Banco Santander Aktie

Good morning, everyone, and thank you [Audio Gap] as Q1 2026 results presentation. Today's presentation will follow the usual structure. First, Hector will talk about our results with a special focus on the performance of our global businesses in the context of our new strategic cycle. Then Jose will give a deep dive on our financials. And then Hector will close the presentation with his final remarks before opening up for Q&A.

Before we start, let me remind you that this is the first quarter that we are presenting our results after the disposal of Santander Polska and using the new group reporting structure we announced in February. As a result, all underlying metrics exclude impacts from Poland, both in 2025 and 2026 to make the accounts comparable. Now Hector, floor is yours.

Thanks, Raul, and good morning, everyone. Q1 was another excellent quarter for Santander, demonstrating the strength of our strategy and the resilience of our business model. Profit reached a new record of EUR 3.6 billion, up 12% versus Q1 '25, supported by all of our global businesses even after a EUR 210 million Motor Finance provision in U.K. on the back of our solid franchise with a growing customer base as we continue to enhance customer experience, leveraging on our global platforms.

We achieved this as we continue to execute ONE Transformation, making excellent progress towards a simpler and more integrated model. This is translating into tangible results with our efficiency improving by 3 percentage points and underlying RoTE increasing to 15.2%. Our balance sheet remains very solid with robust credit quality and a strong CET1 capital ratio, which reached another all-time high of 14.4%. In this concept of high-capital levels, our underlying RoTE adjusted for excess capital would be around 16.5%. All this contributed to strong shareholder value creation with TNAV plus dividend per share growing at 19%.

Going into more detail into our income statement, our P&L was very strong from top to bottom with underlying profit growing double digits year-on-year. We delivered strong top line growth with revenue up 6% in constant euros, supported by all global businesses. NII and fees up 5% and 7%, respectively, accounted for around 95% of total income, supported by a significant increase of 8 million customers and the network benefits we are capturing through our global businesses.

Revenue grew while expenses fell, showcasing the positive effects of our transformation. LLPs were affected by Argentina, reflecting sector-wide trends in the country. Excluding Argentina, provisions declined 2% year-on-year. Finally, as I have just mentioned, we have the impact of the EUR 210 million related to the Motor Finance in the U.K. All in all, as we have shown over time, our results are sustainable and less volatile than peers even in the current uncertain geopolitical environment.

What we are seeing in our results clearly reflects the strategy we outlined at the Investor Day. Our business model is unique as it combines global and in-market scale with customer focus and diversification across Europe and the Americas. This, together with our 3-pillar -- and supported by disciplined capital allocation and investment in data and AI is delivering consistent results. This is not just a framework. It is a model that is already delivering higher revenue, lower cost, improved profitability and strong value creation. Let me start with our customers. We are adding 8 million new customers year-on-year, making good progress towards our target of reaching 210 million customers by '28, including the expected contribution of 8 million customers from TSB and Webster. At the same time, we're improving the economics per active customer with revenue growing 3% and cost decreasing 4%, driven by ONE Transformation.

So we're not only adding customers, but also increasing their value exactly as we set out at our Investor Day. We continue to deliver on ONE Transformation, driving operational leverage. At the Investor Day, we introduced a more granular cost-to-income framework with clear levels to track efficiency across the group. Simplification and automation have already delivered 1 percentage point of efficiencies. Our network businesses are also contributing 1 percentage point by driving customer primacy and capturing scale benefits.

Our global approach to technology is enhancing productivity by building once and deploying across the group while we start to capture the benefits from AI even in an initial investment phase. And all of this is something that is entirely under our control. All our global businesses contributed to group growth as we continue to improve profitability. Customer activity and diversification drive revenue growth. Our customer focus and active balance sheet management continue to support our solid performance in retail. Openbank keeps delivering strong revenue growth backed by an improved funding mix. Our network businesses are also performing strongly, especially CIB and payments with double-digit revenue growth.

At the same time, we're extracting the full potential from our scale. We're improving efficiency across the group, delivering positive operational leverage. This, combined with our focus on profitability and disciplined capital allocation is driving higher returns. The combination of global businesses and our geographical diversification puts us in a unique position to navigate the challenges for '26. For example, higher interest rates benefits some part of our business, while other franchises and developed economies, such as Openbank of Brazil performed better with lower rates.

In retail, we continue to transform our model to become a digital bank with branches, combining cutting-edge technology with the expertise and proximity of our teams. We are making strong progress in the rollout of our global platforms. Gravity is now fully implemented in Spain, Mexico and Chile and is ready to be deployed in Brazil during the year. At the same time, we're scaling our customer interaction platform, enabling greater personalization and increasing customer engagement and primacy. This is translating into tangible results.

Fees grew 7%, Cost per active customer declined 7% and productivity keeps improving. As a result, Retail's underlying profit grew 9% year-on-year, driven by strong operational leverage with good revenue growth, both NII and fees and cost down 5%. At the same time, asset quality trends remained robust, in line with our expectation with cost of risk improving year-on-year to 1.07%, excluding Argentina.

Looking ahead, we expect further profitable growth as we continue to scale our platforms, deepen customer relationships and capture additional efficiencies from TSB and Webster. With Openbank, we are building a more integrated, scalable and efficient business supported by our global digital platform. We are transferring the business by simplifying the model with a single legal entity in Europe accelerating cross-selling and AI deployment and the integration of our U.S. businesses.

Our focus on deposit gathering is improving our funding mix and supporting profitability. As a result, we are already seeing strong benefits, particularly in the U.S., where the digital bank has gathered $11 billion in deposits since launch, delivering around $150 million net funding cost savings annually.

We're also strengthening our position in mobility finance, expanding beyond traditional auto lending. In parallel, we're scaling our embedded finance capabilities through Openbank Pay and new partnerships. This is translating into progress on our performance operating targets and into a solid underlying financial performance, driven by strong revenue growth, continued efficiency gains and credit quality under control, resulting in a 15% PBT growth, excluding Motor Finance.

As anticipated, profit growth was impacted by the end of electric vehicle tax incentives in the U.S. with the tax rate now expected to remain stable. Looking ahead, we expect profit and RoTE to improve as we continue to scale the business, optimize funding and deliver more efficiencies. In CIB, we continue to build a world-class business for our corporate and institutional clients, leveraging our global network and diversified model.

We are deepening client relationships and strengthening our advisory capabilities, taking more relevant roles in complex and cross-border transactions supported by our integrated coverage model. At the same time, we're improving connectivity across markets and products, enabling us to serve clients more seamlessly and operate more efficiently.

Collaboration across Global Banking, Global Markets, GTB and Commercial remains a key driver of our value creation and is increasingly extending across the group. A clear example of this is that GTB solutions are now embedded in more than half of our leveraged buyout and M&A mandates. Even in a more challenging context, CIB continued to deliver strong results with a profit up 16% year-on-year. At the same time, CIB continues to deliver one of the best efficiency ratios in the sector and an RoTE of 21%, reflecting our focus on profitability and capital discipline.

In wealth, we continue to build the best wealth and insurance manager in Europe and the Americas, leveraging our global scale and capabilities. We have simplified the model into 2 clear verticals, enabling us to capture synergies and strengthen collaboration across the value chain. In private banking, we are reinforcing our global positioning, particularly in the ultra-high net worth segment, supported by more specialized coverage. As a result, customer assets and liabilities grew 11% year-on-year.

In parallel, we are consolidating our insurance and asset management solutions, bringing together liquid, illiquid and insurance products. We are building an integrated insurance platform across life, pensions and protection and could become one of the biggest deltas in the future. Collaboration across global businesses remain a key driver of growth with distribution fees up 7% year-on-year.

In summary, this is supporting strong growth. Profit rose 11%, driven by solid revenue performance across businesses lines on the back of the strong commercial activity. Finally, payments, our high-growth platform business. We continue to scale our global platforms and strengthen our position across acquiring, processing and cross-border payments. In Getnet, we're expanding internationally and simplifying integration through a single API, enabling companies to easily scale across markets.

Our platforms continue to enhance capabilities, supporting multiple payment methods and improving efficiency while Ebury keeps expanding customer base and geographical footprint. This is translating into strong results with revenue up 20%, a higher EBITDA margin and a lower cost per transaction with profit up fourfold year-on-year.

Overall, the business is building a strong momentum with clear upside as we continue to scale. Our strong operational and financial performance is driving higher profitability and double-digit value creation for the 12th consecutive quarter. Underlying RoTE improved to 15.2%, reflecting our disciplined capital allocation strategy. At current capital levels, this is even more compelling as it would be around 16.5% at normalized CET1 with further upside from M&A and ONE Transformation.

Underlying earnings per share grew 17% as a result of TNAV plus cash dividend per share increased 19%, reflecting strong profit generation and the impact of buybacks. Including the full buyback currently underway, we have already returned EUR 7 billion to our shareholders out of our commitment to distribute at least EUR 10 billion for '25 and '26. I will now hand over to Jose, who will go through the financials in more detail.

Thank you, Hector, and good morning, everyone. I will take you through the group's P&L and capital performance in more detail. But first, let me remind you, as Raul explained in his introduction, that this is the first quarter we are reporting after the disposal of Poland and under the new cost structure that we announced in February.

As a result, the impact of Poland is reported in the nonrecurring items line in both 2025 and 2026. We will also book in this line the M&A-related charges from TSB and Webster that will arise in the coming quarters. As usual, we present growth rates in both current and constant euros. The difference this quarter was around 2 percentage points, mainly due to the depreciation of the U.S. dollar.

Turning to performance. As Hector mentioned, we are yet again delivering record results for the eighth consecutive quarter with our transformation driving strong operational leverage and profitable growth. Revenue grew 6%, supported by solid business activity, while costs declined, both in line with our public targets for 2026. Loan loss provisions were impacted by portfolio deterioration in Argentina, reflecting sector trends in the country.

In the rest of the group, provisions declined 2% year-on-year. The other results line includes a Motor Finance provision in Openbank Europe of EUR 210 million. As a result, profit continued its upward trend, growing 14% year-on-year in constant euros. Total revenue increased 6% year-on-year to EUR 15 billion, in line with the target we set for 2026. This growth was underpinned by customer activity and 8 million new customers we gained in the last 12 months.

All global businesses contributed to revenue growth, which was mainly supported by another record quarter in CIB, up 15%, driven by strong client activity, especially in Global Markets. Openbank, which also performed well due to strong net interest income growth, especially in Europe and retail on the back of solid NII performance and our increased focus on fees. Payments and Wealth also showed very good figures with payments up 20%, driven by higher activity across business lines and wealth growing, supported by higher assets under management and focus on value-added products and services.

The group's net interest income increased 5% year-on-year. The vast majority of this improvement comes from Retail and Consumer, but Corporate investment Banking also contributed to the overall growth this quarter. Additionally, NII was resilient in Retail across most countries, even with less favorable interest rates in general, supported by higher volumes. Openbank delivered solid NII growth, driven by higher volumes in Europe and South America and an improved funding mix.

In Wealth, NII was impacted by deposit costs, reflecting the nature of the business in a lower rate environment, while in the Corporate Center, we see the expected sensitivity to lower rates. On a quarter-on-quarter basis, net interest income was slightly up for similar reasons despite the usual seasonality in South America and a lower day count. Overall, this performance is ahead of our Investor Day guidance for NII. We had another strong quarter in fees, up 7% year-on-year, supported by customer growth, increased activity and a better mix towards higher value-added products, driven by our network businesses and ONE Transformation.

Growth was well diversified across our businesses. In Wealth, fees grew double digits, supported by strong commercial activity across business lines and favorable markets performance. Retail delivered solid numbers across our footprint, supported by customer growth. Openbank fees increased across our core markets as well, mainly Brazil, driven by portfolio expansion and higher insurance activity.

And we saw double-digit growth also in Payments, supported by high-activity levels with Getnet's total payment volumes increasing 11%. In CIB, fees were impacted by a softer performance in European countries after a record first quarter 2025, although the pipeline remains solid and supports trends going forward. One Transformation remains a key driver of our profitability improvement, leveraging our global platforms and connectivity to deliver operational leverage.

This is reflected in our efficiency ratio, which improved further to 42.8% this quarter, supported by strong underlying business dynamics with revenue increasing and cost declining 1% year-on-year in constant euros or 4% down in real terms. In Retail and Openbank, which are leading our transformation and represents 75% of our cost base, costs declined by 3%, even in the context of the ongoing rollout of our global platforms and revenue grew 3%, resulting in very positive operational jaws.

In our Network businesses, CIB, Wealth and Payments, costs grew below total revenue and broadly in line with fee income, reflecting targeted investments in capabilities to drive low capital-intensive growth, maintaining high recurrency levels. This excellent performance resulted in an 11% rise in net operating income from already very high levels last year. Looking ahead, even in a scenario of higher inflation, we expect to deliver cost reductions supported by the tangible benefits of ONE Transformation and additional mitigating actions, both firmly under our control.

Our balance sheet risk profile remains low with solid credit quality across our footprint even in a more challenging environment, supported by prudent risk management and resilient labor markets in general. Having said that, some of the reported metrics this quarter are impacted by Argentina, reflecting sector-wide trends in the country in a less favorable context and should improve gradually as the effect of lower originations comes through.

Excluding Argentina, credit quality remained very solid. Loan loss provisions were 2% down year-on-year with resilient performance across the group in general. Cost of risk improved 2 basis points and the NPL ratio 5 basis points to 2.94% with a stable coverage ratio. In addition, our NPL portfolio has collateral guarantees and provisions that account for almost 90% of its total exposure.

Stages grew in line with our portfolio with a stable distribution across buckets. Retail and Consumer represent 90% of the group's loan loss provisions. In Retail, we saw a strong cost of risk improvement, excluding Argentina, with solid underlying trends in key markets such as Spain and Brazil. In Openbank, cost of risk also improved, supported by a strong performance in the U.S. and resilient trends in Europe, even with the impact of Argentina.

In Corporate Investment Banking, provisions were affected by some single names in Brazil and in Europe. As of today, we are not seeing significant deterioration in employment and credit quality remains stable. Moreover, it is in periods of higher instability when diversification becomes more relevant. Looking ahead, it is still too early to draw conclusions on the geopolitical environment, given the level of uncertainty at the moment. However, as long as labor markets are not significantly affected, we would not expect material impacts on our credit quality targets.

Moving on to Capital. We continue to generate capital at a strong pace while growing the business. In the quarter, our CET1 ratio increased by 90 basis points to 14.4%. We generated 29 basis points of net organic capital. This was mainly driven by disciplined capital allocation to high-return new opportunities with a new business return on tangible equity of around 21% and a strong contribution from our risk transfer initiatives, which offset 20 basis points of risk-weighted asset growth.

The disposal of Poland added 39 basis points to CET1, net of the EUR 3.2 billion additional share buyback corresponding to around half of the capital generated from the transaction. In addition, regulatory and model updates contributed 20 basis points. Overall, the strong capital generation in the quarter puts us on track to end the year above 12.8%, in line with our target. The impact from TSB and Webster, which we now estimate at around 210 basis points will be phased across the second and the third quarter.

Importantly, our performance in these countries is not dependent on integration execution alone. Our transformation plans are already delivering tangible improvements. For instance, in the U.S., return on tangible equity has reached around 12%, one of the highest levels in recent years, while in the U.K., we're also seeing improving trends in both efficiency and profitability. All-in-all, our capital position remains very strong, supported by sustainable capital generation and profitable growth, with TSB and Webster strengthening our capital generation capability -- capacity going forward. Hector, back to you.

Thanks, Jose. As you can see, this is a great start of the year, and we are well positioned to deliver our '26 targets. Our businesses continue to show solid momentum with revenue growth, cost discipline and strong operational leverage supported by ONE Transformation. This is translating into record underlying profit, a stronger capital position and double-digit value creation.

In summary, we are delivering consistent and predictable results with very positive trends that we expect to consolidate in the coming quarters. On the back of this strong start, we reiterate our guidance for the year, supported by the strength of our diversification, which, as Jose has mentioned, becomes even more valuable in periods of higher macro uncertainty and mitigating actions, particularly in cost, which ONE Transformation enables us to deliver on our target even in a more challenging environment.

Overall, we remain confident in our ability to deliver sustainable and profitable growth and to continue creating value for our shareholders. Our financial North Star is clear: to deliver a RoTE above 20% by '28. This is about execution, disciplined capital allocation, ONE Transformation and scaling our global businesses to accelerate value creation. And that is exactly what we are delivering. And now we are happy to take your questions.

Thanks, Hector. Let's move to the Q&A.

[Operator Instructions] We already have the first question from Ignacio Ulargui from BNP Paribas.

I have 2 questions, if I may, 1 on capital. I mean, after the good performance in the quarter that we have seen, how should we think about the buildup going forward in coming quarters? And if you could give us a bit of a sense of what has been the 20 basis points improvement in regulatory tailwinds in the quarter? And also whether we are still factoring the negative of 20 basis points regulatory headwinds for the year that you flagged initially for 2026?

And the second question is on Brazil. And the performance of NII has been very strong, but we have seen an increase in the NPL ratio. If you could give us a bit of some sense about what has been the driver of deterioration? How should we think about credit quality in Brazil and provisioning NII evolving from here? And I mean, just -- you have probably confirmed that with extra comments, but should we stick to the 100 to 110 basis points guidance for cost of risk in the period '26, '28?

Thank you, Ignacio. So I will take first your question on Brazil, and then Jose will talk to you about capital, if it's okay for you. Okay. So it is important to understand, and let's put things into perspective, okay? So our loan book in Brazil only represents 10% of the total growth. That's basically great about what we have and the diversification that we have.

So let's talk a little bit about the conditions we see in the country. GDP, we believe, is expected to grow around 1.5% in '26 even with this geopolitical situation. We see a resilient labor market, okay, despite, I mean, the rates that we still have in Brazil. It's important to say that Brazil is a net oil exporter, okay? I believe that's why we believe that GDP should benefit. But the problem is also gas and fertilizer prices could see inflation in the short term.

Remember that Brazil is a very important food producer. And in that sense, basically, they get hit by that. The Central Bank began the easing cycle in March '26. They cut 25 basis points. They're down to 14.75% and we assume that SELIC is going to end up by 13% by the end of '26 and hopefully, 12% by the end of '27, in line with the forward curves that we have seen. Remember that every 100 basis points in SELIC improves NII by EUR 60 million, okay?

That basically tells you a little bit of the sensitivity that we have there. Just to talk about, I mean, as you said, I mean, strong -- very strong start of the year. Q1 '26 profit grew 6%, okay? Loan growth and market interest income is underpinning a 2% year-on-year increase in NII. Interest on capital is lowering the tax effective rate. Overall, it is setting a 2% year-on-year increase in cost that is quite good given the particular situation of inflation in the country.

So -- and also, it's very important to tell you how we're managing the mix, okay? We're basically moving towards higher quality business, maintaining a cautious approach to underwriting, particularly in the corporate portfolios. And these factors will support our path to 20% RoTE in the medium term, which is basically what we're aiming for, okay? It is important to say the cost of risk is around 4.1%, all right? It went up a little bit because of some single names that we were expecting because of the credit conditions and the interest rates in the countries.

But nonetheless, we'll see it is stable for the rest of the year. We have a couple of situations that we're monitoring very closely, but we don't see that it will affect the number anymore. The outlook, as I told you, NII will be solid and it is current, I mean, with the guidance that we have. In terms of the guidance on the total -- on the cost of risk, I think it's going to be around where we are. It is important to acknowledge that once we get also TSB and Webster, that basically will decrease the overall cost of risk of the whole group. So we believe that we're going to be perfectly around the numbers that we told you in terms of guidance. And with that, Jose, could you go into the capital please?

Thank you, Hector. The 20 basis points regulatory tailwind in the quarter comes from an updated model for what we call [ carteirizados, ] small SMEs in Spain. This is a new model. So it's structural. It's not a benefit that it's temporary. So it's here to stay. For the next 3 quarters, we would expect still some headwinds from updated models, inspections, et cetera, which again, will be probably less than 20 basis points, somewhere between 10 to 20 basis points in the next 3 quarters. So we feel comfortable and very confident that we will be above 12.8% by the end of the year, which was our target communicated at Investor Day.

Thanks, Jose. Can we get the next question, please.

Next question from the line of Alvaro Serrano from Morgan Stanley.

Just a follow-up on capital. Because if I look at -- I think it's Slide 25 on the capital bridge, it does look like you're going to be above that 12.8% to 13% and even above the 13% range based on what you've produced in Q1. So Jose, can I -- can you sort of walk us through the rest of the year in terms of organic? I know you touched on the capital headwinds.

And if you are above 13%, should we -- extraordinary distributions on the cards potentially if you end up above 13% this year? And the second question is on cost. Obviously, a very good performance on cost. In particular, what stood out to me was U.K., a large step down. Can you sort of maybe talk to that step down in cost in U.K.? And is that sustainable? Can we see more even ahead of TSB?

Thank you, Alvaro. Okay. So on capital, it's very important to acknowledge that we have expressed you or we have told you about really exact capital hierarchy that we have, okay? So it's very important to understand that, I mean, if we continue and we're able to deploy capital at the levels we're deploying it above 20% in our organic business, we will continue to do so because I believe it's in the best interest of our shareholders to reinvest capital at those levels.

And if we see that opportunity, we will take it. If not, I mean, you have the whole capital hierarchy, in which you know exactly what are we going to do. If we don't have that capital to be deployed, then Jose can explain you what we can do about that. In terms of cost, yes, we have a pretty good numbers on cost. The reason is perfectly explainable is ONE Transformation. If you remember, ONE Transformation is we're simplifying as much as we can. We are automatizing all processes. We're eliminating a whole bunch of people that we have in operations. We're sending that people basically to concentrate on the front line in order to be serving customers and trying to transform completely the way we service within the bank.

And that's basically what's going on, and that's why you will see the operating leverage that you saw in the U.K. with revenues basically going up and costs coming down. And you will see continue -- I mean, that trend will continue even without TSB because we believe that we can run that bank in a much leaner way. We had a lot of manuality. We had a lot of complications. We're simplifying in a very important way. So yes, you will see costs coming down in the U.K. towards the end of the year. And then with -- it would do actually much better once combined with TSB with the synergies that we will get there, okay? I don't know, Jose, if you want to complement on capital.

Alvaro. In the first quarter, we generated 29 basis points of organic capital because risk-weighted asset growth was 0. So we were able to mobilize assets more or less in the same amounts of growth. That's a condition that obviously has 2 components. One is the growth. The other one is the capacity to mobilize assets in the next 3 quarters. So we obviously depend on the markets and demand for private credit in the next 3 quarters to be able to meet that condition.

So as long as the conditions remain, that part will continue to perform as it performed in the first quarter, but it is not entirely under our control. Second, we had a good performance in deductions in the first quarter, which obviously, we're working very, very hard to continue delivering good numbers in terms of deductions.

But again, this depends on factors that do not entirely depend on us. For instance, the valuation of pensions, the valuation of the available-for-sale portfolio, et cetera, et cetera. And then we have the -- up to 20 basis points regulatory headwinds that I mentioned. So in a perfect scenario where everything behaves well, et cetera, can we have 3 quarters more or less in line with the first quarter? It may be. But again, that I don't think should be our central scenario.

Thanks very much. Could we have next question, please?

Next question from the line of Andrea Filtri from Mediobanca.

I wanted to insist on the capital side. You're only 60 basis points away from your 13% target for year-end, so only 40 basis points to your 12.8%. You have just said that it's not impossible, you could repeat. Could we then expect an acceleration in growth? And where would you see the businesses within the group that can absorb more growth? And secondly, I don't know if you could comment a little bit about the U.K., core financing charges and if you consider it done for the current level?

I think I explained the quarter. I'm not saying that we -- obviously, could we have 3 quarters aligned with first quarter? Yes. That I don't think is a central scenario, basically because, one, we should be able to mobilize assets at the same rate we did in the first quarter, which is EUR 10 billion. Well, hopefully, we will. But obviously, it's not 100% certain.

Second, we grew assets in the first quarter at a relatively healthy pace because we were able to deploy that capital at over 20% return on tangible equity. As long as we can find opportunities to invest at that level, we will continue to invest at that level. And if we have more opportunities, obviously, we will invest more. But that's something, again, that depends on the opportunity to grow. So 60 basis points to 13%, 40 basis points to 12.8%. I think, again, it's -- as I said at the beginning, we feel confident that we will be above 12.8% at year-end.

Andrea, this is Hector. Just basically, I mean, to complement a little bit and what you have asked is you said, I mean, where businesses can we have more growth? I think we have a great opportunity in mix of corporates and SMEs. So if we see an opportunity to reinvest and we see that the market is strong, we could be looking at basically growing that and using capital because the returns are pretty good.

And you have markets such as Mexico, a little bit on Brazil, if the situation basically goes better, in the U.S. as well. We've also been seeing an opportunity in the U.K. We grew the portfolio [indiscernible] this quarter because we saw the opportunity and the spreads are there because some of the players have gone out of the market. So we see an opportunity in some places. But we always will be very, I would say, focused on profitability and very disciplined in the way we deploy that capital, okay?

And this is what we have. In the U.K. Motor Finance, it's important to say, okay, we booked an additional EUR 207 million pretax provision this quarter. Current stock provision on this matter is at EUR 725 million. That's GBP 633 million. And I do believe that we're very well covered on our expectations. You know that this is always a moving target given that some of the customers basically can go on to directly, et cetera, but we don't expect that to be much more than we have already have done. So we believe we're done on that. Thank you.

Thanks very much, Hector, Jose. We have the next question, please?

Next question from the line of Cecilia Romero from Barclays.

My first question is on asset quality. With recent macro volatility, are there any areas or geographies of caution emerging? And specifically on Argentina and Mexico, where cost of risk has a step up quarter-on-quarter. Can you walk us through the key drivers and how should we think about the run rate for the rest of the year? And also following recent stress cases in private credit, how should we think about Santander's exposure and risk controls in this area? And finally, could you provide an update on the process and regulatory time lines for the TSB and Webster acquisitions?

Cecilia. Okay. Very quickly, okay. By geographies, our diversification is actually quite good in this particular case because we're exactly in the part of the world that I believe that the geopolitical situation is which we are more -- much more defensive, and we see countries that could benefit such as I was explaining Brazil and Mexico that could benefit for the whole thing. So -- and also, we see the U.S. basically coming very strong.

So in that sense, I do believe that we are located in the best places right now as of this situation. Situation in Argentina, to be very blunt, I mean and I was actually in Argentina not so long ago. It is important to acknowledge what's been going on in Argentina. The government is basically -- main goal is to decrease inflation. By decreasing inflation, they basically -- actually, there is no pesos in the market. They are basically drying up the market in terms of pesos.

So the spreads have grown out tremendously so that you basically have a real rate that goes almost to 40%. Inflation, we believe in Argentina, last time we checked was around 2% per month that basically we believe inflation in Argentina would be around 24% to 30%, let's say that. And rates are at around 60%. So with rates at that level, it's impossible to go to the consumer market. We started to lend a little bit to give a little bit of credit cards and to start creating a real bank in the country.

Unfortunately, with those real rates that hasn't come down as fast as we thought that was going to be, I mean, customers started basically to get into delinquency because they couldn't afford the real rates as much. So we basically closed down completely, and we are just doing loans to the corporates that basically have dollars and with the dollars that we have, we're lending to them. Cost of risk went all the way to 9.77%, okay? We believe that it should normalize at around 7%.

That's where we expect, and we are under control completely because we're not lending to consumer anymore, okay? And we believe that if the government continues the way it goes, real rates should come down towards the end of the year, and we could come back to the market to start lending again. But at this point, that's not the case, and we will be monitoring the situation very closely.

In terms of Mexico, look, I mean, cost of risk is around 2.7%. We have been taking measures into that. We changed the mix, and I explained to you last quarter that we were much concentrated in CIB, in lending to the midsized corporates and SMEs, and we stopped -- basically, if you see our credit card portfolio went down 7% year-on-year. That's what we believe that Mexico was going to suffer always, I mean, when there is inflation and this turnaround, Mexico suffers a little bit. We believe that it is under control and it's going to be below 3% for the end of the year. So no worries on that.

In terms of private credit, look, this is not a core business for us, as you know. It's less than 1% of the total portfolio of the bank. We are very much concentrated in the very good names in the market. 70% of what we have outstanding there is subscription lines to the best names in the industry. So we don't foresee any problems at that. And the other risk that we have is very much concentrated in what we know best, which is Project Finance, which is energy. So nothing really in our views to worry about.

But it's important to acknowledge that we have put a lot of controls in place that we have a lot of governance, and we are tightening up a little bit just to be completely sure that we are on the right side on the things. And in terms of TSB, we believe that the transaction, as you know, was just authorized, we're going to enter into the Part VII situation. Numbers shall come in, in the second quarter of the year. And on the other side, the situation with Webster is going a little better than we expected in timing, but it's going to be for sure in the second half of the year. Okay, thank you, Cecilia.

Thanks very much, Hector. Can we get the next question, please?

Next question from the line of Francisco Riquel from Alantra.

My first one is in the U.S. Cost of risk is better than what I was expecting, trending down. So if you can update on your guidance for the year on cost of risk in the U.S. and comment on asset quality, particularly in auto lending in the U.S., I see the loan book here is shrinking. And on CIB, the loan book here is growing strongly. What you can comment on risk taking here in this book?

And then also my second question is on Brazil. I wonder NII has come a bit better than I was expecting. So what is driving the rise in NIM in Q1? I see a 30 bps decline in the retail NIM as you report, but then the total NIM in the country is up 15 basis points in the quarter. So what trends shall we expect for the rest of the year? And lastly, a follow-up question on asset quality in Brazil. I understand the government is preparing a new Desenrola plan to help individuals renegotiate debts. What impact, if any, shall we expect?

Thank you, Francisco. Okay. In the U.S., look, I mean, yes, you're right. Provisions are better than we expected. And that's because even though the cost of risk has normalized, we continue to see a trend after 90 days delinquency, which I have always, every single quarter, I explained this, but we're still surprised that it's still around 60% or a little less than 60%. So what's going on is customers are coming back to us. And after 90 days delinquency, they try to get regular, they pay us a little bit. They try to maintain it, and that's what has helped us to sustain that.

Also, it's very important that -- and I also explained the trend that we were coming down a little bit, if you saw, in terms of origination in prime. In prime, we have stabilized that. It's at 38%, and it continues to grow because we have new contracts with some of the OEMs that are basically helping us out to sustain the prime. What is important also to see that is that after the March 1, all of our auto portfolio is being financed by our own deposits.

Given that Openbank help us with EUR 11 billion of now new deposits, all of our portfolio is now not dependent on wholesale funding. That has basically given us an extra margin and that basically will help us to get to the RoTE that we promised you in the U.S. towards the 18% when we have Webster, et cetera, towards the end of '28. So the U.S., all-in-all, basically is going well. The cost of risk, look, employment is of the essence in order to sustain that cost of risk, and we believe it's going well. In terms of risk taking, what you have seen is that, yes, we have increased a little bit because we are started lending to midsized corporates.

We believe the market is basically helping us a little bit. We see better margins. And also, we see some opportunities in CIB in the sectors that we know very well. Basically, energy, there is a huge opportunity there. We see some projects in Project Finance that are being pretty good. And also the market has been very strong, surprisingly in the U.S. So all-in-all, that's what we are -- but we are very much under control, very disciplined in the sectors we are investing.

So we basically don't foresee any situation. NII in Brazil is basically because of the Auto business. Openbank is actually doing very well, okay? We have increased a little bit the portfolio in that. If you remember that I explained you that we changed the mix, and that is giving us the extra margin and the extra NIM that you will see in Brazil...

No, if I may complement Brazil because I think the mix here is important. We are growing deposits year-on-year by 6% relative to loans -- customer loans, up 2%. So this is one of the objectives that we had for Brazil, which is improve the funding structure and the quality of our funding structure.

Actually, yield on assets, it's up 68 basis points. Also, cost of deposits as we improve the quality of deposits is up 58 basis points. So when we look at the margins, yes, they are slightly down, but what explains the customer NII performance is the fact that we are growing deposits more than loans. And again, this is one of the key strategic objectives in Brazil, like it is in Mexico, which is improving our funding, more customer deposits, less market dependence.

Sorry, sorry, sorry, forgot about the plan in Brazil. Yes. So look, we are working really close -- one of the banks that are working with the government in this plan for the credit card holders that are basically trying to restructure the loans. So far in our negotiations with the government, I believe that the plan would be positive, okay, to help some of the people that are over indebted in Brazil. So in that regard, we will have a little bit more view of how the plan basically evolves towards the end of the week.

But all in all, what we have seen is that the plan is going to be positive and it's going to help our people in order to be able to pay the debt in the credit card, and it's going to help us overall for what we have seen, but we still not have the finalize plans as of yet.

Thanks very much, Hector. We have the next question, please?

Next question is from the line of Miruna Chirea from Jefferies.

Firstly, I wanted to ask on your expectations for the efficiency ratio for the rest of 2026. If I take your revenue and cost guidance for 2026, it points to a cost-to-income ratio below 43% for the full year. And in Q1, you are already at 42.8%. So how should we think about efficiency ratio from here? Should we expect it to be broadly flat for the rest of the quarters? Or are there any ups or downs along the way that you would flag? And then secondly, I just wanted to ask if you could let us know if you've made any changes to your ECL macro scenarios this quarter or any changes to the weightings of the scenarios or any overlays for economic uncertainty?

Okay. Thank you. In terms of efficiency, okay, you have seen that basically in the first quarter in '26, we have minus 1% in constant euros. That's 4% -- minus 4% in real terms. Revenue grew around 6%. So you see an efficiency improvement of 3 percentage points to 42.8%, okay? And this is supported by the execution of ONE Transformation. What we're doing here, Miruna, is basically concentrating on what I said. I mean, a lot of simplification, a lot of automation.

Also the global platforms are starting to be in some of the countries that is helping us out basically to -- I spend a lot less money in terms of what we used to do in IT. Instead of doing things 10x, we do it once and deploy it to all the countries. So we see that trend will continue to be, okay, are going to be in line with our goal of reducing cost in constant euros in '26, okay? So it's important.

We aim to deliver an absolute cost down in constant euros every year, excluding the impact of M&A. It's important to acknowledge that. And as we grow the customer base, we will execute next stage of ONE Transformation, as I explained to you, that's going to improve our efficiency from 45% in '25 to around 36% in '28. That would basically lower our cost base below EUR 27 billion in constant, which is basically what we're expecting to. In terms of the macro...

Yes. We are obviously monitoring very closely what's going on in the market. We have updated our macro scenarios. Relative to what we had 3 months ago when we did the budget, we now have slightly lower GDP growth in Europe, maybe 0.2%, 0.3% with a likely increase in rates to 2.5% at some point next year. No longer we are looking for lower rates in the U.S. in the near term.

But there will be countries that might benefit from the current situation like Brazil or Mexico, net exporters of oil products. So net-net, these are small changes that do not change fundamentally the outlook for our business in terms of growth in revenues, customers, profitability. So yes, we've updated the models. But given our diversification, and as I mentioned in my presentation, is in these times where the value of diversification is more evident. And in this case, we don't think we need to change our outlook.

Thanks very much. Can we get the next question, please?

Next question from the line of Carlos Peixoto from Caixa Banco BPI.

So a couple of questions from my side as well. So basically, on the capital front, just a quick one in terms of regulatory impacts, how much you expect until year-end?

Then on the Corporate Center, if you could give us some visibility on what's under the other income caption on the revenue side and also the rationale behind the tax rate this quarter, which was -- well, the tax yield this quarter, which was more meaningful than usual in this one. And then just finally, if I may, on Spain, if you could share some guidance on your view on the outlook for NII and also for cost of risk.

Capital, we expect regulatory charges probably between 10 to 20 basis points from here till year-end, the next 3 quarters, less than 20 basis points.

The Corporate Center. In the other income line, we have the evaluation of the impact of the updated valuation of [ Marlin ] and some equity stakes. And finally, on Spain, I will comment quickly on NII, and I will let Hector comment on the general outlook.

We've had a very good performance in NII in Spain in the first quarter. Basically, the ALCO strategy, the hedging that we've been conducting on the asset side, the forward starts from mortgages, floating liabilities, all of that strategy that we started a couple of years ago, it's actually contributing a lot. But the most important factor is the extremely good management of our deposits. The cost of deposits in Spain is being kept under control, while we are growing volumes. We are actually growing asset market share in deposits substantially basically because we are growing payroll. We are adding hundreds of thousands of payrolls every year, and this is bringing very good quality deposits. This is sustainable. This is structural, from our outlook for NII in Spain is up year-on-year, mid -- low to mid-single digits increase in NII in Spain in 2026.

Thank you, Jose. I think it's important to tell you, Carlos, that I mean, Spain is the one that is much more advanced in terms of ONE Transformation, okay? These guys are doing a really good job in terms of a lot of simplification, automation in everything that we're doing. And also concentrated in the most important part of ONE Transformation, which is customer experience and primacy on the accounts, okay? As Jose was explaining to you, we get a lot of payrolls right now, and we're growing really the number of customers in a substantial way. But the most important thing is that we're getting the transactional deposits. Deposits in Spain grew 6% year-on-year. And this is key to the business and for the ONE Transformation that we're executing in the country, okay? So retail is doing a pretty good job in that sense, and we'll continue to do so. As you know, also, we have a very good franchise on the corporate side. We continue to concentrate on that one to compete really hard because the market is very competitive in Spain. But nonetheless, we believe there is an opportunity with everything that we're doing. And we have another important thing, CIB, even though it's a little less of what we were having in the first quarter of last year, it's performing really well with everything that is going on. So the combination of basically the corporate segment or the midsize corporates together with the products that we sell them in CIB, which is network benefits, it's helping us quite a lot to take Spain to the next level. So all in all, even though that you're going to see an increase in revenues, as Jose was telling you also a decrease in cost, which will help us to get much better margins, okay?

Next question from Ignacio Cerezo from UBS.

I've got a couple of them. First one is on the CIB revenue sustainability into the rest of the year. If you can give us a little bit of color basically of potential risks. I mean, we're seeing lending growth, I think, is still in the 18% annual growth. I think in Spain, as we mentioned, actually stepping up the pace there. I think we've seen a very strong performance of global markets. So just trying to understand actually to what extent the mid-teens revenue growth you're seeing -- sorry, earnings growth actually you're seeing in CIB is completely sustainable into the rest of the year?

And then the second question is on headcount. We've seen, I think, 2,500 reduction in the quarter, around 11,000 in the year. So if you can give us some color basically about how to expect head count levels to evolve in the next 9 months?

Okay. First of all, I mean, CIB, we have really strong revenue performance, as you have seen. Basically, loan growth is 18%, as you said, it has boosted NII across global markets, Global Bank and GTB, okay? So -- as we enter the '26, '27 M&A cycles, we are very well positioned to capitalize on anticipated upstream activity that we set. We are basically very much concentrated in industry coverage and in high advisory capabilities, mainly that, as you know, that we have hired in the U.S. is helping us. What's going on is a lot of business that used to go away from us when some of our customers in Spain, Portugal and some part of Europe used to do in the U.S. Now the hiring was basically because we have the capabilities. The same thing is in Latin America, okay? So that's why you see the fees basically so strong in the U.S. because it's doing customer, I mean, business to our customers, and this is exactly what we're doing. Why are we growing a little bit in terms of the loans because we see an opportunity there with big customers, okay? So for example, in the oil industry, we decided to expand a little bit the credit lines. Why? Because the sector is strong, prices are going up, so let's take advantage of that. So those are the type of examples that we're doing. We are very much under control and monitoring every single part of the business and really following up first of all, profitability, control and everything monitoring the sectors in which we basically deploy capital. So it's very important to understand that.

Global markets yes, you see a spike because usually, when there is volatility, you have opportunities, but it's mainly client business that we do in global markets, okay? So you'll see that in trading, we have done pretty well, but this basically businesses with our customers, a lot of FX, a lot of hedging, as you can imagine, hedging interest rates. So explain Vanilla derivative we're selling to our customers. So we believe it's sustainable -- but let's see what happens. I mean, if the geopolitical situation complicates much, we come in a recession, let's see what's going on. But so far, so good. I mean, it's doing well. And we will continue to basically be doing it in a very cautious way, but in the right way, okay? And in terms of head count, yes, you're going to see -- I mean, head count is going to grow because of the acquisitions that we just done in TSB and Webster towards the end of the year. But nonetheless, we see opportunities in terms of what we're doing, again, ONE Transformation, okay? When you simplify, you automate processes, et cetera, you require less people than you do normally. And that's exactly what's going on. And that's why you see basically the decrease on some of the teams that we used to basically handle a lot of people and they're actually a very good examples of that where we are automating a lot of processes that is helping us out to do it in a much better way.

Next question from the line of Sofie Peterzens from Goldman Sachs.

Is Sofie from Goldman. So my first question is just on the asset rotation and SRTs. You have done quite a lot on this front in recent years. I think back in 2024, you did around EUR 60 billion last year, I think, EUR 40 billion in this quarter, EUR 10 billion. So if I do like back of the annual calculation, I get the quite meaningful capital impact. What is the regulator saying about all these asset rotation? And how confident are you that you can roll it over, especially if we have a kind of deterioration in the macro environment?

And then my second question would be on the outlook for Mexico. How do you see Mexico evolving? It was a little bit weaker this quarter. Would you consider any inorganic growth opportunities in Mexico in the next kind of 3 to 5 years. So if you could comment on this.

Okay, Sofie, so Jose will give you an overview of what we're doing in terms of rotating the balance sheet, SRTs, et cetera, and I will give you an overview of Mexico. If you see Mexico had a really strong first quarter, okay? Let's see how our peers do, but I think that we're doing quite well vis-a-vis the market. We did the right things. We took the right decisions. We have the right mix. And we're pretty happy with the way the business is basically evolving. At this point, we don't believe that we need to do an inorganic transaction in Mexico to continue thriving. I think that the size that we have in the market, almost 15% of the market basically give us enough space to do and to grow the business in a substantial way and in a very secure way, first of all. But also important that we told the market that we are now very concentrated on the TSB and Webster. So we told the market that we're not going to do any significant inorganic transaction for the next 2 years, and we will continue to do that. We need to concentrate on integrating those two. And so far, that's exactly what we're doing. And we see Mexico -- I mean, just to finish that, evolving pretty well during the year. As you know, there is a negotiation of the T-MEC, that's the new NAFTA. If parties don't come to an agreement, it is automatically renew for 1 more year. But hopefully, we'll come to a thing. But I think it's both in the interest of all the parties basically to come to an agreement, given that Mexico is a very important component of what the U.S. requires in order to be competitive, okay? So we are optimistic about it.

Sofie, you're right. We had a good quarter. We mobilized EUR 10 billion in risk-weighted assets equivalent. [indiscernible] is 40%, more or less at the same rate we did last year. One could have expected that with the current market conditions, the demand for these assets would have been less. Well, probably because we've been doing this for a long time. Investors know our systems and the quality of the assets that we sell. I think we have a competitive advantage relative to other market participants. And we have actually seen an increase in the interest to participate in our transactions. And we have been selling credit in the first quarter at levels similar or even lower that we had last year for similar transactions. And again, we've seen an elevated interest in participating in our transactions, probably again, because we've been in the market for longer than others, we have a trusted and proven technology and the quality of what we sell is actually better. Having said that, obviously, the market will dictate if this strong demand we saw in the first quarter will stay -- will remain for the rest of the year in the coming years. As we have discussed, we are obviously in a position to readjust our capital hierarchy immediately, if that was the case. But again, so far, the demand is actually very strong. And we think, looking at the people or the investors that are participating in our transactions that we are attracting a lot more interest because, again, we are a trusted party in these transactions.

Thanks very much. Could we have the next question, please?

Next question from the line of Britta Schmidt from Autonomous.

I would be interested in your view on the outlook for longwall, specifically in Spain, Brazil and Mexico. In Spain, we had a negative bank lending service outcome, which is probably not a surprise, but how do you think this will impact loan growth going forward? And also in Brazil and Mexico, your GDP revisions, has there been any sort of adjustment that you're making for your projections?

The second one will be on the Wealth Management fees. A very good quarter this quarter in the quarterly time line. Maybe you can comment on what's been driving that and to what level that is sustainable?

And then just lastly, on the tax rate, which was, I guess, lower than expected this quarter, you're doing more interest on capital in Brazil, I guess, should we expect the tax rate to be hovering around the 25% for a while? Or what would be your expectation for the full year?

Thank you, Britta. In terms of, I mean, loan growth basically in Spain, Mexico and Brazil, what we're doing is, we've been, first of all, focused on profitability. It's very important that you know that. Also profitability, but we also take into account what we see and the trends of what's going on in terms of the cost of risk and what's the difference in every single part of -- in every single country, okay? So for example, in Spain, we see an opportunity that right now, corporates and SMEs are basically in a good time. So we are trying to slow that and also a little bit of growth in CIB.

In Mexico, the same, the portfolio is very much concentrated on that side. We believe on the personal loans and credit cards, we need to be a little cautious given what's the dynamics in the market. But we'll see and we continue to see an opportunity of growth, and we grew 9%, the loan portfolio in Mexico this quarter because we saw an opportunity, mainly in CIB and midsize corporates. And we will continue that trend if we see market opportunities, okay?

In terms of Brazil, again, it's all about the mix. As Jose explained to you in detail, it's all about the mix and basically continue growing the deposit base to become much more competitive in that market and have much better margins. So in Brazil, we will continue basically to focus on that. Midsized corporates, again, SMEs is part that we're growing. And we are very -- being very cautious. It's interesting, but you see the mix in Brazil in credit cards basically getting more complicated, but on personal loans, it's actually doing quite well. So -- and that's why because we are concentrated on the affluent segment of the population. So in Brazil, we are very keen on looking at the different segments of the market, and we are focused right now in the affluent given the current market circumstances and the way we see rates basically evolving. If we see that rates basically come down a little faster than we believe at this point, then we'll see if we access mass markets again, but we will be doing it in a very cautious way. What we're doing right now in Mexico and Brazil mostly, we're not on the open market on credit cards and personal loans. We're only lending to our customers. So we're running the customer base, as Jose explained you, very much concentrated on payrolls because when you have the payrolls, you have all the information, you see what the customer does, you see the trends on how they consume and then we'll give them credit, okay? So we're only giving credit to our customers, not open market in those countries because we believe it's the right way to go. And it's exactly what's been working in order to sustain and to maintain the cost of risk at the levels that we would like, all right?

In terms of Wealth Management fees, yes, we'll continue to go up. That trend will help us because we believe that the biggest delta that the group has is insurance. If you see how we play in insurance in every single country, if you see those in Brazil, in Spain, in Mexico, in Chile, in every single place we're punching below our weight. There is always another bank that basically has a large or has the lion's share of the market in that sense. So we believe it's a competitive edge that we need to explore, and we're very much concentrated on that. So you're going to see that as our -- one of our main focus. We're basically hiring the best people that we have in the bancassurance market. We're putting them in the places that we believe we have the most opportunities. And even though in Private Banking and Wealth Management, we'll continue to do well. Insurance is the one that you should focus on because insurance is the biggest delta in the future, okay? Then on the tax rate, Jose?

In the first quarter, taxes eased basically because of Brazil and Argentina, despite the end of the auto EV tax incentives in the U.S. As long as rates remain high in Brazil, we will continue to have a lower tax rate in Brazil. But again, the tax incentives in the U.S. means that we will have higher taxes. So it's difficult to forecast, but I would presume that we are going to see a slight increase, gradual slight increase in the tax rate towards the end of the year. But again, it very much depends on the level of rates in Brazil.

Very I think the next one is the last question. Could we get that, please?

Next question from Borja Ramirez from Citi.

I have 2 quick questions, if I may. So firstly is on the NII, I saw that your loan portfolio increased by around EUR 6 billion in the quarter, excluding Poland, I think mainly in Spain. And I think that there may be upside related to your guidance for NII in Spain, particularly we have a higher interest rates. So that would be my first question.

And then my second question would be -- it's great to see the deposit trends in Spain and a higher share in the payrolls and lower cost of deposits. I would like to ask how are you combining this with your Openbank platform? How -- is this also related to your digital capabilities from [ Openbank ]? And also, if you could remind me of your total deposits at Openbank at group level, how much are you gathering in total?

Thank you, Borja. Okay. On NII, Q1, we grew around 5% year-on-year, that's around 1% quarter-on-quarter in constant euros. This is basically supported that Jose was explaining by active margin management and the growing balances that we have, increase on deposits. okay? What we believe is we're going to grow around low to mid-single digits, okay, in compound average growth over '25 to '28 in constant euros. The macro assumptions include, as we already explained, the rate in Brazil continued to ease, okay, which is very important, okay, 13% towards the end of '26, so we're not being that aggressive. Rates in the developed markets that Jose explained is around 2% in Europe, 3.25% in the U.K. and 2.5% in the U.S. So no much more than that. In '26, for the 2 largest global businesses that we drive NII, we expect, first of all, in retail, low single-digit NII growth, very disciplined in deposit pricing, as you heard, modest volume growth and the contribution of the hedging strategy is supporting margins. And in Brazil, specifically, we see monetary easing as a tailwind of NII, but it's very important that you understand that the key central part of our strategy is primacy and primacy is transactional deposits. And ONE Transformation is all about this, and we will continue to focus on that, and that will help us, okay?

In the other business is the outlook on Openbank. We expect mid-single-digit NII growth in Europe, where we have hedged our exposure to higher rates and NII will be supported by margin management. In the U.S., we will benefit from the lower funding cost and higher yields on loans as we remain focused on profitability. It's very important to understand what I said when I was talking about the U.S. business that now after March 1 is fully funded by our deposits. That will enable us to have much better margins for all the year and on. And we'll continue and Openbank has been an important part of that because, for example, open back deposits in the U.S. is around EUR 11 billion already. So that basically tells you exactly what our strategy is focused on and focusing again deposits and much more than that in transactional deposits.

If I may complement, Borja. As you know, we merged Santander Consumer Finance with Openbank. So now Openbank includes all our consumer business. Openbank Europe has EUR 82 billion in deposits. And the U.S. -- consumer U.S., which is Open Bank U.S. has EUR 51 billion in deposits in total. So that's the right way to look at this because again, we've merged the Consumer business with Openbank and then both business operate together. So EUR 51 billion -- dollar -- no, euros in this case, in the U.S., EUR 82 billion in Europe.

I think we might have one more question on the line. Can we please check if we have another question?

Yes. We do have a question from the line of Pablo de la Torre from RBC Capital.

I just had one on your U.K. trends, if I may. So I know your comments regarding the efficiency improvements in the country, but trends for retail volumes, especially in deposits seem to lag a bit the domestic banks. So cost of deposits were up in the quarter, NIM was down quarter-on-quarter. You also seem to be pricing rather competitively your front book deposits at the moment. I just wanted to know when you expect to see the NIM in the U.K. to inflecting the key moving parts there for the rest of the year, including any expected changes in trends post the TSB integration? And if I may, just if you can give us an update on your U.K. structural hedge.

Okay. Let me give you a little bit, a brief idea on what the trends are. First of all, the U.K. market and actually, it was the last week is very competitive on deposits. I mean we're killing each other for deposits. Why? Because, I mean, you know that people are -- believe that rates are going to go up and it's very competitive in that sense. And we believe that it's much better to cover ourselves and capture a little bit more of deposits given the trends that we see on the market.

Nonetheless, and I don't want to talk [ about ], we have different strategies of what we're going to do in that market, okay? We're doing exactly the same as in the rest of the other markets. We're increasing -- there are 2 ways of basically getting deposits in every single market, one is paying for them, but the most important one is customer experience, and we're working really on that. So we're going to be able to deploy pur One App towards the second half of the year. We're working really hard on that. That basically would enable us to have a much better customer experience, and we'll focus our customers to basically become their primary bank. And that's basically when you get the transactional deposits into account and you get better structure of deposits in there, and we're working towards that, okay? We're going to be very much concentrated on that.

Second, the TSB mixture is going to help us quite a lot. One of the good things that TSB has is very sticky deposit base and actually much more deposit on loans, and that basically helps us to have a much better structures in terms of deposits. Now with TSB, we're going to be the third largest bank in the U.K. with current accounts. So that basically is going to help us a lot in terms of manage in a much better way what we have and manage our deposit base in a much profitable way, if I may say.

Pablo, let me give you some numbers because I'm not sure I understand your comments. Year-on-year, our total deposits are up average balances first quarter of this quarter relative to first quarter of last year is up 4%. So it's a very good performance, actually with a lower average cost. So the average cost of deposits is down quarter -- year-on-year in the first quarter of this year relative to the last quarter -- to the first quarter of last year despite that volumes are up 4%. Again, on the asset side, yield on assets goes down from 4 or 5 basis points year-on-year. So the NII is affected by the higher volume -- higher growth in deposits than in loans. But again, this is part of the strategy that Hector was just explaining. We are -- we believe that we are doing well in deposit gathering in the U.K. For the overall NII in the U.K. we have to take into account that the lengthening of the duration of the structural hedge has had a very limited impact in the first quarter, and this should kick in more -- in more size in the next couple of quarters. As the yield of the investments is around 4%, currently 3.8% in the first quarter. So we would expect the NII in the U.K. to actually improve in the next few quarters as again, we continue to improve the funding mix and the quality of our funding in the U.K., growing deposits, we think at least in line, if not more than the market.

The structural hedge, well, we have more or less flat in the quarter at around GBP 101 billion. The duration 2.5 years, the yield is 3.0%. The loans that we are buying. As you know, we are lengthening the structural hedge buying between 5- to 10-year at bonds more or less the interest rate curve is pretty flat at around 4%. So we would expect this strategy to actually add to NII in the U.K. in the coming quarters.

Thanks very much, Hector and Jose. This concludes our Q1 conference call. Thanks very much for your participation. And if you've got any further follow-ups, the Investor Relations team is available at your disposal.

Good afternoon and welcome to the Santander Investor Day 2026. I'm Raul Sinha, Global Head of Investor Relations, and it's my pleasure to welcome all of you here in London and all of those who are joining us virtually. It's been 3 years since our last Investor Day, and the world is changing a lot. It's time to talk about why we're well positioned for the future. And for that, I wanted to introduce our management team, led by Ana Botin, our Executive Chair; Hector Grisi, our CEO; and Jose Garcia Cantera, our CFO.

A few logistics points to highlight before we start, we're going to have a presentation from Ana followed by a presentation from Hector. Then we'll have a short break. After that, we will have a presentation from Jose and open up to your questions. All the presentations will be available on our website shortly before the session starts. And a recording of this event will be available on our website shortly after the event is finished. And with that, Ana, over to you.

So good morning to everybody, and welcome to our Investor Day. It's the fourth for me. I think for Jose also. And I would like to first begin by giving you an overview of our strategic targets and our plans. Then Hector will follow, we'll have a coffee break, and then Jose will take you in detail through the balance sheet and also capital allocation. I will then wrap up after that at the end.

So I'd like just to take a step back and cover very briefly what has been the last 11 years. It is important. We have transformed Santander into more simple, more effective and more predictable, open global financial services platform. I'd like to highlight 4 things that I think are especially important to show what has changed in a structural way because it underlies what we believe will be an increasingly predictable performance and especially a through the cycle better performance than our peers. First of all, our operating model is now globally aligned. It's more simple. We have reduced complexity. We have fewer products, more common processes and more automation. This improves experience for our customers. You have seen that in our customer growth. At the end, that's what creates value in a company and, of course, at the same time, reducing unit cost.

By the way, this sounds easy, it is hard, and it's what people usually consider boring. It's about changing the culture, it's about changing the way we run the bank in a very structured way. Second, and the second is only possible if you do the first. We are now scaling common technology platforms. That is at the heart of one transformation. Scale in banking is not only balance sheet, it is operational scale. The ability to build once and deploy across markets, improving both time to market and cost to serve and, of course, the customer experience. We are the scale player in retail and consumer banking across Europe and the Americas, and our global platforms enable us to harness scale efficiencies at a global level, not just by country. My third point is equally important, and it's about our earnings mix. It's increasingly of higher quality and even more predictable. We're growing fee income generating more capital-light businesses, deepening customer primacy and importantly, increasing hard currency exposure, which, of course, should lead to lower cost of equity and lower volatility, lower structural cost of equity over time.

And last but not least, our capital position creates optionality. We can invest, execute selective bolt-on acquisitions where returns exceed buybacks and still maintain a sustainable distribution profile. All these are structural changes that matter because they reduce uncertainty, which is a cornerstone for assessing what ultimately drives the valuation of a bank over time. So that is what has changed. That is what is giving us a very solid foundation for the future. But it is equally important to say what has not changed. Our strategy remains the same. We aim to be the best open global financial services platform so we can help people and businesses prosper. And at the heart of that purpose is our responsibility, our responsibility to be there for 180 million customers in good times and bad, and a wider responsibility to help tackle global challenges. To help our customers transition to a green economy, to give more people access to the financial system and empower them to make prudent financial decisions, to support enterprise and give people the skills they need to get on in life and set up new businesses.

We're one of the biggest supporters of universities in the world. And all of that is what drives economic growth and ultimately, our shareholders value over time. So I want to say very clearly, the world is changing, but our principles are not, and we remain totally committed to be a responsible bank for our teams, our customers, our shareholders and our communities. So over the last decade, I think you can see that in the screen. I'm not going to spend a lot of time, but we have not just delivered the last 3 years. We have delivered on every single one of our 3-year plans since 2015. We are coming from way behind, and our profitability was relatively low. It's now higher. We've built capital. We've set the foundations. I have just explained and we are now after what we call 3 years ago, a new phase of value creation, we're not quite sure how we call this period. We haven't really given the name, I call it, it's about growth. I always allow teams, you need to earn the right to grow. We believe at 16% and going to 20% -- over 20% profitability, we now can accelerate growth.

And we are setting, of course, the bar even higher. This is also important because we are a bank. And the world is a complicated place. There's lots of uncertainty. Markets could be volatile. That is when Santander delivers better than peers. This is not about 10 years or 3 years. This goes back, as you can see in the bottom graph since 1999. That covers the global financial crisis and that compares with the best banks in Europe and the Americas. We are, as you can see, the lowest earnings per share volatility. And very important, we have multiplied by 8 our profits in that period. and accelerating, of course, the last couple of years. We are by far the least volatile bank, but we also, with one other U.S. bank, the one that has grown profits more and again, we have set the foundations to continue doing that for the next few years. The other graph is important because, again, we're a balance sheet bank. We have credit risk. Our pre-provision profit reached a level that is close to 3x our cost of risk. You can see it's going in the right direction on the graph. This shows the strength of our model and of our balance sheet. Again, in a global environment where this is going to be increasingly important.

I'd also like to point out some of you, we've spoken about is that in '25, we have delivered in spite of the macro we were anticipating in our base case scenario in Brazil, which was not the one we had. And so the high rates were a negative impact on our net interest income and cost of risk we still delivered on our target for '25. So as I mentioned before, it's about customers and customer growth. That's what makes the business sustainable. You can see here that we have grown our customer base by 13% over the last 3 years. from EUR 160 million to EUR 180 million, and we have grown revenue by 20% from EUR 52 billion to EUR 62 billion, and with fees, again, growing faster than net interest income. The key behind this progress has been the execution of one transformation and also the network businesses, network businesses. We call our Corporate Investment Bank, Wealth Management and payments, and all of these are operating increasingly as global platforms, as I explained. We can see the numbers here. In the Retail Commercial grew revenue by 16%, Open bank by 5. We'll explain later. There were some negative one-offs there. CIB by 27 well by 58% and payments by 23%.

So One transformation. This is the past. I just want to make sure I show this because this is what we showed you 3 years ago, and we have done exactly what we promised from 45.8% to 41.2% in '25. We have increased operational leverage, improving cost to income by EUR 2.5 million. That includes the EUR 300 million efficiencies, which we specified last year -- 3 years ago in the U.S. consumer and commercial. We have reduced our product offering by 61%. This is also a forward-looking indicator because that will deliver better numbers going forward, customer experience and also financial numbers. Our global and [indiscernible] businesses have reduced cost income by 1 point. We are monetizing increasingly our scale and connectivity and growing in the fee-based capital-light revenue while reducing unit cost. And Global Tech, again, a contributor to the cost income improvement as we deploy the shared platforms. And what's important, and this is the sort of headline is that we are seeing higher revenue per customer, lower cost per customer and near 0 incremental cost for growth.

Again, this is really important. And obviously, as you will see, this will make our operating jaws wider over the coming years. I want to say, and I believe the team already gave you details, but we have moved to a more conservative view on our cost. There was a line that was sometimes difficult for you to predict. It will be much easier because we're now fully allocating costs that were previously in other results. So everybody is going to be accountable, and this is very important. It will mean that our efficiency will be a big focus again for the next cycle. So the Santander of tomorrow is underway. This is our new Financial North Star. Let me just take you briefly through it. It looks about the same. But as you can see, the numbers are not the same as last time. We have made strong progress. We are raising our ambition. We still aim to deliver a compounding tangible book value per share through the cycle with accelerating growth over the next 3 years. We aim to grow our profits to above EUR 20 billion, improved ROTE to above 20% by '28 through the execution of One transformation and of course, the M&A we have done this year with the U.K. [indiscernible] U.K. and West in the U.S.

We are targeting EPS growth well into double digits from '26 to '28. We will maintain our ordinary payout of 50% and with cash dividend payout increasing to 35% from 27%. So the second half of '27 on the profits of the first half that will already be this higher payout on the cash dividend and organic capital reinvested above 20% returns. Excess capital above 13% CET1 at the end of the period by 28 will be distributed to shareholders. All of this, if you do your math and you believe the numbers, which I hope you do, cash DPS will more than double by 2028 from 25 levels. As a result of all of this value creation, which is tangible book value per share growth, including cash dividends, will accelerate to high teens, up from our previous target of double-digit growth. Again, we'll take you through that in more detail in a few minutes. And we expect to 2028, actually '27 already with the CET ratio -- CET1 ratio above 13%.

So all of this is financial. It's our North Star. Shareholders, you all, we all own the company. But this is only possible if we have clear operational targets. So we did this time, bring you what is our key targets from an operational point of view. Again, we strongly believe in our business model as a scale player in consumer and retail banking customer growth matters. And so that is what you have in the center, over 210 million customers by the end of '25, and importantly, grow active customers from 106 million today to close to 125 million by '28 . That is a big number, by the way. We aim to increase fees per active customer to 135 from 130 in '25, supporting a high single-digit CAGR in fees. A key operational commitment and what's supporting these numbers is the deployment of gravity and Gravity 2.0, including our One app. So gravity and Anup will be serving over 80% of our retail and consumer customers by end of '26. Of course, operationally went up and common journeys are essential to scale efficiently. We will be able to offer a more personalized proposition at a structurally lower cost per active customer, which we're also putting as a KPI, which should fall by [indiscernible] We aim to fall by close to 17% by '28. So again, the outcome of these operational KPIs, along with One Transformation will increase revenue mid-single digit and lower cost in absolute terms every year in constant euros. That is excluding M&A, including M&A. By the way, all the guidance we're giving today unless we say it includes M&A, it doesn't include M&A, okay? And it's in constant except for the total profit and a few other numbers, including M&A, double-digit revenue and digit growth.

So what is it that makes us different? We believe our business model is unique. It combines unmatched global and in-market scale in retail and consumer banking. We have strong customer focus. We are diversified across Europe and the Americas. More than 30% of our profit after tax now comes from high growth, highly profitable global network businesses. All of this, when combined with our 3 core pillars will deliver consistently for shareholders. So let me take one of these at a time. First, the customer, we aim to be #1 bank by number of customers in our footprint. Our customer growth taking us to above 210 million customers by '28. Second one, transformation. There is a lot of upside still in One Transformation, changing the model to using global platforms to improve customer experience with the lower cost to serve, creating a positive flywheel that will continue to drive customer growth and customer primacy and again, our network businesses, which will accelerate revenue growth, leveraging the network, increasing fees across all these businesses.

Of course, underlying all of this will continue our disciplined capital allocation, continued investments in data and AI and the integration of the bolt-on acquisitions. All of that will drive the mid-single-digit growth in revenue double digit, including M&A with lower cost. So let me just briefly go maybe not so briefly over each one of these 4 pillars. Raul? Okay. Let me start with customer growth again. As you can see, lots of focus on this. We'll drive customer growth by combining our leading local franchise built on trust with our scale and common platforms, creating the best user experience using global, not local platforms, will attract more customers and increase primacy at a lower cost to serve. Again, this is our flywheel. And that will drive growth in the future. This primary focus is clear. We will improve customer experience increasingly with AI-enabled personalization that is already being used across the bank. We will expand our customer base from today's scale to the next level. And very importantly, the integration of TSB and Webster will be a key focus for the next couple of years.

It will increase our market share in the U.K. and the U.S. and help us also to accelerate growth. So this is probably something you haven't seen until now. If we include and restate our M&A, so Webster and TSP, our cost base at the end of '25, obviously, taking Poland out would have been EUR 28.5 million. Our target for '28 is to be below 27%. And believe me, there's very detailed plans behind these numbers. And that's the reason we're showing them to you here. As we execute our plan, the benefit of One Transformation that you see here on a net basis. And I just wanted to make sure you understand the effort and what is going on behind the scenes. So there is inflation in many of our countries quite high. There is investments in tech and AI. So if you take all of that into consideration, the execution of One Transformation -- and by the way, you're going to see now with tech and AI separate, but here, you have tech and AI embedded in the One Transformation. That is an improvement in costs between EUR 4 billion to EUR 5 billion, okay? The synergies from the integrations of TSB and Webster is EUR 1.2 billion. So again, this is one way of looking at One Transformation. This is another one, and the CEO will show you a bit more detail on this, so you can understand our plans better.

So the efficiency ratio 45.3%, that is rich stated. We have been -- as I explained before, more conservative assigning other results to the businesses and countries. So that [ $45 ] million is comparable to the 36. That's 9 points of improvement basically in our efficiency over the next 3 years. So One Transformation is the operating engine. I said that, that's what turns scale into structural advantage. That will help us to reduce efficiency by 3 percentage points. We have broken out our investments in AI and tech because that is something which we're already doing. I will cover AI in a minute, but that would enable us to become more efficient, reducing cost to income by around 1 point. Our global technology platforms, Gravity, Gravity 2.0 will mean another 2 points in reduction. Again, what's important is that we can absorb growth with very limited incremental cost. And this is a key part of what we're doing in the next few years.

And finally, our network businesses. And here, we are increasing our cost, but efficiency is improving, as you can see, reducing cost income by 1 point. So again, the network business is a bit of a different model, but efficiency also improves. And last but not least, TSB and Webster, that's another 2 percentage points from these 2 integrations by the end of the period. I wanted to show when we talk about One Transformation is the whole bank, but it's really a program that is about retail and consumer. And so when you compare us with new bank and Revolut, please compare us and tell us where they're better and where we are better and we'll get closer to them, believe me, this is the numbers because this excludes the network businesses. This is only retail commercial and consumer banking. Here, the ratio will go down to 34. Actually less than 34%. Again, retail, commercial and Open bank. Digital players earn the 30% to 38% range. This is really important, okay? That is why our ambition is to be one of the scale players in retail and consumer banking. We also do this, by the way, while operating 7,000 branches and our work office. We believe in the age of AI, this is differential and this is the best way for us to have the positive flywheel but also have that physical connection, which we think will be more and more valuable as time goes by.

So if you look at, again, retail and commercial and open bank combined RoTE waterfall, how do we get from the -- around 15% to over 20%, 1 percentage point will come from the announced bolt-on percentage point from efficiencies, about 1 percentage point comes from growth and about 1 percentage point from capital allocation. Jose will go into more detail on that most of you know this, but allocating capital in a dynamic way across geographies and across global businesses is something we do better and better. And so again, every one of these levers has specific plans, and this is how we get from the 15% to the over 20%. -- our network businesses, CIB, welcome payments. A big driver of our fees. We said that 3 years ago, that will continue to be the case. We will grow fees in high single-digit CAGR and achieving a cost income of below 43% in CIB. Here, again, we are playing to our strengths. We have said, and we will keep CIB capital below 20% of the total and the ROTE will be above 20% by 28%. In Wells, again, grow fee income, double-digit CAGR, increasing private banking and asset management AUMs by about over 20% with ROTE above 60%. And last but not least, in payments, which is a cornerstone of our strategy where we aim to be a scale player as an enabler, but also as offering more and more to open markets. Revenue, again, is expected to grow double digit, actually over 15%, lowering cost per payment transaction by 40% and expanding EBITDA margin to close to 45% by '28.

So the fourth pillar, which is tech and AI, we will continue to invest. I want to just stress that this investment is starting to see the benefits. We've been investing every year for the last 10 years, over EUR 2 billion. So if you do the math, that's EUR 20 billion investments in both tech and AI, we plan to continue investing about those rates, but now together, which will be a lot more bang for the buck, as they say. But this is how we scale execution with control. Gravity is our foundation. It's a back-end system. It removes reliance on legacy system, creates a common architecture. Gravity already processed 1.3 trillion transactions per year, cover 70% of Santander's technical operations. We have gone live in many countries, but there's one big one that will happen this year, which is Brazil. And that is, again, one of the big uplifts that we have in our plan as Brazil goes on to Gravity. We have already launched actually what we call Gravity 2.0. This is really important. Gravity is not the end of the efficiencies. Gravity has already happened or is happening in our payments hub. This is a global API, an account to account that connects all our banks instantly. With Gravity 2.0, the savings we have gotten across the group as we take out literally hundreds, if not, I think, more than 1,000 applications has been 16%.

With Gravity 2.0, which means that what we're going to build on top of that, these numbers go up to 45%. So this is not a PowerPoint. This has happened already, and we have the plans. And this is only one of the platforms that will come on top of the gravity back-end solution. It is a very simple concept. It's build once and deploy everywhere. And for those of you that follow this, it means integration costs go down to close to 0. That's the aim anyway. This is huge, by the way. And this is something which reduces duplication, strengthens operational resilience. So it's really a very, very powerful concept which is on its way. In terms of AI, I think the slides are being broken up, so you could follow them there. But we believe we have a structural advantage in it's not a given, but we are going to continue to make sure that, that delivers according to our plans. We have strengthened our data and architecture governance, which according stones of AI, but AI allows you to actually leverage our data, which is in multiple places around the world without having to create a single what they used to call source of truth data lake. This is really important.

Our strategy is to use our decades-long quality data, proprietary data, our financial strength and our customer relationships to integrate AI fully into our banking platform. We see this at 2 levels. One is a defensive, i.e., embedding AI for productivity reasons. We are already doing this across different parts of the bank. And we're also taking what we call an offensive stance where we want to use AI to expand our reach. I like to think of what we've done over the last 10 years. I'm not allowed to say LEGOs, I'm not saying LEGO. No, I'm saying building blocks, but let's call it like a Lego-like. Sorry, I had to say it. I didn't say LEGO I said, building blocks. So the building blocks are very simple. We have a company called Ebury. Ebury is already building its own agents processes that are very similar to what we have in our banks today. And these are the results, okay? Again, think of this as a building block that you can then scale and if you think about AI at Santander in '26 and '27 is about a lot of initiatives that are going on that have not yet scaled.

But once they scale the numbers are very well, I would say, very big. So these are back-end processes, operational processes, 10% of the processes. This is a company that's cross-border FX for SMEs globally, 30 countries, single onboarding based in London, 10% of the processes meant 60% of the cost. They're building -- we are building our own agents and getting to numbers. It's early days that could leaders to 50% reduction of cross-border payment costs. This is something that is not just Ebury that we're now working and we have here our Head of Retail, Daniel and Borja, Head of Commercial. I think he's here and Jose Luis, Head of Payments, please talk to them because they know this well. But all these initiatives, if you take everything together over the year of the plan, we're aiming for EUR 1 billion, of which cost reduction around EUR 700 million, I think, and EUR 300 million in revenue enhancements. Again, this is happening across the bank, but this is the year where we start to scale. Okay. So the road map to over EUR 20 billion profit. Again, there's different ways of looking at this. This is one that I think is important.

If you think about hard currency, soft currency, separating the bolt-ons, hard currency ex the bolt-ons grows by EUR 3 billion, soft currency by 2% and the bolt-ons by 2. This will take our profit from a like-for-like $13.1 million excluding Poland, to more than EUR 20 billion by the end of '28. This is, again, important because of the tangible book creation, the leakage will be reduced, and Jose will take you through that later. Again, this EUR 20 billion in profit translates into RoTE exceeding 20% by 28%. And we believe we have further upside after 28. So we are confident that our model is not ending at '28 by the way. I want to make sure I make that point. In retail, our RoTE will increase above 21%. In Openbank, the delta is very big. [indiscernible] to circa 16%. And of course, you know already the U.S. as a country, we have said over no, not over 18%, and Brazil RoTE will also improve to around the 20s. If you look at the network businesses, I already said CIB above 20%, wealth above 60 and payments I mentioned already the numbers.

So again, One Transformation, revenue growth and further cost synergies, together with Gravity 2.0, which is only just beginning, and I we see further upside from 28 in terms of our profitability. So I'd like to end by our capital discipline. Our capital allocation framework in hierarchy will be a fundamental pillar of our strategy as it has been for the last few years as we move into this new phase, following the bolt-on acquisitions of TSB in the U.K. and Webster. We are now at scale in all our co markets, when you combine the in-market and global scale, we will be adherent to the capital hierarchy that prioritizes profitable organic growth, above 20% at the moment, followed by shareholder distributions with a floor on distributions corresponding to a 50% payout. This means that throughout the plan, we will generate over EUR 50 billion in capital to fund both profitable growth and shareholder distributions and we will return excess capital above 13% at the end of our plan, again, following this hierarchy. A brief reminder on our M&A this year, which will add 9% to our EPS -- growth or synergies, 9%, these 2 bolt-ons. We have refocused our footprint.

As we said, when we exited Poland, it's a great bank, a great business, but they were better owners. We the network effects were not as powerful as they should be, and the country happens with TSB and Webster. They were consistent with our capital hierarchy at the time when we did TSB at the time we did Webster, roughly the difference between buybacks and the return on investment capital was about the same, a very significant 5 to 6 percentage points. it will allow us, in the case of TSB to take our local RoTE to close to 16 with a return on invested capital of close to 20 million increasing our market share in the U.K. near the top 3 market players in mortgages and to top 3 in personal current accounts which is the relevant metric in this business. Webster will enhance our local RoTE to 18 in '28 for return on invested capital around 15%. It will accelerate our strategy. It's a high-quality franchise. This is a very good bank. It would put us top 5 by deposits in the Northeast and top 5 among the 25 largest banks in the U.S. in terms of profitability in '28.

As I mentioned already, our hard currency exposure will rise to 80% of the group's loans. And we expect this mix shift to lower the group's cost of equity. This is a bit more detail in what I just mentioned. You can see there, we're going from 75 to 80 in hard currency. This is really important. We think this is a structural shift in our model, and we expect, therefore, lower earnings volatility and higher value creation. It's important that post TSB and Webster, all geographies or countries will be above the 15% RoTE again, which is something we had not achieved before. So I'm going to do the closing twice right? Okay.

Fine. So bear with me, please. Our investment case is solid. We'll increase EPS well into double digits from '26 to '28. We'll accelerate value creation to the high teens, up from a previous double-digit growth, which at the time, 3 years ago, was considered ambitious and will more than double cash dividend per share by 28% from 25 levels, again, assuming we deliver which we will, all the numbers we're telling you today. What does this mean for shareholders? This will lead to, again, cash EPS more than doubling by 28% from the M25. We'll continue to compound growth in shareholder value and tangible book value per share through the cycle. We aim CNAs earnings per share accelerating to high teens -- increase RoTE to 17% to 20% on average. We do expect lower FX headwinds as we continue hedging excess capital in subsidiaries. We'll continue to be very disciplined in upstreaming dividends and increasing the proportion of TNAV denominated in hard currencies to around 60%. That's up from about [indiscernible] -- in short, the plan is to compound tangible value per share while continuing to return capital and accelerating shareholder value creation through '26 '28. So just to end, we have a clear financial note start. We are lifting our ambition for profitable growth and value creation. And now you'll get a lot more detail from Hector, please, the floor is yours.

Hello. Good afternoon. Thank you for joining us today. It's a pleasure. As you have seen, Anna has outlined the ambition, a not small one, by the way. So today, I will focus on how we're going to deliver it with this great team that I have in front of me and why we are so confident that we're going to be able to make it. This, as you can see, you have seen it before, -- this is a go-to model of the group. What we have built is a scalable operating architecture, scale, customer focus and diversification are the foundation of this. This is not complexity. This is one integrated platform. The architecture is built and the engines are running.

Now this is about executing with precision to deliver higher royalty and accelerate value creation. Let me restate our financial ambition very clearly today. Our North Star is to deliver an RoTE of about 20% by 28. This is not about volume, it's not about financial engineering. It's not about capital. It is about capital allocation. It's about One Transformation and how we skill our business to accelerate value creation. This, as I said, is pure execution. These are not stand-alone targets. There are tangible outcome of our model with scale, primacy and productivity, reinforcing each other. This is how we become best-in-class for our customers. Three years ago, we set a clear plan focused on value creation, capital discipline and above all centered in our customer. Today, the message is simple. We are [indiscernible] and we have delivered, not partially, not selectively, we delivered on growth, on efficiency, on capital and on shareholder returns and credibility, as you know, is only built on execution and Santander has sent that credibility.

Since our last Investor Day, we have accelerated our plan. We prioritize the customer to push One Transformation further and to focus on the entire organization on driving higher value creation. We moved from improving performance to fundamentally reshaping the model. As Ana just mentioned, we have met every commitment we made at Investor Day on growth, efficiency, capital strength, profitability and shareholder returns. This is how long-term credibility is built for our organization. The reason we delivered is simple. We changed the model. We moved from operating as a federation of banks to become One Santander, a global customer-driven platform. Today, everything starts with the customer. We combine global scale with deep local knowledge. We simplify what we offer. We connect capabilities across countries, and we scale what works. That is why we operate with One global way of working. We will platform once and deploy them everywhere. We develop data and centrally and embedded it across all their businesses. We industrialize process instead of duplicating them by market. This is what makes us a one-stop shop financial partner.

The objective is clear: grow our customer base and then primacy becoming the main bank for our customers. With more than 180 million customers, primacy drives engagement. Engagement improves revenue quality and revenue quality drives sustainable returns [indiscernible] doing an experience, you win on primacy and primacy, as I said, drives returns. As you know, we operate through 5 global businesses with a strong local presence. Our brand is powerful, but it's not just about the brand recognition. This is about relevance, trust and daily customer choice. We compete at the scale typically with minimum full market share and strong customer engagement, we rank among the top 3 NPS in 8 out of the 9 countries. Deep local presence gives us relevance and global capabilities gives us scale. Together, they allow us to compete head-to-head with both global and domestic peers with better operational leverage.

Scale means faster time to market, lower unit cost, more consistent pricing discipline and a better customer experience. Our local success comes from empowered local teams, with local decision-making close to customers, not from centralized dynamics. Growth does not require proportional cost growth, and this is fully supported by our robust balance sheet. CET1 stands at 13.5%, underpinned by organic capital generation and disciplined capital allocation. Cost of risk is stable. Asset quality continues to improve, and pre-provision profit covers the cost of risk 3x over. A strong capital gives us optionality to support customers, invest in growth and return value to our shareholders. In short, this is a franchise built not just to compete but to lead across cycles. Since our last Investor Day, a key priority has been improving the quality of our revenue and reducing the dependence on capital-intensive growth. This is not simply about fees versus NII, it's about shifting the model towards more recurring capital-light activities across the whole group.

Retail, Openbank, CIB, wealth and payments are driving this transition, increasing transactionality, advisory and other value-added solutions. Around 60% of future revenue will come from these capital-light businesses. This improves our revenue mix, lowest RWA consumption and essentially strengthens the returns. At the same time, we actively rotate the balance sheet, securitizing assets, selling portfolios and reallocating capital to high-return segments. Capital allocation is global. Execution is locally. This gives us resilience and earnings stability across every single cycle and in every different market. This is not 5 separate growth stories. Our businesses reinforce each other, sharing capabilities, avoiding duplication and scaling faster across all markets. This is one integrated model becoming more profitable by design, and this is the first half of the equation. Between '22 and '25, costs remained broadly flat in real terms. That did not happen by accident. It happened because of simplification, network effects and global technology.

One Transformation is not a cost-cutting program. It is already signed of our operating model. The consequence is that cost comes down. As we [indiscernible] October 26, cost per active customer declines materially. We continue converging platforms, embedding data and AI and industrializing all processes. Let me give you a concrete example. In Portugal, after implementing a unified CRM and embedding AI into our contact center, conversion rates improved materially more than 10x. Same teams, same market, better tools, higher productivity that is a structural operational leverage. On top of that, bolt-ons at tangible synergies, TSB and Webster, as Ana saidm integrate into one operating model, one technology and one cost base. And then the network effect reinforces everything. As our global businesses work together, we share capabilities, avoid duplication and we scale faster. When you combine higher quality, capital-light revenue, with lower cost per customer, network scale and disciplined M&A synergies, the result is structural operational leverage. The model becomes more profitable by design.

Over the past 2 years, we focused on 3 things: number one, improving margins. Number 2 is shifting the mix towards lighter capital revenues. Number three, structurally simplifying the cost base and the foundations are built. Moving above 20% RoTE is now a question of disciplined execution business by business. And now let me show you how. The path to above 20% RoTE is not driven by one single lever. This is the result of every business improving its profitability and is country by country. Our ambition is simple, to be leaders in profitability in every market where we operate. We achieved that consistently at close of our businesses being above 20% at group level is the natural outcome. In retail, we're improving growth by combining primacy with operational leverage. Higher engagement drives fees and deposit strength. AI-driven pricing and simplification lower the cost to serve and this increases returns market by market.

In Openbank, we serve 24 million out of customers globally. That customer base is not only about financing vehicles. It is a natural engine for cross-selling increasing customer deposits and also lower the unit cost. This is what makes OpenBank ROTE sustainable. In CIB, we are increasing returns by shifting decisively towards fee-intensive capital-light activities, advisory, capital markets and transactional banking. This improves revenue and organic capital generation, thereby improving profitability. In wealth, we will structurally enhance profitability by growing recurring advisory and protection income, and improving product manufacturing capabilities. In payments, we have scaled transaction volumes on shared infrastructure as volume increase, margins spend that is pure operational leverage. One Transformation laid the foundation, gravity, our next-generation platform and AI now we scale it across the whole group.

This is a layered effect, a stronger revenue mix, better capital allocation and disciplined cost execution reinforced across all businesses. After seeing how each business contributes to ROTE expansion, let me start with the largest and most important engine of the group, retail and commercial. Retail is becoming a digital bank with branches. It is a structural redesign of how we serve our customers. We are moving from a traditional distribution product-driven bank to a scalable customer-centric digital platform. And court on strong local franchises and powered by global capabilities. The idea is very simple: deliver the best digital experience at scale, combined with the physical infrastructure and the best personal advice at the moments that matter most, integrated in an orchestrated omnichannel model.

Digital is our primary channel for daily banking with speed and simplicity powered by data and AI. Branches evolving to advisory and community hubs focused on mortgages, investments, SMEs and complex needs. They become relationship centers that sell value-added businesses, not service counters. This transformation activates 2 forces. First, customer primacy through deeper engagement, resulting in higher transactionality and stronger fee generation. Second, operational leverage, simplifying and automating processes and shared platforms, this basically lowers cost to serve. This is about growing faster and growing better. Now let me show you how this translates into the execution. By 28, retail RoTE moves to above 21%. That's basically contributing clearly to the group's ambition of above the 20%. The improvement is measurable and driven by multiple levers. First is revenue quality. Fee income will grow in high single digits, supported by deeper penetration, a stronger advisory capabilities and expansion of insurance and investment products.

Second, funding strength Transactional deposits will continue to increase, improving mix and supporting the margins. Third, scale and engagement. Total customers will grow steadily, reinforcing revenue per customer. Fourth, structural efficiency. The cost-to-income ratio will fall below 35%. This is basically enabled by One Transformation based on, again, simplification, automation, global platforms and the productivity gains. Profitability improvement is not just driven by higher leverage or additional risk. It's driven by a much better mix, stronger productivity and a very disciplined capital allocation. This is the natural outcome of our really stronger model. Now part of this improvement also comes from a disciplined execution on our bolt-ons.

Let me turn to the bolt-on acquisitions. In the U.K. about integration and simplification. We expect more than EUR 400 million of run rate cost synergies, on cost based on operating model. This is disciplined execution, and it drives a structurally higher profitability, moving ROT from around 10% to over 16%. In the U.S., Webster is even more transformational. It strengthens our commercial franchise, improves funding scale and enhances capital-light fee growth. We expect around $800 million of run rate cost synergies through technology integration and operational simplification. It meets a strict return criteria, and it improves ROTE substantially from roughly 10% to around 18%. Together, these bolt-ons represent over EUR 1.5 billion in additional sustainable profit. These integrations are being executed under a single governance framework with clear milestones, technology conversions and already underway with experienced and dedicated teams.

Now let me show you how this same discipline applies at the country level. Let's talk about Brazil. As you know, Brazil is a key market for us and is entering a new phase of transformation. We are evolving the model in Brazil. The objective is clear first of all, improve the business quality and reinforms primacy to strengthen the profitability. Over time, growth in Brazil was heavily driven by credit expansion. We are now rebalancing the portfolio. We're redeploying capital towards select that the affluent customers, SMEs, commercial and corporates. These are segments where relationships are deeper fee intensity is higher and returns are structurally stronger. This is disciplined capital allocation again. At the same time, we're strengthening primacy we're sitting for pure credit growth to relationship-driven growth, more deposits, more transactionality, a stronger share of wallet, and that basically improves the funding mix and stabilizes the earnings.

We're also simplifying the operating model, reducing product complexity, automating processes and improving cost to serve, and we are leveraging our global capabilities. Brazil has been also very strong in CIB and corporates. We are reconnecting those capabilities for our global factories to improve the franchise. This is not a short-term adjustment, it's an evolution of the model, from volume-driven growth to quality-driven capital-efficient growth. The path is clear move towards 20% RoTE as the business normalizes and then continue improving through transformation towards stronger returns. Brazil is not just about the cycle, it's about evolving the model and strengthening the returns. Now let's talk about commercial, which is one of the key drivers and 1 of the biggest deltas.

Commercial is for primacy. Advisory debt and capital discipline come together. We are moving from a product-led model to our relationship-led data-driven approach focused on high-growth SMEs and mid-market clients. And the difference is material. A high-growth SME can generate multiple times the margin of standard and when served with higher-value solutions like direct lending or structured products, margins increased significantly. In Spain, use 7% of high-growth clients account for around 20% of total income. That is the power of segmentation. For example, let's talk about the genetics sub sector. Nine companies generated around EUR 7 million in total income in 25 million because the required sophisticated advisory solutions. So we will primacy in 2 ways. First, through transactionality, embedding Santander in daily activities, we have payments, collections, trade, payrolls and cash management; and second, through advisory, deploying specialized teams and sector expertise to deepen these relationships. All in all, becoming a trusted adviser of the customer. This shifts a conversation from lending to a strategic partnership. It increases recurring fee income, strengthens deposit primacy and it improves capital allocation. Commercial becomes a capital-light advisory-driven growth engine and a key contributor to higher retail profitability.

Now let me turn to Openbank, which is not a volume story. It's about profitability. By 2018, we expect Openbank Rote to reach around 16%. And we do this by fully integrating automobility, consumer lending and digital banking under one platform, evolving from a monoliner business to a multiproduct digital banking model. First, Auto and mobility. We are already #1 in auto lending in Europe and South America and #3 in North America, and we operate in 26 markets. That global presence allows us to serve manufacturers and partners at scale. Now we expand beyond lending into leasing infrastructure and the broader mobility ecosystem serving manufacturers, dealers and new mobility partners. Second is consumer lending. Through Openbank Pay, we continue adding merchants and entering new markets in 25 a long reach 2 million customers. Third, in digital banking, we're scaling the platforms in Mexico, Germany, Spain and the U.S., Greater scale drives revenue increase and strengthens funding through deposit growth that is up 26% over the last 3 years.

Across our businesses, AI and platform consolidation, improve engagement and productivity. And as we progressively replace legacy systems and simplify our architecture cost to serve declines by around 30%. In short, Openbank is evolving into a fully integrated and scalable digital banking platform that is capital efficient and structurally much more profitable. And when we translate that into numbers, the path becomes very clear. So by '28, Openbank scales materially, reaching around 35 million customers. At the same time, cost per active customer declines at double-digit pace, driven by platform convergence, simplification of legal entities and the embedding of AI across all the processes. As we remove legacy complexity and operate on 1 unified platform, productivity improved substantially, bringing the efficiency ratio towards the low 30s. This improvement is not volume driven. It comes from cost discipline, a better funding mix and a stronger deposit generation, not from increasing the risk. This is digital scale with capital discipline, a fully integrated platform becoming structurally more profitable as it grows.

Now let's turn to CIB. Our ambition is to move CIB ROTEs beyond 20% by '28. By combining value-added solutions with scalability while maintaining our low risk profile. Our strategy in CIB is working. It has been very successful because we combine global factories with disciplined capital deployment and consistent low risk profile. First, growth based on value-added solutions we are accelerating the shift towards advisory solutions led and capital-light activities across the 3 business lines. We will continue strengthening global industry groups and product capabilities, connecting clients across regions, offering integrated solutions rather than isolated local products. Connectivity is a clear factor for this business. Clients increasingly require cross-border capabilities, global liquidity solutions and integrated capital markets access and our global footprint enables us to deliver at scale. In North America, we operate through a uniquely integrated platform connecting the U.S. with Latin America and Europe, strengthening our crossover capabilities. We deployed capital with discipline only where returns exceed the cost of capital, and we prioritize capital light and recurring revenue streams.

Let me give you a concrete example. [indiscernible] a listed North American company covered by our wealth team required a tailored equity-linked solutions, well-originated the opportunity, Global Banking structure it and market executed through our U.S. platform. This is our model. One integrated solution delivered globally. The result multimillion capital-light fee income. Second, scalability. We leverage our global platforms, data and AI to enhance pricing discipline, improve execution speed and simplify operating models. We are not changing the risk profile. We're scaling high-value capital-efficient solutions globally. When we translate this strategy into targets, that direction is clear. So by '28, we expect efficiency to improve to less than 3%. As our global businesses collaborate more closely, sharing client flows, FX capabilities, trade solutions and cross-border origination, the network effect becomes increasingly tangible. Fee income grows at high single digits, outpacing balance sheet growth. At the same time, we're actively rotating the portfolio where we allocate capital away from lower return exposures towards higher-value fee-intensive solutions and solution-led businesses.

Over the last years, we have significantly reduced RWAs, improving capital efficiency and strengthening the overall mix. That portfolio rotation improves mix, strengthen the capital efficiency and supports revenue growth without proportional RWA expansion. Collaboration revenue across businesses is expected to grow meaningfully reinforcing the network effects across the group. Revenue relative to RWA increases by more than 8%, reflecting better capital allocation and improved mix. In the U.S., we expect continued revenue expansion supported by enhancing connectivity and scale. The [indiscernible] is simple, sustained robot 20% improving revenue quality, capital efficiency and operating scalability. CIB's growth is not about size, it's about connectivity, fee intensity and disciplined capital deployment. Now let's talk about growth, which is about recurring high-quality capital-light growth. The objective here is very clear. It's accelerated growth while maintaining a strong ROTE and a strong ROTE level. We do this by focusing on fee-based scalable businesses, expanding capital-light recurring revenue through a model that scales efficiently across all our markets.

How do you deliver this? Number one, we focus on high value-added revenue pools. So we're intensifying our focus on insurance, probably one of the biggest deltas, retirement solutions and protection benefiting from structural demographic trends and generating a stable recurring fee income. We're also reinforcing our global alternatives franchise responding to client demand for diversification. Number two, we elevate advisory through personalization. We are moving from product-led conversations to gold-based financial journeys. This increases loyalty, share of wallet and long-term value creation. Beyond wealth, our global family office service is a great example of it. Number three, we built an integrated and scalable operating model. We are integrating insurance and asset management under a global platform-based model industrializing solutions, and we leverage on AI to improve productivity and margins.

Number four, we expand our global footprint. We continue expanding in the U.S. and Middle East while investing in our core markets; and number five, leverage our network business model. We deploy global capabilities to increase penetration across Santander's client base and expand investment capacity via shared expertise. And when we translate that model into execution metrics, the trajectory becomes very clear. So assets under management, will grow more than 20%, moving towards EUR 650 billion. This is structural growth driven by deeper relationships and stronger distribution, not market timing. Private Banking will exceed EUR 350 billion in AUMs with a strong diversification across geographies, Spain remains score and of our offshore booking centers attract international customers. Our combination of local presence U.S. and offshore booking capabilities and sophisticated products position us strongly in Lat Am and beyond.

Asset Management reaches around EUR 370 billion. With diversified clients and continued penetration supported by our savings, our investment platform. Product expansion has driven strong growth particularly in Spain and LatAm. Distribution fees grow above 30%, that's supported by deeper penetration across existing client base. Our deposit base represents an opportunity to shift balances towards investments, improving the customer outcomes and increasing fee generation. Premiums will grow above 70% as protection and life platforms mature, and we penetrate our client base. The key point is not just growth, it's quality of growth, more recurring income, more fee generation and more scalability. And within wealth, insurance is one of the most powerful drivers of growth, as I said, one of the biggest delta. We are building integrated an integrated insurance platform that brings together life, pensions, investment-linked products and protection under one single execution model. At the same time, we're strengthening our role as a trusted financial adviser, deepening lifetime client relationships. Our opportunity is not starting from 0. It's monetizing a large, loyal and underpenetrated customer base.

First, Santander Retirement Solutions, we are building a global platform for long-term savings and retirement driving more than 50% growth in AUM-related activity. In Spain alone, by focusing on life savings and pensions, we increased premiums by 55% versus 2% in narrowing the gap with our bancassurance peers. Second, embedded protection. we are integrating insurance into everyday banking interactions, generating a scalable capital-light fee income and increasing incremental fees by more than 20%. In Brazil, for example, we are leveraging our strength in SMEs and commercial by protecting their employees through group insurance policies while expanding into health solutions. Third, data and AI. By personalizing and simplifying offers, we expect to increase protected customers by over 20%, maximizing lifetime value. In Mexico, where scaling life savings with high affluent and private banking increasing AUMs by 35% versus 24%. Finally, we're expanding into new revenue streams, including global health and growth in the U.S. and the U.K. Together, this will generate more than EUR 2 billion in PAT and net fees by '28. Insurance is not an add-on. It's a core capital-light growth engine for wealth.

And now let's go to payments, which is about scaling transactions with operating leverage. Payment Solution is one of the highest growth, highest operating leverage businesses that we have. Today, EBITDA margins are around 35%. By '28, we moved towards 45% and as scale and platform convergence drives structural expansion. The strategy is straightforward: combined fee-based growth with platform scalability. We continue deploying our core global platforms across our footprint.This supports issuing A2A and cross-border payments under a unified architecture. We managed EUR 108 million cards across the group, processing 45 billion transactions per year, around EUR 3.8 billion per month. Customer activity, I could tell you, remains very strong with spending up 6% in the combination of our markets and balances are up 13%. We are migrating 8 to 8 and car processing to our global platforms, reducing duplication and the commissioning legacy systems country by country that lowers cost per transaction and improves speed to market.

Second, while strengthening differentiation in SMEs and global accounts. In Iberia and LATAM, Getnet is the leading acquirer embedding our solutions directly into SME's daily operations through integrated software vendors and payment facilitators. We're also enhancing FX and dynamic currency conversion, giving these capabilities to increase value-added services for merchants Payments is not just about processing transaction. It's about earning core flows, embedding ourselves in daily activity and scaling margins structurally. And when we look at the numbers, the scalability becomes very clear. By '28, revenue grows above 15% compound average growth. Total transactions doubled. Cost per transaction declines around 40% that combination drops EBITDA to margins towards 45%. GetNet targets margins above 50%, Getnet platforms above 30%, and [indiscernible] sustained margins above 30%, while growing very strongly.

Payments is a capital-light technology-driven business that supports higher and more sustainable returns, one of the strongest value creation engines for the group. Everything that you have seen today comes together here. We have built a unique model, combining global scale deep local knowledge, strong franchises and disciplined capital allocation. That model is already generating a stable, resilient returns. We are not changing directio. We are accelerating what already works. Now we move to the next phase, a phase defined by execution with precision, precision in capital allocation and profitability precision in cost discipline, precision in execution precision in becoming One Santander, and this is the outcome. As you have seen, we have delivered now selectively, not partially across the group businesses and markets. Santander is ready for the next phase of value creation. Thank you very much.

Thank you, Hector. We have time for a short coffee break now. We are going to regather here in 20 minutes' time.

[Break]

Everyone, and thank you for joining us. Let me start with a quick recap of the numbers that Anna and Hector have already outlined. By 2028, we projected profit above EUR 20 billion and a return on tangible equity higher than 20%, while reinvesting at returns above 20%. And a 50% payout with a cash dividend rising to 35% from 2027, more than doubling cash dividend per share by the end of the plan. and a capital ratio around 13%. Taking them together, this supports high teens to per share plus dividend per share growth by 2028, and double-digit EPS annual growth over the planned period. Operationally, it comes down to the following levers. More customers over EUR 210 million by 2028, with active customers up to around EUR 125 million, better economics per active customer fees to around EUR 135 cost down to around EUR 220 in constant euros.

And overall, through on transformation, we expect mid-single-digit revenue growth and cost reduction every year on a constant euro and constant perimeter basis. The logic behind this is a simple equation, scale, customer focus and diversification, combined with customer growth, One Transformation on our network businesses will deliver operational leverage year after year. Within our capital hierarchy, we have also executed 3 decisive transactions. The sale of Poland and the acquisitions of TSB and Webster will reshape our portfolio and are fundamental to understanding our financial trajectory over the next 3 years. Together, this operational leverage and improved portfolio mix, lift return on tangible equity and strengthens value creation, supported by disciplined capital allocation. Today, I will focus on the specific levers that drive profitability and accelerate shareholder value creation. First, let me frame the macro assumptions embedded on our guidance -- in our guidance.

Our plan is built on a prudent, not optimistic set of assumptions. We assume moderate GDP growth across our core markets probably between 1% to 2% over the next 3 years with resilient labor markets. Inflation continues to normalize towards central bank targets supporting real income and enabling us to maintain our cost discipline. On rates, we assume different parts, easing in markets such as Brazil, while remaining broadly stable in mature economies. Overall, this is a balanced and conservative macro framework under which our targets are fully deliverable. Resilient growth, normalizing inflation, stable mature market rates and gradually seen in selected developing markets. Let me now turn to the key drivers of the plan, structured around 4 building blocks. First, our balance sheet second, profitability; third, capital discipline; and finally, the outcome accelerating shareholder value creation. Let me start with the balance sheet. With our recent bolt-on transactions, we have repositioned our balance sheet. We expect the loan book to reach around $1.2 trillion by 2028. But importantly, hard currency exposure increases from roughly 75% in 2025 to around 80%. This reduces volatility and improve the stability and predictability of returns through the cycle.

Across segments, we continue to prioritize our core franchises. Mortgages remain stable anchor. SMEs and corporates continue to show strong momentum and CIB delivers attractive risk-adjusted growth while remaining at 20% of total allocated capital where we have clear competitive advantages, we expect to grow above the market. Latin America should continue to grow at higher rates as banking penetration is still relatively low. As shown on the right, growth is selective and differentiated across markets. fully consistent with our disciplined approach. Importantly, we can deliver this growth with a structurally lower risk profile. Looking at 2026 to 2028. Group cost of risk is expected to remain stable at portfolio level. At the same time, the mix post M&A reduces cost of risk from around 15% during the last strategic cycle to around 1% to 1.1% over the next 3 years. The key driver is the composition of growth. The majority of incremental lending will come from lower risk portfolios. Around 80% of the loan book is concentrated in low-risk segments, all operating with a cost of risk below the group average.

Higher risk exposure remains limited and tightly managed. Medium to high-risk portfolios represent less than 10% of the loan book. In these portfolios, we take risks selectively with a strict pricing discipline and higher returns. Turning to deposits. We are strengthening our franchise to build a more resilient and lower risk funding structure. With TSB and Webster, we add scale and structurally reduce the commercial gap, improving the balance sheet profile. As a result, the loan-to-deposit portfolio or ratio is expected to move down from 98% in 2025 to around 95% by 2028. We are also enhancing the quality of the deposit base by deepening primary relationships and increasing the share of demand deposits. With a higher contribution from retail and commercial and Open Bank, the deposit base becomes more granular and diversified and the relative weight of CIB is reduced. As the mix improves and pricing discipline remains strong, we expect the average cost of deposits to trend down compared with the 2022 to 2025 average. For 2026 to 2028, we expect the average cost of deposits to be below 1% in Europe, below 2% in the U.K. and around 2% in the U.S. This reinforces funding resilience and support margin stability through the cycle.

Building on the strength of our deposit franchise, let me briefly address liquidity and funding resilience. Liquidity remains very strong across the group. We hold a solid liquidity buffer of around EUR 340 billion of high-quality liquid assets, 96% of which qualify as eligible well diversified by currency. All metrics remain at comfortable levels, well above regulatory requirements, and we expect them to remain strong throughout the plan. Our insurance plan remains prudent and front-loaded. For Banco Santander SA in 2026, we expect to issue EUR 15 billion to EUR 20 billion, of which close to 50% has already been executed. 2027 will require a similar -- slightly higher amount before declining to between EUR 12 billion to EUR 17 billion in 2028. I Issuances will primarily consist of senior preferred and senior nonpreferred instruments. -- replacing securities that are losing regulatory eligibility while remaining current TLAC and MREL buffers. In addition, we expect to issue up to 2.5 billion new hybrids in the first year at around EUR 3 billion in 2017, EUR 28 million, in line with projected risk-weighted asset growth.

Turning to another key level of the balance sheet. We will continue to actively manage interest rate sensitivity across the group, particularly in a lower rate environment. In 2025, the ALCO portfolio, excluding Poland, stood at EUR 147 billion. 75% is dedicated to managing interest rate risk, while the remaining quarter supports liquidity. The portfolio is diversified across our main countries. But let me focus on 2 markets in particular. In Spain, the ALCO portfolio is around EUR 50 billion with an average yield of 3.3% and a duration of 6.4 years. In the U.K., we project margins -- we protect margins through the structural hedge. The average balance in 2025 was around GBP 105 billion with a yield close to 3% and a duration that is slightly above 2 years. There is obviously a clear opportunity to extend it over time. This active balance sheet management provides meaningful protection and support low single-digit NII growth in 2026 in both countries. We take a conservative and disciplined approach to FX risk management across the group. For capital, our policy is to hedge the capital ratio, the CET1 ratio by hedging the excess capital held in our subsidiaries.

In 2025, our capital FX exposure was around EUR 18 billion, with a hedging cost of approximately EUR 700 million. For 2026, both the FX exposure and the cost of hedging are expected to remain broadly in line with 2025. In terms of earnings, our P&L hedging is calibrated to our forward-looking view or reviewed regularly. For 2026, we have fully hedged the expected results from Brazil and Mexico, and partially hedged the U.K. and the U.S. For 2027, Mexico is currently hedged at around 50%. In short, the balance sheet is now positioned to deliver growth with a structurally lower volatility supported by a stronger credit mix post M&A, a resilient funding and liquidity profile and active interest rate and FX risk management, which protect capital and earnings through the cycle.

Let me turn now to our growth profile. As you've seen, we have strengthened our NII resilience by reducing the balance sheet rate sensitivity through disciplined ALCO actions and active hedge management. As a result, the group is now much closer to rate neutrality. Importantly, our objective is not to eliminate interest rate sensitivity entirely but to manage it actively and protect margins through the cycle. For a minus 100% parallel shift, NII sensitivity in euros has improved from around minus EUR 1 billion in December 2023 to roughly a negative $530 million in December 2025, and we expect it to reduce it further to around EUR 500 million by the end of this year. Similar interest sensitivity improvements are visible across sterling and U.S. dollar while the Brazilian real remains positive and supportive.

And just as importantly, relatively small changes in assumptions such as deposit betas not translate into a much more limited impact on group NII than in the past. As we just saw on the previous slide, our active balance sheet management has allowed us to navigate very different rate cycles while protecting margins. From 2022 to 2024, developed markets went through a cycle of share rate hikes, which was supportive for NII. That benefit was partially offset by Brazil where we have negative sensitivity to higher rates. Since 2024, the environment has become more challenging. Developed markets have faced rate cuts, while Brazil has remained at elevated levels. Even in that context, we have been able to defend our NII. This resilience reflects structural discipline, active pricing on both assets and liabilities, strict ALCO management, hedging and the natural geographic diversification of the group. Looking ahead for 2026 to 2028, the rate environment becomes more balanced.

Overall, our rate profile is now more neutral and less dependent on any single cycle, supporting a constructive outlook for low to middle to mid-single-digit NII growth over the period. Let me walk you through how we expect to expand NII over the plan. We started from a position in 2025 of EUR 42 billion, excluding Poland, or EUR 3 billion higher on a pro forma basis, including TSB and Webster. We expect NII to grow at low to mid-single digits over the next 3 years on a compound basis, supported by volumes, lower rate sensitivity improved funding and our active ALCO management. By business, retail will deliver low to mid-single-digit growth, while Openbank rose at a low single-digit rate. By country, growth is also well diversified. Brazil, the U.S. and Chile benefit from a more supportive rate environment and solid volumes, with Brazil expected to deliver mid- to high single-digit growth the U.S. mid-single digits and Chile low to mid-single digits.

In Mexico, strong customer activity and disciplined deposit pricing will support mid to high single-digit NII growth. As we discussed before, the U.K. and Spain, we expect low single-digit growth in 2026, and the U.K. should accelerate to low to mid-single digit through the plan. Overall, this combination of lower structural sensitivity volumes and active balance sheet management will support sustainable NII expansion through the cycle. Turning to fees. We expect high single-digit growth over the next 3 years, supporting structural operational leverage. Around 30% of the increase comes from high-quality capital-light activities. Our network businesses, wealth payments and CIB, which are a key engine of fee growth, leveraging our global footprint, collaboration and scale. Fees play a central role in the plan. They reduce the sensitivity to the rate cycle and enhance the quality and diversification of earnings. By 2028, fees and net interest income -- revenues are expected to represent around 30% of total revenue, up from 26% in 2028 and to contribute more than 40% of total revenue growth over the next 3 years.

At the same time, the recurrency ratio fees to cost is expected to improve to around 65% by 2028, reinforcing the structural nature of our operational leverage. The result of this is a revenue that will rebalance in a more diversified and capital light way by 2028. We expect to deliver a compounded mid-single-digit annual growth rate over the 2025 to 2028, in constant euros and constant perimeter. Across our global businesses, growth is broad based over the plan. Retail is expected to increase mid-single digit, CIB up between 5% to 10%, Openbank low single digits, wealth at double digits and payments above 15%, all expressed as compounded annual growth rates. Overall, fees are growing faster than NII, as I just mentioned, enhancing revenue stability and predictability through the cycle while supporting a stronger operational leverage and sustainable returns. Costs at the other major lever on delivering profitable growth, and our target is clear. Tight discipline and structural productivity gains.

We are taking actions to control the cost base structurally and expand operational leverage in an environment where we could see some easing of inflationary pressures. Before moving forward, let me briefly clarify the different cost bases. As we announced recently, we have changed the way we report costs. We have reallocated certain charges previously reported in other results mainly to the total cost line. This improves reporting enhances cost control and transparency and at the same time, does not affect the group's profit or public targets announcements during the fiscal year 2025 presentation. As a result, 2025 total costs, including TSB and Webster are around EUR 28.5 billion. We are setting a target of reducing them to below EUR 27 billion in 2028, with an efficiency ratio near 36% and we expect to deliver around EUR 4 billion to EUR 5 billion in efficiencies and that together with bolt-on synergies more than offset approximately EUR 3.5 billion to EUR 4.5 billion in inflation and investments. This is structural.

For example, personnel costs, which represented around 63% of total expenses in 2025 are expected to decline to 50% by 2028, reflecting the scale of our transformation. These efficiencies, together with bolt-on synergies, underpin higher operational leverage and support our profitability targets while we continue investing for growth. Moving to asset quality and cost of risk. As I mentioned earlier, we expect cost of risk to remain broadly stable across most of our portfolios, while the post-M&A country mix supports a lower group cost of risk. We have exited Poland, which had a cost of risk of around 70 basis points and acquired TSB and Webster with cost of risk of approximately 10 and 40 basis points, respectively. This structurally enhances the group mix and improves our normalized cost of risk. By the way, Poland's cost of risk that I just gave, the 70 basis points includes loan loss provisions related to Swiss franc mortgages. But the cost of operating in Poland, including Swiss franc provisions recorded below the loan loss provision line was around 130 basis points in 2025. Therefore, the overall impact of having exited Poland and having both TSB and Webster is even higher than that implied by the cost of risk.

Over the next 3 years of the plan, we assume a reduction in cost of risk at the group level to between 1% to 1.1%. Let me now briefly address the Corporate Center. Over the past few years, we have taken consistent actions to reduce its size and complexity. As a result, its weight as a percentage of group underlying profit has declined from around 13% in 2022 to approximately 8% in 2025. Looking ahead, we expect the corporate centers wait to fall even further to around just 5% by 2028, driven mainly by cost actions. The result is a leaner corporate center and again, lower overall earnings volatility for the group. All these operational targets converge on our path to higher profitability. This is the road map from 16.3% return on tangible equity in 2025 or 15.2% on an underlying basis to above 20% by 2028.

First, higher revenue contributes from 3 to 4 percentage points of return on tangible equity. As we discussed earlier, we will grow NII through volumes and algo management while accelerating fees and other revenue lines, improving the revenue mix. Second, lower costs are expected to add from 1 to 2 percentage points of royalty. One transformation will keep driving structural efficiency gains through simplification, automation and scale. The integration of bolt-on acquisitions will generate material cost savings. We expect to reach the full run rate of synergies from Webster by 2028 with 2029 being the first fully synergized year. Creating additional upside beyond the current plan. Finally, a lower cost of risk will add up to 1 percentage point to ROTE. Over the last 3 years, 4 businesses have generated returns below the average of the group, the U.K., the U.S., Brazil and Openbank Europe. Between 2026 to 2028, we expect to increase the profitability of these businesses closer to or even higher than the average of the group, which will obviously push that average to higher levels. The improvement of the returns in these 4 units helps explain the overall improvement in group's return on tangible equity.

Spain, Portugal, Chile and Mexico are already operating at or above 20% return on tangible equity and are expected to remain at those levels. In the U.K., the acquisition of TSB accelerates profitability improvement increasing return on tangible equity to approximately 16% by 2028. Similarly, in the U.S., One Transformation together with the acquisition of Webster will drive a similar step up with ROTE rising to approximately 18%. In Brazil, we expect lower rates to support both NII and asset quality driving an increase in RoTE from around 15% in 2025 to 20% in 2028. And in Openbank Europe, a business that benefits from lower rates, return on tangible equity is expected to improve to around 14% in 2028. Therefore, the path to above 20% RoTE for the group is broad-based and supported across our core markets. With this profitability profile in place, the next question is how we deploy the capital to maximize value creation. We will continue to adhere to our rigorous capital hierarchy, which ensures we maximize shareholder value.

First, organic growth. We prioritize capital allocation to accelerate our strategy and strengthen market leadership but only where returns are attractive and value accretive. Second, ordinary distributions. We maintain a 50% ordinary payout target, but from 2027, we will increase the cash dividend component to around 35% of underlying profits complemented by approximately 15% through share buybacks, subject to corporate and regulatory approvals. Third, bolt-on acquisitions. We will only consider small bolt-ons where there is a clear strategic and financial rationale with minimal capital investment. We require returns on investment capital above 15%, exceeding our cost of equity and the current return from share buybacks. Finally, as Ana said, we will return to shareholders any excess capital above 13% at the end of the plan. This capital discipline is supported by a virtuous capital cycle that enhances profitability and maximizes shareholder value creation. We ended 2025 with a return on tangible equity at 16.3%. From that starting point, capital is first allocated to our 50% ordinary profit, ordinary payout, FX hedging and supervisory requirements. The remaining capital is then available for disciplined redeployment feeding a virtuous circle.

Every year, roughly 1/3 of the balance sheet matures as assets roll off. We reinvest that capital at higher returns, targeting RoTEs above 20%. In parallel, we rotate out of assets at a cost well below the cost of capital and reinvest into more profitable businesses. Risk-weighted assets stood at around EUR 630 billion in 2025 are expected to grow a low single-digit rate through 2028 below loan growth. This disciplined asset rotation and reimbursement cycle supports the ROTE step up to above 20% by 2028. Asset mobilization is key to maximize capital productivity. In 2025, we relieved approximately EUR 6 billion of capital through active portfolio management. Around EUR 3 billion came from asset sales, guarantees, credit protection and other measures. Only EUR 2 billion came from synthetic securitizations and a bit more than EUR 1 billion from cash securitizations. The average cost of capital of these transactions was around 6% to 8%, generating a profitability uplift of more than 10 percentage points with no net capital consumption.

We are disciplined in how we grow risk-weighted assets, focusing on capital-efficient revenue. We have tightened pricing discipline, improved portfolio mix and prioritize higher quality returns, increasing capital productivity. As a result, Return on risk-weighted assets has improved from around 1.8% in 2022 to 2.4% in 2025, and we expect it to reach approximately 2.7 by 2028. In parallel, as I just mentioned, we continue to optimize our balance sheet through asset mobilization. In 2025, we mobilized around EUR 45 billion in risk-weighted assets, as [indiscernible] just mentioned, from 2026 to 2028, we expect to mobilize between EUR 30 billion to EUR 35 billion per year, with roughly 1/3 through SRTs. The combination of improved returns and active asset rotation results in revenue growing faster than risk-weighted assets, meaning a higher income generation per unit of capital. Here, we can see how our capital discipline works, and it links directly back to the capital hierarchy I have just laid out. We use our capital optionality for 2 clearly value-accretive bolt-on acquisitions, strengthening our U.K. franchise through TSB and accelerating our transformation in the U.S. through Webster.

Both transactions meet our strict criteria of capital allocation. They have a clear strategic and financial rationale and each delivers a return on investment capital above 15% and above our cost of equity and the return we can currently generate through share buybacks. Importantly, these acquisitions enhance our capital generation capacity while preserving balance sheet strength. CET1 ratio remains within our 12% to 13% operating range in 2026, ending the year close to the upper end and moving to above 13% in 2027. The key takeaway is that we are moving into a new capital cycle between 2022 and 2025, we'll rebuild capital with a clear focus on profitability. Starting from around 12% in 2022, profit generation more than offset distributions, organic risk-weighted asset growth and regulatory effects, taking us to 13.5% in 2025, around 100 basis points above the midpoint of our operating range. We now begin the 2026 to 2028 strategic cycle from a stronger position. Organic capital generation strengthens as profits increase on our path to above 20% RoTE in 2028. Risk-weighted assets are expected to grow at low single digits, as I just mentioned.

Announced M&A transactions represent around 150 basis points of capital consumption. And we expect a further 60 to 90 basis points from hedges, models and other effects. Even after these impacts, the capital ratio is expected to remain above 13% after 2026, and creating a new layer of capital optionality as we move towards our circa 13% target in 2028. In other words, we can fund growth, execute our capital priorities, and still maintain a stable and resilient capital position. A stronger balance sheet, higher profitability and disciplined capital allocation set the stage. Let me now turn back to our 2026 to 2028 commitments. Looking back at our last strategic cycle, we delivered on our commitments, achieving double-digit value creation over the period. During the last 3 years, we generated an average [ pre-1 ] return on tangible equity of around 16%. Despite headwinds from FX and other factors, we delivered average value creation of approximately 14% and between 2022 and 2025, demonstrating our ability to execute consistently and create value through different market environments.

Our ambition today is to accelerate it further over the next 3 years. We project TNAV plus dividend per share to accelerate to high teens over the plan, up from double-digit growth on average in the previous cycle. Over the plan, we will increase return on tangible equity to between 17% to 20% on average. At the same time, we expect lower FX headwinds as we continue hedging excess capital in subsidiaries, maintaining disciplined dividend upstreaming and increasing the proportion of TNAV denominated in hard currencies to around 60%, up from 55% in 2025. In short, the plan is to compound tangible book value per share growth while continuing to return capital and accelerating shareholder value creation through 2026 to 2028. As we made public during our 2025 results presentation, 2026 will be a transitional year for the group. In 2026, we completed the sale of Poland in the first quarter, and we will also complete the acquisition of TSB in the second quarter and Webster in the second half of the year.

At the same time, we will continue running in parallel, our legacy systems and new platforms for a few months as we migrate our businesses to the global platforms. Excluding these corporate transactions for 2026, we already expect an acceleration in operating leverage. We expect revenue to increase mid-single digit in constant euros, with fees growing more than lower cost in constant euros, leading to operating jaws more or less double of what we reported in 2025. All in all, underlying profit above EUR 14.1 billion with a capital ratio close to the upper range of our -- the upper end of our operating range. Looking ahead into 2027, we expect revenue to grow double digits, deliver positive operational leverage profit increase in the mid-teens and capital above 13%. And in 2028, delivering on our 2020 ambition, more than EUR 20 billion in profit with a return on tangible equity above 20%.

Let me close reiterating our financial objectives for the next 3 years. In addition to the profitability increase that I have just mentioned above 20% and the profit exceeding EUR 20 billion by 2028, based on our disciplined approach to capital allocation, we will maintain a 50% ordinary payout but will increase the cash dividend to 35% from 2027, more than doubling cash dividend per share by 2028 and from 2025 levels. At the same time, we will end the period with a capital ratio of around 13% at the top end of operating range. All of this will help us to accelerate value creation through the plan reaching high teens TNAV plus dividend per share growth by 2028 and double-digit annual EPS growth. This is a plan designed to consistently compound value driven by a stronger balance sheet, disciplined growth, structural efficiency and rigorous capital allocation. Thank you very much for your attention. I will now hand it back to our Executive Chair for her closing remarks after which the Chair, the CEO and myself will be very happy to take your questions. Thank you very much.

Thank you, Jose. Actually, we're going to go to Q&A first. And then we'll do closing remarks at the end to remind everybody. Can I please ask you to raise your hands. We've already got a few hands the mics in the room. I think some people have an early flight to catch. So can we start here with Nacio Ulargui and then Alvaro Sarama.

I have just 2 questions. One a bit more strategic. I mean, just looking to Santander growth potential. Just wanted to get your thoughts on the trade-off between distributions and growth. You have a very clear organic or capital here. You have some with us what makes you to be more keen on growing the balance set? And the second one, more on the cost-to-income interaction with the EUR 27 million constant euros target of cost in '28. The 36% cost-to-income would probably get you to a much higher than EUR 20 billion net profit. So I just wanted to get a bit of your sense what could be changing that picture in the end?

Yes, we said less than '27. Yes, I would let to that maybe -- so in terms of how we think about distributions and growth, the capital priority is very clear. We expect to land in 2 at 13%, Circus or 13%. We do expect to be above 13% actually other things equal at the end of '27 already. So we believe that we are in a situation today where we can maximize growth in distributions over time and deliver higher returns on higher amounts of TNAV. This is really important.

So I would say that, again, our goal is to maximize growth in distributions over time on higher returns on higher amounts of TNAV. There's not many companies in the world that can give you that. So going back to a hierarchy, again, organic growth above 20%, distributions minimum of 50% payout. Bolt-ons, we will not do any bolt-ons in the next couple of years. We're very busy. So again, if and when bolt-ons return, it will always be consistent with what I said and what we believe is that they have to be substantially above share buybacks. And then there would be extraordinary distributions.

So at the moment, Hector has lots of opportunities to invest above 20%. And so I think he deserves that he gets that if again, we can deliver the goods, which he has over time, as Jose has explained. So that's how we see it. If we do not find those opportunities and believe me, we're very disciplined, we'll give it back. We've said at the end of the period, it could be before. Again, it will depend on distributions. If you ask our colleagues in Spain, mortgages, we're losing market share in mortgages. It's a public number. Why? Because we will not allocate beyond the franchise, and of course, we support our customers, but we can allocate capital globally. This is a huge flexibility that not many companies have. So is that a good answer?

Okay. On the cost income, I don't really understand the question. You're saying that less than EUR 27 billion and the 36% don't? Well, there's -- we said over EUR 20 billion. So you do your numbers and you can say 20.01% or 20.1%, it's going to be over EUR 20 billion. And I can tell you that over the last 11 years, I showed you that graph really important one on predictability, 99 until this year. Quarterly earnings per share volatility of Santander was the lowest among those banks, and these are the top banks that you all know. Multiply profits by 8%. Every year, when we start 12 months and we're getting better and better over 3 years, there's a 5% difference in euros between what we say we're going to do with our plan and what happens at the end, in revenues and in net profit. I hope that gives you enough...

If I may add. -- we gave ranges for NII for revenue, we get a cost figure, but we gave ranges for cost of risk. So obviously, if you use the most optimistic scenario, you get to over EUR 20 billion. but we gave ranges with the purpose of being conservative.

Alvaro Serrano from Morgan Stanley. Thanks for the increment of detail in the slides. Two questions from me, please. On the cost efficiency, which is clearly better than most of us expected, you called out EUR 4 billion to EUR 5 billion efficiencies. Could you maybe break that down where they're coming from? Obviously, you've called out the implementation of gravity many times before, and that's part of the plan, I'm sure, but I'm thinking more headcount wise, how much it's coming down? Is it switching off mainframes? Just a bit of color on that to assess how much revenue disruption, if any, presumably not much there could be.

And kind of related to that is the second question on -- in particular, on the high single-digit fee growth. I mean, what part of that, again, can you help us understand what part of that do you feel is entirely in your hands? And what kind of market environment you're expecting, obviously, in CIB that's important and it's difficult from our side maybe putting a high single-digit CAGR as a base case. So maybe help us through the assumptions and how you're seeing that.

Okay. Yes. In terms of cost and revenue, as we think about cost, first, we really believe in today's world, being a cost leader is incredibly important, right? And we want to be a cost leader, but also the best in UX. The only way to do that is investing in platforms, everything we have explained, aligning the business model and then the platforms. You haven't only begun to see the effects of that, okay? And I gave you an example of payment help.

So again, gravity is a first step. Brazil is not even on gravity yet. But there's a gravity 2.0, which will bring additional benefits. And some of that, you're going to see in this plan, and some of it will go beyond that. So again, it's a very structural change. I think Hector explained it really well. It's a change in the way we run the company. It's a change in the business model. This is not about cutting cost and affecting revenues. We're cutting costs and growing revenues. What we've said is every single year in the next 3 years, we're going to grow revenues and reduce cost. This is what we're saying with a stable cost of risk across portfolios, but structurally 1 to 10, given the change in the mix. So again, going to cost of revenue.

This is about a structural change in the business model. It's about reducing costs and growing revenues as a consequence because we are simplifying we're aligning. It's not something you do in 1 year, and it's really hard. And I can say it's maybe not a lot of fun. And actually, this is one of my colleagues calls boring banking, right? [indiscernible] is how do you run a bank in a better way, aligning not just CIB, which I'm sure you can all visualize, but individuals and now there will be personalization, as Hector said. And we will run the banks by geographies in terms of the balance sheet and many of those things.

So we're not going to go all the way and say the global business run everything. It's a 50-50 JV the local countries will have it. But this is, again, the change in the model and the One Transformation. Then you have the way we think about corporate investment banking, wealth management and payments is in a bit of a different way. It's more -- it is about One Transformation, but the model is easier to implement. It takes less time. And there, it's about network effects, it's about leveraging and working across the countries.

Do you want me? Yes. Let me give you a little bit of hard data, Alvaro, because I know you always like it, okay? So first of all, it's important that [indiscernible] is the concept of exactly how we're doing things, and I explained it through the presentation. It's important to acknowledge that we will achieve this by whereas, first of all, accelerating on transformation, as Ana told you. It's important to take into account EUR 1 billion in cost reduction from TSB and Webster, okay? That's a very important number.

IT and operations OpEx will drive around 25% of the total cost reduction, right? It's reflecting the platform consolidation that we're doing, the commissioning of systems and all the automation and simplification that we're doing, okay? It's very important to say that we are not cutting a strategic investment. We will continue investing around EUR 2 billion in technology by [indiscernible] transformation is simplifying the group, but we're tracking synergies at the same time and longer in the cost base, all right? Over the last 2 years, One Transformation has already improved efficiency by more of 4 percentage points. And we have delivered tangible structural results. Headcount, if you see, it's down 3% in '24 and 4% on '25. We have also reduced the number of branches by around 8% annually since '22. IT OpEx has come down around EUR 542 million between '25 and '22. And as Ana, I mean, correctly mentioned that we're reducing our efficiency ratio of 45% to 36% by '28.

But yes, if you say a little bit, I mean, on the next few years, from One Transformation, 3 percentage points. AI initiatives is going to be 1 percentage point, EUR 700 million and EUR 200 million in revenue and cost efficiencies. The global technology platform is around 2% network businesses around 1% and the bolt-on acquisitions that I just told you is around 2%, okay. That's where the numbers come from.

The AI is 700 costs, [ $300 ] mil revenues, just to clarify?

Yes. So on the fees, I mean, assumptions, obviously, there's the macro assumptions that Jose explained. But at the end, fees grow when customers grow, and we are aiming for a EUR 30 million increase in total but EUR 20 million, EUR 19 million increase in active customers. You've seen over the last few years, there is a correlation between growth in customers and growth in revenues and, of course, fees. So that is one part of it for retail and consumer. So as activity grows, fees should grow other things equal.

There is a couple of very significant opportunities. One is insurance. You're going to see part of that in Wealth Management and Insurance. You're going to see part of that as distribution fees. We are aiming for 70% increase in gross written premiums, right? Javier? Hector? There is a huge opportunity that we have not really focused on. A lot of this, again, is what we call borrowing banking. It's actually getting incentives aligned, it's getting the product to be better. It's not rocket science. So there's a lot of basic things that we can do and we will do to increase insurance premiums. Again, that's a big part in the fees. And then you have the what we call network businesses, which are growing we're being quite conservative. In CIB, they say 5% to 10% growth in fees. And hopefully, that's going to be more [indiscernible] let's see.

In payments, over 15% increase in fees and Wealth Management, I think it's like double digit in general in that area. So that's where the fees increase come from, more or less. Again, a lot of it's going to be based on growing customers and the big leap in active customers. That's not an easy thing. It's not so much the macro. So you have to go to the base, right?

I mean just to complement fairly quickly what Anna said. It's important to see. Look at what we have been able to do in CIB, for example. CIB has had a tremendous growth in fees and as I was saying, we're changing the business completely before basically it was a corporate bank. Now it's a true investment bank, all right, in which we are really taking care of restricting value out of the money that we lend to customers. The fee growth was 9%, okay, in '25. So that basically tells you a little bit of what we've been doing in Wealth as Ana was telling you, 9% again in '25.

In payments, the capture -- we're capturing scales and increased by 9% also the volumes. So -- and also the point that Ana said about how many -- the important growth that we have had in active customers that basically has created that we have grown fees much more than NII, and it's going to continue that way because it's exactly what the change of the model is about. By becoming the #1 bank to our customers we're making sure that we penetrate the client base, not just with mono products. It's basically giving them a lot of different services. Insurance is probably the biggest delta that we have, as Ana pointed out. But nonetheless, there's many different kind of products that we can do with that and not just with individual customers.

The commercial side is very important as well. Because we do -- we try to do, and that's our bread and bottling in that business because we actually do everything for them. We're the largest, for example, in trade finance where we operate and probably world where trade finance, ECA financing. So a lot of things and services that we do. Remember that we have the network businesses that are the ones that serve retail and Openbank. And the network businesses service a lot, and that's where the value added come from. It's working together in order to reach over to that.

I think we got Paco who's got the mic already, and then we can come to this side.

Francisco Riquel from Alantra. I have 2 questions, one on capital and the second on capital allocation. On capital, you have followed an asset-light strategy. Today, it's 70 basis points organic generation in '25. That's also the guidance for '26. It seems to me that capital generation in '27, '28 will be much smaller. So you are shifting to a more capital-intensive business model. So if you plan to accelerate the loan growth in the next couple of years, where and what businesses, countries? So any excess capital generation indication that you can give from the business model in coming years?

My second question is you have deployed M&A selectively to strengthen your position in the U.K. and the U.S. once these deals are integrated, I wonder if you would also consider M&A opportunities to improve your position in other markets like Brazil or Mexico?

Maybe Jose, you can take the loan growth and -- and I will take the M&A. I mean, actually, let me go on the M&A first. For the next few years, we're not going to do any bolt-ons. I mean that is something that we have said. I have said several times. Then you go back to the capital hierarchy. Again, we do have markets where, as we have explained, if organic growth is not there above 20%, we have paid the 50% that we have in terms of payout. If there's any opportunities for bolt-on in core markets from '28 onwards that meet our requirements, which is to be significantly above buybacks that enhance our strategic position, improving funding, giving us greater scale and deliver for shareholders, that is something that we're not going to take off the table. But you can relax for a couple of years.

Now, no, I was going to say because then you're going to come back and say, so a few days ago, we did a small insurance deal in Chile, 1.5 basis points. Don't come and tell me then, oh, you said this, 1.5, 2 basis points in specific areas, small things, that doesn't count, right? As long as the returns are 50% or something crazy like we're doing in Chile. But this is minor, and it's not like we're going to do a lot, but...

I have given you all the details of the capital plan. And there are differences between '26 -- '25, '26 and '27, '28, significant differences. I give you a number of a substantial lower asset rotation in the plan than in previous years. We want to be conservative. We need the market to be there. We don't know if the market is going to be there next year or not. And we want to make sure that what is in the plan, we are going to be executing for sure. I have given you an estimate for regulatory headwinds, which is probably also conservative. It might not be there, but we don't know. So the capital plan is consistent. We are going to be generating, as I said, more capital organically, but we are in the plan assuming that some of the components of the capital plan are substantially, let's say, less positive than what we saw in 2025 and we expect in 2026.

Even with that, we will generate capital as an asset. Already in 2027, we expect the capital to be above 13% and above 13% in 2028. As I said as well, there is not an infinite amount of capital that we can invest at 20% organically, but we have very good opportunities to grow organically. And as long as we can grow organically above 20%, we should because that's what this is about. This is compounding growth and value creation going forward. But obviously, there are not infinite amount of opportunities. So that's it, I think.

We've got Jacques-Henri Gaulard, who's already got the mic.

Well, it was hard work. That's visible. Two questions for me. One on borrowing banking again. The insurance development makes a lot of sense. Are you happy about the product engine you have on insurance that you have the whole bank that you're okay. You mentioned a deal in Chile, 1.5 basis points. Would you do some other things like that? Again, not a lot, but to develop that product, which is not necessarily natural with you? And the second question, because we discussed it here at the intermission, is the U.S. development, I mean, we're all putting the great synergies that you've had, but the reality is the integration of U.S. assets from European Bank has been a graveyard over the last 25 years. Why is it going to make it really different and make the paper being realized in effect?

Okay. So insurance, are we going to do lots of 1.5 basis points? I don't know, but we might do a few, but that's not going to take away from the numbers we gave you and even doing better than the numbers we gave you. Okay. But the borrowing banking, that's Manuel's description. There's a lot of borrowing banking improvements in insurance that we are going to be doing and the product itself. And actually, Javier [indiscernible] is here, what are the 2 things you're going to improve in insurance to deliver those 70% increase in premiums, Javier?

Can we please get the mic in front to Javier? Do we have another mic here?

Yes. Well, on insurance, we have 2 different businesses. One is on life-saving insurance, which is around be able to sell to our clients and if a client needs long-term liabilities and deploy those liabilities into long-term duration assets. We originate very small amount of premium of the life-saving insurance every year. So the penetration among our client base is super low compared to our peers. So we want to go from [ 6 billion ] of premiums every year to [ 20 billion ]. So there is very significant upside on life-saving insurance. And then we have another business, which is protection. Just to give you a sense of the upside on protection, out of the 180 million clients that we have, only 22% of those clients buy insurance products from Santander. So aligning incentive digital platform distribution, improving at the end of the day, the franchise is going to have also significant upside and growth in the premiums and the fees.

So thank you. On the U.S., so this time it's different, yes. And we are going to deliver the goods. The first thing I would say is that Webster is a great bank. I'm not sure what other colleagues did, but this is a fantastic bank, well-managed bank, best-in-class profitability. And by the way, they have managed integrations very successfully with the current team. And I think we have John connected maybe he -- but I want to go first to Christiana, who's here on the front row and who thank you for making it in spite of the storms. I don't know how you made it, but that shows you that. Yes. So we have an organic plan that takes us, and that's why I said and I reiterate we're going to get to 15% -- 15%, 16% organically. So I'd like Christiana, the 3 things you're going to do. And then maybe John Siula, who I think is connected can also give us a bit of color on his track record and why he believes that this is something that will deliver the 18% in 3 years. So Christiana?

Thank you. Thank you. We appreciate the question. We appreciate and recognize where the skepticism may come from. As Ana says, we are building on significant momentum in the U.S. business already. So if I take you back to 2023, on a fully loaded IFRS basis, we have to acknowledge our business as was shown in the slides, it was earning less than 6%. In 2025, we had significant momentum had moved that already above 10%. If you translate that from IFRS into U.S. GAAP, that's actually already a comparable return of 11.5% that is well within the midrange of the regional banking peer group against whom we compete in the U.S. market. So we've had momentum building already into 2025.

And our organic plans from here actually represent more than half of the return on tangible equity improvement from 10% to 18% over the coming 3 years. That's coming from 2 very important levers. The first has been emphasized strongly in the presentation is around the continued momentum that we have in our fee-based businesses in the U.S. We've seen fee-based growth in our CIB business in excess of 30% each year in the last 2 years, and we are continuing to build on that pace and momentum over the coming period. And then secondly, which is probably a bit more buried in the story is around the full integration of our auto lending capabilities into our deposit-taking institution in the U.S. So folks will know that our corporate structure in the U.S. has previously had the auto lending business separate from the deposit-taking institution at Santander Consumer. We are on the path to be bringing all of those assets into our deposit-taking institution, benefiting not only from the funding advantages that we achieved through that, but also the elimination of redundant systems and costs. So if you walk that bridge from 10% to 18%, you've got 3 percentage points coming from that integration of the consumer business into the bank, another 2 percentage points coming from the momentum out of CIB and the remainder comes from the successful execution of the integration of Webster.

Maybe just 2 comments on the -- because I'm sure someone is going to ask on the $800 million synergies of the combined institution. And maybe you and John, can you hear us? John, you have a big audience here.

Yes. I'm sorry, I can't be there in person. I appreciate the opportunity to say hi to everybody.

Yes. So you heard Christiana mention our path organically. Maybe you want to comment briefly, both of you actually on the $800 million synergies and also, John, on your and your team track record and integrations and why you believe this is something that we will deliver.

Sure. I'll let Christiana -- go ahead, Christiana.

I'll kick it off on the $800 million. I think it's important everyone to hear from John on the execution track record that the Webster team bring. So we laid out, again, in the presentation, clearly the material 3 buckets that build that $800 million. It's a significant chunk, equally roughly about 1/3, 1/3, 1/3 of our technology and operations strategy, integration. The deduplication of head office functions as well as the scaling and deduplication of retail and commercial overhead. Clearly, it's an ambitious number if you place it only on top of Webster's existing cost base. We know that it's close to 60% of their stand-alone cost base, 19% of the combined.

I think a couple of reasons why you should be confident that we can achieve that. Clearly, it reflects and embeds cost takeout on both sides of the organization and some KPIs that may be helpful in thinking about that, particularly in the retail business. Our goal is, frankly, to get Santander to be as efficient as the Webster platform is. They operate with 1.1 FTE overhead per branch. We're at 1.5. So we're going to move in clearly in the direction of Webster. Likewise, if we think about the amount of overhead per business volume, so if you take the KPI of $1 billion of business volume, how much overhead FTE do you have? Webster operates at about half of the overhead that Santander operate at. So our work is cut out for us. The KPIs are clear. We know what we need to do.

I think 2 other aspects that underpin the credibility before we get to what's really important and the execution effectiveness of the team that will be doing this. Remember that when you think about in-market benchmarks in the U.S., this is actually quite a different scenario, right? This is a G-SIB acquiring a regional bank and a lot of the cost infrastructure around regulatory compliance is frankly already there, and we're able to bank on that. And I think folks have also focused a little bit on the guidance that we've given around a sub-40% cost-income ratio in the U.S. as being out of line with the regional peer banking average. I would encourage you to remember there our business mix that we are indeed a consumer finance player for a significant portion of our business in the U.S., which already operates at about a 25% cost-income ratio. So you marry that with what Webster already achieves today with about 45% cost-income ratio. We just got to get the Santander commercial platform to that level, and we're absolutely confident of being able to do that.

John, do you want to take from there?

Yes, I'm happy to. And I think Christiana hit most of the details, but I just want to let this group know how excited we are for this transaction, and we are confident in our ability to deliver the promise financial metrics of the combined company. Why are we confident? Because Webster has a strong track record of delivering high returns, ROATCs in the high teens through an efficient operating model that focuses on clients, customers and local communities. We're really excited about the scale and the technology that Santander brings to the combined entity. We think there are really opportunities to do things not only more efficiently, but more effectively to deliver products and services to our clients.

We have recently, in the last 3 years, been through a significant integration with an MoA with Sterling Bank a few years ago. And so our team is primed and has a lot of ability and proven track record in terms of successful integrations Ana is nice enough to have me here, but we also have our current President, will be COO of Luis [indiscernible], who led the integration through the last merger and will be a principal in the integration here. And he did a terrific job 3 years ago and has his sights on strong execution here now. So I believe with our model, Ana, and the combined power of what Santander brings with respect to technology, scale and products that we've got a clear path to be able to deliver the types of returns that we promised the market here. And quite frankly, I can't wait to get started.

Okay. So let's get moving guys and get the approval soon, okay? And that's an upside for everybody because that's not...

The mic, but can we move back on this side to Antonio...

Ben Toms from RBC. One of the bits about Santander, which isn't bore in banking, I guess, is the CIB. Generally speaking, what are the growth ambitions of that business? Are there any products that you don't currently offer that you're looking to offer? If I think about CIB RWAs as a proportion of the group, are you looking to grow that over the 3-year plan? Or is this really about doing more with what you've got in the CIB?

And then secondly, in the U.K., I'm just interested in relation to the structural hedge. What proportion of the NII growth that you're expecting to deliver in the U.K. is coming from that structural hedge? I'm trying to work out how much of the growth is just mechanical rollover of the swaps. And whether there's anything specific about your structural hedge versus peers, which means that it won't be the same kind of tailwind that we're seeing at other banks like Lloyds and NatWest.

Yes. On CIB, we're not thinking about launching any new products. We have what we need we have, correct? We have been very clear that we'll keep CIB capital at 20% of the total, just below that. So we're not going to increase the capital to the business. We want to grow it in a capital-light manner, and that's less and less balance sheet relative to the income. There is a lot of opportunities on the commercial side. For example, talking about the United States. We know very well that Webster has commercial customers that don't have today the products that we already have. That's not in the numbers, by the way. There is 0 revenues, correct? 0 revenues in what we have shown you on Webster, 0. Now you might say usually you lose revenues. Maybe we don't think so because we have a very tiny commercial bank. So yes, the goal is to do more with what we have, do more network collaboration. We've invested in the teams. It's now about profitability and scaling up and network effects. I have said it correctly. Thank you. Right, Hector? You agree on that, right?

Yes, no, completely. And look, I mean, let me give you because the proof, as the Chair would say, the proof is in the pudding, okay? 3 years ago, RWAs from CIB were EUR 126 billion. We closed '25 with EUR 106 billion. And actually, we're decreasing the number of RWAs that Jose is consuming because what we've been able to do is basically to really do great in rotating the balance sheet and managing the business in that way, okay? Also, what you'll see is we're doing a lot better in other income, and that's because there's a lot of client flow that is coming in exactly what Ana was talking about of the cross fertilization we have with the commercial and the other businesses that we have in the group in terms of FX, trade financing, terms of credit, a lot of what the factory because you got to understand that CIB is not just an independent part of the company. CIB is an integral part of the business in which -- and it's a global factory. And as they have their own customers, but most importantly, they're a global factory for Borja here that he manages commercial.

So Borja depends a lot on the product that Jose is giving him all the time, and we manage that because that's very important. The amount that I was playing to you the example in the U.S., the moment that John's customers basically will have the capabilities to do something that we don't have today. So that's exactly what is giving us -- and that's why we call them network businesses because it's a part of the network that -- yes, they do -- they have their business within themselves, but as well, they service other areas of the banks, okay?

Thank you. So on the structural hedge, maybe Jose, do you want to take that?

As I said, we have EUR 105 billion at the end of '25. The main difference with our competitors is that this is very short term. It's slightly over 2 years. So there is a great opportunity to lengthen the maturity of the structural hedge. Right now, the yield is below 3%, and we think we can take it to over 3%, 3.3%, more or less in 2 to 3 years. And if we add TSB, TSB -- with TSB, the structural hedge will increase to around EUR 125 billion. But again, the opportunity comes from lengthening the structure of the hedge. More or less half of the growth of NII. As I mentioned, NII in the U.K. will start growing low single digits, accelerating to mid-single digits. Half of that is the consequence of lengthening the maturity of the structural hedge going forward.

Okay. I think Antonio has got the mic.

Antonio from Bank of America. Two questions from me, please. One is a follow-up on the discussion we've had on allocation of capital. I mean if I look at what you've delivered and where we've come from, obviously, you've shown a significant amount of discipline. You bought back shares when you were trading at a steep discount. You've had high return on investments on that. You've sold Poland, you've added to your developed market exposure with Webster and TSB. So my question is really, how should we think about sort of buyback at Santander? From here, you've committed to do more of that. But I wonder to what extent does it make sense for you to deploy this capital to buy back, for example, minorities in Santander Brazil, for example. So how does that compare as a use of capital to buying back your own shares? And would that be at the right time given what you've done in the DMEM mix and what you talked about in terms of Brazil returns and where we are in the interest rate cycle. So that would be my first question.

My second question is on the business unit and specifically on the product. I mean it's quite clear from what you said, the direction of travel of the various business units and the strategy that you've outlined today is quite clear. Maybe help us clear the one hurdle that I have, which is what do you see as the future for the auto lending business? This still accounts for about 18% of your group numbers. So I think it would be interesting to hear your thoughts as to what you think is the end game there.

Yes. In terms of capital allocation to share buybacks, I still believe at this price, Santander is a very undervalued company. If you think about everything you just heard, I'm not going to go through the business model, the plans we have, the scalability. And we're going to get the company to 20% -- over 20% buying at what, 9% spot, but what is it -- whatever it is for it is still cheap, right? And so we always look at that on a constant basis, again, going back to the capital hierarchy, and we analyze minorities and we analyze the group. But the hierarchy is what drives our decision-making. Again, organic, buybacks, bolt-ons, I would put minorities within that, and we always compare that vis-a-vis our share buybacks.

In terms of auto, auto is a business that does better with lower rates. A lot of the volumes in auto have been put on the books at rates in '22, '23. By the way, when interest rates were negative or 0, this was the star in the group, and we value diversification and through the cycle delivery. As you saw, part of these businesses and people think about geographies. The types of businesses have very different correlations with the cycle. Again, lower rates are good for consumer. So you should see a big improvement. Part of it is ourselves improving the business model. Part of it is the lower rates, right? That's why, again, there will be very little upside in net interest income in euros, but there will be upside in consumer. So that's how I would describe it. And again, we have taken a very important step consolidating Openbank with consumer that gives you a huge opportunity to offer additional products to our customers we didn't have before. It was much harder. Today, you have a single bank in euros that is going to have customers, what we call now mobility, but it will have the opportunity in Germany, in Holland, where we have Openbank up and running to offer other products, current accounts, the whole digital bank. Again, a lot of opportunities to make single product customers do what we do in retail, offer insurance, offer other accounts. And that is the strategy, by the way, also in the United States. So you'll have auto and the digital bank, national across the United States, the same as across Europe.

Sofie?

So Sofie from Goldman Sachs. So my first question would be on the number of customers. Back in the 2022 plan, you guided for 200 million customers in 2025, but you actually only got 280 million customers. Now you target 210 million customers in 2028. What gives you the confidence that you can grow the customer base this time around, especially considering a lot of banks have excess capital, they are very happy to kind of deploy that? Everyone wants to grow and competition, you could argue on many fronts is increasing.

Then my second question would be on Mexico. On one of the slides, you say that you are kind of -- or Mexico's profitability is in line with the above 20% return on tangible equity target. However, you continue to kind of lose a little bit of market share in Mexico. How do you think about the organic growth opportunities in Mexico? And what can you do to improve that franchise further? And how should we think about the EUR 2 billion improvement in net income that comes from the soft currencies? Is it fair to assume half of that comes from Mexico?

Yes. On the number of customer growth, we feel confident because we are setting a target, which is very much aligned with the growth we've seen in the last 3 years. So again, the growth we are aiming for of [ 30 million ] is more or less the same as the [ 20 million ] -- sorry, the [ 30 million ], the [ 20 million ] in the previous years. Where it's coming from, [ 20 million ] of that growth is coming from retail and commercial and [ 10 million ] is coming from Openbank, of which [ 7 million ], [ 8 million ] is in Europe based on what I just described, where we are going to -- now with a single euro bank, we're going to be able to offer the digital bank to our mobility customers. And again, these are customers that come in the door with a loan, and we're already testing that, would they like us to offer other products. In Germany, the answer is overwhelmingly yes, okay? We also originate customers in Openbank through alliances with Amazon and others. We are going to try and offer other products. We are working on that.

On the [ 20 million ] growth in retail commercial, about half of that is coming from Brazil and Mexico. I think actually more than half, [ 15 million ] is coming from Brazil and Mexico and [ 5 million ] from everywhere else. So these are numbers that I think we feel very comfortable we can get to. But last but not least, and this is maybe where we got it wrong before, is that for a structural change -- and by the way, the big number is not total customers. The big number is 19 million active customers, 19 million active customers. That's a big jump. Why do we feel comfortable? Because one transformation is helping us. We're going to have a single app across all our countries by the end of this year, which is exponentially better or should be than what we've had before. And again, customers will come because of the better UX. And at the end, that's something which we believe there's other levers to grow customers. As I said, insurance is not just a product you can offer to existing customers. It's also a way to acquire customers. On Mexico, maybe, Hector, do you want to address Mexico?

Yes. Sure, Sofie. Okay. First of all, I mean, you got it right. I mean...

Yes. Sorry, I forgot one very important thing. We did a lot of cleanup in our customers. That's one of the reasons we didn't get to that. So we had a lot of inactive customers, and we are very rigorous. We audit customers. So we did a big cleanup. Millions of customers disappeared. I mean, we decided they were not customers or we -- they didn't meet our bar, and these are millions of the last couple of years. That's one of the reasons that we didn't get to the target. We feel very comfortable that a lot of this cleanup across the group has been done. Yes.

That's [indiscernible]. Okay. So Mexico, first of all, the business basically is returning in pesos much more than 20%. And what we've been doing is getting closer to the best-in-class every single year. If you look at the 3 years, we've been closing the gap to the leaders in Mexico, okay? And that has been part of the reason that we've been so strict and this goes basically to capital allocation. The reason that we've been losing a little bit of market share in Mexico, first of all, we changed the mix a little bit, right, because we wanted to be cautious in the way we were seeing the Mexican economy. So -- and we changed the mix a little bit of that, but also because due to capital allocation, we basically concentrated on profitability. And that's why the reason that Mexico has been growing on the RoTE. But on the other side, -- we basically have been allocating capital in a much, I would say, a strict way than some of our competitors. And this basically goes to being cautious in that way.

Secondly, about, I mean, what we've seen in terms of organic opportunities in Mexico, Look, what we have the #3 bank in Mexico. We have almost 15% market share in that market. That basically gives us the scale and allow us to compete to launch products to do whatever we require in order to compete head-to-head in the market against the 2 big guys. On the other side, what is important is that we continue to enhance the deposit base that we have, and we have been able to do so. So if you take a look and compare what we've been doing in terms of decreasing the cost of funds in Mexico, which is a big difference that we have to both leaders in the market is exactly that. So much more transactional deposits, concentrate on that and closing the commercial gap that we had years ago. So it's basically being and having a much better franchise that we used to have. And at the end, this is what we have. We believe that if Mexico basically doesn't have a good year, we have a very good strong balance sheet in order to sustain that, very good liquidity, very good structure. And we want to maintain that. We don't want to go overboard and grow like crazy in credit cards or something like that. We already had a problem in credit cards in Mexico, if you remember back in 2012. We don't want to go back to that again. So we want to do it in the right way. Cost of risk, as you've seen, has decreased significantly over the past few years. So we maintain a lot of discipline in the way we manage the franchise. And that's what we've been doing it, and we plan to continue that way. We don't believe we need to acquire anything to be competitive in the market.

The EUR 2 billion soft currencies, how much comes from?

No, I think it's -- we have given you the details of Brazil. So it's less than half of that is Mexico.

Next question from Andrea.

One on M&A and one on Brazil. On the slides, you put a 15% return on invested capital as the hurdle for M&A. But you have regions with very different cost of equity. Why not just stick to what Ana said, i.e., returns well above share buyback and above local cost of equity instead as the hurdle for eventual future bolt-on acquisitions?

The second is on Brazil. With rates declining from 15% to 10%, can you explain how is Brazilian cost of risk meant to be stable at portfolio level? And at a 20% RoTE, Brazil would still be a drag to the group given the higher cost of equity versus the group. What do you need to take Brazil to 25%?

So -- but you answered your question on yes, I would go -- again, always back to -- I don't know, we didn't say 15% ROIC. I mean that was -- it has to be substantially above share buybacks. And again, when we did TSB, it was roughly 6 points, 5, 6 points. When we did Webster, it was the same 5, 6 points. If you take the cost of equity at [ 9 ] or [ 10 ], [ 15 ], it was 14%, 15% when we did TSB. So that would be, again, capital hierarchy, we're going to be super disciplined. That is going to be -- that's a firm commitment of this team and the Board that that's going to be something we're going to stick to, okay? So you can relax on that. The 15% -- who's put 15% -- did you put 15%...

This is because this is hard currency. Obviously, 15% in reais is not 15% for -- it's obvious.

It should not have -- I mean there was Okay. Is it clear what it is? Okay. Yes. Thank you. On Brazil, so I'll let Hector maybe cover that. In terms of the cost of risk stable in Brazil with rates coming down, I must say something is that when rates come down, it doesn't mean that customers who have not suffered are not going to continue suffering. So I think this is what we see happening in many cases. So Brazil's stable cost of risk, I think, is what we really think is going to happen. But Hector, you can cover that maybe in a bit more detail.

And as we take Brazil from [ 20 ] to -- Hector was just telling me before, Itaú is at [ 22 ], I believe. But yes, we should aim for higher than 20% down the road. Absolutely, yes. The issue in Brazil is that it's really important that we are able to compete in individuals. We are very good at CIB and affluent. There's space to grow. We are going to grow in commercial. We're going to reallocate capital to the better risk return segments. But there is an issue in terms of the cost base with competitors that are very competitive. Sorry for the repetition. So I do think that's something we have further upside than the 20% for sure. But for now, that's a number we feel comfortable with. If I ask Hector more, he's going to say, that's not possible. So to go above 20% sooner.

Sooner, but yes. I mean the idea is basically to go beyond 20%. I don't know if in 2 years, I'm going to be able to make it to be sure. But look, I mean, the first part was very good in your question. Let me tell you why. First of all, cost of risk has been stable in Brazil below 5%, okay? And we intend to do so and to maintain it. Why if rates are coming from 15% to 10%, the cost of risk doesn't get any better. And let me tell you why, and it's very important. It's because the moment that we see that the credit cycle becomes much better, I tend to go back into credit cards and personal loans in the upper market, which I'm not doing today. So I know perfectly well that credit cards cannot go beyond 11% to 12% cost of risk. If I go beyond there, it's because I'm giving them too much. But if my cost of risk in credit cards go below 10%, then I'm leaving money on the table. And that's exactly the right combination that I need to get in order to deliver the 20% or above 20% growth. And that's exactly how precise it needs to be.

So what we're playing with here is basically the change of the model, what Ana is telling you about basically changing the mix a little bit. When we see the market getting better, I'm going to get back into that market and cost of risk is not going to get better because of that. If I deliver better cost of risk in Brazil, it means I'm leaving money on the table. It's the same as in Mexico. So I understand very well the dynamics on the market, and we are playing it that way. It's very important to understand that we went a little -- I mean, we went a little bit -- remember, rates in Brazil went from 2% to 15% in less than 24 months. So some of the things and some of the markets that you were playing in personal loans, and you lost a little bit of money there. So we are basically recovering ourselves, covering that. And then as soon as the market gets better, we're going to get back into the game.

As Ana said, you cannot be a complete bank in Brazil if you don't play in the mass markets. And this is a huge opportunity. You're talking about a humongous market, 240 million customers -- sorry, 240 million Brazilians at average age of 32 years old, okay? That's much better than Europe. So it's a huge opportunity. And at the end, the market has become very competitive. So that's exactly what we're trying to do. So it's a change in the model, but we're also -- we need to change the cost to serve on how we manage mass markets, and that's exactly what we're doing. So that combination is the one that is going to take us. If we do things right, I really do believe we can go beyond the 20%. We need to. Actually, if you know her, she's going to push me towards that. But in the meantime, I mean changing the model, doing the things I need to do in order to be able to get better. '26 is still going to be tough, okay? But I believe that '27, '28 will get a lot better.

Ignacio from UBS. A couple of questions. First one on AI around the strategy, basically, if you can give us a bit of color in terms of internalization versus outsourcing third-party vendors strategy over time? And the second one on AI is, I mean, you seem to be incorporating some revenue enhancement coming from AI. So what makes you confident actually there's not going to be any margin compression coming through? And if so, what kind of vulnerability or what are the products or the segments where you see more vulnerability in terms of margins coming from AI? And one follow-up in terms of detail. Sorry if I missed it, actually, I don't think I've seen the currency expectations you have. So if you can share basically what kind of FX assumptions we're taking in the main countries. That one, forward rates.

Is that forward rates, is that enough of an answer? You're being very like [indiscernible] and [indiscernible]. Yes. Is that enough? Or do you want him to say more? Yes, the forwards. Whatever the forward curve is as of what they, at least tell him when.

So forward rates as of a couple of weeks ago?

Okay. On AI. So we have not begun to invest in AI yesterday or the day before. So this is really important. But let me just go back to why we think that Santander can be a winner in AI. I know there's a lot of talk about that. So first of all, we have everything that is needed to succeed in AI in the sense that it's all about data, and we have quality data for decades. I mean, huge amounts of quality data, which obviously is important. The top talent today, that's what they want. They want lots of data to work with. We have that. We have -- as of today, I would say, an organization that is able to embed AI in a lot of productivity and improvements. So we are putting Ricardo here. He's the Head of AI. He reports directly to me. He heads up data and AI. But it's actually in the businesses under Hector. So there's a data AI person in every single global business and countries coordinated by the global businesses.

The most difficult thing for us is the culture. That is the hardest thing for us to get right because at the end of the day, if we -- and when I say we, I mean me, Hector and Ana and Jose, if we build our own agents, which we are doing, by the way, this is what every single person in the organization needs to do, right? That's a starting point. That is not easy for people to understand and to spend time on. And that's one of the things we're trying to change. So there is a big cultural mind shift -- mindset, sorry, shift across the company. I think that is the biggest hurdle once we get over that, and that's why I think today or this year, we should be able to see, and that's why we gave some numbers. And we just had a Board yesterday and the Board members are asking for the same. How do I measure progress in AI? I'm saying we're going to do that as of this year, we're going to start measuring progress. To measure progress, you need to know where you're going. And to be honest, this -- what's going on in AI is changing every month, every 2 months. So again, we're going to start being much more specific on both what we call defensive and offensive. Of course, we're going to work with partners, but we're not going to give partners all the IP of Santander. That is not going to happen, right? So we've been very thoughtful about how we build alliances with strategic partners from the very big names to the not such big names to the start-ups. Through our fintech fund, we're making small investments in start-ups where we are working with them and helping them scale. And if these start-ups do well, we'll also be able to benefit from that upside. We've been doing that for 15 years. So there's a lot of things going on. And I would say that in the next 12 months, we should see big progress.

Again, data is crucial, right? And this is something which we have loads of. And as I said in my presentation, with AI, you can actually access that data without having to do anything very expensive or voting the ocean as you had to do before. There was a news yesterday where Anthropic plot is going to -- I hope you saw that one. Yes, they're going to translate COBOL and that had streamlined. Well, I call it translate, COBOL into something more user-friendly, I guess. And of course, every single bank in the world, including us, still has COBOL, right? So again, these kind of things should help us get better faster. I think AI is a huge opportunity for companies that are at scale like us that understand this. We've been working on technology for 11 years. I've been making this speech for 11 years. Nobody listened until 2 years ago, right? Why? Because a lot of the things you have to change are really boring. They're not going to give you a headline, you're not going to do M&A, but it works, right? It's aligning the culture. It's putting in place a global business. And I think today, we're ready to really take Santander to the next level and be a big winner in the AI world. When we say defensive and offensive, we're also going to do offense. Why not? We're very big in many markets, but we have 2 brands. So there's many things we can think of. And again, Openbank and Ebury, when I was saying -- I'm not saying LEGO-like, Raul, I'm the lawyers. But think about a LEGO, okay? I'm not -- think about a LEGO. I think that's...

Building blocks.

Yes, that's very boring. Building blocks. So we have Ebury, we have open bank. We have places where we can actually test these things without getting in the way of delivering all these boring banking and huge numbers that we need to do. So all you guys get all the capital generation. So I'm very optimistic that there's a huge opportunity for us in AI. Again, both defense and offense.

Mike's got a question here. Mike, please?

Sorry, we have Ricardo, if there's more questions on AI. Do you want to say something, Ricardo?

No.

He's got an AI question.

Another AI. I'm so happy in fashion finally.

Yes, I'm Mike [indiscernible] Newton. I do have a question on AI. And most people talk about it as being a massive game changer, whether for companies or industries. If I look at your efficiency ratio walk slide, it shows, I think, 100 basis points of the 900 from AI, which is good, but that doesn't scream game changer that screens kind of just another tool. So would investors be better thinking about AI at Santander and the banking industry in general as being just another helpful tool versus something that changes everything?

So I think we should not get ahead of ourselves. As I said, the biggest -- so my vision for Santander, not today, but in 2, 3 years is that we have lots of AI start-ups within the bank. Remember, we are highly regulated, and we're always going to have to have a person at least for now, controlling whatever happens and whatever goes to customers. And so this is really important. So we need to make sure that before we can say it's a game -- I think it is going to be a game changer, by the way. And for a very simple reason because you're going to end up each one of us, including our mothers and grandparents, if you're young enough and so on, they're going to have AI in here, right? And this is not going to take 10 years. It's going to take 4, 5 years. So maybe less. So we have to be ready for that, and we will be ready.

So to answer your question, yes, I do think it's going to be a game changer. It's going to happen tomorrow. I think it's going to take a bit longer because of, a, it takes a lot of work to change culture, organization, leadership mindset. But at some point, those that are not ready, we're not going to be -- not going to be good. So that's why we want to play defense and offense. And when I say offense, going back to the building blocks, I would not say let go again. Companies like Ebury, which is a fintech that does cross-border payments, one of the more -- or Openbank where we can play with another brand, not play but not put at risk the Santander franchise in any way, it gives us huge optionality, and that's what you want.

We've got a question from Britta there and then another question here in front, please.

I've got 2 or 3 questions, depending on which way you look at it. The first one is on the cost targets. Can you maybe talk a little bit about the trajectory of the cost reductions that you're seeing? You got to a decrease every year, but are there any bumps along the road? And then maybe also comment a little bit on what your plans are for the U.S. in terms of corporate structure and what the time line is to potentially merging the entities, be it Miami, SCUSA and then eventually also Webster. And then the other one is on Openbank. I personally was surprised to see the target of a 16% return from 10%, which is a very meaningful improvement. The back end of the slides points to the European business seeing the improvement mainly being revenue driven, if I see that correctly. And given that the fee growth is low single digit, I would presume that's going to be NII driven. So maybe you can talk a little bit about the interplay of volumes in this business versus also potential margin pressure from digital challenges versus the opportunity of funding cost upsides from expanding the deposit base? And maybe tell us what your deposit growth ambition in this business is.

In terms of the cost reduction trajectory, I guess, -- no bumps. No bumps. So it should be quite linear, right? Cost down every year in constant...

And this is ex M&A. M&A -- M&A will obviously create volatility. But ex M&A, it should be pretty...

The BAU reduction is -- this is something we have worked really hard. And believe me, it's not easy, but because people always give you great projections 3 years down the road, but everything goes up before and then it comes down. There is no hockey stick here, no. And M&A, well, I think -- do we have anything more on M&A? No. U.S.A., the idea is that it'd be a single bank, right? So we'll integrate Dallas, as Christiana was saying. So Dallas will be integrated. We have already filed all the approvals. We should get that in the next couple of months. That should happen this year. They will be collapsed, right? That will be funding benefits. That would be a significant part of the road to 18%, 3 basis -- 3, 4 -- 3 out of the total 3 percentage points will be with the integration of Dallas.

Webster, we both have to have shareholder meetings for that. That should be in the next months, but we don't have -- we're still in the process of approval. So I'd say by the end of this year. So we're estimating the closing of Webster sometime in Q3. That's what we're saying. So again, both of those should happen this year, correct? Okay. On Openbank. So yes, Europe is a big delta for Openbank and it's volumes and margins. It's both. So of the improvement in Openbank, about 50% of the total is Europe and 45% is -- 40%, 45% is U.S. and 10%, 15% is Lat Am. So the big delta is in Europe. Europe had a lot of one-offs this year. So when you see those low numbers, that includes nonrecurring items. Maybe somebody can remind me what they are, but there was a couple of things here in the U.K., there was Swiss francs or something in Poland.

Some fee regulation in Germany.

Germany -- and Germany. So that should not happen again, right? We don't expect that to happen. And that is -- so the underlying performance is much better than the -- what you're seeing as a headline. And again, a big delta will be in Europe. and will be both volumes and margins aside from the one-offs, not happening again. And then there's also one transformation going on, by the way, same as in retail. So consumer is part of the same program with common platforms across consumer and Openbank.

Question here. Sorry, Borja, I'll call you next.

Carlos Peixoto from CaixaBank. Two quick questions from my side, I guess. The first one would be on the cost to income. I know you already broke down more or less the EUR 4 billion to EUR 5 billion expected cost reduction. But I was wondering, given the changes in the disclosure that took place with this new reporting, whether there are any effects from lower legal charges that are now included in the cost line within those EUR 4 billion to EUR 5 billion of cost reduction.

The second question would be on the capital -- the excess capital distribution part. So many of your competitors have opted to distribute excess capital when it's built up at the end of each year or around that. So what drove the decision to allow for capital to accumulate up until 2028 and only distribute excess capital by then?

So on the excess capital, we have a lot of organic growth above 20%. That's going to be the priority. And depending on what opportunities there are, again, after the BAU distributions, we would return any excess over 13% in principle. We do not want to say that, that's going to happen across the plan, but it might happen. So we are absolutely open to that if there is excess capital, if mortgages continue to be below treasuries and we don't grow, we will have more excess capital. But as we've said, I believe that both Mexico -- we have a lot of organic growth, which is very different from our peers. And we are in markets that have growth, we can deliver.

And as I said before, our goal is to maximize growth in distributions over time. higher returns on a higher TNAV, very simple, higher amounts of TNAV, higher returns, growing distributions over time. That is the business model of Santander. That's why you should own Santander if you like that kind of a model. If you want to get everything back today, that's not Santander, right? But again, if we can offer you returns above 20%, as we're saying, in euros, right? Well, actually in euros, high teens, right? But close to 20%, we think that is a good value proposition at these levels. On the cost income and EUR 4 billion and EUR 5 billion in legal?

Yes. Well, I mean, once you move the cost to the cost line, it's all the same. There is -- in the plan, there is not a disproportionate cutting from the piece that has been moved from other results to cost. So for instance, Travaistas in Brazil. That's the cost of operating in Brazil is really personnel cost because it has to go through a judicial process is accounted for below the line, but it's part of personnel cost, and it needs to be managed as such. So the key point of moving those costs to the cost line is that now they are included in the cost to income. So now we are going to have management focus on the cutting of those costs. But in the plan, there is not a disproportionate saving coming from those costs.

Borja has got the next question here.

Borja Ramirez from Citi. I have 2 questions, please. Firstly, a follow-up on the AI. In my view, Santander could be -- seems to be better positioned not only because of the scale, but also because its globality. You are present across many markets and you could maybe learn what is happening in more advanced digital regions like U.S. or U.K. and apply it to other regions. So kind of to the signal of applying a building block or a LEGO from one region to another. That would be one question.

And then my second question would be more of a high level. So it's quite evident the revenue diversification and lower earnings volatility of Banco Santander and that could become more relevant in the current geopolitical environment. Yet if I -- this is my estimate, if I take the EPS 2028 post AT1 based on the plan and I calculate the implied price earnings, it seems to be slightly below the sector average. So I would like to ask -- I mean, this is a good opportunity, but I would like to ask what could the market be missing at this point?

So in terms of the AI, yes, there's a number of other advantages. For sure, learning from one market to the other is one. But I also think the trust and the brand in the age of machines having like branches and people talking to people, I think that will have huge value, and that's something we believe in, and we can make happen in a profitable way because of the network effect and because we don't just have individuals. So maybe you don't need as many branches, but our Work Cafe model is working incredibly well. There's going to be a lot of the creator economy that we can service. We have all these entrepreneurs. And so we think there's a lot of advantages to our scale, but also to our physical presence and our belief in people, talking to people and the brand.

In terms of EPS, '28 below the sector, to be honest, when we benchmark against our peers in '28, in terms of value creation, we're going to be near the top. So that is what we look at. We believe that we're going to be one of the most profitable banks among the top banks in the world. You can see that in our RoTE. Other banks are at our level. The question is, is it sustainable? And is it growing? And that is, I think, the question you need to ask yourself, is our profitability going to stop at 20%? We've said we think we can do better than that. Second, we have growth. So it's not just about profitability, it's about growth. And that's how you compound returns because you make more money, more distributions and a higher TNAV. And that's the difference, I think, with many of our peers, including U.S. banks that not all of them have the growth we have, right? We believe the U.S. is a great market, but obviously, Brazil, Mexico grow faster. So we will be towards the top of the profitability and EPS growth.

Last question there, maybe 2.

My name is Fernando Gil de Santivañes from Intesa Sanpaolo. A couple of questions, please. First one, regarding the assumptions on costs, other than the U.K. and the U.S. restructuring, are there any one-off restructuring included in the plan and where to what units?

Second one is on taxes assumption. I know it's minimal for you, but the banking tax in Spain in 2028, is it included in the EUR 20 billion forecast? And what is in the other provisions line litigation and other stuff, what should we be thinking about in terms of litigation costs and going on?

So yes, in the BAU, every year, we include restructuring costs, pretty big numbers. We just think that's BAU, and that's going to continue. So when we give you the numbers, we're including BAU restructuring in different countries. I mean, numbers close to EUR 1 billion a year roughly across the company. So again, in the BAU, what we don't include in the BAU is the M&A restructuring, okay? So M&A is out. That's why all the guidance we're giving you, all the guidance, except when we say including M&A, and that includes restructuring. Yes, in every single market. So you're not going to get it below the line on the BAU. Is that clear? No. Yes, there is...

He asked about [indiscernible] besides the 2...

No, I said on the BAU, there is a restructuring allowance every year, about EUR 1 billion in the BAU numbers that we're giving. The one thing that's not there is the M&A. The M&A is separate, right? And we will try -- that's an accounting issue. When you do the restructurings, that's when they go in, right? So we're going to try and do some this year already, but that's as far as we can go. But that's in the numbers that we gave you on the ROIC. On taxes and other provisions.

So no, there's -- we believe -- well, we -- the plan is to -- that the Spanish banking tax will stay. It's a very small amount. So -- and it goes in the tax line. So it's very, very small. But there's nothing extraordinary in the expected tax rate for the next 3 years, nothing extraordinary. And in the other results line, in the next 3 years, the average of the 3 years is below EUR 1.5 billion per year. So EUR 1 billion to EUR 1.5 billion to below EUR 1.5 billion per year.

Last question.

[indiscernible] from KBW. So I just wanted to ask a little bit more detail, if you can, about the split of the fee growth by country, if possible, and the cost savings by country, if possible, most analysts still model by country. And then a more high-level question around -- I think you mentioned that the tech transformation probably would continue post 2028. I know that it's an ongoing process, tech transformation, but when talking about moving everything to global platforms, how much do you think will be done by '27, '28 in terms of percentage of your -- like the work -- the bulk of the work you're doing?

So we run the company by global business. I hope that you can model by global business, but we're very happy to try and help you if you need some help on that. Raul, please. So again, the key thing here is the network businesses are the ones that are going to grow more in fees, and that is really important. We did that -- we said that already 3 years ago, 50% of the increase in fees over the plan should come from the network businesses. And I think that number is roughly the same. So again, CIB, wealth management and payments are the big uplift in fees. There is an increase in retail, commercial and consumer also, but those -- that is not going up as much.

If you look about if you want to break down by country, if you -- in Retail Commercial Banking, Spain, the U.K., Mexico and Brazil represent 72%. So 4 countries within Retail Commercial Banking represent 72% in Openbank, as I said before, 50% is Europe and 40% is the U.S. roughly, if you go to CIB, actually, Europe, which is Spain, Spain hub, Brazil and the U.S. is 72%. So it's not hard to model by global business. That's how we run the company. That's how we model the numbers. That's how we do the plans. And of course, within each global business, as I said, 3 or 4 countries are 70%, 80% of the total. So when people say we're such a diverse and everything, once you take Poland out, there's -- you need to understand 4, 5 countries and understand what it means between retail commercial, consumer and CIB, and that's it, simple. Again, I'm really keen that you tell me directly, write to me an e-mail, tell me what you need to model by global business. What are we missing? What information you need so you can do that? Because again, I think that tells a much better -- reflects much better what Santander is and the potential we have. Sorry to say that, but now if -- on fees, yes, maybe Raul can call you and give you some detail on that.

On tech and the deployment of the platforms, a huge country for us, which is Brazil, is still not on gravity. We will focus over the next 3 years on the countries that are not in the process of M&A. So even though, yes, in the U.S., and I think John and Christiana mentioned that, some of our platforms like payments, like the front end of Openbank will be ours from the start. We will wait on the others because we have to prioritize integration, and we have to prioritize customers being serviced in the right way. So we cannot do too many things at the same time. So that's the case for the U.S. It's also partly for the U.K. That doesn't mean that they will not be convergent to the platforms, but that means that you will have further upside beyond '28, especially in those countries where we're going to focus on the integrations. So Brazil, Mexico, Spain, Chile will be much more of a focus on the deployment this year and again, with a big focus on Brazil. Spain is very advanced already, I have to say. So Spain is very advanced on gravity and payments. So yes, there will be further upside from '29 as we deploy further platforms.

Yes. And as I said, '29 is going to be the first fully synergized in the U.S. So by the fourth quarter, we will have executed 100% of the synergies. But obviously, the first fully synergized year will be 2029.

Yes. So finally, I'm going to get to do the closing that as I said before, I think I've done a bit already, but I'm very disciplined, and I do what my Head of IR says. So I want to show you first -- great job, Raul. Not really. You've done a fantastic job. I'm not kidding. So this is a sum up, so you have it fresh in your minds. So we do have a unique business model. It combines unmatched global and in-market scale in retail consumer, customer focus and diversification across Europe and Americas. When combined with our 3 core pillars, we are convinced this will deliver consistently for our shareholders. We aim to be the #1 bank by number of customers in our footprint, going to above 210 million. We are changing the model in a structural way and going to global platforms. We have done a lot of the groundwork, as we have explained today on the business and operating model alignments, which is, again, what we call the boring banking, but incredibly important part of being able to deploy this common tech.

We will continue to leverage our network businesses, CIB, Wealth Management and payments. Together with a continuing focus and discipline in capital allocation, continued investments in data and AI, the integration of the bolt-on acquisitions will drive mid-single-digit growth in revenue, double digit, including M&A with lower cost. Jose has explained in more detail '26, '27, '28. '26 will be a transition year. What's important is we are setting a new standard for profitable growth and value creation. Just going over the targets again, we completed the sale of Poland in Q1. We'll complete TSB in the second quarter and Webster in the second half of the year, hopefully in Q3.

We expect revenue to increase mid-single digit in constant euros, lower cost in constant euros, underlying profit above the EUR 14.1 billion and CET1 ratio close to the upper end of our operating range. For '27, we expect revenue growing double digit, positive operational leverage and profit increase in the mid-teens and CET1 being above 13%. And for '28, more than EUR 20 billion in profit with a return on tangible equity above 20%. I will not go over again the operational targets, but these are being cascaded down to all the countries, countries and global businesses. And this is something which will be our operational North Star with, of course, very important deployment of Gravity in Brazil and Gravity 2.0, including our ON app to serve over 80% of retail and consumer by the end of '26. This means we aim to increase revenue mid-single digits and lower cost in absolute terms every year in constant euros and excluding the impact of M&A. I said already, including M&A, double-digit revenue and profit.

This takes us to the financial North Star, which you have seen a few times already, EPS growth set to grow well into the double digits from '26 to '28, maintaining the payout target of 50% with cash dividend payout increasing to 35% from '27 onwards. This means that cash dividend per share will more than double by '28 from '25 levels. Excess capital above 13% CET1 at the end of '28 will be distributed to shareholders. And again, our value creation will accelerate to the high teens. Importantly, our commitment is to continue to be a compounder, again, growing profits, growing distributions on a higher TNAV and doing this during time and continuing to improve profitability, as we have said before.

Our investment base is solid. In the following 3 years, we'll have more than 50 -- over EUR 50 billion in capital to fund both profitable growth and shareholder distributions. So again, these are the numbers that we have reviewed today. So thank you very much. I want to end by saying something which is really, really important. I mean, here you have in the front row, not all, but our key management team. We have an amazing group of people. They work really hard. Believe me, today is the interesting and fun day. There's been a huge amount of work, and I want to congratulate Hector, especially because he is the leader in a lot of what has been happening in the planning. These are very ambitious numbers. They're not going to be easy, but we are very confident that with the team we have today, we will continue to deliver. So thank you very much.

Good evening, everyone, and thank you for joining Santander's 2025 Results Presentation. We are delighted to be joined by Executive Chair, Ana Botin; our CEO, Hector Grisi; and our CFO, Jose Garcia Cantera. We are going to have a short presentation with Ana leading the way. Ana, it's my pleasure to hand to you.

Thank you, Raul, and good evening, everyone. Welcome to our '25 results presentation. So alongside our strong results today, we are announcing the acquisition of Webster Financial Corporation, an important strategic step for the group. So for that reason, today's presentation will follow a slightly different structure.

First, Hector will kick off with an overview of our results. Then I will explain the transaction in detail, including the strategic and financial rationale and implications, and I will then wrap up with some closing remarks and our outlook for 2028. Hector, over to you.

Thanks, Ana, and welcome to our full year results presentation. This was another record year for Santander with a customer base growing by 8 million new customers to 100 million. Our quarterly profit hit a new record. And with EUR 14.1 billion in '25, we have reported our best ever annual results driven by solid underlying growth across all our businesses. We achieved this by focusing on one transformation. making excellent progress towards a common operating model and simplifying our products. This has enabled us to improve our efficiency to almost 41% and to increase our RoTE post AT1 to 16.3%.

We have further strengthened our balance sheet, ending the year at all-time high CET1 ratio of 13.5%, reflecting our ability to generate capital organically. And finally, we once again delivered strong shareholder value creation with TNAV plus dividend per share growing by 14%. Our profits are up 12% year-over-year and ex Argentina up 15% year-on-year. We delivered strong growth in our top line with revenue up 4% in constant euros, supported by customer activity across all our businesses. Fee income is up 9% in constant euros, supported by significant growth in customers and the network benefits we're capturing through our global businesses.

Expenses grew well below revenue, down 1% in absolute terms, showcasing the positive effects of our transformation, and we delivered record net operating income of almost EUR 37 billion. Our prudent approach to risk is also evident in our cost of risk, which ended the year at 1.15%, in line with our guidance for '25. The combination of our global businesses with geographical diversification continues to drive profitable and resilient growth. CIB, Wealth and Payments delivered strong revenue growth underpinned by solid fee increases driven by network effects and enhanced capabilities.

At the same time, while higher interest rates benefit our retail franchises in Europe, other parts of the group performed better with lower rates. Our consumer business is a great example of this with NII up 5% year-on-year. In addition, our strong customer focus and product track record in active balance sheet management explained the resilient group NII performance, which, excluding Argentina, grew 3% year-on-year.

At the same time, we are beginning to see the benefits of our global platforms. Our global and diversified model allows us to both improve customer experience and efficiency and the ability to allocate capital in a dynamic way across global businesses and geographies, something very few can replicate. Combined with our capital discipline and focus on profitability, this is driving higher RoTE with the group and most of our global businesses above the targets we set for '25. This is despite adverse macro on a net basis compared to our base scenario.

Our consistent execution has driven positive operating leverage. The key driver of this was one transformation driven by simplification and automation, which resulted in 265 basis points of efficiencies followed by our global businesses, which contributed 108 basis points and our global tech capabilities with another 87 basis points. And there is still much more to come. We see further upside as we roll out common operating model and tech platforms across retail and consumer, while we also capture network effects across our global businesses, particularly on wealth and insurance, CIB and payments.

And very importantly, all this is something that is entirely under our control. In retail, One Transformation improved our operating leverage by combining the deployment of our global platforms with a strong local execution and network benefits. We grew active customers by around 2%, while reducing our cost to serve by around 4%, closing '25 with a 39% cost-to-income ratio and almost 80% post AT1 RoTE, exceeding the objectives we set for the year. This performance reflects progress on the transformation of both the operating and the business models in parallel and the beginning of tech platform deployment.

First, we are rolling out common business models across the countries through our global businesses. Second, we are moving towards common operating models by simplifying products and customer journeys. And third, we are making good progress on automation through our global platforms with Gravity and One app now deployed across green markets. As a result, retail profit grew 9% year-on-year with cost declining in real terms. In consumer, we made progress in the transformation by the scaling of Openbank as our global consumer platform.

We are seeing a strong growth in our digital bank across key markets, including the U.S., Mexico and Germany, attracting strong customer and deposit inflows and supporting our deposit gathering strategy to lower funding cost. At the same time, we continue to spend and consolidate partnerships, offering global best-in-class embedded finance solutions with leading platforms and OEMs.

TNAV continued to scale through new strategic partnerships, including Amazon and Apple, reaching more than 2 million customers and expanding installment and co-branded solutions across Europe. Finally, a major milestone in our transformation was the integration of Santander Consumer Finance and Open Banking Europe into a single legal entity under the Openbank brand, simplifying our structure and enabling a more consistent and seamless experience for our customers and partners.

As a result, Consumer delivered a strong financial performance in '25 with profit growing 8% year-on-year, supported by solid NII growth and improved cost of risk. Across wealth, CIB and payments, we are driving double-digit fee growth through the network effects and global platforms. In CIB, we are focused on our markets where we have invested to build a world-class franchise to better serve corporate and institutional clients across all the footprint.

These investments resulted in another record year in revenue with high single-digit fee growth while maintaining our low risk profile. We are building the best wealth and insurance manager across Europe and the Americas, supported by our leading global private banking platform and the best-in-class products. Wealth profit was up 27% in '25 on the back of strong commercial activity and double-digit fee growth. Looking ahead, insurance is one of the biggest upside for fees in the group.

In payments, we hold a unique position as we operate on both sides of the value chain. We're capturing scale and seizing a growing opportunity through our global platforms, principally as an enabler to group platforms, but increasingly also in the open markets. In '25, payments volume was up 9% and PagoNxt EBITDA margin closed above 34%. Looking ahead, CIB, wealth and payments will remain a key growth engine and key drivers of fee growth for the group.

Our strong operational and financial performance is driving higher profitability and double-digit value creation. Post AT1 RoTE reached 16.3%, up nearly 1 percentage point year-on-year, reflecting our disciplined approach to capital allocation. Pre-AT1, we are above our original target of 17% RoTE set at the last Investor Day. Earnings per share rose 17%, supported by solid profit generation and lower share count following the buybacks. As a result, TNAV plus cash dividend per share grew by 14%.

We maintain our upgraded target to distribute at least EUR 10 billion to our shareholders through share buybacks for '25 and '26, subject to the regulatory approvals. The Board approved a new buyback program of up to EUR 5 billion, including EUR 3.2 billion generated from the sale of Poland and EUR 1.8 billion against the second half '25 results. As the ECB has already granted the corresponding approval, the program will begin tomorrow.

Moving on to capital. Over the past few years, we focused on improving capital productivity and accelerating organic capital generation. Our fully loaded CET1 ratio increased 70 basis points in '25 to 13.5%, well above our 12, 13 target, supported by record organic capital generation after investing in profitable growth, remunerating our shareholders and absorbing regulatory impacts. At the beginning of January, we completed the disposal of Santander Polska at 2.2 price to tangible book, generating around 95 basis points of capital. This excess capital has been deployed with discipline in line with our capital hierarchy.

First, we used half of it to accelerate the delivery of our share buybacks within our target of at least EUR 10 billion for '25, '26. Second, we deployed some of our excess capital into the acquisition of TSB, which will improve our U.K. RoTE to 16% by 2028. Given our improving profitability and strong momentum, our excess capital is likely to build further in '26, which brings us to the bolt-on acquisition of Webster. Ana, over to you.

Thank you very much, Hector. And before I turn to Webster, I would like to spend a couple of minutes on where Santander U.S. is today. In a nutshell, Santander U.S. has made huge progress, and you can see that in the numbers into building a sustainable and more profitable model every year in an organic path.

So let me just give you the highlights, but let me start by saying that over the last 3 years, actually '23 to '25, profits have grown by over 30% and that the 1.7 PAT in the U.S. gets us to the 15% adjusted RoTE that we guided in Investor Day. Very importantly, it has been one of the top countries in value creation for Santander shareholders over the last 5 years. Actually, a top 3 geography.

So in consumer, Openbank has continued to scale very, very fast, reaching around EUR 5 billion in deposits, over 200,000 customers and reducing our deposit funding cost. In commercial, we are a top 10 multifamily lender, underscoring our very strong position in this U.S. asset class.

And our strategic investments in CIB, you've seen that again in the results with a business that is delivering a return on tangible equity of 18%, driven by revenue growth, but very substantial growth in fees and very disciplined capital allocation. We also remain the market leader in wealth for LatAm, high net worth offshore. We'll continue to leverage the group's global network to build further scale in this business.

So the acquisition of Webster is going to accelerate this transformation that, as you have seen in the numbers, is ongoing and doing well. But the goal now is to be best-in-class in terms of both profitability and efficiency relative to the major U.S. banks. This is a key focus, I would say, the key focus in all our core markets, be one of the most profitable banks.

And let me give you the highlights. We're going to pay EUR 12.2 billion for Webster. That is a P/E of 6.8x, including the synergies that we have identified and feel very comfortable with in our due diligence. We expect to deliver close to EUR 800 million pretax cost synergies. That's circa 19% of the combined cost base. As a result, Santander U.S. RoTE would increase to 18% and will deliver 7% to 8% EPS accretion in '28.

Santander Group CET1 ratio is expected to be at 12.8% at closing, close to the 13% target this year. And we will keep and we maintain and reiterate our commitment to do at least EUR 10 billion share buybacks while remaining close at the top end -- to the top end of our 12% to 13% target -- operating target for CET1. Very importantly, this transaction is fully aligned with our capital hierarchy, and it is expected to deliver circa 15% return on invested capital that is almost 6 percentage points above returns today from share buybacks.

So moving to some of the key details of the transaction. Webster is a bolt-on for Santander. As we've said, this is the kind of M&A we'll do in our core markets. The asset base represents just 4% of group loans. The headline price translates into 10x '28 consensus P/E or 2x Q4 '25 tangible book value. As a reminder, we sold Poland at 2.2x price to tangible, and we have reinvested the proceeds to improve our deposit franchises in both the U.K. and the U.S. We will pay 65% of the price in cash using our excess capital optionality and the remaining 35% we will pay for in Santander shares.

We expect to complete the transaction before year-end '26 with a joint integration team led by John Ciulla, who is the current Chairman and CEO of Webster and will become the CEO of Santander Bank NA with Christiana Riley remaining Country Head of Santander U.S. The strategic rationale and the financial rationales are both very compelling. The transaction scales our U.S. Northeast franchise to the 10th largest retail and commercial bank in the United States by assets and importantly, the fifth largest by deposits in our Northeast footprint. This is going to bring benefits from economies of scale and a better competitive positioning. Second and importantly, our businesses are highly complementary.

Webster has a lower cost of deposits, loan-to-deposit ratio of 81%. Combining this with our nationwide and top consumer franchise with what Webster brings a very strong commercial franchise in its footprint and funding advantage, this will be a key driver for continuous growth opportunities and synergies, both on cost and revenues. In the due diligence, we've identified approximately EUR 800 million of cost synergies. This is supported and will be supported and led by a management team with a proven integration track record and, of course, complemented by Santander's own experienced tech people and teams.

Together with One Transformation, our current organic growth plans in the U.S. and transformation and open bank Webster enhances significantly our U.S. RoTE to 18% by 2028. This is best-in-class amongst other U.S. regional banks and actually among the top 25 banks, one of the best. It's a highly accretive acquisition for our shareholders. We will deliver 7% to 8% EPS accretion and a return on invested capital of close to 15%, while allowing us to deliver on our at least EUR 10 billion buyback commitment.

As Hector has mentioned and as part of that commitment, we will begin our EUR 5 billion share buyback. So Webster is a compelling combination with Santander. It's a great opportunity for Santander to strengthen and become much better in our U.S. deposit and lending franchises. Webster operates across consumer, commercial, health care, financial services with a strong presence in affluent markets and middle market lending.

It has a leading health service account franchise, which is -- and provides a stable low-cost funding base. While not as large as other peers, Webster has shown a strong track record of growth, profitable growth and M&A integration. Its latest results show a best-in-class financial performance with close to 17% RoTE, a 46% efficiency ratio and a 0.4% cost of risk. On a combined basis, this will raise our deposit share to 8%. That is top 5 position in the Northeast, an economic area that is as large as the U.K. economy. We will be a top 10 national retail and commercial bank by assets in the U.S.

And again, our U.S. deposit franchise together with Webster becomes more stable and diversified. Importantly, the combined banks will have a significantly improved loan-to-deposit ratio around 100%. So a bit more detail for those of you that don't know Webster. You can see here a detail of both loans and deposits breakdown. They have -- Webster has a much greater focus on C&I, which we don't. This results in a much more balanced loan mix and overall portfolio. It brings a lower risk profile, reducing our cost of risk around 1.3% which compares with 1.6% for San U.S. stand-alone.

Importantly, the deposit base, the funding mix brings sticky low-cost deposits with our cost of deposits -- combined cost of deposits falling from 2.7% to 2.4%. And finally, again, I said this already, the combined franchise will help close the commercial funding gap to close to 100% loan to deposit. So I want to stress that a key part of this transaction for us is the team. We value very highly the team that John Ciulla leads together with Luis.

They have done a great job over the last few years, not just in integration, but in making their bank one of the most efficient and most profitable among regional banks. They have a proven track record in M&A. And John, current Chairman and CEO of Webster will become CEO of Santander Bank NA, including Webster reporting to the SHUSA Board.

Luis Massiani, currently President and COO of Webster will become the Head of Integration, Lead of Integration. He will report directly both to John Ciulla as CEO of the banks or the new bank and Christiana Riley as President and CEO of Santander U.S. and our SHUSA Holding. Christiana Riley, again, remains Country Head and CEO -- President and CEO of Santander U.S. And they have -- all of them will have incentives aligned with the financial performance of the combination and the creation of long-term shareholder value.

A combination that, as I've mentioned, will have both revenue and efficiency benefits, combining investment efforts synergizing operational overlaps and bringing Webster onto our open bank front-end platform for consumers, whilst we will take Santander Bank Commercial Bank onto the Webster platform. Through the integration, we have identified close to EUR 800 million in cost synergies fully phased in by the end of '28.

Headquarters efficiencies and branch optimization will reduce EUR 480 million in cost. Technology and operations will reduce EUR 280 million in cost and other initiatives, EUR 35 million in cost. In addition to these synergies, one transformation will reduce over the same time period, around EUR 200 million in cost, landing at a combined cost base of around EUR 3.5 billion. We have identified also EUR 100 million from balance sheet optimization with additional upside potential. And very importantly, we have not included joint revenue opportunities, which clearly will be there.

Restructuring costs are expected to be around onetime cost synergies, along with the TSB integration costs will be largely booked in 2026 against the gain on sale from Poland. Overall, this evolution will translate into positive jaws that will push the combined efficiency ratio below 40% by '28. The transaction accelerates our 3-year organic plan. As I've mentioned at the beginning, it was a very ambitious plan.

Now with Webster, we aim and our target is to lift U.S. RoTE from around 10% today to 18% on a post AT1 basis by '28. This level of profitability will allow us to grow our business organically by investing in our customers, our technology and our people. Reiterate again that on a stand-alone basis, San U.S is already on track to improve returns in a very significant way, driven first by the full integration of Auto and Consumer Banking. This is expected to deliver cost and funding benefits and result in a 3 percentage point improvement. Second, growth in capital-light business, including CIB, which would add another 2 percentage point uplift to returns.

Based on consensus forecast and our identified synergies, the combined San U.S. franchise will be top 3 in cost efficiency among the top 25 U.S. banks and in the top 5 by profitability by '28 based on current analyst forecast. I want to reiterate, as I said at the beginning, that being one of the most profitable banks in our core geographies is a key target for Santander and the Webster acquisition gets us there.

Webster provides this final step change that we needed in the U.S. by lifting the returns by the 3 percentage points or higher. Again, the combined U.S. business expected to deliver RoTE of 18% by '28, which is close to or at best-in-class among U.S. banks. During 2026, organic capital generation, net of distributions, regulatory headwinds and other factors is expected to be circa 70 basis points. At the time of expected closing for this deal, our CET ratio is expected to be close to 13% in the range of 12.8% to 13%, again, very close to the upper end of our operating range.

The acquisition of Webster is expected to have an impact of around 140 basis points on Santander Group CET1 ratio. And in '27, we expect to be back above 13% CET1, creating further capital optionality for additional shareholder remuneration subject to our capital hierarchy. Importantly, as this is a bolt-on acquisition, we're able to reiterate our capital return commitments to remunerate shareholders with a 50% ordinary payout and at least EUR 10 billion share buybacks for '25 and '26 earnings.

In summary, we're using excess capital in line with our capital hierarchy for a bolt-on acquisition that represents only 4% of group assets, which delivers a cash-on-cash close to 15% ROIC with Webster offering a perfect fit for Santander U.S. and a combination that will be very competitive in its footprint. Second, together with the improvements that are already in plan from One Transformation will make San U.S. more efficient, more profitable, reaching 18% RoTE in '28 and very importantly, improving the hard currency mix in terms of loans to 80% of total for the group. 80% of all the loans for Santander Group will be in hard currency.

And third, that brings a strong management team with an excellent track record on successful integration and a culture and values similar to Santander. We have a culture like Webster of being a community bank close to our customers in every geography in which we operate. So let me just add to this that this transaction, together with TSB will accelerate our journey to be the most profitable bank in all our core markets. U.S. is among the most attractive banking markets globally with very attractive risk returns, a growth economy and favorable regulatory environment.

As is the case of the U.K., the U.S. has very strong connectivity with the rest of our global franchises, and there will be additional network benefits across our global businesses and geographies. And as I just said, increases the share of hard currency earnings, which is a good -- which is overall a good thing for us and for value creation for our shareholders. So looking forward, what is the outlook?

Well, this transaction, together with a very significant progress you've seen in our strategy, in our numbers, you've seen the '25 results. We're headlining some of our key targets. Obviously, we'll give you more detail at Investor Day. Following the acquisition of Webster, the integration of TSB, Santander will be at scale in all its core markets with near to a best-in-class profitability.

And as a result of this and based on the current macro outlook, we expect to achieve an RoTE in excess of 20% in '28. As we have indicated in previous results, '26 is a transition year, I would say, also an excellent year from a BAU, but also capital reallocation point of view because we are selling Poland in Q1 '26, we just closed that. We expect to close TSB in Q2 of '26. We expect to close Webster of '26 and continue running our legacy and new platforms in parallel for a few months as we migrate our global platforms in both the U.K. and the U.S.

Excluding these corporate transactions in '26, so ex M&A in '26, this is what we're expecting. First, revenue to grow mid-single digit in constant euros, double digit, including M&A in '26, with fee growth higher and surpassing net interest income growth, cost to be lower in absolute terms in constant euros, cost of risk broadly stable. attributable profit to increase, so a higher profit in '26 over '25. Again, this is ex M&A and a CET1 to be close to 13%, somewhere between 12.8% and 13% by the end of '26.

Looking ahead further into '27, our guidance right now is revenue to grow double digits, net profit to grow mid-teens and CET1 to be over 13%. So exciting times ahead for Santander. We have a lot more detail for you at our Investor Day and obviously, more detailed targets. We will detail how we will execute on the strategy, and I hope to see you all there at Investor Day on the 25th of February.

Good morning, and welcome to Santander's Third Quarter 2025 Results Presentation. For the call today, we will be joined by Hector Grisi, our Group CEO; and Jose Garcia-Cantera, our CFO. Hector, over to you.

Thanks, Raul. Good morning and everyone, and thank you for joining Santander results presentation. We will follow the usual structure. First, I will go over our results with a special focus on the performance of our global businesses. Then Jose, our CFO, will then provide a detailed view of the financials, and then I will wrap up with some final remarks before we open for Q&A.

Before we begin, a quick note that all figures in the presentation continue to include Poland until the disposal is completed.

Q3 was another record quarter, reflecting the strength of our strategy and the resilience of our business model in a more demanding environment. Our quarterly profit hit a new record at EUR 3.5 billion, making 9 months '25 the best 9-month period ever, driven by strong revenue growth across the global businesses and our solid customer base, which increased by 7 million year-on-year to 178 million as we enhance customer experience by leveraging our global platforms.

We achieved this while we continue to invest for the future through ONE Transformation, making excellent progress towards a simpler and more integrated model. This has enabled further efficiency gains and a 70 basis points increase to our RoTE to 16.1%. Our balance sheet remains also solid with a strong capital ratio, which ended the quarter with an all-time high of 13.1% and a robust credit quality. All of this drove a strong shareholder value creation with TNAV plus cash dividend per share growing 15% despite some currency headwinds.

We are approaching the end of our '23-'25 strategic plan well on track to meet our targets. Thanks to our profitability and our disciplined capital allocation, which is further improving profitability. Remember that earlier this year, we raised our RoTE target to around 16.5% post-AT1, equivalent to above 17% pre-AT1 from our original Investor Day target range of 15% to 17%. At the same time, we're already operating with a CET1 ratio above 13%, clearly exceeding our original post-Basel III target of above 12% with 88% of RWAs generating returns above our cost of equity.

Finally, after our latest inorganic transactions, we decided to accelerate the execution of our EUR 10 billion share buybacks and upgrade our target, so we announced that we expect to distribute at least EUR 10 billion to our shareholders through share buybacks for '25-'26, subject to regulatory approvals.

Let's go now into our income statement. Our P&L remained very solid with profit growing double digits year-on-year, once again reflecting the strength and diversification of our model. We delivered strong top line growth with revenue up 4% in constant euros, supported by NII, which increased 2%, but especially by a new record quarter in fees, up 8%, supported by significant customer growth and the network benefits that we are capturing through our global businesses. At the same time, expenses grew below revenue, down 1% in euros, in line with our target, showing the positive effects from our transformation. This performance translated into solid growth in net operating income, again demonstrating the sustainability of our results.

Our prudent approach to risk is also evident in our robust credit quality trends with a cost of risk that is consistently improving year-on-year. Overall, as we have shown over time, our results are sustainable and less volatile than peers even in a more challenging environment.

We are ahead of our plan executing our transformation, boosting our operational leverage and structurally improving both revenue and cost. Simplification, automation and active spread management have already delivered 259 basis points of efficiencies. Our global businesses added 101 basis points and our in-house and global tech capabilities, another 88 basis points, exceeding the level expected by the end of '25. And there is still more to come. We see further upside as we stay focused on rolling out common platforms across Retail and Consumer while also capturing additional efficiencies from Wealth, CIB and Payments by leveraging our global network. And all this is something that is entirely under our control.

All our global businesses delivered strong profit growth while we improved the group's profitability. Customer activity and diversification continue to drive revenue growth. In a less favorable interest rate environment, our CIB, Wealth and Payments businesses, which are more fee driven, are seeing increased revenue with fees up 7%, 19% and 16%, respectively. At the same time, some of our franchises and emerging markets performed better with lower rates. Our Consumer business is a great example with NII up 6% year-on-year. In addition, our customer focus and solid track record in active balance sheet management explained the resilient NII performance in Retail, which excluding Argentina, grew 1% year-on-year.

At the same time, we're extracting the potential from our scale. Scale gives us efficiency and also the flexibility to allocate capital quickly, something very few others can replicate. Combined with our strict capital discipline and focus on profitability, this is driving higher RoTE which most of our businesses already above the targets we set for '25. It is this unique combination of customer focus, scale and diversification that enables us to deliver strong and recurring results, putting us in an excellent position to navigate the challenges ahead.

In Retail, we are transforming the way we operate to become a digital bank with branches, combining cutting-edge technology with the expertise and proximity of our teams. We continue to digitalize and enhance customer journeys, driving double-digit growth in digital sales.

A key milestone was the launch of the new app in Brazil that introduces conversational capabilities that we are now preparing its rollout across more countries. In cost, we are making the most of AI to speed up simplification and automation, which is reducing manual activities and allowing teams to focus more on customer interactions and value-added activities. As a result, dedication of teams to noncommercial activities has dropped by 17% during the last 12 months. We are progressing in the rollout of our global platform, Gravity. Our back-end technology is fully implemented in Spain and Chile, and we expect to deploy it in Mexico in Q4.

Retail profit grew high single-digit year-on-year, driven by sound revenue performances across most countries. Costs declined in real terms and credit quality remained solid. In a more demanding environment, NII grew year-on-year, excluding Argentina, reflecting our focus on profitability and the disciplined margin management and fees rose 5%, supported by higher customer activity, our ongoing digitalization and improved customer journeys. We will keep scaling our transformation to boost efficiency and contribute to group's growth. By improving customer experience and simplifying operations, we expect to continue growing our customer base while reducing cost in euros.

In Consumer, we continue to advance in our priority to become the preferred choice for our partners and customers by delivering the best solutions and strengthening our cost competitive advantage across our footprint. Deploying global platforms is key to scale our business and to reduce cost to serve. We recently announced the integration of Santander Consumer Finance and Openbank in Europe, a natural step that simplifies our business, reduce cost and improve our product offering. We keep enhancing our value proposition and Openbank is again a great example. In Germany, it now offers a new AI-powered investment broker. In the U.S. and Mexico, Openbank has attracted EUR 6.2 billion in deposits as part of our broader deposit gathering strategy.

We continue to expand and consolidate partnerships, offering global best-in-class solutions with top OEMs. Zinia continued to grow, reaching record volumes during Amazon Prime Days and introducing installment payments for Amazon customers in Spain.

Profit grew 6% year-on-year in a challenging context of weaker car registrations in Europe, driven by NII growth and solid cost of risk performance, especially in the U.S. We continue to prioritize profitability over volumes, lower funding costs and accelerating transformation while actively managing capital to maximize returns. We expect Consumer to be one of the drivers of the group's profit, supported by NII growth as the business benefits from lower rates and progresses in our strategy to lower funding cost, solid fee income performance as insurance penetration improves and further cost efficiencies as we accelerate our transformation.

In CIB, we are building a world-class business to better serve our corporate and institutional clients across our footprint while maintaining our low-risk profile. Number one, we continue to deepen our client relationships and strengthen our position in our core markets, leveraging our centers of expertise and expanded coverage. This is translating into market share gains in the U.S. as we achieve greater relevance in the investment banking space.

Number two, our enhanced capabilities are enabling us for significant opportunities across CIB, improving our cross-business value proposition and driving solid growth in our institutional franchise in Global Markets, where revenue rose 27% year-on-year. Even in a more challenging environment, CIB keeps on delivering solid results with profit up 10% year-on-year, supported by solid fee growth across business lines and exceptional performance of Global Markets early in the year.

All of this, while we maintain one of the best efficiency ratios in the sector and a RoTE of around 20%, reflecting our strict focus on profitability and capital discipline. We will build on the capabilities developed in recent years to drive revenue growth in CIB across the group, driven by stronger connectivity across countries, products and businesses.

In Wealth, we are building the best wealth and insurance manager in Europe and the Americas. Number one, in Private Banking, we remain focused on expanding our fee businesses and consolidating our global position through value-added solutions. We continue developing our new Global Family Office service, which after just 3 months of activity is bringing advisory services to our first clients in Spain who represent a total wealth of more than EUR 500 million.

Number two, in asset management, we keep reinforcing distribution and investment capabilities in alternatives and streamlining our liquid product platform.

Number three, in Insurance, we are focused in 2 new verticals: Life & Pensions with new products for senior customers in Brazil and annuities from Private Banking and affluent clients in Spain; and P&C, where we expanded our value offering to SMEs with new protection business products in collaborations with Getnet.

Number four, collaboration with other businesses is a major growth driver for Wealth. Collaboration revenues have been a strong growth lever with PB and CIB working hand-in-hand from tailored capital market structures for ultra-high net worth individuals to new joint opportunities.

In summary, all of this is supporting strong growth and high profitability levels. Profit rose 21% off the back of strong commercial activity and double-digit fee growth across the 3 businesses. Efficiency improved 1.3 percentage points year-on-year and RoTE is close to 70%, confirming wealth position as one of the most efficient and profitable businesses in the group.

Finally, Payments, where we hold a unique positions on both sides of the value chain. In merchant acquiring, we're expanding our global platform with a single API to serve all our customers across our footprint and is now live across our 5 countries in Latin America, reinforcing Getnet's positioning in the region.

PagoNxt Payments is leveraging the best proprietary technology to deliver account-to-account processing, FX, fraud detection and other value-added services. Volumes processed by our Payments Hub were more than 5x higher than last year.

In Cards, where we are amongst the largest issuers globally with 107 million active cards, we continue to expand the business and deliver best-in-class products. As part of our debit to credit strategy to promote the benefits of using credit cards, this quarter, we launched Pay Smarter in 5 of our countries. We also kept strengthening the integration between Cards and Merchant Solutions, expanding our bundling proposition with Getnet in Brazil, which now joins Spain, Chile, Portugal and Argentina.

Payments delivered a strong quarter, resulting in double-digit revenue increase year-on-year, both in Cards and PagoNxt with controlled cost, driving profit growth of more than 60% and improving PagoNxt EBITDA margin to 32%, already above our '25 Investor Day target with Getnet being one of the best among peers.

Our strong operational and financial performance is driving higher profitability and double-digit value creation for the 10th consecutive quarter. Post-AT1 RoTE reached 16.1%, up nearly 1 percentage point year-on-year, reflecting our disciplined capital allocation strategy. Earnings per share rose 16%, supported by solid profit generation and fewer shares following buybacks. As a result, TNAV plus cash dividend per share increased 15%.

We maintain our upgraded target to distribute at least EUR 10 billion to our own shareholders through share buybacks for '25 and '26, subject to regulatory approvals. Since '21 and including the program that is underway, we will have repurchased more than 15% of our outstanding shares, providing a return on investment of approximately 20% to our shareholders.

I will leave you now with Jose, who will go into our financial performance in more detail.

Thank you, Hector, and good morning, everyone. I will go into more detail on the group's P&L and capital performance. Let me first remind you that as we always do, we are presenting growth rates in both current and constant euros. The difference was around 5 percentage points as of September, mainly due to the depreciation of the Brazilian real and the Mexican peso towards the end of last year.

As the CEO explained, we are yet again reporting record results this quarter for the sixth consecutive quarter. Revenue grew 4% with a good cost performance in line with our objectives for 2025. Cost of risk improved in the quarter, supported by robust labor markets and our prudent risk management. There are several positives and negatives in the other results line, but the concepts that explain most of the significant drop in this line year-on-year are the write-downs in PagoNxt in the second quarter of last year and the temporary levy on revenue earned in Spain, which this year is being recorded under the tax line. For the last 2 years, we have reported a continuous upward trend in profit, which grew 3% this quarter in constant euros on the back of a resilient NII performance, cost under control and lower loan loss provisions.

Total revenue increased 4% to EUR 46 billion, on track to meet our 2025 target, even with less favorable interest rates than initially anticipated. This growth was underpinned by customer activity and more than 7 million new customers. All global businesses contributed to revenue growth. Payments accelerated with revenue up 19% as both PagoNxt and Cards delivered double-digit growth in NII and fees, driven by higher activity. Wealth also maintained the positive trends from the first half with revenue rising 13%, supported by record assets under management and a strong commercial momentum. CIB grew 6% year-on-year, driven especially by Global Markets and our growth initiatives in the U.S. Consumer also had a strong performance, supported by strong net interest income growth across most of our footprint. And finally, in Retail, revenue rose even in a less favorable interest rate context, thanks to our active margin management and our increased focus on fees.

The group's net interest income increased 3% year-on-year, excluding Argentina. Although the majority of group's NII comes from Retail and Consumer, this quarter, most of our businesses contributed to the overall growth year-on-year, which was supported by active asset and liability pricing management. This is most evident in Consumer, both in Europe and the U.S. with improving loan yields and a funding structure with a larger share of customer deposits. Also in Retail, especially in the U.K., Chile and Mexico.

Strong activity in Cards, particularly in Brazil, higher volumes and lower funding costs related to market activities and CIB on our efforts to adapt the sensitivity of our balance sheet to protect NII on the new cycle of interest rates. A good example of this is Retail, where net interest income increased across most countries in a less favorable context of interest rates.

In the quarter, net interest income was impacted by the Argentine peso. Excluding Argentina, NII was flat and net interest margin declined only 4 basis points for similar reasons I just mentioned. This performance is in line with our guidance of NII going slightly up in 2025 in constant euros, excluding Argentina and slightly down in current euros. We believe net interest income is approaching its trough as we move into a more balanced environment with rates in Brazil expected to ease and lower rates in Europe likely to support consumer volumes and funding costs.

Net fee income achieved yet another record period as the number of active customers continue to increase and our transformation promotes connectivity across the group, deploys high value-added products and services and delivers the best customer experience. Fees grew high single-digits, above our target for the year and well above inflation and cost. This was supported by positive activity trends, customer growth and a product mix that is shifting towards more value-added products and services.

This shift is evident across all global businesses. Retail fees rose 5%, increases across most of our footprint. CIB increased 7%, up from record levels last year, boosted by an excellent first quarter and year-on-year growth across all business lines, particularly in Global Banking in the U.S. Wealth maintained strong momentum across business lines, backed by record assets under management. Double-digit growth in Payments, both in PagoNxt and Cards, supported by higher activity levels.

As discussed in previous quarters, this year, Consumer is affected by new insurance regulation in Germany. Nevertheless, we saw a recovery this quarter, supported by our strategic focus on Insurance with rising penetration expected to translate into higher fee generation as activity accelerates. As we advance our transformation, enhancing customer experience and connectivity and continue to attract more customers, we expect a strong and sustainable fee performance.

ONE Transformation is key to understanding why we are improving profitability in most of our markets, leveraging the connectivity that our global businesses provide. The improvements are already very evident. Our costs dropped 1% year-on-year in current euros, which translates into better efficiency levels already amongst the best in the industry. In Retail and Consumer, which are the -- which are leading our transformation, costs are evolving very positively, down 1% in real terms, even with pressure on salaries in some countries and the upfront cost of rolling our global platforms. In CIB, Wealth and Payments, where we are investing, costs grew. However, they showed positive operating jaws with a double-digit fee increase, as I have just explained.

This excellent performance resulted in a 5% rise in net operating income from already high levels last year, and our efficiency ratio improved to 41.3%, the best we have reported in more than 15 years. Going forward, we expect sustainable improvements in operational leverage as we further implement the structural changes to our model, especially in Retail and Consumer, which represent 70% of our cost base.

The risk profile of our balance sheet remains low with robust credit quality across our footprint on the back of low unemployment and easing monetary policies in most countries. Loan loss provisions increased 5% year-on-year, reflecting the decision to reduce NPLs and also some deterioration in Brazil in the context of higher interest rates. Credit quality continued to improve year-on-year as reflected both in the NPL ratio and cost of risk. The NPL ratio was fairly stable at 2.92%. Remember that much of our NPL ratio -- NPL portfolio has collateral, guarantees and provisions that account for more than 80% of its total exposure.

Cost of risk improved year-on-year and quarter-on-quarter to 1.13% despite the management actions I just explained. In Retail, cost of risk improved year-on-year across all our main countries and was steady in the quarter. In Consumer, cost of risk also improved both year-on-year and quarter-on-quarter as the excellent trends in the U.S. continued in the third quarter, even with the usual seasonality. U.S. auto has demonstrated to be highly profitable and resilient business through multiple macroeconomic cycles. It continues to perform better than expected even after some normalization of the delinquency rate in line with our expectations with over 90-day delinquency at historically low levels, backed by strong labor markets and resilient used car values. Finally, our lending exposure to private markets is less than 1% of group's lending exposure. We anticipate a stable cost of risk going forward, supported by stable labor markets.

Moving on to capital. As you know, we have been working on improving our capital productivity and accelerating our capital generation for some time. Our CET1 ratio increased again to 13.1% and is now above the top end of our 12% to 13% operating range. This quarter, we generated 56 basis points of capital from attributable profit, which enabled us to accumulate capital after allocating some capital to profitable organic risk-weighted asset growth, mostly offset by asset rotation initiatives, compensating capital distribution charges for shareholder remuneration and AT1s and absorbing other charges, including some regulatory headwinds, which, as we discussed last quarter, this year will be lower than initially expected as some of them have been postponed to 2026 and some of the technical notes published by the EBA were more favorable than anticipated.

We continue to deploy capital to the most profitable opportunities and leverage our global asset desks, mobilization capabilities to maximize capital productivity. Our disciplined capital allocation delivered a new book RoRWA of 2.8% in the quarter, equivalent to a return on tangible equity of 22%, well above that of our back book.

Hector, back to you.

Thanks, Jose. In conclusion, these are great results. Good business dynamics and our business model supported solid revenue growth with fees rising high single digits while we reduced cost in euros. Cost of risk improved and remains in line with our target of around 1.15% at the end of the year. We grew the CET1 ratio again to 13.1%, exceeding the upper end of our operating range on the back of our strong capital generation, while we profitably grow our business organically and continue to reward our shareholders. Our RoTE improved and is on track to reach our target of around 16.5% in '25 and TNAV plus cash dividend per share keeps growing double digits.

In summary, very solid results even in a less favorable environment than we initially anticipated, which makes us confident that we will achieve all our '25 targets. We expect to maintain the good trends supported by our focus on profitable growth as we deepen in our transformation in a context of resilient labor markets. We are building a stronger and more connected Santander to track the full potential of our unique combination of customer focus, scale and diversification. This is exactly what makes us confident that we will keep on growing and creating long-term value across different economic cycles. And the best is yet to come.

Now we will be happy to take your questions. Thank you.

Thank you, Hector. Thank you, Jose. Could we go to the first question, please?

[Operator Instructions] We already have the first question from the line of Ignacio Ulargui from BNP.

I have 2 questions. I mean, looking to your RoTE target for the year of 16.5% has to be an acceleration into the fourth quarter to get to that level. What would be the main drivers for that? I mean, don't you feel revenue and NII has probably troughed this quarter, we should see a more decisive increase in the quarters to come? Or would be fees what drives that performance? I mean, linked to that, how should we think into 2026 on those lines?

I have -- the second question is a bit of a clarification looking to the credit quality in Brazil. There has been a small improvement in the quarter. Provisions have come down. How should we think about cost of risk? And I mean, there has been any kind of release of provisions that you took in 2Q for the extraordinary top-up that you did? Or it's just underlying improvement of credit quality and provisioning?

Thank you, Ignacio. First of all, let me discuss a little bit about the RoTE of the 16.5% of CET1 target. First of all, I mean, as you have seen, in the first 9 months, we have delivered a record profit with a RoTE of 16.1%. But if you see just in Q3, the underlying RoTE is well above the 16.5%, okay? So it's very important that you see that.

Second, we expect a really strong performance in Q4, basically driven by a number of factors. You can see, first of all, we also have seasonality higher fees. We have an increased momentum from the execution of ONE Transformation, and we're reiterating the guidance of around EUR 62 billion in revenue for '25. We see lower cost and the cost of risk around 1.15% that we have discussed and other results of around EUR 3 billion. So I do believe that our strategy, the business model, the diversification, the disciplined approach to capital allocation will deliver a compounding effect that will continue yielding the positive results we're aiming for. So I see that we're going to get around that circa 16.5%.

The important thing also to take into account is the disciplined capital allocation that is driving a 15% growth in value creation and higher shareholder remuneration and with the CET1 that you have seen that is strong at levels of around 13.1%, okay? So it is very important for that. I mean, as you were also, I mean, the outlook for '26, as you have seen over the last 2 years, we have shown consistent execution of the strategy, and we have delivered RoTE every year from below the 15% that we were back in '22, okay?

As you know and we have discussed, we will provide further details over the next -- for the next 3-year plan, our Investor Day that is going to be in February '26. So wait us for that. But it is important to understand that if you see every single unit of the bank basically showing improvement, first of all, every single business unit, global business is also improving. And as we already said, we're only scratching the surface of the potential with ONE Transformation.

As we have discussed previously, and I said back in the Investor Day in the beginning of '23 is that our aim was to become the best bank in every single geography. And up to today, we are best-in-class in 5 of our geographies, but we still have 5 geographies to close the gap with the #1 in that market. So that basically gives you the view that we will continue improving.

And then we have, as you know, '26 is also a transition year with the impact from Poland reducing net profit by EUR 700 million and the TSB contribution that is likely to be more material once we make progress on the integration. So also on the current cost base is elevated given the migration towards global platforms, which is resulting in some duplication of cost. But nonetheless, I do see that we have a very promising '26.

In terms of -- sorry, Jose, go ahead.

No, no, cost of risk in Brazil.

Yes. I also want to talk about cost of risk in Brazil. Look, in the quarter, loan loss provisions fell 9% quarter-on-quarter, okay? 12-month cost of risk remained stable at around 4.71%. Over the last 2 years, we have derisked the balance sheet as we have been explaining to you every single quarter. With a rapid contraction of unsecured and less profitable lines such as personal and payroll loans that remember that I explained to you that we were changing the mix, and that's basically helping us out. However, I mean, we have rates that are the highest in the developed world. I mean, 10% -- 10 points of real rates, which is also a challenging environment for companies, especially agribusiness, corporates. So it's a difficult environment. Hopefully, rates, and we basically believe we will be coming down a little bit during the first quarter.

So I do believe that credit quality, volume growth and earnings will be supported by an improving macro, which we have seen. Even with these rates, remember that Brazil is going to grow around 2% the year. And as I said, hopefully, by the end of '27, we see rates falling down to 10.5%. Jose can basically give you more details.

Just to add, if you look at cost of risk on a quarterly basis, in 2024, cost of risk was 4.5% every quarter. In the first 2 quarters of this year, we had cost of risk of 4.9%. It's back to 4.5% in the third quarter. There's nothing extraordinary, no reversal of provisions or anything. So it's a more normalized asset quality level, the one that we've seen in the third quarter. And we would expect to finish the year within the range that we guided you for, which is somewhere between 4.7% to 4.8% or around 4.8% cost of risk.

Next question from Cecilia Romero from Barclays.

The first one is on capital. You have guided for around 20 basis points of regulatory headwinds, if I'm not mistaken, for the rest of the year, which now obviously looks like it will come in Q4. Is that still the case? Considering Q4 is typically a more intensive risk-weighted asset quarter and that there could be an additional hit from U.K. motor provisions. How comfortable are you with the 13% CET1 target?

And then my second one is on corporate actions. For the Santander Bank Polska sale and the TSB acquisition, is everything still on track to be closed by year-end and early 2026, respectively? And is there any changes to capital impacts or any of the financial impacts previously announced?

Thank you, Cecilia. So in terms of -- I'm going to basically answer you #2. So in terms of Santander Bank Polska, I mean, I review every single week the advance on that one, and I believe that we're right on track to close on Q1.

In terms of capital, I will ask Jose basically to give you his overview of what you have asked.

So the outlook for regulatory and supervisory charges is now better, as I said during the presentation because some charges that we expected this year have been postponed and probably will be lower than we had anticipated. They have been postponed to '26. And also some of the technical notes, model adjustments, et cetera, came in better than expected. So for the year as a whole, I would say that regulatory and supervisory charges will be in the region of 20 to 25 basis points. We have had 16 in the first 9 months of the year.

In terms of targets, we believe that we will generate capital in the fourth quarter from the 13.1% that we reported in September. So the -- let's say, the view that we have today on capital is that the ratio will increase in the fourth quarter further.

In terms of the capital charges, et cetera, related to the acquisitions, nothing has changed. We think Poland will generate around 90 basis points of capital. We don't know exactly because it depends on the deductions, but it will be around 90 basis points. The acquisition of TSB is around 50, 52 basis points capital charge. And remember that we announced once we closed Poland, a share buyback in the amount of EUR 3.2 billion, so -- which is around 50 basis points. So those are the capital charges from the transactions, and we haven't -- they haven't changed in the last couple of months. So we don't expect them to change materially from the numbers I gave you.

Next question from Francisco Riquel from Alantra.

My first question is on NII in Spain, which is 1% up quarter-on-quarter. You were guiding for a decline. You already improved the full year guidance from minus 6%, minus 7% to minus 4%, minus 5%. So I wonder if you can update again on this guidance because I think I feel trends are better than expected and comment also on the margin dynamics. I see the customer spread is down, but NIM is stable. So what should we expect for NII loan growth in Spain in Q4 and in 2026?

And then my second question is, I wonder if you can update on the rollout of the Gravity platform. You have recently completed in large markets like Spain and Chile. I wonder what type of efficiency and productivity gains are you capturing already? And what shall we expect on a full year basis?

Thank you, Francisco. Yes, you have said, I mean, NII in Spain is much better. I think that the Spanish team has done a great job in terms of managing betas. And as Jose explained in his presentation, we have done a pretty good job in that sense. That's why you see NII basically up 1%. We expect, I mean, to continue fourth quarter up low single-digits from flat that we have expected. So -- and we expect to basically have that.

For '26, I will basically tell you that, I mean, we have good dynamics. But nevertheless, we expect -- it is important that you wait for the beautiful picture that you have in front of you in terms of the Investor Day, we will give you a little pretty good idea of what we expect.

In terms of the rollout with Gravity, I'm glad you asked the question. I think that, look, it's very important. As a matter of fact, we just migrated Mexico this weekend, okay? That's another large market that is being migrated. So to tell you exactly how it works is basically once we migrate a country to Gravity, we start basically shutting down the mainframes.

Let me give you an example. Remember that Spain was migrated in April. We had -- used to have 5 mainframes in Spain. 2 already have been shut down. We're still waiting to shut down another 3 more that we will be closed down over the next 18 months. Once we shut down those, that basically decreased costs quite a lot because every time we do that, I mean, actually, we save a lot of money by all the charges that we get from the suppliers in terms of that.

So to give you exact numbers, I mean, we can contact you later because I don't have the exact numbers that we will get from that. But I do believe by the end of '26, all the big countries will be migrated, and we will start the migration with the smaller countries.

What I can tell you is the results are pretty good. The NPS with the customers is getting better. The response, I don't know what market is and if you're a customer of ours, but hopefully, you are, you're going to see that the speed has become a lot better. It's a lot easier because we don't go back and forward to the mainframe every single time you consult your balance on your current account or anything like that. It's pretty much faster.

So I think that the results are there. Spain is getting less cost out of what we have done. Chile, the response has been really, really good. Mexico migration was a success, and we expect to be closing -- I mean, decreasing the amount of capacity. We're using the mainframe right away, and we'll see it over. But you see the results on '26. That's when exactly happens because we will be shutting down the mainframes on those markets.

Okay. If I may add some details on NII, you asked about the difference between customer margins and NII. I think we are -- as Hector said, we are doing a great job in managing cost of deposits, a lot better than we anticipated. We are growing volumes at a lower cost. So that's one component relative to the initial guidance we gave at the beginning of the year.

The other one is obviously all the hedging decisions that we've taken. Right now, we have around EUR 50 billion of Spanish government bonds at an average yield of 3.4% and a duration of 5 years. That's expected to add quite a lot to the NII in the fourth quarter and next year.

So on a sequential basis, I think, as I said, we are close to the trough. It's possible that we see a slight decrease quarter-on-quarter, maybe 1 or 2 quarters more, but from very, very close to basically flattish, but basically probably slightly down quarter-on-quarter. So if you look at the year as a whole, you're right. We guided for minus 6%, then minus 4%, and it's going to be flat or slightly down year-on-year. But the outlook for 2026 beyond these 1, 2 quarters where it might be marginally down is quite positive.

Next question from Sofie Peterzens from Goldman Sachs.

Here is Sofie from Goldman Sachs. So my first question would be around the kind of litigation provisions still to come. You took a provision in the Corporate Centre in the fourth quarter. How much -- or is there any additional details that you could give around this provision? And how much should we expect still to come from U.K. motor and also AXA provisions? Do you have any other litigation provisions that we should expect in any other countries over the next quarter or year? That would be my first question.

Then my second question would be if you could maybe talk a little bit more about the net interest income outlook in Brazil. I know interest rates are expected to come down. But in the kind of short term -- short to medium term, what do you expect in terms of volume growth? Could you remind us of your rate sensitivity in Brazil? And how long does it take for lower rates to help the Brazilian net interest income?

Thank you, Sofie. Okay. I mean, first of all, on this situation of the litigation provisions to come. First of all, on the U.K. AXA situation, we do not expect the net impact of the judgment to be material for the group, okay? In October 22, the court granted Santander permission to appeal and the case will now proceed to the Court of Appeal. Given this is an ongoing matter, we are not able to comment any further. I'm sorry about that.

In terms of the U.K. motor finance, in '24, as you know, we took almost a GBP 300 million provision for the U.K. FCA motor finance review. We have noted that the FCA has recently published a consultation into a proposed reduce scheme and Santander U.K. is reviewing the consultation in detail basically to understand the potential implications. We also know that the FCA's proposed approach differs in an important respect from the Supreme Court's ruling and the legal basis for the redress scheme relevant period is not clear, and it remains at the consultation stage.

So there is, therefore, a certainty regarding the final scope methodology and the timing of the redress scheme that may ultimately be implemented. So at this point, I think it's very complicated. And the important thing that I can tell you that is not expected to be material for the group and no more than a few points of CET1. So we will provide you further update on the Q4 results, and we reiterate that we're on track for the results and the guidance that we have given you for '25 on all the targets.

In terms of NII outlook for Brazil, what I can tell you is interesting to say basically that we need to put Brazil in context. So it's very important to understand that. The loan book in Brazil is only 9% of the total group loans. Diversification is working. The impact of higher rates and inflation in Brazil has been positively offset by the stronger performance in Europe and in other businesses. But Brazil is also -- it's important to say, it is growing by 2% in '25. Labor markets have been resilient, okay, despite the challenging rate environment. And as I said before, interest rates are the highest, I mean, in terms of real rates, which is an important point to take.

So what we have done is that we are changing the mix, and we are going to a higher quality business, which means lower margins, but more stable asset quality, which is very important. And I feel comfortable and confident that as monetary policy eases, the business will do even better than we did in the last easing cycle.

Also, you got to remember, as you know very well, that we have negative sensitivity to high rates in Brazil. So we expect once the rates start coming down that, that basically will help us out and we will give better margins for us. If we've been that, I don't know, Jose, if you would like to complement.

Yes. Just some details on that. Interest rate sensitivity today to 100 basis point move in the curve is EUR 75 million upwards and downwards. You know that this is lower than it has been in the last few years. We've been decreasing the overall sensitivity, but more importantly, we've been moving the sensitivity towards -- we've made the sensitivity more sort of homogeneous along the curve. So we no longer depend as much on short-term rates, but we have a spread sensitivity from 0 to 3, 4 years, which we think is the right position to be in front of the lower rates. We expect next year.

So we would expect NII to be stable in 2025 with basically stable revenue and with fees up. This basically on loans that are also going to be stable in 2025. So again, no further, I would say, the sensitivity we have when we look at 2025 -- sorry, 2026 and 2027 should contribute positively to NII evolution in Brazil in the next couple of years.

Next question from Alvaro Serrano from Morgan Stanley.

I kind of have a follow-up on costs and another one on U.S. asset quality. On cost, cost income continues to improve sequentially quarter-on-quarter. My follow-up is, apologies, Hector, I heard you say that Mexico Gravity was implemented this weekend, but I don't -- I missed if you can give us the pipeline of the next few countries over the next few quarters. And as we think about next year's cost in medium term, I noted in the past, you've said you can achieve flat costs in retail in particular. Is this possible in places like Brazil and Mexico? Because in Mexico, sorry, your cost income is not as good as peers. So just wondering if there's an advantage there that we're not taking into account?

And the second on costs -- sorry, on cost of risk in the U.S. Jose, I noted your comments saying that stable asset quality performance in the U.S. But if we look at ABS data at an aggregate level, there is a deterioration, it looks like in subprime auto, which you have some exposure to. Can you maybe talk us through why you think you're not seeing that deterioration? Is it because you haven't been growing that much in the segment over the last 2, 3 years? You're not exposed to undocumented where there has been some trouble. Maybe some more color on that stable asset quality performance in the U.S. that you've noted.

Thank you, Alvaro. So first of all, let me give you a general view on cost on the group, and then we'll get into the details of Gravity and then flat cost in Mexico, Brazil, which, by the way, are pretty good questions. And then I'll address the U.S., which thank you very much. I knew you were coming with that one, so I was prepared, okay?

So costs remain very well controlled in the first 9 months of '25, as you have seen, so minus 1% in current, all right? I must tell you that we will reiterate the guidance to deliver lower cost in current euros versus '25 versus '24, okay? Because we see that we're done in absolute terms and the cost growth remains below the revenue growth, which is very important in this group. Remember, always positive jaws, underpinning the confidence in delivering the positive operating leverage that we are creating through ONE Transformation. Remember, ONE Transformation is all about increasing revenues and decreasing cost, and that basically creates the operating leverage that we're working for.

Short-term costs are higher as we continue to invest in the global platforms. As I explained to you, I mean, Mexico, even though we had the migration this weekend, I mean, the mainframe is still basically consuming MIPS because we want to keep this in parallel until we stabilize Gravity. Once Gravity is stabilized, we start basically decreasing the amount of MIPS that we consume on the mainframe. By the way, then we start decreasing the cost that we have. So -- and we have the same in many different platforms, Alvaro. So that's why I say that '26 is the most difficult year because that's where we are doing this transformation in which the global platforms are coming in, Gravity, Plard, Payments Hub, et cetera, and we start in parallel running those.

By the way, just getting into Mexico, Mexico is the worst one by far because Mexico is the one that we needed to upgrade the most and it's the one that has most dual platforms working on. They have in dual Plard for credit cards, and they have Pampa working at the same time where we're doing the migration. We have Gravity and the mainframe at the same time because we're doing the migration. We have in Payments Hub and transfer working at the same time because we're going to decommission transfer towards the end of the year. So you'll see that Mexico will start basically getting more -- I mean, in the level of our peers.

And by the way, our only peers that you are talking about is Banorte and BBVA because the rest are further ahead from us in cost. We're much better. I mean I would say that we are a little better in average but we need to get -- I couldn't agree more. We need to get to our peers, and that's exactly what we're working on. And the same thing is -- I will tell you is Brazil, okay? So Brazil is going to be the same, but I mean, we implement, for example, Brazil just got the new version 24 of the global app that is coming in. It's the first country to do so. We already have 1 million customers migrated, but we need to migrate 60 million customers at the end. So this takes time. But nevertheless, we are also at the same time, because we're doing the simplification and the automation, we've been able to maintain cost.

And you were asking precisely about what's going in Retail and Commercial, which is a really good question. How are we basically doing to decrease cost in Retail and Commercial at the same time, we're doing this deployment. It's because in Retail and Commercial, we are doing interesting things in terms of basically concentrate on simplification. You take a look at the number of products that we had 3 years ago, it was over 10,000 products.

Just to give you an example, 300 different credit cards in Brazil. We're down to 17 different credit cards in Brazil. Mortgages in Mexico, we have 17 different types of mortgages in Mexico. We're down to 3. So the amount of things are going. The important thing is basically change the legacy on the back of the bank. That's where the big job is being taken on in terms of simplifying all the legacy that we have, and that's a huge amount of cost.

Sorry to extend myself, but it's very important that you understand what ONE Transformation is all about. It's not just about the platforms, it's a lot about simplification and automation of processes, which really change exactly what we're doing. So I'm confident that '26, even though it's a tough year in terms of everything that I'm explaining to you, we will be able to maintain costs flat or down in the group because that's exactly where we are concentrated, okay?

So it's very important that you get that. I don't know if that basically answers all of your question. If not, please let me know, and I will gladly give you all the details on that. But the thing is, I mean, the amount of money that you save once you're decommissioning, and that's the most important part, the discipline on the commissioning, you really start to see the savings coming on and you have seen it because there was no other way that we could be giving you this number in cost if we were not really doing those commissions and being very disciplined about it.

In terms of cost of risk in the U.S., first of all, it's important what I was telling you. We continue to be and to high exposure to prime and near prime. If I'm correct, 38% of our book is prime and near prime, okay? As you say correctly, the amount of origination has come down significantly. We were at the peak about 2 years ago at around EUR 35 billion in origination. We're down to EUR 22 billion, EUR 23 billion. And at the end of the year, it's going to be EUR 24 billion in origination. The origination that we do in subprime and this subprime is very well managed and it's not the same that the other player basically was doing. As you say, we never get into with undocumented customers. So it's a completely different model than the one we have.

So what you see is what Jose explained in his presentation that we see that even 30 days and 60 days delinquency is normalizing, 90 days is still below what we expected. So we expect less provisions even in the fourth quarter from the U.S. auto business because of that. So I don't want to give you an exact figure because, I mean, you never know what happens towards the end, but we see nonetheless that labor market is still strong. Manheim is up 2% year-on-year, even though it has decreased a little bit in the past 3, 4 months, but nothing to concern us. And the customers, what's happening after 90 days is that they want to keep their autos because they know that it's going to be much more expensive to go out into the market. So that's why 90-day delinquencies, people are basically coming back to us and renegotiating because they want to keep their autos.

So I don't know if that basically answers your question. Jose, I don't know if I left anything out.

Just again, in terms of cost of risk, the second half tends to be worse than the first half. But when you look -- when you compare quarter-on-quarter '26 against -- sorry, '25 against '24 the numbers are coming in better every single quarter than we had last year. So in the third quarter, last year, cost of risk was 1.85%. It is 1.69% in the third quarter of this year in the U.S.

Remember, at the beginning of the year, we guided for cost of risk slightly above 2%. Today, we see cost of risk in the U.S. below 2% in 2025. So actually better than we expected. Again, knowing that there is some seasonality in the second half, but the numbers should be better.

And just to give you a bit of more details on what Hector just said, when we look at loans past due over 60 days, and if we look at the last 10 years, this number for non-prime has moved between 4% to 8%. And we are within that range at the moment. So it's not -- by any means, it has been going up recently, but it's within the range that we've seen in the last 10 years. When we look at prime, for instance, over 60 days, it's below 3%. And again, this figure has been moving a bit higher, a bit lower than 2% for the last 10 years.

So very much normalized. It's true that in the last couple of quarters, we're seeing some increase in this ratio, but this is not translated into losses because the recovery rates remain very robust. So when we look at actual losses, net loss in prime, it's basically below 3%, which is much better probably that we saw, for instance, during the period of 2010 to 2020 or 2019. And if we look at non-prime, losses are below 7%, which is the best we've seen, excluding the post-COVID period, these are the better numbers, the best numbers that we've seen in many, many years. So net-net, actually very normal behavior is what we see in the U.S.

Next question from Carlos Peixoto from CaixaBank BPI.

First question would actually be regarding first brands in the U.S. So there was the press reports over previously this month regarding some engagement with Jefferies and the possibility of Santander being involved in the refinancing of first brands. I'm just trying to understand here whether there is any relevant exposure? Or do you see this as a risk for the group?

The second question would actually be focused on the corporate tax rate. So how do you see -- what should we expect in terms of overall corporate tax rates in the full year or in the fourth quarter? If you prefer for the group as a whole, but focusing as well on Brazil, we had this quarter low tax rate given the interest payments on capital. Should we see a similar effect in the fourth quarter? Or should we see it reverting back to the previous levels now in the first?

Thank you, Carlos. I must tell you in terms of first grants, as you know, we don't discuss customers. What I can tell you is that whatever we have is not material for the group at all.

Tax rate. Yes, the tax rate for the group in the first 9 months of the year was 26.6%, which basically it's -- in Spain, it was 37.5%. Excluding Spain, 24.1%. This is a little bit better, not significantly better than what we anticipated.

There are 2 reasons for this. In the U.S., tax rate is 10%. Remember that we said that when the EV vehicles, the aid program finalizes and the tax rate would normalize gradually, and we thought that it would normalize faster than it is normalizing. So actually, the tax rate is lower in the U.S. than we thought, slightly lower in Brazil, nothing significant. So for year-end, we would expect the tax rate to be around the same level it is today, 27%.

Next question from Britta Schmidt from Autonomous.

A couple of follow-ups on credit, please. In Mexico, I think there's some comments on model updates and higher SME provisions. Can you help us disentangle these 2? What was the impact of the model updates? And what are you seeing in terms of the SME pressure? And do you expect that to continue or get worse?

In Brazil, there were also some selected issues in the corporate world. Can you maybe comment whether you've got any exposure here and whether you still feel happy with the provision that you built in the last quarter?

And then lastly, Argentina came in quite high as well. Is this only lending or are there also impacts in potentially the bond portfolio? And maybe you can share with us a little bit as to what you expect for Argentina in the coming quarters with regards to results, hyperinflation and also FX developments?

Thank you, Britta. I will address the questions on Brazil and Argentina and then Jose will tell you a little bit, I mean, what's going on. But let me tell you that in Mexico, I mean, the portfolios are performing really well. We have had some model updates, anything, but nothing that hits capital in that. And SMEs basically, actually, we're growing in the segment because we have really good roll. So I can tell you that we're going to be for that, but Jose will give you better details.

In terms of Brazil corporates, I can tell you, we have taken a deeper look on the portfolio because with 10% real rates, corporates suffer in that environment. So we have reviewed the portfolio in detail. We have actually understood and located exactly what the problems are, and we're working on them. But I don't see any significant situations on the portfolio up to this point. All of them are under control and they were taken -- we're really taking care of them. So on the corporate side, -- and we don't have anything material that would be a material impact for the group, at least on the next few months, okay? But -- and I don't foresee it because even the situation, as I said, Brazil is growing 2%. So in that sense, the economy is still growing.

Argentina is an interesting story. I actually was in Argentina. I was in Brazil a couple of months ago. And what I can tell you is the situation is complicated. In one sense, it's complicated because, as you know, inflation is at around the levels between 25% to 30%, and that's where the year is going to end. Rates because the government has really, I would say, basically, there is no pesos to lend in Argentina, okay? So the government is squeezing pesos out to really decrease inflation in a strong way. So that basically -- that has basically taken rates to -- real rates to levels that are tremendously high.

So what you see in Argentina happening is that the cost of risk is growing tremendously hard. So we've been very cautious in Argentina because of that. I mean, cost of risk in Argentina went almost to the level of 7%. And that's why, I mean, with real rates at this level, it's really impossible to make money with 60 points of real rates. So what we've been doing is being very cautious. We're basically being -- the only lending that we're doing in Argentina is to exporters in dollars. That's the majority thing and energy -- I mean, and energy companies. So we're basically involved in situations in Vaca Muerta, where there is a lot of opportunities and the portfolio is basically going very well. But I must tell you to lend in pesos in Argentina in this market today is hard because of the real rates.

So hopefully, let's see what the government does with this victory that they just had. They had a pretty good rally. The peso appreciated a little bit. So hopefully, let's see that they ease up a little bit on the economy, the rates -- real rates start to come down, and we see a much better next few months. But today, we're being very cautious in the way we manage credit in Argentina. Jose?

Mexico, yes, we've updated the models, the provisioning models and some capital models. The consequence is that without really seeing any significant deterioration in real asset quality, there has been a movement from Stage 2 to Stage 3. So it's around 10% of the Stage 2 loans moved into Stage 3, but it's the consequence of the model, not that the actual deterioration was taking place.

In any case, cost of risk in the third quarter is still below 3%. In the third quarter alone, if we look at the last 12 months cost of risk at 2.6%, below 3%. And remember at the beginning of the year that we said cost of risk in Mexico would not go above 3%. It's actually quite well below 3% because the overall performance is pretty good. But in this quarter, in particular, again, it's this technical change from Stage 2 to Stage 3.

Next question from Pablo de la Torre Cuevas from RBC.

I just want to get your thoughts on the deposit for the U.K. into the next year. One of your peers talked about muted deposit growth in 2026 and another has spoken of elevated competition in term deposits. So just interested in your thoughts there as deposit growth has been a big driver of top line growth over the last couple of years for U.K. banks. And then if we translate that into U.K. NIM directionally and excluding TSB, would you expect underlying U.K. NIM to grow as much in 2026 as it has been in 2025, driven by that structural hedge repricing?

So structural hedge right now is EUR 106 billion at 2.7% yield and 2.5 years of duration. So this should have positive contribution to NII next year.

Second comment, we expect rates to go down from 4% to 3.5% by year-end next year. It could go down even -- there could be even 3 cuts, but we believe that we give today more probability to 2 cuts.

Volumes should be up next year. So overall, we would expect NII to actually increase in the U.K. in 2026, excluding TSB, of course. And we are talking low to mid-single digits increase in NII.

Thanks very much, Jose. Ben, hopefully, that answers your question, but we can take it offline if you've got any further details on deposits outstanding. Could we have the next question, please?

Next question from Borja Ramirez from Citi.

I have 2. Firstly, on capital, I believe it may have been mentioned that in Q4, it's generally more intensive in terms of the SRTs. So I would like to ask if you could provide any details on the capital benefit that we may see in Q4 linked to SRTs?

And then my second question would be on other provisions. If I understood well, it was mentioned that other provisions would be around EUR 3 billion for 2025. Given that you have booked EUR 2.5 billion in the 9 months, this seems to imply EUR 0.5 billion for Q4. So I would like to ask if my numbers are correct, of course, if -- what are the assumptions on provisions?

Thank you, Borja. The first one, yes, the fourth quarter is the most active in risk-weighted asset mobilization initiatives. And as a consequence, we would expect net risk-weighted asset growth to be close to 0 in the fourth quarter. It was slightly positive in the third quarter. We have gross risk-weighted assets up EUR 11 billion and asset mobilization initiatives between EUR 7 billion to EUR 8 billion in the third quarter. So the fourth quarter the net gain from SRTs, which, by the way, is not the only way we are mobilizing capital. In the third quarter, we mobilized as much by asset sales as securitizations and also we had some hedges. So we are using different tools to optimize the capital and increase the capital productivity. So putting all this together against risk-weighted asset growth in the fourth quarter, it should be very, very close to 0.

Your second question, when you speak about other provisions, I presume that you're talking about other results, so the line below provisions. And yes, this line should be substantially lower than last year because of the one-offs that we had last year and because the banking tax in Spain last year was accounted for in other results now is in the tax line. And yes, we would expect this line to be a bit higher than EUR 3 billion in the year. EUR 3 billion, EUR 3.2 billion is the reasonable number. In the absence of any substantial one-offs that at this point, we do not envision. But in the absence of substantial one-offs, the answer is yes. And the reason is, excluding these one-offs, what is in this line is the labor cost in Brazil, operational risk. It tends to be a bit higher in the fourth quarter, but not to deviate a lot from, let's say, EUR 3.2 billion for the year, again, excluding one-offs.

Next question from Andrea Filtri from Mediobanca.

The first is a bit of a back of the envelope. Your 16.5% RoTE target discounts around EUR 13.6 billion profits in 2025, which would only imply EUR 3.3 billion left for Q4 '25, which would be a deceleration quarter-on-quarter, while your RoTE guidance implies a marked acceleration in Q4. So which of the 2 is right?

And second question, more conceptual on insurance and the Danish Compromise. You have made statements prior on the intention to gain Danish Compromise like benefits at Santander. Could you elaborate a little bit how you intend to do that and what sort of benefit you could get?

Okay, Andrea. First of all, and I know you're very bright, probably brighter than me, but you need to redo your numbers because for me, actually, the numbers shall be going up. So that will be my comment on that one.

In terms of -- okay, in terms of Insurance and what we're doing with Danish Compromise, the only thing I could say is we have formally approved -- I mean, sorry, applied with the ECB for enhanced supervision, and that's the only thing that I could discuss at this point. And let's see what the ECB decides. And if they give us enhanced supervision, that will give us basically the trend to see the following path or the following step.

Yes, Andrea, post-AT1, 16.5% would be slightly higher than the numbers, but we're very happy to give you a call after and take you through the details. We have the next question please?

Next question from Ignacio Cerezo from UBS.

First one is if you can give some color on any excess capital above the 13% by the end of the year if that is going to be used for incremental capital return or there's going to be some uses of that capital, thinking of potentially restructuring costs, for example?

And then the second one is on the payout mix between cash and buybacks, considering higher share prices and lower profitability of buying back stock, if you think it makes sense conceptually to be moving towards the cash dividend component basically of the payout mix in the future?

As you know, we have a very strict capital hierarchy, okay? First of all, as we have said, we're going to prioritize organic profitable growth. Second, we're going to follow it by ordinary distribution. Then we do any bolt-on acquisitions that must be complementary and to generate attractive financial returns. And those need to surpass those of any organic investments or buybacks, okay? So I believe that at this point, we feel very comfortable with the capital levels that we have. And the capital allocation framework has been fundamental pillar of the strategy, as you have seen. And we will continue the disciplined and strict capital approach that we have had to capital, all right?

So in that sense, then I will ask Jose basically to give you more details on the buyback.

So this is a very interesting intellectual and financial discussion because you have all types of technical papers written on this matter. But the way we see this, and obviously, this is for the Board to decide, and it will decide in the Board of Directors that will take place in December about the dividend policy for next year. But the way we see that or I see that is that when you are looking at improving profitability going forward and when you are looking at a cost of capital that is at worst stable, probably improving, and then you add growth, high single-digit growth buying back shares is still a very good value proposition.

Obviously, the new business is being written at a return on tangible equity, as I said, of 22%. That is the first and most important use of our capital, but there's not an infinite amount of capital that we can put to work at 22%. So once we have covered that bucket, buying back shares, again, when you're looking at improving profitability, stable lower cost of capital and growth in profits is still a very good value proposition for shareholders.

More details to come next year, not sure. I hope you understand. We've got 2 more questions left. Could we go to the next question, please.

Next question from Fernando Gil de Santivanes from Intesa Sanpaolo.

Can you hear me okay?

Go ahead.

Okay. First question, a follow-up in Spain regarding the repricing on rates, are we done in the repricing? And what is the bank risk appetite going forward regarding the actual pricing trends, especially in the loan yields?

And the second question is on DCB Europe. I see the NII up 13% year-on-year, 5% Q-on-Q. What is driving these upgrades? And can you comment what is -- what should we expect going forward?

Look, in terms of Spain, what I tell you, I mean, it's a very competitive market, as you know. We have rates in -- even with the Spanish bond at [ 330 ], we have mortgages down, and we have seen 190s, 175s. I think that the market is being rational in that point. So hopefully, there is some rationality in the months to come, and we see rates at much better levels. And we have been very disciplined and very focused on profitability, and we will continue to do so even if we lose a little bit of market share that you have seen that we have lost a little bit of market share because of that discipline.

So we don't believe that mortgages today at 175 makes sense to do in the bank. So we won't do them and exactly when the price and when there is a lot of competition on the high-risk name in the corporate side, et cetera, we're going to maintain our level of risk reward that we believe is the right one. So we will continue, and we will put a lot of discipline in that sense.

In terms of what we see in terms of DCB, give me 1 second. But look, I mean, in global DCB, first of all, it is important to say that we are improving the RoTE from 24% to 10.4% post-AT1s in '25. So it's important. Part of the improvement is explained by the lower conduct basically of the charges that we have remember on the Swiss francs, mainly in Poland, but the underlying attributable profit is growing at 6%. So that basically is positive. NII is growing 6% year-on-year. That's well above credit, which is up 2% and is benefiting for the focus on profitability, as we have said. The yields on loans have improved 25 basis points and the cost of deposits has come down by 39 basis points. As you know, in this business, we are sensitive to higher rates, negative sensitivity to higher rates. When rates start to come down, we have much better margins.

And also, it's important to say that we have improving credit quality. The cost of risk is down for 2.01%. That's less than 10 basis points versus Q3 '24. And 12 months cost of risk is at 2.06%, down 3 basis points quarter-on-quarter. And we have excellent LPs performance as we have said.

Our strategy is to expand the deposit gathering capabilities through Openbank. As you know, it has been a success. We are doing that in Germany. And also, as we have announced, we are merging Openbank and DCB Europe that basically will enable us to basically have much more control, better management and the deposits close to the origination of the assets. So that basically would be a help to have much better margins, much better operation and also much better cost.

Could we have the last question, please?

Last question from Miruna Chirea from Jefferies.

I just had a quick one, please, on Openbank. I was wondering how your progress in Openbank is going in Mexico and in the U.S. If you could give us maybe an update in terms of the balance of deposits that you've raised in those markets since you launched?

And then secondly, to this point that you are making now on merging Openbank and Santander Consumer Finance in Europe, could you give us just a bit more color on what kind of synergies could you see there by merging the 2 lines of business and the overall rationale for this?

Thank you, Miruna. Okay. So Openbank Mexico and the U.S., this is basically -- I'm giving it to you from the back of my mind. If I'm correct, it's EUR 6.5 billion in deposits on the 2 combined, if I remember correctly. And we're talking about 160,000 customers in the U.S. And in Mexico, I don't recall -- I'll give you the exact number. Sorry, basically, I don't have it in front of me. We're trying to find it out for you.

Let me -- in the meantime, let me discuss a little bit what's the rationale behind the merger that we're doing with Openbank and DCB. As you know, I mean, we've been operating in parallel. It's one unit, and we have one boss basically managing both of those businesses. At this point, I mean, we had 2 of everything because there were 2 separate institutions. That basically will help us a lot in terms of cost because now we're going to have just one for both of them. So cost systems, et cetera. So a lot of that is going to be a lot of synergies in that sense.

But the most important synergy is the amount of deposits that we have in the bank that will be basically used to eliminate or try to eliminate as much the negative sensitivity that we have when rates basically go up. When you have a sustainable deposit base that will basically help you out to match it to the assets and you have a much better planning if you have that.

Openbank, as you know, is the largest deposit base of any digital bank in Europe. We believe there's a huge opportunity to continue like that and also will help us to upgrade our operations in Germany, which we have a really good deposit base there, and we would like to increase it and continue basically growing the business as we see fit. So all in all, I think it's going to be a pretty good combination.

Yes, in the U.S., it is EUR 5.8 billion in deposits, and we're talking about 162,000 new customers in Openbank.

Thank you, Miruna. I think that we are out of questions. Thank you, everybody, for your time this morning. This concludes our analyst presentation, and we look forward to speaking to you soon. Have a good day.

Good morning, and welcome to Santander's First Half 2025 Results Presentation. We are delighted to be joined by our CEO, Hector Grisi, and our CFO, Jose Garcia-Cantera. We will start with the presentation and then come back for your questions.

Hector, over to you.

Thanks, Raul. Good morning, everyone, and thank you for joining Santander results presentation. We will follow the usual structure. First, I will talk about our results with a special focus on the performance of our global businesses. Then Jose, our CFO, will give a deep dive on the financials. And I will conclude with some final remarks before opening up for Q&A. Before starting the presentation, let me remind everyone that we have announced an [ arrangement ]. All figures in this presentation include Poland.

We are approaching the end of our strategic cycle well ahead of our plan. Thanks to our disciplined capital allocation, which is further improving profitability up to 16% post AT1 with our CET1 ratio at 13% and 88% of our RWAs generating returns above our cost of equity. After latest inorganic transaction, we decided to accelerate execution of our EUR 10 billion share buybacks and upgrade our share buyback target, so we now expect to distribute at least EUR 10 billion to our shareholders through share buybacks for '25, '26 subject to regulatory approvals.

Q2 was another record quarter, constraining the strength of our strategy and the resilience of our business in a more challenging environment. Our [ cartel ] profit hit a new record of EUR 3.4 billion, making H1 '25 the best first half ever, driven by strong revenue growth across global businesses and our solid franchise of 176 million customers that continues to grow having increased by more than $8 million year-on-year as we improve customer experience, leveraging our global platforms. We achieved this as we continue to invest for the future through ONE transformation making excellent progress towards a simpler and more integrated model.

This has helped us to improve our efficiency and increase our post AT1 route by almost 1 percentage point. Our balance sheet remains solid with a strong capital ratio which ended the quarter at 13% at the top end of our 12% to 13% operating range. All this contributed to strong shareholder value creation with TNA plus dividend per share growing 16% despite the depreciation of some currencies across our footprint. Going into more detail on our income statement, our P&L remained very solid. We delivered strong with revenue up 5% in constant euros, supported by NII, which increased 1% or 4% excluding Argentina, and also by new record fees up near double digits supported by a significant customer growth and the network benefits we're capturing through our global businesses.

Expenses were below revenue, showcasing the positive effects of formal transformation we rate -- in 25. We are once again demonstrating the sustainability of our results with 5% growth in net operating income. Our prudent approach to risk is also evident in our robust credit quality trends with a cost of risk that is consistently improving year-on-year. As a result, profit rose by double digits year-on-year. Lastly, these [ qualities ] that were not part of our ordinary business and are fully compensated in the net capital gains and provisions line. All in all, as we have shown over time, our results are sustainable and less volatile than peers, even in an increasingly challenging environment. We are ahead of plan in executing our transformation which continues to boost our operational leverage, structurally improving both revenue and cost performances. Simplifying and automating processes and our active spread management have already contributed 243 basis points of efficiencies since we started.

Our global businesses continue to drive the group's profitability and have delivered 104 basis points in efficiency gains. Our proprietary and global tech capabilities have generated 87 basis points in efficiency so far surpassing the levels which we expected to reach by the end of '25. As we said last quarter, there is still more upside over the medium term from our strategy for both revenue and cost. retail and consumer, which represent 70% of our revenue, have significant upside as we progress on the implementation of common platforms across all our global footprint. The rest of our revenue comes from wealth, CIB and payments, which are more fee-driven and will deliver additional efficiency improvements as we continue playing to our network strengths.

All our global businesses delivered to drive revenue growth across our businesses, double-digit in wealth and payments and also strongly in CIB. Profit also grew at double-digit rates in a sub consumer, which remained broadly stable year-on-year and improved significantly in the second quarter. In terms of profitability, we are already above the target we set for '25 in most of the cases with an efficiency ratio that is improving at group level. The combination of our global businesses and our geographic footprint is a powerful example of how diversification works, putting us in a great position to navigate the challenges ahead. Higher-than-expected interest rates support some of our retail franchises while other parts of our businesses, such as consumer and certain emerging markets performed better with lower rates allows us to deliver recurring strong results, consistent profitable growth and value creation even under more challenging circumstances.

Overall, the record first half performance, the execution of our strategy and our diversification keeps us on track to achieve our full year profitability targets. In retail, we are transforming the way we operate to become a digital bank with branches combining cutting-edge technology with expertise and proximity of our teams -- competitors while offering personalized support and advisory through our branch network. Over the last year, we have gained almost 3 million active customers increased 3% our deposits and digital sales are up 16%. A key initiative is our new based AI global CRM already being deployed across the group. In Spain, we completed the rollout of the CRM in the branch network during the quarter, boosting agent productivity by 20 channels.

On the cost side, additional complexity. Allowing teams to focus more on customer interactions and value-added activities and reducing manual activities to improve our cost to serve by 2% year-on-year. We are progressing in the rollout of our global platform. This quarter, we achieved a major milestone. We completed the migration of Gravity in Spain, following last quarter launch in Chile. This bring us closer to becoming the first major Western bank to operate fully in the cloud and has already resulted in tangible 15% faster. Running costs have dropped over 65% in Spain. Deployment speed has improved and customers now enjoy a faster, more agile and intuitive digital banking experience. Retail profit were strongly year-on-year, driven by solid revenue across most countries, cost decline in real terms, while credit quality remained solid.

In a more demanding environment, NII grew 3% year-on-year, excluding Argentina, reflecting our focus on profitability and disciplined margin management. Fees rose 8% higher customer activity. As we said last quarter, by enhancing customer experience, reducing operational complexity and fostering connectivity, we expect our transformation to continue driving customer growth and lowering cost in euros. In consumer, we continue to advance in our priority to become the preferred choice for our partners and customers by delivering the best solutions and increasing our costs competitive advantage across our footprint. We are converging towards platforms. The recent launch of Openbank in the U.S., Mexico and Germany has proven highly successful, attracting EUR 6 billion in incremental customer deposits. We're expanding and consolidating partnerships, offering global and best-in-class solutions integrated into our partners' processes.

[ Sina ], our checkout lending platform continues to gain traction with more than 200,000 new customers onboarded in Q2. Consumer profit was relatively stable year-on-year in the context of lower car volumes in Europe, which began to show signs of recovery towards the end of Q2 and was supported by a solid cost of risk performance. Quarter-on-quarter profit grew 16%, driven by strong net interest income and fees as well as solid underlying L&P trends, mainly in the U.S., which was also benefited from some seasonality. Costs remain flat, reflect the benefits of our transformation. Our focus is clear. We prioritize profitability over volume. We are currently originating [ Nadrotis ] above 16%, well ahead of our back book. At the same time, we're lowering funding cost. Retail customer deposits grew 10% year-on-year and now represents 62% of total funding, up 5 points year-on-year.

We are accelerating our transformation, which keeps, bring and we actively manage capital to maximize returns, redeploying it from lower return businesses to most profitable opportunities. As a result, we expect profit and NII to improve through the year as we continue to regulate at attractive profitability levels, lower funding costs and accelerate and transformation. In CIB, we are building a world-class business to better serve our corporate and institutional clients across our footprint while maintaining the same low-risk profile. Number one, we continued deepening our client relationships by expanding our advisory capabilities in the U.S., building on our areas of expertise to accelerate growth across the group.

As a result, we are gaining market share and more relevant roles in investment banking. In the U.S., for example, we have won 30% more deals than last year with better roles in a market where overall deal count has fallen by 11%. Number two, we're strengthening our position in our core markets, leveraging our centers of expertise. A good example of this is a record half in Global Markets with revenue up 25% driven by, first of all, craneflows, the investment banks -- investment, sorry, we made and the collaboration with global transactional banking and global banking. Third, collaboration with other businesses is also a key growth level. CIB provides FX solutions to retail, product development and structuring to wealth and a full suite of products, including capital markets and advisory to commercial and auto.

Even in a more challenging context in Q2, CIB delivered solid results with revenues up 9% year-on-year, leading to the highest H1 revenue of record, supported by a higher NII increase and fee growth across the business lines and the exceptional performance of global markets in Q1. All this, while we maintain one of the best efficiency ratios in the sector and then ROTE above 20%, reflecting our focus on profitability and capital discipline.

In wealth, we are building the best wealth and insurance manager in Europe and the Americas. Number one, in Private Banking, we remain focused on expanding our fee business and consolidating our global position through value-added solutions. This quarter, we launched [ Beyond Wealth ], our new global family office service and opened a dedicated service center for nonresident customers in Spain. Number two, in asset management, we will strengthen our position in alternatives with the launch of the real estate co-living opportunities fund; and third, in insurance, which represents one of our most relevant growth opportunities were accelerating our strategy across 2 verticals: life and pensions with new lines such as retirement in Spain and unit-linked products in Mexico, and property and casualty expanding high-growth businesses, such as health and Autocompara. These efforts have supported a 6% year-on-year growth in gross written premiums.

Fourth, promoting connectivity and collaboration with other businesses, mainly CIB and retail is also a major growth driver for wealth. Collaboration fees increased close to double digits. In summary, all this supports a strong growth and high profitability. Profit rose 24%, driven by strong commercial activity and double-digit fee growth across businesses. Efficiency improved 1.5 percentage points year-on-year and ROTE closed to 70%, making wealth an extremely efficient and profitable business for the group.

Finally, payments where we hold a unique position on both sides of the value chain, among the largest players in Latin America, Spain and Portugal. We are focused on expanding our global platform with a single API to serve all our customers and we have already integrated several partners in Mexico, Argentina and Uruguay. As a result, GetNxt total payments volume keep growing strongly, which is helping us to consolidate our presence in core markets. PagoNxt payments is leveraging the best proprietary technology to deliver account-to-account payments processing, FX, fraud detection and other value-added services. Volumes processes by our payments hub were 4x higher than the same period last year.

In cards, where we are amongst the largest issuers globally with 106 million active cards, we continue to expand the business, offering best-in-class products to our customers. This quarter, we have introduced Pay Smarter in Spain, a new initiative designed to enhance the security, control and benefits of credit card usage, encouraging greater adoption among our customers. We also continue to expand our joint value proposition with GetNxt now available in Spain, Chile and Portugal and following the recent launch also in Argentina.

Payments delivered a strong quarter, with double-digit revenue growth year-on-year, both in cards and PagoNxt and cost under control driving 47% profit growth. Finally, PagoNxt's EBITDA margin improved to 29% backed by GetNxt with one of the best ratios among our competitors. We expect revenue growth, cost efficiency and CapEx optimization to continue driving profitability in the coming quarters. Our strong operational and financial performance is improving profitability and driving double-digit value creation for the ninth consecutive quarter. Post AT1 ROTE was 16%, up nearly 1 percentage point year-on-year, reflecting the high levels of the new business profitability. Earnings per share rose to more than $0.43 supported by strong profit generation and fewer shares following the buybacks.

As a result, we continue to grow our value creation, which in terms of TNAV plus cash EPS increased 16% reflecting our disciplined capital allocation, the impact of our share buybacks. Buybacks remain one of the most effective ways to generate shareholder value. Yesterday, the Board of Directors approved a new buyback program up to EUR 1.7 billion against '25 results, which, as the ECB has already granted the corresponding approval will start to be executed tomorrow. Since '21 and including this last program we are announcing today, we will have repurchased around 15% to 16% of our outstanding shares. These programs have been executed at an average price of EUR 3.9 per share, providing a return on investment of approximately 20% to our shareholders.

I will leave you now with Jose, who will go into our financial performance in more detail.

Thank you, Hector, and good morning, everyone. I will go into more detail on the group's P&L and capital performance. But before I do that, let me make a couple of comments. First, this quarter, we have recorded 2 one-offs, obviously not part of our ordinary business of the same amount but opposite directions. A net capital gain of EUR 231 million from the sale of our stake in cases, amounts that we decided to use to strengthen the -- second, as we always do, is in both current and constant euros. We have a difference of around 5 percentage points between them again this quarter mainly due to the depreciation of the Brazilian real and the Mexican peso towards the end of last year.

As the CEO explained, we are yet again reporting record results this quarter for the fifth quarter in a row. Revenue grew 5% with a good performance in costs, in line with our objective for 2025. Cost of risk remained stable in the quarter, supported by robust labor markets and prudent risk management. There are several positives and negatives in the other results line, but the concept line year-on-year are the write-downs in PagoNxt and the temporary levy on revenue earned in Spain which were accounted for last year. Finally, on the right-hand side of the slide, you can see the upward trend in profit, which grew 4% this quarter on the bank of understanding NII performance which rose 2% quarter-on-quarter, cost control and better loan loss provisions.

Total revenue increased 5% to EUR 31 billion, on track to meet the target for the year in a less favorable context than initially anticipated. This was underpinned by growth in number of customers and in their activity with us across all businesses. All our global businesses contributed to revenue growth, which was mainly supported by another record half in CIB, up 9% year-on-year, driven especially by global markets and our growth initiatives in the U.S. We had 14% revenue growth in wealth with record assets under management and strong commercial trends. Payments was up 17%, with double-digit growth in NII and fees both in PagoNxt and cards, which was fueled by higher activity levels, and we showed a strong performance in retail and consumer.

In retail, particularly due to good NII and fee income in most countries and in consumer, supported by net interest income growth, both in Europe and in the U.S. The group's NII increased 4% year-on-year, excluding Argentina. Almost 85% of the group's net interest income comes from retail and consumer. However, this quarter, most of our businesses contributed to the overall positive growth supported by our active asset and liability pricing management, most evident in consumer, both in Europe and in the U.S. with improving loan yields and funding structure with a larger share of customer deposits, but also in retail, especially in U.K., Chile and Mexico. Lower funding costs, CIB and the measures that we have been taking in the last few quarters to adapt the sensitivity of our balance sheet to protect NII on the new cycle of interest rates.

A good example of this is retail where NII increased across most countries and remained fairly flat in Spain and Brazil in a less favorable context for interest rates. As you know, we have positive sensitivity to rates in Spain and negative in Brazil. Net interest income grew 2% quarter-on-quarter primarily due to the performance of net interest margin, which improved in the quarter for the same reasons that I mentioned before, while 10 basis points year-on-year without Argentina. This performance is in line with our guidance of NII going slightly up in 2025 in constant euros, excluding Argentina and slightly down in current euros guidance that we reiterate. We generated another record half in net fee income, reflecting our transformation efforts to promote connectivity across the group, deploy high value-added products and services and provide the best customer experience.

Net fee income grew close to double digits, well above inflation and cost activity in general, customer growth and a mix that is more weighted towards value-added products and services. Retail showed good performance across our footprint with solid consumer growth. CIB grew 9%, up from record levels last year with an excellent -- after an excellent first quarter and the second quarter was supported by the good performance in GTV and banking in the U.S. We had a 20% increase in wealth with a strongest lines backed by record assets under management and a greater share of fee businesses. We show double-digit growth also in payments, both in PagoNxt and cards supported by high activity levels as GetNxt's total payments volume increased 15% and cards spending rose 9% year-on-year.

As we detailed in the first quarter, this year, consumer is affected by the impact of the new insurance regulation in Germany and also by lower car registrations in Europe. However, strong fee income growth in consumer U.S. came mainly from servicing fees on auto portfolios sold under our capital-light strategy, which is helping to partially offset this impact. And our strategic focus on insurance is also delivering tangible progress in consumer across Europe and LatAm with rising penetration expected to translate into higher fee income generation as activity gains momentum. ONE transformation is key to understanding why we're improving our profitability in every single market, leveraging the connectivity of our global businesses, providing economies of scale and scope.

As a result, we expect sustainable improvements in operational leverage as we further implement the structural changes to our model. These improvements are already very evident as demonstrated by the evolution of our cost base in absolute terms that translates into better efficiency levels, which are amongst the best in the industry. In retail and consumer, which are leading our transformation, costs remain well under control, down 1% in real terms even after absorbing wage inflation in some of the countries and upfront cost of rolling out global platforms. Retail and consumer represents 70% of our cost base and we expect them to showcase the benefits of ONE transformation going forward.

CIB, wealth and payments are more free driven. Cost in these businesses grew 6% and however, showing positive operating jaws with a double-digit fee increase, as I just explained. We had a strong cost performance also in the quarter which was affected by Argentina. Excluding Argentina, cost remains flat, even after our investments on transformation and initiatives for future growth. As a result, net operating income rose 5% from last year, and our efficiency ratio improved to 41.5%, the best in more than 15 years. As Hector said, we reiterate our guidance for lower absolute cost in current euros for 2025. The risk profile of our balance sheet remains low with robust credit quality across the footprint on the back of strong labor markets and easing monetary policies in general.

Loan loss provisions increased 6% year-on-year, reflecting our efforts to reduce NPLs and also some deterioration in Brazil in the context of higher interest rates and inflation. Excluding the provisions allocated to accelerating write-offs, the increase would have been just 3%. Credit quality continued to improve year-on-year as reflected both in the NPL and the cost of risk. The NPL ratio fell further and is now at 2.91%. Remember that much of our NPL portfolio has collateral guarantee of total exposure.

Cost of risk improved 7 basis points year-on-year remained stable in the quarter at 1.14% despite proactive management actions to lower NPLs, as I just explained. In retail, cost of risk improved across all our main countries and was also slightly down in the quarter with significant improvement in Mexico, compensating a weaker performance in Brazil. In consumer, cost of risk improved both year-on-year and quarter-on-quarter with notable improvements in the U.S., where we are seeing a resilient customer behavior, stable labor. We anticipate a stable cost of risk going forward, clear deterioration in employment levels.

Moving on to capital. As you know, we have been improving our capital productivity and accelerating our capital generation for some time. Our CET1 ratio increased to 13% and stands at the top of our 12% to 13% operating range. This quarter, we generated 54 basis points of capital from attributable profit and asset rotation initiatives more than offset organic risk-weighted asset growth. [ Deca ] concentrates in the second half of the year we would expect net organic capital generation to accelerate meaningfully in the next 2 quarters. This enabled us to accumulate capital after compensating capital distribution charges for shareholder remuneration and AT1s and absorbing other charges, including some regulatory headwinds, which this year will be lower than initially expected as some of them have been postponed to 2026. As a result, we expect regulatory charges of around 20 basis points in the second half of 2025.

These figures -- we continue to deploy capital to the most profitable opportunities and leverage our global asset desks mobilization capabilities to maximize capital productivity. Our disciplined capital allocation delivered a new book return on risk-weighted assets of 2.8% in the quarter, equivalent to a return on tangible equity of 22%, well above that of our back book. We are selling credit risk at a row of approximately half of that figure. All these actions underpin our growing profitability and consistent capital generation. A credit capital redeployment is a top priority for us. Our recent organic transactions are a clear example of our consistent applicated capital hierarchy under which we prioritize organic profitable growth and ordinary distributions while any bolt-on acquisition must be complementary to our strategy and deliver attractive financial results at least in line with those of any organic investments and exceed share buybacks.

We announced the disposal of Santander Polska at 3x our initial investment, which is expected to generate around 100 basis points of capital. As buybacks remain one of the most effective ways to generate risk-free shareholder value, we decided to use half of this excess capital to accelerate the execution of the share buybacks that we announced at the beginning of the year, and improve our target to at least EUR 10 billion for 2025 and 2026 earnings. We will deploy the remaining half excess capital into the acquisition of TSB at highly attractive returns, while we enhance our strategic position. We are deploying capital at least a 20% return on investment capital. The deal will be EPS accretive from day 1, and it will increase group EPS by around 4% by 2028. We are buying TSB at around 5x earnings post synergies.

At the same time, TSB will contribute to the group with a low-risk profile. It will accelerate Santander U.K.'s transformation, improve connectivity across the group and increase our exposure to mature markets and hard currency. During 2026, we provide additional room to deploy capital in line with our capital hierarchy.

That's all from my side, Hector over to you.

Thanks, Jose. In conclusion, this is a great first half. We are well on track to achieve our '25 targets that we reiterate. Good business dynamics supported a revenue increase backed by all our businesses with fees growing in high single digit at the same time that we reduced cost in euro terms. Cost of risk improved year-on-year and is also in line with our target of 1.5% at the end of the year. We grew the CET1 ratio again to 13%, so it now stands at the upper end of our operating range as we profitably grew our business organically, accrued shareholder distributions and absorb some regulatory impacts and the ROTE increased to 16%, on track to reach our target of circa 16.5% in '25 and TNA plus cash dividend per share is growing at double digits. In summary, very positive first half, which we expect to consolidate in the second part of the year to achieve our targets even in an environment of higher uncertainty than initially anticipated.

We anticipate revenue to continue evolving along similar lines with NII growing slightly in constant euros, excluding Argentina and fees increasing in line with the guidance we provided at the beginning of the year. Cost should improve during the rest of the year as we continue to capture the benefits of our transformation, and we expect the cost of risk to remain stable, supported by resilient labor markets. The strength of our business model is clear. Our unique combination of customer focus, scale and diversification with consistent execution of ONE transformation delivers profitable, predictable and sustainable growth and creates long-term value for our shareholders, our customers and our teams.

Before we move to the Q&A session, I would like to announce our next Investor Day where we will deep dive end goals for the next 3 years which will take place in London on the 25th of February of '26. Now we will be happy to take your questions. Thank you.

Thanks, Hector and Jose. Let's move to the Q&A. Operator, could we have the first question, please.

[Operator Instructions] And our first question comes from the rank of Francisco Riquel from Alantra.

The first one is NII in the U.K., which disappointed this Q2, particularly in deposit costs and despite the structural hedge, if you can please comment on the Q2 dynamics and update your NII guidance for the U.K. going forward and how this could affect your recently revised ROTE target for this unit after the TSB acquisition. And my second question is top-up provisions in Brazil. What is the problem here? What segments are the most affected despite the top-up provisions to accelerate the write-offs, the NPL ratio is approaching 7%. So you can please update on the outlook for NPLs and cost of risk in Brazil going forward?

Okay. First of all, it's important to say that U.K., as you know, is work in progress, okay? I believe that one of the biggest opportunities of Santander is here. We have a big transformation underway here in the country, and we're very focused on profitability, okay? You have seen the deposit margin discipline that we have. We have delivered strong net operating income and also better fees and focus on becoming the #1 bank for a customer. It's important to say also we have had some tailwinds from the structured hedge that we have, and Jose can give you in detail exactly what's going on there. Also, it's important to acknowledge that we have a cost savings from transformation of around 3.5% that is showing off in the numbers.

And to expect is impacted by the closure mainly that we have done there as the program that we actually announced in the first quarter, okay? And we believe also that the cost of risk is basically going to normalized level of around 8% to 10%. It is important to say that our commitment to the U.K. is reinforced by the TSB acquisition, okay, that will contribute in improving RoTE From 11% in '24 to 16% expected in '28, okay? Also, for '25, we expect NII to be, as I said already, is slightly up, driven by the focus on the margin management that we have already stated, the structural hedge that we have. And what I said, I mean, cost should be down.

I don't know, Jose, if you would like to complement a little bit on the hedge.

In the first quarter, there was an abnormally high volume of mortgages ahead of the end of the stamp duty exception, and this was corrected in the second quarter. And we also had substantial early repayments. So when you look at margins, actually volumes, margins, they are behaving very much in line with what we expected, excluding this one-off from early repayments. So average volumes for loans were -- was down 3% in the first half relative to the first half of last year. But net interest, the yield on loans was up 28 basis points. Similarly, deposit volumes were down 4%, but cost of deposits was down 25 basis points.

So the improvement in net interest margin, client net interest margin in the first half relative to the first half of last year, was actually 53 basis points from 1.66 to 2.19. So very good net interest margin performance from customers. And again, as Hector said, we reiterate the guidance that we gave for the whole year. Again, here, let me reiterate there is a strong seasonality or a very different behavior between the first quarter and the second quarter. And because we mostly have -- we have a mortgage portfolio, we are more affected in relative terms than others for the early repayments. Brazil?

Thank you. Francisco in Brazil, okay. Despite the challenging environment, we will make mid-teen returns in Brazil. That's basically around the same returns we did last year. As you have seen, fees are going up quarter-on-quarter despite the one-off that we had in insurance. ONE transformation is basically impacting and helping us out in many ways to manage much better the bank. Putting into perspective, Brazil is only 9% of our loan book, okay? So it's very important. And also diversification is helping out and is offset by the U.S. and Europe and the power that we have in terms of basically managing the books as we see fit. We're -- it's important to say we're operating for profitability, okay? We're changing the mix on the portfolio given the environment, and we're concentrated on secured lending for individuals.

Examples what we're doing in auto, we're the #1 lender in the country. and payroll loans, which we believe are an opportunity given the current environment. Credit cards, for example, we are diminishing what we're doing there and instead of placing and doing 400,000 cards per month, we come down to 250,000 trying to be and only giving credit cards to our customers, okay? It's important also to tell you that cost of risk losses didn't change, okay, relative to our expectations. So it's very important to say that. But given the macro environment, we wanted to be conservative and strengthen the balance sheet. That's what we took the game from cases to do that and to do the PMA. That's basically what it is, but nonetheless, we believe that we're going to be around the levels that we told you at the beginning in terms of cost of risk, basically at levels at around 5 or below.

The next question from Ignacio Ulargui from BNP Paribas.

I have 2 questions, if I may. The first one is just looking to ONE transformation, and I'm sure that you will probably give us much more in February. Just wanted to get a bit of a sense of what would be the potential direction of travel, of course, at a group level going forward if you think that the trend of declining costs could be maintained going forward. The second thing is on capital. I mean, following Jose's comments in the call that organic capital generation would be stronger. I mean, can you give us a sense a bit of how much that growth improvement could be and whether that could be a scope for incremental distributions in full year '25 results beyond EUR 3.2 billion an ounce from the disposal of Santander Polska.

Thank you, Ignacio. Okay. First of all, I would tell you that costs remain under control, as you have seen on the first half, we're down EUR 0.4 in year-on-year and we reiterate our guidance to deliver lower cost in current euros in '25 versus 24. H1 caused and in absolute terms and cost growth remaining below and revenue growth in cost in euros as we see. Short-term costs and higher than as we invest, it's very important to understand what are we doing, okay? If I give you some particular examples, we're deploying plants in Brazil, in Mexico and in Chile. And at the same time, we still have [ Pampa ], the old platform basically running at the same time. So even with that, we are actually being able to lower cost because we're controlling costs in all levels.

So what this will tell you this is a transitional year in that sense. And even with that, we're able to decrease costs given what we're doing. And it's not just that we are already deploying platforms in every single place, for example, for -- of our new app is being redeployed now in Brazil. And at the same time, we are basically shutting down what we had before and doing the same in every single country. So I believe that ONE transformation is driving positive drop. The cost-to-income ratio improved to 41.5% in the first half of '25 below the 42% target and I believe will continue to do so. So we're very well under control on cost and basically working really hard to maintain it.

So in terms of capital, Ignacio, organic capital generation thinking about how much capital we are going to be generating from profits, it's going to remain at the same level, it might be a little bit better in the second half. Risk-weighted asset growth tends to be lower in the second half because as a rotation initiatives tend to concentrate in the second half. So if you look at the first half, in the first quarter, we did around EUR 2 billion in risk-weighted assets, EUR 12 billion in the second quarter. We still are targeting between EUR 40 million to EUR 45 million. So most of the asset rotation initiatives tend to concentrate in the second half. Also, although we guided for around 60 basis points of regulatory charges this year, around '20 to '25 has been -- have been postponed to next year.

So now we are looking at, let's say, around 40 basis points, so we still have 20 left. So with all of these, I think you have all the numbers to look at what the capital ratio could be by the end of the end of the year. And what we said and we reiterate is that excess capital above 13%, subject to regulatory approvals and the Board of Directors will be distributed as share buybacks. But again, subject to regulatory approvals and the Board of Directors.

Thanks, Ignacio. Could we have the next question, please?

Next question from Andrea Filtri from Mediobanca.

You're only 45 basis points away from your best-case scenario on ONE transformation implementation. But this means that we have already seen the benefits of this transformation? Or could you go below 41% cost income in coming years? If so, what is the next stage? The second question is on consumer which is representing a drag to group RoTE. Why is that? And when will we see this segment no longer dragging down group profitability?

First of all, I think that you're going to have a lot of fun in the Investor Day because that's exactly what we will be talking about in terms of ONE transformation. I really do believe that you are seeing the tip of the iceberg on what we're doing there. Given that, as I explained to Ignacio, we're still basically running and deploying some of the platforms and running the old platforms at the same time. As I said, '25, '26 are transitional years. For example, payments hub, which is very powerful and already, as I told you, I mean, a lot of our payments are going through there are still running in parallel lines because, for example, the regulator in Mexico has not allowed us to close down transfer. So I'm still basically running 2 platforms at the same time, the same with the credit card platform, the same in many of the different things that we're doing.

And once basically, these platforms are finished and deployed in all the countries, you're actually decommissioning the old ones, the commissioning teams of FTEs that are basically doing manual processes, et cetera. So remember that transformation also is simplification. If you have seen, for example, in the group on front is basically down more than 40%. And we continue to do so in the following years. And we continue to lower products and simplify what we do. The back end is a little bit more difficult but once, I mean, we are in runoff with some of the portfolios, this actually will help us also in the operations side because we will be able to decommission a lot more than we do today. So all in all, just to answer your question, no. It's -- I think we're going to be able to deliver much more than we have in front of us today. In terms of consumer...

That's Openbank that is doing very well. We already have EUR 5 billion in deposits in the U.S., over USD 5 billion from 150,000 customers. So the strategy in the U.S. is working. And we will be adding more products over the next few quarters to be a full-fledged bank, digital bank in the U.S. with Openbank. So that's going very well, closing deposits and also capturing clients very well. So Openbank is doing as expected and I would say, going even very, very well. You can see that the cost of risk is a lot better than we expected. We see stability in NII, obviously, as we do less EVs we will see an expansion of NII that we have already seen that, but it will accelerate towards the end of the year and next year.

And obviously, the consequence is that we will have to pay more taxes. Tax rate is still below 10% in the U.S., but it will gradually normalize, again, starting in the third, fourth quarter due to the impact of EVs. And next year, it should gradually increase and the weakness, and you're right, it's in consumer Europe. And this is due basically to the impact of rates. Although we have no sensitivity to rates in consumer Europe, this is a business that is very sensitive, highly sensitive to volumes and the car registration in Europe are down in most countries. So we are suffering a little bit from volumes. But if you look at quarter-on-quarter, cost of risk is already normalizing. So we are very constructive in terms of the returns, the path to normalization of returns in consumer Europe quarter after quarter in the coming quarters. Lower rates will definitely help with volumes. We are seeing that already, and lower rates will help with cost of risk as well.

Thanks very much. Could we have the next question, please, operator?

Next question from Alvaro Serrano from Morgan Stanley.

Kind of 2 follow-up questions. You made a 16% RT in the first half, obviously, target for full year 16.5%. It's a step up. Maybe you can talk us through sort of big picture what's going to drive that step up. And the follow-up, which I think part of the expansion is around consumer Jose and [ Nick ], I've heard your comments around the medium-term outlook. I'm wondering that 10% return in consumer at the moment, how much is it dragged down by the launches of Openbank in the different countries, both in Europe and the U.S. I'm just wondering if there's a front book back book dynamic there?

And the second question, also a follow-up on Brazil. On the provision side, should we -- when do you expect the peak in provisions Obviously, rates are still high for the time being, but expected to come down early next year or late this year. One would give there's still a bit of room until you reach that 5% cost of risk charge that you've guided for?

Okay. First of all, it's important to say, if second quarter, we're already at 16.2% in terms of ROI, okay? It is important to assess that it's also due to the change of the model that we're doing, becoming #1 bank to our customers because ONE transformation is not just about cost, it's also about changing the model about how we manage clients. So you have seen we have already increased tremendously the number of active customers, the amount of products that we sell to these customers, and that's why you see fees, for example, in retail, you'll see fees numbers basically going 8% year-on-year. This is basically because we are selling much more products to our customers and penetrating that client base at the same time that we gather new customers.

So we will continue towards that, and that's helping us basically to go not just depend on the NII, but also to get fees and commissions are helping us in the bottom line. So it's very important to understand that and we do believe that we're going to be able to tell you and to get to the rates that we indicated in the guidance, all right? In terms of consumer, I think also gave you a pretty good explanation of what's going on there. It is important to say that also mine came in the U.S. has helped us quite a lot. It's very strong. It's up 6 points. I was looking at the numbers that I explained to you every quarter about delinquencies and also delinquencies above 90 days, we are repossessing no more than 65% of the cars. That's basically still far away from the pre-COVID levels that we were around 90%.

And we are looking at the different mix of the portfolio and how it's basically we see, as Jose told you that the worst is behind us in terms of that and also that volumes are getting much better in terms of the registrations that we see in Europe. So I see that, all in all, that is basically helping also Openbank is helping us to get better margins. As you've seen, we already gather really good amounting deposits on the U.S. It has been a huge success, more than 140,000 customers coming in deposits about $5 billion, and that's basically helping us to manage that and to fund that operation. We have a little bit of cost, yes, because of the deployment of that, but that would be basically amortized over the next few years. It is important to say that Openbank in the U.S., just to start with the deposit gathering. We're going to have a full-fledged commercial bank towards the next few months in terms of where we're implementing that.

But, for example, in Germany or in Mexico, we have a full bank already operating there with very good and I would not say in Mexico with very good results. In terms of Brazil, what I could tell you about is we wanted, as I said, to be conservative, and that's why we basically did the PMA. So we wanted to be conservative because we see what's going on in terms -- it's important to understand the dynamics of the country. You have real rates that are 9.5 points that's the largest real rates. We're talking about rates at 15% with inflation and 562 plus the spreads, et cetera, you can imagine that we have some SMEs and some midst corporates that are suffering a little bit given those rates. I hope that which basically rates coming down, we will be able basically to drop the cost of risk in one sense, also get better margins because we see that if rates come down to the levels we expect in Brazil towards 12%, we're going to be about 20% ROTE. So in that sense, we believe that we're under control, that the worst is over now and that we understand exactly how the portfolio is performing.

If I may add very quickly on consumer, but there is a, let's say, a game of production, right? So post COVID, the profitability of post-COVID production was extremely high. Then it was significantly lower. Now the post-COVID production is coming to an end. So the low production, the low profitability production of the years following COVID is gaining relative weight. But as we produce the new production is actually significantly higher profitability. So in the next few quarters, as the all low profitability production matures, and we substitute that by the profitability, the production that we are producing today, which is significantly higher, we should also see much better returns in consumer.

Also remember that Consumer Europe has the Swiss franc mortgage provisions in there, which obviously is affecting results. But again, pretax profit in the U.S. auto U.S. is up 42% year-on-year. Pretax profit in Europe is flat year-on-year. So again, despite these negative trends, the business is performing well. So truly, I mean, we are quite optimistic about the next 3, 4, 5 quarters to see a normalization of both cost of risk and profitability of the portfolio.

No, in Brazil, when it's going to normalize cost of risk? If you look at the 3-month cost of risk, it was 4.5% every quarter last year, 4.5%, 4.5%, 4.5%, 4.5%. In the first 2 quarters of this year, it was 4.9%. We guided for something like between 4.7% to 4.8%. So we are slightly above what we expected. Obviously, rates at 15%, we didn't think they were going to get to that level. They're going to stay -- when you look at the NII in the context of significantly higher rates, we have been repositioning the balance sheet a lot for lower rates. So when we look into 2026, the market expects rates to go down 250 basis points. The balance sheet today would react to that extremely well. And we do not think cost of risk as Hector said, on average, will go above 5% this year. Again, the provisions we've taken using CASA's capital gains, is a post model adjustment because we want to be conservative, rates at 15% ahead of elections next year. But again, BAU cost of risk is below 5% in the first half, and we think it will remain more or less at this level for the rest of the year.

Thanks very much. Can we have the next question, please?

Next question from Carlos Peixoto from Caixa Bank.

A couple of questions from my side as well. Just one will actually be related with the loan loss provisions at the corporate center. So you booked EUR 98 million there. This quarter, the previous one, you had already booked EUR 99 million, we believe that those were related with NPL sales. I was wondering if this is also the case this quarter? And also, if you could give us some visibility on what geographies your NPL related to? And also, should we expect this to become the normal quarterly run rate of loan loss provisions at this unit for upcoming quarters? And then just going back to Brazil, if you could give us some view on what you expect in terms of NII evolution over the coming quarters, considering the derisking of the portfolio, you are mentioning the fact that the volumes are down as well? And how will that play out in terms of the final pre for NII?

Okay. So provisions at the Corporate Center, as we explained and Hector explained during the call, these were taken to basically accelerate charge-offs to lower the NPL ratio, which is below 3%, 2.91%. We do not think this is recurring. So we should not expect this to happen every quarter in the coming quarters. This was a, let's say, a decision to accelerate charge-offs to bring the NPL below 3%. So do not expect the same level of provisions at the corporate center going forward.

NII in Brazil. I just referred to how we've been repositioning the balance sheet for the rate environment that is going to come next year. So let's go a little bit in detail about the first half. So average balances for loans were up 5% year-on-year in the first half and yield on [ OSA ], 63 basis points. deposits, and this is the key going forward, we're up 8%. Demand deposits was up 6% and time deposits was up 9%. Obviously, the deposits is where you see the sensitivity and the yield of deposits was up 131 basis points. So net-net, we had a customer margin that contracted 68 basis points year-on-year despite which NII was actually up year-on-year in Brazil, slightly up. So we've been working a lot on improving not only the quality of the asset side, but the quality of the liability side. And there is what we think is where the gain is going to come in the coming quarters.

Rates are at 15%. The market expects rates to go down 250 basis points maybe to 12.5% by year-end. So in 2027, we should see rates at around 12% on average. And in our models, at 12% rates, the return on equity of the bank moves to 20%. So we are quite confident that if rates are on average 12% in 2027, the return on equity in Brazil will exceed or be at or exceed 20%. And again, this is due to the work that we've been conducting in the last few quarters to improve the quality of the asset side, but mostly the quality of our funding structure and our deposits.

Thanks very much, Jose. Next question, please, operator.

Next question from Ignacio Cerezo from UBS.

I've got one and coming back summarizing a little bit, actually, some of the questions, my colleagues have done. If I'm doing the numbers right, actually, your second half of the year on a group basis needs to be around 5%, 6% higher than the first half in terms of net profits to get to the guidance. So if you tell us geographically, where is that growth going to come from, especially considering that, I mean, the currency headwinds seem to be compounded a little bit actually and you have seasonality in the U.S. Regulation, I mean the 20 basis points you're postponing or shifting back into '26. If you have any color preliminary information basically on what is going to be the underlying regulation in '26 over and above those 20 basis points?

Okay, Ignacio. In terms of what you're basically asking in terms of where do we see basically in the second half, I could tell you that, first of all, I explained in detail already a lot of the details that we're doing in ONE transformation, while we're focusing on basically becoming the #1 bank to our customers, here do we see that? But it's very important to say that we have a really consistent track record of implementation in everything that we say, okay? So Santander makes us confident that we will achieve our targets, as I said. And based on the macro outlook for '25, we expect, first of all, to reiterate our guidance of $62 billion in revenue for the year, despite a 5% headwind from FX translation that we have seen.

On the first half, revenues are growing 5% year-on-year in constant currency, was persist to growth and continue to the second half given by improving consumer revenue momentum, that's basically up mid-single digits. We see also continued strong growth in payments and wealth and also CIB. Remember that [ CIB ] is one tough due to the fact that markets were basically after liberation day for 8 weeks basically completely off. So that basically is helping us out because we believe that that's not going to be the case on the second half. In retail, revenues up 1.6% in the first half, flat in NII, but fees growing at 8%. What I said about ONE transformation, very important. We're doing much more business our customers. We're penetrating the client base, and we expect that revenue basically to continue basically doing well, maybe flattish for the full year, but we will continue to see growth in fees.

At the country level, we expect Mexico growing revenue high single digit, the U.K. up low single digits and offsetting low single-digit declines that we see right in consumer, we expect revenues to grow mid-single digits both in the U.S. and Europe, driven by NII, which is also expected to be up mid-single digits, okay? And in CIB, as I already explained, we continue to expect the growth to mid-single digits for the year. And if the market basically is strong, that also maybe it's going to give us an extra tailwind. In wealth, revenues were up 14% in the first half and we expect double-digit growth for the full year. So that basically tells you 100% of what's going on there.

Just one final comment. Remember that the other results line in 2024 was abnormally high. You already saw a substantial improvement in the first half. So we would also expect a better second half relative to the year -- to last year. So again, yes, we are confident that we will meet our 16.5% return on tangible equity in the year, absolutely.

In terms of regulation. Well, I think it's early days. I think this 20, 25 basis points is the SME model in Spain that we need to recalibrate. Other than that, it's -- we see very little levels at this point. But again, we need to wait to see the calendar of inspections, et cetera, by the ECB, which will come later in the year. So I think for purposes of estimating capital, I would use more or less the same amount that we had this year. We'll see we have different guidance towards the end of the year, we'll communicate that. But today, I don't see anything different from what we saw in 2025.

Thanks very much. Could we have the next question, please, operator?

Next question from Chris Hallam from Goldman Sachs.

Hector, you talked earlier about the parts of the business in Brazil looking to pull back slightly in credit cards. I think is that a temporary phenomenon? Or should we assume that's the new normal? And how would that feed into the NII growth algorithm in terms of volume versus margin. And then on the top-up in Brazil, I guess, why now calls within Q2 to trigger that, aside from the -- obviously, the availability of proceeds from CASE on the U.K. and the [ Axis ] last week. So I understand you already have a provision in place here, but it would be prejudicial to disclose the amount. But I guess, in broad terms, is the potential delta on that provision, i.e., whether it would need to be sized up or down material to the CET1 walk for '25 or '26?

Okay. Thank you, Chris. Okay. In Brazil, it's not exactly a pullback. I mean as we know, and I have explained basically in the past, we are very flexible in the way we manage our portfolios. And we manage the portfolios as we see fit, okay? So what we basically started looking in Brazil was that open market was starting to be pretty difficult to manage. So we decided basically to concentrate on our own customers and to just give credit cards to them. So open market -- we will go back when we see basically a much better market, even though labor market is still strong in Brazil and the economy is doing much better than we have seen. Nonetheless, I think it's important to be conservative at this point. and move the portfolio when you have these high rates, basically to other more secure things that like I was telling you about auto and about payroll loans, which are what we call [indiscernible], which is much better cost of risk at this point.

Basically, exactly as you were saying, this NII volume versus margin because we have now basically investing in things that have less margin than we used to have when you basically have much more credit cards and unsecured personal loans. We will go back them -- to them when we'll see basically the economy in a different way, and we see rates starting to come down and a better macro scenario. But this is exactly what we do, and we manage the portfolio. Look very active, our teams basically surprising and they basically change the way we manage the portfolios on a weekly basis. And so it's important to say that that's the way we manage that. And what this -- as you were saying, it's temporary. I do believe that when market basically clears up, and we believe that it's a strong thing.

We will be back into that and then margin could be a little better. And also basically, Jose explained you that when rates basically go to 12% returns, and we basically have positioned the portfolio will give us a lot better margin and a much better position and much better returns as you have seen. Okay. In terms of the AXA situation, regarding the U.K.'s core decision in relation to the claim, we disagree with the outcome and we are seeking to appeal. We do not expect the net impact of the judgment to be material for Santander given the provisions already made and the potential reelections available. It's important to say also that no customers have suffered a loss as a consequence of the claim brought by AXA or the judgment. And given this is an ongoing legal matter, we are not able to comment any further, unfortunately.

You asked specifically if the capital path is going to be affected by this. Look, our pre-provision profit is going to be EUR 37 million, EUR 38 billion this year, something like that, between EUR 35 billion to EUR 38 billion. This is immaterial, really. Why now Brazilian provisions? Is because the capital gain happened right now. And we think given the level of rates, given we have presidential elections next year, we think we wanted to be prudent. It's as simple as that.

Thanks very much. Can we have the next question, please, operator?

Next question from Cecilia Romero from Barclays.

I have 2, one in Spain and another one on litigation. The first one in Spain cost of risk down quarter-on-quarter, but still running higher than peers. Given back do you continue to be very supportive, how do you see the Spanish cost of risk developing through the rest of the year? And what's your view on the medium-term trajectory? And in terms of -- could you walk us through the respective dynamics in customer spreads for the remaining of the year, given current trends with NII up quarter-on-quarter, do you now expect NII to perform better than the guidance of minus 5% full issue earlier. And the one on the antitrust regulator has issued preliminary fines, mainly several banks in a potential case of fixing on deferred credit card payments. Can you comment on that forward?

Okay. I will go to basically -- thank you, Cecilia. First of all, on the litigation in Mexico, we cannot comment at this point. There is no basically information about it that we can tell you. So that one is as much as I can say. In terms of what we're doing in Spain cost of risk, as you have seen, as you have said, is coming down. And we are actually performing very well. The Spanish economy and the labor market are quite strong. And we see that, that will continue towards the end of the year. We don't see basically any changes whatsoever on that. On the other side, actually, we see the market coming very strong, and we see also good amount of credit on mortgage, a little bit of consumer loans coming in. So nothing to report there. I think it's much better than we expected.

In terms of NII, if I remember correctly, we guided for NII down in Spain, 6% to 7%. Obviously, NII is behaving better. So now we think it will do better than that maybe down 4% to 5%. We are still building the ALCO portfolio, adding government bonds at well over 3%. And we bought some ALCO portfolio in the second quarter. The asset hedges are coming to an end, and we are not hedging the repricing of mortgages anymore at this level of rates -- within rates are close or about to stabilize. And we obviously put all the funding floating already. So the hedging still some hedging coming from the ALCO portfolio, not a lot more though. So the improvement is coming from cost of deposits. Cost of deposits first half this year relative to last year is down 30 basis points. Now cost of deposits is 67 basis points relative to 98% last year. So extremely good deposit cost management, and that's what is going to drive the better NII performance we expect this year relative to the guidance we gave in the previous quarter.

Can we have the next question, please, operator.

Next question from Britta Schmidt from Autonomous.

But just a follow-up on Spain. The volumes at reports were weaker year-on-year in Q2 and also compared to the trends that we've seen in Q1 and remain below the market but at what sort of level of customer set would you need to see volumes pick up again to continue on an NRI growth trajectory into '26 and '27. And then just a follow-up on the provision on Brazil. I mean, with rates expected to be lower, and there's obviously going to be a volatility on the elections to be managed. But what would need to happen for the provision in Brazil to be released back into the P&L or to be used towards provisions in the future? What are the macro parameters that would need to improve?

I mean on your question on Brazil, it's important to tell you that we -- as I said before, and Jose already explained that we don't see expected losses to change, okay? So we basically continue on the same trend over there. In terms of what we see in terms of Spain.

The increase in cost of risk in Brazil is not coming from individuals. Employment levels are very strong. The economy is doing very well. It's coming mostly from companies and the increase in Chapter 11 bankruptcies due to higher rates. So some of the higher leverage companies are suffering because of the level of rates. So there is a limit to the deterioration in asset quality, obviously, because this only affects a very small portion of our balance sheet. So again, levels of employment, the ones we have today and with the expectation of lower rates, it's because we believe clearly cost of risk will go down next year. So these are the variables that really matter. But it's really important to mention that the increase in cost of risk is not retail. It's not individuals or SMEs. It's mostly midsized large companies that are having problems with interest rates.

Thank you, Britta. Okay. Let me give you a little bit of the dynamics of what's going on in the Spanish market, okay? It's never seeing a drop, an important drop in spreads and in margins because of tremendous competition in the market, okay? And we are being very, very disciplined in order to manage and to concentrate on profitability, okay? So it's important for you to understand that some of our competitors have decided to do mortgages. And I would say, all the way down to 165. We don't think that that's the right thing to do. We believe that the market basically is not profitable to do them at those levels, and we are being very disciplined in that. And the volumes that we're basically doing are at much better margins than those.

So when are you going to see us back doing much more bigger volumes when the spreads basically go to the right level. Because we do believe that the market would basically change and react to that and be more, I would say, more the right word in English is be more intelligent or smart in the way we're managing the margins. So in that sense, we have all the firepower, but we are basically expecting that the market will basically be much better, and we're concentrated also on fees and taking advantage of that. And also, you can take a look at what we're doing in terms of fees and penetrating the customer base. What we're doing in credit cards, for example, volume in credit cards in Spain grew really strongly these past 6 months because we believe there is an opportunity in the consumer side, as I said.

Even though also, we see some of the SMEs basically coming back to the market, and we are basically fulfilling that volume demand and also CIB with a lot of interesting opportunities, and we're basically going back to the fair volume, but we need a market that is smart and organized to be able to do that.

Thanks very much, Hector and Jose. This is the last question. So this brings our call to an end. I would like to thank everybody for joining us on what is a busy day. If you've got any follow-up questions, the whole Investor Relations team is available at your disposal through this week. Thanks very much, and have a good rest of the day.