Welcome to the CGD's conference call. This call follows the first quarter 2021 consolidated results release, which took place yesterday. It is possible to follow the consolidated results presentation from the CGD website. The CFO, Mr. José de Brito, and the Head of IR, Mr. Nuno Pereira, will guide you through the presentation, and a Q&A session will follow. Please go ahead. Good afternoon, everyone. I'm Nuno Pereira from Investor Relations, and welcome to today's results presentation. First quarter was marked by a lockdown here in Portugal, but it was also marked by the acceptance by DG Comp of the 2017-2020 Strategic Plan. It's good to know that we achieved that milestone, and that it was a successful delivery of that commitment. To present you today's results, I will hand you over to our CFO, Mr. José de Brito. Hello. Good afternoon, and thanks for your presence in this call. I will maybe start with slide four, where we have the main highlights for this first quarter of 2021. Starting with the net income, which achieved EUR 81 million, translating in a return on equity of 4.2%. As in previous years, these first quarter results include all the regulatory costs for the full year of 2021, which had an impact of more than EUR 52 million in the net income. This is a practice within CGD on the last years to account in the first quarter all these costs, even if they are charged along the year. Also to mention and to highlight that we continue to enforce the credit impairments on a preventive way as we will see. For this quarter, we have an increase in credit impairments of EUR 59.6 million. In the end of the quarter, we achieved a CET1 ratio of 18% and a total ratio of 20.6%. Sorry, that I have here a mistake in my presentation. Continue. In terms of the commercial activity, it is important to highlight the growth in loans to corporates and businesses, which achieved 4.4% in this first quarter in comparison to the same period of last year. We continue to have a very good dynamic in terms of the new mortgage loans, where we achieved the market share in the new production of 25%, also. Hello, once again. Sorry, our line went down. I don't know exactly where I was when the line went down. I will continue highlighting the topic of the conclusion of the strategic plan. We received the confirmation by DG Comp that they will end the monitoring of the plan, which means that they consider the conclusion with success of it. This is a very important milestone for CGD, especially if we have in mind that since 2012, that CGD has been under monitoring processes with DG Comp, the previous restructuring plan and after this strategic plan. Now we are concluding. We are back. Sorry once again for these problems. We need to move to a different room. Apparently, our equipment was malfunction. Maybe as I don't know for sure where you stopped listening to me, I will start again on slide four and presenting the main highlights for the first quarter of 2021. Starting with the net income that reaches EUR 81 million, and thus resulting in a return on equity of 4.2%. Also very important, as in previous years, this net income for the first quarter already includes all the regulatory costs for the full year of 2021, which had an impact of more than EUR 52 million in the bottom line, in the net income. Important, due to the context, is that we continue to enforce the preventive credit impairments, to tackle the potential effects of the pandemic crisis in the credit, in the quality of our loan book. In this first quarter, we reinforced the credit impairments in EUR 59.6 million. Even though we continue to have very strong capital ratios with CET1 reaching 18% in the end of March. This includes the net income for the period and the total ratio achieved 20.6%. Pretty much stable in comparison to the end of 2020. These ratios, of course, already deducted the dividend that will be proposed in the general assembly that will take place in the end of this month. In terms of commercial activity, we have a significant growth. Well, I will start for the fourth time after these technical issues. I hope that now things work. I was mentioned that the highlights of this first quarter, but maybe I will move to slide five, where we mentioned this very important milestone for CGD, which is the closure by the DG Comp of the monitoring process of our strategic plan 2017-2020, which means that it was considered a successful implementation and the achievement of the majority of the commitments that were agreed back in 2017. This is very important milestone for CGD as it comes after eight years of monitoring by DG Comp of the activity of CGD, bearing in mind that this starting with the previous restructuring plan that was initiated in 2012. With the end of this process, we are now finalizing the design of a new strategic plan for this next cycle from 2021- 2024, which will be disclosure to the market in the next weeks after the new board of directors took in charge, which we are expecting in the following months. Moving to slide six, this is mainly to give the context on the situation in Portugal for those who are less familiar with the numbers of the pandemic and the impact on the economy. In fact, after a decline of GDP in 2020, a decline of 7.6%, this first quarter was once again very negative, with an additional decline of 3.3% in the quarter, especially if we bear in mind that in these first three months of 2021, we have the economy and the society in lockdown almost for the whole period. In the middle slide and the right side slide, we can see that the numbers on the infection and the numbers on the vaccination process are fairly positive. We are now experience the removing of the restrictive measures on the mobility and on the economic activity. We are start to reopen again the economy. This is already been translated into the numbers that are being released. This is to say that we are pretty confident and pretty positive, in terms of the evolution for the following months. I will ask now you to move to slide 15, because these next slides are more related to the commercial activity, the market shares of CGD, the evolution on the payment systems and on the digital platforms, also on sustainability. These are more descriptive. If you have any question, please feel free to ask in the end of this session. I will move to the financials which start precisely on slide 15. There we can see the quarterly net income. We have a decline of 6.5% from the first quarter of 2020 to the first quarter of 2021. Of course, we have several changes in the different items of the net income. I would like to highlight that this decline could be totally explained by the increase in the regulatory costs, bearing in mind that in Portugal, banks are paying an additional tax that was approved last year in June within the supplementary budget that was approved to face the COVID-19 situation. This represents roughly EUR 6 million for CGD. In 2020, this was accounted just in June when it was approved. In this year of 2021, we are already accounting it in this first quarter. This fact explains the decline on net income. Of course, we have several fluctuations that should be also highlighted. Moving to slide 16, where we can see that if the net income was pretty much stable, if we look at the core operating income, we will see that we have a decline of 11% in domestic activity, and we are just presenting the domestic activity because in the international activity, we have also some impact from currency devaluations in some of the geographies. Looking at the domestic activity, which as you all know is the biggest part of our assets, we have this decline of 11% on the core operating income from 2020- 2021. The main reason for that is expressed in slide 17, which is precisely the net interest income, which has a decline of 10.7% in the domestic activity and 11.5% in consolidated terms. The reason for that is, once again, the evolution of market interest rates, especially the Euribor rates, which we show on the right-hand chart which precisely has had a significant decline from March 2020 to March 2021. As you know, we have the majority of our assets, especially in the loan book, on a float rate basis, so this evolution of Euribor rates has a direct impact on the net interest income of CGD, especially on the mortgage book because on the corporate loan book, we already have in our contracts, in the majority of our contracts, we have already established 0% floor on Euribor. This doesn't impact the corporate book, but it impacts directly the mortgage book. This is precisely reflected in slide 18 in the retail margin, the retail net interest margin, where we can see that in the domestic activity decline 11 basis points, and in the consolidated activity, it declines even more. It declines almost 20 basis points. To compensate for this decline in the net interest income, we have a good evolution in terms of net fees and commissions, which we are presenting in slide 19, which proved to be quite resilient. The comparison to the same period of last year shows an increase of 2.2%. This is more important if we consider that in this first quarter of 2021, we were under lockdown in Portugal since the 15th of January, which means 5/6 of this period, the economy were under strict lockdown. Whereas in 2020 for the same period, we have just two weeks of lockdown. In five-sixths of the period, the economy was fully working. This increase of 2.2% is relevant and is a positive signal. If we look in slide 20, the reasons for that, we can see that this increase was totally supported by the fees and commissions on the securities and asset management businesses, because in terms of the banking services, they were almost stable from one year to the other. In terms of forward looking for the core income, for sure, we will continue to have some pressure on the net interest income due to the behavior of the Euribor rates, especially if we bear in mind that in 2020, we have Euribor rates increasing until more or less June, July, and start to decline after that. In comparison, we will have a negative impact from one year to the other. By the contrary, in terms of net fees and commissions, we are expecting a significant increase for the following quarters with the reopen of the economy, and especially considering the resilience that we have witnessed in this first quarter. Moving to slide 21. One other positive aspect for this first quarter was the evolution of the operating costs with an overall decline of 6%, being 3% in terms of staff costs and 15% in the other administrative expenses. Also to mention that we have included in these first quarter accounts, like we used to do in the first quarter of each year, the potential costs for the pre-retirement programs that are in place in CGD. In this first quarter of 2021, this amount was EUR 34 million, whereas last year it was EUR 61 million. This is considered non-recurrent, and it has no impact in the net income, as this was made by using the provision that was constituted back in 2017. We exclude that from the recurrent costs. Otherwise, the decline will be even more expressive, but we are not considering that. So in recurrent terms, the decline or improved, the decline of the overall cost structure was 6% and t his translates in a cost to income ratio that we show in slide 22, pretty much stable, achieving 50.6% in the end of March, and almost the same in the domestic activity. Moving to slide 23, in terms of the contribution from the international activity, where we can see that we have an increase on that contribution from EUR 22.4 million in 2020 to EUR 29.5 million. If we look just to the core activities, we can see a decline of 9%. This decline was mainly explained by what I already mentioned, by the devaluation of the currencies in some of the geographies where we are present. Namely, this is the case for Mozambique, where we can see that in euros we have a decline of net income of 3%, but in local currency we have an increase of 22%, and in Angola where we have a decline of 23% in euros and an increase of 9% in local currency. The only exception is Macau from the most relevant entities, where the decline in the net income was also explained by the decline in net interest margin, due to also the evolution of local interest rates, which declined significantly from one year to the other. Moving to the balance sheet on slide 24, we have this evolution of the business volume, considering the business volume, the sum of the customer resources and the loans and advances to customers. The sum from the liability side and the asset side of the contracts with our client base. We can see this increase of 6.7% from one year to the other, mainly supported by the evolution of the customer resources. As we will see, we continue to increase our deposits, which then translate in excess liquidity. Nevertheless, it's also an expression of the good image of CGD and the strong franchise of CGD. In slide 25, we can see the evolution of the net assets. We have a very significant increase in this first quarter of the year, but about half of it is explained by the fact that CGD went to this last TLTRO operation in the end of March. We went with an additional EUR 2.5 billion of fundings. Of course, the main reason for that was to take the opportunity to benefit for the good conditions that the ECB announced, and especially with the changes that were announced back in December last year. This explains half of the increase on net assets. The other half is explained mainly by what we have in slide 26, which is the evolution of deposits, EUR 1.6 billion increase from December to the end of March, as we continue to have this trend in Portugal and not only in Portugal, I would say almost in all Europe, which is an increase in savings rates, and an increase in the deposit base of the banks. If we look on the right hand, we have the segment distribution of deposits, and we can see that apart from the institutional sector, this increase in deposits was split and significant, not only on households but also on corporate clients. On slide 27, looking at the evolution of the credit, we can also see that we have an increase in the gross volumes in all segments, with the exception of the consumer credit, which is the last piece of the column in the graph on the left. As I already mentioned, if we exclude the construction and real estate sectors, because these are the sectors where we continue to deleveraging due to the need to reduce the NPLs. If we exclude those sectors, we can see that we have a significant increase of 4.4%, which shows more dynamic from the credit demands in Portugal. In terms of the distribution of the loan book in slide 28, the numbers are pretty much the same that we show in the end of 2020. We have increased slightly the exposure to the manufacturing industry, but on the other items, those are pretty much stable from the end of December. The split of our loan book between households and corporates is 55%- 45%. In terms of the average loan-to-value of our mortgage book, it was precisely the same with 60.3%. On slide 29, we show the evolution of the new mortgage loans. This is an especially important business line for CGD. As you know, we are market leaders in Portugal. This is a traditional product for CGD. After a few years where we have a market share in production below our market share in stock, we were able, in this first quarter of 2021, to achieve a market share in new production higher than our market share in stock. This is also very important for us. To mention that we had, in March, the best month in terms of new production since 2008. It was even better than what we have in the end of 2020. We have an increase on new production of 43% from the first quarter of last year to this year, whereas the market had an increase of 18%. If we consider the market without CGD, we can compare our 43% with 11% growth for our peers. Moving to asset quality on slide 30. As I already mentioned, we have booked EUR 59.7 million of credit impairments. These are mostly preventive impairments, as we have no changes or no signals of deterioration in our loan book. Of course, we must bear in mind that we continue to have the moratoriums, which might be hiding some deterioration. This is something that we are monitoring very carefully on an individual basis, even though we decide to continue to increase the preventive impairments to tackle the potential consequences of the COVID. With this reinforcement of the credit impairments, we have now booked in our balance sheet about EUR 317 million of impairments to face the consequences of the COVID-19. Saying the other way, to face the potential impacts of the end of the moratoriums. On slide 31, we have the evolution of the NPL and NPE ratios. As I already mentioned, the NPL ratio decreased to 3.6%. This was mainly due to the increase in the loan book rather than a significant deleveraging in the NPLs. More important, I would like to highlight once again the specific impairments to this NPL stock that, for CGD, achieved 63.6% in the end of March. If we consider the total impairments that are booked, that we already have in the balance sheet, this coverage achieves more than 100%, 102%. If on top of that, we consider the collateral, then we will go above 130%. We consider that we have a very strong and adequate coverage, and that we are well prepared to face the end of the moratoriums. On slide 32, we have also the NPL evolution and the evolution in this first quarter, where we can see that we have roughly EUR 80 million of cures and cash recoveries, and we have an additional, so new entries on the NPL stock of roughly EUR 70 million. These are more or less the usual numbers in terms of new entries, but the net impact of new entries and loans that are going out of this stock is positive, as we have a net reduction on the NPL stock, but not expressive, so we have more or less the same that we had in the end of 2020. On slide 33, we have the foreclosed assets. That also has a very minor change. We must bear in mind that this first quarter was marked by the severe constraints in the Portuguese economy and in the Portuguese society, so not the best environment to proceed with this kind of deleveraging. This is the reason why the numbers are so stable. Nevertheless, it is important to highlight this small increase in the coverage by impairments. The same on slide 34 with the investment properties and the corporate restructuring funds, where we have no significant changes in this first quarter. Slide 35, very important information, the stock of moratoriums. We have a decline since January to the end of April. Our data here is for the end of April, so the most updated and most recent data. We have a decline of EUR 287 million on the stock of loans under moratoriums. We can see that since the peak of this stock in September. Where we have roughly EUR 6.9 billion in moratorium, we have in the end of April, EUR 5.7 billion, which means a decline of EUR 1.2 billion since the peak of the moratoriums. As of April 30, this represents about 13% of our total credit portfolio below the average in Portugal, of which 9.6% in terms of households, and 20.8% in terms of corporates. In the households, we are significantly below the average in Portugal. In corporates, we are more close to the average of our peers. In the bottom table, we have for the credit moratorium for companies, we have the split between what are considered COVID sectors, so the most impacted sectors of the COVID situation, and the non-COVID sectors. What we can see is that we have roughly 29% of the corporate moratoriums are on the COVID sectors. Moving to slide 36. We have the data on the credit lines to support the economy during this period. We continue to increase the placement of credit lines with public guarantee, and also with the European Investment Fund guarantee. Here it's important also to mention that from the loans of these COVID credit lines with public guarantee, we have considered an extension of the grace period for roughly EUR 484 million of loans. This was an extension that was established under a law that was approved by the government in the beginning of the year. Which means that roughly one-third of these lines with public guarantee decided to ask for this extension of the grace period. Finally, on slide 37, we also have additional information on moratoriums. This data in this slide is consolidated. The previous one was just for the domestic activity. This one is in consolidated terms. We also have here the split between stages, where we can see this is pretty much stable since December. Where we can see that we have roughly 8.9% of credit under moratorium in stage three. Of those, we have a coverage close to 62%. This is more or less stable since December. Also to mention that we have several moratoriums that already ended in March, and for those, the ones that are not paying are very residual. Which means that, of course, we understand that this is just a sample. It's not something where we can conclude for next September when we have the majority of the moratoriums ending. So far the signals we have are not worrying, by the contrary, are fairly positive. Moving to slide 38 in terms of liquidity. As I already mentioned, we accessed the TLTRO in March with an additional EUR 2.5 billion. Now we have EUR 3.5 billion of TLTRO funding. Of course, with that, the eligible assets available decline in proportion. Even though, we still have more than EUR 18 billion of available eligible assets. In terms of slide 39, in terms of wholesale debt maturity profile, we continue to have a very light calendar, which is, of course, we didn't issue new debt recently, so we continue to have this very light calendar. On slide 40, we have the liability structure. Our funding is based, as we all know, in the customer deposits. We continue to have a decline in the loan-to-deposit ratio. This is a burden for CGD as we continue to accumulate excess liquidity, which as we all know is charged at 50 basis points by the ECB. Of course, this also translates into very high liquidity ratios, which we present on slide 41. Finally, in terms of capital. On slide 42, we have the evolution of our capital ratios, so a very strong position both in CET1 and the total ratio. On slide 43, the comparison with the regulatory requirements. Very high buffers in all dimensions. In terms of CET1, almost 9% capital buffer. The other indicators on slide 44, the risk-weighted asset density, 45%, excess ratios more or less stable, and the leverage ratio with a small decline from 8.7: 8.3. Finally, on slide 45, we have the available distributable items and the MDA, where we can see that we have buffers higher than EUR 3 billion, no restrictions on dividend payment or the AT1 coupons. In summary, on slide 46, we have here the comparison between CGD and the European average, considering the EBA Risk Dashboard. Of course, the data for European average is based on December numbers, whereas for CGD it is for March. Even though, it allows an important comparison. I would like maybe to highlight on, we compare well in CET1, in cost to income. Return on equity, we should see a significant improvement in the European average from December to March as we are witnessing a strong recovery on profitability in the European banks, we don't have yet the data. I would maybe highlight on slide 48, in terms of the comparison on the NPL stock and the coverage by impairments, I think this is quite important. If you cross the two indicators, so the NPL stock with the coverage level, you will see that the not covered NPLs for CGD are already in line with European average. It is true, our ratio is higher than the European average, our coverage ratio is also higher. If we cross both, we will be already in the European average, which is also a very important milestone for CGD. Of course, we understand that in the next months, we might see an increase in the NPL ratio, depending on the evolution of the moratoriums and also the evolution of the context. Nevertheless, as of March, this is, of course, a very important milestone for CGD. Finally, on slide 49, the summary. The most important element for the quarter, the successful completion of the strategic plan. The profitability pretty much stable in comparison to last year. Significant growth in terms of new credit operations, which is also important to support the future business of CGD. We continue to improve our efficiency levels. We have resilient, and in some cases, increasing market shares, which shows that we are increasing the trust levels of our client base in CGD, and the strength of the brand in Portugal, which is very important asset of CGD. Also the strengthening of the asset quality, and finally, a very strong liquidity and capital positions, which allows CGD to continue to perform and to continue to develop our goals and our targets. This is it. Once again, sorry for the turbulent beginning of this call. We will now open for questions. At this time, if you would like to ask a question, please press the star and one on your touch-tone phone. You may withdraw your question at any time by pressing the pound key. Once again, if you would like to ask a question, please press the star and one on your touchtone phone. Now we will pause a moment to allow questions to queue. And once again, it is star and one on your touch-tone phone if you would like to join the queue. We will take our first question from Jakub Lichwa with Goldman Sachs. Please go ahead. Your line is open. Hi there. Thanks for holding the call and persevering with it despite the difficulties. First question is on your margin. Where do you see it bottoming out? It seems to be going down quarter after quarter. Second, can you comment a little bit more or give a little bit of color, what was behind CET1? Was it just simply profits and higher risk-weighted assets? Final one on just the excess CET1. Is this something that you update the market on with your new business plan? Or can you comment how that will be deployed already at this stage? Thank you. That's it. Okay. Thank you. Well, in terms of the net interest margin, I think as we saw for the first quarter, we have a decline of roughly 10%. I believe that for the rest of the year, this decline will increase. What we have in our projections is for the year-end, a decline of roughly 13%. Nevertheless, our expectation is that we could be able to compensate that with the increase in fees and commissions. Of course, this is dependent on the new business that we can generate, and more than that, also on the evolution of market rates. This projection that we have is based on the stabilization of Euribor rates from the actual levels until the end of the year. The decline on net interest margin is expected to increase, so more pressure for the next quarters. On your second question, in terms of CET1, we have a decline of 20 basis points due to risk-weighted assets increase from December to March. We also have a decline of roughly 20 basis points due to the deduction of the dividends. We have an increase also close to 20 basis points from the net income on this first quarter. The net income offset the impact on the dividends, so we can consider that all the decline on the capital ratios are coming from the increase on risk-weighted assets. Finally, in terms of the business plan for this next cycle, we are almost closing it. As we will have a change in the board for the next weeks, we already know that the CEO will continue and the majority of the members of the executive board will continue. We will have a new chair of the board of directors, and this process is being dealt by our shareholder. We expect this new board to take charge for the following months. I would say, as soon as the fit and proper process is concluded. As soon as we have that, I think the new board is in conditions to approve and to disclose the information on this business plan to the market. I would say that maybe in the beginning of the third quarter. I don't expect it to happen prior to that. Okay. Thank you. Thank you. Once again, it is star and one on your touchtone phone if you would like to join the queue. Star and one. One moment while we queue. We'll take our next question from Maksym Mishyn with JB Capital. Please go ahead. Your line is open. Yeah. Hi, good afternoon. Thank you for the presentation and for the opportunity to ask questions. I had two, if I may. The first one was on the mortgages. You've been very successful in gaining market share in the first quarter, and I was wondering what was the reason for this, because you were more aggressive with the offer or because other players are not being as aggressive as before? The second one on the corporate loan book, it grew in the first quarter, and I wanted to ask you whether the growth was driven by large corporates or SMEs. Thank you. Thank you. Thank you for your questions. Yes, in fact, in terms of the mortgage market, the market continues to be very competitive. There is strong competition. Interestingly, until the end of last year, until the end of 2020, we are seeing the debt translating in lower spreads on the new production. This was no longer the case in this first quarter of 2021. Whether this will be a trend or not, let us see. Continue to have a strong competition of the market. In these last months, the competition was not made by price. Having said this, I would say that the success of CGD was a consequence of several measures that we took in the last years. This was namely in terms of the speed up of the decision to grant the credit or not. Also, some agreements with real estate promoters, which we didn't have in the past, and we start to have these agreements with them, which translates in a flow of demand to CGD. Also, the improvement on the quality of service and the reduction of the bureaucracy on the process for a new mortgage. I would say that during 2020, of course, this quality of services and all the process contributes to improve the position of CGD, but there was also competition by price. In this first quarter of 2021, I think it's mainly the consequence of this improvement of service quality and the speed up of the decision process, all of these items. Let's see, this is a very competitive market in Portugal, but we hope that we can be able to keep our position of market leaders. This is a very important business line for CGD. In terms of the corporate loans, I would say that the growth in the stock is mainly driven by midsize and small companies, by SMEs. We have also granted some new loans to big corporates, but we also have some redemptions that more or less offset the growth in that specific segment. It's also important to have in mind that part of this growth, I would say roughly 25% of this growth, was supported by new credit lines with public guarantee. Part of this is driven by these specific lines that were launched by the government and, of course, where CGD plays an important role, CGD and the other banks, but this is also supporting the growth on the stock. To answer directly to your question, the growth is coming mainly from the SMEs. Thank you very much. Very clear. Thank you. As a reminder, it's star one on your touchtone telephone if you would like to ask a question. Star and one. There appear to be no further questions at this time. I would now like to turn the program back over to our presenters for any closing remarks. Okay. This concludes our presentation. I want to thank everyone for their interest and once again for your patience, given the technical difficulties at the beginning of the call. We will be available through the regular contacts, telephone number, email, and you should have the full podcast on the website in the coming days. Thank you once again. Thank you for attending the conference call. The audio webcast will be available on the CGD website.