Good morning, welcome to the ABN AMRO second quarter 2021 analyst and investor call. During this call, all participants are in listen-only mode. During the presentation, we will conduct a question and answer session. I would now like to hand the call over to the Chairman, Mr. Robert Swaak. Please go ahead, Sir. Thank you very much. Good morning. Good morning, everyone, and welcome to ABN AMRO's Q2 results. Delighted to be joined for the first time by Lars Kramer. He's in the room next to me, our new CFO, and Tanja Cuppen, our CRO. Just stepping back on Lars for a minute, he has an extensive experience in the banking sector, joined us from the Hellenic Bank, where he was Group CFO and member of the Managing Board. Prior to that, he held various CFO functions within ING. We will now run through our Q2 results and update you on the progress on our strategic agenda. Lars will go through our second quarter results in more detail. Tanja, as always, will then update you on impairment developments in our loan portfolio. Turning to our second quarter results on slide two. It is very clear that COVID-19 has impacted all of us in some way or another, but the outlook is surely, but slowly improving. Society is gradually opening up as vaccination programs across Europe are steadily progressing and restrictions are easing. We expect the economy to rebound in the second half of the year. The more optimistic outlook on the economy allowed us to release impairments this quarter. I'm pleased with the result over Q2 of EUR 563 million, excluding CIB non-core. We indeed made a big step in the wind down of the CIB non-core portfolio this quarter, thanks to a number of portfolio sales. The wind down is one of the reasons why interest income was lower this quarter, as well as the negative interest rates environment, which continues to put pressure on our deposit margins. Cost-saving programs are on track, yet at the same time, we are investing to lay the foundation for the future of the bank. We continue to work towards a cost base of EUR 5.3 billion for the full year. Given the good progress on the wind down and the optimistic outlook on the macroeconomic environment, we now expect the cost of risk for the whole bank to remain well below the through-the-cycle level of the year. The ECB stated they will not extend the dividend recommendation, and this allows us to pay the final 2019 dividends in October. Let's turn to strategy on slide three. Just a brief reminder of the outcome of the strategic review we undertook in November. We have a strong foundation with leading market positions across all customer segments, retail, private, and corporate banking. We have strong digital capabilities, which have helped us to adapt rapidly to the COVID pandemic. The Dutch economy, which is our home market, is healthy and resilient. Lars will update you on this later on. For our clients, we want to be a personal bank in the digital age. We choose to serve those clients where we can achieve scale in the Netherlands and Northwest Europe. We will continue to lead in sustainability, while we're also building a future-proof bank, which is digital first with simple processes and products. We set ourselves an ambitious program, on the next slide, I'll highlight the continued good progress we've made on our strategic agenda so far. Starting with the first pillar, customer experience. We are leveraging our video banking platform, starting this quarter, mortgage clients can now be connected live with a specialist without prior appointment. Staying with mortgages, we have launched a new price competitive label, Moneyou, which will serve the important intermediary market. Moving to sustainability, we aim to be the first choice of our clients in sustainability, addressing a clear need and attracting target clients. This quarter, we announced the launch of our EUR 425 million sustainable impact fund, and we closed the first in its kind green IPO. The AML remediation is well on track, and I expect completion in 2022. At the same time, the pace of branch closures has picked up this quarter with the closure of a further 17 branches, bringing the total down to 79, as most clients now do all their business with us through digital channels and call centers. Turning to slide five, let me update you on the progress of the CIB non-core wind down. I'm very pleased with the significant asset sales we achieved this quarter. These transactions significantly reduced our exposures in the U.S., especially in the oil and gas sector, intermodal, and shipping. The overall discount we took on these transactions were modest given the size of these transactions. Looking at the overall wind down, we are now over 80% done in one year. Clearly, this is well ahead of schedule, and the remaining non-core portfolio could end up below the EUR 2 billion mark by year end. This brings us into the tail end of the wind down. Looking ahead, costs will start to come down materially in 2022, as we start to hand in foreign licenses and wind down mid and office back office operations. We have materially delivered on the non-core wind down ahead of schedule, and this is improving the overall risk profile of the bank. Tanja will discuss the risk profile of the remaining non-core portfolio as well as for the bank overall. First, let me hand over to Lars, who'll take you through the financial results of the quarter. Lars, go ahead. Thanks, Robert. Morning, all. I'm delighted that this is my first quarter as CFO of ABN and to have joined this great institution. I also look forward to meeting you guys as well as the investors in the coming months. Let me highlight a few of the main performer results of the core bank. This will be excluding the CIB non-core. We showed a net profit of EUR 563 million. This was helped by impairment releases. The operating income held up as the NII declined due to the low rate environment, but this was offset by some higher other income. Operating expenses were down due to seasonally lower regulatory levies, while there was some cost increase in the AML front. We again released impairments this quarter as our macroeconomic outlook turned more positive and new additions to impairments were very limited. I'll run through the developments we're seeing in the Dutch economy on page seven. While the Dutch economy is feeling the impact of COVID, the extensive government support measures have been very effective over here. The success of the support measures is evidenced by the exceptionally low level of bankruptcies, and we can also see unemployment decreasing towards pre-pandemic levels. Consistent with these developments is the rebound we observe in consumer and corporate confidence. While COVID cases rose strongly following easing of many restrictions, we see cases coming down quickly as a number of the measures were reinstated. The willingness to vaccinate is high in the Netherlands, with over 85% of adults now vaccinated at least once. Given these developments, we're optimistic about the economic outlook for the second half of the year as restrictions are lifted further. Now turning to slide eight, I'll discuss how this affects our business. Mortgage volume was up again for the quarter as the number of housing transactions remained strong. With the launch of Moneyou as a low price label, we have another tool in our chest to increase our market share. Corporate lending volumes for the core bank stabilized, and demand is still muted by the extensive government support measures. We do expect volumes to pick up, however, in the second half of the year, which will help us in achieving the TLTRO threshold. Now turning to interest income on slide nine. The NII of the core bank came down compared to Q1, reflecting deposit margin pressure and the wind down of CIB non-core. Higher prepayment penalties for mortgages were more than offset by EUR 30 million of incidentals. Mortgage margins will be lower back book margins due to the ongoing strong competition in the markets. However, the effect on NII was partly offset by growth in volume. Looking ahead, we do face deposit margin pressure of around EUR 20 million per quarter, which will be mitigated partly as we lower the threshold to 150,000 for negative pricing, which started already on July 1st. The wind down of CIB non-core leads to NII declining by around EUR 10 million per quarter during the remainder of the year. Together with all of this, I expect that NII will be between EUR 5.3 billion and EUR 5.4 billion for the year. The range reflects whether we achieve the TLTRO threshold or not. We are optimistic on the outcome, though we do have some work to do to reach the threshold. Now moving to slide 10 for fees and other income. Fee income for the core bank was stable. Positive stock market developments supported the results in private banking, and we saw another strong quarter for global markets. Fee income for clearing is still strong. However, slightly below Q1 as markets have settled down. For the second half of the year, I expect fee income around EUR 400 million per quarter. While the strong markets related income may not hold up, we are seeing credit card usage improving as restrictions are lifted. Moving to other income. Positive equity participation revaluation has boosted the results for the core bank this quarter, and other income for CIB non-core was negative due to EUR 121 million haircuts on their asset disposals. Turning to slide 11 on costs. Expenses were slightly up this quarter, mainly from rising AML costs, impacting both personnel as well as other expenses. AML costs are expected to peak this year at around EUR 425 million as we are ramping up FTEs. Expenses also rose due to the investments we're making in our strategic agenda, Robert already highlighted a number of products and services which we brought to the market recently. For this year, we expect costs to peak at EUR 5.3 billion, also reflecting some additional regulatory levies and general cost inflation. Cost savings are on track to reach our target in 2024 of EUR 0.7 billion of absolute cost base being no higher or EUR 4.7 billion. Now turning to capital on slide 12. We'll pay the full-year 2019 dividend in October, as the ECB has announced that the dividend recommendation won't be extended past September. As we announced previously, we'll not pay an interim dividend this year, only a full-year dividend. We're committed to resuming dividend payouts amounting to 50% of net profits as stated in our dividend policy. Capital ratios increased further, reflecting the Q2 net profits and lower RWAs, specifically driven by the non-core wind down. In addition, Basel III operational risk-weighted assets decreased following the AML settlements. Basel III RWAs are expected to converge towards Basel IV in the coming quarters as we shift some portfolios to the foundation and standardized approach and as well as the DNB mortgage floor kicking in sometime around the 1st of January. Our leverage ratio is also strong, and as SA-CCR has now been implemented, these numbers are no longer pro forma. With that, I'd like to just hand over to Tanja. Thank you, Lars, and good morning, everyone. This quarter, we again released impairments as the macroeconomic outlook improved, and we made significant progress on the non-core wind down due to portfolio of sales. The improved macroeconomic outlook led to significant releases in Stage 1 and Stage 2 of total EUR 99 million. We increased the management overlay by EUR 12 million, reflecting the current unprecedented economic circumstances not fully captured by our models. The total management overlay now amounts to EUR 343 million, with the Stage 3 ratio improving from 3.3% to 3%, Stage 2 ratio improving as well to 9%, and an adequate Stage 3 coverage ratio of 64% in non-core, covering some of the tail risk. The outlook for credit risk is positive. For the bank overall, I'm therefore confident our cost of risk for this year will be well below the through-the-cycle cost of risk level of 25 basis points- 30 basis points. With that, I would like to hand back to Robert. Thank you, Tanja. Let's turn to slide 14, which shows our financial targets and strategic KPIs. Our net promoter score is well on track for mortgages, but we have indeed work to do on SMEs. The current score on SMEs is very much influenced by the negative sentiment around the AML settlement, closing of branches, fee increases, and some operational changes as we are transforming our client service model. I am pleased with how our mortgage business is doing. Despite strong competition, we managed to grow our loan portfolio. The launch of our new mortgage label should help to increase market share going forward. As economic growth resumes, we aim to capture our fair share of the business in the SME sector. I'm pleased with the progress we continue to make on our sustainability KPIs. We see clients further increasing their investments in ESG and impact related investments as interest remains high in these products. Our costs are under control. I'm confident we can achieve our 2024 target as set out by Lars just now. With a large part of the non-core assets now wound down, the risk profile of the bank continues to improve. This year, we expect our cost of risk to remain well below the through-the-cycle level. Our capital position is strong. With our Q4 results, we will update you on the threshold for share buybacks and dividends. To wrap up, we showed a good net result over the second quarter, helped by releases from impairments. We feel the impact of the low interest rate environment in our deposit margins and competition in long-dated mortgages. We expect an economic rebound in the second half of the year, which should return some growth in corporate lending volumes. We made a significant step in the wind down of the CIB non-core portfolio this quarter. Cost savings programs are on track, and at the same time, we're making investments to lay the foundation for the future of this bank. Last but not least, the final 2019 dividend will be paid in October. Next, I'd like to ask the Operator to open the call for questions. Thank you, Sir. We're starting the question and answer session now. If you have a question or remark, please press star one now on your telephone. May I remind you to limit yourself to two questions. If you have any remaining questions afterwards, you can press star one again to rejoin the queue. Thank you very much. Please press star one now for your questions or remarks. Go ahead. Our first question is from Mr. Benoît Pétrarque of Kepler Cheuvreux. Go ahead, your line is open. Good morning, everybody, and welcome, Lars, to this call. Just a few questions on my side. First one will be on the cost. I think your guidance is clear on EUR 5.3 billion for this year. Given the good progress on the runoff, how do you see cost developing in 2022? I think you target EUR 4.7 billion for 2024, which is quite far away. Could we trend towards EUR 4.7 billion earlier than expected? That would be the first question. The second one is on capital with your 16% CET1 ratio under Basel IV, which is extremely strong. How do you think about share buyback in this context? Are you currently in discussion with the ECB? Just wondering how the discussion is going actually on the potential additional distribution on the top of the one you announced for the Q4. Just maybe, just finally, on the legal side, any update you want to provide on the variable interest rate for consumer loans? We've seen that Rabobank announced a settlement, and I was wondering if, on the basis of this settlement, how much provision will be taken on your side? Any thoughts on the new ruling around the variable mortgages as well, which came lately as well. Any thoughts on that? Thank you very much. Thanks for the question. I'm counting four of those. I'll take them in order. I think you're absolutely right. The runoff has accelerated. We've talked about this before, where we'll look at the cost base in 2022. As indeed, we are handing back licenses, offices will close. We'll see how much we can bring forward. We will still maintain our guidance of EUR 4.7 billion. By the time we've completed the overall analysis, I would expect we'll come back to you on the effect of accelerating a further cost wind down related to the wind down. In terms of your question on the share buyback, I think I've been very consistent in stating that, A, we'll pay our dividend on 2019 dividend this year when restrictions ease. B, we will look at potential share buybacks in the first quarter of 2022 on the basis of the results of 2021. That is a conversation we will have with the JST, clearly, as we need to continue to engage on constructive dialogue with our supervisors. We expect to do so as we begin to firm up our positioning on buybacks. Keep in mind, as I've said before, this will be done on the basis of a full-year result 2021. In terms of the legal files on Kifid, your specific question, that is indeed an issue which we've flagged before. We continue to be in constructive dialogue with the Dutch Consumer Agency in order to determine an overall position, whilst taking note of the earlier announcements in the Kifid- case. We've provided what we can provide for at this stage, what we know of, and we will continue to have the constructive dialogue with the Consumer Agency in order to reach some conclusion. As soon as we have those conclusions, clearly, we will communicate. On mortgages, remind me again of your question. Yeah, we've seen this Kifid case on mortgages as well, going in the same direction than the consumer loans, the variable loans. Any thoughts on that? Could that be a potential risk for you, or are you confident that you can take any actions? As far as I know at this point, that's not a risk for us. Okay. Thank you very much for that. Thank you. Our next question is from Mr. Stefan Nedialkov of Citi. Go ahead, your line is open. Yeah. Hi, guys. Good morning. It's Stefan Nedialkov from Citi. A couple of questions from my side. The first one is on NII. Just to confirm that the EUR 30 million in NII is a one-off from the German dividend tax withholding issue. That's a proper one-off. There's no repeat of that going forward? Similarly, the EUR 22 million of funding cost breakage in the non-core CIB, that's also a one-off. Just more broadly on NII, you have made some comments that your front book spreads are below your back book spreads, and that you're repositioning your Moneyou offering to be a price-competitive product. I just wanted to understand here, what's the value proposition to the customer in Moneyou, and what's the value proposition for you? Are we talking about sacrificing margins a little bit going forward, but the expense of higher volumes? A couple of different parts to the NII question. Apologies for that, but there is a fair amount going on here. My second question is on fees. The EUR 400 million of guidance that you have for a quarter. How much of that relative improvement versus your previous guidance is driven by your confidence in CIB, core CIB lending? Those fees held up pretty well this quarter. I guess that's also key to meeting your TLTRO- target. Thank you. All right. Thanks for the questions. Lars, could I ask you to comment? Yeah, Stefan, on the NII, definitely the EUR 30 million is a one-off. On the EUR 22 million break funding costs in terms of the non-core is also a one-off. These things happen as you're unwinding funding, as you're selling off positions. In terms of the uniqueness of the Moneyou offer, I would say that from a customer point of view, there is definitely a channel that is focused at the intermediaries, firstly. For us, it is a straight-through channel. In a way, what we get there is an improvement in efficiency, therefore one of the steps for us at least in terms of our cost savings and digitalization efforts and straight-through processing efforts. This is probably the biggest benefit. Therefore, also, some of that benefit we do pass on to the customer. In terms of fees, I would say the EUR 400 million level, we've got two impacts. We've had a positive impact in the first half of the year, really coming from more volatility in the markets, as well as a strengthening of the share markets, which has obviously helped the private banking fees. We do expect that volatility, and we're already seeing it. It's actually calming down a bit. Maybe that won't carry through so much into the second half of the year. On the flip side, we are seeing a pickup in terms of our credit and debit card usage. That should more than compensate anything that happens in terms of the market. The fee pickup in terms of CIB lending, definitely we are seeing in terms of at least stabilization in volumes on CIB. In terms of pipeline, there is definitely something happening in terms of a more positive pipeline, which is also what we would expect to see in terms of our economic outlook as well for the second half of the year. We definitely should be getting some good tailwind there. Yes, that could be a supportive factor as well in terms of fees. Okay. Thank you. Thank you. Our next question is from Mr. Omar Fall of Barclays. Go ahead, please. Your line is open. Hi there. Just a couple of questions from me. If I take CB and core CIB as proxies for the TLTRO benchmark. It looks like you maybe need 4% volume growth for the rest of the year to meet the threshold. That seems awfully ambitious, even if corporate loan demand picks up and the pipeline you mentioned crystallizes. Just some more color on that would be helpful. One for Tanja. I just want to revisit the 25 basis points-30 basis points through the cycle cost of risk target that you presented at the last Investor Day, which continues to frankly make very little sense to me when it's the same as it was in the last cycle when non-core made up a small proportion of the overall book, but drove more than half the loan losses. What's the real through the cycle cost of risk for ABN when non-core is almost gone? Based on history, it looks like barely 10 basis points. Thanks. Thanks. I'll ask Lars to comment on TLTRO and Tanja on the cost of risk. Yeah, Omar, in terms of the growth expectation, clearly you've got to take it from the background of the first half of the year was still very much impacted by COVID, and therefore loan demand and working capital demand was still muted. We also still in the Netherlands have the government measures going directly to companies. These government measures we expect to be lifted come Q3, and therefore there's quite a bit of pent-up demand here that we're seeing that's built up. 4% in a half year, I agree with you, in a normal year would seem very ambitious, but in a period where we are really coming out of COVID, and certainly every sort of forward-looking that we are doing at the moment is skewing towards the positive. It is doable. The other thing to take into account is that in CIB, you are looking at much bigger tickets. You can actually move the dial with not having to wait for a lot of smaller tickets. We're definitely not depending on this coming from consumer lending. We are very much seeing CIB as the driver and then flowing through into the commercial bank. Okay. Omar, on your question on cost of risk, indeed, you're right. Our risk profile for the core bank is a clear improvement once non-core has been wound down. Indeed, we didn't update our cost of risk guidance during Investor Day because non-core would be part of the bank for quite a bit of time, up till 2023 and beyond. Right now, we see actually this quarter that we made significant steps in winding down non-core, which feeds into the guidance for this year as well. Well below this through the cycle cost of risk. We haven't updated our guidance yet, but that's something we will look into at some stage. Thank you very much. Thank you. Our next question is from Miss Giulia Aurora Miotto of Morgan Stanley. Go ahead, your line is open. Yes. Hi. Thank you for taking my questions. Two, please. The first one, I want to go back to the capital distribution question. At the moment, CET1 is at 16%, if I look at the Basel IV, and the target for buybacks is basically above 15%. On this basis, could we assume that the whole 1% excess could come back in terms of buybacks? Or that optically is too high in terms of payout based on basically 2021 results? Perhaps a sub-question on capital. Given all this excess capital, is there a chance that you might consider perhaps some further restructuring or some further actions to basically improve profitability structurally, given that revenues are, especially NII, are a bit weak? My second question is a bit of a technicality on NII. If I look at the trends in the key divisions quarter-on-quarter, especially retail and commercial banking, they are down quite a bit. Corporate center, especially once they remove the EUR 30 million one-off, NII actually went from -EUR 30 million in Q1 to +EUR 52 million in Q2. I was wondering what drove that big change, and what is the realistic level of NII for the corporate center? Thank you. Hi, Giulia. Thank you for your questions. Let me take the first two, Lars, maybe take the second. Go back to the 16% of Basel IV, CET1 around the 16% Basel IV that we've gotten to. We have said that we would consider the discussions on buybacks, as I said previously to the previous question, in the first part of next year. I don't want to get ahead of that conversation just at the same time. I will say that what we will also engage in during that discussion is a recalibration also of the thresholds that we have considered in terms of buybacks. Now, without really getting into the details of what that conversation will entail, I will confirm again, as I've done consistently, that we will have those conversations both within the bank and then subsequently to get to a decision on that based on our full-year results in 2022. As to your question on further restructuring, at this point, we continue to execute against a strategy that has been designed around an anticipated ROE out in 2024 with a cost base of around EUR 4.7 billion or lower. That's what we clearly guided toward as we talked about our expected cost basis. We will always look at the potential to accelerate our costs decreases. We just talked about non-core and the potential there for an acceleration of further costs. We will continue to evaluate this as the year continues. I think on the technical question around the Corporate Center, it relates a bit back to the earlier question about the break funding cost, where the break funding cost is a one-off. Actually, in terms of the organization as a whole, we have a EUR 21 million prepayment pickup as well against that. Overall for the organization, it's neutral. I think it has to be looked at in that light. Thank you. Our next question is from Miss Anke Reingen of RBC. Go ahead, your line is open. Yeah, hello. Good morning. Thank you for taking my question. Apologies for coming back on the capital. Just one thing. In terms of the speed of running down the excess capital, are you considering special dividends as well, or is it mainly ordinary dividends plus the buyback you have in mind? Secondly, on the private bank, you gave your strategic update. It was in one of the growth engines and one of the momentum areas. I just wonder how happy you are here with respect to the performance. They seem to be impacted by the charging of deposits. Just if you can maybe just talk about your general, how you think it's positioned and then also if M&A is still one area that you think you could consider strengthening that business part of yours? Thank you very much. Yeah, thanks for your question. On your question on dividends, just let me reiterate. 2019 dividend will be paid during in October 2021. Then any other considerations in terms of buybacks we will have or consider during the first quarter of 2022 based on those full-year results. At this point, we are thinking about the potential for buybacks. We will discuss, as I've said before, recalibration of thresholds. When we've decided, we will then communicate what the outcome is. On the private bank, actually, I've been quite pleased with the performance over the second quarter. Net- net, although we've seen a significant cash outflow, which is a direct result of the negative interest that we began charging, pushing out cash as we intended to do. We've also seen an increase on NNA of about EUR 1.9 billion for the six months. That implies that we've indeed received also new customers. We've seen an increase on the back of market conditions of fees as well. At the same time, we continue, as I considered a Northwest European strategy around our private bank. We continue to expand on our strategy to serve entrepreneurs and their enterprises. We're uniquely positioned for that particular segment because we do carry the sectoral knowledge of our corporate bank, making it available to entrepreneurs as we serve them around their own private needs. Strategically, that makes a lot of sense in terms of the uniqueness of the proposition. Therefore, when we consider M&A, as I've said before, both on M&A could well be in that direction as well. Strategically, I'm happy with the performance of the private bank. Clearly, we will continue to ensure that that performance will continue to benefit from the economy further opening up. We will consider M&A as and when appropriate. Thank you very much. Our next question is from Mr. Guillaume Tiberghien of Exane BNP Paribas. Go ahead please, your line is open. Good morning. Thanks for taking the question. I have a question on the corporate center, whether you could give us a guidance of what to expect maybe at the PBT level, maybe this year and going forward, please? Thank you. Yeah. I think that's going to be a short answer. We're not going to give any specific guidance in that sense. That's a very short answer. Maybe if I try to rephrase it a little bit, do you think your revenues can be around zero in the Corporate Center? Yeah, I think you're rephrasing your question, but I guess the essence is still the same. We're not going to get into those specifics. Okay, thank you. All right. Our next question is from Mr. Robin van den Broek of Mediobanca. Go ahead, your line is open. Yes, good morning, everybody. I was just wondering if you could specify how you deal with your private equity investments in your other income line. Some gains came through this time, I think also related to the Tink sale. That asset has seen quite a few refinancings over the last few quarters. You would expect, basically, that you capture those gains when those events happen. I was just wondering if you could comment on that and also if there's more gains in the pipeline? That's question number one. Secondly, also in relation to Omar's question on TLTRO, did you confirm that the core CIB and the CB divisions are a good proxy for where you stand on getting through that benchmark? With Q1, you sound pretty optimistic on making that benchmark. Do I understand correctly from your narrative today that you're a little bit more cautious now? Maybe lastly, and sorry to come back on this, on the buyback levels. If you were to lower your threshold based on the AML settlement, I think 1.5 percentage point is quite a bit of potential buyback, especially given your average daily volume with a shareholder that still has 56%. I was just wondering, to what extent is this limitation driven by the liquidity for stock consideration in setting a buyback on those levels? Thank you. All right. Thanks for the question. Lars, would you mind taking the first two? I'll take the buyback. Our accounting treatment here for the private equity is very much a mark-to-market treatment. We are continuously, every month, looking at what the best fair value is. For the Tink one, there was basically new information. This is going to be a volatile item. This tends to be the nature of all these investments that we hold in a mark-to-market portfolio. I can't give you an outlook on that. This quarter, it was a positive outlook. In terms of the TLTRO, I don't think we're changing our views. In fact, I think we are supporting the view that we really believe that we can make this threshold and that we are working extremely hard to get there. For sure, the CIB and the CB are going to be the primary engines that are going to get us there. Yeah. In that sense, our outlook has not changed versus Q1. To your question on any potential buyback and the resulting role of the stock or the majority shareholder. We're going to get to our own assessments around the potential for buybacks. It will then go through the usual governance that you should expect from us. That's what we will then do, and the results of that will be communicated. Thank you for those answers. Sure. Now we have a follow-up question from Mr. Stefan Nedialkov of Citi. Go ahead, your line is open. Yeah. Hi, guys. Just a follow-up on the number of questions that have been asked on the buybacks. If you will, can you give us a targeted buyback one-on-one, so to say. Are they feasible in the Netherlands? How quickly can they be implemented under your governance structure, if at all? Is this something you would consider? Thank you. As we consider the structure of the buyback, we will have ongoing conversations, clearly, on how to best execute a buyback. There's a number of options you consider on buybacks, and I appreciate the need to know and the type of scenarios that we'd like to run, but I really don't want to get ahead of that discussion before we've had a clear indication of what the buyback will actually entail. As I said before, and I appreciate there's a need to know and there's a desire to know, but I do think we need to go through our own governance before I give any further details around how we would potentially structure a buyback. Now, rest assured, if that's applicable in the questions and very well-understood questions on buybacks, I've been very clear about returning 2019 dividends. I've also been very consistent and clear around when and how we would consider buybacks. As soon as we have any details as how we intend to structure, if and when we consider the buybacks, I will come back to this audience post-haste. Robert, just to make sure I understood your answer. My question was, is there anything legally preventing a targeted buyback for any bank in the Netherlands? Is there anything in your governance that currently prevents you from doing trying to buyback? There's nothing in there that would keep us back, no. Thank you. Our next question is from Mr. Tarik El Mejjad of Bank of America. Go ahead, your line is open. Hi. Good morning. Just one question, please, on capital. The CET1 build was driven by a material drop in RWA from op risk and credit risk. I wanted to know if there is anything on this RWAs decree that could reverse in the coming quarters. Like, is one of the things that affect the whole decrease is actually there to stay. Also, when you mentioned. Sorry, could I ask you to speak a bit clearly into the mic? Your line is breaking up a bit. Sorry. I was saying. Is this better? Yep, that's much better. Thank you. Sorry about that. I was saying your CET1 ratio build was mainly driven by a significant drop in your RWAs from op risk and credit risk. I want to know if there's anything in this drop in RWAs that could reverse or increase in the next quarters due to technicalities? Or is it there to stay? The second question on capital is the 16% CET1 ratio in Basel IV that you kindly give us as indication, if that includes all Basel IV impacts, like further implementation and everything, or is it just a part of it? That's it for me. Thank you. Tanja, could I ask you to comment? On your first question on RWAs, I think it was already mentioned previously in the call what we still expect in the coming period. It is one related to reversion to different approaches, standardized and foundational approaches that will lead to some increases in credit risk RWAs. Also, the DNB add-on is expected in the first quarter of next year. Yes, there will be some ongoing developments in RWA under Basel III. What was the second question? Sorry, I forgot. Could you repeat your second question? Yeah. Yes, of course. The second question was. Okay. Basel IV number you gave us of 16%. Does that incorporate all the Basel IV impact or only part of it? Very hard to. So- It is all impact? I couldn't hear the question. The first part of your question is, you're breaking up a little bit. Whether the Basel IV, 16% incorporates? All business. All information. Tarik, are you still there, or could you maybe just repeat because again y ou were breaking up? Yes. Can you hear me now? Yes. I'm on a landline, so I'm not sure what's happening. Yeah. Yes. my question was, the 16% CET1 ratio in Basel IV. Yes. If that includes all Basel IV impact or only partial impact of Basel IV? Well, that is the Basel IV number based on how we interpret Basel IV at this date. Of course, as you are aware, the Basel IV regulations are not final yet. This is based on what we know today. Everything we know today is incorporated there. Okay. Thank you, and sorry for the voice on the line. No, worries. We got there. Our next question is from Mr. Benjamin Goy of Deutsche Bank. Please go ahead. Your line is open. Yes. Good. Hi, good morning. Just one follow-up from my side. Maybe you can give us a bit of context on how important prepayment fees are for your net interest income normally. Now, in Q2, it was a good boost. I think Q4 is also seasonally strong, but just trying to understand how important this is to your quarterly NII generally? Thank you. Thank you. Lars? Okay. I think prepayment fees, yes, in the second quarter was particularly strong. There is some seasonality attached to this, and it basically has to do, I think, with this COVID period as well. People having saved a lot, they have used some of that additional cash to pay off. The seasonality here would normally be probably Q2 and Q4. Is it important? Well, it's important that we do get some payback for prepayments, because clearly this is lost income for the future. I don't think it's going to be at these sorts of levels carrying through. When we're giving our projection of the 5.3 to 5.4, we're not building in there that it's EUR 20 million a month or a quarter. Okay, understood. Thank you. We have a follow-up question from Benoît Pétrarque of Kepler Cheuvreux. Go ahead, your line is open. Yes. On the head office disposal, could you update us on that one? In terms of timing, do you still expect that to be happening in the second part of the year? Just on the capital, leaving aside the kind of question on the excess capital versus your threshold of 14.5% or 15%, whatever. You are going to be paying 50% payout ratio. Arguably, you could actually push it to almost 100%, right? In a year where your CET1 ratio under Basel IV is 16%. What is your thoughts on the adequacy, let's say, on the more long-term of your 50%? That's it. Okay. Thank you. On the disposal of our headquarters, I'd say the transaction is proceeding. It's continuing. We've targeted completion for the end of the year. When we have announcements to make, we'll make announcements. In terms of our dividend policy, we've just recalibrated our dividend policy just last year. At this point, I don't see any reason to change the policy as is. We will stick to the policy of 50% as we communicated in November last year. Okay, great. Thank you. All right, thanks. We have a follow-up question from Giulia Aurora Miotto of Morgan Stanley. Go ahead, your line is open. Yes. Hi, thank you for taking my follow-up question. It's on Net Promoter Score. I understand why it has decreased. You highlight a number of things, fees and AML settlement. How do you plan to turn that around, also in light of targeting market share growth? That both in mortgages and in SMEs, please? Thanks for your question, Giulia. I'm glad you referenced that because these are important indicators to us as we continue to execute our strategy. On mortgages, I'm actually quite pleased with where we are in terms of our ultimate goal set on NPS for mortgages. All the initiatives we talked about during this call, particularly as we work very closely with our intermediaries, allowing opening up of digital channels, particularly speed of offering with the relevant pricing levels that go with these types of offerings will continue to help impact our mortgages NPS. On SME, clearly the reasons that we've indicated are the reasons and why the NPS scores decreased. It's never good that it happens yet again on the back of negative publicity as it related to settlement, as it related to some of these offices that we were closing. It was to be expected. The way we're offsetting this is to continue to ensure that our digital capability to the SMEs continues to improve. That's actually why we've launched the various initiatives that we've also highlighted in our quarterly report. I think the first indications are actually quite positive. I can speak from my own personal experience in talking to many of these SMEs about, A, the digital packages that we're making available to them, but at the same time, starting to combine some of our expertise around private banking in a service offering to SMEs actually does do very well for NPS. Now, clearly, as you know for NPS scores to begin to change, that'll take a few months to actually see the effects thereof. We will continue to monitor, and we will continue to adjust as necessary. Thanks. We have a follow-up question from Anke Reingen of RBC. Go ahead, your line is open. Yeah. Thank you very much for taking an additional question. Apologies to follow up. You might as well say I have to wait till February. Just trying to understand, is a payout ratio consisting of the dividend 50% and the buyback above 100%, is that possible? You see 100% payout ratio is basically as much as you can go, obviously aside of the 2019 extra payments you want to do this year? Thank you very much. Yeah. Again, I appreciate the question, I'm just not going to get into the details of what the potential buyback in combination or in relation to payout ratios would look like. I think we've been very clear that we need to get our facts on the table as it relates to full year results 2021. That will be the time that we will then consider buybacks, as we said all along. As soon as we have the details on how we expect to structure a buyback, we will provide those details. Okay, understood. Thank you very much, and sorry for asking again. No worries. We have a follow-up question from Omar Fall of Barclays. Go ahead, your line is open. Hi there. I just wanted to ask about M&A, please. Historically there's been disappointment on capital return that the group, prior to your times here, because the spreadsheet math have been attractive in terms of excess capital. We're surprised by unforeseen uses of that capital. What confidence should shareholders have that the same might not happen now in terms of M&A? I.e., that any transactions are truly bolt on. I guess a lot of the confusion around capital stems from the fact that, unless we're really talking about paying out more than 100%, the math suggests that your high starting point of capital is just going to keep growing ad infinitum, even with a reasonable payout. Thanks. Yeah. I can't really talk about the M&A that's happened before at the bank. Hopefully, the track record is telling you right now in a year's time we've made some very conscientious choices and we've executed consistently against it. That means that any time I will consider M&A, it has to be accretive in terms of the strategic choices that we have made, keeping in mind of the dynamics of any transactions that we would have to do. Obviously it's keeping the strategic priority for the bank front and center, but it's also keeping any potential considerations for shareholders front and center in the way we would structure any deal. The only way I can show that to you is by actually concluding a transaction, and let the record then speak for itself. We will only consider transactions when and if they are accretive to our overall strategy. That will consume some capital. Hence, we said in our calibrations in our 200 basis points, 13%-15% calibration, there is something in there that is allocated to M&A but will be very consistent as we have been all along around the actual execution of M&A. Thank you. We have no further questions, sir. Please continue. Okay. Well, that wraps up the call for today. Again, really love to thank you for all your questions. I know we're going to be speaking soon again. I'm sure we'll have a follow-up with some of the questions that we were talking about today. For now, see you later. This concludes the ABN AMRO second quarter 2021 analyst and investor call. Thank you for your attention. You may now disconnect.