribution policy, and we will start the execution as soon as we receive the supervisory approvals. As you have seen in the previous pages, we are already a 17% ROTE bank, 15% YoY growth in tangible book value per share. With such metrics, you can be sure that we will continue to create value, and we will continue to share that value with our shareholders. Page number 12, some pieces around our strategic progress. New customer acquisition, again, we discussed it many times before, but we believe that the most healthy way of growing the balance sheet is through growing our franchise of clients, customers. In the first half of 2023, another record, we have acquired 5.4 million customers, doubling the client acquisition that we had five years ago. Even more impressive in this page is the share of those acquired through digital channels, which increased to 65% in the first six months. It was 11% in 2018. We, we do think that this is the key difference versus most of our competitors out there. Slide 13, our commitment to sustainability. We are accompanying our clients and supporting their sustainable transition. We have reached a new record this quarter, channeling EUR 19 billion in sustainable business, a total of EUR 169 billion since 2018. We remain committed with our increased target of channeling cumulative EUR 300 billion to sustainability by 2025. On the right side of the page, you can see the results of our effort to extend this business of sustainability to all of our customer segments. We are starting to see the results of our specialist teams, of our expansion in the sustainable products, products catalog. We are seeing the growth not only in a certain segment, but in all segments, especially in enterprises and retail segments, you see a very significant growth this quarter. This growth, this quarter and this half of the year. Slide 14, as I did last quarter, I would like to highlight. This is an important page. I would like to highlight our positive impact on society. It's our core business. With our primary activity of lending, we continue to help our clients achieve their life and financial goals. In the last year, we have increased our loan book by 8.4%. This implies it's a very high-level number, but what this implies, for example, that we have put some examples there. In the first 6 months of the year, we have helped more than 70,000 families buy their homes. We have financed the growth of more than 263,000 SMEs and self-employed individuals, and more than 70,000 larger corporates, and through this, promoting employment, promoting investment, and promoting welfare in the society. Year to date, you also see on the right-hand side of the page, we have also mobilized EUR 7.4 billion to finance inclusive growth, as we call it, initiatives, including social infrastructures, social mortgages or financing entrepreneurs. Finally, Slide 1 5, regarding our long-term targets announced on the Investor Day. First good news to note here is that on all the metrics, all the metrics, we are well on track to realize them. Second, as mentioned in our previous quarterly call, as we are in the mid-period of our 3-year strategic plan, we wanted to give you a better guidance on how we expect to fare at the end of the planning period with an upgrade of our expectations. On the page, from left to right, from top to bottom, from cost to income, a slight improvement is expected versus the original goal of 42%, as you see in the page. For ROTE, we believe that we will reach high teens as compared to our original goal of 14% in 2024. For tangible book value per share plus dividends, we expect to reach mid-teens versus our original goal of 9% average annual growth between 2021 and 2024. Target customers, we expect to be 40%-50% above the original goal. For sustainable business, where we have already improved our goal twice, we expect our performance to be aligned with the latest upgraded goal. Therefore, according to our current best estimate, and in the absence of a very exceptional situation, the key message in this page is that we expect to comfortably beat all of our original goals. Now for the business update, I turn to Rafa. Rafa? Thank you. Thank you, Onur. Good morning, everyone. As Onur anticipated, we are very pleased to share with you a very good set of results. We are delivering very solid operating trends across the board and excellent progress in the different goals of the business units. Our organic, profitable growth strategy remains well on track in all the geographies, with some momentum in those products and segments where we see the greatest value. Starting with Spain, Slide 17, we continue seeing very positive dynamics. In terms of activity, loan growth continues to be driven by sound dynamics in the most profitable segments, consumer and SMEs, where we are consistently gaining market share. In the mortgage portfolio, early repayments remain high, deleveraging the portfolio despite the sound new lending inflows. In terms of P&L, we are showing a very strong pre-provision profit growth, with core revenues as the main drivers of the P&L. NII growth step up in Q2, leverage on improving customer spread. The repricing of the loan portfolio continues, while the deposits pass-through in the retail segment is non-material, keeping the cost of deposit well contained. As of today, we are not facing much pressure on deposit remuneration, which leads us to upgrade our NII guidance for 2023 to grow between 40%-45%. Also, I would like to highlight the positive underlying dynamics on fees. Sound contribution from the asset management business, backed by strong net inflows and higher credit card fees. Efficiency ratio continues to improve to 41.8% as on June, given the highly positive yields of the geography. Finally, on the asset quality side, underlying trends remain stable and within, within our expectation. Year-to-date cost of risk stand at 27 basis points, with no major changes in the quarter. Overall, another very positive quarter for BBVA Spain, increasing, I would say, normalizing his contribution to the group results. Slide 18, Mexico. The economy in Mexico is performing better than expected, showing a very strong employment momentum, supporting activity growth and asset quality metrics. The loan portfolios continue to show a very positive evolution in the quarter. Worth mentioning, the 5% QoQ growth in most profitable segments: consumer loans, credit cards, and SME. On the P&L components, once again, once again, a very strong quarter in Mexico. Net attributable profit at record levels exceeds the EUR 1.3 billion mark, with core revenues reaching +26% YoY growth. Solid trends on NII are maintained leverage on activity growth, above 11% YoY, and the further improvement of customer spread. As you know, activity and effective pricing policies are the main drivers of our Mexico NII. These trends make us much more confident about the, our NII guidance to grow at high teens. I would say even close to twenties in 2023. Outstanding fee growth is above 20% YoY, with sound growth across the board, highlighting credit cards and payment fees, and the increasing contribution from the asset management and insurance businesses. Efficiency ratio stand at very low levels of 30%, 30.4% as of June, as revenues continue to grow well above the expenses. Asset quality trends remain in line with expectations and with our portfolio growth strategy. Cost of risk remain stable at 286 basis points. NPL ratio stand at a very low levels in the quarter of 2.5%, and with a sound coverage ratio close to 130%. All in, Mexico continues delivering extraordinary results quarter-over-quarter. Regarding Turkey, in Slide 19, after the election in May, we are seeing steps toward more orthodox economic policies. Rates hiked by 900 basis points. We have seen some easing of regulatory measures in the banking sector, and currency interventions has decreased. In anticipation of this change in policies, we have continued decreasing the duration gap of our total balance sheet in Turkish lira to only 2 months, 61 days. In the first half of the year, net income in Turkey reached EUR 525 million. That represents or implies a 10% decline in the quarter, negatively impacted by a strong currency depreciation since March 2023. Beyond the effects evolution and looking at the key operating trends in the quarter, we can see that the customer spread in Turkish lira remain under pressure, as regulation in place continue to stress deposit rates while maintaining caps on lending yields. In this context, Garanti managing to offset the pressure on customer spread with a strong performance in fees, especially from payments and credit cards, and also very strong net trading income. Asset quality continued to improve in the second quarter of 2023, thanks to strong recoveries in the commercial segment and still limited NPL entries in retail. As a result, the cost of risk in the first half of 2023 stand a very low level of 23 basis points. Finally, South America. The region continues showing positive activity trends, supported by growth geared towards retail portfolios. Positive trends in core revenues and the higher contribution from net trading income drive net income growth. This is partially offset by inflationary pressures on expenses and higher impairments. Nevertheless, efficiency continues to improve to 44.8%. Higher provisioning needs coming from the retail performance in all the offices lead us to review our cost of risk guidance for the region to around 225 basis points in 2023, from the previous guidance of 200. All in, net profit in the region almost reached EUR 370 million in the first half of the year. Now, back to Onur, who is going to highlight the main takeaways of the quarter. Thank you, Rafa. We do have this commitment with you that 25 minutes or so, we will finish the presentation and go to Q&A. This last page on the takeaways, we already have gone through them, so let me not go through them. The only message that I would give to you is that we are very, very pleased with the quarterly results, and we are on a very good path. That's our clear conviction. Maybe let's go to the Q&A. Patricia? Yes, sir. Thank you, Onur. We are now ready to start with the Q&A session. The first question, please? Yes, we have our first questions from Maksym Mishyn, from JB Capital. Maksym, your line is now open. ... is about Net Interest Income in Spain. I was wondering, when do you expect the customer spread to top out? What kind of customer spread should we think when their pricing is done for loans and deposits? The second question is on the loan book. Corporate loans and CIB product in growth has slowed. Actually, the loan book declined quarter-over-quarter. I was wondering if you see more competition there, less demand, or simply this is seasonality. Then the last one is on capital. I was wondering if you could update us on the expectations for headwinds and tailwinds in the second half of the year. The question is, with the 70 basis points of excess left after the buyback, why haven't you done more? Thanks. Very good. Oh, let me, let me take them very quickly. Rafa, the spread, the topping of the spread, it depends obviously on the better. I mean, we did guide you in the previous calls that the better would be around 20%-25% by the end of this year. We do think that it's gonna be better than that in terms of results. The latest expectation that we have is gonna be around 20 rather than 20-25. The topping is obviously dependent on the deposit, better, and we don't see pressures there. As a result, we don't see the topping will happen at least until the first quarter of 2024. We have another 6-9 months for the continued upgrading of the customer spread. We did share this with you before, but 2/3 of our mortgage book, it is repriced every 6 months and 1/3 every year. When do you do the repricing? You take 2 months before you reboard. There's a 6 plus 2, 12 plus 2, so there is a 2-month delay in which price you took, you take as well. Given that resetting that we have in our contracts, again, until 2024, we don't see the peaking happening. Corporate CIB, is it more competition or less demand? Very simple, less demand. Capital, given the fact that you have, you say, 70 basis points, why haven't you done more? Maksym, we, we, we also discussed this before, but I would like to once again... We say it every time, there is no harm in saying it over and over again. We are committed to profitable growth, we are committed to attractive distribution to our shareholders. That's what we have been saying for many quarters now. We see this as a continuous process, as a continuous process. We deliver, we then invest for more delivery with a very strict capital return perspective, so it has to be value creation-focused, then we deliver again. Deliver, invest, deliver. In the process, reward your shareholders also very attractively. I mean, these are nice words, I'm sure many other banks, many other companies say this, forget our words. I do think that we are delivering. We are delivering. We had a 17% ROATE business. We did mention this to you before. Again, we, as we mentioned, 15% YoY growth in tangible book value per share. Every quarter, please look into the quarters before. Every quarter, we are consistently increasing our earnings per share. We now have doubled, basically doubled our earnings per share in, in less than 5 years. Despite all this 17% ROATE business, we are still trading below book. We are still trading below book. We do think this is an amazing value creation opportunity for our shareholders, and we do see this as a continuous process. Rather than words, deliver, create value, share, and in that sense, we don't have a rush. It's a continuous process. We will continue to do this as long as these valuations are where they are, as long as we deliver those returns. We also have guided you today regarding our rather long-term perspective on our, on our ROATE. You can be sure, you can be sure that we will continue to deliver, and we will continue to share it with our shareholders. It's a continuous process. You also asked about maybe the future impact and so on. We don't expect any regulatory impacts this year. As we did mention in the first quarter call, we had 20 basis points in the first quarter capital number, and that was the number for the year. We don't expect anything extraordinary in the coming quarters. Obviously, the We are in many multiple emerging economies. The currency has some impact in certain cases. On that one also, we did mention today that we have seen some major devaluation in Turkey. Only in the month of June or in the quarter, there was a 26% devaluation. We don't expect major issues there as well also, given the hedgings that we do. Thank you. As a reminder, ladies and gentlemen, if you would like to ask any further question, please press star followed by one on your telephone keypad. To withdraw your questions, please press star followed by two. With our next question comes from Francisco Riquel from Alantra. Francisco, your line is now open. Yes, thank you for taking my questions. Congratulations to Rafa. My first question is on Mexico NII. Spread is up quarter-on-quarter, the loan book is still growing. There is a slight decline in Net Interest Income. If you can please explain the non-customer NII impacts in this second quarter. You mentioned before it's ALCO and wholesale funding, how does it work? In the context of the slight decline, if you think that the first quarter was the peak of the NII cycle, or you think that NII can grow sequentially in the coming quarters still? Second is on capital. The capital generation has been limited to the second quarter with retained earnings offset with a growth in the risk-weighted assets. The question is, why you are not generating capital organically with record earnings on the 17% ROTE? Separately, you are booking 17 basis points you mentioned related to the currency impact in the second quarter, which is more like EUR 600 million. You have also booked EUR 600 million of trading losses at the corporate center in the first half, which I understand is related to currency hedging. You can explain the hedging strategy, the total costs incurred today, and how do you see the trade-off between the cost and this strategy? Thank you. Perfect. Rafa, maybe for the second question, you can explain the general hedging policy that we have in both P&L and also capital to our colleagues. Let's start with the first question, Mexico NII. As you mentioned, slight decline in the quarter. We partially talked about it in throughout the text, Francisco, but basically, two things happened in Mexico in the quarter, and you can see it in the numbers. In constant terms, so in Mexican peso terms, there was a EUR 3 billion move, EUR 3 billion worth of pesos moving from deposits to off-balance sheet funds, mutual funds. Rather than start paying a lot to the time deposits and so on, as you can see in, in our numbers, that our cost of funding is still relatively limited as compared to 11.25% central bank rate in Mexico. Rather than kind of tainting the whole portfolio, we have chosen that we would rather. They are typically private banking clients, high liquidity clients, and so on. We have chosen that it's better, also given the markets and so on, to take some of that money to off-balance sheet funds. That EUR 3 billion is the first component. The second component is, as you have also seen, you can see also in the appendix of our documentation, we have increased our ALCO book by EUR 3 billion in Mexico, 3 plus 3. This implied more wholesale funding. The second component, also maybe talk a little bit on that one. Why did we do that? We do think that we have to serve for the long term. Today, we have increased our ALCO book, for example, with 4-5-year Mexican peso paper, trading at 9.5, 9.6, and so on. The cost of carry for that is 11.25. We are basically, let me say it the other way around. Rather than giving our liquidity to the central bank at 11.25 and making a very good NII only for today, we said we are going to give it to 4 years, 5 years at 9.25, 9.50. Why? We do think that the rates are peaking, the official rates are peaking in Mexico. We are basically carrying for the long term, mid to long term, also in the process. To cut the long story short, this EUR 6 billion implied higher wholesale funding costs. We funded it at 11% or so, which created the impact on NII. We have done a large part of this already in the second quarter, more importantly, looking forward, we don't think we have reached the peak yet in Mexico. Our expectation for the third and the fourth quarter is that we will have higher NII as compared to the second quarter, higher NII in both quarters going forward. In fact, our guidance to you, if you remember, for Mexico, has been NII to grow at high teens for the year. We are now thinking that it's going to be close to 20%. The 3rd and the 4th quarter will continue to go up. Why are you not generating capital in the quarter? It's a detail. Again, we partially talked about it throughout the presentation, but it's important. Maybe I take a little bit time here, and then I give it to Rafa for the general hedging policies that we have. As I mentioned, it was an exceptional, it was an extraordinary quarter in the sense of Turkish lira devaluation. Turkish lira devalued 26% only in one quarter. Expecting this devaluation, elections, and so on, starting at the latter part, at the end of the 1st quarter, we started hedging our excess capital more than usual, more than the policy that we have. Again, that strategy worked. Despite the heavy devaluation, we only lost 4 basis points as a direct impact from this heavy devaluation, and we were guiding you. You remember every 10% devaluation, 1 basis point, this was the direct impact. Obviously, again, these hedges, they come with a cost. This increased hedging, it cost us 6 basis points as the cost of carry, 6. In the same period, interest rates in Turkey, as you, as you know very well, they were very volatile. Given this, you have to mark to market, constantly value these hedges in capital, constantly mark to market. At the end of the first quarter, these hedges were very valuable, and as such, we have booked 7 basis points of mark-to-market value gains in the first quarter. As interest rates have normalized since then, in the second quarter, that mark-to-market gain of 7 basis points, we reverted it, and basically, it's a wash. It's an exceptional positive capital gain in the first quarter, which was reverted in the second quarter, which was a wash. When you sum these three components, 4, 6, 7, 4, the direct impact. 6, the cost of carry. 7, the reversal of the mark-to-market. That is the 17 basis points that we have been talking about. We still saved 12 basis points versus an alternative no-hedge scenario. It's great that we have done these hedges, but especially given also the flow of the impact from the first quarter to the second quarter, first quarter was more positive than the underlying numbers, and the second quarter, you have seen the 7 basis points mark-to-market reversal. These are all details. Beyond all these details, especially in the case of Turkey, what matters is the forward perspective. Looking forward and having passed this significant devaluation, we normalized our hedging levels back to 60% of excess capital. Our sensitivity is now 3 basis points for a 10% devaluation. Now in the document, you will always see this additional plus, we have 1 basis point monthly cost for the hedges, independent of devaluation. Our going forward is 3 basis points for a 10% devaluation, plus 1 basis point monthly cost, which we think, again, will hopefully make the second quarter number quite exceptional. Our overall hedging policy on P&L and capital, Rafael, do you want to comment on this? I know, I think, I think we have shared many times, but very quickly, Francisco, I think you know that our hedging policies have two main objectives. It's just to, you know, to manage the volatility of our P&L to FX movements, and also to manage the volatility of our CET1 ratio due to FX movements. In the case of, of... On average, we tend to have a 40%-50% hedge on the P&L at the end of the day, on the contribution of the different geographies and different currencies to the net profit of the group. In the case of the, of the hedging of the sensitivity of the CET1 ratio to the FX, we also hedge between 60% and 70% of the excess capital in the different currencies that, at the end of the day, is the metric that generate the, that variability and sensitivity. As you can imagine, given the current performance of the different geographies and the contribution of the different geographies, the key in the management of the FX exposure on the P&L is Mexico, when we have been clearly hedging those, that contribution of Mexico to the group. The, the only issue is just that f- when we have movements, either depreciation or appreciation, concentrating in a period of the, of the year, in this case, we have seen a significant appreciation of the, of the Mexican peso of more than 11% in the first half of the year. We are going to have an asymmetry. The positive contribution or the incremental contribution of Mexico because of the precision of the currency, is going to spread out throughout the year. Although, on the, on the hedging, is a mark-to-market, and therefore, we have already impacted on the valuation of those hedges, the full appreciation of the, of the peso in the first half of the year. Assuming that the Mexican peso from, from the rest of the year, from now on, behave in line with the forward curve of the Mexican peso, what we are going to have is not additional impact on the hedging, but we will see on the contribution in the second, in the third, and the fourth quarter of Mexico, a higher contribution in terms of the, of the P&L. In the, in the case of the sensitivity of the CET1 ratio to currencies, as you can imagine, the most relevant metrics is just Turkey. And what we have seen in the second quarter of the year has been a very extreme scenario in terms of the depreciation of the currency in Turkey, the 26% that Onur already mentioned. I think we did, I think, a great job hedging a significant position, more than 80% of our sense, excess capital in Turkey, for this 2Q of the year. The, the hedge work, as Onur already mentioned, Clearly those hedge has been expensive in terms of the carry cost of those hedge, and clearly offset some of the positive contribution of the hedging. As I said, on general terms, we will see, we will continue hedging in terms of P&L, 40%-50% of the contribution in the different currencies to the group NII. On the, in terms of excess capital, of, that we have in the different currencies, we will continue hedging between 60% and 70%. I mean, our general policy, there is a range around this 40%-50% of P&L, expected P&L for the coming year, and 60%-70% of excess capital, we hedge it. That's the policy, and sometimes we go beyond, as we did in the Turkish case, in the, in, in the first half, but this is the general policy. One final thing. Given this flow of some of the impacts between the first and the second quarter, I would encourage you to also look into the first half in terms of the capital evolution. In the first half, because there's it's a wash between the quarters. There's a 19 basis points capital generation, 20 basis points, as I mentioned, regulatory impact in the first quarter. In total, 39 basis points of before regulatory impact, 39 basis points of organic capital generation, which is clearly better than what we have been guiding you before, which was we expect before regulatory impacts and before M&A inorganic moves, we expect EUR 1.5 billion excess capital generation every year. Obviously, quarters, 6 months, 1 year might change. In our planning, the latest planning that we have for the next 3, 4 years, our own internal numbers tell us that rather than that EUR 1.5 billion, we would expect, again, the quarterly or the 6-month numbers might change depending on the currency and so on. On average, for the next planning period of 3-4 years, we would expect in the base case, EUR 2.3 billion excess capital generation. To me, that's the important number. Thank you, Francisco. Next question, please. Thank you. With our next question comes from Benjamin Toms from RBC. Benjamin, your line is now open. Morning, both. Thank you for taking my questions, and good luck, Rafa, in whatever is your next endeavor. Firstly, you've upgraded your 2024 ROTE guidance from 14% to high teens. Can I just invite you to comment on what high teens might mean? Looking at where you draw the line on Slide 15, it suggests 16% upwards, but perhaps it's reading into things a little bit too much. Perhaps you could give some idea of the shape after that point. Whatever the answer is for next year, is there potential for further growth in ROTE after that juncture? Then secondly, on capital, you currently own something like 80%, 6% of Garanti. Given the excess capital that you have, can you rule out, in the short or medium term, spending any of that excess capital on increasing your ownership in that entity? I know that management see untapped value in this geography, but investors tend to have a different view. Thank you. Let me start with the second one. 86% of Garanti, are you planning to increase your share? We are very comfortable with our existing share ownership, we don't plan anything. Benjamin, do you want to comment on this one? Rafa, I'm having some second thoughts on you. This is your last. Should I be nice to you, not nice to you? Do you want to take the first question? The 14%, there is a range, it's not so clear. What does high teens mean in your planning for the coming year and a half? I think it's, it's, you say, yeah, high teens. High teens is high teens. It's. Clearly, I think the message is very clear. I think we are clearly we're going to outperforms what was our goal. We definitely want to, you know, guide us in, in that direction. Second, today, what we are projecting, what we are seeing is that this high teen, that we can talk, can be 17, 18, 19. Clearly, clearly, we'll continue working to make sure that we do high teens as high as possible. Clearly, our projection are telling us now that we are going to be on the, on the upper part of the teens range, clearly in the very upper part, but we will continue pushing, you know, the business units to get the best. I will add 2 things on this one. Number 1, the ranges that you see there, it, it might seem like it's arbitrarily drawn. It's not. There, there is a, there is an intention behind those ranges. Why is it a range? Why aren't we so precise and so on? Typically, typically, we are precise. It's because of the fact that we are not providing guidance for 2024 today. We have a clear process with you. The 2024 guidance will be provided in the first quarter of next year. We have to see some of the uncertainties and so on. Our clear expectation at the moment is I'm looking into the reports of some of you, the analyst reports, they're expecting 14% return on tangible equity for BBVA for next year. What we are telling you is that we clearly think we are gonna be delivering. Again, we have to be cautious in these numbers, and so that's why we have to give it to you in the first quarter next year. We are clearly expecting to overperform some of your expectations. That's why we said clearly high teens. Thank you, Benjamin. Next question, please. Thank you. With our next question comes from Sofie Peterzens from J.P. Morgan. Sofie, your line is now open. Yeah, hi, here is Sofie from J.P. Morgan. Just kind of on Turkey, I, I know it's a very volatile environment, but you had EUR 5 million of recoveries in Turkey, and so basically, no, no credit losses and also kind of the other income was quite largely positive, mainly because the CPI linkers. Kind of, can you share how we should think about Turkey going forward, given that NII also was down 45%, almost quarter-on-quarter? Just any, any guidance on Turkey. Just related to Turkey, I noticed your books value in Turkey fell to EUR 6.1 billion from EUR 7.8 billion. I guess that, that purely has to do with FX, or have you kind of done any, any value adjustments, to, to the book value? That would be, the first question. My second question would be, my usual question: How do you see kind of any M&A opportunities, any inorganic, growth opportunities, considering that your capital position is, very comfortable here? Thank you. Do you want to take the first one, Rafa, about the forecast for the rest of the year for Turkey? I mean, the guidance, we maintain the guidance that we provide for Turkey, that, you know, the contribution of Turkey is going to be in line with the contribution that we have in 2022. The reality is that it's very difficult to do a forecast in detail. So far this year, clearly, Turkey has been contributing in line with the full year of 2022, but it is also true that, you know, after the depreciation of the currency... the trends on the currency is difficult to forecast. At the same time, the rules of the game, how the banks are performed and operate, is changing continuously in a return to the orthodoxy, of what is good, but I think it's too early. What we have done, clearly, is just to keep the bank as flexible as possible, minimizing and reducing the duration gap of the balance sheet. It's around 2 months now, so that in this changing environment, with the rates normalizing according to the inflation and also, the currency depreciating in line with the inflation gap with the rest of the economies, clearly, we are just flexible, quick enough to reprice the balance sheet as soon as possible. We maintain our guidance, but clearly, the evolution of the country are going in the right direction. Regarding your question about the reduction in terms of book value in Turkey, is, you know, is mainly, it's only driven by the FX effect. The M&A question, any inorganic opportunity and so on. We discussed it many times again before. We obviously look into opportunities in general, but our, our clear, clear focus at the moment is organic growth. We have to... We have a we are a 17% ROTE bank. We have amazing opportunities in different countries that we are in, so we are focused on organic growth. Thank you, Sofie. Next question, please. Thank you. We have our next question. It comes from Alvaro Serrano from Morgan Stanley. Alvaro, your line is now open. Hi, good morning. I guess it's really a couple of follow-up questions on Mexico and capital. On Mexico, Onur, you've very clearly explained the, the increase of the bond portfolio as you think about 2024 and 2025, I guess, and rate cut environment. The question is, are you intending to grow the bond portfolio even more, and how much can you reduce the rate sensitivity in Mexico? Maybe some flavor on what to expect next year as rates seem to be coming down, what those rate sensitivity is there. On capital, sorry to do this, but in Q4, I think you referred to... I don't wanna hold you against to your comments, because it's 6 months on, but I remember you did a very passionate defense of the 12% target, and I seem to remember that you were wanting to be at 12% by the end of the year. Your pro forma now is 12.60 something% post the buyback. Are you still intending to be at 12% by year-end, or is that 12%, we should think it as a medium-term target that you will go down to? Thank you. Very good. Thank you, Alvaro, for both questions. On Mexico, how much did we reduce the sensitivity by doing all these actions? You see it in the appendix. In the appendix of our presentations, you have all these figures. It was 3.4%, the 100 basis points increase in rates, and it's a very symmetric, relatively symmetric calculation, so it's the other way around also for -100 basis points. 100 basis points, it was 3.4% in the previous quarter, and in this quarter, you would see in the appendix that it's now 2.5%. When rates come down, we are gonna be hurt much less as compared to before. You are asking, are we gonna continue on this? We have done... A piece of this 2.5, by the way, is dollar and so on, so the total is 2.5. You also see in that page, again, as, as, as, as I mentioned before, the cost of hedging in the, in the footnote, that we do also have 1 basis point of cost of hedges for the Mexican peso, in addition to this, in addition to in the, in the capital figure. You should see all these numbers there. They are the new updates to the appendix pages. Are we gonna do more? Are we gonna increase the ALCO book even more and so on? We have done a lot in the, in the second quarter. A bit more can be done, but not to the extent of the, of the second quarter. On capital, you're saying I was very passionate about 12. I'm still very passionate about 12. I don't know, so you can hold me to, to my words every time. No, There is no problem. We are still underscoring our clear conviction that we don't like to operate with excess capital. 11.5-12. We told you that we are gonna be at the upper end. The 12% is our reference, and we don't like to operate with excess capital. That 12, why is it 12? Look, please look, please, please look into our requirements. As compared to our requirements, the 8.76, 8.75 was the previous quarter. It's 325 basis points buffer versus the requirement that the supervisor sets for us. Now, everyone says, "Is 12, and where do you sit versus others?" and so on. Please compare the capital figures with the requirements. We do have a very diversified business model. We have, over years, if you take a 5-year, 10-year, 15-year time frame, you would see that our capital generation and our profits and our capital generation capacity has been very high and with very little fluctuation. As a result, our requirement is low. That 325 basis points gap, if we are at 12 versus our requirement, is much better than the 270 basis points of the same calculation for other European banks. 12%, we do think, is a very fair number to operate our bank, and we don't like to operate with excess capital. You are asking, again, I guess: Why 12% if you are 12.67% now, pro forma, why don't you do more now? As I mentioned before, it's a continuous process. We are not in a rush. The consistency in doing this is very important. I will repeat myself, but I think it's important. We are a 17% ROTE bank, and we are trading below book. We will continue to do this. We will continue to do this. It's a continuous process, a consistent process, until we see that we get somewhere close to our intrinsic value. We are not in a rush as such. We are doing EUR 1 billion today, we might do more. Our planning period was 2021 to 2024, and our, our commitment, our, our previous discussions that we will be at the, at that upper end of the range by 2024 still remains. Thank you, Alvaro. Next question, please. Thank you. We have our next question. This comes from Ignacio Ulargui from BNP Paribas. Ignacio, your line is now open. Thanks very much for the presentation and for taking my questions, and congratulations, Rafa. I just have two questions. One on Mexico. If I just look to your loan to deposit ratio has, it, it stands at around 100 and slightly above 100%. You keep on pushing for loan growth and gaining market share in Mexico, but you are losing a bit of market share in deposits. How, how comfortable are you with that, and how farther we can go on the loan to deposit on the mix in, in deposits going forward? The second question is on Turkey. Just wanted to have a bit of your thoughts, if you could help us to understand a bit on the impact that the potential changes that the central bank is taking in terms of removing the caps slowly and in the Turkish lira spread. What could be the impact of that into the Turkish lira spread? How long would it take to normalize the current customer spread in Turkish lira? Thank you. On the loan to deposits ratio, 99% for Mexico, as we just mentioned, we have done it on purpose. Our cost of deposits is 2.4% versus the industry average of 4.6%. We have 220 basis points cost of funding advantage versus a typical average Mexican bank. The reason that we have done this off balance sheet is we thought for those customers as well, it was the right instrument for their investments. If you like, we can start paying to time deposits, and we can get it back. We have. I mean, we have such an amazing franchise in Mexico, so the loan to deposit, 99% is not a restriction at all. If we can, if you like, we can always improve on that figure. We are far away from the risk limits also. At the moment, what we thought is the best value-creating opportunity, also the best strategy for our customers, was the strategy that I mentioned to you. It's not coming out in the numbers. I should also mention to you that we have gained market share in retail demand deposits in Mexico. Retail demand deposits, which I think is much important than the broader market shares and the numbers that you see in the deposits. On the potential changes in Turkey, let me just say initially that we see the changes that we are seeing lately. There was an inflation outlook report and presentation by the central bank governor yesterday, also outlining, the central bank's plans going forward and so on. We see all these changes quite positive. As we mentioned to you many times, Turkey has a great potential, but there are some macro fragilities. We do think that the new administration, the new economic administration, they are, confronting these challenges right up front, and in that sense, it's, it's, it's a positive trajectory. Turkey, all the time also in, in, in the last 10 years, Turkey wants to prioritize growth, investments, employment, which we like, but we have to do it in a, in a, in a, in a, in a gradual pace, and you have to do it without getting away from a, a market-based economy. We do hope that Turkey finds the solution in reestablishing market-based economy. In that sense, all these regulations that Rafa talked about, which led to a very low net interest margin in the quarter, and it's very low, 0.81, in the page that you see for TL. It was actually negative at the beginning of July. Our expectation is that it's gonna come back up to positive in August, and it's gonna continue to improve from there on. There are many macro fragilities. As you know, we have hyperinflationary accounting in Turkey. Yesterday, the central bank governor has announced that the expectation for the year is 58% inflation. In the first half of the year, it was only 20%, you should expect it's compounding, but still around 40% inflation in the second half. Some of that will be hurting the P&L, to be fair, we are all seeing very positive signals. We always said Turkey is a, is a long-term, but a very important, a big option, for, for, for BBVA, we are seeing the signals that, that option can be realized. We have to continue with this process. You are asking a specific number on the NII going forward. I can only tell you that the August numbers will be back to positive. Beyond that, it depends. Really, it depends on how fast that the central bank unwinds some of the regulations that are in place, especially around caps and so on. Going back again to what I was saying, in my view, independent of BBVA, independent of the banking system, they have to do it for the benefit of Turkey, because Turkey has to go back to its path of a market-based economy. In that sense, we are positive, but I cannot give you a precise figure, Ignacio. We have to see the next few months. Thank you, Ignacio. Next question, please. Thank you. We have our next question. This comes from Carlos Peixoto from CaixaBank. Carlos, your line is now open. Yes. Hi. Yes, hi, good morning. First of all, have a best of luck for future. Pleasure to have worked with you for all these years. Now going to the questions. Sorry, just to go, to going back on the capital excess and the comments you made earlier, regarding how comfortable you would be with a 12% CET1 ratio and all of that. First, should we assume then that the average CET1 ratio embedded in the high teens ROTE guidance for next year, to be at around those levels? Secondly, so, doing here some back of the envelopes, right now, BBVA would already have around EUR 2 billion or over EUR 2 billion in excess capital already, adjusting for the share buyback announced. There we expect further capital generation throughout the coming quarters. Should we expect quite significant share buyback programs to be announced before the deadline of year end 2024? Second, the second question would be actually on Spain NII. Here apologize if I missed some previous comments on that. Basically, in the previous quarter, you were guiding towards a 30% rise in NII in Spain. Looking at the evolution, in the, in this quarter, This quarter would have to be the peak in terms of NII evolution in, in Spain for that to be the case. I, I was wondering if you still see, 30% as a, as a reasonable level, or, or, or now you're, you're more upbeat on the evolution of NII in Spain. Thank you very much. The second one, Rafa, if that's okay, you take it. On the NII, I think we did upgrade the 30% today, but let's Rafa, why don't you take that one? Regarding the other question, the excess capital, are the numbers calculated, assuming that we will be in the targeted ratio? The answer is yes to that one. You are saying 2.5, you have EUR 2.5 billion excess capital. Does that mean that there will be more share buybacks in that range until 2024, as I understand the question? Carlos, we, we just announced the share buyback today. Relatively speaking, we did the largest ever share buyback relative to our size, the largest buyback program of Europe, EUR 8.2 billion buyback and dividends in the last 2 years. As I mentioned, let's go step by step. Let's do this EUR 1 billion. It requires an authorization. Most likely we will execute this in the fourth quarter of this year. Once again, it's a continuous process. We are committed to what we have been saying. In my view, there is more to come, but we have to do it step by step. You mentioned your Excel. I have my Excel as well. Once again, if I look into our earnings per share, the dividends per share, I really do think there is clearly much more room to go in the share buybacks and in the fact that there is a lot of value in the share at the moment. Regarding the NII, Rafa? As we already mentioned on the speech, we are, we are upgrading our guidance on the NII in Spain to 40%-45%. The main reason is just at the, at the end of the day, what we have seen, is just the increase in the, in the cost of funding in Spain, is still, you know, probably lagging behind what was the initial expectation at the beginning of the year. We have been upgrading our guidance on that respect. Today, we are expecting the NII to, to perform between 40%-45% for, for the full year. This is a process in which, we believe that there, you know, the excess liquidity that we have seen in Spain is still putting pressure down on the cost of deposits. That the reason was also we have been downgrading the beta that we were expecting. Today, we are expecting for the year, a beta of 20, as Onur already mentioned at the beginning of the speech. Thank you, Carlos. Next question, please. Thank you. With our next question comes from Andrea Filtri, from Mediobanca. Andrea, your line is now open. Thank you. two, you know, question on NII and one on capital. On NII, ECB changed the mandatory reserve remuneration yesterday. Do you have any expectations of further harshening of the conditions going forward? Could you also elaborate, just as you've done for Spain, on your projection of evolution of NII in Mexico, when do you expect the peak, and what do you expect? You know, what are your assumptions there on the evolution of future rates, beta and ALCO contribution? The second question on capital, what portion of your CET1 ratio is affected by hyperinflation accounting? Could you guide us on the buffer for impact? Thank you. Rafa, maybe you take the, actually, there are three questions, maybe the third one on the CET1 ratio, and the piece of Argentina and Turkey within that. Andrea, on the first one, the NII, the further harshening of the conditions going forward, I mean, it's obviously dependent on institutions and people beyond us. We cannot judge. Yesterday's change in terms of not paying to the mandatory reserves, it will have an implication of EUR 70 million-EUR 80 million in 2024. Full year impact will start September 20th. That was at some point, it was going to be happening. That was kind of expected. To be fair, there is nothing else that we are expecting at the moment. Again, it's dependent on others. You never know. When do we expect the peak in Mexico? Well, as I mentioned before, we do think that the third quarter and the fourth quarter numbers will continue to increase. The peak in the NII, in the absolute number, it depends on many other things, but the, the growth rate in volumes is the key driver here, not the pure spreads. Spreads might be peaking, but the NII, in my view, will not be, in the sense that you see the growth rate of our high return portfolios. I mean, consumer book has grown 17%, credit cards has grown 22%. SMEs has grown 21% YoY in Mexico, year-over-year. I'm looking into the quarterly growth, so this is the year-over-year. In the quarterly growth, I see basically 5% growth quarterly, which is implying that the trend is still there if these portfolios are growing, growing 5% in the last quarter. If year-to-year growth is 20%, I, I, I do see that the volume growth is, is sound and is, is, is very robust. I look into the new production, new production of loans in, in Mexico. That is also very, very positive. The new production quarter-over-quarter is 4% up versus last year, last quarter. Last year's second quarter, 19% up, new loan production, again, especially in high-return businesses. The volume growth in, in our view, is gonna continue to drive the NII. Why is this happening, and why is this happening without creating too much problems in cost of risk? Because Mexico is growing. I, I do think that Mexico. We just upgraded our GDP growth forecast from 1.4 to 2.5, if I'm not mistaken. The latest number is 2.5. I don't know whether it was 1.4 or 1.6. We have upgraded our numbers in such a way that we continue to see very high activity in the country. I mean, very few factoids, this nearshoring topic is finally becoming real in Mexico. FDI, foreign direct investment, is up 48% in the 1st quarter of this year. That's mainly reinvestment of profits and so on. We are seeing most of this happening in manufacturing. You might have seen this, BBVA Research has published a nearshoring report. In that, you also have some forward-looking perspectives, the industrial complexes, especially in the north of the country, what is happening in the industrial are there new companies basically renting new spaces and so on? You see an amazing trend there. Very important, the May numbers came out. In the month of May, Mexico, after decades, has become the number 1 country exporter to USA, number 1. It passed Canada, it passed China. China has been the number 1 for many years. In terms of the imports to U.S., what is the number 1 country for U.S.? It's now Mexico. There's so much happening in Mexico. Remittances, it was record last year, 2022, 13% growth. In the first five months, another 10% growth. We are gonna have another record of remittances. It's gonna be more than $60million-$ 65 million, billion of remittances. In that context, we do think that the volume growth is there to stay. We are gaining market share in all the key portfolios, 81 basis points in SMEs. We have a wonderful bank in Mexico. NII peak, you ask a simple question, I took some opportunity to talk to you a little bit about Mexico, but we are very positive, huh? We are very positive on Mexico. On the capital question, Rafa? The question was, how the CET1 is affected, at the end of the day, by the hyperinflation economies. At the end of the day, the only, the most significant one clearly is Turkey, given the weight and the group. A way to measure can be your other comprehensive incomes, amount on capital related to hyperinflation, and those are 15 basis points. At the end of the day, the capital that we are generating because of hyper- hyperinflation accounting on accumulated terms, at the end of the day, is representing only 15 basis points of our CET1 ratio. The second part of the question was about, was just what we are expecting on Basel IV. Today, our best estimates are that the expected impact of Basel IV is very limited, less than 40 basis points in 2025. Thank you, Andrea. Next question, please. Thank you. Our next question comes from Carlos Cobo, from Société Générale. Carlos, your line is now open. Hi, thank you very much for the presentation and just wishing all the best to Rafa. Three quick questions. One of them is basically following up on the growth in Mexico, and thanks for it's very detailed and granular color. Just as it's a bit of a challenge, year to date, loans have grown in Mexico by 4.5%, and your target was double digits. Could you double-digit growth in the year? Could you elaborate a little bit on the dynamics during the year? What we heard from some peers is that higher rates are gonna impact the loan demand, and expect this lower demand in, from lending in the second half. Just quickly, if you can touch on those specific dynamics? It's very clear your views on the long term, but why growth is underperforming your initial guidance? If I'm correct in reading those figures. Second, am I correct to understand that the growth, the upgrade in ROTE is coming primarily from a stronger NII in Spain, or are there other drivers of your upgrade to the 2024 ROTE guidance? Lastly, this is more of a general question on, on, on valuation and everything you said. Stock is, is undervalued in your opinion. Some, some peers may say similar things, but at the same time, the only thing we hear from banks is that they wanna do share buybacks with excess capital. Why aren't you putting your extra capital at play if you think there's opportunities to buy cheap banks when you can obtain returns above the cost of equity? If banks are not putting their, the capital at play there, is that they are not seeing value either, or, or, or am I wrong? Why aren't you considering acquisitions? Thank you. I have to start with the last one. I mean, Carlos, if you, if you know some of those cheap banks, we should have an offline discussion on who they are, and then. We are looking into every single opportunity of capital deployment as a competition of scarce resources, capital, which return is the best for our shareholders. That's how we look into it. Obviously, there's a strategic perspective overlay on this. Obviously, we want to grow, but it has to make sense from a capital return perspective, and we don't see those opportunities as you are, as you are saying. As compared to that, the execution risk is basically zero, and we see a huge potential in our own share price. I'm not gonna repeat myself, but we see that clear value in our share price. As a result, it's very normal that we consider this as the capital deployment opportunity. Regarding the growth, the first question that you asked, first of all, the numbers that you have seen there, this, the growth of 11.1% YoY for Mexico, broken down into retail and wholesale. Retail portfolio growth is 15.3, and wholesale is 7%. A part of that 7%, the company segment, the empresas, the company segment, is 7% because of the devaluation of dollar versus or the appreciation of Mexican peso, let me say it that way. There was 12% appreciation of Mexican peso in the year so far, and if you take out that impact out, that 7% becomes 11% in the company segment. Our core strength is in the retail portfolio, and that retail portfolio, there is no dollar lending there. In the retail portfolio, we see still very strong trends. Very strong trends. I did mention to you, I mean, the quarter-over-quarter growth in consumer is 4.4%, credit cards, 5.6%, SMEs, 5.1%. This is only the quarter. If you annualize this, this is the last quarter. I mean, you do get to that 20% that I'm telling you about. If there is some softness, it is in the wholesale segment, and there is the impact of the currency that you have to be factoring here. The second question, did I miss a question? ROTE? In 2024, related to an improvement just on NII in Spain. It's basically NII improvement in revenue improvement in Mexico and Spain. That drives the most of it, but Mexico as well. Okay. Thank you, Carlos. Next question, please. Should we skip? the next call? Next question. Yes, we have our next question comes from Marta Romero from Citi. Marta, your line is now open. Thank you very much. I've got a few follow-ups. The first one is the Mexico ALCO. What's the right way of looking at it from the outside? How do you measure your interest risk appetite? Should we look at it relative to your current accounts and equity? I don't know if you can give us some guidance on what the end game for that ALCO should be in Mexico. The second question is fees in Spain. You've been very resilient, seeing the performance of your peers. I mean, it's been a bit of a catastrophe. What explains that performance? Do you think that you still need to update your prices and bring them down, given that you're making a lot of money on your NII, so your margins on fees are gonna be lower, or is it just that you are gaining so many customers? Can you explain a bit, what's, what the reasons behind the, that, outperformance? The third one, I'm gonna push my luck, but given that you've given, your ROTE target is, is pretty vague already, and then it's complicated to calculate the, how that- ... translating to euros, because it's over excess capital, and we need to put our RWA into the equation and so on. Can we get some sort of commitment from or not commitment, an indication of a bottom for that, for earnings next year? Is it like EUR 7 billion a reasonable number or? Thank you. The 9.5... Thank you, Marta, for all the questions. The 9.5 yield that we have on the ALCO book is the key driver for growing that ALCO book. In Mexico, what is the end game you're asking? You're asking about sensitivity, I mentioned it before. In the previous quarter, we had a sensitivity to 100 basis points of 3.4% NII sensitivity. Now, using all those ALCO strategies, we took it down to 2.5. 3.4 has become 2.5, as I mentioned, we increased our ALCO book by EUR 3 billion, and we extended the duration also in the process for the whole to collect portfolio. We do think that we have done a big part of it. There might be a bit more that we can be doing in the third quarter, but the most of it is done. The 2nd question, the fee income. In Spain, we are really doing well. It's across the board. Asset management, quarter-over-quarter numbers, you see in the, in the document that 4% is the average growth in the fee income in the quarter-over-quarter for Spain. When you break it down, asset management, quarter-over-quarter, up 4.7%. Credit cards, which we have been pushing, it's a relatively small business, but it's EUR 77 million fees in total, cards and POS in Spain, it's up 19%. 19%. Insurance, we have an insurance venture with Allianz you might know, 9%, so it's across the board. It's growing very nicely. What is down? We were charging fees a bit last year. A year-over-year comparison is completely driven by that. Deposit fees are now gone. In general, all the line items I'm looking into, they are in front of me now, they are doing really well. ROTCE invitation for bottom kind of an expectation for next year profit. Also you mentioned this sensitivity of the currencies and so on. I would encourage, Martha, you and everyone else, to not only look into ROTCE, but our guidance on tangible book value as well. Tangible book value incorporates everything. It's a beautiful metric. You have everything included, and on that one, we are also up basically saying rather than 9%, as you see in the, in the document, we're upgrading our expectation there as well. That should be the guidance of value creation. The expected profit for next year, don't, don't do this to us. We'll do it next in the first quarter of 2024. Maybe there is only one clue that I can give to you. As, as we are expecting, it's gonna be better than 2023. Thank you, Martha. Next question, please. Thank you. We have our next questions from Britta Schmidt, from Autonomous Research. Britta, your line is now open. Yeah, hi there. Thanks for taking my question. Just one on the fee income in Mexico. I mean, in line with the comments that you just gave on Spain, maybe you can break down the drivers there and comment a little bit on the sustainability, because that's been a line that's performing very well, actually, over the last couple of quarters. Rafael, do you want to take this one? I don't know if I, if I catch the, the question. Breakdown of fee income in Mexico. Fee income in Mexico, whether it's going to continue. The answer is yes. You did it. Thank you, Onur. The answer is yes, because it's based on payment systems, and payment systems is going so well, so it's gonna continue. We have to pick up some speed now, we have 10 more minutes. Yes. Next question, please. Thank you, Britta. Thank you. We have our next question from Ignacio Cerezo, from UBS. Ignacio, your line is now open. Yeah. Hi, good morning. Thank you for, for taking my questions. I've got three quick ones, hopefully. First one is on the buyback authorization process by the ECB. Given it's kind of outside the normal channel, basically, in terms of timing in the year, we're sticking to the 3-4 month approval, or is there anything different basically this time around? Second, I'm sorry if I'm not reading the numbers correctly, but in local currency, the NII in Turkey went up a little bit in the quarter, considering the margin compression was quite significant, if you can elaborate on that? Then into next year, I mean, obviously, the, the cost of risk actually of most of the units is probably below in normalized levels. Is it logical to expect a pickup of cost of risk in 2024 versus 2023 on a group basis? Thank you. On the first one, Ignacio, it's 4 months, actually. We submitted our request to ECB today, the 4-month calendar starts. They can do any time within the 4 months, but that's the regular process. On the, on the Turkish number, the current figures, you see it on page 19 of the presentation, it doesn't show that NII increase, so I didn't get the question. Maybe in constant you were asking it. The Turkish NII? Local, local figures. Local figures. Local figures, NII is impacted by CPIs. CPIs kick into the NII in the, in the local, local figures, if you are looking into it, and the CPIs again delivered a good number. The cost of swap has come down a bit, so it's beyond customer, it's more the wholesale topics that is impacting the local figures. Was there a third question? No, it was this. Guidance. The guidance for Why don't you? I, I think, at the end of the day, we will see at the beginning of the next year. We are not. We, we believe that the performance of the portfolio is just clearly in line with what we were expecting. That the reason why we are maintaining our guidance in terms of cost of risk for this year. Ignacio, I think we do get also a lot of benefit from the fact that the countries that we are in are not highly leveraged still. I mean, I repeat this over and over again, but in the case of Mexico, the banking debt over GDP, let's focus on that. The banking debt over GDP is still 38%, basically half of Brazil, 40% lower than Colombia, and it's at the same level as Nicaragua. The leverage is important. Leverage is important. We are growing our book, but still, it's a very highly under-penetrated country. And in the case of Spain, you do know this, but household debt over GDP is now 35 percentage points lower as compared to 2010. Corporate debt over GDP, 50 percentage points. It used to be around 120% of GDP, now it's 70% and lower than Europe for the first time. The leverage, the de-leveraging that we have been seeing in Spain and the low leverage of Mexico, these two countries especially, is a safeguard, in my view, of the cost of risk going forward. Thank you, Ignacio. This was the last question, so thank you for all your questions, and well, we leave it here. Just let me remind you that the entire team would be at your disposal to answer any further questions you might have. Thank you very much, and Onur, I don't know if you want to close? No, I just want to thank everyone, and if you have not done your holidays, happy holidays, happy, happy summer, and see you next time. Thank you so much for joining. Thank you. Thank you.