Hello, and welcome to the Novo Banco 2021 Results Presentation. My name is Jess, and I'll be your coordinator for today's event. For the duration of the call, your lines will be on listen-only. However, there will be the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question at any time. If at any point you require assistance, please press star zero, and you will be connected to an operator. I will now hand over to your host, António Ramalho, CEO, to begin today's call. Thank you. Okay. Hello, everyone. I'm here with Mark Bourke, the CFO, and all the team in order not only to announce the results and to check some ideas with you, but also to answer all the questions that you want to pose. I will be very brief in terms of the update on the strategic issues, and after that, I give the floor to Mark Bourke for a deep analysis of the numbers. Just to say that this was the year of the turnaround, the first year of profitability we achieved. We have four quarters that were positive, the last one with EUR 7.4 million. That means that at the end of the year, we achieved a total result of EUR 184.5 million, so EUR 185 million. That means, return on tangible equity significantly improved to a level of 8.8%, even if this should be in a way understood a little bit after. When we see, let's say, the main reasons for this situation, I will say that this broadly comes from increase on net interest margins, 3.3% year-on-year. Also in terms of fee income, 3.9%, and a reduction of operational costs of 5.4%. This is, let's say, the trend that we have for the last years, proving that the core activity and core banking income is quite robust and are increasingly every year. The loans in terms, let's say, since we achieved the end of the restructuring period, exactly in 2021. 2021 was the last year that we have done, let's say, the more cleanup of the balance sheet. We remain at a level broadly stable of the customer loans, EUR 23.7 billion, even with the sales of the NPL that we have done during the period. We have growth significantly in terms of the deposits with EUR 47.1 billion, EUR 1.222 billion in terms of increase of customer deposits. Digital grows normally at a 7% year-on-year, putting us as one of the top banks in the Portuguese market. NPL ratio, as we have told before, has not reached the 5% as we intended to, but 5.7%. Nevertheless, showing a trend that came from 8.9% and shows that we are in the right path. The NPL coverage ratio is now at 71.4, and probably the most important is the unlikely to pay represent 65% now of the total NPL portfolio. Cost of risk is now on 60 basis points versus the 208 basis points that we have, of course, in the last year of the cleanup of balance sheet. We need to understand that we continue to have, let's say, the final stage that comes from the COVID sectors where we need to do a small increase in terms of the impairments in a cautious way. The milestones for 2021 represent also two SPMs of a total of 575 returning to the market in July and after that in the end of the year with the two issues. We have done LME of 161 tendering, where we have reduced again the cost of funding to a more normalization process. We were capital accretive during the process. We continued to focus in terms of the discipline in risk-weighted assets, and we finalized the year with 11.1% CET1 ratio of a total capital of 31.1. The liquidity ratio has increased, the NSFR also, and the bank has complied with the MREL requirements in January 1, 2022. Going to page five, only to tell you, let's say, first year of annual profitability is not only show the clear turnaround of the bank and the result of the restructuring efforts that we have done, but also that we are in the good path in terms of the underlying profitability. You can see that, coming from a consolidated income before taxes of EUR 211, we should take from this the special effects of the bank's and market results. Market results with the LME, they should be seen almost together. We have in one case the benefit, the other case of course we have loss, a part of losing the capital markets needs of doing the LME of EUR 161 million. Pension funds that Mark will go a little bit deeper into that in a way, have two movements and discovered provisions. One of the provisions that is something that will be discussed a little bit later, that is a special aggravation of any provision that we have done for our fiscal contingency, that we intended to talk clearly with all the investors. We have several extraordinary events in 2021, but the underlying profit remains at a level of almost EUR 300, and this means return on tangible equity of 11 or 8.8%. We maintain our focus in maximizing the value of customers. I think that's a trend that we have shown even in the difficult times of recession. Obtaining always increase of net interest margins and the fees and the reduction of costs show how we were always concentrated on everything that represent the universe of customer centric. We are the only bank, as you know, from the five big banks in Portugal that have more presence in corporate than in retail. We are the corporate SME bank in Portugal. This means nevertheless, let's say, the continuous improvement in terms of the online activity supporting credit of the companies, the investment support programs based on the several programs that we have in Portugal. Namely, EIB programs and namely the European funds that are coming from the post-crisis. We maintain like your leadership in terms of our activity, in terms of trade finance. That is, let's say something that occurs since the beginning of the inception of the new bank. It is our characteristic agreement and not only the quality, but also a market share of 20%. In terms of retail, we have focus not only in terms of the products and digitalization of products, but we define two areas as priorities. The first is small business finance, where we are increasing our market share, and the second, consumer finance partnership that we have started in terms of consumer credit in the POS area to our SMEs clients and serving, let's say, clients and non-clients in terms of consumer activity. Going to page seven, you can see, let's say, the movement in terms of digitalization that we have done. We have changed our mobile app. Our mobile app now is much more a machine learning process that adapts to the client. Very easy to use. We have now 54.4% of our clients is digitalized, and 40.3% of clients work with mobile solutions. Don't use, not even iPass or online banking, but use only mobile that, as you know, is gaining ground in terms of the digitalization assessment to the bank. We are restarting the process of a new distribution model that it is very interesting. I will use and I will invest a lot of time explaining this. This is the only channel presence that allow us to have a footprint that is much more efficient, reduced in terms of footprint, but with more capacity in terms of serving our clients or retail clients in terms of big cities and the medium-sized cities. We have invested a huge amount on physical that is, let's say, the answer to everything that comes from the pandemic. We are of course improving also the access to different situations coming from changing ATMs to DPMs, digital lounges, where you can do all the basic automatic banking activity 24/7. We maintain the profitable operation and capital efficiency based on people and efficiency, based on profitable and safe risk profile and talent and innovation. We have done several things. We have a very, very significant model of the social dividend. That is the way we look and we address the ESG issues that allow us to be completely, let's say, done in terms of the targets that we want to achieve during the period of 2021. 2021 was not only the year of the turnaround, it was also the year where we defined the Shaping the Future program. That is in a way our statistical problem for the future that has clearly a target, a number, and figures in terms of targets that Mark will take further. We have proven all the conditions that we continue to bet in terms of our normal activity as a very important retail bank in Portugal that was able during the restructuring process that was well succeed during this period also to maintain the path of evolution in terms of our activity in customer centric. I think that financial results are now the most important thing, giving the update in statistical terms. Mark, let's go. The floor is yours. Good morning, everybody. I will make a brief presentation starting on page 10, and then we'll turn it over to Q&A with everybody. Page 10, profit and loss. What we can see as you look down through the lines is that the bank is making progress on each of the targets that we defined earlier this year when we set out our equity story on our strategy day. Just to recap briefly, the financial targets are essentially to maintain a net interest margin in the region in the range 1.3%-1.5% to achieve, to reach and then to sustain a cost income ratio of less than 45%. This with a cost of risk through the cycle, which we think should be less than 50 basis points. The whole performance adding up to us being or delivering a return on required tangible equity of double digits or greater than or equal to 10%. If you take each of the lines, as António said, we'll do this in greater depth in the presentation. Net interest income is up from EUR 555 million to EUR 573 million, reflecting on the one hand our pricing discipline and on the other hand an improved liability profile through the year. Fees and commissions continue to recover. That is a mix of bancassurance, increasing our payments business while still having a lower level of activity, particularly on the corporate side. The capital markets and other results, I won't labor because they're more or less important in terms of the ongoing underlying performance of the bank. Capital markets is a combination of that loss on net LME that we carried out earlier in the year, but also we have a positive impact from the swaps that protect our portfolio. That has to be looked at in the context of loss on the in terms of OCI on the other side. It is essentially a partial protection. Other operating results is the big part of it, our contribution to the Single Resolution Fund. Looking at operating costs, again, we continue to focus on our cost profile that is reflected in our footprint and reflected in our continuing investment in our omni-channel delivery and digitization. Our impairments and provisions line. On the one hand, I think we can say that we're starting to converge at the cost of risk target. We have 60 basis points that's split roughly 50/50 between COVID-related sectors and non-COVID. It is difficult to sort of specifically say something is a COVID-related provision. I think it's just split it between the sectors is important way to understand it. We also have a provision for aggravated real estate tax, which is EUR 116 million there. That was really a product of the budget in the prior year, and I'll talk a little bit more about that later. Turning to pages 11 and 12, we look at the NII. The average balance sheet is, I think, the best way to look at a snapshot of the bank's performance. If you look on the asset side, the corporate loans first, we can see, you know, average book is pretty much flat. It is slightly down point to point on the year. I suppose flat when you extract the portfolio sales. It is a book or a market with, you know, significant competition in terms of pricing as we see 2.42 going to 2.33% year-over-year. That's a product of competition, but also of the impact of COVID loans. On mortgage book, again, very competitive market. We are flat to slightly down in terms of our stock, despite, you know, almost EUR 1 billion of new lending. Again, it's also a function of Euribor in terms of pricing. Customer loans or consumer loans, we are making progress in terms of building the book. It is a highly profitable one. We have some loss of margin, but not significant in the overall context. That's on the asset side. On the liability side, we can see our old expensive liabilities continuing to roll off. We also benefit from TLTRO in this year and the coming year. All of that adding up to us maintaining that NIM in the 142 range, which is bang in the center of what we set out as our sustainable ongoing targets. Turning to page 12, just two points. Obviously, our deposits evolution, we have increased our deposits. The profile remains the same as we'll see later between retail and non-retail. This in you know in the face of both the publicity that the bank suffered and our current rating is a significant performance and shows the remarkable stickiness of particularly retail deposits. You see the time series on the right-hand side of page 12, showing the average rate of total liabilities and customer deposits moving down through the years from 1.05% to now 0.17%. We will continue to see a little bit of roll-off on the one hand, on the deposit side, but we will, at the same time, have to build MREL as we go through the coming years. Page 13 is fees and commissions. Fees and commissions, as António mentioned, we have seen an increase from EUR 271 million to EUR 282 million in total. That reflects a significant improvement on the bank's insurance asset management side, from EUR 61 million to EUR 68 million, and also an increase on our payments, good performance from our payments business. At the same time, we are flat to down in terms of commissions on loans and guaranteed fees. That reflecting again the lower levels of activity that we saw throughout the year, particularly early in the year, which had the third wave of COVID. On the left-hand side of that page, again, we see the time series through the quarters. What this shows is, you know, a Q1 very depressed level of fees of EUR 62 million, and then normalizing to between EUR 72 million and EUR 74 million in the final quarter. What that really implies is that if you take it as a run rate, we are somewhere between the 290, 300 run rate as we come into the 2022 year. Turning the page to costs. Our operating costs are down from EUR 431 million to EUR 408 million. This really does reflect, you know, the relentless focus in the business on costs. What we're seeing is our redesign of the retail footprint. Our number of branches down 358 to 311, and that will continue to fall. At the same time we have remodeled and invested in the branch network throughout the year. Every one of our branches will be by the end of 2022 or beginning of 2023, will have been refurbished. At the same time, we will have introduced or we will have implemented our omni-channel offering. That allows us, as António was saying, to reduce the footprint and then to use digital to drive efficiency, but maintain the customer experience or improve significantly the customer experience while doing so. Decreased branch footprints, number of employees decreased by 389 throughout the year, all part of the execution of a three-year program. We are seeing, as I say, the ability to continue to take costs out, drive efficiency while maintaining momentum on the top line. Page 15 is really just another way of looking at the cost profile. We see a time series on cost income ratio from 75%- 48%. That therefore we have the momentum we believe to take us to the 45%. The real challenge then is to maintain when you reach. On the commercial banking income per employee, equally a continuous time series rising from 126 to 195 per employee over the five years, showing that, you know, continued focus and at the same time maintaining the investment profile. Turning again the page to page 16, and looking at cost of risk. Our cost of risk at 300 or our provisions, 352 encompasses EUR 150 million or 149.4, which is our loan provision level. That is split between COVID related areas and non-COVID related areas. As I said, you can't actually isolate a perfect COVID provision. What you do is you look at the different sectors and the ones that are more affected and then classify them. We're seeing a 60 basis points charge for the year. Again, that's putting us, you know, on target, we believe, to get down to that through the cycle target of less than 50 basis points. On the other hand, we have EUR 155 million, including for other provisions. EUR 136 million of that is aggravated real estate tax contingency in relation to Spain and a restructuring provision. To take the two small ones of EUR 10 million first, the restructuring provision is simply our recalculation of the restructuring provision required for that branch footprint change and for the digital program in the bank overall. The tax contingency of EUR 10 million is related to the sale of Spain. The remaining one of 116 is this aggravated real estate tax. The background to this is there was introduced in the budget of 2020 a tax targeted at property transactions, which were essentially controlled or involved companies which were offshore resident. That increased to 7.5% on an annual basis. The tax law as written appears to apply to a number of activities in the bank. I don't think this was in any way intended, but this is as written. Therefore, we have had to take the view that we need to provide, and we are at the moment seeking confirmation from the tax authorities, hopefully that we don't need to pay, but we have a more probable than not assessment from our auditors given the tax law as written. What it does is it applies to our leasing book, it also applies to our own properties, and it applies to the properties we have repossessed, as well as properties in funds that we are in control of. All of that adds up to EUR 116 million. That was a product of essentially an assessment, which would mean that potentially in our ownership structure, there is the possibility of control being imputed from an offshore jurisdiction, which is the way our ownership structure effectively works above the company. I suppose the first thing is to say that was a long process. It was not the expected outcome that we would provide. We have provided on the basis of legal advice. We have also sought to get confirmation from the tax authorities by getting a binding ruling that it does not apply, but that will take some time. If that were not to be the case, then we will have to control the liability in a different way, which would mean that we would convert our leasing book to essentially a straightforward loan book. Then we would take various actions in relation to our own properties or our repossessed properties to ensure that the tax did not apply. We would see that even in the worst case, over a two-year period, we would be able to mitigate this tax. At the moment, as of December 31, we had to take the charge as we appear to come within the charge to the new law. It is still very uncertain because it is only one year old. That is the long version of the real estate tax that is in the provisions of EUR 352 million. If we turn to the balance sheet on page 17, what you essentially see is that we are liquid. We are normalizing both on the asset and liability side. The result is essentially a capital generation bank. We can see, you know, a path to that equity story that I talked about earlier. Equally, on the balance sheet side, we had our first year of MREL issuance and issued EUR 575 million, which is, I think, a landmark sort of return to the markets for us, and also carried out in the same period a liability management exercise, taking out some very expensive long-term liabilities. Turning the page to page 18. Just looking at, you know, what the business that we're really about, we originated EUR 3 billion of customer loans. So in that is approximately EUR 1.5 billion of corporate, EUR 900 million or so on residential mortgages, and the remainder to extend between consumer and corporate lines. What we saw in the year was essentially flatlining across our books as the sum of planned and unplanned amortization effectively equaled the new business origination. What we saw in the individual books is activity starting to climb back and normalize on the corporate side, and that across, you know, all of our sectors, services, real estate, retail, construction, tourism. We saw a resumption probably in all but the tourism area. On the mortgage side, we saw, as I say, EUR 900 million issuance. We are split roughly between branch and intermediary networks. We are split one third, two thirds. There's an increase on the intermediary side in terms of our intermediary origination channel. On consumer, as António has already said, we have started to look at increased levels of partnership and also the online offering of consumer finance, so considerable increase on that side. All in all, for us, this is the area that we are really focused on, starting to get some momentum because it is part of that equity story which I didn't mention, which was that we would expect our balance sheet to expand by, you know, low single digit levels on an annual and sustainable basis. Turning briefly to NPL, pages 19 and 20. The point that I would bring out, and António has already mentioned, we continue to drive down the NPL ratio, and that includes both the assets that are within the CCA estate and our normal non-CCA book. We are at 5.7%, and that's down from 22% in 2018. Our level of NPL coverage has, over the period, increased from 56%- 71%, which is exactly what you would hope to see. We did believe that we would be probably 5.2%. We had one portfolio which we are hoping to agree with the resolution funds and be able to complete on the sale of it. Then the next two years, the target for us would be to get to a European average, which, you know, two or three years ago was 5%, but now would be between the 2% and 3% regions. On the left-hand side of the page, you see the breakdown. It's a combination roughly between cures, sales, and write-offs that we achieve that decrease of EUR 0.7 billion to a now EUR 1.7 billion of stock. This will continue to be a focus, but we are starting to look a bit more like a normal bank. On page 20, there are really two messages. One of them being that although we have a decreased level in terms of stage three, but equally the quality of what's in stage three, if you want to put it that way, has improved. When you look at our stage three now, the not overdue level at December 2021 is 65% or 66%, two-thirds of them from 41%. The level of deeper arrears has also dropped from 13%- 17% over a two-year period. That is a result of us essentially selling out of the deeper years portfolios, and we have a, you know, for want of a better word, a higher quality stage three stock. On the right-hand side of the page, we're showing evolution of loans under moratoria. The messages there are that by doing and taking the steps we did in terms of staging, we anticipated what the effect of moratoria would be. We haven't seen a big spike in NPLs or charges as a result, and you can see that in the stability of the stage three percentage from 10.8% at December 2020 to 10.6% at December 2021. Overall on NPLs, momentum continuing and coverage more than adequate, as well as the stock being less in deeper arrears. Turning the page to 21, this is the real estate exposure, which we have EUR 824 million of real estate exposure on our balance sheets between investment properties and foreclosed. There's a note in the middle which is really saying that 52% is represented by either yielding assets in the commercial side or assets that are, you know, ready to be listed and ready to be sold. This is an area where there isn't significant progress in this year, but we expect to make significant progress in reducing across the board our real estate exposure over the next two years. We believe also, as we have said in previous presentations, these assets are marked in a way that we do not expect capital consumption, and that is true both of our loan and our real estate portfolio. Page 22 and 23 are our bond portfolio. Roughly, EUR 10.5 billion, a third, a third, a third between Portuguese sovereign, other sovereign and a wider bond portfolio. We have maintained the yield year on year, as you have seen from the average balance sheet at 128 or 1.28%. We have at the same time decreased the volatility, and the duration has come back in to under 4 years from 4.6, and that is an improvement on a trend that was already established in the prior year, therefore decreasing our DV01. What we see coming at us in the coming years between under 2-5, 5-8 is obviously the reinvestment challenge. In relation to that, I suppose if there was one advantage to the current situation is that we may see investment opportunities in the markets as we rebuild the book. For us, it's a question of reinvestment, a question of maintaining that focus on reduction of volatility, building probably more in the amortized cost portfolio and less in the fair value through OCI, therefore, again, taming volatility. Delivering over the next 2 or 3 years a kind of reinvestment profile, which is considerably lower in terms of yield, but still a significant contribution to the equity story. Customer deposits, then pages 24 and 25. We can see our 6.6% increase in terms of customer deposits and total funds. But when you look at our deposit breakdown, we have EUR 26 billion-EUR 27 billion, still 72% retail versus 28% non-retail, which is exactly the balance that you would like to see. The balance between size and term is not, I think, hugely important as much more the retail non-retail due to the stickiness of retail. Turning the page, our loan-to-deposit ratio at 86. Our liquidity ratios of 182 and 117 for LCR and NSFR improved from prior year of 140 and 112. Showing that, you know, we are, you know, our liquidity metrics are much more normal and much more comfortable than they would have been two years ago. We also have a stack of EUR 16 billion of eligible assets in terms of collaterals. So the liquidity story is very strong and continuing to strengthen. Page 26 is MREL. So as we said before, we did two things during the year to reach our binding target. So our MREL requirement is at 15 or 17.65. We issued EUR 300 in July, and then another EUR 275 in private placement format and loan format in December. That put us in a position to meet our binding requirements, both 31 December and 1 January, even with the IFRS step down. We will now have to reissue throughout this year. That will, you know, all be driven in tandem with our path back to a fully SREP business by the end of the year. The last table, pages 27 and 28, in relation to capital. Our capital position is slightly changed on this year as we are no longer recognizing. Well, actually we didn't last year. There's a call implicit in our accounts of a CCA call of 209. That is not recognized, therefore, we have an 11.1% CET1. Our total capital then being 13.1%. All of this is in the context of the COVID waiver, which will expire at the end of this year. We will then have to build throughout the year to a 15% level to meet our capital requirements. That's a combination of looking for any balance sheet opportunities, as well as continuing to deliver the 80-100 basis points capital accretion that the underlying business can produce during the year. The last chart is really one just showing, and António has effectively talked us through it, how we get to a call from essentially the income before tax line. You can see the impact of Spain, the impact on other comprehensive income, bringing us back to a capital generation level of 192. Between that and a CCA call are three things. We have essentially unpaid calls which are still carried over, so we have never been brought up to the 12%. We have that tax contingency that I talked about, and we have the impact of phasing in in relation to IFRS 9, both static and dynamic. That is the bridge between essentially a capital generative business and a capital call, which is not so much an investor story as a press story. I will, I think stop it at that. I think the messages though again are we set out an equity story, built around a simple corporate and retail bank. Which is, we are well on the way to implementing both on the retail and corporate structure. We are also making considerable progress towards those NIM, costs, income, cost of risk, and ultimately, return on acquired tangible equity targets. They are the central messages, that we want to get across on this set of results. I'll stop there and go to questions. If you would like to ask a question, please press star one on your telephone keypads. Please ensure your line is unmuted locally, as you will be advised when to ask your question. So once again, that's star one if you would like to ask a question. The first question comes from the line of Corinne Cunningham from Autonomous. Please go ahead. Hi there. It's Corinne Cunningham from Autonomous. Few questions, please. First one, just on the claim under the guarantee. It looks like the EUR 209 million call and the EUR 165 million claim are overlapping. Does that effectively mean that your claim for this year is just EUR 44 million or should I say the amount that would be paid up would be EUR 44 million? Another question is just can you confirm the size of the restructuring funds? Then maybe a broader question, perhaps both on your view on NIM, given you've got the more expensive MREL issuance coming through in 2022, offset to some extent by the buybacks. Just also how you do intend to bridge that gap to get into the 15% total capital ratio by year-end. Thank you. In terms of the claim of the CCA, I will try to answer. After that, I give all the floor to Mark to answer the other ones. Let's say CCA is not very easy to understand, so I will try to split the amount in several parts. First, EUR 116 of these depends from this provision, fiscal provision for a contingent issue in terms of this new law on aggravated IMI. So you should take this from the other ones because this is pocket one to pocket two from the government. That is, if we need to pay, we need to receive. In a way, we should take this. Taking this, we have 93. 93 is less than 165 that they did not pay. 200 that we claimed. This proves that, you know, in a more direct issue that we were capital accretive. If they have, if this- Sir, I'm really sorry. Can I just interrupt? We can barely hear you. I'm not sure if you could s ay that again. Sorry, because let's say the mics, we sometimes don't work so well. Are you hearing me better now? That's better, yes. Thank you. Okay. Just to try to explain the claim on CCA because it's really complex, to be honest. First, we are talking about EUR 209. From this EUR 209, EUR 116 came from the IMI aggravated tax. IMI aggravated tax is something that is a provision that we have. We are not completely aware that we have received the note that we need to put the provision from our auditors. We are aware that we need to pay, but we will discuss this. To be honest, it is a provision. Let's see if the provision does not exist, also the claim from the resolution fund does not exist. This is, let's say, the part. Taking the 116 from the 206, we have a normal claim of EUR 93. Let's say that is the ordinary claim. As you said before, this is less than EUR 165 that we have from last year. That's why if the last year, SRF has everything that is needed to fulfill the 12%, we were capital accretive, and we have more than 12%, and we don't need, let's say, no more claim. This is clear. Of course, this claim of EUR 93 will stay till we have, because we have the right by the contract to have always 12% of core equity guaranteed by the shareholder resolution fund. This is the way, the most simple way that I have to explain. You are right, EUR 165, it is the claim that we have from last year. If the shareholder has paid this claim, we have no ordinary claim this year because we were capital accretive as I have said before. We were able not only to pay the IFRS 9 static and dynamic effect in terms of our accounts, but also we will have the capacity to recreate a surplus in terms of capital. This is obvious. This is all. Mark, in terms of the other points. I think there were three other points. On the first one, I think it was simply a question of what is the size of restructuring funds. We have about EUR 500 million. It's a little bit more in terms of restructuring funds. The RWA absorption of those is about 185%. The second question, I think, was just outlook for net interest margin as we go forward. You know, I mean, I think our base case is that we will maintain the levels of net interest margin, and that will be maintaining stock, growing it slightly, and then compensating for some new releases which we will need to carry out in terms of the business with roll off. We see into this year a level of net interest margin, which is not dissimilar. That is also a pre-Ukraine scenario analysis comment, just to be clear. The last question I think was a more broad one on how do you see the build from 13.1%- 15%. Getting from where we are today to a fully SREP analysis, it's roughly a 50/50 split. The underlying business, we think generates half of that, or somewhere between 80-100 basis points. The remaining elements of it are levers that we see ourselves being able to pull include the disposal of a large chunk of those restructuring funds. This is a project which has been ongoing between the banks and potential buyers for quite some time, so it's quite advanced. We will and have already executed on selling highly RWA consumptive equity stakes for instance, the Visa stake or Euronext stakes that many of the banks like ourselves have. Equally, we can look at restructuring of our overall bond portfolio to get a more efficient approach. As I said, as I went through the presentation, we also expect to take out our real estate or significantly reduce our real estate portfolio. They are a combination of actual, you know, yielding assets which are ready to sell and also, assets on the land side, which are more development but are going through and coming to the end of licensing processes. All of those are the levers, not including obviously the potential for issuance, because for us it's always, you know, we're always seeking to create a number of different paths to green, because markets you can't depend on, and you go when you have the opportunity and they're stable. Clearly, that's not the case at the moment. All of that is built around, and that's our, you know, our capital conservation program is built around a base case which assumes receipts of the CCA and non-application of the tax. Even however, if we did not, if that was not the outcome, we also see a path to green. It's probably a bit more restrictive in terms of new business, but then again, we expect that new business would be tamped if the current scenario holds for a long period of time. For the same reason as the markets would be forbidden to us, there would be a lower level of demand. We have built ourselves essentially a path back to fully SREP from a regulatory point of view, with a base case which is receipt of CCA, but also a path if that were not the case. If the tax was confirmed as applying. Thank you very much. The next question comes from the line of Iñigo Sola from Credit Suisse. Please go ahead. No, the question I was going to ask has been asked before. For me, from my point it's fine. Sorry. That's the easiest question I've had. The next question comes from the line of Jeffrey Berry from Pictet Asset Management. Please go ahead. Good morning. Thank you for the call. I just had two quick questions. One is I had seen some local press reports of Russian energy exposures in the investment portfolio. I was just wondering if you could just walk through what the total exposures were there, if there are any, and if the provisions have already been taken against them. My second question was just a follow-up on, I think you mentioned issuance could be a potential tool to meeting your total capital SREP. Could I just confirm which instruments you're looking at? Okay. I'll take the issuance one first because should we have to do capital issuance, then you can see from the stack that it's not a CET1 issue. It would be a tier-two issuance. And then the size of that is, you know, at the moment not clear. But that would be the way we would access, and we would expect it to be at the back end of the year. The other question was Russia and we have small holdings in two of the energy companies in our bond portfolio. A total of EUR 40 million, which EUR 41 million in total, which we are obviously considering in terms of impairment at this stage. One of them is on fair value. Let's say the value of the market immediately affects the value. The other one. The other two companies are European SPV, but nevertheless the last resource is naturally the Russian capital. Okay. Thank you. Immaterial. Yeah. Our exposure. Yeah. Fair value just feeds through. Not public debt. We have no Russian. Also to say that if you are familiar with the Portuguese press, let's say the Bank for International Settlements have said that Portugal has a total amount of EUR 150 million, EUR 135 million of exposure to Russia and Ukrainian debt. We do not have our number is zero. Also for the total financial system is low. Very clear. Thank you. The next question comes from the line of Samir Adatia from Exane BNP Paribas. Please go ahead. Good morning. Right Results and efforts in making the bank profitable. I've got four questions, please. Firstly, looking at your Tier 2 regulatory stack, it appears you have roughly EUR 99 million above the external capital issued, which I suspect is due to excess provisions versus expected losses on the IRB. When do you expect this to fall away? Secondly, on MREL, do you know what your minimum subordinated requirement is, and do you have to issue senior non-preferred? Third question, P2G. Looking at your adverse stress test result, it appears you fell below the 5.5% threshold and therefore, what impact has this had on your P2G? Because the 1.5% P2G you disclosed looks very small versus the guidance the SSM gave around how P2G would evolve in respect to the adverse stress test. Final question, in respect to your 2017 plan agreed with the EC, do you expect DG COMP to discharge you this year? Thank you. Do you mind if I can go for the two last ones, and after that, you go. Yes, it is 1.5 and remains 1.5. I think let's say I don't want to guess, but let's say I understand that you are saying that it's quite small when you look at the adverse stress test scenario. To be honest, the stress test was run with Spain inside, and this makes a huge change. I think that this was evaluated by the team that has analyzed the results. Also because the swap is inevitably higher for us. We have 3% in terms of swap. I think that in terms of P2R. In a way, I think that this justifies the 1.5. The 1.5 remains, and I think that this proves a little bit a better perspective for the future that the regulator even expects from us. This is the first point. The second point, that is DG COMP commitments. As you know, we have 33 commitments. We have fulfilled all the 32 commitments, namely the cost income and so on. We have one commitment that we need to be clear to say that in our opinion, we fulfilled, but we don't know if the DG COMP will accept or not. That is the pre-provision one. The pre-provision one was defined only based on net interest income and fees. Let's say the base assumptions of the plan that was done in 2016, 2017 has a 2% average in terms of interest rates. We are working with 0% in terms of interest rates, 0.1 Euribor. We are talking about the Euribor assumptions, first one. Second, there's no pandemic effect in terms of the fees of transactions. We have done already our work proving that based on the assumptions that we did have, we were able to compensate this with costs, and we have implemented the cost income that is the other viability commitment that in a way is linked with this one, and we were able to fulfill it. We are now working with our auditors. After the closing of accounts, we are working with our auditors in order to make independent evaluation about our assumptions and our figures. The answer is yes, we expect that this year we can sort out with this issue that we need to put on the table to you. Okay. Okay, Mark. At the risk of boring you, I'm gonna ask you just to repeat the first two questions. Was it... Was the question on EUR 99 million falling away? Yes. The first question was on the tier two. You have roughly EUR 499 million, which I expect EUR 400 million is due to external issuance and the other 99 is due to having more provisions versus expected loss under IRB. I'm curious when you expect that to fall away. In order to- We don't, we haven't disclosed that, in terms of the difference or expected difference, between provisions and expected loss. We wouldn't be generally, disclosing when we expect it to fall away. I think you could, for modeling purposes, take it as maintained. Understood. The second question was, in respect to MREL, have you been informed of your minimum subordination requirement? If so, do you need to issue non-preferred senior or is the ongoing issuance of preferred senior sufficient? Our base case is that should we not need Tier 2, it would be Senior Non-Preferred. If we do have to do issuance, it would be a combination of Tier 2 and that. That's kind of what we're working with the investment banks at the moment on. Understood. Thank you. The next question comes from the line of Stéphane Suchet from Credit Suisse. Please go ahead. Thank you for the call. Most of my question have been answered. Perhaps a final one, if I may, on my side. Could you share with us more of your 2022 financial targets being in terms of net profit, cost of risk or NPL ratio, if I may ask? Can you give me that question again? Yeah, sorry. I was asking, could you share with us, 2022 financial targets in terms of net profit, CET1 ratio, in terms of cost of risk, just to have a bit of a roadmap for 2022? At the risk of being a little bit uncooperative, the targets are the targets. There are medium-term targets. In terms of, you know, what we can and can't disclose, in terms of our, you know, expectations, I would say to you that the first thing is we have to build essentially a path to full SREP. That is a combination of an 80-100 basis points outcome at the bottom line, plus a combination of those individual transactions as in sales of portfolios, sales of our own assets, reduction of RWAs through restructuring bond portfolio and also disposal of restructuring funds. The underlying momentum of the business, we would expect, as I said, NII, you know, the level would be similar. Fees and commissions, I mentioned our run rate being similar to our backup in the 290-300 range. And that's based on what, you know, you see as run rate coming out of Q4. I would expect us to maintain costs but with a slight decrease, but not significant. And that is because we will take some cost out, but we will have increased depreciation, effectively compensating for as the investments in our refurb and branch network program are commissioned. Then we expect a sort of cost of risk to be within that 50 basis points range. A 40-50 basis points cost of risk, you know. That sort of walks you down through the P&L, but leaving out obviously those specific transactions where we expect to dispose of REOs, et cetera, and they're part of the one-off elements. The only other thing I would say is that we are doing all of this based on capital requirements and the expansion of the business in terms of the books, which is, you know, reasonably sizable in terms of both corporate and mortgage books. We're in the single-digit% expansion. Okay. Well, listen, thank you. Thank you very much. You'll appreciate that anything more, I'd start getting into having to do a prospectus. The next question comes from the line of Maximiliano Machin from JB Capital. Please go ahead. Hi, good morning. Thank you for the presentation. Hi. I have two questions, one on the NII. I was wondering if you could clarify how much contribution comes from TLTRO, and also if you are currently charging any of your deposits with negative rates, and if so, how much and which line does this go through? The next question is on the fixed income portfolio. I was wondering if you could tell us how much of it is at fair value versus amortized cost. Thank you. Sorry, the first question was TLTRO. Our annualized TLTRO is about EUR 60 million impact. That will fall away because we're getting the full 1% that will fall away halfway through this year. We will have a step down in the second half, and our rate will halve essentially. As you go into next year, you go from 60 to 45, I think for the full year, and then it falls away to 30 for the following year and then 0. That's the MREL contribution. The next question. This is TLTRO. Oh, sorry. That's the TLTRO contribution. The next question was. It is negative rates. Negative rates is how it looks. Negative rates is not allowed in Portugal. It's not legal. Legal. Legally allowed in Portugal. Unfortunately, this is, let's say, a decision that was taken, and that we are suffering all the Portuguese financial system. What was the third question? The share. I think it was the fair value. The share of fair value in the amortized cost. I think we have published that. Yes. We have a 23% amortized cost and a 70% fair value through OCI, with 8% fair value through P&L of that EUR 10.4 billion. Thank you very much. We currently have no questions in the queue. As one final reminder, please press star one if you would like to ask a question. We have no further questions in the queue. I'll hand the call back to your host for some closing remarks. Okay. Just, again, like to say thanks to everybody for coming on the call today. For us, this is, you know, this is a really important set of results because, we can see, on all the lines of the P&L and, all the targets that we have set out, we have made substantial progress, and we expect to continue, to deliver that as we go through 2022. I'm gonna hand back to António now. No, I want to say that, let's say you know the strong commitment that we are doing all this period in terms of defining, let's say, the core banking income as the priority and the focus on clients. We were able to maintain this with the restructuring process that was tough and difficult. Now that we have almost finalized, unfortunately, no process of restructuring finalized, but we have achieved our results. Let's say we believe that we can even be there a little bit further in terms of the customer experience and capacity to grow in terms of the market to the level that we expect to do. The commitment that we have shown this year will show for the next years for sure. With that, thank you very much to everybody. Thank you for joining today's call. You may now disconnect your lines.