Bank Millennium Aktie

Good afternoon, everyone. Welcome to Bank Millennium Second Quarter/First Half '26 Results. As usual, with us, we have Mr. Joao Bras Jorge, our CEO; Fernando Bicho, Deputy Chairman of the Board and CFO. My name is Dariusz Górski, I am Head of Investor Relations.

The structure will probably be similar to what we did in the past first. Joao will guide you through our business achievements, and there's a lot to talk about. It's been a very strong quarter for us. Fernando will follow with details of financial results. And after that, we will be ready to take your questions. Gentlemen?

Good afternoon, and thank you very much for your participation. We will have just one slide before Fernando go into more financial and operational details.

In the fall of 2024, we present our strategy, value and growth. And in that strategy, we explained that we would like to increase the volumes of the credits of the bank, particularly in the corporate side. And now that we already crossed 1.5 years, we are very happy to present the results that we are showing on Page 4.

And in the Page 4, you can see that we have total deposits grew 16% year-on-year. Total net loans grew 10% year-on-year with a record level of PLN 81 billion. Consumer loans grew 5% year-on-year. Corporate financing grew 32% year-on-year with loans up to 41% year-on-year. Leasing portfolio grew 8% year-on-year and growth of investment funds was 25 -- 27% year-on-year. This is already a big demonstration of the new dynamics that the bank is having. And moreover, the commercial momentum is even increasing.

In the right side of this Page 4, we can see that the active retail clients already achieved 3,354,000 with year-to-date, so just on this half of the year, the growth was 83,000 active customers with maintaining the high digitalization of this customer base with 94% of the customer being digitally active.

In terms of origination or sales, the first half of the year, we had in cash loans PLN 4.2 billion of cash loan sales, and this is 18% higher year-on-year. We had PLN 5.2 billion in terms of mortgage disbursements, and this is almost 3x higher than a year ago. Corporate loans, PLN 6.5 billion of origination, 77% higher than a year ago. And even leasing that was in the previous quarters, a little bit less dynamic -- than the other areas of the corporate already presenting PLN 2.3 billion of new leasing sales 21% increase year-on-year and factoring turnover PLN 17 billion of invoicing, which is 25% increase year-on-year.

So as I said, and this is shown also in the Page 5, the bank is progressing and even gaining momentum in terms of the commercial activity. The growth in terms of active customers and deposits has been significant since the beginning of the new strategy. So it's -- it's -- I would say that it's already -- the market is already used to that. The corporate, particularly in the middle of last year started to grow in a more intensive way. And now it's also the rebound of mortgage that supported very well this growth of the credit for the bank. And so we are very confident about the targets that we have for 2028, the business targets, but also the profitability targets in terms of return on equity, cost to income and all the other targets.

So I would pass now to Fernando.

Thank you. So I will continue with Page #7 with the main financial achievements of the first half of 2026.

Also financially speaking, we have a significant improvement. Reported net profit during the first half of this year reached PLN 708 million, which represents a growth of 39% year-on-year, supported by a resilient net interest income despite a lower interest rate environment when compared with one year ago. Some compression of the margin, but already being also offset by growth of the business volumes as it was already explained.

Also a better performance in terms of net fee and commission income, relatively low cost of credit risk also deceleration of overall cost growth and much lower costs related to FX mortgage. And so all these combination of these factors helped to more than offset the much higher taxation that we are facing in 2026 with a corporate income tax of 30%, which, in fact, translates to an effective tax rate over 40%.

Return on equity at 14.5% and NPL ratio, again, further improvement, reaching a new all-time low of 3.4%. On the capital side, very solid and strong capital position with a consolidated total capital ratio of 17.1% and a Tier 1 ratio of 16.1%. Both of them were supported in the first half of the year by the issue of AT1 in January. Further on, we still -- after the approval of the -- for regulatory capital purposes of the subordinated bond issued in May '26, we will have a further significant improvement of the total capital ratio. So we have now surpluses over 5 and 6 percentage points in terms of the main capital ratios.

We also keep very solid buffers over the minimum MREL requirements. And also, we are already complying with the long-term funding ratio according to the new formula that was approved and communicated last Friday. So also with a significant surplus above the minimum. Anyway, we were -- even if the formula had not changed, we would also be fulfilling the -- previously designed ratio. And we keep the loan-to-deposit ratio at 58%, which gives a very strong liquidity position to support the future lending growth.

On Pages 8 and 9, as usual, we summarize key profit and loss items and other key indicators, but I will go through the most important of them during the next pages of the presentation. So I would move to Page #10. So apart from this growth on the first half next -- this year, a profit of by 39% versus one year ago, we also registered in the second quarter a net profit of PLN 408 million, so a significant improvement also versus the previous quarter.

And in terms of overall performance, we have from one side, a growth of operating income without extraordinary items by 1% versus the growth of operating expenses by 6%. I mean, comparing second quarter '26 with second quarter '25. And so it is visible the deceleration of the cost growth, especially when compared with the previous two years. Also visible, it's already the better level of return on equity with the return on equity in the second quarter reaching 14.8% and 13.5% for the first half of the year without adjustments related to the contributions to the banking resolution fund.

On Page 11, we see the evolution of the NII. And the NII in the second quarter was flat versus the previous quarter. And in the first half of the year had just a small decrease of 3% versus one year ago despite the significant decline of market interest rates. The decrease of the net interest income was partially offset by a growth of 11% year-on-year of net fee and commission income, supported mainly by commissions coming from insurance, payment cards and investment products. The lower interest rate environment, of course, has been translated gradually in a decline in the average yield on loan portfolio. At the same time, there is a gradual decrease on the average cost of the deposits. And so the net interest margin in the second quarter was at 3.4%.

On Page 12, visible deceleration of the growth of operating costs, a growth of 9% year-on-year during the first half of this year, so already a single-digit figure. When we look at second quarter '26 versus second quarter '25, the growth is only 6%. And on the other side, we have a relatively stable number of employees with small fluctuations up and down through the quarters and a small decrease in the overall number of the branch network.

On Page 13, the credit quality continues to be strong. The NPL ratio fell to 3.4%. As a consequence, the cost of risk continues to be relatively low during the first half of the year, it stood at 34 basis points over total loans. In the second quarter, the cost of risk was further supported by the sale of NPLs, which had a positive gross impact of PLN 70 million. We also would call the attention to the fact that not only the NPL ratio is decreasing, but at the same time, we continue to increase the coverage ratio of impaired loans by total provisions, which went up to 82% compared with 76% one year ago. And once again, despite the sale of NPLs, which typically is done with loans that are significantly or totally provisioned or already written off.

On Page 14, the evolution of capital ratios. I already mentioned the most important, so much above the minimum requirements in all the different tiers, including the common equity Tier 1 ratio, Tier 1 and total capital ratio, so significant surplus. Total capital ratio still will benefit from the inclusion of the subordinated bonds in the total. And so this also gives the capacity for the bank to support the continuation of a strong growth, specifically in lending.

On Page 15, the picture about MREL ratios, also a significant surplus over the minimum requirement. And I already mentioned the status of the long-term funding ratio, which is also already fulfilled before its implementation in the end of December this year.

On Page 16, regarding FX mortgage legal risk, we continue to have a significant drop in the overall legal risk costs compared with the previous periods. So in the first half of this year, the pretax legal risk costs, mainly provisions dropped by 65% year-on-year. We also had the lowest inflow of court cases since 2020. The cost of provisions, the legal risk cost in the second quarter of '26 was also the lowest since 2020. And so although the costs are yet -- are still material, they show a significant decrease versus the previous year as it was expected and as we had expected during previous investor conferences.

So moving now to the second part of the presentation. A very strong business momentum on Page 18. We see that, first, we have a loan growth of 10%. It's a long time since we had a double-digit loan growth after also some of the restrictions that we have gone through. So for the first time in a long period of time, we have a total loan growth of 10% year-on-year, especially fueled by the growth of loans to companies by -- including factoring and leasing by 32% year-on-year, consumer loans by 5% and mortgage already growing, although modestly by 1%, but also for the first time in several quarters, we have the return of the growth of the PLN mortgage portfolio.

As a consequence of this evolution, the structure of the loan portfolio is gradually changing. So there is a gradual dilution of the share of PLN mortgage in total loans, which is now below 44%, while there is a growth of the share of loans to companies, leasing and factoring. On the customer deposits, very strong performance, overall growth of 16%, of which retail loans grew by 17% and investment products growing by 27% year-on-year.

On Page 18 -- 19, sorry, the growth of the loan portfolio is supported by very strong sales results, as it was already mentioned in the beginning of this meeting. On the retail side, the overall retail loan portfolio grew 1%. There is still a small depression in the loan growth due to the still decrease at a fast pace of the remaining FX mortgage portfolio. But as I said, it is visible already the return to growth of PLN mortgages and also the growth of consumer loans. So in fact, the retail loans would have grown 2% without FX mortgage. And we have a significant increase in sales, both in mortgage, almost 3x higher than one year ago and in cash loans, 18% growth year-on-year. On the customer fund side, what we would highlight is also a change of the structure with a faster growth of current and savings accounts in retail at the expense of term deposits.

On Page 20, a continuation of a solid and resilient growth of the retail active customer base. So in the second quarter, we had a net growth of 40,000 clients in retail, net growth, not gross growth. So which implies an overall growth -- net growth of 160,000 customers during the last 12 months, bringing the total number to more than 3.3 million active customers in retail. This is also being followed by a steady growth in the number of micro business clients, which is one of the segments in retail. And then, of course, all this customer acquisition translates into a significant increase in the number of current accounts and payment cards.

The next pages illustrate also the evolution in digital, again, continuation of the trends that we showed in previous periods. We would highlight this time that 80% of the active digital customers log into the bank only via the mobile app. We have more than 3.16 million active digital users of which 2.99 million are active mobile app users. So next time, we will already show a number above 3 million. We have 2.52 million active customers that are mobile-only users.

On Page 22, the omnichannel strategy is, of course, supporting significantly the servicing and sales to retail customers with very high shares in the sales of cash loans, current accounts, term deposits and junior accounts.

On Page 23, together with the significant growth in customers and also in digital usage, we are, at the same time, providing additional solutions, security and convenience to our customer base through different initiatives as it is shown on Page 20 -- 23.

Page 24, we are also, at the same time, strengthening the omnichannel assistance through the mobile app, through consultant support, improved accessibility and self-service. Page 25, we continue to invest in the development of the multibank cash back platform also following agreement with PSP, and we continue to see a significant increase in the number of users using the cashback service and in the amounts of cash back that were paid out.

Page 26, switching now to corporate, very strong momentum in the financing of companies has been kept and accelerated during the second quarter of this year. So total portfolio grew by 32% year-on-year, of which loans were up by 41%. Also, we had very strong growth in terms of the leasing portfolio and factoring portfolio. And so the numbers already allowed to have a significant increase in the overall exposure to company's financing that crossed PLN 25 billion and is supported by much stronger origination than in the homologous period of last year.

Also, as it was already mentioned, leasing sales have picked up in the second quarter of this year and overall grew 29% versus the homologous quarter of last year and 21% in the first semester and also the significant growth in the factoring turnover by 25% year-on-year. On the company deposits -- company's deposits, what we would highlight is the positive change of structure with a higher share of current accounts in the total deposits, but overall with a growth of 10% year-on-year.

So these are the most important highlights of our second quarter and first half results, and now we will go through the questions. Thank you.

Thank you very much, Fernando. As you were presenting, a handful of questions has arrived -- had arrived. Let's me start with questions relating to loans and deposits, and let's here give the floor to Mr. Joao Bras Jorge. Let's start from mortgages. Is share of refinancing in new mortgage sales still hovering around 40%? Second question about mortgages. Do you expect momentum on mortgage sales to be kept in the second half of the year? And also loan spreads development for new mortgage loans and in the corporate segment, please. So let's do mortgages first, corporate segment.

So yes, yes. In the morning, I said we are 35% to 40%, and it's 35% looks like it's the run rate of this month, but 40% is more adequate one, yes. It's around 40% the share of refinancing the new mortgage sales.

Yes, we expect that the volumes that we will have in the second part of the year would be similar to the volumes that we had in the second quarter. So it's around PLN 1 billion disbursement per month. So this is our expectations as well.

And what can I say about the spreads? Spreads have compressed, but a very small compression in terms of mortgage. At the moment, the biggest part of the production of mortgage loans in Poland are fixed rate or a 5-year fixed rate loan. The Bank Millennium at the moment only offers a 5-year fixed rate loan. We will see if we will change to flexible rate as well in the -- with Polestar. But at the moment, it's what we are doing.

So sometimes there is some changes also connected with IRS changes and so all of these changes. But I would say that in terms of mortgage, there was slightly -- a small compression, particularly compared because the question is also about corporate. And in corporate, we see the compression of the margins. This is not new. Quarter-by-quarter, we always express that we would accumulate price concessions in the corporate, of course, but we would not accept risk concessions. So we prefer to take 20 basis points if needed, to have gain a relation and to gain a customer than to accept some transaction that is a little bit more compromise in terms of risk assessment.

But of course, this needs to be compensate by volume. And also, we need to make these in medium transactions in order to allocate well our capital in corporate relations that also we can leverage later on in other kind of relations, transactionality, FX and all of the other business.

But it's clear that the market in corporate is very active. There is a lot of transactions. It looks like the companies after a time that they were investing using their own means and also making a lot of projects under the European Union funds it looks like there is a new phase that will require more financing. So we would expect as we are having good numbers that all the sector will present good numbers in terms of volumes, but some aggressiveness in terms of the spreads in corporate, particularly.

One of the participants is asking about the difference between the average interest rates on the back book and new production per segment, but you largely covered that. So maybe consumer is probably the only left...

Yes, it's -- but consumer is the one that is more indexed, the pricing for the interest rates directly because, of course, the interest rates go down, also the offer is going down. I think in Page 11, we have a very clear -- of course, it's blended, so it's everything together. But it's very clear the decrease, especially year-on-year in terms of the interest on loans, particularly if you compare versus interest on deposits. So I would say that the new production in -- it's -- the biggest margin depreciation is in corporate after that is consumer loans and then it's mortgage, I would say like that.

Now questions about corporate lending in volumes this time. What growth rates does the bank expect for its corporate loan portfolio, excluding leases by the end of the year? What is the outlook for '27 and '28?

I would say that we are having the volumes today that we would like to maintain. So it's -- when we present our idea about doubling the corporate portfolio looks too ambitious in 2024, in the fall of 2024. And of course, now looks even more than realistic looks like we are overachieve it. But we want to build the portfolio with time, exploring each relation, assessing each transaction. So I would say that we would maintain the growth in net terms as we are having PLN 3 billion to PLN 4 billion per year, let's call it like that. But as the portfolio is going -- is getting higher, of course, the percentage will getting lower. But we are at speed that we want to have. We do not want to speed up. We want to do what we are doing at the moment in a very consistent way quarter-by-quarter up to 2028.

We'll now make a small detour. I'll move to Fernando. There's a question about the structure of the breakdown of the corporate book in terms of sectors and the changes that occurred since last year.

As it was already said in the previous conference three months ago, the growth of the loan book is relatively diversified. We are trying to have a balanced growth of the financing to companies for different sectors of activity, avoiding excessive concentration. Of course, we are also subject to the demand and the demand is not uniform from the different sectors of activity.

But generally speaking, we see more appetite for investment, which is also supporting more demand for loans. This is also visible from market statistics that shows some acceleration of lending to companies in Poland in the recent periods. So overall, when we look at the picture of our corporate financing to companies one year ago compared with now, of course, it's not every -- not all the sectors, not the exposure to each sector did not grow at the same pace. But I can say, generally speaking, that we have been increasing the share of -- in financing of manufacturing, retail and wholesale trade and energy sector. So these are sectors where we have increased the share in the total loan portfolio, while there were a few others where the growth was slower or even did not grow, including in some sectors that can be more affected by high energy prices. So here, we are being careful in terms of managing this growth. But as I said, it also depends -- sometimes the change of proportion also depends on the demand that is coming from companies in specific sector of the economy.

Thank you. Now a few questions of -- regarding the deposits. First, it seems that one -- it has been one of the strongest retail deposit growth quarters, including the number of current accounts. Has there been any particular strategy behind such growth?

No, not really. We -- for us, it's clear that the mix is important. So in Page 26, you can see the corporate. So in the corporate, we are when we would like to be. So it's in a very stable time deposit portfolio that -- where we price it in a very rigorous way and all the growth will come more on the current account side. Of course, the corporate accounts, there are between -- in corporate between small organizations to big organizations. So we have different characteristics. But I would say that this is -- as we put more transactionality, improve our wealth services and everything, we would like to keep growing on current accounts, but there is nothing special that we are doing there.

On the part of the retail on Page 19, we are for some time, as you can see even for one year like that, we are trying to grow on savings account and current accounts. So we have sometimes it's not everything through current accounts, it's current accounts and savings account. We believe that this is more mass market. This is more adequate for our growth. The bank is extremely liquid. So to pay costly time deposits is something that does not make sense unless it's an investor affluent customer that is also investing or something like that. But in -- as a time deposits gathering, it's not a profitable game for us.

So we would keep growing in current accounts and in savings accounts for mass market. They've -- sometimes they have some promotions, but in a regular way, they are much less remunerated than time deposits. So I think it's more -- it was more success of previous strategies than anything specific that we did this quarter in our -- in our total deposit strategy, I would say.

Just adding that because it's going to be the next question regarding the evolution of the average cost of the deposits. So there was a decrease, not very significant, but there was a decrease in the second quarter. There is a -- there will be a trend of continuing to have a gradual decrease in the average cost of the deposits. So we expect these effects to continue. It always takes some time after the cuts of interest rates to -- that this is reflected in the average cost of the deposits. But our expectation is that there is still room for further reduction in the average cost of the deposits in the future periods.

Thank you. We're now moving to the P&L. One of our participants is asking for an update on NII. NII ex consumer charges performed minus 2% in the first half of the year, slightly below compared to the resilient/flattish NII guidance. Shall we expect an improvement in second half '26 in the trajectory?

I think that -- so the NII continues to be very resilient. We consider this decrease of 2% year-on-year, relatively small, taking into consideration the size of the decrease of the average interest rates between the first half of last year and the first half of this year. Second, we expect that also the significant volume growth that we are showing, both in the deposits and in lending will have a gradual positive contribution to the NII.

We -- as everybody knows, we have a significant excess of liquidity loan-to-deposit ratio of 58%. It means that we have a substantial portfolio of bonds and NBP bills. And of course, any recycling, let's call it, of this excess of liquidity in lending should also bring some additional margin. So we stay relatively positive regarding the -- in terms of prospects for the NII, also supported by this volumes growth from the commercial activity of the bank and also from the expected stabilization of interest rates in Poland until the end of this year because this is currently the most likely scenario. And so if it will happen, it will also be supportive for the resilience of the NII.

We have two somewhat contradicting questions on NIM. One says like-for-like NIM seems to have stabilized. What's the outlook going forward given the strong volume growth? But the contradicting question is, what is the reasoning behind your guidance regarding the downward trend in the NIM? Is it due to the growing share of bonds and assets? Or is the growth in the corporate segment taking place at low margins?

So I think we would answer in the following way. So the -- so interest rates have come down. Consequently, although, of course, we tried to hedge as much as we could for the anticipated reduction of interest rates, there is always some negative impact in terms of NII and also in the NIM. We also -- and so we -- when we look at the evolution that we have of the NIM and still going forward, we have gradually been increasing the share of the fixed income portfolio in the total assets. It is visible that the growth of the bond book in the last two years. And of course, this helps to compress the margin.

So although, as I said, we have been trying to protect as much as possible against the decrease of interest rates, there are also limitations in terms of for which -- for how long we can make these hedges. And so that's why we have been careful in showing that this trend has been downward growing. We think that with the stabilization of interest rates at the current level, this can help to stabilize the NIM. But at the same time, we cannot forget that we are -- when we have situations where fixed rate loan portfolios from the past are maturing or being repaid and then they are replaced by lower rates -- lower current rates, like, for example, in mortgage or in consumer loans. It's also true that the contraction of the spreads in corporate is also not helping to offset this compression of the margins. Still, all in all, we expect the NIM to gradually stabilize and which still gives good prospects for the resilience of the net interest income.

We have touched upon the balance sheet structure. So there's also a question about the share of bond securities going forward. Do you expect them to grow, remain the same?

We do not have a target per se regarding this, right? What is driving this is the fastest growth of deposits versus loans. We see now a reduction of this difference, right? But in absolute amounts, deposit growth have continued to grow at a faster pace than loans. So as long as this happens, of course, we always have some additional excess of liquidity that needs to be deployed. We expect going forward that loan growth will stay double digit because we think it is feasible to achieve with the trends that we have seen in the second quarter. This is a big difference versus the past.

Deposit growth, we are not limiting the deposit growth, especially in retail and in current accounts from companies. We are not limiting this growth. So we are a little bit dependent on what will be also the market conditions. But I think that we are reaching, let's say, the top in terms of the share of bonds in terms of total liquid assets. I think that with the current trends, I think this will not grow much more.

Thank you. Moving to costs. Our viewers would like to know what's the latest -- what's the guidance in second quarter, costs have decelerated. How do you expect cost to behave in full year and second half of the year in...

So as we mentioned and stressed during the presentation, after at least the last two years or three where we had double-digit growth of costs and as we had signaled already two quarters ago, we expect for this year single-digit growth of total operating costs. And we keep this view, the numbers after the first half of the year are, let's say, supporting this view. Of course, it's still a relatively high growth. So it's still, let's say, high single-digit growth, but it's single-digit growth. So there is a clear deceleration.

And we keep the view that this will still be achieved by the year-end. And this is also -- this is somehow translating also what we see in terms of the market. We see slower growth of overall compensation in Poland in recent periods when compared with previous periods. We see also less hot labor market, which is also visible in different sectors of the economy. So we see some, let's say, external evolution that also can support this slowing down of the cost growth.

Having said that, we are still investing, okay? So we are still -- the new strategy that we have been implementing implies investments and implies costs related with the development of some activities to a much bigger scale than what we were doing in the past. So that's why we knew that we were going to still to have some relatively high cost growth. So it's not a surprise, but I think the trend is positive.

We have one very detailed question regarding fees. One of the analysts is asking about fees from accounts. Profits from account-related fees has declined this year due to a noticeable increase in costs. Does the bank expect this line to return to higher level?

It's a very detailed question about which I will give a very generic answer. So this is related to the growth of commission costs related to accounts. And this is related to costs related to the customer acquisition, external customer acquisition that are booked as commission costs. And of course, if customer acquisition increases also some related costs also increase.

And also due to the change of the model related to the ATM network that the bank was having this also implies that some of those costs have increased in the commission cost line. So this is a general justification for the fact that the commission costs have been increasing and part of them will stay. So we cannot say that they are one-offs. Some of them are here to stay.

Thank you. We have three large blocks left. One would be FX mortgages only one question effectively foray. Do you expect a sequential decline in CHF mortgage costs in second half of the year after 65% running -- run rate decline so far.

I would not call it sequential. I would call it a continuation, right? So last year, I think I remember to have said when we closed the year that we -- last year, the overall cost reduced by 34% versus the previous year. And we said that we were expecting that the fall of the cost this year would be higher than in the previous year -- at least 50%. So it's dropping 65%.

We think that it is still possible that the same drop in percentage-wise will be possible by year-end. So I think that without speaking to a specific percentage, we continue to believe that there will be a very substantial decrease of the overall cost related to FX mortgage during this year versus the previous year.

Thank you. Now elephant in the room. There's a handful of questions related to consumer loans. I will not read all of them because they are, in a way, similar. The viewers are mostly asking, first of all, about our expectations for, first of all, litigations that we expect after the trend in litigation that we expect after the ECJ ruling. They also ask about provisions, if we expect them to continue and if they are tax deductible. Yes, I think this is. And also, when do we expect to create provisions regarding past portfolio? So these are four questions.

So I will give the first initial view, and then Fernando will go to what we already did in our accounts. So the legal risks on consumer loans, it's -- we have been worried about the situation. We disclosed this situation in our reports, but also in all the interventions that we have in the public interventions with the press, with everything, roundtables, conferences and everything, we always highlight that we are very concerned with this situation, and this is for more than one year ago.

It's very difficult to assess, and you need to understand that because the number of cases is in nominal terms is still very slow -- very small. When we look about claims, when we look about court cases, is extremely small, and it's very difficult to make assessments, projections. It's very difficult. I know that it's a concern that all the analysts have, but to have any guidance on this area would be impossible because it's very difficult to assess. So we are concerned. We are disclosing our concerns, we are disclosing also our information. We believe that --there is ground for the sector to find solutions. But meanwhile, we did what we should have -- should do, and Fernando will explain what is our disclosures and also what was the movements that we already did in the -- in second quarter this year.

So I start just by reminding that, of course, we have been disclosing the risk related to consumer loans already for quite some time in our financial reports. The event that now is triggering more attention is the decision of the European Court of Justice of 23rd of April. It is not a decision about free credit sanctions, just to be clear. But it is a decision that has implications in terms of the interest that can be collected on part of the loans in case they included a component that was financing the commissions or insurance. And so it's -- so this is, let's say, the trigger for this additional attention regarding this topic.

So what we have done during the second quarter was the following. First, taking into consideration this decision, it is visible that the bank -- the banks in general will stop charging interest regarding the part of the loans in case they exist that financed this related credit cost component. So -- and we are going to do that in the near future. And as a consequence, we made an assessment about the impact on the future net interest income that will not be received because of not charging this interest component. And the amount that we booked through net interest income in the second quarter was PLN 35 million. So I would say this is a one-off adjustment that is related with future lower interest income.

And then taking into consideration the uncertainty regarding the legal environment of this consumer loans and the certainty, especially regarding in which way local courts will interpret this decision from April from the European Court of Justice, we have set aside a charge of around PLN 61 million that was booked through other operating cost. So these were the two things that we have done during the second quarter. We will need now time to see if there will be any change in terms of claims or in terms of court cases and in terms of court verdicts in order to be able to assess to which extent the picture from the past will be changed or not, namely the picture from the past was that until April, the banks were winning in general, more than 80% of the of the court cases. And since April until now, it's still too short time to be able to take conclusions regarding the -- how the courts are -- will interpret and apply this decision from the European Court of Justice.

And on the top of that, also, we must add that there are additional questions that are submitted to the European Court of Justice regarding the same topic of consumer loans that -- which decisions in the future also can have impact in terms of the application by the local courts of specific decisions. So we are not able at the current stage of giving any guidance regarding any needs of future charges regarding this topic. It's what we have done now is based on, let's say, the current uncertainty is based on the existing number of cases that we have received through time.

As I said, we have been always disclosing in the different periods, the number of lawsuits that is pending, and this is also disclosed in our financial statements published today. And now we will -- in the next months, we will continue to assess the implications, but especially the jury is prudent in terms of the decisions of the Polish courts and also analyzing to which extent there is a change or not of the trends in terms of the inflow of the claims.

Thank you…

Sorry -- because there's a question if what we have done is tax deductible or not. We have considered that the adjustments that we have done are a tax cost. So this is -- so that's what -- the value that I mentioned are gross values.

Thank you. Moving to a completely different subject. What comfortable dividend payout do you see for the bank given the strong pace of loan growth?

Yes, the policy is announced. So if something -- so the guidance would be to the lower level of the -- at least in the initial phase of the policy, 35%, 50%. Anyhow, I think it's also important to state that -- and we always said this, it's the payment of dividend depends, first, of course, the results of the bank and the level of the results of the bank. But second, and even more important, by the regulatory conditions for that and the recommendations, the direct recommendations of KNF.

So it's -- this is always very important to say this. It's, of course, there is behind this question also, it's with such a dynamic growth of lending, if it makes sense or not to pay or not to pay. But we believe that paying is also a signal of healthy shareholders' relations. So we need to have a combination of that. But it's, of course, that the generation of capital is also important to -- to keep growing the lending book.

Fernando, a question to you probably. Should we expect new senior nonpreferred debt to refinance the upcoming call?

This will be announced in -- in due time, but everybody knows what were the conditions of the first issue. So -- and also everybody can see how much surplus we have in terms of MREL, but we will announce the decision in the proper time.

Either one of you gentlemen, your views on taxation -- noise in Poland that has been floating around recently.

Poland is a extraordinary economy, a beautiful country, but a very challenged regulatory and political environment to run a business. So when we think that everything is very clear that, of course, there was a increase of corporate tax, but there is also -- was also announced all the further steps to come to a more regular rate. There is now a noise about maintaining, increasing to name it.

I already said once and some of the colleagues I think its -- it was -- we should not say this, but truly, truly, the corporate rate is this less – my less concern. My biggest concern is the lack of rule of law and the difficulty that we need to have long-term contracting this environment. So this is my concern. And this is what I hope that Swiss franc sideway is over. It's very difficult to go back and to restate the legal ground to get all of that confusion. But it's very important that in VIVOR migration to Polestar to have a clear environment without ground for litigation companies to make their profit pool. And also in terms of consumer loans, it's very important that we find a solution that is good for the economy and consumers, but not another ground for the litigation companies to have their profit pool.

So -- but this is the concern. We are very focused in growing the lending book, developing our business. We are extremely happy with this commercial momentum. When we start this strategy, we were seeing some difficulties to be already at this level. We knew that we had the big challenges in terms of corporate, but also in mortgage because its --it was -- there was some legal challenges on VIVOR, as we said, but also there was long-term financial conditions and everything.

So -- but step by step, we have been addressing these topics. Of course, it's -- we have PLN 140 billion of deposits and PLN 81 billion now of loans. So to be balance, it's not very reasonable. But at least, we grew PLN 5 billion, a little bit less than PLN 5 billion in loans year-to-date and PLN 10 billion in deposits. So it's -- we have a lot of room to grow in lending. We are very happy to have double-digit growth. Of course, it's very low double digit, but it's double digit already. So I think it's -- and we feel the commercial reaction and the customers' interaction is very positive. So we are very positive in commercial terms for the second part of the year.

Well, before we move to close remarks, we have developed a little bit of a ritual that Fernando always said right to the last question. We have -- do you think any of the questions we did not answer completely or we omit any? I guess the answer is no.

All right. I think that we covered in general.

Okay. Thank you very much. So Joao, any closing remarks?

I did it already. But just to tell to the analysts that today in the morning, the journalist, there was no questions on M&A and if BCP is selling the bank and this kind of questions that I have been having in these meetings for the last 20 years. But also that -- the -- we are very focused also in this execution. So we don't have -- we will not have a new story to tell up to 2028. So up to 2028, we are 100% focused in execute what we announced in 2024. So it's -- there will be no -- and unless something extraordinary happen, but we will be very focused in increasing the investment funds. We have still a huge potential there. We will keep revamping the mortgage. And now that we also grow in corporate, we start to be more balanced as a bank, so we can dedicate more in mortgage. Consumer loans, maybe we are -- we will be able also to produce even more than we are producing. And of course, corporate, as I said, we will keep this space at least in nominal terms for the next quarters to come.

So it's -- we are quite positive. It's also important, as Fernando said, to see some deceleration on the cost base. This is also important. And also, we believe that maybe a little bit slightly correction here or there, but we believe that the biggest part of the reduction of the margins is done. So it's -- the big part of the rate decreases last year was at the end of last year. So it was obvious that the impact is in beginning of this year.

With lower interest rates, sometimes also the margins reduce a little bit because it's, of course, it's much easier to put 2% spread when you put in the rate of 5%. Then when it is 3% or 2.5%, it's more difficult to have this 2% on top because it's always a percentage also of this amount, and this is very normal. But we are quite confident and I would say, quite proud about the results that we are delivering.

Thank you very much, gentlemen. Thank you very much for your time. As usual, thank you very much for your direct and open answers to some of these not easy questions. And to the audience, thank you very much for interest in Bank Millennium. We wish you a lovely summer and the rest of the summer. I hope you will enjoy and have some holiday break once the results season is over. Otherwise, see you on the 27th of October. Thank you very much. Best of luck. Thank you.

Good afternoon, everyone. Welcome to Bank Millennium first Q results call. With us, the usual speakers and presenters, Mr. Joao Bras Jorge, our CEO, Chairman of the Board; Mr. Fernando Bicho, Deputy Chairman of the Board and CFO. My name is Dariusz Górski. I'll be trying to manage or let's say, control the call.

You know the drill, we typically do presentation first, and then we are answering your questions. We follow it this time as well, although we want to make a small change. Mr. Joao Bras Jorge will do the opening and also guide us briefly through key business achievements of the quarters because we are very proud of this time. Over to you Joao.

Thank you. So let's start on Slide 5. So Slide 4, we have just a highlight of some of the awards that the bank received that just confirm that -- the bank is very focused by differentiating itself by the quality of services and the innovation of the products and the customer experience that provides. But to Page 5, we have in beginning, just to highlight some of the business achievements. As we initiate second year of the strategy, it's very visible the results that we are achieving and how successful the implementation of the strategy is being. As you can see, the total deposits year-on-year grew at 13%. Consumer loans year-on-year grew 5%. Net loans to companies, 40% year-on-year.

And as you remember [ well ] this was the biggest challenge that we have for this new strategy to build such a strong franchise in corporate banking as we already have in retail. Leasing with the portfolio grew 6% year-on-year and also the growth of investment funds 30%. In last 3 years, we have been presenting the growth of the investment funds every year around 30%. On the right side, we keep growing very well in organic [ way ] on customers. So in retail active customers, we already achieved 3,313,000, and this is a year-on-year acquisition of 150,000 customers active as net growth with 95% of the customers being digital actives.

And looking for the origination that gives a bigger flavor about the dynamics that we are having at the moment in commercial level. You can see that in cash loans, -- we had almost PLN 2 billion of production in the first quarter. So it was PLN 1.9 billion in production, which is 9% higher than the first quarter of 2025. In mortgage loans, PLN 2.2 billion of production, and this is 179% higher than the first quarter 1 year ago. Corporate loans, PLN 3.2 billion, which is 122% higher year-on-year. Leasing PLN 976 million, 12% higher than the first quarter of last year and Factoring Turnover also with almost PLN 8 billion of turnover, which is 21% higher than 1 year ago. So this is a demonstration that the strategy is being successful, implemented, that the results are visible and that we are in front of a very dynamic business volumes that, of course, will translate also in the financial results.

And now I will pass to Fernando.

Thank you. I will continue with the main financial highlights of the quarter. On Page 7, we reported a net profit of PLN 301 million, a growth of 68% year-on-year. The net profit, excluding extraordinary items, stood at PLN 514 million, 28% lower than 1 year ago. The return on equity on an adjusted basis by splitting throughout the year, contributions to the resolution fund reached 15.2% or 12.1% on a reported basis. We continue to show a very resilient net interest income despite a much lower interest rate environment. In fact, our NII in the first quarter reached PLN 1.4 billion, just 2% down year-on-year with the net interest margin at 3.65%, 58 basis points lower than 1 year ago, but this is against the background of a drop of the average 3-month WIBOR of 199 basis points, so almost 200 basis points decrease year-on-year.

We show some accelerating and well-diversified fee and commission growth, plus 12% year-on-year. The cost-to-income ratio on an adjusted basis at 39%. The cost of credit risk continues to be relatively low and stood at 45 basis points over total loans, not being supported this quarter by any sale of NPLs. The NPL ratio further improved and reached an all-time low of 3.7%. We also had relevant developments in terms of capital during the quarter.

We significantly improved the total capital ratio that is now at 17.6% and the Tier 1 ratio that is now at 16.4% after reflecting the proceeds of the AT1 bond issue that we have done in January in the total amount of PLN 1.5 billion as well as the retention in nonfunds of the second half 2025 net profit. Consequently, we further increased the buffers over the minimum regulatory requirements, which were respectively at 5.8 percentage points and 6.6 percentage points.

We also have solid buffers over the minimum requirements, also supported by the issue of the AT1 in the first quarter. The long-term funding ratio reached the targeted level of 40%, which was supposed to be met by year-end. And the loan-to-deposit ratio was flat at 58%. I will skip the tables of Page 8 and 9 that gave the more detailed information about important P&L items and different ratios because we will see them throughout the presentation. So I will go directly to Page #10. As usual, we are presenting the status of the execution of the strategy 2025, 2028 in terms of the main business, financial and risk indicators.

And we can say that we are generally on track to achieve the targets for 2028 with special emphasis this time on the execution progress that we have achieved in the corporate area with a significant growth of the corporate loan book. And just as a reminder, we have targeted doubling the size of the corporate portfolio during this 4-year period of the strategy. Other indicators are also supportive in terms of the improvement of the ROE, reduction of the NPL ratio, continuation of the pace of significant growth of the customer base in retail, which is also now being followed by the growth of the customer base on the company's segment. On Page 11, -- we see the evolution of the net profit that, as I mentioned, stood at PLN 301 million.

It must be highlighted that in the first quarter of this year, we had higher contributions to the banking guarantee fund, namely to the resolution fund than 1 year ago, but this will be offset throughout the next 3 quarters due to the fact that there will be no contribution to deposit guarantee fund. So when we will reach the end of the year, actually, the contributions to the banking guarantee fund will be lower than in the year 2025. Anyway, we have this inflated figure in the first quarter of the year when the resolution fund contribution is fully booked. And as a consequence, this inflated the admin costs and somehow deflated a little bit the net profit that would have been achieved otherwise.

On a reported basis, we show an ROE of 12.1% or 15.2% if we would spread out through the year, the contribution to the banking guarantee fund. On an adjusted basis, so as I mentioned, the net profit stood at PLN 514 million. On Page 12, we see the evolution of the NII, which continued to be very resilient. We had a drop of only 2% versus 1 year ago and 3% versus the fourth quarter of 2025. It is visible on the top right graph that we continue to have repricing of the loan portfolio of the variable rate part of the loan portfolio, which translated into a reduction of the interest on loans to 6.75%. But at the same time, we managed to decrease the average cost of deposits by 17 basis points to 1.78%. And so the net interest margin marginally contracted in the quarter by 13 basis points versus the fourth quarter of '25.

On the net fee and commission income, we have some positive developments. After, let's say, more difficult period last year, we already see clear signs of improvement with the growth of net fee and commission income by 12% year-on-year and 2% quarter-on-quarter. The growth year-on-year being supported by higher commissions from insurance and from investment products. On Page 13, on a reported basis, operating costs grew 12% year-on-year. If we exclude this BFG impact, the growth was 10%. Other admin costs grew just 8%. So we see signs of deceleration in the cost growth. The cost-to-income adjusted stood at 39.1%. Asset quality continued to be strong. Page 14, NPL ratio further down to 3.7%. Cost of risk at 45 basis points over total loans. As I mentioned, no sales of NPLs in this quarter. And also, I would stress the further improvement of the coverage ratio of impaired loans by total credit risk provisions from 74% 1 year ago to 82% in the end of March.

On Page 15, capital position further improved in the quarter, mainly due to the issue of AT1 bonds and the retention in own funds of the net profit of the second half of the year. This was partially offset by a decrease in the valuation of the hold to collect and sell bond portfolio due to the correction that happened in March.

On Page 16, significant surplus also on MREL requirements, both MREL trea and MREL tem and a very strong liquidity position, which puts us very well positioned for the further growth of the loan portfolio since we have now a loan-to-deposit ratio of only 58%. Last but not the least, we reached the level of 40% in terms of long-term funding ratio according to the current definition of the ratio. Of course, if the formula will be changed, we will have even bigger comfort in terms of the fulfillment of this new requirement.

On Page 17, regarding FX mortgage legal risk, we had from one side, a significant drop in the overall cost connected with legal risk. On a pretax basis, a drop of 61% year-on-year. In terms of quarterly dynamics, we had an increase versus the previous quarter of the inflow of court cases to 893 million. Still, this is the second lowest inflow for many years of court cases. And on the other side, we had a lower number of settlements in the court and out-of-court proceedings also due to different dynamics of the cases in the courts. But we can say that from our side, we continue to do all the efforts to continue to have the -- as much possible settlements regarding the existing court cases. Moving now to the second part of the presentation regarding business development. So we have visible signs of acceleration of loan growth.

Net loans on a consolidated basis grew by 5% year-on-year or 6% if we exclude the FX mortgage portfolio. And this is despite the fact that we still have year-on-year the contraction of the PLN mortgage portfolio, although on a quarterly basis, it already grew. We continue to have a solid growth of consumer loan portfolio, 5% growth year-on-year, especially, of course, the growth in this quarter was fueled by the significant growth of the corporate portfolio, including leasing and factoring that grew 27% year-on-year, accelerating the growth pace vis-a-vis the previous quarter.

As a consequence, the structure of the loan portfolio is gradually changing with some dilution of the PLN mortgage portfolio and increase of the share of corporate leasing and factoring in total loans. Customer deposits has also a strong performance, a growth of 13% year-on-year, both coming with similar growth rates from retail and from corporate, but also with an increase of the share of current accounts and savings accounts in total deposits and the decrease of time deposits. While in investment products, despite the turmoil in March, we still show a significant growth of 31% year-on-year and particularly a growth of 39% of our Millennium TFI mutual funds.

On Page 20, the sales of consumer loans in the quarter were solid, a growth of 9% year-on-year. But of course, much more visible is the significant jump in the sales of mortgage loans that grew by 79% (sic) [ 179% ] year-on-year, the origination in the first quarter reached PLN 2.2 billion, which allowed us to reach a market share closer to our natural market share of 7.7%. In cash loan sales, the market share is close to 9% in the first quarter. Overall, we had the growth of retail customer funds by 15%, especially fueled by the growth of investment funds.

On Page 21, we continue to show a significant growth of the active number of retail clients. On a net basis, the number of customers grew by 42,000 in the quarter, 150,000 year-on-year. And at the same time, the micro business clients portfolio also further increased by 5,000 during the quarter. And of course, this growth of customer base is followed by a significant growth of current accounts by 276,000 in the last 12 months and cards by 229,000.

On Page 22, Mobile app is in the center of our contact channels with our customer base. We continue to show impressive numbers regarding the level of penetration of digital in our customer base. So just a few important figures. We ended the quarter with 3.13 million active digital users, a growth of 6% year-on-year, 2.94 million active users of our mobile app, a growth of 8% year-on-year, of which 2.43 million are active mobile-only users. And we had 2.26 million BLIK users in the first quarter, a growth of 9% year-on-year. And on the top -- on the right side, you can see the split of how our customers use the different digital channels. The digital processes are contributing to Boost acquisition.

On Page 23, you can see that in the first quarter, we had 69% digital share in current accounts acquisition, apart from already very high share in credit card sales, 81% or cash loan sales, 88%. And this is being recognized externally. We got the first place as best remote account opening process. Pages 24 and 25 further illustrate how we are putting the customer needs at the forefront of our digital development. And this is translated into very practical usage of our solutions. So for example, 74% of the Family 800+ applications were submitted via the mobile app. And we are promoting solutions that we are implementing solutions that promote cross-channel synergy as illustrated on Page 25.

Page 26, we continue the development of the goodie platform. And this quarter, apart from the continuation of the relevant growth in terms of transactions with cash back and we would highlight the establishment of strategic cooperation with Polish Payment Standards, the PSP, the operator of BLIK in the area of multi-bank cashback platform.

Moving to companies, Page 27. We have a strong momentum in company's financing. Total portfolio grew 27% year-on-year and specifically, loans to companies increased by 41% year-on-year. At the same time, total deposits grew by 13% year-on-year. The origination of loans to companies in the first quarter was more than the double of the one registered in the first quarter 2025. Also, positive signs are coming from leasing, where new sale picked visibly -- picked up visibly in March. And this has allowed us already to have a 6% growth in the overall leasing portfolio.

And finally, on Page 28, the acceleration of -- and the momentum of the corporate business is also illustrated by the levels of leasing sales, plus 12% year-on-year and factoring turnover plus 21% year-on-year.

So these are the most important highlights of our first quarter results, and we will go through the Q&A. Thank you.

Thank you very much, Fernando. You're doing very well because we have practically no question referring to the content of the presentation in the past. So this speaks for itself. We give you a bit of a breathing space. So why don't we start from questions relating to loans and deposits, and I will direct them or ask them to Joao.

First question is, first quarter was another quarter and despite strong sales portfolio of PLN mortgages only grew 1% quarter-on-quarter. Are early repayments behind it or refinancing? When do you expect an acceleration of the growth of the portfolio? And also a question within this context, do you consider the mortgage market as attractive at the moment?

So we believe that already next quarter, we will present more the same level than a year ago or starting to show some growth in mortgage. It was PLN 5.7 billion is the portfolio. So we should be where we started just -- so if I remember -- so we have mortgage -- sorry, PLN 35.7 billion. So yes, so we have PLN 35 billion [indiscernible]. So we should already present some growth next quarter. Last year, of course, we had also some intention of producing a little bit less. We end up to have this impact with an increase of the early amortization and some refinancing.

So we end up falling in terms of the portfolio more than we were expecting. We explained this in the results presentation of last quarter that the decrease was not so intentional and that it was our intention to stabilize and start to grow, and this is what we are doing at the moment. So we are producing as it was shown PLN 2.2 billion in the quarter. We should expect the same levels of production, maybe a little bit higher in the next quarters. So there is a mix here, and we need to remember that for our portfolio, we already have a reasonable normal amortization. Besides that, there is also some early repayments. So it's partial or total early repayments, not just by refinancing, but by the customers per se because it's all the processes are user-friendly without commission. So even in a mobile app, a customer can repay partially any amount that he wants of his mortgage.

And of course, now there is the refinancing. So putting together because we have also these kind of questions. 40% of our production is refinancing. We believe that should be aligned more or less with the market. We think the market is attractive, but it's always a question of doing in a balanced way. And what we are trying to fine-tune as much as possible is to do the right size of the mortgage portfolio. So to do the right size of the production, also aligned with the market share that we have in retail and market share of customers and all of that. We have been also giving some special conditions to green mortgage, so mortgage that fulfilled some ESG criteria to build a better portfolio. And I think that's all.

There's also a bit more nuanced question in that regard. How much of the mortgage sales results or include or a function of refinancing of loans from our own portfolio, so effectively existing clients?

This is -- so we don't refinance ourselves in this perspective. Of course, we have some retention process in cases of the customers renting outside, but it's in a small amount. So even when we go back to trying to understand the repayments, we -- that's why I was so assertive that there is normal repayment. So a lot of our customers repay the loan not by refinancing, but by their own cash or partial repayments.

So it's not so significant. Some of the refinancing that is done, there is also a different tenor, sometimes more amount. So sometimes it's not just a question of price. There is also a question of taking the opportunity of a lower interest rate environment to make a different structure of the finance. And as I said, we -- so the percentage of our own, let's call it, renegotiation of the rate is small. The percentage of our production that is refinanced is 40%.

We also have other uncommon question already one about deposits. Do you expect to continue reducing the share of term deposits throughout the year? What are you doing to change the mix and still grow the overall book?

So I alert that it's the part that is not time deposits is also savings account. So it depends a little bit what is the product preference or the product that also the bank invests more in promoting. The bank have been promoting savings accounts because we believe that it's the most adequate product for the mass market. Being very liquid as our bank is to be aggressive in the affluent or even in private banking. On-time deposits only makes sense if there is a strategy to attract the customer to further on allocate this amount in investments, the deposit per se does not make a lot of sense.

So that's why the bank is promoting more the savings account because it's a tool for the standard savings and to attract mass market customers and also to initiate the journey for -- first for savings and later on for investments. These have been the strategy. So the strategy as a consequence, the growth of the total deposits with the growth of the amount that is allocated in savings accounts plus current accounts. The amount, I would say, in gross numbers is a little bit 50-50 between savings accounts and current accounts. As time goes by, you will see even maybe an increase of the savings accounts versus time deposits.

In a traditional way, what we grow in terms of total deposits is very similar what we grow in current accounts, which also shows primacy, increase of customers and all of that. There is always a challenge for us. So sometimes we discuss it very internally a lot. because the bank is very liquid. And so we are always waiting to grow in the credit to allocate all of this liquidity. Anyhow, because the growth is very much in mass market, it's a nonsense to block this normal growth because this will be blocking the growth of our own franchise in retail. So we will keep growing as we are. This is an issue about all the sectors. So the banking sector is very [ liquid ] in Poland, but we will keep this developing of our retail bank.

Thank you very much, Fernando, over to you. First question, let's get the historics out of the way. First question on the past. Despite the balance sheet growth, the value of banking tax dropped. What was behind this?

The level of the banking tax is influenced by the size of the equity and by the size of the Polish government bonds portfolio. So what we had during the first quarter was, first of all, the significant increase in our equity due to the issue of AT1 instruments, right? That was included in March in our own funds. So this contributes to contributes to decrease the base. And second, also some change of the composition of the liquid assets portfolio. So we had a little bit more -- a little bit bigger part in Polish government bonds and less balance of NBP bills. So these were the main drivers of the change of the base, which translated into a little bit lower -- not substantially, but a little bit lower banking tax.

Thank you. We have received a few questions on NII. So let me aggregate them. Could you please update on the NII guidance from '26 and '27, given the new rate outlook? By the way, do you have a new interest rate outlook? How do you expect volumes and margins to behave in the rest of 2026?

When we started the year, we were -- our interest rate scenario was that interest rates would be cut to 3.5% until the middle of 2026, and then they would stay flat throughout the '27 and '28. This was our base macroeconomic scenario. We have now interest NBP rate at 3.75% and current market expectations is that this rate will stay stable maybe until the end of the year. We cannot be sure, but at least this is the current market consensus. So what we expect is that this can be supportive to avoid further compression of the net interest margin.

There is always some further compression that comes -- that was coming from the gradual repricing of the portfolio that is variable rate. And so with the lower interest rates, of course, there was some repricing that is visible in the average remuneration of the loans that I mentioned during the presentation. If the interest rates will stabilize at the current level, what we can expect is some stabilization going further in terms of the net interest margin. But also we expect that the positive effects from the volume growth will start to play out and namely that the growth of the loan portfolio gradually will replace part of the bond portfolio that we have, which would bring nominally higher yields.

And so would be -- so this volume growth would contribute to offset, let's say, the contraction of the margin that we have observed in the last 12 months. So to summarize, we also, of course, have a partial protection through our bond portfolio in terms of NII. So all in all, we expect to -- that NII going forward will tend to be more stable. We are not making, let's say, projections for each quarter. We -- usually, we don't do this. But I think that the perspective for the year is that the volume growth throughout the year will tend to offset the reduction of margin that we have observed during the recent quarters. For 2027, if the interest rates will remain stable, of course, the perspective should be positive due to the continuation of the volume growth that should be beneficial for the NII.

Next question is on fees and commission commissions. Is low double-digit net fee and commission growth in first quarter a good proxy for the rest of the year?

I think we are positive in terms of the evolution of net fee and commission income, but we are -- it's too early to say whether we will be able to achieve double-digit growth. I think there is already some visible rebound. But also due to the recent market volatility, of course, it's more difficult to predict how the commissions from investment funds will evolve. It's obvious that when there is market turmoil or volatility, the inflows decrease or even in specific moments, there can be some outflows, and this can have an impact on the overall fees that are charged on the investment funds. So I think we are positive that this year will be clearly better in terms of evolution of net fee and commission income versus the previous year. We are -- it's too early to say whether a double-digit growth can be achieved.

Thank you. Now cost of risk. Could you please update us on the cost of risk given the worst/uncertain macro environment? Is it still 50 basis points for the full year?

In our quarterly report that we published today in the morning, we also elaborate about the macroeconomic environment and the potential consequences of this war in the Middle East, which, of course, is subject to a large uncertainty due to the fact that it's impossible to predict when the situation will finish and for how long the effects will stay and which effects will have more impact for the Polish economy. But our -- but our view so far is that until now, we have not seen any material impact from this situation in the quality of the credit portfolio. Of course, we have put into place the monitoring that is appropriate for these situations, both for the corporate and for the retail portfolio.

This situation started less than 2 months ago. So it's too early to take definitive conclusions about what is going to happen. As I said, so far, we do not see any material impact on both the corporate and the retail portfolio. Also, the prospects for the growth of the Polish economy for this year are still very good. The projections point to a GDP growth clearly above 3%. So even if a few decimals below the original estimate, it's still a very strong economic growth, very low unemployment, growth of real wages, inflation at the end of March, 3% year-on-year. So for the time being, the situation is still relatively benign. But of course, we will need to continue to monitor the evolution of the situation.

Thank you very much. Next question is on costs. How much do you expect cost to grow in '26? Do you plan to achieve positive operating jaws this year?

The second -- the answer to the second is no. We don't expect to have positive jaws in the year '26. We are investing a lot, especially due to the execution of this new strategy. And investment means IT and technological investments from one side and increasing the number of employees. So we are not in a stage of cost optimization for the time being. So we are really investing in the future and also expecting that these investments will bring additional scale to the bank, which will be very important in the long run.

So what we expect -- having said that, what we expect this year is to show a clear deceleration of cost growth when compared with the year 2025. In year 2025, we had a double-digit growth of costs. This year, we are targeting a single-digit growth of costs, both on admin and in staff costs. So of course, this is always more complex to achieve at the same time that we are significantly investing and we are investing. Our investment plan for this year is significant, I would say. But our expectation is that costs will grow single digits. However, revenues due to the fact that the NII tends to be, let's say, flattish, I would say, versus last year, and this is the biggest revenue component. And even if the cost of risk will not be much higher than last year, of course, it creates that overall, we still will benefit from much lower cost related to FX mortgage. But on the other side, the operating jaws will be negative.

Thank you. Indeed, difficult to expect positive operating jaws in this environment. One question on capital. Operating risk requirements are growing. What trajectory do you expect by end of the year and in subsequent years? How much of this growth relates to CHF portfolio?

The implementation of CRR III last year brought a significant increase in the operational risk requirements for the bank, which we reported last year. And the operational risk charges that are based on a 3-year average are still relatively inflated. What we expect at year-end is that the average will decrease. Most of the operational risk charge or significant part comes from the costs related to legal risk. We are using now the average of 2023, '24 and '25. '23 was the peak of such costs. So it's obvious that when we reach the end of the year and we will drop the year 2023, there will be some relief coming from the Swiss francs.

So this is the positive part. But on the other side, the operational risk charge is not only about legal risk, it has also other components, including the business component, which will continue to increase as the bank is growing. So -- but all in all, we expect that for 2027, the operational risk charge will be a little bit lower than what we have today.

Thank you. One interesting fresh question just arrived on bond portfolio. revaluation of the securities portfolio. How exposed would the bank be in the case of sustained Polish government bond yields widening on the back of volatile markets given the sizable bond portfolio?

I mean it's difficult in a few words to explain. But just the big picture is we have a relatively large bond portfolio. It represents more -- 45% of total assets. So it's very high. Not everything is Polish government bonds. We have one component, which is around PLN 12 billion equivalent and invested in euro sovereign debt, which corresponds to the excess of liquidity that we have also in foreign currency. But the other part that is invested in Polish government bonds is divided between hold to collect and hold to collect and [ sell ] portfolios. And so of course -- and by the way, we -- the disclosure in the end of the year was done of the value of both portfolios.

During the first quarter of this year, of course, we had a decrease of the valuation of the portfolio of hold to collect and [ sell ]. The decrease of value was -- we had a positive amount of valuation at the end of the year of [ PLN 250 million ] more or less I don't have the number by heart. And in the end of the first quarter, we had a negative valuation of PLN 90 million. So we had a drop of valuation over PLN 300 million, so not dramatic. Part of it was already reversed in April, of course, as yields have come down. What protects us against significant volatility and the increase of yields is the fact that the portfolio duration is not very high, especially in the hold to collect and sell portfolio. We have strict rules regarding the distribution of the portfolio through different tenors. Usually, we do not invest in fixed rate bonds with tenors above 5 years for the banking book.

And so even in -- but as I said, we have the portfolio split throughout these tenors, which means that even in situations of volatility, the impacts are relatively contained. For the future, what we expect is as the portfolio -- loan portfolio growth will accelerate, the portfolio of bonds will start to decrease, hopefully to -- and we will reach a more, let's say, normal position because, as I said, 45% of liquid assets is not so standard, but it's the result of the recent years dynamics where deposits grew much more than the growth of the loan portfolio but also having said that, if you look at market data, you see that in the Polish banking system, deposits are systematically growing more than loans. So -- and that's why the system is so liquid.

We have 3 remaining blocks. One would be the FX, should we do it? Okay. Why has the amount of new lawsuits increased and amicable solutions declined in the first quarter? Do we see this as a change in trend? Sorry, it was clearly heard. I repeat the question, sorry.

It was. It's difficult to -- we always -- the trends are difficult. There are some seasonality sometimes. So we cannot say that there is a reverse of the trend, but it's clear that there was a deceleration of the decreasing trend, let's call it like that. So this is clear. It's early to say that we achieve a plateau of levels of new cases. But this [ acceleration ] that we were seeing or the decrease -- the level of the decrease, it's clear that it was a slightly change. We need to wait and see a little bit -- also, we need to see these consumers of repaid loans, how they behave. And so we need a little bit more time. In terms of the settlements, we don't have much place to make settlements more or less.

So it's a little bit -- we have been impressed [indiscernible] is that the team is able to keep doing settlements lately because truly, we have been pushing -- first, we were pushing for the 2,000 per quarter, then we push for the 1,000 per quarter. but we were expecting this decrease of settlements for a while. And first, we moved for pre-court settlements to court settlements. This is a trend that -- so now we still do, but it's very small the numbers of pre-court settlements. And what we do more is court settlements at the moment.

But when we see the cases that we have and versus the settlements that we have, it's -- we start to reach to a situation that there is no more customers that are open to make able settlements that we didn't contact with them 10 or 20 times. So it's -- I think we are running out of also the opportunities. But anyhow, -- we keep exactly the same openness in before court after first in after. So we are always open to find a solution for any kind of dispute with the customer.

Thank you, Joao. Fernando, one of your favorite questions on CHF. The reduction of CHF mortgage costs has been very material in the quarter. What are your expectations for the remainder of '26? And a similar one, can you update the guidance? Does 50% decline year-on-year still make sense? Or could this be a larger decline?

So last year, we had a decrease of the pretax costs of around 34%, if I remember. Now in the first quarter, we had a decrease of 61% pretax. What we -- in the previous meeting, we said that we -- based on our expectations, we were expecting to have further material drop of the cost related to FX mortgage during the year 2026. I would say that the drop can be 50% or higher. So of course, based on the assumption that no further, let's say, negative developments will occur. Very recently, we had developments that were important, namely 2 weeks ago or less than 2 weeks ago, 3 verdicts of the European Court of Justice that are supportive in terms of not, let's say, opening new, let's say, new downside risks.

And so for the time being, we don't see further downside or events that could have a material negative impact. So that's why we think that it is possible to have this another significant drop of the costs. Of course, it's something that we will be updating every quarter. The only thing that probably is a little bit behind our expectation is that the wall did not drop as -- we do not have a continuation of the trend of 5 or 6 consecutive quarters of drop of the in court cases. So this was something that we were not forecasting. But on the other side, as I mentioned during the presentation, despite this increase in the quarter, it's the second lowest quarter for many years. So it's also not to dramatize the -- let's say, this and not to treat immediately this as an impression of the trend.

Thank you very much. We're moving to a slightly different subject, interest-free loan sanction. What is the outstanding volume of consumer loans with interest charge on credited costs?

We are not providing this type of information, as you can imagine. I think that the questions are being put in the context of the decision of the European Court of Justice of last week. But I think that more important than the question about how much it is or not covered is what is the consequence of such a word, right, which is I think we will need time to understand because it's not clear that the decision of last week will translate into significant additional number of cases from one side or the application of the sanction on another, right?

So I think there is reading the verdict and the considerations that led to the verdict, I think it's not possible to conclude that automatically, the sanction will be applied. By the way, it was -- the sanction was not being subject to appreciation by the court was rather specific components of the loans that were done with the clients. So I think this is what we can say for now, right?

Yes, yes, yes. So it's very important to understand well because for us, it's not clear how this is impacting the free credit sanction. So it's -- we think that this is -- to give guidance on this subject could be very misleading. So it's it can be nothing or can be big, and it's too early to say.

What I can say because we wrote it in our quarterly report today is that the number of open court cases increased a little versus the previous quarter, but we have, on average, 100 cases per month. So the number of cases that we have is 2,000 something as we wrote in the report. And we -- the statistics are still at bank and the banks in general are winning between 85% to 90% of the cases so far. So this is -- these are the facts until now.

All right. Second last question, again, a slight, let's say, deviation from the normal subjects. One of the participants is asking for an update on so-called long-term funding ratio. Could you please review your position in terms of the long-term funding ratio? What is the status of the legality binding -- legally binding regulatory minimum? Was it eventually revised from 40% to 20% and also entailing a change in the calculation composition logic?

So as we have shown in the presentation, with the current formula, we are at 40%, which was -- which is the requirement to be fulfilled by the year-end. If there will be a change in the ratio and in the way it is calculated to 20% we will be above this target of 20%, I can say. I will not be precise now. I think what we want is to see if really this is going to change and what is the final formula that will be adopted. But if what was announced a few months ago will materialize, we are clearly already above the 20% that were -- that would be the new target. So we would have, let's say, more comfort in the fulfillment of the requirement versus the current situation.

It's [ 14:59 ]. So last question would be on which one. Exactly. That's the one that I'm left kept for the last. Can you comment on potential dividends and payout ratio? How much would Q1 profit boost CET1 ratio?

This actually calculated 50 basis points.

So I think what we can say today is in the strategy, we have put as an objective to be able to distribute -- to return to dividend distribution in the year 2027 from the results of 2026. we still see this is possible to be achieved subject to the recommendations of KNF that will come by year-end regarding dividend policy of the Polish banks and any specific recommendation for us. Our historical dividend policy was to distribute 35% to 50% of the net profit. I think that if we will start to distribute dividends, we will start from a lower payout in the beginning. How much it can be, it's too early to say. But our intention continues to be to achieve also that objective that we have disclosed in our strategy.

And more is indication of normalization of the process and not so much by the amount. So all the feedbacks with investors and everything, they have been very much giving less relevance for the dividend and being more focused about the growth and to keep capital to make this growth, especially in terms of the corporate credits. So we need to balance a little bit this because it's very important that I said this last quarter, but the numbers are very much the same. So when we separate the new credit exposures, more or less is 1/3 below PLN 30 million, so EUR 3.5 million. Then another 1/3 between PLN 30 million to PLN 100 million. So it's up to EUR 25 million. And then just 1/3 higher than that. Moreover, 50% of the new exposures are new clients.

So 50% of the growth, it's from new clients. And so it's -- we are very -- and as you know, the team is fully the same. So it's -- the risk team is the same. So it's not -- there was not a change of underwriting criteria. There is no relaxation of any type of risk management. So we are very happy with the openness of our customers for our value proposition. And also, we are very proud and confident about the results that we are presenting and the continuation of that results. So for us, it's also important to be able to sustain this growth. So it's -- we are -- we announced it, and we are very keen to -- if allowed by the regulator to distribute dividends. But as Fernando said, it's more as a demonstration of normality that they have a concentration to distribute a big amount of the profits because there is still a huge potential to deploy by the bank and to use this capital in this speedy development that we are having at the moment.

Well, Fernando is very meticulous about the question. So he does not allow any questions to remain unanswered. And he rightly noticed that maybe the question on the cost of risk wasn't directly answered. So question was about the guidance for the cost of risk in 2026.

So just to be clear, so because I mentioned about this macro environment that we were not seeing material negative impacts, both on the corporate and retail. So what I missed to say is that we still expect the cost of risk during this year to be relatively benign. -- not -- we are not expecting to be so low as it was last year, which was 32 basis points of our total loans. So we are not guiding in that direction. We benefited last year from significant results from the sale of NPLs. We are not assuming that it will always happen at the same -- in the same scale. In the first quarter, 45 basis points of our total loans is very similar to last year without the sale of NPLs. So I think that it is possible that during this year to be somewhere between 40 and 50 basis points of our total loans. I think it's -- for the time being, based on the information that we have, seems possible to be achieved.

It's a very specific guidance. Thank you very much, gentlemen, for your time and as usual, very insightful questions. Joao, would you like to have any closing remarks?

No, just that we keep -- and because -- maybe because I spoke so much about corporate, now I'll speak about retail. So we -- in retail, of course, it's more visible, the progress that we did lately in mortgage. But we keep deploying our strategy connected with the primacy. We deployed a new platform in terms of recommendation engine for customers. This is this hyper personalization approach powered by AI. We will up to summer onboard 1 million customers.

We have already 500,000 customers being served by this approach. This will we believe that with that, we are building the competitive advantage of the bank for the future. And this is as relevant as 10 years ago was deploying digitalization in the banking system. This is something that will not have a major consequence in terms of increasing the volumes, but it will increase the customers that will interact with us as main relation. Besides more sales and more contacts and more interactions, also, we have a very important thing for the bank, which is selling the same with less approaches.

The constant approach to the customers sometimes also can be too much. That's why we have, for example, in-sourced call center to not have a situation that we outsource approach and contact with the customers with a lower quality, although it can be cheaper, but lower quality interactions, sometimes to push that creates customer attrition and lower net Promoting scores. So we are keeping this approach. And so we believe that this also will translate to be able to increase it. The bank is keeping this customer acquisition at strong pace.

Now the challenge is keeping this 150,000 new customers that every year we onboard and maintain as active, but also to increase the interaction with them and being our bank as a prime bank, as we know, the demographics does not allow that all the banks who fulfill their targets of acquisition and growth because unless we have a huge increase of the population, there will be no clients for everybody, at least as the first bank. And then so we keep deploying this.

This is less visible, but it's a very relevant activity that the bank invest a lot for several years, namely some regulatory authorization to deploy some technologies that are new and not tested and challenged. And so we went also to grow through the authorities about that. But we believe that with this, we are building also a competitive advantage of the bank for the next 5 years now that things are going faster. I cannot say 10 years or 5 years. And that's it.

Thank you very much. Again, gentlemen, this concludes our call. Thank you very much for participation and interest, time and questions. Good luck to those who will be involved in CEE banks reporting on Thursday. We -- there are 6 banks reporting on that day. So good luck. And hopefully, you will have a restful and peaceful long way weekend after that. From us, we're here on the 28th of July. Thank you very much. As usual, we're happy to answer any questions and requests you have in the meantime. Thank you very much. Goodbye.

Good afternoon. Welcome to Bank Millennium 4Q '25 /2025 Results Call. As usual, with us, we have Joao Bras Jorge, our CEO and Chairman of the Board; and Mr. Fernando Bicho, CFO and Deputy Chairman of the Board. My name is Dariusz Gorski, I'm Head of IR. Also have two more inferior functions, one is to manage the traffic. [Operator Instructions] And secondly, also -- I'm also, let's say, a caretaker of compliance, so to speak.

So I would like to remind everyone that we are presenting today preliminary non-audited results -- we're still in the process of audit. So things can change, obviously, not abruptly and not, let's say, revolutionary, but still some numbers may be different. So please note and take that into account. Thank you very much, Fernando, over to you.

Thank you. Good afternoon. Thank you very much for joining this call. We will go through a brief summary of our fourth quarter and full year 2025 results.

So we go directly to Page #5 of the presentation where we present the main financial achievements of the year.

We had a very positive year. We reached the highest in our history level of net profit to PLN 1.202 billion, a growth of 67% year-on-year. If we exclude the extraordinary items, the net profit grew by 1% versus 1 year ago.

The return on equity on a reported basis stood already above 14% at 14.3%. The results were supported by a resilient level of the net interest income despite the fact that we have been facing a gradually lower interest rate environment.

So overall, in the full year, the NII grew 4% on a reported basis or 2% if we exclude the 2024 impact of the credit holidays. The NIM for the full year was at 4.01%, and during the year, we had a drop on average of the 3 months WIBOR by 80 basis points, while the reference rate of the National Bank of Poland dropped by 175 basis points.

The cost-to-income ratio reached to 36.9% on a reported basis, or 35.8% on an adjusted basis. We had a very low cost of credit risk during the year at 30 basis points over total loans. And for the first time, the nonperforming loan ratio fell below 4% and stood at 3.8% at the end of the year, already meeting the target that we had set in our 2028 strategy.

On the capital side, we continue to show very solid levels of the capital ratios. We finished the year with a total capital ratio at 15.1% and Tier 1 at 13.7%. These ratios still do not include the second half 2025 net profit, which will be incorporated after the shareholders' meeting that is planned to take place before the end of March, and also does not include, of course, the issue of the AT1, PLN 1.5 billion that we have completed in January 2026 and where we are still waiting for regulatory approval in order to include the proceeds from such issue in our Tier 1 and total capital ratio.

We also continue to show solid buffers over MREL requirements and also on target to meet the long-term funding ratio in its current format. The loan-to-deposit ratio continued to be very low. It was stable versus the previous quarter at 58%.

So I switch now to Page #8. As we are showing this page every quarter, we are tracking the achievement of our strategic targets for the year 2028, showing where we were when we announced the strategy in the fourth quarter of '24 and where we are now. So as it is possible to see, we are largely on track to meet the business and financial and risk goals that we have announced more than 1 year ago. In particular, the pace of customer acquisition and growth of the retail customer base remains very strong, and we finished the year with 3.27 million active customers in retail. Also significant level of digitalization of our retail customer base with a share of retail digital active clients at 93.7% of our active retail customer base.

And on the business and corporate side, visible signs of growth, especially shown by the growth of the corporate loan volume that grew by almost PLN 3 billion during the last 12 months, also followed by a growth of the number of business active clients.

In terms of return on equity, we came back to double-digit level of return on equity at 14.3%. The cost to income, of course, worse than in the previous year as a consequence of lower interest rate environment and still some cost pressure and the NPLs, again, showing the resilient quality of our loan portfolio and also supported by the sales of NPLs that were done during the year.

Moving now to more details on the results, starting with Page #9. For the last 3 consecutive quarters, the level of net profit of the group has been above PLN 330 million. This has allowed us to have a return on equity on a quarterly basis between 14% and 15% and helped us to reach this level of 14.3% ROE in 2025.

At the same time, if we exclude extraordinary items, essentially -- most of them related to FX mortgage the level of the net profit would have reached PLN 3.222 million, which would mean a growth of 1% versus the previous year despite the lower interest rate environment.

On Page 10, we can see the evolution of the net interest income, which so far has been quite resilient to the gradual decrease of interest rates. So looking at the fourth quarter, the NII stood 1% below the third quarter. Looking at the full year we had a growth, excluding credit holidays impact of 2% year-on-year. Of course, there is a contraction of the net interest margin that fell in the fourth quarter to 3.78%, but still, for the full year, as we mentioned before, the NIM stood at 4.01%.

On the fee and commission income for the full year '25, the net fee and commission income was flat as a consequence of still some downturn in bancassurance fees that offset the relevant growth, especially coming from payment cards and from investment products.

On Page 11, the picture about cost is more or less in line with the previous quarters. We finished the year with a cost growth of 13% year-on-year or 10% if we exclude the contributions to the banking guarantee fund. Other admin costs grew already only single digit at 6% year-on-year, while staff costs grew 13%, partially driven also by some increase in the number of employees as we proceed with the deployment of the new strategy until 2028.

On Page 12, the asset quality remained solid, and we managed to bring down the NPL ratio to a level below 4% as this was one of our strategic targets. So during this period of 1 year, NPL ratio went down from 4.5% to 3.8% despite the fact that the loan portfolio overall did not grow much. It grew only by 2% year-on-year. And this was a consequence of from one side, the resilient quality of the portfolio, both on the retail and corporate side and also the positive result from the sale of NPLs, especially concentrated in the second and in the fourth quarter.

So overall, the cost of risk was at a very low level at 30 basis points of our total loans, so even lower than the 40 basis points that we had booked in 2024. This translated into a reduction in the nominal amount of provisions that was created during the year. But also, we would like to highlight that even in this scenario of decrease of NPLs, we have further increased the level of coverage by NPLs by total provisions from 73% to 79%.

On Page 13, we show the evolution of the capital ratios. In the recent quarter, there was some additional consumption of capital, which is also partially driven by the growth of the different loan portfolios and especially corporate. But anyway, we should stress that the capital ratios at the end of the year still do not include the results of the second half of the year. If such results would be included, the Tier 1 and total capital ratio would be higher by 1.3 percentage points.

And additionally, after we will get the approval for the AT1 issue consideration in terms of our capital base, this will further increase the capital ratios, especially the Tier 1 and the total capital ratio by further 2.7 percentage points. And as a consequence, we will be prepared also to deal with additional capital requirements coming from the countercyclical capital buffer in September this year, also for the growth of the risk-weighted assets, and at the same time, keeping a Tier 1 ratio clearly above the 15% target that we had in our strategy.

On Page 14, significant surplus of fulfillment of the MREL requirements and also very strong liquidity indicators. So loan-to-deposit ratio at 58%. So positioning us in a very comfortable way for the growing lending cycle that we are expecting in the next few years.

Regarding FX mortgage on Page 15. The portfolio continues to be downsized at a quick pace. So overall, a reduction of 40% year-on-year. The provisions in the fourth quarter were at PLN 487 million is in line with the current report that we have disclosed 4 weeks ago.

And it is visible on the bottom right side of this page, the drop in the overall costs related to FX mortgage in 2025, they were lower by 34% pretax when compared with the year 2024, and that year 2024 had already shown some drop versus the peak that has been reached in 2023. So this is a positive development in line with some of the expectations that we had already formulated in previous periods. And it's supported by a lower inflow of new court cases as it can be seen on Page 16. The inflow of court cases dropped for the sixth consecutive quarters to 699 in the fourth quarter, while the number of settlements, especially majority of them done during court proceedings still stood above 1,000 in the fourth quarter.

Now moving to the business development section and starting with the main highlights on Page 18. It was a very positive year in terms of business development, especially translated into a high growth of customer funds, growing customer acquisition and much stronger dynamics in terms of corporate lending. So all in all, we achieved double-digit growth of total deposits by 12% year-on-year. Corporate portfolio, including leasing and factoring grew by 20% year-on-year, investment funds by 40% year-on-year and consumer loans by 4%. In terms of sales, the corporate loan sales more than doubled versus the previous year, while leasing was flat, factoring grew 11% and cash loans grew by 4%.

At the same time, we continued the solid pace of growth of the active retail customer base, reaching 3.27 million active customers in retail, of which 94% are digitally active.

Seeing in more detail on Page 19. We have clearly encouraging signs -- continuation of encouraging signs coming from the growth of the corporate business with the already mentioned 20% overall growth of financing to companies. Also consumer loan portfolio still growing 4% year-on-year, while mortgage year-on-year still contracted. But when we look at the quarterly basis, it is visible that finally, the mortgage loan portfolio has stabilized as a consequence of a significant rebound in the origination in the third and fourth quarter.

The combination of these trends is leading to a gradual rebalancing of the structure of the loan portfolio of the group with a lower share of PLN mortgages, which is now -- which are now at 45%, while we have gradually increased share of loans to companies, leasing and factoring.

Important also for the last year performance was the growth of investment products by 40% year-on-year, especially driven by the growth in Millennium TFI funds, where we already crossed the level of PLN 11 billion of assets under management. On the deposit side, both deposits from retail and corporate have grown at single -- at double-digit pace.

On Page 20, we see, first of all, the rebound in the sales of mortgage in the third and fourth quarter, allowing a gradual recovery of the market share of origination and the stabilization and which will be followed by subsequent growth of the PLN mortgage portfolio. On the consumer loans, the origination year-on-year was higher by 4%, allowing us to reach a market share close to 11%.

On Page 21, we kept the strong pace of growth of our retail customer base, a growth of 36,000 net active customers in retail in the fourth quarter and overall growth of 144,000 during the full year.

At the same time, the strategy is also focused on the micro business segment, where during the last 12 months, we increased the portfolio by 20,000 customers net. This growth of number of customers is followed by a significant growth in the number of current accounts, and in the number of debit and credit cards by more than 200,000.

The next pages show additional data, especially regarding the digital strength of the bank, 78% -- on Page 22, 78% of the customers log into the bank only via mobile app. We have more than 3 million active digital users, a growth of 6% year-on-year. We have 2.87 million active mobile users, a growth of 8% year-on-year. Very high ratings of -- in the app stores of our mobile app.

On Page 23, we continue to show the very high share of digital channels in different sales and services processes of the bank, not only in terms of the sale of loans, but also important in terms of the acquisition of new current accounts.

On Page 24, in the end -- in the fourth quarter '25, we have 2.23 million BLIK users. And on Page 25, a summary of the initiatives launched in the year 2025 that are further supporting our leading position in terms of digital banking, including several digital processes, but also a lot of focus on the security. And also a reference to the introduction of new insurance payments, including property insurance in our mobile app and also payments with wearables and digital dispositions as we can -- as we are showing on Page 25.

The goodie platform continues to grow at double-digit pace with more than 20% increase in the number of transactions done with cashback.

On Page 28, moving now to the corporate side. we are leaving a very strong momentum in terms of financing of companies. It was one of the pillars of the strategy that we have announced more than 1 year ago. We have, in terms of loans to companies, only a growth of 34% year-on-year, followed by a growth of 15% in factoring and 4% in leasing, and that's how the overall growth of 20% in financing to companies was reached during the year 2025.

The origination of loans has accelerated further, an increase of 52% versus the previous quarter and 152% versus the homologous quarter of the previous year. The new sales in leasing are always -- are already picking up in the fourth quarter '25. At the same time, deposits year-on-year were mainly supported by the growth of current accounts by 15%.

Finally, on Page 29, a word about the sales. So as I mentioned, leasing sales in the full year were flat, although with a clear rebound in the fourth quarter of '25, while factoring turnover grew by 11% year-on-year. So these are the most important highlights of our fourth quarter and full year results.

And now we will go through your questions. Thank you.

Thank you very much, Fernando. In the meantime, questions have indeed arrived. Let me present -- do the bundling or the allocation of this. Why don't we start with a more general question on the competition and then you have a look at questions in the meantime and then we'll go through this. So a question for Joao. How do you see the competitive landscape, especially from UniCredit, Ernst were others?

So let's start with others because I believe that the landscape in Poland is always with a very competitive market also because it's a fragmented market and all the operators are in. And so we see it as demanding, but also positive. So it's -- there is always a push for new products, a new approach, customer acquisition, new digitalization and new tools. So it's -- we think that this is positive for the market. We are in the game as well. So Santander was an amazing bank. Ernst is an amazing bank. UniCredit is an amazing bank. It was already a very strong corporate bank when it was the owner of Pekao SA. Now it's back on the market and also more present on the corporate side, at least for now, we say they're welcome.

And we are here to also make a lot of transactions together and sometimes, of course, competing to the serving the customers. So for us, we believe that the new players bring value, valorize the market as well, but they will not create more competitiveness in the market because the market is already very competitive and very demanding.

Thank you very much. We have so far received only two questions specifically relating to the results, which means the results are very clear. It's a very nice development. So let me read those two out. What was the expected DTA in 4Q accounts? What is the level of provisions for [indiscernible] unauthorized transactions?

So starting with the question about DTA. So due to the increase of the corporate income tax rate in 2026 to 30% and then followed by a decrease in subsequent years to 26% and 23%, we had to perform a reevaluation of the DTA in the fourth quarter of 2024 -- '25.

The result of such revaluation had a positive impact, slightly above PLN 100 million. But on the other side, was to a large extent or at least partially offset by a number of other items that increased the tax rate in the fourth quarter 2025. This included namely higher share of nontax deductible costs related to FX mortgage, also some NPLs write-offs that were not tax deductible, apart from the other typical items that are not tax deductible such as the contributions to the banking guarantee fund and the payment of the banking tax.

So as a consequence, the tax rate in the fourth quarter was a little bit lower than what would be normally. It was at around 16%. And the overall effective tax rate for the full year was at 26%. So it's still high, relatively high, although it was a little bit lower due to the extraordinary DTA reassessment revaluation that has to be done at the end of 2025.

So this is the answer regarding the tax. Regarding the provisions for free credit sanction, for the time being, we have not opened the provisions for this topic. We are -- we will be disclosing as usual detailed information in our annual report in the end of February about this. But what we still have is a regular flow of claims and court cases, which has not increased versus the previous periods. And also, the banks in general and our, in particular, have been still winning in court around 85% of the court cases. So in this context, until now, we have not opened provisions for the free credit sanction.

Regarding the unauthorized transactions topic that we also have been disclosing in our quarterly reports. We have created provisions in the second and third quarter in a total outstanding amount of PLN 82 million, if I'm not mistaken, and this amount was not changed during the fourth quarter, and these proceedings are still not finished. So we are still before the final conclusion regarding the proceedings that were opened by [indiscernible].

I'm sorry. Apologies. I read it again. What is driving rising cost of accounts, while revenues from this fee line are essentially flat?

I think we would say that we have different costs related to customer acquisition through different channels. And then the revenue from such -- coming from customers that are acquired through these channels are, how to say, shown in the future through different lines depending on the products that they will be using. So it's not possible just to look at the single line on the commission cost and commission income to take a conclusion regarding the -- how these costs are translating into additional profitability for the bank? Because for us doesn't matter. We are not, let's say, targeting just a specific product.

What we are trying is each time that we acquire a customer that he will become a primary customer of the bank. And so the -- we are incurring costs in acquisition of customers as every other bank with different promotions and channels mix. And then we expect that there will be an interaction with different transactions and products that the bank -- that the customers are taking that will generate a different fee and commission income or net interest income doesn't matter, that will come through different lines.

Thank you very much. So we're moving away from 4Q specifically. Now a set of questions, actually, surprisingly large number of questions relating to PLN mortgages. And I think Joao will probably be willing to answer this. What growth rate should we expect in '26 with regards to PLN mortgage portfolio?

So I would say, so roughly, we had a decrease of the portfolio of 6%, so we would capture 50% of that. So we should have as a target to have now a growth of 3% around this number.

There was also a more specific question. Despite higher origination of PLN mortgages in 4Q, portfolio was flat quarter-on-quarter. What is driving the high amortization of the portfolio, repayments, refinancing?

So it's mainly also, we need to remember that in our case, so every time that we have a year that we are a little bit less active, the natural repayments will be higher as the loan, as the time goes on a mortgage loan.

Anyhow, of course, there is also some early repayments, part is due to normal conditions of life, but others is, of course, also refinancing of mortgage. So when we have moments of decrease of interest rates as we have this year, as Fernando said, we have during 2025, 175 basis points of decrease of reference rate. So it's natural that some of the consumers in the banking system would look for refinancing their rates, especially, of course, if they made loans in the top of the rate hike moments.

There's actually a very specific question on this subject. What percent of new origination of period-end mortgages is related to refinancing of existing loans on the bank?

So at the moment, it's around 25%, 30%. I don't know if this is a guidance for anything. Also, we are revamping the volumes. So with high probability, customers that have the biggest relation with us, took the opportunity to bring the mortgage. So maybe it's a little bit higher than in a more stable environment. But at the moment, I would say that is this 25%, 30%.

There is a question on the outlook for loan growth in '26. We covered mortgages, but obviously, the question is then on the other parts of our balance sheet.

So for everything?

Per segment.

Okay. Okay. Okay. So I would say that in consumer loans, it's obvious that we are in our natural production. So it's -- we could consider to maintain the growth that we are having at the moment. And it would be difficult to be much higher than what we are doing at the moment. So it's -- we have a natural amortization. We have -- so it's -- even if we keep fighting from the privacy of the customers.

And as Fernando said, and this also just to complement also what he said, we need to remember that as a normal commercial bank, so when we acquire customers, more the customer is engaged with us, more you will pay in terms of commissions and fees directly in the accounts. So more active is, more waivers you get, more services use, so more costs is for the bank, but of course, then it's also easier for us to make models to offer consumer finance, cards and other products.

But I would say that the consumer loans, we will have a similar rate. Mortgage, as we said, so it's a recovery for 3% more or less in terms of the stock. And in terms of corporate, I think we should start to expect the volume of this growth. So not as a percentage because, of course, as the stock is getting bigger, also it's -- but if you pay attention for our targets, as we announced for the strategy, so this would be more or less the volume that we should present as growth per year from now up to 2028. So this should be embedded in the expectations of the analysts.

Speaking of corporate business, the next question is on the margins. How are the lending spreads developing in the sharply growing corporate business?

So I would not like to give any guidance even because, as you asked me in the beginning about competitors. So it's not -- it's never a good idea to say this. I would just give an information that maybe is relevant also to understand the business that we are doing.

So if we would divide the business of small companies in Poland, which is below PLN 30 million of turnover then medium companies in Poland, which is PLN 30 million to PLN 100 million. And then not big, but already bigger, let's call it bigger, higher than PLN 100 million. We have more or less 1/3, 1/3, 1/3 of the production.

So it means that if the question is behind, if we are making very large transactions with the squeeze margin is not true. So we are more or less with the pricing that we are having. We are splitting between small, mid and already corporation size, although still in the SME criteria in European level, but at this level, 1/3, 1/3, 1/3 of the production.

And it's -- we are not a price maker. We are -- we participate in the market, but also we do not differentiate ourselves by being the more aggressive in terms of spreads. So we are mainly applying what are the market rates today for the corporate business in Poland.

And last question in this, I'd say, topic, a bit philosophical. What is the reason for such a strong growth of deposits? Do you expect this trend to continue in '26?

So -- we were a little bit surprised in the quarter in terms of corporate, current accounts, but there is also some seasonality on that because when we put together it's 15% in current accounts in retail and in corporate. So it looks like there is a natural trend through customer acquisition, relations and everything to have these dynamics.

We always have internal debate about if -- or being already so liquid and having some -- not difficulties, but some limitations from the market also dynamics in terms of credit growth, if we should keep be competitive or not on the savings market. However, we believe that as a big retail bank, this is what we should do. So we need to be a saving bank for the savings of our customers.

This also then help us to have the growth that we are presenting in terms of investment funds. So we -- our investment funds are more balanced funds, more regular contributions, mass market in participation. And so we are presenting at the moment, 40% growth year-on-year after some years of 30% year-on-year. So it -- we have been very positive. So I would say that we would -- if the market will grow as in total deposits in the system as have been growing in the recent times, we will also participate.

So I don't think that we can -- we should expect the normal participation of our bank. So it's not anything specific. It's just more activity with the customers and also wants to be competitive. And also, we want to be a bank that our customers consider to keep their savings. So it's -- I would say that like that.

Now it's time to bring Mr. Fernando Bicho into the action. Do you think the low cost of risk can repeat in '26?

We still expect it to continue to be relatively low, but not so low as in 2025. We cannot assume that each time that we sell NPLs, we will continue to generate the same positive result. We are also growing the portfolio at a fast pace. So we are always prepared to come back to, let's say, more normalized level of cost of risk, which traditionally, we always have put around 50 basis points of our total loans. So we would not guide for repetition of what we managed in 2025.

In 2024, we had 40 basis points of our total loans, which was also below the -- what we were expecting. So here we are, let's say, prudent. We are not, let's say, bringing the expectations too much down regarding the cost of risk. We think that as time will pass, we tend to come back to a level of cost of risk that will be around 50 basis points of our total loans.

Next question is on FX mortgage related costs and provisions. First of all, on provisions, what led to the increase of FX provisions in quarter-on-quarter, so it relates to 4Q? And then a follow-up is, how should we think about this in '26? And also, could you give us a more tangible target for CHF mortgage costs in '26?

So we are never guiding amounts of provisions on a quarterly basis. So we never promised that each quarter will be lower than the previous. Especially at year-end, we always have to make assumption about everything that's happened during the year. We have to make, again, the update of all parameters to incorporate all the available information. So here, we are not committing to a straight line downwards trend in terms of the provisions that we will be doing.

Having said that, as I stressed during the presentation, on Page #15, it is visible that last year, we had a significant drop in the pretax costs connected with FX mortgage by 34% year-on-year. Of course, the drop of provisions was 9%, while the drop of the other cost was 74%. But this was also partially related the way we were accounting for the different costs and especially how we were accounting for the cost of the negotiations with the customers. But what matters is that the drop of the cost was 34% on a pretax basis.

So what is our outlook for 2026? We have been saying already for some time that we expect in 2026, the costs to be -- to again, to drop significantly versus 2025. We cannot be very precise. We have a base scenario. Under that base scenario, the costs could fall even more than 50% versus the previous year. But of course, are based on the knowledge that we have about the current status of the different legal cases, jurisprudence and court jurisprudence and so on. So our expectation is that there will be a continuation of the significant decrease of the costs.

Of course, we also highlighted that the decrease of the costs was also supported by the lower inflow of court cases. And of course, if the inflow matches our expectations, it means that we do not need to create additional provisions because of the inflow that is being received on an ongoing basis.

So we are not inflating the expectations. But if nothing extraordinary will happen, we should see a continuation of the significant drop in the costs related to FX mortgage.

And we can say that we're hoping for a free digit number?

So let's say, I say more than 50% drop versus the 2025.

Tangible guidance. Tax rate. Do you have a tax rate guidance for '26?

It's not so much of a guidance, but it's just to give a reference. So when we have an official tax rate of 30% this year, and we know that part of costs of banks are not tax deductible, namely the banking tax, the contributions to the banking guarantee fund and in our case also a significant part of costs related to FX mortgage. This means that excluding any other effects, the tax rate for this year will -- effective tax rate will tend to be close to 40% against 26% that I already mentioned, that was the final result in 2025.

What can change this again is the structure of the provisions and cost related to FX mortgage because it depends if there will be more or less tax deductible. But, let's say, in general, we should have a tax rate -- effective tax rate close to 40%.

Time for NII and NIM. How should we think about NII in '26 and its main drivers, rates, volumes, hedging? I mean, volumes we've already covered, raise to some extent to...

So I would say that regarding revenue is the most important question, right? So it's -- there are many assumptions that we need to take into consideration when speaking about the levels of NII in 2026. So from -- so coming back just for a moment. In 2025, NII proved largely resilient.

However, we need to take into consideration that there was accumulation of interest rate cuts in the second half of 2025, which impacts are gradually flowing through the P&L through a gradual repricing of the variable rate loans through a gradual repricing of the variable rate bonds, and at the same time, with more limited space for the repricing of the deposits. So what we are currently expecting is that in the first quarter, there will be a drop of the NII versus the fourth quarter. This is going to be inevitable.

But as we don't like to just to give very concrete guidance on a quarterly basis, our view for the full year is that first, interest rates will still go down up to 3.5% and will remain flat thereafter. So this is important assumption. And this should be reached until June, July. And second, that the volume growth will also gradually help to offset some margin compression that still can come from all the repricing that is taking place and from this lower interest rate environment.

So looking for the full year, despite the drop that is going to happen in the second -- in the first quarter, we still can expect a quite resilient NII. We are not going to provide exact guidance about if it will be possible or not to repeat the level of the NII of 2025. What we see is that the combination of hedging that we have done from the past and volume growth will help to offset to a large extent, margin compression. This is our current belief. And of course, we will see in the next months how the NII will evolve.

And a bit of a question on the component of NII, namely NIM. Shall we expect the similar NIM erosion in relation to the expected base rate decline in '26 or a bit more pronounced?

Yes. As we show in the presentation, in the fourth quarter, the NIM was at 3.78%. And it still does not fully reflect all the cuts that have taken place during the fourth quarter because sometimes there is a lag in terms of the repricing. So we still can expect the NIM to be -- to go further down at least to 3.5%. This is possible to happen. But then as I said, also the volume growth, especially from the lending side can start playing a role in terms of offsetting further compression. This is our current view.

Thank you very much. And the final block set of questions. They are from a little bit different subjects. First is what would be the level of the long-term funding ratio in the newest format?

So I understand that this is a reference to the potential change of this ratio, which is still not approved. But if it would happen in the way it was presented, we would be above the minimum 20% -- the new 20% -- the new 20% level. So this would be -- this would imply that we would be already above the minimum required.

Very comforting answer. How comfortable are you with the growing government bond portfolio? What are the limits to which you would accept the size of the bond portfolio?

We have a bond portfolio divided in, let's say -- or one -- the biggest part, of course, invested in Polish government bonds, but also we have a sizable portfolio of euro sovereign debt where we are investing our excess of liquidity in euros.

The portfolio grew substantially as in the last 2, 3 years, the deposits have grown much faster than loans. We expect that gradually with the loan growth, this growth of the excess of the liquidity will slow down. We don't have a specific limitation to the investment in Polish government bonds. And -- but although we have limitations in terms of the tenors that we are buying due to the different risk limits, including regulatory limits that we are obliged to comply with. So due to that fact, typically, the bond portfolio that we have has tenors up to 5-, 6-year maximum.

So I understand that the question behind the question is the fact that there are additional needs of financing of the state budget. The hedging of Poland has remained stable so far. So we -- so far, we do not have a concrete limitation regarding the investment, although we already started to diversify by having part of the excess of liquidity invested in some -- in euro sovereign debt.

Payouts?

Yes. Okay. Could you comment on payout targets? When will these be restated? Is leverage a limitation?

So we are speaking about the payout ratio, right, for dividends. I think before we restate the payout, we should start to pay, right? Because I think to have this discussion before, we still did not pay the dividend. I think it's a little bit too early. As we have been stating through time, we envisage a payout ratio between 35% to 50%, and we expect to be able to come back to normal dividend distribution in 2027 from the results of 2026. It's still too early to have now the discussion about whether this will still be the level of payout range that we will keep for the future.

What we can say is that, of course, in order to ensure the possibility to pay dividends, of course, we will be closely managing all the requirements published by the regulator that usually are summarized in one letter at year-end -- at each year-end. So we are always, let's say, monitoring that we will be able to fulfill the minimum requirements that will allow us to pay dividend in 1-year time. This is what I can say for the moment.

And it's probably worth reiterating that we will -- we're committed to return to dividend payments from '27 on. So '26 profits will be the first base of, let's say, profit that will be divided.

And of course, needless to say, of course, the issue of AT1 apart from improving the Tier 1 and total capital ratio also improves the leverage ratio significantly. So just to be clear.

Even if this was a hurdle in the past, it should not be anymore going forward. Can you explain declines in capital ratios in 4Q?

I already mentioned partially -- it comes from risk-weighted assets growth that we have been observing. We will provide more details in our annual report when we will provide more detailed information about the structure, and also about the own funds position at the end of the year. But as I said, most of it comes from the risk-weighted asset growth.

On effective interest rate methodology change? I think any comment...

We will not -- we will also -- of course, we'll be providing further explanation in our annual report. As time passes, we always need to look back at different assumptions and the way from a technical point of view, that some calculations are being done. So we have also been looking especially at the way of applying effective interest rates to contracts, loan contracts where we have, let's say, a mixed rate where we have temporary fixed rate, followed by variable rate. So that's why we have made also some update in the way we have the algorithm making the completion of the effective interest rate.

It's 15:00. So time for the last question. It's the question as well, M&A, are you willing to explore potential consolidation opportunities? And then there's another question on that is, do you prefer to act as an acquirer or a target?

So during these 20 years that I have been working in Bank Millennium, always the questions, okay. But usually, the question is more if the bank is going to be sold and not so much if the bank is going to be an acquirer.

So it's, of course -- I think each transaction, it deserves to be studied. But one of the things that I think everybody already learned even by the processes that we have been seeing around the world is that we can only buy what is for sale. And it was like that, that we did Eurobank. So when Societe Generale decided to initiate the sales process, and which means that if there is a sales transaction, if there is somebody that wants to sell, and we think that there is a value added.

For our bank, we, of course, will study the operation, and we will do the transaction and we will recommend for the shareholders. What we can do is, of course, to be will capitalized to have a strong business model, also to have clean systems and process and to be already an organized entity that can bring value to any transaction. And this, of course, we have been doing.

But this is, of course, talking about the potential. Usually in Poland, we talk a lot about consolidation, but what we see is change of shareholders, which is completely different. Consolidation is when two banks of the system, merge or one acquired another. When we change shareholder, nothing changed in the system. Of course, it changed the owner, but the environment is the same. And this has been the normal environment here and the transactions are then usually are with the much smaller players. So anyhow, we will see whatever will be present to us. But for us, what is really, really important is to deliver the strategy.

So we were very clear. It's -- sometimes it looks like it was a long, long time ago, but it was just in October 2024. So it's not so long ago, even because in '24 before the summer was -- it was the time that we also raised a recovery plan. We present a new strategy. The strategy was very clear, paying dividends in 2027 on the results of 2026, to keep the speed and the growth in retail. We are very happy that we are presenting this.

I know that it's difficult to quantify, but for a franchise of the bank, the capability to grow every year, active customers is extremely valuable. And every year, we have been growing. Not a long time ago, we were celebrating the 3 million customers. Now we are already with 3,270,000 customers. And every year, we put 120,000, 150,000 customers that are active, and this is the net growth, and this is very valuable.

We would like to have done even better in terms of the credit side in retail. Part, it was our own decisions how to scope with some of the limitations in terms of mortgage, in terms of long-term financing and everything. But we are already very happy from the signals of last quarters in terms of revamp of that area. Deposits doing very well. Investment funds are very well. Cards are very well. So it's clear that we are with a very strong growth and momentum in retail.

And even more important was our capability to show that the bet in strategic terms to invest in corporate ranking is successful. And that although we were very strong in retail, we can be also strong in corporate.

We -- when we present in 2024, we had a lot of questions about that. Why we thought that we could do it, what would be the competitive advantage, what wold be the strategy, how this is possible, that the market is already very crowded and very competitive. We explained that we would not do nothing strange that we would leverage as the relations that we have, the capabilities that we have, the presence in the banking areas and in the locals and the proximity to the customers that we already have.

We are very happy that we can show the results that we are showing. We believe that, as I said, that this pace of the growth, it will continue. Also, of course, as we're financing also, we increase the relationship. So we will have also more transactional banking, more treasuries, more factoring. So this is -- all of this business would come along. And so we are confident, happy, and we believe that we could not forecast better at end of first year of the strategy.

What Fernando said is very important also that we need to -- there is always these seasonalities, ups and downs. The markets always have difficulties to understand how the banks gain a lot when the interest rates have the first time going up but also how difficulties to adjust as the first time as the interest rates go down. But there is always stock portfolio, habits with the consumer. So it's -- to reduce the prices of time deposits take time. The impact on current accounts that are not remunerators, of course, is immediately. So all the rebalancing of the system, it takes time especially when the movements are so abrupt as the ones that we were having.

So I think this is also prepared, but we could not be in a better position and also with less optimism -- or we could not be with more optimism for the year of 2026. So we really believe that we would have, again, another year of strong execution of the strategy, and that we would be closer and closer to the targets that we present for 2028.

Thank you, Joao. Thank you gentlemen, for your time and for your very insightful answers. Thank you, the audience. To remind, next data point is February 27, when we are to release our full year accounts. You have all the notes and narrative there. And the next event will be AGM, which we typically have in end of March and then first Q results on April 28. Thank you very much for your time. Thank you very much for your questions. See you soon, I hope. Thank you very much.

Good afternoon, everyone. Welcome to Bank Millennium results call. We're very happy to be starting Polish Bank's 3Q earnings season as such a strong note. With us, we have, as usual, Mr. Joao Bras Jorge, our Chairman of the Board and our CEO; and Mr. Fernando Bicho, Deputy Chairman of the Board and CFO. Fernando, over to you.

Thank you. Good afternoon. Thank you for attending this meeting. As usual, we will guide you through the presentation that we released today in the morning, highlighting the most important aspects from the financial and business performance of the bank and the Bank Millennium Group in this third quarter and first 9 months of the year.

So starting with Page #5. We reported a net profit of PLN 855 million after the first 9 months of the year, up 56% versus 1 year ago. In the third quarter, we had a net profit of PLN 345 million, which is higher by 82% than 1 year ago. The net profit of these first 9 months, excluding FX mortgage related costs, was at the level of PLN 2.34 billion, growing 2% year-on-year. These strong results translated into ROE in the third quarter annualized of 15% and the 9 months ROE of 14.2%. The results were supported by a resilient net interest income, which despite the fact that we are having already lower interest rates.

The net interest income was up 7% year-on-year on a reported basis and 3% up year-on-year, excluding last year's impact of the credit holidays. The 9 months NIM was at 4.1%, decreasing 26 basis points year-on-year despite decrease of the 3 months WIBOR rate by 98 basis points. The adjusted cost to income was at 35%. The cost of credit risk continues to remain low and in the first 9 months reached 32 basis points over total gross loans, and the NPL ratio was stable at 4.2% as in this quarter, there was no sale of NPLs.

The capital ratios improved in the quarter, mainly as a consequence of the incorporation in own funds of the net profit of the first half of 2025 after receiving regulatory approval. Consolidated total capital ratio stood at 16% and the core Tier 1 and Tier 1 ratio reached 14.4%. So we are keeping significant buffers over the minimum regulatory requirements.

The same is happening with MREL requirements where we are also keeping a significant surplus over the minimum required levels. The long-term funding ratio is hovering between 33% and 34%, still clearly on track to the targeted level by the end of 2026. And last but not the least, we continue to have a significant excess of liquidity as the loan-to-deposit ratio at the end of September was at 58%.

So moving now to more details. So first, a quick look at Page #8. As usually, every quarter, we are showing the status of the achievement of the targets and objectives, both from a business perspective and from a financial and risk perspective that we have set when announcing the strategy for the years '25, '28, value and growth strategy that this was announced around 1 year ago.

And as it can be seen from this page, we are on the track to achieve these goals. Of course, this is still the first year after the announcement of the new strategy, but it is visible that the business goals related to increase of the number of active customers in retail is growing according to the plan. We have now more than 3.2 million active customers in retail. Also the share of digital in the active retail customer base is over 93% now.

And on the other side, already visible growth in the number of business active clients and also corporate loan volumes, which is especially visible during the third quarter.

On the financial side, the ROE improving versus the last year with 9 months ROE annualized at 14.2%, while in terms of the NPL ratio, we are trending down in order to be below 4% in the near future.

Moving to Page 9. We are showing the evolution of the results since the fourth quarter 2023, over the last 8 quarters, and it is visible the improvement on the reported profitability in this quarter, PLN 345 million growth versus the previous quarter. And in terms of 9 months, so the growth of 56% that I already mentioned. The net profit, excluding extraordinary items, was at PLN 743 million. So -- which is still a relatively high figure. And overall, when we compare the accumulated net profit without extraordinary items this year versus last year, we are growing 2%. Operating income was relatively stable in the quarter.

And moving now to more details on Page 10. We see that the net interest income is showing resilience despite the gradual decrease of the interest rates. I should remind that the level of interest rates at the end of September, the intervention rate or the reference rate of the National Bank of Poland was at 4.75% and was further cut in the beginning of October to 4.5%, while 1.5 year ago, we were at 6.75%. So the NII was stable versus the previous quarter. And when we compare the NII this year versus last year, we have a growth of 3%, excluding the effects of the credit holidays.

Of course, the net interest margin is trending down as interest rates are going down and stood at 3.95% in the third quarter '25, an average of 4.1% for the 9 months of this year. It is visible that on one side, a lower remuneration from loans as a result of the fact that the part of the loan portfolio is indexed to market rates. And so there is a natural decrease on the average yield of the loans, but at the same time, a relevant decrease in the average cost of the deposits in the third quarter by 14 basis points.

Net fees and commission income performed better than in recent periods, actually the best since the first quarter of 2024, growing 9% quarter-on-quarter and in accumulated terms being just 2% below 1 year ago as a consequence of still much lower fees from bancassurance when compared with last year.

On Page 11, operating costs are still growing double digit. Total operating costs grew 15% year-on-year, but just 11% if excluding the costs connected with the banking guarantee fund. In particular, other administrative costs were up just 7% year-on-year. So we can say that most of the cost growth versus the first 9 months of 2024 is attributable to higher regulatory costs.

Moving to Page 12. The quality of the loan portfolio remains solid. NPL ratio stable at 4.2%. Cost of risk, 32 basis points over total loans in the first 9 months of the year. And last but not least, another increase in the coverage ratio of NPLs by total provisions from 72% 1 year ago to 78% at the end of September this year. As I mentioned before, no sales of NPLs in this quarter. And on the top right, the evolution of the NPL ratios for different portfolios showing either a decreasing trend or stability.

Capital adequacy ratios at comfortable surplus despite the new countercyclical capital buffer, which increased 1% in September and another 1% will increase in September next year. But as it is seen, we have a surplus over 4 percentage points in terms of total capital ratio over the minimum requirements and the surplus of 4.6 percentage points in terms of Tier 1. As I mentioned before, the capital ratios in the quarter improved versus the end of June, mainly as a consequence of the recognition in own funds of the first half net profit.

The same picture for MREL with -- on Page 14 with still a very comfortable surplus over the minimum regulatory requirements, very strong LCR. A very high share of debt securities of liquid assets in total assets due to the significant excess of liquidity that is measured by the loan-to-deposit ratio at 58% as of the end of September.

Regarding FX mortgage, we continue to see a fast downward trend of the outstanding portfolio. Year-on-year in currency, so excluding FX variations. We have a decrease of the portfolio by 34%. And currently, FX mortgage gross exposure after deduction of the allocated risk provisions represents just 1% of the total gross loan portfolio. The provisions against legal risks were lower in the third quarter versus previous periods and stood at PLN 394 million for the Bank Millennium originated portfolio in line with the announcements that we made 2 years ago in a dedicated current report. So the outstanding balance of legal risk provisions as of the end of September was close to PLN 7 billion.

In this quarter, we had 2 positive trends from one side, a continuation of the lower inflow of new court cases, which for the first time in 5 years, were below 1,000, more exactly 904 new court cases, while the number of settlements was above 1,200 and within this number, a relevant number of in-court settlements. So all in all, we have already signed since the beginning of this process, more than 29,000 amicable settlements with clients.

Not much change in terms of the main assumptions regarding legal risk. So in fact, the provisions during the current year are being driven by other related costs and not so much by the inflow of the court cases as until now, the inflow has been more or less in line with the original estimation.

Moving now to the second part of the presentation regarding business development and with the main highlights on the Page 18. We would highlight, first of all, the high growth of customer funds, both deposits and investment funds, and the growing customer acquisition. And please remember that we are always reporting the customer acquisition on a net basis and not on a gross basis. And so we are adding on average, around 150,000 net growth of active customers in the retail.

We also in this third quarter are showing strong dynamics in corporate lending and which is already translating in a double-digit growth of the loan portfolio. And on the other side, stable and relatively high origination of consumer loans and an inversion of the trend in mortgage origination with a much higher already production in the third quarter compared with previous periods. So these trends translated into a total deposit growth of 12% year-on-year, a consumer loan growth of portfolio of 3%. The loans to companies' portfolio growing 12%, investment funds growing by 39% and the number of active customers reaching 3,234,000, of which 93.5% are customers that are digitally active.

On Page 19. Despite this evolution, we still have year-on-year a small decrease of the net loan portfolio by 1% and this is due to the fast amortization or reduction of the FX mortgage portfolio and also to some contraction of the PLN mortgage portfolio due to lower origination from previous periods and also some higher early prepayment rates. As I said, anyway, the new origination is going to allow sooner or later to stabilize the size of the portfolio and then to resume a growth also on this segment.

The stronger growth of corporate loans that we expect to continue, of course, will contribute to a gradual change in the structure of the loan portfolio with a little bit going -- a decreasing share of PLN mortgages offset by growing share of loans to companies, leasing and factoring, while consumer loans should keep more or less this share that has currently.

On the customer deposits, both retail and corporate grew at double digit during the last 12 months and investment products, a significant growth over 30%, allowing also our asset management company, Millennium TFI to cross the level of PLN 10 billion under management.

On Page 20, we can see that cash loan sales are stable year-on-year but allowing us to reach a market share close to 11% in terms of the new sales, while there is a clear rebound in the sales of mortgage with origination in the quarter above PLN 1 billion.

On Page 21, in the last 12 months, we had a net growth of 136,000 active customers in retail and in particularly, a growth of 41,000 just in the third quarter. And at the same time, we see acceleration of the growth in the number of active customers from micro business or individual entrepreneurs, which grew by 5,000 versus the previous quarter. And the growth of number of customers is also followed by a growth of the payment cards by more than 200,000 in the last 12 months.

Page 22. The high quality of the digital customer experience is enabling the growth of the active user base. I already mentioned, this threshold of 3 million active digital users that was reached in September. This means 3 million customers that log into mobile app or to Millenet on a regular basis. From these active digital users, 70% are mobile-only users. And we see the growth translating into a 6% growth of active digital users and a 9% growth in active mobile users, which already reached over 2.8 million, and a growth of 8% in mobile-only users. So we believe that very soon, we will be celebrating also another threshold of 3 million active mobile users.

On Page 23. We continue to promote convenience, mobility and security as key drivers to -- for our clients to adopt digital solutions. And we are here showing very strong numbers, for example, 2 million e-commerce users in September, making e-commerce transactions, 2.18 million users -- BLIK users in the third quarter, more than 18 million P2P transfers and 260,000 Good Start 300+ applications.

Page 24, we show the share of digital channels in different sales processes, which continues to grow. So for example, 56% digital share in current account acquisition in the third quarter '25. Also 84% digital share in credit card sales, 88% in cash loan sales.

Page 25. Digitalization is also supporting the omnichannel approach. As examples, 30% of customer requests were handled by AI-based solutions, 586,000 orders were authorized at the branches via mobile app instead of physical paper in the third quarter 2025.

On Page 26, we continue to develop our goodie platform and intensifying promotional activities. In this quarter, we would highlight the 29% increase year-on-year on the transaction values made through the goodie cashback and a 25% increase in the number of transactions.

Moving to corporate. Page 27. So we have achieved a double-digit growth of loans to companies and gross loans to companies in the last 12 months, a growth of 12% year-on-year, fueled by 19% growth of loans to companies, 11% growth in factoring and 4% growth in leasing. The origination of loans to companies accelerated to 15% quarter-on-quarter in third quarter '25 with a share of investment loans at 42%. And I would remind that one of our targets is to achieve a higher share of investment loans in our corporate loan portfolio close to 25% by 2028.

Company's deposits have grown 5% quarter-on-quarter and 16% year-on-year. And in terms of transactional activity, we would highlight the stronger growth of factoring that can be seen on Page 28. And growth in the factoring turnover by 11% year-on-year, while leasing sales were still slightly down when compared with last year by 2%.

So these are the most important highlights of our third quarter and 9 months results, and now we will go through the Q&A session. Thank you.

Thank you very much, Fernando. Thank you very much for all the questions that we have received so far. We'll be reading them out shortly. To give you a bit of a breathing space, I think we start from Mr. Bras Jorge, and there's a lot of questions about volumes on loan and on the deposit side. Fernando, you will go for questions and prepare for the other ones.

Corporate loan book and corporate loan growth has attracted a lot of attention and a lot of praise, the questions suggest. So I'll start from the first question, which is normal. Corporate loan growth was meaningful quarter-on-quarter. Was there any seasonal effect, one-off? How sustainable can this be going forward?

There is no seasonality here in this process. We believe that what we should be now expecting is around these levels in the next quarters to come. Sometimes, it's -- we were seeing already this progress in terms of production in the previous, even we said that, although it was not yet visible in the increases of the volumes, we were already seeing the signals. Today, we are already seeing the signals. So we grow more or less 12% corporate credits.

But in terms of production, year-on-year, we have 100% higher than the previous year. Just also to give you a flavor, if we would divide these in terms of ticket size, we would have 1/3 below PLN 30 million, another 1/3 between PLN 30 million and PLN 100 million and then another PLN 30 million higher than PLN 100 million. So it means that we are doing what we explained on the strategy.

So we are working in SME sector, across Poland, supporting 44% of the lending in corporate was then in investment loans. So we are supporting modernization of factories, new warehouses, new technologies, new investments that our customers are done -- doing and across different regions and across also the sectors and the size because it's very important to understand that since the beginning, we were explaining that we would not be the bank of the huge transactions of the national projects, but we would be a bank exploring our close relations with the family business, with the midsized corporate in the different regions in Poland.

Thank you. Sticking to corporate business and corporate book. Are you seeing any opportunities to grow your corporate loans portfolio inorganically? What is the plan of expanding activity in the corporate segment as announced earlier versus limited growth in the corporate sector generally in Poland?

We are capturing our size on our presence, let's call it like that. So it's -- during the recovery plan, we were preserving capital. So we were maintaining the relation but reducing our credit exposure to our customers. Now we are taking it back. So this is -- so even if -- first of all, the sector is growing. So we will see the other banks presenting as well, but there is some growth in the corporate sector. But it's natural that also we would be capturing our own space.

Inorganic is a little bit difficult. So inorganic would be or buying a portfolio or buying a bank specific in corporate, we are much a believer of cost synergies that revenue synergies. But -- so we don't see any space to make a good transaction. Our strategy is different. We explained in the previous sessions also with the analysts and investors that we were dedicating also the most talent teams from IT to develop new workflows of credit to improve the time to yes in the corporate side, that we were reinforcing the analysts and the writers to be able to have also faster time to yes and also that we would improve the Internet services and the payment systems that we have to companies.

So we would go more on this direction. So improving our skills, our tools and exploring this proximity to the customers instead of trying to buy positions in syndicates or to buy portfolios or even to buy something else.

Thank you very much. We're moving to mortgage business and mortgage book. In Q3, Millennium returned to quarterly mortgage shares above PLN 1 billion. Do we expect it to remain around this level. Last time the CEO suggested that selling mortgages is not the most profitable business for the bank due to potential bigger risks?

So there was some improvement in the environment, we believe from one side decision of European Court of Justice. And also, we see the progress in terms of the national group of the substitution of the [indiscernible]. So it's -- I think we explained also that maybe in the previous quarters, we went a little bit too much in terms of the restrictions that we have. At the same time, lower interest rates, there is also more demand. So we are more comfortable now. We need to monitor in still the situation in a proper way, but our risk assessment for the time being is a little bit more positive than it was in the previous quarters in terms of potential of litigation for mortgage in zloty.

We are comfortable to this level. It's between PLN 1 billion to PLN 1.5 billion, maybe even more than PLN 1.5 billion, it could be seen in the future. Of course, it's crucial also that the business to have healthy spreads and good risk criteria, but this is what we are seeing at the moment in the market. So we are comfortable to the level that we are doing and even to do it in the future a little bit higher.

Thank you. Another question, which relates to mortgages is on refinancing fixed-rate mortgages. Could you comment on customers' willingness to refinance fixed rate mortgages. It seems to be -- it seems that the process is speeding up.

So the experience and -- from the customer side, but unfortunately, sometimes even from the authorities about the importance of the mortgage products, but also the importance of the maintenance and respect of the rules and the loss in the long run to have a healthy mortgage business, sometimes it's not the highest in Poland, and there is still a learning process. When we have a fixed rates, it's very important for the customers because it's -- they have known and stable installments to pay. But it's obvious that if the interest rates go up, they are protected. But if the interest rates go down, they have less advantage, and they don't capture immediately at least the benefits of the interest rates going down.

One possibility to do this is trying to refinance, of course, with the falling of interest rates, there is more activity of the refinancing. You know us, when we were starting a long time ago, the negotiations of the settlements in Swiss francs, a lot of times the analysts were asking, but what are the rules, what are the criteria, what are the discounts, what is the FX that you convert? And we were always explaining that each customer is a customer that is a life behind though there is a discussion to find a solution that is good for the both sides. And here is exactly the same.

So it's -- if the customer wants to refinance and wants to discuss with us, and of course, we have the systems and the people capable to do this, we're trying to find what could be renegotiation that is good for both parties, and that could be a reduction, but also a prolongation of the fixed period or can be another solutions. But -- so it's clear that there is an increase of this tendency. And we think it's natural because the interest rates, they decrease a lot. There is still some space. We see it as a terminal rate 3.5% in reference rate of NBP. So let's -- until arrive to this level, probably we will see still right of negotiations or early repayments or something like that.

Sorry for this, our translator apparently broke into our line. A bit more -- not philosophical, but a bit more, say, strategic question on mortgages. Where are you in the digital mortgage process? Some banks announced progress here recently.

Keeping in the philosophical aspect, management is making choices. And it's clear that we made a choice to allocate a lot of resources to corporate side does not mean that we would not develop the digital mortgage process, but it means that in terms of the priority, it's -- it will not be our first priority. We believe that the digital solutions in terms of payments and daily services. It's crucial and brings a lot of advantage. The digital mortgage process is positive. But as you know, there is a lot of limitation.

So if there is only 1 borrower, if there are 2, it's more complex. So it's not a plain vanilla case that we can use for everything. So we believe that we will have a solution in the near future, but I would not say that it is our priority in terms of digital development for services for our customers at the moment.

Thank you. Now we're moving to the liability side. Is the 3Q level of corporate deposits sustainable? Or do you expect some reduction in the next quarter or at the end of the year? What was driving the significant quarterly growth in deposits in 3Q, both retail and corporate? Have you increased prices? What is your deposit strategy for the next quarters?

We do not want to limit our development of the deposits business by the lending. The deposit business per se is a profitable business. It's a combination in the individuals more savings accounts and current accounts. In corporate, it's more current accounts and then deposits and deposits sometimes is some institutions that they have excess of liquidity in a regular basis and then, so they go more looking for coating for time deposits. We didn't change anything in our strategy. There is sometimes some seasonality also in terms of December moment. So there is some seasonalities in the market.

Also in terms of the corporate, the half year or the preparation of the half year, there was a little bit of more competition in the market. And this quarter, we saw it less. So it was -- corporate deposits were at cheaper prices. So we end up to have it in more in a natural basis. But it's important also. So at the same time that we are not having a policy of increasing the time deposits as per se. So it's -- but it's natural for example, we are growing in retailing investment loans in the 30% year-on-year and already for some time.

So it's natural that these customers that are also making their investments with us are also bringing some time deposits with us. But in a regular basis, even this quarter, the growth was more healthy in terms of current accounts, even than the normal time deposits. So no change of strategy, just a natural growth that -- and also with our intention of not limiting the growth of deposits by the loan portfolio. So because the deposit -- the deposits are a strong revenue pool in the Polish banking system.

Thank you. Very sorry for keeping or staying in the subject of volumes, but we are very meticulous and devoted to us answering each question, so sorry for that. Last question about the volumes. Any signs of pressure on margins on corporate loans since all banks want to grow in that segment?

So we see, yes, yes, yes. We see a little bit year-on-year, I don't know if it is 15 basis points or if it is 20 basis points, but there is some pressure in terms of corporate lending. But at least in our bank, we always prefer if it is to make an adjustment to make it in price and to make it in risk. Because when we make it in price, we know that we will charge 15 basis less, and that's it. When it is in risk terms, what we put in jeopardize is 100% of the loans. So it's much better to do it like that. So it's -- we are not a price maker as well. So we are just conquering our space.

So we will take -- we try to differentiate ourselves by the closeness to the customer, understanding their business to be fast. That's why we are so much in medium-sized tickets, but we will operate in the margins of the market. And it's true that we saw this year-on-year decrease of the margins of the market.

Thank you. It's now time to bring back Mr. Bicho into the game. So now for a change, let's talk a little bit about the results. What kind of outlook should we expect for the NII in 4Q '25? What is your view on the cost of deposits and loan yields?

So first, we are still reporting a relatively low sensitivity of our NII in the next 12 months versus a decrease of the interest rates. So we believe that our NII in the fourth quarter will still be resilient despite the cut of the interest rates that took place in the beginning of October. Of course, there is still a risk of a further cut in November, which, of course, then can have some additional impact.

As we already said, we -- our forecast is that interest rates will go down to 3.5% by mid next year. This is our, let's say, our assumption that this trend will continue. And then we believe that -- and then our assumption is that the interest rates will stabilize at that level of 3.5%. So what we expect is in the fourth quarter still for the NII to be resilient.

And regarding the evolution of deposit costs and loan yields, so starting with the loans, we have part of our loan portfolio at fixed rate, namely more than 40% of the mortgage loan portfolio has a temporary fixed rate, almost all the consumer loans have a fixed rate. So this provides some temporary protection, of course, with the exclusion of these early repayments of the mortgages that are at fixed rate, of course.

On the other side, on the -- we also have a large bond portfolio and part of the bond portfolio is also at fixed rate. And so this also provides some protection for some time against cuts of the interest rates.

Regarding the deposits, we are already showing an adjustment in the average cost of the deposits in the third quarter. So it's already visible, a decrease of 14 basis points just quarter-on-quarter. We know that our cost of deposits still compares a little bit higher than the average, which is -- which has the good side and the bad side. So the best side is that, of course, it is what it is. We are paying a little bit on average -- the average cost nominally seems a little bit higher than the average. But at the same time, it also means that we have more space to decrease going forward.

But the deposits, and especially the savings accounts, promotions that we are doing is also one important way of attracting new customers to the bank. So we cannot see just isolated the pricing of the deposits because this is part of, let's say, a comprehensive strategy of increasing our presence in the -- especially in the retail segment.

So all in all, NII relatively resilient in the fourth quarter. The NIM, the net interest margin will tend to go slowly down. But there is going to be a moment where it also -- we expect that it will be visible that this decrease of the interest rates will start to be offset by growing volumes, especially on the lending side. And so we cannot look at this only from a static perspective. We expect that the acceleration of the loan growth, which, of course, provides higher yields than the bond portfolio will bring sustainability to the levels of the NII and will offset the reductions of the interest rates that we are still forecasting to take place.

Thank you. Now interesting question. Higher origination of mortgages did not translate into a growth of portfolio. Amortization seems higher than in the past. What are the main reasons?

It's exactly connected with the previous comments. So as interest rates go down, there is a higher -- there is an increase in the early repayments by customers or because -- one of the reason is refinancing. Another reason may be that in the meantime, they have the financial capacity to make early repayment of parts or the whole loans. So this is just something that could be expected when we enter into this cycle of downward trend in terms of the interest rates.

Thank you. Consumer protection. In the report, the provision for consumer protection is PLN 45 million. What exactly is included in the PLN 45 million amount?

So this is the continuation of the creation of provisions for an open consumer protection-related topic, which was described in the previous report, and it continues to be described in the current financial report, which is connected with so-called unauthorized transactions. This is a pending procedure from the Consumer Protection Authority against basically all the banks. The proceedings are being prolonged in time. In June, we made an assessment of the potential consequences of, let's say, a decision and we booked a provision of PLN 37 million.

In the third quarter, as the process still was not finished and still may be prolonged until the end of the year or even to the beginning of the next year, we made another assessment. We took a more conservative view, and so we increased the provisions by this PLN 45 million. So it's connected with the same situation that was reported in the end of the second quarter.

Were there any one-offs in other operating income to offset the PLN 45 million provision for consumer protection? Were there any one-offs in other operating income to offset PLN 45 million consumer protection provision?

In other operating income?

Other operating items so consumer...

No, not that I remember out of the normal. So in the second quarter, there was, but not in the third quarter.

Probably the one hint from us is that this other operating cost line, remember, there's also residual FX mortgage related costs. And in 2Q, these costs were in high 60s. In 3Q, they were 20s. So this is offsetting also somewhat this line.

Would you comment about NPL ratio in the corporate segment, reasons for increase in 3Q and subsequent decline? What is the outlook for cost of risk in the corporate segment?

Increase in third quarter last year. I don't remember -- I think in third quarter -- third quarter last year, there were 2 isolated cases in 2 nonrelated exposures, which increased the ratio at that time, exactly. The -- so we can say that in the last 12, 24 months. What we have in terms of NPLs in corporate are added isolated cases and not very significant, let's say, very significant cases.

So of course, this also contributed to increase a little bit to the cost of risk for corporate because -- but this is also a consequence of having a relatively smaller corporate business, right, that if we have a smaller corporate business, if we have 1 NPL or 2 NPLs, it's immediate to be noticeable in terms of the cost of risk of the segment. As we will grow, of course, each isolated case, we will not have such visibility as we have now. But as I said, until now, isolated cases in different sectors and for completely different reasons, so we don't extrapolate general deterioration on the corporate loan quality.

Moving further down. The question is -- there's also a question about the NII and net interest margin outlook when rates stabilize. But I think you largely covered that unless you want to elaborate? When interest rates stabilize, what sustainable NIM...

So as I -- I think -- as I said, the NIM will still tend to go down, but this does not mean that the NII goes now, right? Because we have also the volume -- for example, our situation. We have a loan-to-deposit ratio, which has been decreasing through time. So now at the end of September, we have 58% loan-to-deposit ratio. So it means that we have a lot of gathered deposits which liquidity is being invested in bonds and NBP bills. So obviously, the margin that we are getting from these is smaller than the margin that we would get from loans.

What we expect is that in the future, loan growth will accelerate. And part of this excess of liquidity will be deployed to support lending growth. And this change will be supportive for the NII. Of course, it will be -- it will consume capital, of course, it's not -- no doubt about that, but we'll be supportive to stabilize the NIM.

So the NIM still has some space to go down. So I would say it will be probably going down, still 20, 30 basis points through time. But then there will be a moment where as soon as we will start to, let's say, recycling this excess of the liquidity into lending, this volume effect will stabilize also the NIM. But more important than the NIM, to be honest, for us, is the level of the NII. This is where we are focused. So our main revenue stream, and so far, it's proving extremely resilient.

Thank you. Moving to the inevitable still subject of FX mortgages, but more so cost related. I will not read all the questions. There aren't many though. Do you expect FX mortgage provisions to reduce further in 4Q '25? Any tangible guidance for 2026? Do you still expect '25 to be the last year of CHF provisions? How much CHF provision is ahead of us? These are the 2 and we have more.

And if we expect to use any positive tax effect to upfront FX mortgage process...

This is an interesting question. Yes, yes, yes.

So I would try to combine this. So first, the trend continues to follow, let's say, the guidance that we have done in previous periods, namely the overall costs related to the FX mortgage are going down visibly year-on-year. So if we look at the first 9 months of this year, and we compare with the first 9 months of last year, we see that the total gross costs related to FX mortgage decreased by PLN 750 million or 32%. And this includes provisions, related costs, legal office, court costs and so on.

So 32% decrease versus 1 year ago, of which provisions are lower by 12%, but also the provisions now are covering not only the existing court cases, they are also covering additional costs and also future settlements. So there is a visible downward trend, especially when we look at these overall costs.

In terms of quarterly charges of provisions, third quarter was below PLN 400 million, so it was lower than what we have been incurring so far. We do not give guidance on a quarter-by-quarter basis of the level of the provision. So because we did not promise that each quarter, the provisions will be lower than the previous quarter. This for us is not important. For us, what is important is to show that when we will reach the end of 2025 that we can say that we can observe that total costs continue in a downward trend. This is one thing.

And second, and I think more important is to the assessment, how much is still before us to cover in 2026. And so based on the information that we have now, we still believe that 2025 is the last year with significant -- very significant financial impact on our P&L. This does not mean that there will be no cost in 2026, but they will be -- they should be clearly lower than the ones that we are still showing during the current year.

So unless something extraordinary happens in terms of courts, jurisprudence or the law that is being, let's say, divided to be applicable to Swiss franc mortgage loans, which according to the current tax that does not, let's say, create something completely new. So excluding any unknown factor, this should be happening next year.

In terms of fourth quarter of this year, so -- and on another side, we -- of course, we can say that we are interested in getting over the -- this impact as soon as it is possible. So what I can say for now is that the fourth quarter will still be relevant, most likely. Fourth quarter is also the moment of truth, also with the audited accounts. So where we are checking very detailed every single driver and parameter of the methodology that is behind the creation of these provisions. So the fourth quarter, we are not signaling lower provisions than in the third quarter, not at all. What we would like is to in 3 months' time when we will come to present the preliminary results of the first -- of the year to confirm that we still expect this significant decrease of the cost related to FX mortgage during the next year.

It is true that in the fourth quarter, there is going -- if the increase of the tax will be confirmed, which impact, of course, will be very negative for the next year. However, there is -- it implies a revaluation of the deferred tax assets during the -- until the end of this year. So the law is still not finally approved. And we need to make very detailed estimation about the time structure of the DTAs in order to make a proper valuation -- revaluation of the DTA. So we cannot provide now any guidance regarding the number.

What we said is that in our financial report that we published today, so we will carry out this assessment after the act is signed and in the positive financial impact on the net result can be significant, right? So -- but still, we cannot comment on concrete amounts. We are still before more detailed calculations and also seeing the final shape of the law, which should be known until the end of November.

Yes. Thank you. So this covers the DTA-related questions but sticking to CHF for a while. There's a question, what other related -- what other costs related to CHF mortgages are there? I would direct you to our front part of the report. There's a lot of details there. They're all remunerated and there are numbers so you can satisfy your first there.

Yes. But generally speaking, so we have -- the total costs are broken down between provisions for legal risk, which includes existing court cases, future estimation of court cases, assumptions regarding how many settlements will be done with clients in the court and out of the court, includes additional costs connected with verdicts that invalidated loan agreements, including court related costs, sometimes statutory interest and other costs, cost of legal representation of the claimants and cost of the counter claims that we are obliged to file against the clients in order to protect the original capital and court related costs.

Thank you. Now a question, strategic one. Could you update us on your inorganic ambitions? Can they buyout of minorities be possible or a combination with a corporate bank?

So it's -- in our case, it's -- what can I say on this part? It's just that if a potential transaction in a hypothetical scenario appears to us, we will study with the focus of mainly cost synergies. So we believe in transactions and operations that bring cost synergies, and transactions per se a little bit more difficult to justify, especially because we, as an institution, known by efficiency and digitalization and process-oriented mindset. So this is the value that we bring for the table.

But we don't see these kind of transactions in the horizon. And so meanwhile, what we are focused is in our strategy that so far, so good. So it looks like it's working, at least in the results that we are bringing today. And through that, we pretend to keep bringing value to our shareholders. So the strategy, the name is value and growth. So we bring the growth in terms of the business that will be translating on the value for the shareholders and all the other stakeholders.

But any kind of transaction, the hypothetical, we don't see any space even because we need to -- the transactions that we saw up to now in the market were more a change of shareholders than a real M&A transaction. So it's not -- although very positive because they show the value that the Polish market has and also the high appreciation and the expectations for the Polish economy.

Well, you are holding the mic. What prevents Millennium from paying dividend already from '25 earnings?

So keep this hypothetical. So what would hypothetically prevent could be the leverage ratio. But once again, we were very clear in our strategy that it's clear the plan to apply to the authorities to be authorized to pay dividend in 2027 on the results of '26. This we are extremely committed. And this is clear our target. This is in everything that we do, this is inside.

If besides, of course, the approval of the authorities, KNF, the regulator, but what -- looking for our capital position, different ratios, limitations and everything in hypothetical when we put everything together, the leverage ratio may be.

Very clear. Thank you very much.

First, of course, each year, we need to wait for the guidelines of the supervisor, right? So in that...

Yes, you are absolutely right.

Besides the direct authorization, case by case is also the guidelines of the supervisor for the sector in that year. You are completely right.

Gentlemen, the end is nearing. Two questions and one question actually about a very technical on RWA growth. Credit RWA was up 6% quarter-on-quarter, while net loans grew only 1%. What is driving the difference?

Yes. It's a fair question. The -- we had an increase of risk-weighted assets over PLN 2 billion in the quarter. And there are 2 drivers. One -- 2 main drivers. One is the lower benefit from securitization transactions than in the past, which are already in amortization period. And so as they -- as we have less loans covered by such securitizations, we have an increase of the risk-weighted assets related to the loans that were under those that securitization. So this immediately is responsible for around the growth -- for around PLN 1 million growth of risk-weighted assets in the quarter.

The other part is connected mainly with the corporate portfolio, which also increased more than PLN 1 billion in terms of risk-weighted assets, mainly as a consequence of the growth of the loan portfolio itself, but also some changes in terms of the risk weights assigned to the consumption of capital assigned to our factoring business due to a combination of changes that were done during this quarter. So these were the 2 drivers for the relatively high increase of RWAs versus the growth of the loan exposure. And of course, the loan portfolio did not grow much because we had still a contraction of the PLN mortgage, which has a very low -- much lower risk-weighted asset -- risk weight.

So the mix is changing simply to some extent.

Yes.

A very unusual question because it relates to goodie, I think we need to ask this question, let me read it and answer. Would you comment about business case behind cashback platform between goodie and BLIK?

Yes, there is not much to comment. But the service -- the value-added services that we put in the bank systems, are in general, connected with transactions and payments. And so goodie was startup that developed quite well in terms of some smart shopping, namely cashbacks and things like that, discounts, cashbacks and this kind of information. It's an autonomous company. But with the BLIKs, any cooperation makes sense to us because it's connecting payments with advantage and discounts and cashback, so it makes sense.

This is with the digital world, a lot of things. Our customers know that they can pay in our app, they can pay tolls in highways, parkings, top-up telephones and things like that. And this could be an interesting service if then with a proper customer experience.

I'm tempted to say that was the last question, but there's one that arrived late. Return to dividends. Do you plan to return to paying dividends with a 30% payout ratio or another level?

Yes, Fernando says that...

So our dividend policy is 35% to 50%. So when we will be able to restart -- I think we would start probably, starting with the...

Probably with the low very interval...

Yes. And then going up even because, of course, as you're seeing, the business growth is developing quite well. And by that, it's natural that things would go up. And so the usage of capital would be well used and also in the developing out of the business.

Gentlemen, looks like we covered the vast majority of questions.

There is here a question about buy now pay later.

True, true.

You don't want me to answer. So because the question is if we are satisfied. And the answer is yes, is not yet. So it's -- so the answer is not yet. Sometimes it takes time, but the first impacts are not so positive as we thought. But also, I remember that the transfers, P2P, when we start in BLIK, also they didn't develop so much as we -- as for example, the payments in e-commerce. And so sometimes the rush moments or the initial moments are not so strong as we were forecasting. So we were forecasting enthusiasm from our customers on that, and we are not seeing that yet.

You see IR is being scrutinized by CEO and CFO. So that's Bank Millennium. It's not an easy job as you see yourself. Fernando, maybe...

Yes, there's a question about long-term outlook of cost of risk bearing in mind acceleration in SME lending.

I think this year; we still see it very positively in terms of the cost of risk. So after 9 months, we have a cost of risk of 32 basis points over total loans. In the fourth quarter, it is possible that we will conclude another sale of NPLs. Usually, we do 2 transactions per year in the second and fourth quarter. So it's still possible to have another transaction in the fourth quarter. If that will happen, it can be supportive, both for the NPL ratio and for the cost of risk. So we are assuming that this year, we will likely finish not -- lower than 40 basis points over total loans.

And for the next years, of course, we have a gradual change in the structure of the loan portfolio. We can also -- we also do not -- cannot expect forever that sales of NPLs will be so accretive.

So we are assuming that most likely, we will come back to this usual guidance of 40 to 50 basis points of out total loans as time will pass. But this is what we can say for now. When we will enter the new year, we will probably come back to this guidance.

Gentlemen, we extended the time of the call over 1 hour. So I think it's time for closing remarks from Joao.

Very well. So thank you for attending to this conference and also to following the bank and assessing also our results and performance as we have been doing quarter-by-quarter. The results are positive on a year-on-year basis, at least we assess it as that. We are quite confident also for the future. We will have, in terms of tendency as it is known, lower interest rates, probably up to summer next year, stabilizing at 3.5% with a high -- very high probability, higher taxation. From another side, of course, we will have lower costs or much lower costs of Swiss francs. And also the volumes keep growing in retail deposits, customer acquisition, investment funds, recovering on lending and cash loans and mortgage. And also in terms of corporate, we believe that we will not only be able to maintain this pace. But then in the next years to come, even to be able to present higher growth that we are presenting at the moment.

So we are quite confident. We -- in the end of 2024 when we were presenting the strategy in interactions with different analysts and even investors and everything that there was this discussion about it. If the bank would be capable to have the skills and to have the know-how to explore the commercial banking in terms of SME and mid-corporate banking, we have been presenting quarter-by-quarter also with the progress that we are doing in this area, also explaining different systems, recent development, recruiting different people, also deploying the people that was already with us, but that we're working with some constraints in terms of usage of capital.

The results now presented are quite positive. So I think that we are in a moment that we are quite confident about the strategy and we are quite confident about delivering the results and the view and the transformation even of the bank that we presented in our plans for 2028, and we will invite us for the end of the year that will be end of January, yes, with high probability or first days of February, I don't know.

We're still due to announce.

Yes, yes.

So you'll hear from us on this matter, hopefully, shortly. Thank you very much, gentlemen. Thank you all for participating. Thank you for your interesting questions. And apologies for the morning issues with dispatching the results. Again, have a good weekend, and speak to you soon. Thank you very much.