Welcome to the Novo Banco 9 months 2023 results presentation call. My name is Laura, and I will be your coordinator for today's event. Please note, this call is being recorded, and for the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. Today, we have Mark Bourke, CEO, Benjamin de Giraud d'Agay, CFO, as our presenters. I will now hand you over to your host, Mark Bourke, to begin today's conference. Thank you. Good afternoon, everybody. I'm in the room here with Ben, as you said, and also Maria Fontes from Investor Relations. We'll make a short presentation, and we will have plenty of time for Q&A afterwards. I will make a few initial remarks and then hand you to Ben to do the main part. So, you know, in summary, it's been a very strong quarter, strong profitability and capital generation. The business is very well already very well capitalized and liquid, and we are very well positioned and totally focused on looking after our customers and providing for their needs. So that was the, essentially, the quote at the top. I'll make a couple of comments now just about the results. So if you go to slide 5 of the presentation, our profit after tax, EUR 638 million, and that is a, in a sequence, quarter by quarter from the first of EUR 148 million, EUR 224 million and EUR 265 million, so constantly climbing. Capital generation year to date of 340 basis points. We can see net interest income growth in the quarter of 10% to EUR 307 million, and the total year to date at EUR 831 million. Our commercial banking income at EUR 1.048 billion includes EUR 271 million of fees and commissions, and that has grown by 7% in the quarter. Our cost income ratio is below our target of 35, it's 32.4%, and the third quarter, 30.2%. Our cost base increased year-on-year, and that is, and it is for all of us, an area of focus as we go into 2024, but it is a very strong cost income ratio. Cost of risk at 36 basis points is well within our target, and is also reflective of a very conservative stance. We see, you know, minimal NPL creation in the period, and, as I say, remain well below the 50 basis points through the cycle target. Our gross customer loans at EUR 25.7 billion show growth year to date, and that reflects growth in both consumer and mortgage with a slight decrease or a decrease in our corporate book. But in all, we have either maintained or increased our market shares. And the last point, which is, you know, puts us in, if not at best in class, certainly with the best in class at 340 basis points of CET generation thus far. Turning the page to six, a little about the backdrop. So Portuguese economy continues to be a bright spot in overall European terms. So a 6.8% growth of GDP last year, down to probably now 2.1%-2.3%. Still, that's three times the expected EU average. Inflation, and we've seen recent statistics showing it coming very much under control, which I suppose is consistent with, you know, the lower growth expected numbers. And in Portugal specifically, you know, strong fiscal discipline is driving a re-rating of the sovereign. So we've seen, we've seen Fitch upgrades to A minus. It is S&P on positive, expecting to move in that direction, and Moody's probably also. Crucially, all of this is aligned with unemployment being at historic lows and employment at historic highs. So that is a clear underpinning of the economy. And then turning to page seven, we see the housing sector. So reflecting all of that, we expected probably a plateauing of prices. There's still - there is still an increase. There is a decrease in number of transactions, but that price being supported to some extent by crimping on the supply side. But however, a very stable backdrop for our mortgage book. And on the right-hand side of the slide, you see Portugal going from, you know, being considerably more leveraged at a personal level in 2010 to less so now in 2022 at 93%. And at the same time, the corporate, the corporates have significantly deleveraged as well. All of this is also going to be underpinned by a continuous flow under the RRP of EUR 16 billion-EUR 20 billion over the next three years, three or four years. And that, again, is an area that we are very focused on as a bank and facilitating our customers' needs in relation to it. Turning the page to page eight. A quick summary of our two core businesses. On the retail side, we go to market via our new distribution model, which is an omni-channel presentation. So we have a branch network, contact center, and online offering. We have invested and developed that over the last four years and continue to do so. The idea being to be able to serve our clients sustainably, but also with a very high-quality customer experience. You can see also the results in financial terms on the left-hand side of the banking income and profit before tax increasing from EUR 316 million-EUR 607 million, and from EUR 108 million-EUR 332 million on the retail side. On the corporate side, we are fundamentally an SME bank. We go to market through a sectoral approach. We have six sectors that we concentrate on, that we've chosen: retail, industry, tourism, agriculture, real estate, and logistics, and that represents almost 60% of our book. We continue to develop the product set and sectoral expertise to back that up. We are also gaining market share in providing working capital finance across those sectors. Hello, and welcome to the Novo Banco 9 months 2023 results presentation call. My name is Laura, and I will be your coordinator for today's event. Please note, this call is being recorded, and for the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. Today, we have Mark Bourke, CEO, Benjamin de Giraud d'Agay, CFO, as our presenters. I will now hand you over to your host, Mark Bourke, to begin today's conference. Thank you. So good afternoon, everybody. I'm in the room here with Ben, as you said, and also Maria Fontes from Investor Relations. We'll make a short presentation, and we will have plenty of time for Q&A afterwards. I will make a few initial remarks and then hand you to Ben to do the main part. So, you know, in summary, it's been a very strong quarter, strong profitability and capital generation. The business is very well already very well capitalized and liquid, and we are very well positioned and totally focused on looking after our customers and providing for their needs. So that was the, essentially, the quote at the top. I'll make a couple of comments now just about the results. So if you go to slide 5 of the presentation, our profit after tax, EUR 638 million, and that is a, in a sequence, quarter by quarter from the first of EUR 148 million, EUR 224 million and EUR 265 million. So constantly climbing. And capital generation year to date of 340 basis points. We can see net interest income growth in the quarter of 10% to EUR 307 million, and the total year to date at EUR 831 million. Our commercial banking income at EUR 1.048 billion includes EUR 271 million of fees and commissions, and that has grown by 7% in the quarter. Our cost income ratio is below our target of 35, it's 32.4%, and the third quarter, 30.2%. Our cost base increased year-on-year, and that is, and it is for all of us, and will remain an area of focus as we go into 2024, but it is a very strong cost income ratio. Cost of risk at 36 basis points is well within our target, and is also reflective of a very conservative stance. We see, you know, minimal NPL creation in the period, and, as I say, remain well below the 50 basis points through the cycle target. Our gross customer loans at 25.7 show growth year to date, and that reflects growth in both consumer and mortgage with a slight decrease or a decrease in our corporate book. But in all, we have either maintained or increased our market shares. The last point, which is, you know, puts us in, if not, if not at best in class, certainly with the best in class at 340 basis points of CET1 generation thus far. Turning the page to 6, a little about the backdrop. Portuguese economy continues to be a bright spot in overall European terms. A 6.8% growth of GDP last year, down to probably now 2.1%-2.3%. Still, that's three times the expected EU average. Inflation, and we've seen recent statistics showing it coming very much under control, which I suppose is consistent with, you know, the lower growth expected numbers. And in Portugal specifically, you know, strong fiscal discipline is driving a re-rating of the sovereign. So we've seen Fitch upgrades to A-. It is S&P on positive, expecting to move in that direction, and Moody's probably also.... Crucially, all of this gives, is aligned with, unemployment being at historic lows and employment at historic highs. So that is a clear underpinning of the economy. And then turning to page 7, we see the housing sector. So reflecting all of that, we expected probably a plateauing of prices. There's still there is still an increase, there is a decrease in number of transactions, but that price being supported to some extent by crimping on the supply side. But however, a very stable backdrop for our mortgage book. And on the right-hand side of the slide, you see, Portugal going from, you know, being considerably more leveraged at a personal level in 2010 to less so now in 2022, at 93%. And at the same time, the corporate, the corporates have significantly deleveraged as well. All of this is also going to be underpinned by a continuous flow under the RRP of EUR 16 billion-EUR 20 billion over the next three years, three or four years. And that, again, is an area that we are very focused on as a bank and facilitating our customers' needs in relation to it. Turning the page to page eight, a quick summary of our two core businesses. On the retail side, we go to market via our new distribution model, which is an omni-channel presentation. So we have a branch network, contact center, and online offering. We have invested and developed that over the last four years and continue to do so. The idea being to be able to serve our clients sustainably, but also with a very high-quality customer experience. You can see also the results in financial terms on the left-hand side of the banking income and profit before tax increasing from EUR 316 million to EUR 607 million, and from EUR 108 million to EUR 332 million on the retail side. On the corporate side, we are fundamentally an SME bank. We go to market through a sectoral approach. We have six sectors that we concentrate on, that we've chosen: retail, industry, tourism, agriculture, real estate, and logistics, and that represents almost 60% of our book. We continue to develop the product set and sectoral expertise to back that up. We are also gaining market share in providing working capital finance across those sectors, and looking to be the facilitator and help our clients, particularly where there are investment projects or the potential for benefiting from that EUR 20 billion that will be pumped into the economy over the next number of years. And then the last page, page 9, before I hand you to Ben, a summary of where we are versus the targets that we set ourselves. So we updated our targets in July, and we are beating the updated targets, and we will actually upgrade again on one of those. So our net interest income, we moved from 2.2 to 2.5, and the result is 2.66 year-to-date. Cost income, we decreased our target from 40 to 35%, and our result is 32.4%. The cost of risk, we did not move as it's through the cycle, but we are at, at 36 basis points, less than the 50 basis points through the cycle. And our NPL ratio at 4.2, is below the 4.5 we set ourselves. We upgraded our PBT target to EUR 700 million, and we are at EUR 647 million for the three quarters. So again, setting, meeting, and beating targets being part of our developing story. On the last one, capital generation, we had set a target of 250 basis points at the beginning of the year. We upgraded that to 350, and we are at 340. So we will upgrade that in this call to a 400 basis points expectation. So with that, which is really, in numbers terms, a progress report on strategy and achievement, I'm gonna hand you to Ben to look at the detail. Thank you, Mark. I will go to page 11, and as Mark has said, this is an excellent set of results for the nine months, but also in particular for the third quarter of this year. EUR 638.5 million net income for the nine months, and EUR 265 million in the third quarter, driven primarily by an expanding top line, which has increased by EUR 427 million year-on-year, with net interest income expanding 10.6% quarter-on-quarter, and fees up by 0.7% year-on-year. Cost income ratio, despite investments which were undertaken in the business and inflationary pressures at best-in-class levels, 32.4% in the nine months, and in the third quarter at 30%. Cost of risk has stayed at very benign levels, 36 basis points, in the nine months, which includes a considerable amount of management overlays, which we have built. Then moving to page 12. To give you more insight in terms of the net interest margin development of the bank. We are sensing we're reaching the peak of net interest margin. We're right now at 3%, in the third quarter. Loan yields stand at 5.06% in the third quarter and have almost fully repriced, particularly on the corporate book side. On the mortgage lending side, where we have currently a 4.29% yields compared to Euribor, which is close to 4%, there is still a positive momentum, and this is a book which reprices slower. But given the continued development in terms of deposit betas, which has stood at 20% in the third quarter, we are expecting net interest margins to decelerate going forward. That being said, we have invested heavily over the last 12 months in terms of reducing our interest rate sensitivity, whereas 12 months ago, we would have had an interest rate sensitivity, where 1 percentage point change of Euribor would have increased our net interest income by over 20%. By now, we're down to a 5% sensitivity. So we've reduced the sensitivity by over 75%, with now a 100 basis points decrease in Euribor, decreasing NII by 5%. Going to page 13, on the fee side, you can see that we are broadly stable on a year-on-year progression in terms of fees up 0.7% year-on-year. This is on the back of a very strong performance in the accounts and payments area, which is up 9% year-on-year. And we're seeing headwinds on the one hand side, on the asset management and bank assurance side, where we're down 4.7%, as we've clearly been more focused on our deposit business than the asset management business. And loans are down 7.3% year-on-year, which is to some extent driven by a legislative change, where we will have only the full runway impact in the fourth quarter numbers. Page 14. Operating costs are up 8.1% year-on-year. We're expecting this to decrease for the full year in terms of a year-on-year progression, given that we had a significant increase in costs in the fourth quarter of last year. On an underlying basis, recurring costs are up 6.9% year-on-year, which we're also expecting to be lower for the full year. Cost income ratio, as we have mentioned, 32% on a reported basis for the nine months, and 30% on an underlying basis. You can see that in the benchmarking in the middle of the page, that at those levels, we are among best-in-class in Europe, and will compare well with almost any bank in Europe. Page 15 shows the current provisioning environment in Portugal, and cost of risk is staying very benign at 36 basis points. As I mentioned, this includes management overlays, which we have built in the first nine months of the year, and also where we stand now, we are not experiencing or seeing a change of the credit environment. All of our early warning indicators don't signal to us a weakening of the underlying performance of the credit. Moving to the balance sheet on page 17. Total assets have declined this year by EUR 3 billion, and this is on the back of having repaid roughly the same amount of TLTRO funding. At the same time, and we can see this in more detail on page 18, we were able to grow our loan book. So loans are up from EUR 24.6 billion to EUR 24.7 billion, and market share in the lending side has increased by 0.1% to 10.6%. On the right-hand side, you can now already, however, see that credit demand, like in most European jurisdictions, is softening, and we had a deceleration in terms of new credit origination to only EUR 0.8 billion in the third quarter. This deceleration is in particular observable in the corporate loan book, where we're down from EUR 14.2 billion at the beginning of the year to EUR 14 billion, while market share has stayed stable on the corporate loan book side. Moving to page 19. There has been no significant change in the composition of the loan book in the quarter. We are continuing to pursue the sectoral approach. And on the right-hand side, you can see that default rates at 0.7%, and that's an annualized number, for the corporate book, are at the lowest levels which we have observed, I would say, in the history of Novo Banco. Page 20, the mortgage loan book. We have originated in the nine months, EUR 1.14 billion of new mortgages, which on average had a ticket size of 120,000 EUR, and with a loan-to-value of below 60% on average. The stock of mortgages is very well seasoned. We have an average LTV on the book below 50%, which will compare very favorably compared to other Portuguese banks. And And the average ticket is roughly 50,000 EUR, so roughly 200,000 mortgages at 50,000 EUR each, roughly. On page 21, the personal loans business has shown good performance this year, up 7.9% year-to-date, which allowed us to rebuild the market share to 5.4% after having dropped to 5.2% last year. On the right-hand side, you can see that we were able to increase interest rates by only 90 basis points on this product, despite the significant change in interest rate environment. This is due to the fact that the personal loans and consumer finance business in Portugal is subject to a Usury Rates Law, which means that changes in interest rates are very difficult to, or take a long time to be able to pass on to clients. Page 22 gives the perspective of the performance of our NPL book, where we're down 12.5%, year-to-date in terms of growth NPLs. New entries of NPLs at EUR 144 million, so below EUR 50 million of new NPL formation per quarter, equating to 0.8% for the entire book. So also there's an annualized figure, similar message as with the corporate side, also for the entire book at very benign new NPL formation. Coverage ratios, we have been able to increase further on the NPL side from 78% last year to now 84%, which is considerably above EU average levels. NPL ratio at 4.2%, or if you exclude advances with banks at 4.7%. On a net NPL ratio basis, so taking into consideration the provisions which we have built, we are now at 0.7%, which is in line with the Portuguese market. Also worthwhile to point out that neither the coverage ratio nor the net NPL ratio considers here the backstop. The backstop is EUR 50 million, which we have deducted directly from capital and haven't taken through our P&L. Page 23 goes in more detail into our NPL coverages. On the right-hand side, you can see that we've now further increased the stage three coverage from 110% in the prior quarter to now 116%. You can also see in the middle of the page that if you were to exclude the CCA assets from our NPL ratio, the pro forma ratio would be 2.7%. Worthwhile to point out that we don't have full servicing rights for those CCA assets, so the speed of the deleveraging of the CCA assets is to some extent outside of our control until CCA maturity. On page 24, there were no significant changes in the composition of our securities book in the third quarter. Given the further increase, especially where we sort of saw a peak of interest rates in, as of 30th of September, unrealized losses in the book has increased now to EUR 300 million post-tax, as of 30th September, up from EUR 226 million in September, and a full liquidation of this portfolio, which would reduce our CET1 ratio by roughly 80 basis points. Going to page 25, our deposit book standing at EUR 28.1 billion. August and September are usually seasonally, the two weakest amongst the two weakest months in the year, so we're not surprised by having decreased deposits by EUR 100 million in the year. You can see... Sorry, in the quarter, and you can see that we've been able to increase market share by 10 basis points to 9.7% in the quarter. Deposit betas, as I mentioned, we are at 20% total deposit pass-through in the third quarter. If you just look at the term deposit book, the pass-through would have been 45%, and we would expect also for the entire year to have a deposit pass-through of roughly 20%. Loan-to-deposit ratios has stayed at healthy levels of 83% as of end of September. Moving to page 26. We are within our target range of the LCR ratio of between 130% and 150%, with 136%. And this is on the back of having repaid another EUR 600 million of TLT at the end of September. So we have repaid EUR 3 billion of TLTRO this year, with only EUR 1 billion outstanding, which will mature in December 2024. On the bottom left slide of the page, you can see that we have now a negative balance of cash with the ECB of EUR 1.8 billion. So we have further increased our net position with the ECB from-- by EUR 600 million in the quarter. The right-hand side, you can see the composition of our liquidity buffer. We have EUR 13.3 billion cash or HQLA assets, which back, let's say, our EUR 28 billion of deposits, which we feel very comfortable with. Roughly EUR 8 billion of the EUR 13.3 billion are made up of level one unencumbered level one securities, which gives us enough room to also strengthen LCR and NSFR ratios and then if required. Going to page 27, and I think this is probably one of the highlights in this quarter, is really the very strong capital build at 1.4% in the third quarter on an organic basis, ahead of the 100 basis points, which we are able to deliver in the first and second quarter, delivering 340 basis points in the nine months. On the total capital basis, we've generated 390 basis points, which factors in the EUR 100 million increase in the Tier 2 issuance, which we have delivered in June this year, where we've replaced the EUR 400 million issuance with the EUR 500 million issuance. Page 28 gives you our current MREL position, where we have an MREL ratio of 28%, which compares with our binding targets at current buffers of roughly 26.5% as of first of January 2026. This means that we currently have a 3.7% shortfall to the binding MREL requirements, which compares to the run rate organic capital generations of 100 basis points per quarter. We are expecting, or it's expected from us, that we will comply with the MREL requirements already as of first of January 2025. That basis, I would hand it back to you, Mark. Okay. Thanks, Ben. I think the next time we make this presentation, we'll probably end on slide 27, because you could spend 20 minutes on slide 27. You know, it really shows the underlying organic performance of the bank. So we expect that to continue into the fourth quarter. So we'll continue to have strong underlying performance and organic capital generation. While, you know, we note that demand is slack, we can see that we have made progress in terms of our market share position, and we will continue to concentrate on developing our product set, developing our services and client acquisition, therefore improving our position as and when demand inevitably returns. Particularly as there is, you know, a significant investment to come in this economy, which is already, you know, one of the bright spots in the European context. So with that, I think we will go to Q&A. Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We'll now take our first question from Maksym Mishyn at JB Capital. Your line is open. Please go ahead. Hi, good afternoon. Thanks for the presentation and taking our questions. I have two. The first one is on loan book. Could you please share your view on the expectations for loan book growth in the coming quarters per segment? Your residential mortgage loan book is growing while sector is deleveraging, and I was wondering, what's the reason behind your market share gains? And also, if you could tell us what kind of percentage of new mortgages you produce at fixed rates? And the second is on customer spreads. What kind of customer spreads do you expect after repricing of your assets is done, and what kind of quarterly evolution should we expect? Thanks. Okay. So, I think we'll probably do this as a two-hander. If I just take a little bit of outlook in terms of loan book growth. I think the second question was, it was a consumer... What was the second part of the question? Loan book growth, and I have made a note that I don't understand. So first of all, our loan books, we have, you know, we've seen, as I say, demand slacken. We have in the mortgages area, we have seen, you know, quite a bit of refinancing in the first half. We would expect or we're targeting at remaining flat from end Q3 for both, you know, our consumer and mortgage books, and we will probably be slightly down. This is in the next quarter. But as I said, we have managed to take market share in both of those, and we have maintained our position on the corporate side. What was the second? The amount of fixed rate mortgage production. Oh, yeah. Oh, yeah. Oh, that's why I've written less than 10%. Yeah. So, in our stock, we had 7% of fixed rate mortgages, and we haven't seen a significant change in terms of the amount of fixed rate mortgage production over the last year. There is a bit of a change in product offering, where fixed rates are offered for a short duration, two years or so, before you reset back to a variable rate product. That's a bit of a change in the marketplace, but it's below 10, 10%, 7% in our stock. So operator, Mark, I don't know if there is any other question. Thank you. Yeah, I was just waiting for Mark. No worries. We'll now move on to our next question from Hugo Cruz at KBW. Your line is open. Please go ahead. Hi, thank you for the time. Just a few questions. So with slide eight, you mentioned client acquisition of +35% year-on-year, which sounds very interesting, quite a punchy number. Where are you taking share from and what's driving this? And then, if on NII, if you could talk a bit about the deposit pass-through dynamics. You know, I understand there was a lot of the market moved very quickly, launching some new time deposits in Q3. You think this is now slowing down, should we see some stabilization there in terms of market competition? And then the final question on OpEx. You grew very strongly year-on-year, 8.1%, but I think that includes investment. So it'd be great if you could split how much is the underlying growth versus what, what are the investments going through the P&L? Thank you. Okay. So, first of all, I think the question was client acquisition. So on our retail side, we have had, you know, quite a bit of focus on building our client numbers. And we have taken about 100,000, so about 10,000 per month of new clients. And that, you know, there is a significant split of non-nationals and nationals in that, and we continue to focus on that area. We will probably narrow down our focus to the more high-value clients. First of all, it was to get essentially our engine running and our offering into the marketplace. In corporate, there isn't a massive shift in our client base. It's more about continuing to serve the clients that we already have. On consumer, it would be a similar story. We generally harvest on our own client base, but that is where the large number comes from, a big focus in retail on getting new clients and getting current accounts on our books, which, as demand is slack, we see that as being central to building your position for when it shifts. Then I'll hand to Ben for the pass-through question. Yeah. In terms of market dynamics on pass-through, as I mentioned, in the third quarter, we would have run at 20%, which is ahead of roughly 15% in the second quarter. So we've seen acceleration of pass-throughs. And let's say the market, especially in the retail side, has been particularly dynamic in the month of October, where competitors have put out attractive offerings at up to 3.5% for term deposits. This is moving the market, but it's too early to call exactly how this was settled. It hasn't settled yet. This is a relatively new development over the last couple of weeks. That being said, we still feel comfortable with delivering a 20% deposit pass-through for the full year. It has brought forward your views on peak NIM, peak NII. Absolutely. Whereas, I would say, a quarter ago, we would have said, NIIs will peak in the first quarter of next year. We would now be seeing an NIM peak being reached roughly. Then on the OpEx question, so we see, you know, a certain amount of exceptions. There's probably 6.8% of an increase, and we see inflation feeding through both on the wages and on the G&A side. And the G&A side, it's particularly technology. But as Ben, I think, has already said, we'll probably end the year when we do the, you know, the complete comparison year-on-year with somewhere around 5%. And I think that's an overall. There's some increase in headcount, but by and large, that's inflation-driven. On the investment side, we're roughly at the kind of level of inflation or investment equals depreciation, so stability with a sort of EUR 40 million-EUR 50 million kind of investment profile, which is nearly normalized. Do you want to? Okay, great. Thank you. Thank you. We'll now move on to our next question from Aleksej at Bank of America. Your line is open, please go ahead. Good afternoon, Mark, and Ben. Congratulations on great performance. My question is, in your view, when will rating agencies appreciate Novo Banco's performance? You have a balance sheet and P&L of an investment-grade company. Do you expect Moody's to recognize your progress, and would you consider obtaining a rating from another agency? I'd have to say, Aleksej, that, you know, I'd have to tell the entire call that we did not ask you to ask that question. It is not a planted question, but it is rather a welcome question. So I'm gonna give to Ben, you know, really to talk about our performance versus, you know, what would give us an investment grade. But briefly, our view is that if—as long as we keep delivering quarter by quarter, we're already at the level that would give us the right answer, and it's effectively allowing them to catch up. But Ben has, as you know, a slide here, which is page 13- Forty-five. 45, which is really worth us taking everybody through. Yeah. Thank you, Mark. What we try to convey on page 45 is exactly the point you're making, Aleksej, is that we believe our current point-in-time metrics already justify an investment-grade rating. What we show you here is the scorecard, which Moody's has published, and it would do so for all banks it's rating, which is focused on their five core metrics: asset risk, capital, profitability, funding structure, and liquid resources. What we have in the middle of the page, in yellow, is the scorecard, which Moody's has produced last time around, on the back of the last rating review, on the back of our full year 2022 results in April of this year. You would see that the historical ratio, which then translates into a raw score, which is unadjusted, without any subjectivity going into it, would have landed at Baa2 on average. You can see. So that's double B flat, and you can see that we've been assigned Baa3, so double B minus. If you now do the same calculation of the scorecard based on our 9-month run rate performance, and not also taking into account historical averages, which Moody's does for two of the ratios, asset risk and profitability, you would see that on average, we would now be at triple B plus, just using--just on a raw score perspective. So we clearly see that there's a 5-notch differential between the BB-, which we are currently assigned to, and the BBB+, which the raw score at least supports. And hence, we feel confident that we are on a positive outlook, and hence we feel confident that we have a continued positive trajectory. On your question regarding engaging with other rating agencies, we are considering to do so, and certainly ahead of any new issuance on the senior side. We do hope that the rating agencies are on this call. Thank you very much. As far as Moody's- Thank you. Do you have a timeline when they can possibly review your rating? So usually they base their review on year-end, but the process would start probably as we move into November, December. Okay. Okay, thank you very much, and good luck with both agencies. Thank you very much. Thank you. We'll now take our next question from Lee Street at Citigroup. Your line is open. Please go ahead. Hello, thanks for taking my questions. Well, on the results. Two for me, please. Firstly, I think you said you've got no early warning signs within the loan book, but my question is: do you expect sort of a natural increase in non-performing loans as we head into 2024? As the existing loan book, you know, reprices higher, and if so, any sort of idea of order of magnitude? That'd be the first question. And secondly, obviously, presumably at some point there might be an IPO in the future. Is there a scenario ahead of that you feel, you know, pressured to try and sort of increase the loan book and grow the loan book, you know, sort of significantly as you head into that? That'd be my two questions. Thank you. We'll take them in reverse order. But I'll just make a couple of comments on the early warning indicator, but I think Ben may come in after that as well. You know, it is. This is very hard to call because we see nothing, and we see no stress in the portfolios. You see the NPL formation levels are well down. We are pretty much through the asset repricing cycle, as he has already said. So corporate gone through, mortgage, the last leg of it would come through because about 40% of our book is 12-month Euribor repricing. So we're not seeing the stress. There's, you know, there's obviously gonna be a question mark over whether you're talking about depleting savings, and that has to settle down for some time. But we are not, other than the fact that we are generally cautious and we are generally, conservative, we're not planning for a major uptick, but what we are doing is protecting the balance sheet with, the appropriate level of conservatism. If you take it to the other side, which is, you know, as the economy we were looking at, at the beginning, you know, a 2.1, 2.2-2.5% growth, a very, the crucial one is that employment is at an all-time high, unemployment is at an all-time low. As long as that holds, and as long as what looks like a plateauing of interest rates, which is likely if you see that the European overall economy is moving sideways, that would mean that we, you know, we think the likelihood is a benign play through of this. On the second question, which was IPO, are you, are you likely to actually push yourself to go down the credit curve and increase your book, which is the veiled question? The answer is no. We do, again, a bit through the cycle, believe that we should grow the book by in small single-digit percentages, but we would do that while maintaining credit quality. And we have actually erred, as we believe we're at a point in the cycle, where we should be more rather than less conservative. We have erred on the side of caution rather than gone for growth. Yeah, and it, particularly, we've changed our credit underwriting standards on the mortgage book side, where we've mid of last year decided to cut production above 80% LTV. We've reopened that for the highest-rated clients up to 85%, and we've also cut production of the lowest-rated personal loan business. So we've clearly taken steps to tighten credit underwriting standards, and for us, it's about efficient allocation of capital rather than chasing growth. ... All right, that is very clear. Thank you both for your answers. Thank you. Once again, ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We'll now move on to our next question from Daniel David at Autonomous. Your line is open. Please go ahead. Hi, all. Congratulations on the results, and thanks for taking my questions. I've got two. The first one is just on MREL. Could you just comment on where you are versus your January 2024 interim target? And I'm assuming that this allows you to call the small senior preferred you've got coming up without refinancing, noting the CET1 accretion. But given you're accreting so much CET1, could you maybe just comment on the issuance plans next year? And I hear your comments on rating agencies, but just interested to hear what you're thinking in primary markets. And the second one is just a bit more broadly on the CCA. Again, I hear your comments on kind of the restrictions that it puts on your non-performing loans and also on capital distributions. But are you considering a way of kind of ending the CCA early, maybe to free up what you can do? Or should we be thinking about the CCA running until the end of 2025 and nothing to do there? Thanks. Yeah. Hi, David. I'll take your questions. On the MREL side, on the EUR 100 million private placement, which we have in place, which where the call date is coming up at the end of the year, we've received approval by the SRB to call with no replacement. We haven't taken a decision yet on what we'll do, but we have the approval to and the flexibility to do so. In terms of our current position versus linear targets, we are we have a linear target of 21.5%, which compares to our current position of 22.76%. So you have an excess in terms of MREL of EUR 266 million at the end of September. So generally, we would be able to comply with our January 1, 2026 binding targets on the basis of organic capital generation. As I've mentioned, we have a target based on current buffers of 26.5%, which compares to a 22.8% current position. So it's a 3.7% shortfall. I mean, given that we're generating 100 basis points per quarter currently capital, it shouldn't take too long to fulfill the requirements just on the basis of organic capital generation. That being said, we would, we already want to comply or expected to comply with the MREL target on January 1, 2025. So we want to accelerate this by one year, and we might consider starting to build the MREL curve in 2024, then post a new upgrade cycle on our ratings. Okay. And on the last one, which was a kind of general question on CCA. Look, we're on record as for the bank, there's, you know, the sooner that we have the ability to pay dividends and essentially normalize the balance sheet and do the things that Ben just talked about, do issuance, but not sort of add to inefficiency, that's a good outcome for the bank. So that is always something that is worth exploring, either in part or in whole, in relation to the CCA. However, there are a number of different parties involved, and that all has to come together. So the answer is that would be good. The planning assumption is that that doesn't take place, and we are working within that. Thank you very much. Thank you. There are no further questions in queue. I'll now hand it back to Mark for closing remarks. Thank you. Okay, so, all that remains from me is to say, thank you very much. This is, as Ben said at the beginning, an easy set of results to deliver, and I hope that we have a similarly, good first or final year, AFR proposition in a few months. As I said, in the room, we also have Maria. As with Ben, we are available to take questions, calls offline, should anybody wish to, contact us. So thank you very much, and have a nice afternoon. Thank you. Ladies and gentlemen, this concludes today's call. Thank you for your participation. Stay safe. You may now disconnect.