It's 11 o'clock already. My name is Agnieszka Dowżycka, I am Head of Investor Relations in Santander Bank Polska. I'd like to welcome you all at the presentation of the financial results of Santander Bank Polska Group after the first half of 2023. Today with me we have Michał Gajewski, our CEO, Maciej Reluga, our CFO, Wojciech Skalski, head of financial accounting area. Let me give the floor to our CEO, Michał Gajewski. Good morning. Welcome at the presentation of the results after the first half of the year. As Santander, we want to consistently and consequently help our customers. Our business model works well. We are performing against our targets as planned. As we said in the previous quarter, we must bear in mind all the external factors that affect our performance. At the end of June, we generated PLN 3.2 billion of gross profit. At the same time, the tax levies were PLN 1.2 billion, while the total regulatory costs amounted to additional PLN 194 million. We closed the first half with a solid net profit of PLN 2.3 billion. In slide seven, we can see general operational data. Let's move on to this slide. As a group, we provide services to over 7.5 million customers, out of which over 4.2 million are digital customers. In Santander Bank Polska itself, we have 5.8 million customers, of which 3.4 million are digital customers. Year-on-year, the number of digital customers grew by 7%, and the number of mobile app users grew by nearly 14%. Customer deposits totaled PLN 201 billion and grew by 9% year-on-year. The gross loans portfolio year-on-year grew by 3% to PLN 163 billion. Our assets grew by 7% to PLN 264 billion, and customer funds alone totaled PLN 216 billion, which is also a material growth year-on-year by 10%. Now slide eight. I will discuss the results in detail in further slides. Now let me highlight the key items. As I said, PLN 2.3 billion of the group's net profit for the first half of the year, net interest income was PLN 6.3 billion, and net fee income was PLN 1.34 billion, an increase by 5% year-on-year. The total income was PLN 7.6 billion, and this means a growth by 17% year-on-year. The TCR for the group was over 20.77%, and return on equity was 14.3%. Our capital position, in my opinion, allows us to generate further growth and address all the risk factors that could occur in the future. In our assessment, it also allows us to share the profit with our shareholders. Slide 10, our customers. As I said in slide seven, 3.4 million active digital customers, including 3 million retail customers, which means a growth by 7% year-on-year. 356,000 SME customers, a material growth in this segment as well by 8%. In terms of large businesses, we had over 21,000 such customers. The number of mobile application users is also growing. Currently, it's almost 2.6 million customers. In retail, by 13%, and in SMEs by 24%. The number of transactions in mobile banking also grew. We have already made over 70 million transactions in the retail segment, 29% more year-on-year, and 2.2 million transactions in SME segment, a growth by 34%. In slides 11 and 12, you can see our new products and services and our customer support activities. Let me mention just a few key highlights, new products and services. For example, for retail customers, we prepared a refreshed account and debit card offering. On the 1st of July, we launched Santander Account, Santander Max Account, and Santander on the go package. For SME customers, we improved the lending process and reduced the time to yes. For corporate customers, we introduced more improvements in iBiznes24 platform, an option of executing transactions at a future date in the e-FX module and simplifications of electronic services for amortization. In slide 13, we have some business data. For example, we have 5.7 million accounts for individual customers, an increase by 6% year-on-year, which translates into 322,000 more accounts year-on-year. Accounts in Polish zloty grew by 4%, foreign currency accounts grew by 12%. We also opened more accounts for foreigners. In this area, we recorded a growth of 18%. In quarter two, we sold mortgage loans worth PLN 1.6 billion. This is a double growth versus quarter one this year. In total, in the first half of the year, we sold PLN 2.4 billion worth of mortgage loans. When it comes to cash loans, the cash loan sales in quarter two totaled PLN 2.5 billion. On an annual basis, this is an increase by 3% and by 6% quarterly. Our sales in remote channels have been also growing, 67% in quarter two. In quarter four last year, 57% of accounts were opened and loans were given in digital channels. In the first half of the year, we sold PLN 4.8 billion of cash loans. Net sales of TFI investment funds totaled PLN 1.2 billion. Our Santander TFI assets totaled PLN 15.2 billion, and its market share was over 10%. We are very happy about that. In total, in the first half of the year, net sales of investment funds totaled PLN 1.9 billion. In the SME segment in quarter two, we opened 16,500 business accounts, out of which 52% were sold or opened in digital channels, including 31% of that in e-commerce. In the first half of the year, we opened over 35,000 customers, 35,000 accounts for SMEs. Total loan sales grew by 3% quarter-on-quarter and totaled PLN 1.4 billion. In business banking, so in larger company segments, we recorded good performance in terms of lending and we've been recording a growth in both loan and deposit balances. We have also increased our income on transactional banking and 12% growth in income from the e-FX platform. In corporate and investment banking, we recorded a growth in income from transactions in credit markets and trade finance services. Slide 15. As I said, gross loans grew year-over-year by 3% to PLN 163 billion. I have already mentioned sales in the retail and SME segments. In business banking, loans grew by 3%, while in the largest company segments, loans grew by 15% year-over-year. The lease portfolio grew by 10% to over PLN 13 billion, and the value of net sales was PLN 3.8 billion. Our factoring subsidiary has been also developing. It has grown by 7%, while the turnover, which is very crucial for this segment during that time, grew by over 14%. Slide 16. Customer funds, the deposits grew by 9% year-on-year and excluded more than PLN 200 billion at the end of June. Quarter-on-quarter, they grew by 2%. Comparing year-on-year, the deposits, they grew by PLN 17.1 billion. The growth of PLN 10.6 billion of that was recorded in the corporate segment and PLN 6.5 billion in retail. We can see some growth in term deposits and the decline in current accounts, which is natural given the interest rate environment. The group can boast excellent liquidity with the consolidated LCR at 205% at the end of June. Slide number 13. Net interest margin and net interest income. Net interest income in Q2 was PLN 3.2 billion, which is a growth of 3.5% quarter-on-quarter. Across 6 months, it was PLN 6.3 billion, growing by 22% year-on-year. The negative adjustment of net interest income in view of recognizing the impact of payment holidays was PLN 44 million. This is the result of updating our estimate to date, which was driven by the higher growth in deferred payments in 2023. As you can see on the slide, the reported annualized net interest margin in quarter two was 5.37%. That is, it was flat on the previous quarter. Slide 18. Net fee and commission income. We saw here the growth as well by 5% year-on-year, as the generated fee income was PLN 1.3 billion. We saw really good fees, especially in credit fees, which grew by 14%, debit card fees by 26%, insurance fees grew by 8%, and growth in credit card fees by 4%. In quarter two, the net fee income was PLN 678 million, growing by 2% quarter-on-quarter. Quarter-on-quarter, we saw a good growth in FX fees and fees for funds management, which showed a growth by 23%. Slide number 19. Income. PLN 7.6 billion, growing by 17% year-on-year and growth by 4% quarter-on-quarter. Lower income and other operations year-on-year are the results from our activities aimed at making settlements with customers, FX mortgage holders. For the group, the cost of that was PLN 267.5 million for six months, and in quarter two alone, it was PLN 82 million. At the end of June, we signed 6,700 settlements, of which 1,200 was signed in quarter two alone. Shaking it off, the other non-interest and non-fee income totaled PLN 232 million and PLN 72 million in quarter two alone. Overall cost. Slide number 20. They increased by 9% year-on-year. This was the result of lower levies arising from the contributions to the Bank Guarantee Fund and from the fact that the fees for the institutional protection scheme posted in quarter two 2022 were lower at PLN 407 million. Slipping all these levies, the cost overall increased by 16% year-on-year, driven by inflation, salary increases, IT costs, and building maintenance. We adhere to our cost discipline. Administrative expenses on the same basis actually declined by 1% quarter-on-quarter. That cost grew by 21% year-on-year as we actually revised the salaries in September 2022 and because we increased the variable component of the total pay. In the first six months, the cost-to-income ratio for the group was 30.4%, improving to what we recorded the year before when it was nearly 39%. Slide number 21. In the first six months, it was PLN 590 million. This is a growth year-on-year, which resulted from the low allowances we posted in the previous year and the observed impact of the economic landscape on the condition of our customers' portfolio. The cost of risk on annualized basis after quarter two is 80 basis points. The NPL coverage ratio is stayed at 58%, while the NPL ratio at the end of June stood at 4.9%. Slide number 22. Taxes and regulatory costs. I've already mentioned that after six months out of the profit of PLN 3.2 billion that we earned on a gross basis, we had to assign PLN 1.2 billion to taxation levies and PLN 194 million to regulatory costs, including contributions to the Bank Guarantee Fund of PLN 175 million. Slide 32. Summary. We can see that we are improving our performance quarter-on-quarter. Our sales volumes grew significantly, and this shows that our business performance in quarter two was better than what we saw in the solid quarter one. Of course, we are focusing on our overarching aim, that is, to help our customers prosper. Our effort has been appreciated because we were awarded the title of the best bank in Poland by Euromoney. That's all in presentation, and now let's switch to the questions- and- answers. We've had quite a lot of questions. Maybe let's start with the one that has been repeated a few times. The outlook for the dividend. When do we expect the formal letter from the KNF on dividend distribution? What's the probability of dividend distribution, especially after the last recent negative opinion about PKOBP? Let me answer this question. First of all, we received the official letter, and it referred to the European Court of Justice judgment being the condition, in a way, for dividend distribution. As I've mentioned to you already, our capital position, our performance actually allows us to share the profit, to pay the dividend, and also to cover all the risks that could appear in the next quarters. We will uphold our recommendation, and we want to get back to the discussions with the KNF about that. We will try to convince the KNF that given our capital position and our current performance and the situation of our bank, we will try to convince the KNF that we would be able to pay the dividend. We will not give you the probability of that happening, but in my opinion, we have very strong arguments supporting our recommendation. Now, the outlook for interest rates and what the sensitivity what's the outlook on NIM? We thought for a longer period of time that this is not the landscape for interest rate cuts given that we have the inflation target in place and what the NBP projections show when it comes to inflation. Nonetheless, the guidance of the NBP governor that we actually heard in July states clearly the conditions and outlines the landscape for interest rate cuts in the coming future. The inflation might hit one digit in September or August. We'll see. The inflation might decline further. We expect it maybe not as much as the inflation target, but then it might trigger the interest rate cuts. It is very likely that we might see some cuts in October or maybe already in September. It seems to us that there will be some break in the cutting cycle, but then in 2024, we will have the continuation of that. We do not envisage such cuts because the market is really aggressive in pricing in this potential cut. If this was to happen, well, of course, the reality is that we will see some cuts. For the time being, we've been facing some stabilization. This is in line with what we've been saying at previous conferences. If interest rates keep falling, clearly, it will be difficult to keep our NIM as it is. Of course, that will depend on the series of new loan situation in the sector. The sensitivity of NIMs, interest income to the interest rate changes, we do not provide it clearly in the report. We just actually provide you the sensitivity in line with the model. As you know, our sensitivity to the interest rates was quite high when the interest rate hike cycle started. In the recent quarters, it was contained. When we think about two years ago, about the share of variable interest loans in the total amount, it was 95%. Now, the fixed-rate loans represent one-fourth of our portfolio. This is a result of higher sales of fixed-rate loans and the fact that we hedged part of our balance sheet with swap transactions. There's also a very specific question referring to which part of the book is hedged and in what segment. The segments primarily refer to mortgage loans. I can say that on average, this is a hedge from four to five years for the PLN book. When it comes to the new sales, to show you the tendencies, the fixed-rate loans accounted for nearly 80% of sales in Q2. At the beginning of the quarter, it was 72%, and it grew to more than 80% at the end of June. These two trends really led us to decrease the sensitivity. Okay. The next group of questions refers to Swiss franc transition. What are the assumptions for creating provisions? Is there a bigger interest after the European Court of Justice's judgment? Are there any changes in customer behavior? Let me answer this. Of course, we can see a growth in customer interest in getting information about the credit history after this new judgment. This is also the result of the intensified marketing actions taken by law firms dealing with this. It can, but doesn't have to translate into the bigger number of lawsuits. This is already included in the modus for expected costs of legal risk. With respect to all the ends, we think that provisions are adequate and they correspond to the model. That is the lifetime model that we have in place. Of course, the growth in provisions in quarter two, it's related to the update of the number of expected lawsuits. As I said, it reflects our expectations. In the report, you can see the parameters that we are taking into account when building our model. We keep thinking that a settlement is a better solution than a lawsuit, and that is why we've been offering settlements to customers, and we are proactive in our actions in this respect. Actually, we covered the entire Swiss Franc portfolio of active agreements with our settlement efforts. We started to talk to those customers. We are in the course of negotiations with them. We could see that there were some expectations when it comes to the judgment, then there were different interpretations of this judgment. That was the period before the judgment and just afterwards when there was some slowdown in the pace of signing the settlement. We can see that now we are coming back to the pace that we saw before, and the customer's willingness is there. Of course, this is also driven by our marketing activities that we've taken together with other banks. All the time, we've been continuing our efforts. We are persuading the customers to go ahead with settlements. Of course, we have also the part of some customers who want to repay their denominated Swiss franc loans or indexed Swiss franc loans, and we respect their choices, of course. This. Doesn't. You can read that in note 33 to the report. You can read about the assumptions of the model and sensitivity to different scenarios. Now we have a couple of questions about settlements. How many settlements have we signed? Are those settlements based on the KNF chairman's conditions? There are some out-of-court settlements. There are some court settlements as well. We do not have the exact statistics, but we believe that each settlement is legally binding. What was the last question? Is it in line with the rules set forth by the KNF chairman? Yes. Those settlements are in line with the KNF chairman's proposal. What can we expect in the quarters to come? Well, we have been negotiating settlements with customers, but we do not have any targets for that. The number of settlements in quarter two dropped due to the number of settlements made in quarter one. That's all about Swiss francs, I believe. The cost of risk. There are a couple of questions about that. I have just received a few questions about settlements as well. The cost of settlements dropped strongly quarter-on-quarter. Will the bank improve their offering to encourage more customers to make settlements? We do not provide any values in the settlement scenario, and we cannot give you those numbers because it is in DTA, in deferred tax assets. That's the answer to this question, actually. The cost of risk, NPL, why such a growth in NPLs? Is it due to retail or business customers? This was due to retail customers, namely mortgage loans. There have been a certain number of customers who used the Borrower Support Fund and met all the conditions to be deemed NPLs. I believe that the 100 basis points has been revised two quarters ago because a quarter ago, we said that the situation looks a bit better and the peak would be lower than 100 basis points. A quarter ago, I would support what we said a quarter ago because it's in line with our expectations, namely an increase in the cost of risk took place. This results from how we calculate that because in 2022, we started off with low figures, and quarter two of 2023 was more or less at the level of quarter three and four of 2022. That's why we increased the ratio to 80 basis points. Further on, we believe that this level should stabilize. In the first half of the year, we had stagflation. The GDP was close to recession level with inflation still being high. We do not give any guidance other than a quarter ago. There is a question about the ESG. Will the creation of a special unit dedicated to ESG affect ESG activities in the bank, increasing the eco-friendly conditions of buildings and so on? Well, the majority of our buildings meet actually ESG conditions, so there will be no pressure to increase costs for that. We believe that the entire ESG agenda is, first of all, a great business opportunity for us. We are very active in energy transformation. We participate in many transactions. We are the leaders, in my opinion, in this area, especially in terms of the largest transactions that take place in the Polish market. Even if some costs would be triggered on the administrative side, we believe that business benefits will be much higher. Will ESG shape remuneration policy? Well, we are benchmarking ourselves against the market. This is our approach. We are looking at the market situation. We compare salaries of our employees to the market, and we adjust them accordingly. We want to pay in line with what the market pays to employees. There was also a question. Do we plan any salary rises? Well, actually, each year, we review salaries, and we decide on that. This is our business as usual. We do not announce any salaries. This is a fixed element of each year's salary review process. We will see what this process brings this year. What's the progress in PSP and BLIK deferred payments? I do not want to answer this question. We will have a meeting with the shareholders soon, but I may say that we want to join this solution together with PSP and BLIK. We believe that the skills, and especially in terms of customer experience that this company has, is very strong. That's why we are very strong supporters of this initiative. There are also questions. What is the outlook when it comes to the net fee income in 2023? Well, I think that overall, we expect the continuation of the trends and the growth in the order of mid-single digits, and that's what we should be continuing. What is the dynamics in individual credit segments, in your opinion? Do you envisage further growth in the space of mortgages because now the interest has shifted towards the customers who offer the 2% loan? Apart from that, we see the growth in lending, and it grew a lot in Q2, even though we've heard that many people refrain from taking out loans, waiting for the 2% loans. Nonetheless, we have a solid quarter. I think that the mortgage loans will continue growing, and the same is expected for cash loans. We can see the harbingers of increased demand for investment loans. We'll see if they are confirmed. The scenario for 2023 and 2024 is the economic revival, which should actually stimulate the lending growth, which should start growing at a sound pace. What else? I'm sorry. We are trying to put together the number of questions together, and we keep receiving new ones. Please excuse us for a second. What is the level of repayments in the asset portfolio compared to December? I'm talking about the loans which were not subject to settlements. Well, if they were repaid, the balance is zero. What you're asking, I understand, is what was the original value at the moment of sanction and the value of loans repaid? The response to the second part of the question is easier because I don't have figures to answer at the top of my head to answer the first part. The repayment ratio is really low. The second question referring to this, are there any huge drops with regard to the loans that were already repaid? Well, we can say this is a marginal number. There is also a question whether the bank asks for tax interpretation whether the cost of Swiss franc lawsuits could be viewed tax deductible. If so, what categories of costs are viewed tax deductible? We can say that we asked for such interpretation, especially if we lose lawsuits, and the interpretation received was negative, that we cannot view it as tax deductible. Of course, we will continue our efforts. The question is also whether you are interested in acquisitions on the Polish market because there is at least one button put on sale. I think that we have huge scales in acquisitions and mergers, at the moment, we are not interested in this. I mentioned that a number of times that our model is the one of organic growth and not the model of mergers and acquisitions as we used to see a number of years ago. Has the bank received any lawsuits concerning the sanction of a free loan? We will have to have that checked, I think there have been very few such lawsuits. Another question. Do you think there will be any payments to the Bank Guarantee Fund, to the resolution fund? We think that in the years 2022, 2024, are neutral when it comes to BFG contributions. Of course, there are also Institutional Payment Protection scheme. We've already paid a lot, and we don't need many more payments in the coming years. I think it will be neutral. The 2% loan, we have not discussed that yet. Do we envisage that we will offer that? Yes, we will at the turn of quarter three and four. Probably the last question, what is the outlook for overall costs in 2023? Well, what can we say? Actually, apart from the trends that you've seen that are going to be continued, there is one element, a new one, and this is related to what the CEO has said, that is the review of salaries in the second half of the year. This will have more impact on the cost in 2024 than in 2023. Apart from that, we do not expect any additional elements. If we strip off such elements on a quarterly basis, if we look at comparable costs, then the dynamics is close to zero. If we look only at the administrative expenses only quarter-on-quarter, we can see that our cost discipline is really sound. This is not going to change. Michał, is there anything else? What is the outlook for the growth in loans for this year for us as the bank and the group and for Poland? Everybody discussed that, I think. No, I don't have any more questions. That was the last one. Thank you for your numerous questions. We hope that we've answered all of them in a satisfactory manner and quite an organized manner, given that there was such a big number of them. If we have not answered any of your questions and you cannot find the answer in our report, of course, we will be in touch. Please join us at the next conference after we publish the results of quarter three. Thank you. Goodbye.