Welcome to Banco del Bajío's second quarter 2025 results conference call. My name is Daniela and I will be your coordinator today. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. Before we begin the call today, I would like to remind you that forward looking statements made during today's conference call do not account for future economic circumstances, industry conditions, company performance or financial results. These statements are subject to a number of risks and uncertainties. Please note that this video conference is also being recorded. Joining us today from Ban Bajío are Mr. Carlos de la Cerda, Executive Vice Chairman of the Board of Directors, Mr. Edgardo del Rincón, Chief Executive Officer, Mr. Joaquín Domínguez, Chief Financial Officer, and Ms. Angélica Muñoz, Investor Relations Officer. They will be available to answer your questions during the Q&A session. Today's opening remarks and presentation will be delivered by Mr. Desmond O’Shaughnessy. With that, I will turn the call over to Mr. O’Shaughnessy. Please go ahead. Good morning to everyone and welcome to Banco del Bajío's conference call for the second quarter of 2025. On this conference call we'll talk about the quarterly results and the evolution of the main trends. All the information used throughout the presentation about the industry is from CNBV's data as of May, which is the most recent publicly available information. Without any further ado, let us start the presentation. To begin with, on slide 3, we would like to briefly describe some key ratios recorded in the quarter. The loan portfolio grew 6.7%, with company loans expanding by 9.5%. Total deposits grew 7%, showing sequential growth in the quarter. Regarding asset quality, the NPL ratio stood at 1.8% and the coverage ratio at 1.19 times. While the cost of risk was 124 basis points, the preliminary capitalization ratio stood at 14.5%, 118 basis points lower than in the first quarter 2025. As a result of the dividend decree, quarterly net income was $2.2 billion pesos, yielding an ROE of 18.7%. The net interest margin was 6.1% and efficiency ratio stood at 13.9%. Meanwhile, the ROE for the half year was 20.6%, the NIM was 6.2%, and the efficiency ratio was 38.1%. We would like to emphasize some key indicators from our digital transformation strategy. On slide 4, you can note the evolution of the transactions at Ban Bajío. In the chart above, you can see the number of transactions on the different channels. Observe how in 2020 we had more transactions done in branches than in digital channels and how this has evolved with branch transactions decreasing in absolute terms compared to five years ago. On the other hand, digital transactions are now by far our most important channel. The chart below depicts a similar picture with amounts transacted on each channel. The amounts transacted have increased at a compound rate of 23% over the last five years. Within the same time span, transactions in BajioNet increased by a multiple of 3.5 times while branches have only 1.4 times. Moreover, BajioNet now accounts for 81% of all the amounts transacted compared to 64% of the second quarter of 2020. The increasing volumes and transactions met through our channels are the results of an effective digital strategy which has led clients to be more engaged with BanBajío. This becomes evident when you see how transactions have increased compared to the growth of active clients at a CAGR of 7% over the last five years. This evolution may be supportive of continuous growth in deposits and on interest income. On slide 5, we continue to observe good trends in company and consumer loans that grew 9.5% and 14.4% respectively, while we saw contractions in government, financial institutions, and mortgages. The total loan portfolio reached $265 billion pesos, an increase of 6.7% compared to the second quarter of 2024 during this quarter. It is worth mentioning that this evolution continues to be supportive of the yield of the portfolio as the bank is growing in segments with better margins. Total deposits stood at $263 billion pesos, an increase of 7% compared to the second quarter of 2024. We will provide more details about this funding structure and its strengths in slide 8. The evolution of our consumer loans portfolio without auto loans is stated on slide 6. It accounted for $7 billion pesos which increased by 15.1% against the second quarter of 2024. As we have mentioned in previous quarters, we see the consumer loan portfolio as a strategic asset to diversify our business. We have managed to grow these portfolios with a remarkable asset quality better than the industry standards as shown in the charts, with NPL ratios of payroll loans at 2.62%, credit cards at 2.94%, and personal loans at 1.88%. We would like to highlight Ban Bajío's asset quality on slide 7. As you can see in the upper chart, our NPL ratio stands at 1.83% while our NPL adjusted stood at 2.69%. Both ratios compare better than the industry standard. The chart on the bottom right shows the evolution of the cost of risk which stands at 124 basis points for the quarter. The coverage ratio remains strong at 1.19 times. Even though we have done a cleanup of the balance sheet over the past quarters, we continue to hold $650 million additional reserves in the balance sheet. The increasing cost of risk and NPL is a combination of specific cases involving poor corporate treasury management and, on the other hand, the deterioration of the financial situation of several companies resulting from economic uncertainty. Moving on to slide 8, total funding stood at $314 billion pesos, an increase of 5.8% compared to the second quarter of 2024. Within the funding mix, we see how the overall mix of client deposits against institutional funding has remained stable. However, we have seen how in the last two years demand deposits with cost have gained relevance against zero cost deposits. Reflecting on the competition within the market for corporate treasuries, the funding mix now is comprised of zero cost demand deposits at 18%, interest bearing demand deposits at 24%, time deposits at 42%, and institutional funding at 16%. On Slide 9, we can observe the evolution of our margins. The NIM for the second quarter was 6.1%, decreasing by 85 basis points year over year. The year on year reduction comes as a result of the sensitivity to rates accounting for 47 basis points of the reduction and a negative impact on the mix which accounted for 38 basis points. We estimate our ex-ante sensitivities to rates considering the current mix of assets and liabilities to be around 21 basis points of NIM per every 100 basis points change in the benchmark rate, which would represent an impact of around $738 million pesos of revenues and $465 million of net income for a full year. You will see the performance of Ban Bajío's revenues on Slide 10. We are presenting pro forma figures without considering the sale of non-strategic assets. In the second quarter of 2024, total revenues decreased 2.9% pro forma compared to the second quarter of 2024 due to the reduction in interest rates. The financial margin contracted 5.4% while non-interest income increased by 19.4% pro forma, fees plus trading income grew strongly in the second quarter by 17.6% pro forma. The bank continues to make important progress in businesses like cash management fees, bancassurance, interchange fees, and POS fees, growing at 53.1%, 14.7%, 9.3%, and 9% respectively. We can see the evolution of our efficiency ratio on Slide 11. It came in at 38.9% for the second quarter of 2024. Ban Bajío's efficiency ratio stands strong against the industry in this second quarter. Expenses grew by 7.5% year over year, which is less than the lower range of guidance. We continue to make efforts to bring down expenses growth and it is a priority for this year. However, the bank continues to invest in some key initiatives such as branch openings and some upgrades to the infrastructure. Slide 12 presents the evolution of the profitability metrics of Ban Bajío as shown in the charts. The quarterly ROE at 18.7% and the quarterly ROA stood at 2.3%. On a per share basis, the second quarter EPS stood at $1.82 pesos, which represents an annualized earning yield of 15.2% computed with the average stock price for the second quarter. Slide 13 shows the preliminary capitalization ratio as of June of 2025 of 14.53%, of which almost all of it is Core Tier 1 capital. The capitalization level decreased compared to the previous quarter as a consequence of the dividend decree and payment. Lastly, on slides 14 and 15 we present the updated guidance for 2025. We have revised our expectations for macro estimates. Now we expect an average Banxico rate in a range between 8.25% and 8.50% and Banxico end of period rate between 7% and 7.25% and GDP growth from 1% to 0%. We are forecasting loan growth to be from 5% to 6%, deposits growth from 6% to 9%, net interest margin to be between 6.0% and 6.1%, expenses growing from 8% to 10% and efficiency ratio between 40% and 42%. On the other hand, we update our expectations for asset quality given the weakness in the economic environment that we are seeing in the market. We are slightly increasing the guidance for cost of risk between 100 to 110 basis points and we expect the NPL ratio to be below 1.9%, net income from $8.5 to $8.8 billion pesos and an ROE from 18.5% to 19.5%. We will continue to closely monitor the evolution of the drivers for the second half of the year and we feel comfortable to deliver on the guidance we are providing to the market. With this I conclude my presentation and now we can open the call to the Q&A session. Thank you. We will now conduct the Q&A session. If you would like to ask a question, please press the raise your hand button located at the bottom of the screen. If you are connected via telephone, please dial star 9. We remind you that all lines have been placed on mute. When it is your turn to ask a question, you will be given permission to speak. You will then be able to unmute yourself and ask your question. We will now pause for questions. Our first question comes from Ernesto Gabilondo at Bank of America. Thank you. Hi, good morning. Carlos, Edgardo, Joaquin, and Angélica. Thanks for the opportunity to ask questions. My first question will be on your long-term ROE expectation on their normalized rates. We noted that you're expecting interest rates by year end to be at 7.7%, 7.25%. However, how do you see interest rates for next year and where do you see them normalizing? Considering those assumptions, would it be reasonable to expect the year-over-year inflection point in your earnings, maybe at the end of the first half of next year? Any color on that will be very helpful. My second question is on asset quality. As you mentioned, there was deterioration in NPLs. We saw provisions doubling year over year and you reduced your reserve coverage ratio. Can you elaborate how much of the trouble corporates have already been cleaned up and in which type of industries or geographies were those loans? Are you perceiving any potential risk in any sector? I think that will be my two questions. Thank you. Good morning everyone. Can you listen to us? Yes, now we can hear you. Very good. Good morning everyone and thank you Ernesto for your questions regarding ROE. Our position is the same that we mentioned in the previous call. As you know, when we issued our initial 2025 guidance in January, we were expecting policy rates to end that year between 8.25% and 8.5%. A revised estimate is now from 7% to 7.25%. Of course, that is having an impact already in margins. Additionally, we are experiencing a higher cost of risk than initially planned. However, we expect to manage and gradually reduce these impacts moving into 2026. Despite this, we remain confident in our profitability outlook for this year. We now are expecting to close above 18.5% ROE and with capital ratios close to 14%, we see no issue in maintaining a sustainable ROE in the high teens, supported by our discipline, cost control, our standard in credit underwriting, and growing the loan portfolio. What we are seeing in the medium term and long term is an ROE in the high teens. Regarding asset quality, yes, we are seeing some deterioration in asset quality, mainly among clients in the agribusiness and real estate development. In some cases, these clients have been affected by the market conditions, the strong peso, or a slowdown in sales, while in others it is regarding poor decisions, poor business decisions in those businesses. As a result, we are seeing an increase in NPLs and higher cost of risk. Nevertheless, we believe that the fundamentals of the portfolio remain solid. We continue to originate credit with discipline, underwriting standards, and have become even more conservative in collaterals and guarantee structures. Our goal is to gradually reduce delinquency levels and cost of risk. At the same time, we acknowledge that this is part of the deterioration in the economy as well. We remain committed to sound credit practices and close monitoring of the portfolio. We're expecting to reduce quarter by quarter NPLs in cost of risk in the coming months. Thank you very much. Just a couple of follow-ups. The first one is on the interest rate policy. As you mentioned, you're expecting between 7% to 7.25% this year. Do you expect that to continue in 2026, or do you expect that we can still have some cuts in 2026? That's my first follow-up. The second follow-up is in these agribusiness and real estate developments. Y ou have already cleaned up everything, or you have created all the provisions, or how much of the provisions have been created related to those sectors? Geographically, most of it coming in the center of Mexico, or do you have some of these real estate developments in the north of the country? Thank you. In terms of interest rate for 2026, there is a lot of uncertainty in how deflation is going to behave and also the exchange rate. We believe there is a space to continue reducing a little bit more waste during 2026. I mean, with inflation in control around 4%, the real interest rate could be between 150 and 200 basis points in a regular environment. Regarding asset quality, what we are seeing is a reduction quarter by quarter in stage two. We are reviewing all the cases that we are seeing in risk to see that future transition between steps in those cases. We're expecting to reduce little by little in the coming quarters, starting the following quarter, the NPL formation. Excellent. Yes. In terms of geography. As you know, we have very good market share in the Bajío region and also in several parts of the north. In the agri business, it's mainly in the Bajío region, and in the real estate development sector, it's between the Bajío and the north. Excellent. Super helpful. Thank you very much. Thank you, Ernesto. Thank you. Our next question comes from Brian Flores at Citi. Hi, team, thank you for the opportunity to ask a question. I have a question here, maybe a quick follow-up on asset quality because in the guidance I think you committed to 120% coverage. You're already at that level. Basically, what I'm trying to ask here is if that level could increase a bit given that, as you mentioned, NPL creation should come down going forward. That is maybe the first question. Then a second one, given, I think the graph you put in the presentation where the efficiency gains that you had been seeing are a bit slowing down, you see expenses, a bit of pressure. If you could elaborate a bit on what is driving these investments, what are the main items there, I think it would be great color. Then a third one, if I could, if you have any insights on extraordinary dividends. I think you mentioned 18.5% as a target of ROE. I think you mentioned capital close to 14%. I just wanted to get your thoughts on if this already includes some extraordinary distributions for 2025. Thank you. Thank you, Brian. Regarding coverage ratio, the idea is to maintain the same levels that we have today. As you saw in the presentation, that level is very close now to the regulatory level. The idea is to continue around those levels. Regarding expenses, at the end of the second quarter we are growing expenses 8.9% year over year. As you saw, we continue to expand our branches network. We opened already four new branches and the plan is to open five more in the coming four to five months. It is important to remember that these new branches are adding 80 to 90 basis points to the expense growth. They also allow us to enter new markets or strengthen our presence in areas with good potential growth. It is important also to say that they are reaching breakeven point really soon, in less than 18 months. Given the current trend, we are planning to revise our full year expense guidance to 8% to 10% now. We remain very cautious in new technology projects. We are giving priority to those that enable new revenue streams or new infrastructure regarding functionality that can provide better satisfaction to customers or cybersecurity strategy. Thanks to this discipline, we are expecting to continue to have a very good efficiency ratio. Now we are planning to close the year very close to 40%. For the coming years, we would like to keep the efficiency ratio in the low 40s. Hi Brian, this is Carlos de la Cerda. Regarding the dividends issue, all of our guidance ratio are calculated without considering any extraordinary dividend. Whether we decide to pay an additional dividend, that decision will be taken when we have more clarity on the direction of the economy. We think we will make that decision at the end of the third quarter of this year. Okay, perfect. That is super clear, if I may. I think you mentioned, Edgardo, your expectations of lower rates, maybe by or a continuation of lower rates. Do you think that it would make sense to reduce a bit the 21 bps sensitivity you have on the NIM, or you will maintain this as you have in the last quarters. Hello, Brian, this is Joaquín Domínguez. We think that we maintain the sensitivity rate, and we are not doing any additional change on our portfolio of investments in order to change it. It will depend more on the growth of the deposits and the mix of the deposits, and also the growth on the portfolio in the consumer loan portfolio. If we will see a change, it will be a very small change in the sensitivity. Super clear. Thank you, team. Thank you, Brian. Thank you. Our next question comes from Ricardo Buchpiguel at BTG Pactual. Hi everyone, and thank you for the opportunity of making questions. I have only one topic that I wanted to ask, which is loan growth. We saw downward revision in our loan growth guidance and it would be interesting if. Could you elaborate more on what is driving this loan down, especially since it seems larger than the cut in? GDP forecast that you guys showed. If you could comment if there are any specific sectors or regions where you're seeing loan growth being a bit more challenging and if you think that this headwind eventually could extend into 2026 as well. Thank you. Thank you, Ricardo. As you saw by segment, we are seeing good performance in company loans growing almost 10% year over year. It is important to say that 90% of the growth in company loans is coming from new customers with an average ticket close to $20 million pesos. It is very well diversified. On the consumer side, the loan growth continues to be strong with more than 14% year over year. We are planning to continue with that trend going forward. Now the consumer portfolio is exceeding $7 billion pesos. In contrast, we continue to intentionally reduce exposure in lower margin segments, including government loans in which the margins today are really, really very, very small and also in mortgages. This is impacting and has a positive impact in the yield or the loan book. It is important to highlight also that yes, we are seeing softer credit demand mainly as a result of the slowdown in the economy and also the increase in uncertainty. We are seeing private investment reducing in the coming months and less projects from our customers. Still, the second half of the year historically is the most relevant period for loan growth. To reach the new guidance in loan growth, we will need to grow the portfolio in approximately $20 billion pesos in the second half. Given the growth rates that we are achieving in the last year, we consider this target to be achievable. That is what I would like to comment. If you have any additional question, please let us know. Very clear. Just one quick follow up. You mentioned that you decided to reduce exposure on these lower margin segments. The change that you saw versus the beginning of the year was higher risk on these types of loan or perhaps this lower margin got even narrower margins after the year went by. Yes. When I'm talking about lower margins, I'm related mainly to government loans in which we are seeing very, very short margins now, and also in mortgages. We continue growing company loans, mainly small and medium companies and also the consumer lending portfolio. Thank you very much. Thank you. Our next question comes from Tito Labarta at Goldman Sachs. Hi, good morning. Thank you for the call and taking my question. A couple questions, also I guess a bit of a couple follow ups. First, on the asset quality, you. Mentioned, I guess part of it was related to the FX appreciation in the quarter. Do you know, like maybe I don't know what percentage or can you quantify to some extent how much of it was related to FX and how much of it is related to just the slower growth in the economy. If it's just related to FX, maybe that subsides if the currency is a little bit more stable or if there's more risk, just because the economic growth should continue to be at least a bit muted in the second half of the year. My second question, also a follow up on the dividend just given. You want to maintain capitalization ratio above 14%, you're at 14.5% and with some pressure on profitability given lower rates and the asset quality. I mean you already committed to a 50% payout of last year's earnings for this year. Do you think that 50% payout is sustainable in sort of this environment? Keep it trying to maintain that 14% capital ratio with ROEs in the high teens. I mean loan growth is a little bit slower. Just how do you think about the sustainability of a 50% payout in the current environment? Thank you. Yes, thank you, Tito. Regarding your first question about the asset quality and the impact of the strong peso, what a few customers are seeing in the past year is a combination of higher production cost and at the same time a strong peso that is reducing revenues. That is impacting in general a few customers, mainly in the agribusiness that do export avocado, berries, etc., the different products. That is the impact that are facing a few customers. Regarding the dividend, do you want to mention, Carlos? Yes. Historically we have been paying out between 40% and 60% dividends for the near future. That means next year. I don't see a problem that the bank remains paying in that range, basically 50%. Since we don't expect an explosion of loan growth in the economy, we will keep monitoring closely our capitalization rate and the loan growth to decide year by year. As of these conditions, I don't see any problem to keep paying out 50% dividend each year. Okay. No, that's helpful. Thank you. Carlos and Edgardo, maybe just one follow up Edgardo on the asset quality. Can you remind us, I guess maybe what percent of your loan book is agribusiness? You mentioned, I think real estate was the other sector that had some impact. I guess what percentage is real estate and I guess the real estate, was that more specific to a slowdown in the economy and that's related to the currency? Yes, Tito. The agribusiness is around 17% of the total portfolio and the real estate is about 7% to 8%. Perfect. Great. Thanks, Edgardo. Next question comes from Neha Agarwala at HSBC. Taking my question, if we can just talk a bit more about asset quality. Some of this deterioration was expected. You were mentioning that there are specific cases here on. Do you see more such cases when you talk to your customers? Do you see there are other specific cases which could be a problem in 3Q or do you see that most of that has been identified and you're dealing in provisioning for it already? Just wanted to get a sense of can the cost of risk worsen in 3Q 4Q or do you think this quarter was the peak? We'll have elevated drivers in the second half as well, but it seems like it should ease here on and this was the peak, so could you just confirm that? Thank you, Neha. What we are seeing since mid-2025 is specific cases in many cases regarding poor decisions in those customers and also the impact, as I mentioned, of the strong peso in those which export to the U.S., mainly in the agro. I mean we could have more specific cases, but we are not seeing a deterioration across all the activity in the agro or in real estate, we are continuing to see various specific cases. We are expecting to improve quarter by quarter the formation of new NPL and be able to reduce cost of risk by next year. Okay, thank you so much. Thank you, Neha. Thank you. Our next question comes from Pablo Ordóñez at GBM. Yes. Hi, good morning. This is Pablo. Thanks for taking my question. My question is on your regional strategy. How is it evolving? Are you still seeing an opportunity to take market share in Mexico City and Monterrey Bay? How do you see the competitive dynamics? Banks are mentioning that they are looking to grow by taking market share. Is this also considered in your lower loan growth assumptions? In terms of profitability, are you seeing any pressure in terms of the loan rates for your commercial customers? Thank you. Yes, thank you, Pablo. What we are seeing is, I mean, we are growing very well in the metropolitan area. We opened a new region in Puebla that is part now of the metropolitan area last November, and we are growing very well in Puebla as well. A part of the growth that you are seeing in this report is coming from the metropolitan area in which, when we started this strategy three years ago, we had only 2.4% market share in Mexico City, now it is above 3.1%. We are growing well. The idea is to continue with that growth in the coming years. We are growing very well, mainly in SMEs, in small and medium companies in that area. We are opening a few branches to reinforce our presence in that region. We are maintaining very good market shares in the Bajío region, in which we are already leaders in commercial lending to companies in all the states in the Bajío region. We are continuing growing and gaining market share in several states in the north of the country. About the competitive environment, yes, we are seeing a strong competition and a lot of pricing competition, mainly in the loan book. That happens always when it's harder to grow the loan portfolio, and we expect that to continue. Our competitive advantage is mainly in small and medium companies, and we are growing very well there. Perfect, thank you. A quick follow up on asset quality. If we look at Banco del Bajío, before the pandemic, you used to have an NPL of 1%. Now it's a little bit below 2%. How should we think long term of Banco del Bajío in terms of risk appetite and the recurring levels of NPLs, where do you feel comfortable? Yes, Pablo, in that, let's say, assumption, we need to consider that we are growing faster. The consumer portfolio, and by definition that has a higher NPL but also a higher margin. Yes, the idea is to reduce NPLs mainly in companies, in company loans. We believe that in the coming quarters we are going to see a normalized NPL for companies. Perfect. Thank you very much. Our next question comes from Yuri Fernandes at JPMorgan. Thank you guys for the opportunity of asking questions. If I may, a few follow ups here on asset quality. If you can comment a little bit on collaterals, especially the government guarantees that you have. I think asset quality has become a topic right on these words. It is not only for you. We also saw more misses on other players that reported already. If you can comment on the collateral, all the government guarantees on the things like that can work and help you to set some of the problems. My second question is regarding government loans. I think this is also an industry topic, right? The industry has not been growing in that portfolio. I think only BBVA is gaining some market share there. Can you explain why the product become less attractive over the years? Like why spreads are compressed so much and many players are kind of reducing their exposure to the government lending in Mexico. Finally, a third here. Just quickly on know your client, money laundry, given all the noise we saw. If you can comment briefly on any initiative the bank has been doing to strengthen your internal controls. Thank you very much. Thank you, Yuri. We continue to have very good collaterals and also guarantees from FIRA and development banks and also real estate guarantee. In several cases, of course, where we are taking legal action and we are expecting to recover in the coming months by that channel. The strategy to have a very strong collateral in loans continues. That has been also the case for Ban Bajío. Your second question was about. Government loans. The government loans. What we are seeing today is a margin that in many cases is less than 50 basis points. The value of those loans compared to the value that we can get in company loans is very small. It is not attractive for us. We rather continue growing higher margin segments other than government loans. That is the main reason. I would like to add about government loans that they are usually very long term. It is normal that they ask for 20 year loans. Also, what usually happens, you get a very small margin, sometimes way less than the 50 basis points that Edgardo was mentioning. After a couple of years they usually repay you or prepay you that loan to restructure a bigger debt. It is a dynamic that we do not like and we do not think it creates value within the bank. That's why we decided to strongly restrain our government loans. Regarding your question about money laundering, Ban Bajío has always got a very strong institutional vision that is focused on regulatory compliance, transparent collaboration with authorities always. The grades that we have from the CNBV are very good and very robust internal controls. Our AML and KYC framework includes segregation of duties between front and the back office. We employ very well trained personnel, automated systems, and a second line of defense with decision making autonomy to monitor clients and transactions. We have been doing for years investments in technology that enable digital KYC records, real time alerts, and risk based customer assessments. The bank is enforcing strict documentation and due diligence protocols, especially when we open new accounts. We are using third party companies to visit the address of the customers to ensure the existence of those customers. We are updating customer profiles continuously to prevent suspicious activity. Our compliance culture is rooted in ethics, accountability, and proactive risk management. We are planning to continue with that and of course reinforce that activity. Oh perfect. All answers very clear. Thank you guys. Thank you. Thank you. Our next question comes from Andres Soto at Santander. Good morning to all. Thank you for the presentation. I have a follow up question regarding cost of risk outlook. You had mentioned your expectation for this to improve next year. I would like to understand what type of GDP growth are you looking for in 2026, or what are the drivers for recovery in some specific sectors that you guys may participate. There is a lot of uncertainty at this moment, Andres, in terms of GDP. Yes, we are expecting a recovery from 2025 in which we are expecting zero growth in GDP. With that, we expect to grow the loan book a little bit more than this year. It is very difficult to forecast at this moment. We would rather wait until we have more clarity about the T-MEC negotiations, the final impact of the tariffs between the U.S. and Mexico, and all the political uncertainty that we are having now in Mexico. We are a little bit concerned about private investment, and we believe we need to wait a little bit to forecast with more clarity for 2026. Yes, we expect to grow a little bit more because the base of 2025 will be really a good comparison. Absolutely. My question was more related to cost of risk, if the improvement in cost of risk was something sector specific, client specific, or it was related to the overall economy. On that note, I also had a follow-up question to your previous answer. Can you give us a sense of what% of your loan portfolio has any type of collateral? Yes, Andres, as I mentioned, we are talking mainly in terms of the activity about agro business and real estate development. The collateral level of the ban is around 80% and it has been at that level for a while. Perfect. That's very clear. Thank you, Edgardo. Thank you, Andres. Thank you. Our next question comes from Tej Kiran Kanalouri at HSBC. Hi, thank you for the opportunity. I want to understand this 80% collateral you have. Typically, what is the amount of time it takes to recover money from the collateral on stress loans? I have some more questions. I'll follow up after your answers. Hello, can you hear me? Yes, the collaterals that we have, for example, guarantees from the government, is immediately. A nd we are using of course that possibility. In terms of collaterals that we need to recover when we take a legal action, that could take a few months, in some cases a couple of years. Understood, thank you, that's very helpful. In terms of, can I just follow up on the asset quality again? When I look at commentary and the numbers, thank you for the commentary on how you expect the asset quality to trend over the next few quarters. If you could help us, maybe in your experience compare it with some previous asset quality cycles that you've seen and what is it that you see that gives you confidence that this is probably not the start of a stressful asset quality cycle for you? Yes, the main reason why is what we're seeing is very specific cases, but we have not seen a trend across all these segments regarding those activities that we are seeing today with more concentration of problems. We continue to have many, many customers that have a very good payment behavior. That is the main reason why we continue to see that this is not a formation of NPL across all the segments. We are seeing specific cases with problems. Understood. Final question, in your NIM contraction you mentioned 38 bps is due to changes in mix. If you could please double click on that and help me understand what exactly this change in mix is. Thank you. That's my last question. Yes, this is Joaquín Domínguez. When we refer to mix, it is a combination of several items. First of all, as we have been paying dividends, we reduce the amount of productive assets. The reduction of this amount implies less interest rates, so less interest that affects the NIM. The second part is that we grow more in deposits than in loans. The excess of liquidity was invested in securities. The yield of the securities is lower than the yield of the loan portfolio. The impact in the NIM is that it reduced the NIM, and we also call it a mix effect. Finally, the cost of funding, specifically demand deposit with cost, increased a little bit. It affects the total cost of funding, and it also impacted the cost of funding and the mix. Thank you very much and all the best. Thank you. Our next question comes from Meyrick Barker. Please state your company name and then ask your question. Hi, I'm from Camissa Asset Management. Just three questions on my side. If I could just understand the recalibration in your deposit growth outlook. Typically, in high uncertainty, results in individuals and corporates may be retaining greater cash balances. I mean, why are you seeing the need to reduce your deposit growth outlook? Second question, just understanding the proportion of your loan book that's exposed to exporters and how you're thinking about managing any tariff related risks that might impact those exporters' business prospects. Third question, one of the earlier attendees queried the possibility of extraordinary dividends. I'd just like to understand in terms of capital allocation decisions, if you do result in a situation where you have excess capital, how you think about share buybacks versus extraordinary dividends and why you may or may not prioritize either of those options. Thank you. Yes, thank you. Regarding the mixing deposits, what we are seeing is a very good level of transactions from customers, and that is improving operational deposits. We are now doing 26 million transactions per month in that. That is the average of the second quarter, 2025. To give you an idea, that is 47% more transactions than three years ago. In digital channels, we are growing in that same period more than 100%, 103%. That is having an important impact in deposits from customers mainly. Mainly customers, mainly companies. That is reducing the need, for example, to capture deposits from interbank loans or repos. If you see the mix of transactions, we are now depending more on customer deposits than institutional deposits. That is the change. It means t hat we are seeing regarding buybacks. We are not planning at this moment any activity of buyback. In the case of the capital level of the bank, yes, the level of exporters of the bank is about 10% of our customer base. Now you are needing to see a need to recalibrate risk appetite towards the export sector or not? I don't think so. I mean, we are closely monitoring the activity of our customers, and we are in very close communication with them to see how they are going to react to any tariff. Of course, the activity, for example, is steel and aluminium. We are having very good communication with those customers to see how they are changing their strategy to face the tariffs that they are having today. We are planning to continue with that very close communication with them. Thank you for your time. Thank you. We are going to close off with one last question. It is going to be a follow up from Ernesto Gabilondo at Bank of America. Thank you, guys. Just last question. A follow up on the special dividend. I believe in the past you mentioned that you will pay or you could potentially pay everything what exceeds the common equity tier one ratio. I believe it was around 14.3% in this quarter. Making some numbers, you have an excess capital of roughly $0.8 billion pesos. That implies a 1.6% dividend yield. Am I right with the maths? Is that what at some point you could be expecting? As I mentioned before, the decision whether we will pay an additional dividend will be taken after the third quarter results. We can have more clarity and a better view of the economy and the loan growth rate in the economy. If we don't see an important loan growth, we could consider paying an extra dividend. That would take our capitalization rate close to 14%. Not below, but close to 14%. That would be a figure close to what you mentioned. Okay. Perfect. Thank you very much. Thank you. I would now like to hand the call back over to Angélica Muñoz for some closing remarks. Thank you very much for connecting. Please let us know if you have any further questions. We look forward to seeing you next quarter when we report the third quarter 2025. That concludes today's call. You may now disconnect.