Good day, everyone, and welcome to the Banco Santander México's Q1 2023 earnings conference call. Today's call is being recorded. Following the speaker's prepared remarks, there will be a question-and-answer session. I'd now like to turn the conference over to Mr. Héctor Chávez, Managing Director and Head of Investor Relations, who will make some opening remarks and introduce today's other speakers. Please go ahead. Thank you. Good day, and welcome to our Q1 2023 earnings conference call. We appreciate everyone's participation today. By now, you should have access to our earnings press release and the presentation for today's call, both of which were distributed yesterday after the market closed and can be found in our investor relations website. Presenting on our call today will be Didier Mena, Vice President of Administration and Finance. As always, we also remind you that certain statements made during the course of the discussion may constitute forward-looking statements, which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties, including COVID-19 pandemic, that could cause actual results to materially differ, including factors that could be beyond the company's control. For an explanation of these risks, please refer to our filings with the SEC and the Mexican Stock Exchange. Didier, please go ahead. Thank you, Héctor. Good morning, everyone, and good afternoon to those of you participating from Europe. Before reviewing our Q1 results, I would like to inform you that the tender offer being executed by Santander Group had a very high level of participation. The Santander Group was able to repurchase 96% of the total shares that were still outstanding, thereby increasing Banco Santander's stake in Santander Mexico from 96.2% to 99.84%. Further, the delisting process is evolving as planned. We expect that the last day of trading of our ADRs on the New York Stock Exchange will be on May 4th, while the delisting from the Mexican Stock Exchange should occur in the subsequent weeks as we await authorization from the Mexican regulator. Moving on to our Q1 performance. I am pleased to share with you that we started the year with very strong results, with net income of MXN 7.6 billion, growing slightly more than 49% year-over-year and demonstrating the earnings power of our strategy. Total loans grew more than 5% year-on-year with strong performance across our entire loan book. In individual loans, we had a solid increase compared to last year, mainly due to double-digit growth in credit cards, payroll and other loans. In fact, February was our 10th consecutive month of double-digit growth in payroll loans and in credit cards. We also reached a market share of 16.2% in auto loans, keeping us firmly in 3rd position in the auto segment. On the other hand, we started to see a gradual and expected loan slowdown in mortgages due to higher interest rates. With regard to deposits, we achieved solid growth of 14.6% compared to the Q1 of last year. That was mainly due to good performance of term deposits, which grew close to 52% year-on-year, thanks to our strategy focus on increasing retail deposits for new customers, as well as higher interest rates that have practically doubled in this period. Our main opportunity continues to be increasing our market share in individual demand deposits, which stood at 9.8% in February, a 20 basis points decrease compared to last year. It is also worth noting that although we have increased the contribution of deposits from individuals to total deposits from 24% in 2016 to 40%, the contribution share of demand deposits to total deposits fell to 64% in the Q1 of this year, from 73% in the Q1 of last year. This due to strong growth in term deposits. During the Q1, asset quality remained at excellent levels despite the solid growth of our consumer loans. The NPL ratios stood at 1.96%, improving 83 basis points compared to the Q1 of last year, while our cost of risk improved 79 basis points to 1.62%. This results underscore our prudent risk management strategy that has been consistently executed by our risk team in consultation with all business units. In terms of profitability, our Q1 of this year performance reflects solid growth in individuals, both in terms of credit and deposits, as well as the excellent risk management that I just noted. Accordingly, we achieved a return on equity of nearly 18%, 560 basis points higher than a year ago. Thanks to our solid earnings growth and strict cost controls, we also managed to improve our efficiency ratio by 644 basis points year-on-year, which stood at 40.8% at the end of the Q1. It's noteworthy that we accomplished this in a high inflation environment. We continue to maintain strong balance sheet as reflected in our solid capital ratio and liquidity position, well above regulatory requirements for a systemic bank of our size. At the end of the Q1, our total capital ratio was 22.1%, while our liquidity coverage ratio was 212%. Before we open the call for the Q&A session, I would like to briefly summarize the quarter. The healthy growth we achieved in retail loans, coupled with a reduction in our cost of risk and effective cost controls we have maintained, generated solid net income growth, building on various initiatives to consistently deliver strong results. We will continue executing our many growth initiatives and advancing our bank's transformation, hand in hand with our strategy focus on further strengthening customer loyalty by increasing the digitalization of our products and operations. Innovation and market-leading digital advancement will enable us to continually enhance the value of our products and digital offerings. All in all, our goal of building a much stronger franchise and becoming the best bank in customer experience for all of our customers remains our top priority. This concludes our prepared remarks. We're now ready to take your questions. Operator, please open the call for questions. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pre-pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Nicolas Riva with Bank of America. Please go ahead. Thanks very much, Didier, Felipe, for the chance, and Hector, for the chance to ask questions. Got a few questions. The first one, if you can comment, give us an update on the 2028 bonds. I remember last earnings call you mentioned that you had asked for approval from the bank regulator, I believe, to call this bond in October. If you can confirm, what's the plan for the regarding the call option in October of that bond, and if you would plan to issue a new Tier 2 bond, which would be majority subscribed by the parent company as done in the past. That's my first question on the 28. Second question, if you can explain a bit more, the driver for that big jump in the CET1 ratio this quarter to 17.7%, I think up from, I believe, 13.9% or so last quarter. That's the second question. Third question, of course, you know, the parent company carried the tender offer on the shares. I think the ownership was increased to 99.8%. If you can give us an update in terms of when you expect the delisting from the stock exchange to be completed, and also if the delisting would mean that you wouldn't be able to issue in the future AT1s, which are convertible into shares, as done in the past, or if you could still do that because the AT1s in the past have been fully bought by the parent company instead of going to the market? Thanks very much. Hi, Nicolas. Good to hear from you. Regarding your first question, you know, I think that we have the fiduciary responsibility to do what's best for our shareholders. We have started the approval process for, you know, doing what would be best for our shareholders. It could be, you know, calling the bonds, it could be issuing new bonds. The approval process before the central bank takes some time, so we are prudent, and we already started that. We will make a decision as to what what is best for the company. Okay. We will remain with all our options open. Okay. One thing if I can just, sorry, just ask a follow-up question there. At least can you say if you were to call these bonds in October, in that case, would you replace them with a new Tier 2 bond with the same structure, 10-year non-callable five? Can you say anything about that or not? What I can say is that we will analyze all the options available at that time and will make the best decision. That we will do. Okay. Understood. Thank you. Okay. Regarding your second question, the CET1 jump, you know, we used to have a finance company as a subsidiary of the bank, and we merged that. In the past, as it was a subsidiary, you had to deduct the capital invested in that finance company from Core Tier 1. By merging it, you increase actually CET1. That's obviously retained earnings also contributed for an increase in CET1. You know, we haven't paid dividends, so we are still accumulating capital. That's on your second question. I'm sorry. I'm sorry to interrupt one second, just to clarify. There was a merger between Banco Santander México and the consumer finance subsidiary, Santander Consumer, so I believe it was the name. Yes. Because the bank no longer needs to deduct that investment in the subsidiary, because of that, you had an increase in the CET1. Absolutely. That's. Okay. Totally right. Okay. Okay. Thanks. Regarding your third question, you know, as mentioned, you know, we expect that we will be delisted from the New York Stock Exchange on May 4th. We're still in the process of getting the regulatory approval, you know, by the Mexican Banking Commission to delist in Mexico. We expect that to happen soon, you know, because all conditions to the list, you know, have been met. That will happen, I would guess, in the following weeks. Being or not being listed do not prevent us to issue, you know, for issuing AT1s. That used to be a restriction that, you know, in a law or in a regulation, but I think was changed back in 2019, if I recall right. In the past, you know, BBVA was not able to issue these instruments. You know, the central bank, when they put in place these conditions to create an incentive for banks in Mexico to list their shares, they prevented them from issuing capital securities, okay? At some time they changed their mind and they allowed, you know they actually, in my opinion, they made the right call because this is something that the market, they should consider. You know, if the instrument is converting to shares and the bank is not listed, well, that's an issue that investors should take into consideration. That's a risk. Obviously, there are several ways that you can value a bank using alternative methods and not only by being a listed company, okay? We have been, one of the banks the most active in capital securities, and we will continue to do so, going forward. Okay. The conclusion is you believe that in the future you would be able to continue issuing AT1 that are convertible into shares despite not being listed? Yes. If I recall right, the current regulation has the option of not only converting but also writing down the AT1. That's something that you actually negotiate with the investors. You know, you're depending on the conditions that you put forward in the prospectus, you get a pricing for that. Okay? Okay. Okay. Basically you could continue issuing AT1s, but maybe instead of being converted into shares with that, write-down feature. Okay. Last question, I already asked this in the last earnings call. Assuming the stock delisting goes through, early May, this would be your last earnings call, right? Yes. You know, actually, you know, last time I gave some words, you know, thanking you and everybody that has been very helpful to us throughout this process. We continue to be listed. You know, there was an extension in the tender offer timeline. That's why we still are listed. We have an obligation before you that we are honoring. Yes, if during the following weeks we are formally delisted, then yes, this will be our last earnings call. We will continue providing information as required by regulation. Obviously, if there's anything that you need from us, we. You know where to reach us. Awesome. Well, thanks very much, Director Felipe Rodriguez. Thanks a lot. Thank you. Thank you. Thank you. If there are no further questions, I'd like to turn the floor back to Mr. Héctor Chávez for any closing comments. Thank you, operator. Thanks everyone once again for joining Santander Mexico on this call. As always, if you have additional questions, please don't hesitate to call or e-mail us directly. Have a great day. This concludes today's conference call. You may disconnect your lines at this time. Thank you again for your participation.