Commerzbank Aktie

Good morning, everyone. Good morning, Bettina.

Good morning.

So 2 years ago, when we both were sitting here, and you just took over as CEO, actually -- I mean, to be named CEO literally the day before. Italian bank UniCredit took just the first position.

So it was already our intro in the call -- in the meeting. So today, UniCredit sits on close of half of the register. And on Monday last week, your 2 largest shareholders had the first discussion and first meeting, and they both called this constructive. So you laid out 2 phase path, collaborative first and consolidate later. So I would like to spend the next few minutes on where this actually stands and what investors in this room should be watching between now and the moment something is signed. So I will let you maybe do some first introduction, and I will certainly follow up.

Sure. I mean it's important to note that we are now entering a new phase, that's for sure. And we have been very successful in the past 2 years. So we are very proud of that. I think it's also important to note when you look at our performance of the share price, but also when you look on the performance and profitability, I think we can be all very satisfied, and we are at least very proud.

We are now in the situation, I call it always the phase zero, where we wait that the approvals come through that will be either by the end of this year or beginning of next year.

I think both CFO teams would rather prefer beginning of next year, just because it's much easier to consolidate first quarter as a testing moment than a full year, but we will take it as it comes.

So it's now important to really prepare for that. That is number one. And then there is a phase 1, which we phrase it like that, which is where we are still an independent bank that publicly listed, and we have our own strategy. But we are part of a group. And I think it's best if we use this phase for -- and that is why I called it a collaborative approach, where we can already use the power of the group for certain things. I mean, still HVB and Commerzbank are competitors and UniCredit, but we can definitely will have some sources of potential revenue synergies and cost synergies, which you can create in this time.

And then it's clear that the question that, that should not be the end, because if you have gone so far, it's very clear that you also want to get at a certain point in time, realizing at least the domestic synergies, which are in place, which means that in this Phase 2, there should be a kind of an integration between Commerzbank and HVB, but -- and for that phase specifically, you need for the structural changes, you need more than the 49% majority.

You need to have a majority in an AGM of 75%. And therefore, the talks between UniCredit and the government as a second largest shareholder are pretty important to make that happen.

Very clear. So the press reported potentially an accelerated agenda to what you just described, where you will have a scenario where Commerzbank does a reverse takeover on HVB. That would be definitely an easier option for both parts and make things actually probably smoother and faster. Do you agree with this? And is that something been floated as an idea and discussed?

I mean we have discussed and analyzed all potential options in the last 2 years, and UniCredit potentially has done the same. And I mean, there are always 3 basic options on how you can structure such a structural deal.

One is just simply a merger between Commerzbank and UniCredit. Another one is that you go out, make an offer to the remaining shareholders, most likely with a premium. You get above 90%, and then you kind of do this squeeze-out and then you can integrate the 2 things or -- and that is the third option, is that you do basically an acquisition of HVB by Commerzbank, and you pay in shares, which would bring UniCredit up in the shareholdership with Commerzbank.

All 3 basic options are on the table. All 3 basic options require a voting in the AGM of minimum 75%, and that is something we need to keep in mind, and that brings us back to the role of the government.

So in these discussions and all these options, what's the role you're playing into this?

Well first of all, I think it's not on us in the moment to discuss at all this Phase 2. I think we have our hands full with preparation of Phase zero, and we also have a bank where everybody expects that we deliver our momentum targets, which we do. I'm pretty sure we will talk about that in a minute.

And then for us, it's important now to think about the Phase 1 and how to detail that because that I think is the short-term expectation and rightfully so from investors that they see already in Phase 1, what kind of additional value can be created. And this is where we at Commerzbank focus on to think about potential levers one can pull.

So really last question before we move to -- on the -- before we can move to Phase 2, there was also some -- in the press again, some conditions set by government as the seats in the Board. And is that something you think could be a hurdle to progress into that Phase 2? Is it something really, from the government's point of view, a red line? Or is this start of a negotiation?

Well, I mean, it's pretty clear that the government has 2 hats on in this thing. One is, they are a shareholder. That's clear. But on the other side, they also are keen to see that for the economy in Germany, the situation is the right one, given that we are an important lender for a German economy.

And therefore, certain things are important, also from a political standpoint. But at the very end, that is something which needs to be discussed. And I don't like the wording of a red line because I always think that all involved parties should always think to the benefit of the institution and to the benefit of all stakeholders involved in that.

So if this Phase 1 stays longer, investors in this room, how should we think about Commerzbank? Is it like a stand-alone bank, keep beating their targets and reaching this very, very ambitious targets, or actually a subsidiary of a bigger group preparing for integration?

Well, the thing is that, I mean, company laws make this very clear in Germany. We are in this Phase 1. Commerzbank is an independently acting bank. This is a stand-alone strategy.

We have a stand-alone strategy out there with some very ambitious targets for 2028 and 2030. We are completely convinced and I have the feeling that investors also believe us, that we can realize these targets. And I think now the trick is to think about what additional value can be created in this Phase 1 to make it even more attractive to be invested in Commerzbank.

Thank you, Bettina. Are there any questions on the floor before we move on to, no, very good. So maybe we can talk about the German economy first. So clearly, the picture looks slightly better versus 12 months or 6 months ago.

Can you tell us on the ground from your discussions with the corporate, Mittelstand, what do you see, what do you hear, and how? I mean, you've been saying in the past that you have some constructive discussions to start to leverage again and invest. What do you hear now?

Yes. I think it's a little bit of an up and down, right? If you go back 12 months, I think GDP assumptions were already at 1%, then it dropped after the start of the Middle East conflict, I think down to something very low.

Now we are back. And I would say it's even a little bit better because at least our latest research assumptions are that we are at 1.2%. Still not great, but it's a starting point. And what we also see is that there are some positive signals.

Just today, we saw the latest new [ Ifo ] data, and they again have improved despite all the noise around the oil price. So that's good. And overall, also PMI data, order data is good.

I think if you then do a drill down, you see that there are some -- it's a mixed bag because it depends very much on which industries you look at. There are some sectors which are doing extremely well, who are extremely bullish, who also invest a lot.

And then you have some other sectors who are still very cautious, who think a lot about restructuring and things like that. What we do not see is -- I mean, we see a very high level of defaults, but they are very much focused on smaller and younger companies and less related to a certain industry or to larger companies.

So it's really a mixed bag, but I would say clearly some signals of recovery. And therefore, we believe we should also see a good outlook for 2027.

And on the fiscal stimulus, and we're all waiting for this to show more than just green shoots. Do you think the latest elections in the [ Länder's ] that has been clearly a breakthrough for the [ AfD ] will slow down or impact the reform agenda for Mr. [ Merz ] or even threaten the coalition?

I think there are two answers to it. I mean my clear hope is that there will be no changes because I think if there's one thing which is clear is that it is super necessary to just implement the reforms as quickly as possible and just -- that's easy to say as a nonpolitician, to just not care about the polls, just do the right things.

But then there is a political debate, which is hard to be influenced by anyone from the industry.

Very good. So let's move on now to your CMD strategy. So you've upgraded your guidance earlier this year and with very, I mean, I would say, impressive RoTE targets above 20% in '23, so -- 2030, sorry. So 6 months into the plan, what areas do you think that you've been perhaps too punchy or you see actually more upside?

Actually, we feel very comfortable with the strategy implementation. We just had yesterday our yearly meeting with the Supervisory Board, having a deep dive discussion on the strategy, and we are also in the middle of our multiyear planning exercise for next year. And the good thing is that the targets which we have laid out in May, we feel very comfortable about it.

So we are progressing very nicely when it comes also to the implementation of the measures. We have just also launched, again, a very large part-time retirement program offer to also make the redundancies happening, which we have promised to the market.

So overall, it's really progressing as expected. There are always some things which are developing differently when you take. I mean, clearly, our expectation was that there would be more growth in Germany, lending growth. Now we have more lending growth internationally.

I mean the deposit competition is very high, as we know. But then on the other side, you also have a very nice development of the forward rates, at least from our perspective. So there are different factors. But overall, we feel very comfortable for this year.

And we will also have already -- we will see some booking even this year in the fourth quarter, most likely for some of the restructuring and then more to come in 2027. But despite that, we feel very comfortable with the guidance of the EUR 3.4 billion of net income.

I mean your plan was very ambitious because you had behind you the team yellow, and it was almost seen as, of course, we want to do best and improve, but we have the incentive we want to do it. Now with the current situation, do you still have the army behind you and delivering every day?

Yes. I mean we have seen it in the second quarter. I mean we had so much, so much noise in the second quarter because of the takeover offer, and we had an excellent second quarter.

And I mean, third quarter, we all know is always a little bit difficult because of the summer breaks and stuff like that. But we do not have the feeling that this is really preventing our team to deliver. And I mean, I have a lot of talks also with our clients.

And my first question, I mean, it's always about UniCredit, the question from their side. But I always then ask, "Is the team focused? Do you have the feeling that they are distracted when covering the clients?" And the answer is luckily always no.

So team is fully focused. Also, I have to say that clearly, if there is some nervousness in the system just because of all the headlines which we see, that is not entirely helpful. And we also have our competitors hanging around our key talents and our clients, sneaking around trying to convince them to move.

But so far, I have to say, clients and also staff has been very loyal and I think the important part now is, and this is why we're also pushing for that is, I mean, people want to have clarity, clients want to have clarity.

Our staff wants to have clarity, and that is the most important thing. And I think that is the most important thing we now need to do.

Very clear. So let's talk about your net interest income. You're guiding for EUR 8.6 billion in '26. I mean the first half run rate suggests that second half, you have to step it up quite significantly. What will be the levers to accelerate it? Because clearly, you mentioned the rates are more favorable, but that's new news, I would say. So what was the initial levers? And would that come on top of your guidance?

Yes. Plus, I mean the improvement of the forward rates basically since May, but also the possibility there might be another interest rate hike this year, that is nothing which will really influence the result of 2026.

So it's the same. What we said is that, first of all, we have now this or we have this interest rate hike increase in September, plus we always said that most of the additional benefits from replication portfolio, you will only see in the second half, and this is what makes a difference between H1 and H2. And that's still valid and therefore, the EUR 8.6 billion guidance is still a very valid assumption.

Very good. Can you spend a few minutes on deposit competition in Germany? You've always been very comfortable, I mean, Chase is the 13th bank competing. So do you still believe that? And can you maybe tell us on the ground how really you defend your deposit franchise there?

I mean competition has been always high in Germany. So there's really no difference. It's just the players. There are more players out there. And I would say also the offers are. I mean, some of them are really crazy from an economic standpoint, because it's very hard to see how you can really make money out of it.

So you really have to see some of the offers as marketing spend. Otherwise, you can't argue why you do that. And we always said that we would do always the right balance of clearly keeping deposit base stable and also, to a certain extent, increasing.

But on the other side, be also cautious about the deposit beta, and making it still economically sensible. And that's what is driving us. We are also out there with some offers, but there are always coupled with some other products. And we also stay away from this offers above 4%.

And that's what also will drive our thinking in the upcoming quarters. But this is also why we always stay -- people say sometimes we are conservative, but we think feel good with it about the deposit beta. So we also closely watch the market and we'll also adjust, if necessary, deposit beta assumptions and stuff like that to be really sure that we are not in the pressure to do some stupid things to just create some top line growth.

So that's what is driving us. It also stays that -- I mean, there is a certain group of so-called interest rate surfers who really run around and move their money from A to B to C, and that has not changed.

But how long do you think -- I mean, if this competition continues -- irrational competition continues, in your eyes, the trade-off between managing deposit beta and actually the benefits of higher deposits and benefits from replication portfolio works. I mean I'm sure you are watching this closely, but at some point, you might actually try to jump into the competition, no?

Yes. And this is why you need to be cautious on your deposit beta assumption because it also means that whenever you participate in this game, you also need to be aware that your deposit beta is going up.

So this is what you need to try to balance out and you also need to -- and this is where AI actually also helps is, what are you applying to which client group when? And to also watching and keeping the stickiness of your client in mind and also what you can achieve in addition, because I think having an attractive offer out there, if it's a tool to really attract new clients and to keep them, then it's a nice thing.

But if you just have it to show a short-term increase of deposits and then you lose everything after that, then you have to ask yourself whether this makes a lot of sense, specifically because there's always also additional costs attached to it, because most of the times, most of the offers only are valid for clients who are new clients, which means you're opening up an account and these clients come, then they move to the next bank, and they close their account with you again because they want to be eligible for the next great offer.

And that is creating a lot of useless costs also for the system. And this is where we are a little bit mindful of resources.

Very good. You've touched already on it on the lending growth perspective, but maybe you can give us a bit overview on the lending dynamics between Mittelstand, International, and also the public lending as well.

I mean the trend is still what we also have seen after the first half of the year, more in international terms. Public sector is also providing some growth and lending -- domestic lending is still rather low.

Yes. On the fee income side, it was one of the pillars of your CMD, and you upgraded the guidance with the update. So beyond just the customer growth, so what's the other opportunities you see? Is the pension reform kicking in from January next year would be a significant lever? It's been downplayed by some of the other players in Germany. Is that something relevant for you?

I mean we have some pretty aggressive assumptions out there when it comes to the net commission income. And so far, we have proven that we can manage that.

So we said that in the first years, we would see a 7% growth, which will come a little bit less in the later years. And you see that we are capable to organize this growth. And it's a combination of many, many things. It's also due to lending growth because there's also some fee income attached to it, but it's also payments, it's securities. It's trading on the one side, but it's also distribution portfolio management on the other side.

And it's at mBank, it is at Corporate Clients and Private Clients. So it's all over the place. And that's the secret also that you always have different levers who work out differently in the different quarters.

And so far, it provided us now for the third year in a row with more than 7% growth in net commission income. And for next year, still the pension reform, we see some support.

I mean, we have an aggressive assumption again out there for next year. It will provide us some support, but we are not only relying on that. I think the good news on the pension reform is that the product itself, which is embedded in the pension reform, given the cost limit, and then also we have now first competitors out there with some for free things, the results out of this product will be probably, I mean, the upside, rather limited.

I think the potential and the beauty of the pension reform lies in the things which might be connected to that because, I mean, today, we have only 72% of Germans saving money.

And out of this, only 40% are investing in securities. So if there is really an activation of more people investing in securities and having just simply a securities account, our conviction is that you will then also see much more people investing, taking security savings plans and stuff like that, and that will become then very attractive for us as well.

Very clear. Just maybe before we move on to costs, another question on revenues. Some of your -- I mean, another German-listed bank talking about positioning for capturing some of the dis-synergies you would have eventually with HVB.

First of all, first question, do you still believe really that exiting that fast international market is a bad idea? And secondly, how does it work in Germany, the referral process or discussion between like, okay, I have a client, he's too concentrated now, he needs to diversify, how does it work with other banks? How really is it realistic to move on from you and diversify?

I mean, as I said, competitors are clearly out there. But so far, clients have been very loyal.

I mean if you look also on our lending growth now for the first half year, you see that we are also -- I mean, we are also successful because we have the international network because we support clients to go abroad. And lots of our revenues in corporate clients is connected to the international network. There's lots of clients who are banking with us because we have this international network, specifically medium-sized corporates like it, but they have one bank who supports them when they are the hidden champions in one product area.

They really like that they can use Commerzbank and go basically everywhere with us, be it Asia, be it Latin America, or be it Africa, whatever.

So there is a -- I mean, there's a value proposition in that. And there's a lot of revenues connected to it, and we have shown that in the past. So therefore, yes, I mean, we believe that we need the international network to keep the clients.

When it comes to dis-synergies, as set in the moment, and we think that will also hold true then for Phase 1, if we do it smartly, clients see us still as 2 separate banks.

And clearly, it's always a question they have that this problem of having more diversification will clearly come to with some clients when it comes to real combination of HVB and Commerzbank, and might be also single cases beforehand.

I think for us, in the moment, the bigger concern is really to keep the international network, because that is a real value proposition of Commerzbank today with our clients.

Moving on to the costs. You -- I mean, we know your target, you've been progressing well. But beyond that, I mean, with the AI topic, it's almost every cost plan gets outdated the day after how AI goes fast if the banks embrace AI in a smart way.

So you've already, on the previous plan, mentioned that from February to we met in November, and you said so much things that we have done. So now, even like 1 year later, what opportunities do you think Commerzbank can leverage on?

I mean we have updated the plan also on that one in May. And for the moment, we also feel comfortable with it. But indeed, I mean, we see a lot of moving pieces here. And we also see now, given that we have the rollout of different AI tools to the complete bank, we have done a lot in training our people.

We have also implemented a number of tools now, like also a sales companion for the Corporate Clients side. We will come up with -- just in the testing phase and a friends and family phase for a wealth management tool provided to our corporate -- our private clients.

So there are many, many things in innovation ongoing, but we also see the flip side.

I mean, we invest much more than we originally thought in cybersecurity given that AI has a lot of opportunities, but it also provides some risk, and we definitely want to be prepared also on that one.

So I think it will be the task in each and every cycle now to always -- I mean, a 3-year plan is great, but you really need to make sure when doing recruiting, et cetera, that you keep your flexibility to really adjust to all the benefits you see stemming from AI. That's for sure.

So you mentioned earlier that your CFO, Carsten, is reaching out to HVB and start to think about consolidation and accounting and so on.

So now on the cost perspective, the latest is that some of the restructuring will be booked within Commerz. So how should we think about once the control is done in next year, the cost -- restructuring costs will be booked within yours before integration within the Commerzbank unlocked phase?

Well, I mean...

If we go that route.

Yes. I mean I can only talk about actually Momentum 2030, and we said how much restructuring we would see here. And we will most likely book a very small part this year, and then the majority will be booked in 2027.

And besides that, we believe for achieving the targets which we have laid out for 2028 and 2030, there are no further restructuring measures and bookings necessary.

There might be some additional ones when you think about some things which you can do jointly in the group. But it's nothing, I would say, which will prevent us of delivering really the results which we have promised and keeping up a very attractive capital return policy.

Okay. And just on asset quality, really a question just to check if everything is fine. So EUR 850 million guidance for this year as a cost of risk. We hear a lots of delinquencies pick up in Germany. Presumably, it doesn't sit with you or with the Deutsche Bank, but do you see any flare-ups in asset quality there, any pockets of concern?

No. Everything is running swiftly. I mean, we stick to our guidance because we are always cautious on that. And as a matter of fact, it is always that there can be one larger default and then you have it in your books, and therefore, we just stay cautious on that, but we feel very comfortable with the guidance of the EUR 850 million given the -- I mean, the constant increase, which we have seen in the default rates, and one should not forget that we really had 3 years of stagnation behind us.

I think it's a good number, and we feel very comfortable and the whole guidance of the EUR 3.4 billion net income is based on the EUR 850 million assumption.

And then on capital distribution, you just said it, you stick to Momentum, 100% payout, extra structuring costs. Are you not tempted to do something to please your investors other than that?

Well, I think it's anyhow an attractive plan. I mean, for -- just look back what we have already returned. I think, something around EUR 6 billion so far since we started really paying out, which has been not the case for quite a decade.

But now it's -- for this year, we are fully focused on this year. And this year, we said we will -- we retarget the EUR 3.4 billion. If you then deduct the [ AT1 ], EUR 200 million then you are at EUR 3.2 billion.

And we said we will have a nice mixture of dividend and share buybacks. First share buyback program is ongoing up to EUR 1.2 billion. And then we will see how the year progresses. And then latest in the fourth quarter, we will have a decision on how to move forward.

But there's no reason to deviate from that, either in one or the other way because we also have the thing about the 100% embedded in our capital return policy.

And clearly, also when we look on our CET1 ratio, it's very decent. It will get even further relief through the RWA reduction, which we expect in the upcoming quarters. So overall, there is -- it seems to be a very attractive capital return plan, not only for this year, but also the years to come.

Indeed. Checking last time on the floor, if there's any question? Bettina, would you like to have some closing remarks?

I mean for us, it's really now important to move on. We want to deliver on the targets. We think that there can be a very good Phase 1 with a collaborative approach where we provide guidance to stakeholders and specifically also clients and staff.

And I think it can be only better than what we have presented already today.

Thank you very much.

Thank you.

Okay. We're going to start so we can be on time. So hello, everyone. I'm Flora Bocahut. I head European Bank Research here at Barclays. I'm very happy to have with me today Bettina Orlopp, who's CEO of Commerzbank. Thank you for being with us. So we are going to go through a few questions. There will be time then for the audience here to ask a few questions. And then we will also put you to work. We have also 3 questions we're asking in every fireside session. So bear with us.

So let's start -- I think let's start with the obvious big topic of the moment, the M&A situation between Commerzbank and UniCredit. So UniCredit currently owns just below 30% in Commerzbank. They will be closer to 50% ownership once the offer settles, which is later this year or early next year. Once UniCredit effectively owns a majority stake, what do you expect the next steps will be?

Yes. I mean I think best is to think about different phases we are in. In the moment, we say we are on Phase 0. So we have the tender offer completed. It's clear how much shares UniCredit will have whenever they get the approvals from the different authorities, and that will be slightly below 49%. And what we currently do is really prepare for this next step. So whenever there is a technical consolidation due that we are prepared for that, and that can be the case either end of this year or beginning of next year, and we need to prepare that to make sure that this is working.

Then there's clearly a phase where you have a de facto control of UniCredit, which means they will have the majority, the simple majority in the AGM, and they can clearly influence the Supervisory Board composition and other things. However, it's also very important to note that Commerzbank in this Phase 1 is still an independent publicly listed company with a large majority shareholder, but also a minority shareholder and Supervisory Board and Management Board are obliged by law, by company law to act in the interest of the institution. And we have to file independent reports and all the stuff.

So we really need to make sure that we only do things which are in the interest of the institution. We should anyhow always do that. And if there is anything we do, which is for the disadvantage of -- to the disadvantage of minority shareholders, we would have to ask for a disadvantaged compensation. But in this phase still, it's not only about the implementation of our stand-alone strategy, but we can also clearly think about things we can do together and how we can make our targets laid out for 2028 and 2030 even better by cooperating, finding joint ways of increasing the efficiency gains, increasing revenues and stuff like that. And that should be the objective of Phase 1 to deliver on the targets which we have promised, but probably also lay out even more aggressive targets based on the new situation.

And then there is a Phase 2, which is, however, unclear when it starts, where the real consolidation would happen when you would have kind of an integration of HVB and Commerzbank and you could create all the domestic synergies one could expect out of such a transaction. That is, however, Phase 2, and I think we should be all very much focused on this Phase 1 because at the very end, our organization, our institution needs to know what they're heading for, what's the North Star? Where do we want to go? What do we want to have?

Our clients want to know. They like apparently our business model, and they want to know how this is developing and staff also wants to know it because our competitors are sneaking around our clients and talents, and we want to make sure that they are not successful in that. And for that, it's always important to have clear messaging.

Well, Germany has been a very competitive market for a while. So indeed, I can only imagine. One question also I wanted to ask you. There was obviously this meeting taking place yesterday between UniCredit CEO and the German Finance Minister. Is there any comment you want to make around this meeting?

I mean it's very clear that we are aligned with the government because it's an important shareholder as well. And also, they have 2 candidates in the Supervisory Board, which are sent in from the government, and they have some special rights still around and they take that.

And I think it's important that there's also discussions between the 2 large shareholders, specifically when it comes to a potential Phase 2 because those are very clear to really do structural measures, meaning a merger, a termination agreement, a squeeze out or what is currently in the discussion where you have a sale of HVB to Commerzbank, all this only runs smoothly when you also have an agreement with the second largest shareholder, the Bund. So I think it was an important step, that they sit down, and I think we have to take it from there.

There's obviously many scenarios out there. It's still early days at the end of the day. If I were to ask you, and you touched on that already in your answers, but 12 months from now, what would you say is success in this situation?

So success is if we have a collaborative friendly approach where we provide a lot of stability necessary for clients and for staff because that is the best way to maximize also the value for our shareholders. Success is if we stick to the targets which we have set also for 2027 and that we most likely will have even new targets out there for 2028 and 2030. And the objective and expectation clearly is that it's not worse to what we have seen so far.

Short term for us, it's really important that we will deliver on 2026, and it looks pretty good as you might have seen from the half-year results, and there's no reason to adjust that. And we feel pretty comfortable on the delivery for 2026. So it's also very important that we do not stop any change, any update, any upgrade of the business model because there's so much going on, specifically when it comes to AI that we cannot afford an institution which is frozen for a certain period of time because this is really changes and adoptions on a daily business, and it's really important that we keep doing what we are doing, also providing new products, new service offerings every month to our clients and that we should not stop that. And I think that is the most important part and that our competitors have not been successful in getting any core clients or staff to be the other one.

So actually, let's dig now a little bit more into first, the macro environment and then the macro, if I may say, on Commerzbank specifically. Let's start with the German outlook. We are starting to see positive signs on the factory orders, on the Confidence Index. On your side, are you seeing early signs of a pickup also on the loan growth? Or what's your take from the ground on the German economy?

Yes. So first of all, it's correct. Signals are better. And the Ifo is an important indicator. But also, as you said, the production and the order data, which is developing nicely and heading in the right direction. And also, we now have an adjustment by nearly all economic research departments, and we are back to something around 1% GDP growth, which is not great, as you know, but it's a starting point, and it's better than what we had before the summer break where we were, I think, down to 0.5%. And that despite all the things ongoing with the geopolitical conflicts we are currently seeing. So that's good.

And we, however, also still see that the default rates are still very high, and we haven't really -- we haven't been feeling that we have seen the peak. So we stay cautious on that. And when it comes to the investment behavior, it's still that in Germany, people are cautious, which has probably also a lot to do with the reforms and are the reforms now implemented? Are they not implemented? Are they progressing in the right way? Will there be more to come? That are the things where German corporates wait for. And they are, as you know, a conservative group.

So they really need to be sure that things are implemented before they really move. So we haven't seen really something yet, and you see it also in our loan growth numbers of the first half year that the majority stems from our international growth and less from domestic, and it will take a while until you see it. But I think for us, specifically important is how the industries are developing, and we have no reason to believe that we cannot keep our risk guidance. So we feel very comfortable with the risk result guidance, for example.

Okay. That's very clear. Okay. So let's move maybe now to the NII, which is another big topic of discussion with investors. So for this year, 2026, you target an NII of roughly EUR 8.6 billion. In H1 so far, you've achieved EUR 4.1 billion. So you are implicitly pointing towards an acceleration of your NII in H2. Can you maybe remind us why you're confident this is going to happen?

Yes. I mean 2 main things. One is clearly that we always assumed also that there would be one other interest rate hike, and that has happened last week. That is one which supports H2. And the other part is clearly replication portfolio because we said that the majority of the positive extra contribution, we rather expect a little bit back-end loaded and not front-end loaded. So that is the second part which we will see.

So we feel very comfortable with the guidance of the EUR 8.6 billion. And we all know that forward rates have also developed very much nicely in our direction in the latest weeks, but that will less have an impact on 2026 that has more a positive impact at least from our current perspective for the years to come.

As we talk about the NII, there's a question we received a lot also from investors. And you touched earlier on how competitive a market Germany can be. How is the deposit pricing ongoing? Are you seeing increased competition?

The competition has been always very high, and it has not weakened with the entrance now of Chase. I mean, Chase is out there with a big campaign is a very, very attractive offering from the consumer perspective. And what we, however, currently see is it's always the same group of consumers, clients that are targeted by this offering, very digital native. So it's really a play mostly between the mobile banks with the mobile and online offering only, while the clients of the ones with the branch network a little bit more sticky. It can be call them interest rate surfers, or interest rate hoppers because what they basically do is -- and the interesting part is that they are now doing it also for 10, 15 basis points difference in the offer.

They really move from bank A to bank B and to bank C. Whoever has a good offer, the caravan, the troop is moving in this direction. And retention is not really high on this group. So one really need to think about what type of offer you have, what do you want to achieve with it. Ideally, and that is our perspective, we do not want to have only the ones to come there, give us the money for 3 months and then move on to the next one. Plus it's also a lot of work because normally, they close down your account with you, then you have to have the cost of closure of the account and the reopening of the account and all the stuff attached to it.

So we rather target clients who then really want to stick with us as new clients and take that as an attractive entry point. But that is something we are, as everybody else, are experimenting on. But competition is high, has never been really easy. It's just the players who are changing, who are the attackers.

So if we summarize on the NII because we've had quite a move on the rate curve over the last few weeks now, especially the last 1 or 2 weeks. Would it be fair to say even considering this level of competition, which maybe is captured already in the deposit beta guidance you have, the risk is more to the upside maybe versus your guidance considering the rate changes we've seen so far?

Definitely for the years 2027, the following because you know that the replication portfolio has quite an important impact for us and such a move of the forward rates, which we currently have seen is definitely impacting in a positive way revenue stemming from the replication portfolio. However, we also always have to think about potential counter effects of the interest rate hikes, be it increased deposit beta, be it some less demand and things like that. But overall, it's definitely a plus for the years to come. And for this year, we just feel comfortable with our increased guidance. We should not forget we increased the guidance once. So we feel pretty comfortable with that one.

Moving slightly away from the P&L here temporarily. I wanted to ask you a question also on the payout policy because you have this target of 100% payout in your existing plan. And then obviously, now UniCredit is a bigger and bigger shareholder with possibly different plans here. So is there, from your standpoint, a risk on the payout policy?

Well, I mean, I think we have seen in the past years that we really are very solid on our capital return policy. I think in total, since we started the pickup of dividend payments and share buybacks, and we all know that we haven't been really reliable in the decade before. We now have returned something around EUR 6 billion so far to our shareholders in the last 4 years with a very sharp increase. For this year, we planned EUR 3.2 billion, which is a EUR 3.4 billion net result, which we expect. And then you take away the AT1 payments and that leaves you with a EUR 3.2 billion.

And we have a clear commitment that as long as we are above our targeted CET1 ratio of 13.5%, we will return 100%. And that has not changed, and we have apparently started with it because we have a share buyback running as we speak and of EUR 1.2 billion -- up to EUR 1.2 billion. So in total, we believe that the EUR 3.2 billion capital return is the right one. We also said that we want to have a good -- and that's also what we heard as feedback from investors. It must be a good balance between dividend and share buybacks. So you can assume that there will be a 50% share of dividend. And that is very clear. We, as a Supervisory Board and Management Team, we will propose that to the AGM, and that's the AGM who will decide on that one in May.

I see no reason why AGM should vote against it as long as we deliver according to plan and as long as we have this surplus capital because if you look at the capital return policy and what UniCredit has done in the past, it's very similar. They also -- they have a little bit lower target CET1 ratio despite similar MDA, which clearly has to do with their profitability is also still higher. But besides that, I think we have a very similar approach. So I don't see any reason why that should change. And it's always -- I mean, it's backward looking. It's for the year 2026, it seems to be that we are in full delivery modes. So you will see the results, you will see the CET1 ratio. So no reason to change that.

Okay.

And then for the years to come, I mean, you know what our targets are there for 2027 and 2028 and up to 2030, and that is constantly increase of the net profit. So I would also assume that there will be a constant increase of the capital return, and that's also embedded in our share price, as you see.

Yes. And you mentioned profitability. This is actually the next question I wanted to ask you. In terms of RoTE, you target a significant improvement over the next few years. You target an RoTE of around 12% this year, but then 17% in 2028, 21% in 2030. On our numbers, in fact, you are one of the best EPS growth among European banks in the next 3 years.

So can you maybe elaborate here on the main drivers that you expect will help you achieve this RoTE development so quickly between the revenue growth, the efficiency gains, the capital optimization? And what gives you the high level of confidence that you can get through this strong improvement?

Yes. Well, as you summarized nicely, it's everything as you described it. So on the one side, it's clearly -- I mean, momentum is about growth. We have some aspirational target out there when it comes to NCI. The 7% growth on a yearly basis is something, but we have now proven also we will prove this year that this is a number we can achieve by multiple levers, and that will also play a role in the years to come. And that is coupled with a very strong increase of NII, which is the mixture of the one side that you will still have pressure because of the deposit beta and other things, but then you have a positive loan growth and you have the positive contributions, additional contributions of the replication portfolio, which is huge.

You can see that when you look in our analyst presentation, we always now put it in the backup, but you see basically the annual additional contribution we expect out of the model deposits. So that is the revenue side, which is clearly positive. And then the other side, with all the initiatives ongoing also supported by AI, we will balance out all the inflationary effect, all the investments we expect and keep the cost base pretty stable, which given the growth on the other side, will automatically improve our cost-income ratio down to 48% for 2028 and then 43% for 2030. I mean that includes compulsory contributions. That's important to say.

And then the RoTE is a very sensitive ratio. So it's pretty sensitive on how much you can improve the net income, plus we try to get the CET1 ratio in the direction of our target CET1 ratio, and that clearly helps to achieve this target.

Okay. I'm going to take a first pause here to check if there's any questions from the audience at this stage. We have a mic in the back. So if you want to ask a question, just raise your hand. If not, I give you some more time, and I will continue for now with more questions on my side.

So there's another question I wanted to ask you, which is around this effort we're seeing in the EU around the competitiveness of the banking industry, very important, obviously, for the industry. Any view you want to share there on what you expect to come in the next few months?

Well, I mean, we are in full support of this paper. We think it is addressing the right topics. When you look at it, specifically when it comes to the level playing field and this thing about thinking -- rethinking, reconsidering the rules still out there for the Basel environment to come -- for the Basel regime to come in, the output floor for unrated corporates for mortgages, reconsidering the implementation is something which is pretty important and would make a huge, huge difference, specifically for banks like us. I mean, German economy has a lot of unrated corporates because we have this medium-sized Mittelstand clients who traditionally as family-owned companies do not see the need for rating.

So that one is an important one. Same holds true with the treatment of software assets when it comes to capital, which would be really a beneficial one and it would create and it would create a level playing field because we know for the U.S. banks, it's very different to them. And also this gold-plating approach is definitely something we can only support. But same holds also true about everything what is said about the Savings and Investment Union when it comes to the securitization regime, we really need progress there. And we also need progress on the Banking Union.

So believe it or not, but we are full supporter also of this European-wide deposit protection scheme because that is -- if we can really achieve that cross-border groups, cross-border consolidation much more fun because then you really can move liquidity and capital around and can really treat Europe as one market and not as the different markets as we have it today. So we are in full support.

I think the only worry we currently have is that specifically the topic on the Banking Union and the European-wide deposit protection scheme, such a political thing that if it's too much connected and treated as one package, then the fear clearly is that we will see the relief, which we would all really, really support, we would see in -- yes, for quite a long time, we wouldn't see that. And so we think that probably you need to decouple some of the initiatives and not try to bring everything in one program because that might have the disadvantage that it would take too long. But otherwise, we think it's super important that we make progress there. Yes.

Checking again in the room. We have one question here, please, if we can get the mic over there. If you can maybe raise your hand. I think we can hear you okay.

You can hear me. Okay. Fantastic. I guess you outlined 2 distinct phases to the integration of the merger of Phase 1, Phase 2, and you said clearly we're in Phase 1 right now. Can you outline the conditions that are needed to move from Phase 1 to Phase 2?

Yes. Well, first of all, we are in Phase 0 because we're still waiting for the approval to come, but that is an automatic thing. And then we clearly are in Phase 1. And I think it depends a little bit on -- and that's not -- that actually, that's the question also UniCredit needs to answer because they need to think about when they move to Phase 2 because Phase 2 requires even more support because for the Phase 2, which is some kind of an integration of HVB and Commerzbank and UniCredit and Commerzbank you would have to have a 75% majority in the AGM.

And that would require that you either have a very convincing proposal, which you can bring forward to shareholders so that shareholders vote or that you make an offer to get even more shares in the possession of UniCredit. That are the 2 ways on how you can achieve that. And I think it's also -- it's also important to see when does it make sense and when do we think that this is the right moment to move in the full integration because at the moment, I think everybody has also the feeling that we have our hands full when it comes to the digital transformation and the AI transformation game.

I'm not sure whether this will be better in 2 years' time, we don't know. But it might be also that given the developments which we currently see, specifically on the IT software development and migration side that AI can also help do some of the pain which we have seen in former integrations might be eased also by AI. But I think it's really a question when Phase 2 begins, which needs to be addressed in the direction of UniCredit.

Do we have any other questions in the room?

So I'm going to ask you another question, different theme, but coming back a bit to the megatrends that we are seeing in the back, the German pension reform. There's one element we didn't discuss here. We talked about your NII. We didn't discuss the fees, but you do actually target 7% fee growth. You're, in fact, running ahead right now, 8%, 9% growth in Q1 and in Q2. You are very supportive of the German pension reform. I think this could also help you, especially if we look forward towards your larger plan to 2030. So how could Commerzbank potentially benefit in terms of fee growth from the pension reform?

I mean what we clearly do in the moment is do what everybody else is also doing, preparing the specific products because there's some certain requirements for this product to then offer to the clients when it comes to the state-subsidized products. And that is -- our expectation is that this will start 1st of January 2027. And this will definitely also support a little bit net commission income.

Although I think our expectation is more that by the mere fact that you will convince much more people to have a securities account that this next step, which is so necessary to really activate capital that people start thinking more about the security savings plans and stuff like that, that we can really change the -- change really the investment behavior of German citizens because so far, we still have -- we just -- we do a yearly survey among clients, private clients and the latest survey of summer revealed that so we have only 72% of Germans are saving at all, which leaves you with 28% of Germans not saving any single euro, which is bad news, but that is another topic.

But out of the 72% who are saving actually, only 40% still, 40% are investing in securities. The rest keeps the money in call money, term deposits and stuff like that. And that is something we definitely need to change to activate the private capital, and that is also part of the Commission paper, by the way, because it's really about how to activate, how to free the private capital. And our assumption is that by really opening up citizens with the state subsidized product for securities that they will feel also more comfortable to do more than that if they have already a securities account and the step is a little bit smaller. And that's what we expect, and that will clearly help our ambitious targets to be met also in the 2027 and the following.

I also have to say that with the product given that there are certain requirements, how much it is -- what the costs are, you should not expect too much impulse out of the original product, but there should be a huge impulse just by changing the investment behavior of Germans, which could be a big, big step in the right direction.

And part of the European plan in the SIU as well, right?

Yes. And I mean what you see is also that it's changing with the younger generation, which is good news because younger generation has, I think, now understood that this thing that they can only rely on the state retirement programs that this is no longer feasible. And you see an increasing number. So the increases we currently see in investments, specifically with the younger generation, which is great, but we also need to activate the other generations. Yes.

Yes, yes. So last chance for the audience, if there's one question. If not, I will ask the last question, 1, 2, 3. We have one.

I just wanted to come back to the point of the competition, especially from the international players. I'm just like zooming out a little bit, trying to understand when people come in trying to hunt these interest rate surfers, what is the strategic rationale for going after this client base when the money is so hot? Is this just opening up initial client relationship and then trying to cross-sell? Like I mean, clearly, there's a bigger agenda here for someone like Chase to go after these guys.

Yes. Yes. I mean the clear objective is to get a solid client base. The interesting part is that Chase, and it's contrary, I think, to the introduction in the U.K. is that they have really only started. They have not started with the current account and the account. They only started with the call money account. So in the moment, there is no possibility to do more with the clients. But whenever they also offer a current account and then even more that -- it's always an angle. I mean we also use that.

For us, it's very important for the new client acquisition also on the comdirect side to have an attractive call money offering. Same holds true for Wealth Management clients. Wealth Management clients, you can trigger a positive one. Sometimes, I think it's also funding why some people are having this very insane offerings out there. It's very much dependent on who you look at. Truth is, however, also that -- and that has changed over the last 12 months, I would say, that before you really have a kind of a stickiness in the deposits.

So you acquired a huge amount of deposits and then there was always 30%, 40% stickiness, which you kept. That is different in the moment because there are some very attractive high offerings out there that clients are really moving. So it will be an interesting one. I mean, for us as an established player who has to defend every quarter, our results, we always can only do things which make economic sense. So we can't do it just for showing top line and growth. We really need to make sure that our products really create value.

So we will rather say we have a little bit less growth as long as profitable growth instead of showing an insane high number of deposit inflow, which we then risk to lose 3 months later, and we only have spent a lot of money in it. That's very, very costly marketing spend from our side because then you can only see that as marketing spend, nothing else.

So before we finish, we actually need to put you to work. We have 3 questions I'd like to ask the audience, please. The first question, so you have this small remote on the table, if you don't mind helping us out here.

So first question is, how do you think Commerzbank's share price is going to perform over the next 12 months compared to the European Bank index. So if you think it's going to outperform, perform in line or underperform and we're going to leave you a few seconds to answer.

So around half is outperform, which is good. And then, let's say, a small third perform. So that sounds rather good to me.

Yes. I like that. It looks good.

We move to the next question. So what do you think the main earnings growth driver is going to be for Commerzbank over the next 12 to 18 months, whether it's NII, fees, lower cost, lower provisions, more buybacks or M&A. So then we can test if you actually listen carefully to what we've been discussing.

Yes. I mean I don't know if you want to comment these results on your side.

No. I mean, it's pretty clear. I mean, if you look at our Momentum 2030, documents, I think it's very much supported by that. But I would also say that without growth on the fee side and without major cost discipline, you won't achieve really the earning improvements because we really need to make sure that we stay flexible also on the cost side to move and stay very flexible. Yes, it's good. And it's also good. I like that provisions is not...

Yes. Let's move to the last question, please. How would you prefer Commerzbank to use any excess capital it may have? It does have actually. So more dividends, more buybacks, more organic growth, investments into AI, M&A, but bolt-on only or transformative and large M&A. That's the last question.

So this is rather spread, more buybacks. I mean you do have a 100% payout. So I don't know if you can go much above that. It's rather spread, but let's say, buybacks, which you are doing and more organic growth, which you are doing as well. So I don't know if you have any closing remarks you want to make at this stage.

No. I mean, it fits to what we really target to do because it's very clear that, I mean, we should always invest which is necessary to provide further growth, and we should not return capital if we have a great idea internally for organic growth or even other investments or bolt-on M&A. But I think it's exactly the order we follow. First is where do we want to invest, what to invest? Second then is there any inorganic M&A opportunity? And then third is clearly return the capital to our shareholders and then it must be a good mixture out of buybacks and dividends.

And I'm glad to see that people still like our buyback program, which is a good signaling for our ongoing buyback program of up to EUR 1.2 billion. Yes.

Very good. Well, thank you again...

Thank you.

Thank you for the presentation, and we're going to close it here.

Thank you.

Thank you, everybody.

Please note that this call is being transmitted as well as recorded by audio webcast and will subsequently be made available for replay in the Internet. [Operator Instructions] The floor will be open for questions following Bettina Orlopp and Carsten Schmitt's presentation. Let me now turn the floor over to our CEO, Bettina Orlopp.

Good morning, everyone, and welcome to our earnings call. Carsten and I are pleased to present the results for the first half of a truly remarkable year for Commerzbank. We again achieved record results in an especially demanding environment. This achievement is a credit first and foremost, to our clients and our people. The continued partnership and unwavering trust of our clients deserve our sincere appreciation and the dedication and commitment of our outstanding team, both in Germany and abroad, are the foundation of our success.

Our performance demonstrates the fundamental resilience of our business model and the focused execution of our team, even while navigating the complexities of a public takeover discussion at a mixed macroeconomic backdrop. Geopolitical tensions continue to create uncertainty and the volatility in energy prices with its impact on inflation has added another layer of complexity.

Let's dive right into the figures that prove the momentum of our financial development. In the first half of 2026, we generated strong revenues of EUR 6.5 billion, a significant increase of 7% year-on-year. Our enhanced operating leverage is evident as our operating result grew by an even stronger 14% to EUR 2.7 billion. This operational strength translates directly into a record net result of EUR 1.8 billion for the first 6 months, a 40% increase compared to the previous year, which included restructuring charges for our Momentum strategy. The favorable development is the result of a consistent and successful strategy execution. Our cost discipline remains a cornerstone of this success. The cost-income ratio improved significantly to just 53%, including compulsory contributions.

The net return on tangible equity reached an excellent 12.6%, which is a tangible proof of our capital-efficient and profitable business model. And all this is built upon a CET 1 ratio that remains strong at 14.4%, even after accounting for significant capital distribution. This brings me to our capital return policy, which remains a central pillar of our equity story and a key driver of shareholder value. Our strategy comes with a full commitment to a total payout of 100% until our CET 1 target of 13.5% is reached.

For 2026, this translates into a planned capital return of EUR 3.2 billion, representing an attractive total yield of 8%. And we are already acting on this commitment. Just last month, we applied for a new share buyback of up to EUR 1.2 billion as a key component of payout for this year. The ECB has already approved our application. And as soon as the German Finance Agency approves as well, we will do the final preparation to actually start the program.

Alongside the share buyback, we are planning a higher dividend for 2026. We are targeting a dividend share of at least 50% of the total capital return. Looking ahead, our path is clear. As our profitability continues to grow, we see a credible trajectory to increasing the total yield to 11% in 2028 and an even more compelling 14% by 2030. This is a financial translation of our Momentum strategy, a clear and unwavering focus on creating sustainable and attractive shareholder value. Our strong performance is underpinned by a German economy that despite all headwinds, shows resilience.

Due to the slightly improved GDP figures for the last quarters, we lift our expectation from 0.6% to 1% GDP growth for the full year 2026. While sentiment in the Mittelstand remains cautious, we have seen an improvement of the Ifo Index and a surprisingly good development of new orders in the second quarter, which could signal a pickup in activity.

Furthermore, the latest ECB lending survey indicates an improving demand for credit from corporates and the German government has launched important reform initiatives for the pension system and the labor market. These initiatives could provide further tailwinds when implemented short term. This increases our confidence to reach our outlook 2026, which we already raised in May and includes a targeted return on tangible equity of around 12% and a cost-income ratio of 53%.

Our Momentum targets also remain fully in place, providing a clear trajectory for profitable growth and increasing efficiency. It shows a steady improvement in our net RoTE targets towards 17% in 2028 and a 21% in 2030, while our cost-income ratio is planned to improve to 43%. This future path is built on a solid track record of successful transformation. At the end of this year, we will have improved our profitability by approximately EUR 3 billion since 2021, and we consistently have exceeded our ambitious financial targets.

Market has clearly rewarded this performance, as you can tell from our share price, which rose by more than 600%. And this brings me directly to our management priorities. The first and most important one is to execute our strategy with continued discipline. "Momentum 2030" is working. It is delivering, and it is a benchmark against which any alternative must be measured. Our focus is on further development of the business model and the consistent delivery of strong financial results.

Second, we will further drive performance. This means leveraging our excellent client franchise and the deep trustful relationships our teams have built over many years. It also means sustaining the high motivation of our employees who are the bedrock of our success. And third, we will protect value. As Management Board, we are committed to acting in the best interest of all our stakeholders. This includes constructive strategic discussions with UniCredit. The clear objective is to maximize value and to ensure the long-term success of Commerzbank. A key accelerator of our progress and a central element of our Momentum strategy is artificial intelligence. We are moving with speed and precision from initiatives to concrete proof points that realize tangible value.

To recap, we are targeting cumulative investments in AI of around EUR 600 million through 2030, which are expected to generate a value contribution of approximately EUR 500 million per annum by 2030. In the second quarter, we made significant progress. We have completed the rollout of AI tools like MS Copilot and Google Gemini to all employees and launched a dedicated AI academy to foster the culture of digital innovation. Our AI-powered Agent Assist is now available to around 2,800 employees, enhancing the quality and efficiency of client interactions in our remote advisory and call centers.

Furthermore, AI is helping us to modernize our IT landscape. In the first half of 2026 alone, we decommissioned 10% of all IT systems. For us, AI is not a distant vision. It is a core driver of our transformation, delivering tangible results already today. The strong group performance is driven by the strength of our client business. In Corporate Clients, we have once again proven our position as a clear #1 in Germany. The latest Finance Survey named us the leading Mittelstandsbank and the best bank for Corporate Clients overall. This is a testament to our strong trustful client relationships.

Our success is built on deep client orientation, a locally established and a globally networked franchise and market-leading products. This is exemplified by our successful expansion of commodity products, which we have started to support our clients with the trading of physical gas. Furthermore, we have expanded our offering for Mittelstand clients who use our direct banking services. Overall, we are the partner of choice for the German Mittelstand, and we are continuously investing to defend and expand this leadership position.

Our Private and Small Business Customers segment also shows an excellent momentum. The key driver here is our securities business, which is significantly boosting our fee income. We achieved a strong 10% growth in net commission income in PSBC Germany. This growth is fueled by strong client activity. Discretionary portfolio management volumes grew by an impressive 20% year-on-year to around EUR 25 billion. The total securities volume held by our clients increased by 16% to EUR 285 billion.

And at comdirect, the number of trades increased by 5%. This success is consistently validated by external recognition. For the ninth consecutive year, we were named the best branch-based bank and with comdirect, the best direct bank in Germany. This proves that our two-brand strategy is the right approach to serve the needs of our clients.

Now I would like to turn to the takeover offer from UniCredit. The offer period has ended and the results speaks a clear language. UniCredit has reached access to almost 50% of voting rights. Also, the offer was not supported by independent shareholders. Only 2.7% of our institutional and retail investors tendered their shares and a large portion of the shares tendered was most likely borrowed by UniCredit-linked financial institutions.

However, we have to navigate the way forward. This requires a professional level of collaboration to develop a common path that reflects the emerging shareholder structure, including technicalities when it comes to legal and financial topics. Hence, we have started talks on this, which is in the genuine interest of both UniCredit and Commerzbank as we are both determined to create value for our shareholders, clients and employees. I'm optimistic that step by step, we can find common ground on governance and also on the business model.

The governance framework is clear. Any structural changes such as a domination agreement require a qualified majority of at least 75% of the votes at our Annual General Meeting. This is key for the realization of major parts of synergies while always considering the rights of minority shareholders. Beyond this, only full ownership via squeeze-out provides a clean path towards exercising full control.

The Management Board and the Supervisory Board of Commerzbank have a fiduciary duty to all shareholders. We will continue to work in the best interest of all our investors and to protect the rights of our minority shareholders. Our mandate is to ensure that the value generated by Commerzbank benefits all of you. This leads me to the conclusion that besides Momentum 2030, only a joint approach has the potential to create value for all stakeholders. Our Momentum strategy represents a proven, reliable and highly attractive plan with limited execution risk. It is a tangible road map to substantial value creation.

In contrast, the Commerzbank Unlocked approach presented by UniCredit is in our firm opinion, based on incomplete outside information and assumptions in terms of value creation and comes with significant execution risks. Moreover, it does not reflect value-accretive business, especially when it comes to our international network. Therefore, our position is clear. We are ready for constructive discussions towards a jointly developed solution and realistic value creation assumptions. This will avoid costly misunderstandings of the Commerzbank business model.

Let me summarize my key takeaways for you today. First, we achieved a record H1 result, and we fully confirm our guidance and targets. We are a bank that delivers. Second, we continue to focus on the disciplined implementation of our Momentum strategy. This is our plan for delivering reliable shareholder value with low execution risk.

And third, we are ready to find a constructive solution with UniCredit, and we will always work in the best interest of all stakeholders. Our shareholders continue to benefit from our strong delivery and the strategic optionality that comes with the current situation. And with that, I'm happy to hand over to Carsten, who will guide you through the detailed financials.

Thank you, Bettina, and a warm welcome also from my side. Bettina has set out the strategic picture. We are performing well. Momentum 2030 is progressing, and we generate attractive shareholder returns. Since 2021, we have consistently improved our performance and delivered on our commitments. This quarter is another step on that journey. In Q2, we have continued to make progress where it matters. Revenues are up and costs are managed in line with our target cost-income ratio while increasing investments. Continuously improving this positive operating leverage is at the heart of our Momentum 2030 strategy.

The risk result continues to be well contained and the capital ratio remains strong. With these positive developments, we have achieved our best ever quarterly operating result of EUR 1.367 billion. We are delivering these results in a less supportive interest rate environment, especially in Poland and facing ongoing geopolitical headwinds. This demonstrates the strength of our franchise, the resilience of our business model and the progress we are making in executing our strategy.

With a net RoTE of 12.5% in the quarter, we are firmly on course to reach our 12% target for the year. I will now go through the line items in more detail, starting with revenues. Revenues are up 9% year-on-year and the uplift is broad-based. Net commission income has again grown by 7% compared to last year. The strongest contribution came from PSBC Germany. The net interest income of EUR 2.59 billion is up slightly compared to Q1 and basically stable compared to last year. This is in line with our expectations, and we anticipate a pickup in the second half.

In contrast, the fair value result is up EUR 92 million year-on-year and EUR 21 million compared with Q1. This mainly reflects the impact of lower interest rates, particularly in Poland and to a lesser extent, in the Eurozone. Other income, excluding mBank's FX loan provisions was also higher. The EUR 19 million year-on-year increase mainly reflects tax-related effects and realization gains. The quarter-on-quarter improvement was additionally driven by the nonrecurring hedge results and the seasonally higher dividends from participations.

The next 2 slides cover the fee income. Net commission income is up 7% year-on-year, supported by all customer segments, underlining the quality of our revenue growth. The very healthy 6% increase in Corporate Clients was driven by cash management, trade finance and capital markets. Bond market activity remained particularly strong and continued the momentum we saw in Q1.

Net commission income growth in PSBC Germany was an excellent 11% year-on-year. The securities business was the main driver. This includes both advisory business at Commerzbank and transaction-based business at comdirect. Payments also developed well, supported by the account fee increases introduced last year. We expect the contribution from this source to normalize over the coming quarters. Overall, the growth demonstrates the strength of our franchise across all customer groups.

I will now move to interest income on Slide 19. The net interest income reflects two opposing effects, business growth and lower Central Bank rates. Net, they have largely balanced out this quarter. Looking at the segments in Corporate Clients, higher loan and deposit volumes resulted in a healthy increase of the net interest income of 7% year-on-year. In Private and Small Business Customers Germany, NII grew by 10% year-on-year based on the ongoing improvement of the profitability of deposits. At mBank, the picture is different. Lower policy rates in Poland more than offset higher volumes. As a result, net interest income declined. However, this was compensated by a better fair value result from rates hedging activities.

Adding the 2 line items together, this results in EUR 9 million higher rates-related revenues at mBank year-on-year. The story is similar in Others and Consolidation, where year-on-year lower net interest income is partially offset in the fair value result. On the next 2 slides, I will go through the volume development. Quarter-on-quarter deposits were overall stable in PSBC Germany and Corporate Clients. Corporate Clients have attracted EUR 2 billion additional sight deposits, while PSBC Germany has seen a decline in call money by EUR 2 billion. Competition for call deposits remains very intense in Germany. We, therefore, saw some outflows of highly rate-sensitive deposits to competitors offering teaser rates above 3%. We stay disciplined and continue to prioritize profitability.

In the loan business, PSBC Germany had stable volumes, while Corporate Clients has sustained its very substantial volume expansion, keeping it well ahead of target. More details will follow on Slide 21. In the last 12 months, Corporate Clients achieved a remarkable average loan growth of EUR 17 billion or 16% thereof EUR 8 billion in the first half of 2026. This level of loan growth reflects the strength of our franchise and the trust our clients place in us. Demand from our clients remains largely international. Encouragingly, we have recently seen relatively more activity within Europe. We are also seeing the first signs of a recovery in Germany, albeit coming from a low level. With Institutionals, we have increased revenues throughout the last 12 months despite a lower growth in trade finance.

Overall, we are encouraged by the trajectory of the loan business. Our expectation is that the slight trend of more European demand can be maintained and are cautiously optimistic for a pickup in Germany. This brings me to our NII outlook for 2026. We confirm our outlook for NII of around EUR 8.6 billion. So far, we have only seen a slight increase in H1 compared to H2 of last year. In the second half, we expect a noticeable pickup. Rates in Poland, which were a drag in the first half, should stabilize and the NII increase in mBank. The contributions from the replication portfolio will increase with further rollovers. The expected higher ECB rates will be beneficial, and we anticipate further volume growth.

With all these drivers moving in the same direction, we are confident that the net interest income will increase over the coming quarters and reach around EUR 8.6 billion for the full year. As discussed previously, the replication portfolio provides a significant structural tailwind and will add EUR 400 million to EUR 600 million NII every year until 2030. Updated projections are included in the appendix.

And now to costs on Slide 23. Group costs are fully aligned with our Momentum 2030 targets. We continue with significant investments where it matters while keeping a firm grip on efficiency. In the Group, excluding mBank, we increased IT investments by 12% and further expanded our shoring and sourcing activities. We have added staff in a few key areas while also absorbing salary increases and costs related to our employee share programme. Despite these investments, costs in the Group, excluding mBank, remained flat. The increases were offset by active cost management, lower burdens from equity-based compensation and the nonrecurrence of a one-off from last year.

mBank has continued investing in its business but also had to absorb higher compulsory contributions. Overall, we are well on our way to reach our target of a cost-income ratio of 53% this year or 51%, excluding compulsory contributions, an improvement of 4 percentage points from last year. The risk result came in at EUR 202 million. This is fully in line with our expectations and outlook. Default rates in Germany are edging up slightly. However, most of the increase relates to small service sector companies where our exposure is limited. When looking at the default rates in the German Mittelstand, trends are broadly stable with only a very moderate uptick.

The portfolio remains highly resilient with an unchanged nonperforming exposure ratio of only 1.1%. We have maintained our approach to overlays, and there has been no material change in the outstanding amounts. Year-to-date, the increase of the risk result was only around EUR 44 million. However, given the ongoing geopolitical uncertainties, including the conflict in the Middle East, we maintain our full year guidance of a risk result of around EUR 850 million. This concludes the view on the key line items.

Slide 25 summarizes the drivers of the EUR 898 million net result. The tax rate was 28% in the quarter. For the full year, we expect a tax rate close to 30%, mainly driven by a higher corporate tax rate in Poland. As I've covered the main developments in the segments already, I will now jump straight to Slide 30 and the development of RWA and capital. In Q2, we have around EUR 3 billion higher RWA quarter-on-quarter due to the expanding loan business in mBank and the assets in the liquidity portfolio of treasury in Others and Consolidation.

RWA from higher volumes in Corporate Clients were more than offset by a new SRT. Capital is slightly higher as the OCI increased. In line with our capital return policy and commitment of a 100% payout ratio, we have reserved the full net result after AT1 coupon payments amounting to EUR 1.7 billion for distribution. Thereof, part will be utilized for the share buyback of up to EUR 1.2 billion that has already been approved by the ECB. The CET 1 ratio is therefore at 14.4%. In Q2, we have applied for an adjustment of the scope of our internal credit risk models. We expect ECB approval in Q3. Once implemented, the change should lead to a significant reduction in RWA.

Based on our current calculations, the impact should be in the mid- to high single-digit billion range and gradually materialize by the end of Q2 2027. This will further strengthen our capital position and support profitable growth. Depending on the timing and final approval, this may reduce the volume of SRTs we issue this year.

And now to the outlook. We are firmly on track for another record year and confirm our unchanged outlook for the year. We expect total revenues of approximately EUR 13.2 billion based on strong NII and NCI growth. We maintain our outlook for the risk result of around EUR 850 million. Based on costs of around EUR 7 billion, we target a cost-income ratio of approximately 53%. We confirm our net result target of at least EUR 3.4 billion, leading to a net return on tangible equity of around 12%. And we confirm our plan for a payout ratio of 100% after AT1 coupon payments and expect our CET 1 ratio to be above 14% at year-end.

To summarize, the unchanged outlook and the record results clearly confirm our financial strength and potential. We will continue to deliver. And with that, I conclude the presentation. Thank you for your attention, and Bettina and I are now happy and looking forward to answer your questions.

[Operator Instructions]

The first question comes from Tarik El Mejjad from Bank of America.

I have 2, please. First, on the deal with UniCredit. Clearly, there's a changed tone here in regards to UniCredit, and which is good to see it could remove that deadlock -- sorry. Your red lines were the valuation and strategy of Commerzbank Unlocked, especially on the international markets deleveraging. So what all these talks will include that you have post Q2? And how far are you ready to compromise on the strategy on that specific point?

And also in Q2 results for UniCredit, CEO mentioned that some of the restructuring costs, EUR 2 billion, EUR 3 billion will be booked in Commerzbank accounts, possibly as soon as '27. Is that something that you can have a say or a choice on that? And should we start to adjust our numbers on that regard?

And second question is on the mix of cash and share buyback. You announced up to EUR 1.2 billion. Should we expect another tranche of buyback or the remainder will be mostly in the form of dividend?

Yes, I mean, indeed, what we now need to do is to sit down and develop a joint solution. And I think it starts with exchanging views on what we see, what the strengths are. We also have some technical details to clarify, but we also need to work out how we collaborate in the current situation with UniCredit having a little bit less than 50%. But I think still we should identify areas where we can already create value in a joint approach. And then probably we also should think a little bit about a target picture midterm.

And I mean, I think we should start the dialogue and then we will come back whenever we have a solution. I think that is a better way than the other way around, being now very transparent on what we wish or not wish. When it comes to restructuring costs and what has been said by UniCredit, I think it's outside-in assumptions. And I mean, we don't know any details, and it's very clear that we, as Management Board, but also as Supervisory Board, our mandate is to protect the institution to protect the interest of our stakeholders.

So we can't actually also do not take any directions from a controlling shareholder, but we have to follow our own strategy. And that is, for the time being, Momentum 2030. We also have restructuring costs, which we still need to book to keep that in mind. We will do that a little piece probably this year, and that's included also in our guidance and more to come in 2027, very much dependent on where we stand then with the negotiations with the workers' council. And the rest very much depends on in talks and the results of any talks between UniCredit and Commerzbank.

When it comes to the mix of cash and share buyback and our dividend policy, I assume we have been too subtle in our color coding. So we have now the first tranche of the share buyback up to EUR 1.2 billion, where we very quickly received the ECB approval and just wait for the Finance Agency to follow. [Technical Difficulty] We will look as we have done in the past years; we will talk to our investors and then decide on the final mix.

It's very clear, and we said that also beforehand that we will increase the share of dividend because that is also in the feedback that we received from investors that they want to see more dividends. So you can assume that at least 50% of the capital return will consist of dividends.

Next question comes from Benjamin Goy from Deutsche Bank.

You reiterated net interest income guidance assumes a pickup in run rate of about EUR 100 million. Now you mentioned a couple of points why this should be the case and particular rates, which seems to be hopefully a given. Just wondering where do you think are still the moving parts in terms of volume growth or deposit beta where there could be a surprise or you have actually good visibility to a much better run rate in the second half and going into '27?

Benjamin, thanks for the question. Yes, as you rightly say, first half of the year actually gave us a EUR 4.1 billion run rate of the NII, therefore, keeping it stable compared to the previous quarters despite lower rates. And we've already seen, as we expect, the impact of lower rates, especially in Poland in the first half of the year.

So for the second half of the year, with the current Polish rates expectation being flat, we rather expect a positive impact from mBank given the volume growth that we are seeing. The biggest part in the uptick of the run rate of our NII in the second half will come from the replication portfolio, which will continue to actually roll into higher rates and therefore gain more traction.

And then lastly, with the beta being stable, broadly in the portfolio and volume growth expected on the deposit loan side towards end of the year, we expect a slight impact from that. And then lastly, concluding with the ECB rate hike that we just saw and the landscape that we have ahead of us, that should clearly also support that stronger trajectory in H2. And therefore, we are confident to reach the EUR 8.6 billion in total for the full year.

And maybe a second question, if I may. Have you seen -- I mean, clearly, the numbers are ongoing and you don't see an impact from your new large shareholder. Is there anything you noticed from early indicators, call it, RFPs in Corporate Clients or Wealth Management in June, July?

No. I mean, luckily not -- as I said also in my speech, I mean, we are very grateful for the trust and the loyalty of our clients, which is clearly supported by the high resilience and commitment of our team members who are out there to serve our clients.

And actually, rather the contrary, I mean, look on our loan growth volume, which has been 16% up, look at our volume growth and securities volume, specifically the discretionary portfolio management, which is part of advisory, which is up 20%. We are in the lucky situation that clients value our business model, our value proposition and therefore, are loyal, and we intend to keep it like that. But it's indeed an effort if you have a lot of noise outside.

Question comes from Jeremy Sigee from BNP Paribas.

You gave some quite mixed -- sorry, I don't know if you can hear me.

Jeremy, can you just start again because I think we didn't hear the beginning of your talk.

I think I started talking before I was put into the call. Two questions, please. Number one, you talked about German corporate sentiment, and you gave some slightly mixed comments. There were some positives, including new orders, but you also noted some areas of weakness in sentiment.

So could you just expand on that topic a bit more from your conversations with corporate customers, particularly Mittelstand. What are the strong points? What are the weak points? And then my second question on the UniCredit situation. I appreciate you need to talk to them, and you need to form a joint view. Do you have any view at this stage from your point of view on what are the most promising areas among their proposals or among what they can bring in terms of cooperation?

Okay. Thank you, Jeremy. So first on sentiment, yes, indeed, I would say it's a kind of a mixed bag, as I said. So when you talk to Corporate Clients, I mean, they clearly see the reforms taken by the government. However, and they appreciate that.

However, they want to have more and faster. That is the story on that. And if you look on the investment side, we see a lot of investments happening. The unfortunate thing so far is that still large part of the investments take place in Europe or even abroad [Technical Difficulty] or in the U.S. And then clearly, you have a lot of volatility as we speak. So you have good numbers when it comes to order data, you have good numbers when you have -- we come to sentiment.

But then on the other side, you still have the energy price situation. You still have the ongoing Middle East war. And now we have this new complexity say like that, which is the ongoing heat in Europe and the results of that. So it's basically yes, it's stable and -- but we expect to see more recovery in the coming quarters, specifically when we really see, hopefully, the positive results of the reforms kicking in and the sentiment further improvement and improving and hopefully also an end of the Middle East conflict.

When it comes to your second point, I mean, we will need to sit down to talk, but we clearly will have to see whether we can join forces on specific things, large investment programs, which are not bringing us in difficulties because of the competitive situation. We will definitely need to compare products and value propositions, whether we can strengthen each other on that. And then clearly, at a certain point in time, we should also talk and see whether we can create any synergies by combining operations in a midterm target picture. So very much the things you would expect when 2 banks come together, both very successful.

And the next question comes from Chris Hallam from Goldman Sachs International.

On the RWA...

Can you hear me now?

We can hear you, Chris.

Okay. So just 2 questions on RWAs. On the RWA efficiency measures, would there be any offsetting impact from the output floors in later years, i.e., with the approvals you receive take you below 72.5% of standardized in which case you need to give some of that back as the output floors kick in?

And then second, you said on the RWA approval measures, they may reduce the SRTs you do this year. Is there -- is that -- I guess, is there overlap on the specific RWAs, i.e., the bucket you get approval for is what you had earmarked for SRTs? Or is that just you're solving for an overall capital tailwind from RWA management? Or is -- are lower SRTs part of sort of the quid pro quo for the ECB approval? So anything just to understand that overlap? And then if you could also comment on how you see SRT pricing today?

Yes, Chris, let me start with the second question on the RWA relief that we are expecting once the model change has been approved. So approval, as we stated, we expect during Q3, and then we have a time line until Q2 next year in which we gradually see these reliefs coming in. We did not have these incorporated in the original figures for Momentum 2030.

So you could see those coming in on top and providing tailwind and giving us optionality, quite frankly, in how we're managing RWA and generally our book. So it could have an impact on SRTs, but mostly on timing in terms of us having more flexibility in when we would go for relief of RWA and hence, also for capital.

When it comes to RWA -- sorry, to SRT pricing, we actually did an SRT in Q2. We had around EUR 2.2 billion in relief. And as we already expected when we had our conversations in the last quarter, pricing at the moment [Technical Difficulty] is quite favorable for this. So we were slightly better off than the originally planned for 400 basis points per RWA. So we saw slightly more favorable pricing in the market.

And regarding your first question, on the RWA relief and the expectation in line with the output floor, that's actually a pretty good question apparently. The end game, if you want so, for this is not yet final, especially when we're looking at the impact on unrated corporates. Generally, I think we can rather look optimistically into this, and we will revert once we have more clarity on the impact.

And the next question comes from Máté Nemes from UBS.

I have 2 questions, please. The first one is just a follow-up on the IRB scope changes. Could you clarify which areas the scope changes pertain to and what could be the approximate benefit here? And secondly, a question on deposits. We've seen some PSBC deposit decline in the second quarter. You also highlighted that some fast-moving deposits, sight accounts move to competitors.

Could you comment broadly on the competitive nature in the market? And what does that do to liability margins? Have you changed anything on commercial strategy and how you intend to protect your liability margins while reaching higher deposit levels or higher volumes that you Carsten also alluded to when talking about the NII outlook?

I mean the deposit competition is very high as we speak. I mean, we have new entrants on the scene, very attractive offerings, offering partly 4% and stuff like that. That's not profitable from our standpoint. So we have a valid situation. We also accept the fact and that's also embedded in our planning that we let certain deposits go because, as you know, this is -- it's a certain group of clients, which we have specifically the ones who are more digital native.

So it's also specifically for us at comdirect who are jumping around to say it like that and looking for the best interest rate offer. And therefore, it was a clear decision from our side not to participate in these offers and to compete against that and have that also in our own planning included. We will, however, also go out now with certain combined products, both for Commerzbank as for comdirect, see how this runs, but it's more really a more midterm thinking of gaining clients to also stay with us to also do -- bring their complete banking relationship to us than just only focused on the so-called interest rate service.

Yes. And to your first question regarding the model changes, I mean, what's in scope is broadly the corporate book, but it's only parts of the model, so partly addressing the book. The majority of the effect is coming from Commerzbank AG. We also expect a slight effect coming from mBank, but that's effectively the changes that we're seeing now.

Yes. The next question comes from Tobias Lukesch from Kepler Cheuvreux.

Also 2, 3 questions from my side, please. First, again, touching on UniCredit, the dialogue and potential timeline. Bettina, Carsten, maybe you can, again, maybe indicate what kind of timeline you have in mind in terms of really getting to results and communicating this? Is that more of a kind of year-end story, which will be communicated with year-end results? Or is there even a chance like to get these things done earlier?

In terms of capital and the payout, you mentioned the 50% plus payout ratio for dividends. If there was more to come on the buyback side, I think you kind of hit 80% now of the expected value of around EUR 1.5 billion. Is there a chance that we get another buyback announcement already with Q3 results? Or would that only be communicated with the year-end results and the final take basically on the overall payout?

And very finally, on the risk result, Carsten, you mentioned that it was more bits and pieces from smaller clients, more from the service sector. I mean we are now at EUR 200 million, which is kind of 1/4 of the total you're seeing. We are used to very low risk cost numbers over the past years and quarters. So yet no impetus from any other industry which concerns you? Or is there may be like one or the other bigger industry showing a little momentum at least, which could then be potentially extrapolated into the coming quarters?

Yes. So on time line, I mean, it depends very much on the progress we can make. And it's also very clear, I think, that it's in the interest of both institutions to move as quickly as possible, at least also on how to deal with the current situation of the less than 50% now and to get our arms around how we can create value in that. And yes, we will see how this goes. I mean the good thing is you will have a natural stop anyhow at Q3 results. And I'm pretty sure that you all will ask both of us where we stand. So you can be ensured that latest then you will get an update on where we are.

When it comes to the capital with the payout, I mean, we have done in the past. We did -- we announced the second tranche with Q3, at least we reported that we would file for approval with the authorities. And in the moment, we have no reason to see why we should not follow this track, which we have now done twice also this year. So that's for that. And on the risk result, Carsten.

Tobias, on your question regarding the risk result, yes, with EUR 202 million in Q2, actually, we have a, I would call it, regular quarter in terms of the level of risk result. When looking into the year, my comments in the speech earlier were more of a general nature when it comes to the small sector companies. This is where we saw inclining default rates, but we are usually not so engaged in that sector. So that was more a broader-based comment on the economy in total.

When we're looking into the German Mittelstand and also [Technical Difficulty] different segments that we are looking at, we are not seeing any outliers in the portfolio at this point in time that we could extrapolate actually into the next quarter. So take the current result and our guidance for EUR 850 million in the full year as being mindful of the current macroeconomic situation.

And the next question comes from Riccardo Rovere from Mediobanca.

Two, three questions, if I may. I hope you hear me well. The first one, Carsten, I just wanted to be sure I understood it correctly -- sorry, if you can just repeat what is the RWA saving that you expect from the new IRB models? And then just a confirmation, I understood it correctly, the RWA savings are expected to be mostly on the corporate book in Commerzbank AG.

And is it mostly international exposures or is also Mittelstand or anything that is not the international exposure? And the other question I have is, if I understand it correctly, okay, the EUR 1.2 billion is supposed to be the first tranche of a buyback to be carried out in 2026. So I imagine you must have done your calculations that the liquidity of the stock is enough for you to go on with this buyback and maybe a second bit in the last part of the year. Am I right in saying so?

Riccardo, taking your RWA question first. As to the amount, we are expecting this to be in the mid- to high single-digit billion amount and phasing in over the next quarters until Q2 next year. The book that is actually affected by this is -- the majority is actually AG. So there's a minor part in mBank only, but on group level, mid- to high single digit. And underlying corporate is practically a mix throughout the portfolio. So it's not limited to international or MSB. It's a mix of the model [Technical Difficulty].

And to your second question, the answer is just yes, there is enough liquidity, and we look on that.

And the next question comes from Stefan Stalmann from Autonomous.

The first one is on the benefit from the replication portfolio this year, the EUR 600 million. Is that roughly evenly spread between the first half and the second half? Or are there bigger differences between the 2 half of the year? And the second question I wanted to ask about the growth in your nonperforming exposures, which has been quite steady still. I mean, plus 4% during the quarter, plus 9% year-to-date. There is quite a bit of growth. And maybe you can shed a bit of light on which areas of the bank are producing this nonperforming exposure growth, please?

Let me start with the replication portfolio. There is indeed a structure in the incremental return we're seeing over the course of the year, in line with the rolls that we see on a continuous basis, the effect actually is increasing for this year, we will see around EUR 400 million, call it, in the second half versus EUR 200 million that we saw in the first half. So that is the structure. And on the nonperforming exposure, there's actually really no specific structure that we would have to this. This is broadly based in our corporate book. That's what it is no outliers.

And the next question comes from Anke Reingen from RBC.

I hope you can hear me.

Just firstly, on the deposit competition you mentioned in Germany. I just wonder, I mean, deposit beta is already 41%. You guide to 41% for the year. And how far are you sort of like does this guidance, what are you assuming in terms of deposit volume? Or is there a risk that the deposit beta has to move higher? If you can just talk about the competitive dynamic?

And then sorry, just coming back on the RWA and the potential reduction. Does that mean the EUR 183 billion you guided to for 2028 could be lower? Or you mentioned as well you could revisit some of the securitizations just looking in terms of the net impact on the RWA guidance you previously provided?

So on the deposit competition, we feel pretty comfortable with the deposit beta. This is -- it's also priced in the competition, as you have seen. I mean, the second quarter was highly competitive, and we kept our deposit beta pretty stable. So no need to adjust. I mean, we have been cautious for the years after that, still assuming a constant increase because we believe that the competition will not go away. So we keep that in mind. But overall, it's priced in.

And on the RWA relief, a portion of the relief we will see this year. So not all of it. We will see the effect mostly in Q4, Q1 and Q2. And the effect that we would see this year could mean that we are revisiting the timing of our SRT. So net-net, we are not changing the guidance for RWA for year-end at this stage.

But sorry, just to follow up. For 2028, you gave us the EUR 183 billion of RWAs. So should that number now be coming down?

Yes, Anke, you're right. For '28, that number should be coming down since this effect was originally not in the plans for Momentum.

And the next question comes from Kian Abouhossein from JPMorgan.

First question is related to a more subjective topic around your main shareholder and the discussions that you're having might have. I just wanted to see if you can talk about Standort Frankfurt, Munich, if this is a topic for you as well as listing, if you, in your view, think Commerzbank should be listed continuously in case of a takeout.

And I also wanted to see how the middle market German clients are currently Mittelstand clients are behaving recently in terms of acquisition of clients as well as turnover of clients. And then the second question I had just on the beta. I wanted to come back. If you could just briefly discuss the exit beta on the deposits as you've done in the past, that would be helpful.

So with your first topic, first question, I mean, really, we will evaluate all potential design criteria when it comes to target pictures. I think what should always drive everything what we do is that we protect the value and that we maximize value for our shareholders, but we also should keep in mind that there are other stakeholders, including staff, including clients.

So therefore, I think let's start first discussions and then we come out with some recommendations. When it comes to the behavior of our Mittelstand clients, they're very loyal. So we haven't seen clients leaving because of the situation, which is important. They are, as you know, rather conservative, meaning they are still waiting for German government to implement more reforms. So we also see larger Mittelstand clients investing. They do that also together with us, but we do that most of them, not in Germany, but abroad.

And they are clearly interested in -- when it comes back to our strategy, what happens to our international network because many Mittelstand clients rely on the fact that we can support them in their export business, and that is not focused only on 4, 5 countries, but most of the time goes really across the world and includes Latin America, Africa, Asia and other continents. And on deposit beta, I hand over to Carsten.

Yes, Kian, on the exit beta for Q2, we are pretty much around the average of the beta we're expecting for the full year. So call that close to 41%.

And if I may just add one more question since it's at the end of the call, pension reform. You haven't really mentioned that much. Can you just discuss how that's affecting you or how you see that, how you're positioned?

Yes. I mean we see that very positively. We also have reported that publicly that we support the -- we support the pension reform. And I think it's the right thing to do. And we will definitely benefit from it given the fact that we have very clear and ambitious plans on the net commission income side.

So an increased demand hopefully starting from next year on when the implementation of the pension reform starting will also support us in delivering on our plans with respect to net commission income. But overall, we are very positive. I think it's the right step. I think you can do even more as always, but it's a good starting point.

And the last question for today comes from Borja Ramirez from Citigroup.

I have 2 follow-ups on Slides 10 to 12, please. Firstly, you have reiterated that Commerzbank is open to constructive discussions with its main shareholder. Could you kindly elaborate on what needs to happen before an aligned joint approach becomes feasible? And in particular, how should we think about the ongoing regulatory and supervisory processes, including the BaFin investigation as having any influence on the timing of such discussions?

And then my second question would be on Slide 12, you referred to the potential value of an aligned joint approach. I would like to ask, could you elaborate where you see the greatest areas of strategic overlap between Commerzbank plans and the view of the main shareholder? And more specifically, how should we think about the role of the international business within any potential future alignment?

Borja. So I mean, the regulatory approval process is something which runs separately whenever -- and this is what we learned out of the press that there might be the completeness of the documents, and you have a 60 working day period where ECB has to decide. I think they can extend that to a certain amount. And then there are other approvals necessary coming from the EU, but also some other countries and that defines the regulatory approval process.

But regardless of the regulatory approval process that we can and should work with the assumption that this goes in yes, confirmation of the deal and the tender offer, and therefore, we can start dialogues as we speak. I think the only thing what we have to keep in mind, we are still competitors, number one.

And number two is we, as Commerzbank management team, have the obligation to protect the interest of our stakeholders and specifically also of our minority shareholders. But when keeping that in mind, we can have discussions about a joint approach. And first of all, I mean, we are in a situation where we do not have any structural changes but where we can just discuss how we deal with the situation where UniCredit has a little bit less than 50%, meaning we can align and that fits to your second question, we can align on where can we collaborate without getting into problems because we are competitors.

And that includes the international network because we can clearly also provide access to that, but it also includes certain product areas where we can think whether we can benefit from each other's product ranges. And therefore, I think there is a lot we can discuss. And then clearly, we can also discuss how a potential target picture could look like and what kind of values you could create out of that. That's the task for the coming weeks and months, but we can start with it without waiting for the approvals.

And the BaFin investigation is anyhow something completely separate and is something where only BaFin can speak about. So my understanding is that [Technical Difficulty] some of the questions. Thank you very much. And I wish you all a great day and a great summer, hopefully, even some summer holidays that has not happened yet. And we are also happy to take your questions afterwards. And thank you very much. Talk to you soon.

Okay. Good afternoon, everyone. My name is Dirk Lievens, I Co-Chair our Global Financial Institutions business for Goldman Sachs. It is my pleasure to welcome to the stage this afternoon, Bettina. Bettina Orlopp, CEO of Commerzbank; and Christoph Wortig, Head of IR at Commerzbank. Thank you for being here with us and for making time for this discussion. It's been a busy 3 days.

As this discussion is also being webcast, we are also welcoming the people who are online. Just a few housekeeping points before we open. As a reminder, there should be no discussion of confidential or nonpublic information, in particular, due to the ongoing takeover offer by UniCredit. Discussion about the offer should be limited to the formal public statements and documents published by the parties. And secondly, although Goldman Sachs Investment Banking is hosting this meeting, we will not be sharing any confidential information or views of Goldman Sachs. So please respect these rules.

And with that, I hand it over to Bettina and Christoph.

Thank you very much, Dirk, and welcome, everyone, also from my side, Christoph. I'm moderating the session today with Bettina. Very much looking forward to this, Bettina. And we thought it's a good idea to kick it off a little bit around our strategy, a little bit about touching on the most relevant macro points, I believe you're all interested in before we then move over to the topic of the current takeover offer by UniCredit. And throughout all the time, we're happy to take questions. We have a mic over there, and Alex will be happy to move it around so that everybody also in the webcast can listen to it.

And with that, Bettina, I'd like to start to kick it off and put it very easily for beginners. Our strategy Momentum 2030 comes with 17% return on tangible in '28, and it comes with 21% in 2030. Would you like to summarize a little bit around these quite high numbers for Commerzbank in the German market?

Yes. Thank you. Thank you both for the introduction. Thank you for being here. Interesting times indeed. So let me start with the strategy, which we have presented the update in May 8. The reason was a very successful year 2025, you're all aware of, which is the continuation of the improvement of profitability at Commerzbank. We had quite a development over the past years based on a very robust business model. And with the experience which we have seen specifically last year, we decided that an upgrading of our numbers is important. And we base that on the one side, very strong growth, which we see and based on the strength of our business model and growth comes on the NII side, but also on the NCI side, coupled with a very strong trajectory when it comes to transformation and the improvement of our cost base.

And you can also see that when you look at our cost/income ratio, which is now at 56%. It's projected for this year for 53%. It will come down until '28 to 48% and then 43% for 2030. And that is due to the fact that we see a lot of positive momentum. So not only our strategy is called Momentum, but we see a lot of momentum. And one of the key drivers is on the efficiency side, clearly, AI, which is probably the hot topic also of this conference because we have seen in the past year that the impact is higher than we originally thought back last year. And it comes with improved customer experience and therefore, also increased revenues, but it comes specifically also with increased efficiency, which we will see and will organize for 2028, but more importantly, for 2030 because our cost base will shrink in absolute terms when you exclude mBank, which is already today at a very attractive cost/income ratio and shows a lot of growth.

And we see just that workplace efficiency, but also the improvement of processes, the acceleration of processes with AI is very powerful. And so it's really the combination of growth and transformation, and that does the trick. And you also see there's no hockey stick in our plans, very important. It's a continuous improvement as we speak for this year, 12%, next year, 14%, the year after, the 17%, 19%, 21%. And it's indeed pretty good numbers for the German market, but they come with very limited execution risk from our perspective.

Yes. Thank you, Bettina. Maybe talking about execution risk and about the different components of the plan, NII obviously stands out as a contributor to the increased revenue and profitability going forward. Would you like to shed some more light on what you see on the deposit side when it comes to pass-through rates with customers, competition with Chase entering the stage, but also with our famous replication portfolio?

Yes. I mean you will have seen that also in the May presentation that NII is driven on the one side by loan growth, which we have shown also in the past years, also this quarter, very much driven also by our international network, and by a very solid deposit development. We do not assume a lot of deposit growth also for the future. That's important to state. We just assume that it will increase like what we see, which is basically driven by inflation. So it's a 2% to 3%, very modest growth of the deposits.

And on the other side, we have been super conservative by still assuming that deposit beta, which is already at a very, very high level in Germany with a 41% that this will grow further up to 45%. And that is very much driven by the competition. We see Chase at the day of our AGM, wonder why started its deposit program, its call money account. But what we currently see, given it's only -- it's not a current account, it's just a call money account thing that they attract exactly the same crowd, which we see already the last 1.5 years flying around between the different players, and that includes comdirect, that includes ING, N26, BBVA since last year and some other specifically direct banks.

And what you see is basically that the same number of interest rate hoppers are just jumping on the best offer. And the best offer in the moment is clearly Chase, 4%. We are also out there currently with an attractive offer of 5%. It just has a little, little side condition that the German team needs to win the World Soccer Championship. I have to say inflow is not great. You can imagine that we hedged it and hedge costs were not really high. That is the bad thing on it. But joking aside, I mean we see it. It got attraction. I mean they have done a slow start. They will definitely increase it.

I think for them in the moment, what they're doing is just marketing spend to become a little bit more popular. We observe it. We do not have the feeling that this is also given it's only a call account, call money account that this is really a threat for us in the moment because they're just picking up the same crowd we have seen all the time. But we carefully analyze the situation because we are aware of the fact that there could be current account coming next and probably some more marketing spend. But what we do is what we always have done with competition in Germany, we try to have a better offer. So we also invest a lot in our mobile app to get the onboarding even quicker to increase also the value proposition.

And one has to say that the competition, we really always need to differentiate between Commerzbank brand and comdirect brand and also the Chase offer specifically goes, if at all, against the comdirect brand and less against Commerzbank brand because Commerzbank is very much driven by a full-fledged offering, including a branch network, which still a lot of Germans love.

Have you talked about the replication portfolio?

Sorry, big important step, no. But I assume this is a very informed crowd. So you have seen the replication portfolio, it is basically adding value every year. We have not assumed, which will probably not the case that the replication portfolio will further increase. So there is the upside part because we kept it stable. We have assumed the forward rates back end of April. We all know that this is very much something which has decent volatility in there.

But you also see that these benefits come pretty surely because we have an average yield currently at the replication portfolio of 1.3% for this year, which means every year and as long as we do not have a changing of the forward rates to a significant extent, you will see additional benefits every year as long as we keep at least the deposits stable. And even then we have a lot of buffer when it comes to our sticky deposits. So we haven't spent and not invested everything in the replication portfolio. So it's a very safe bet on this revenue stream.

Yes. Thank you, Bettina. And then maybe switching to the other side of the balance sheet, a little bit about loans and loan growth. I think we've seen quite significant loan growth in our Corporate Clients division. What do you expect going forward? Is that trajectory going to continue? And where does the loan prospectively come from? The growth?

Yes. I mean we have assumed further loan growth. That has not changed between momentum and Momentum 2030. We have seen more loan growth last year than originally expected because we thought it would be an annual growth rate of 8%. Now last year, it has been 10%, so even more. So it will probably not go on with this double-digit number, but it will be still a very, very high number. And I think what has been a surprise was what were the sources for loan growth because originally, we really thought that there would be more in Germany given that we have the stimulus package. And we also had originally higher assumptions on the GDP growth for Germany.

And what we currently see is that also due to the geopolitical topics we see, including the Middle East conflict that there are investments, but they are unfortunately not so much investments in Germany. So our German clients localize even more, and they do investments outside of Germany. And the good thing is we have an international network, which works very nicely. And therefore, we do the loan growth and we show the loan growth outside of Germany, except for a little bit. And then public sector is strong, which has to do with the stimulus package. And then we have some things linked to institutional business and also renewable energy.

Super. And you touched on it in the very beginning of the session, talking about AI. Would you like to share some numbers from Commerzbank of what we expect as contribution from AI in terms of efficiency levels?

I mean we said we figured -- and that is our current belief, I have to say, because what we learn is every day something new, but our current belief at the moment is that you will have a value contribution of AI from 2030 onwards of around EUR 500 million. Vast majority will be linked to cost reduction. There's also some cost avoidance. There's also revenue increase or also avoidance of negative revenues because you can avoid fraud via AI, but we also use AI already today when it comes to pricing. But I have to say it's our current assumption because we really see how powerful it is.

I just had a meeting this week with our legal team. We have just introduced Legora, which is a Swedish legal tech tool. And one of our Level 2 managers said that she had to write a brand-new policy, which we didn't have so far. You could say policy, but we are a regulated bank. And she said, for the basic draft where she normally would need a week to do so, she basically had this basic draft within 30 seconds. And then she said, now she's working on that. That's basically also the examples which we have, we are collecting, and we need to see what does this do to our business model. So -- but that are the current numbers which we have.

All right. So now let's switch gears a little bit and talk about the big topic, which is the offer of UniCredit. And I mean, maybe it's best to start with your view on the question, is there still a path -- a potential path for a friendly deal?

Well, I mean, we always have said that we would be open for discussions, and that has never changed. We said that from the beginning on because we see as a management team, our task to produce value for our stakeholders, and that starts with the investors, with the shareholders of the bank. And I think we have proven to a large extent that we were able to produce a lot of value in the past 20 months for our shareholders, but also for our customers and for our staff. And that is the driving force of what we do. And we also said that our job is to provide alternatives.

We now have provided again the alternative. This is the value you can get with our stand-alone strategy, which is with the -- which is a set of targets we have just talked about. And then there might be different paths. And there is a path of a friendly deal, and we are fully aware of it, and we always said that we would also be willing to sit down and discuss such a solution. We just did 2 [indiscernible] visits on that. One is we want to have a decent premium for our shareholders because we see that the current offer does not include any premium. It rather comes with a discount as we speak. So we said there must be a significant premium in it because our shareholders give up control, they give up value creation potential.

So that is one of the prerequisites. And the other one is that we believe that there's a lot of value in our business model in how we do things because we are not a bank which needs to be restructured. We are a bank which will show significant growth over the past years. And you can make use of it. If you're smart, you can use that very nicely also in the combined bank. And we said we want to make sure that this is reflected in business model and governance, plus one should not forget that if there would be a combination, the largest market would be Germany. So you need to reflect to a certain extent also for the stakeholders in Germany that this is reflected. So these are the preconditions. We said that publicly.

We said it -- I said it during the AGM. And to be very clear also, I did an active reach out to UniCredit to make sure that they also know that we are prepared to do so. But there are these 2 prerequisites. And we are where we are. There is, in the moment, no friendly deal, but there's always a side that we say we want to provide you as our investors with the alternatives. And then there is a third alternative clearly out there where you could say that there is an acceptance of the offer, but it takes place in a hostile approach as it appears in the moment, which I think is value destructive.

It's value destructive for all stakeholders on both sides actually. It's not only on Commerzbank side, it's also on UniCredit side because we will suffer. Commerzbank will suffer, HVB will suffer. Our competitors out there publicly state that they think it's great if that would happen because they can steal clients from us, they can steal key talent from us, and that is what happens if we are not doing it in a proper and an organized version. And we think that currently, in this hostile approach, we see no reason why our investors should accept the offer because there is no premium, it comes with a discount.

So it would be -- if you really want to have UniCredit shares, it would be much smarter at this point in time, sell our shares and buy UniCredit, which I think would not be very smart because we have a very good stand-alone strategy out there, super attractive capital return. One should not forget that with the plan we have presented, we will -- as we speak, we will return approximately 50% of our market cap in the next 4 years to our shareholders. So it's super attractive. So you have to compare that.

Absolutely. And is there any news on the German government and what the German government is currently saying in the situation we are in?

Well, I mean, they have been very clear. I mean, they are -- first of all, they are also investors, shareholders. And then clearly, they have an interest that there's a stability for German economy. And with a bank where 30% of German trade runs over its books, you can imagine and who is the financer of the German Mittelstand, there is an interest also from public authorities on how the whole governance look like.

And also one should not forget, which hopefully will never happen, but we also know that always the governance of an institution where the largest market is in is always the one everybody will turn to first if such an institution would be in any point of time in trouble, they would always turn to the government, which would lose most for its economy. So they have an interest that the governance works. And when you listen carefully to them, they always said that they don't like the approach and that -- and they will stick to their shares until the approach is not changing.

All right. Very clear. And now let's turn and let's talk to about the tender offer. You released a press release yesterday -- we released a press release yesterday, that's right, questioning the progress of the offer. What are your concerns actually?

Well, it's exactly what I just said. I mean our real task, and I see that personally as my task is that you get the best out of what can be offered. And I want to create the maximum value for our stakeholder. And therefore, I want to have a fair process. I always said that the investors will finally decide what happens. If they like option A better than option B, one has to accept that. But I think we should be all aware of the fact that there is a transparent process, what's really going on.

And what triggered us actually already last week when we saw it for the first time is that there is a tendering into the offer where it is economically not sensible or rational to do it. because why should you, at this point in time, tender into an offer which is a discount to the current share price. We don't find any reason why you should do that. And this is why we dig a little bit deeper into it. We did that already last week and saw last week, it was just one player tendering. It was Nomura. This week, there are more. But we see that at least for many what we have seen already and the analysis are still ongoing, that these are banks who are, in most cases, even connected with UniCredit via the TRS structures.

And that is something where we have to say that, no, it's not that our institutional investors, they do not like this offer. And that was the impression created because no institutional investor. And when I listened to you and I was at another conference in Paris on Tuesday, and I spoke to many of you and your colleagues, and they all said and you all said to me, you would not take this offer because it is a discount. So no institutional investor and the retail investors are at 0.05%, so neglectable. And -- so you can't say that this offer is in the moment attractive. And that is the one key message we want to bring across. This offer is not attractive.

And the second part is that there is this attempt to increase a little bit the tender dynamic, if I may say so, by suggesting that basically the majority -- a control majority, de facto control is already achieved also by including the derivative structure into the thing. And what we see is, yes, there are 3%, which are also linked to physical shares. So they will allow you also to have voting rights. But then now 13%, we were wondering how can you build up such an enormous amount without seeing it in our share price because you would assume normally because at a certain point in time, UniCredit could ask the counterpart to deliver shares. So you would assume that the counterpart somewhere has already the shares, but that is not the case because we only find 5% approximately maximum with banks holding it for such purposes.

And that compares to the 16%, 13% and 3%, which we have here, which also means that if this should be delivered at a certain point in time, there must be a lot of acquisition via the market to ensure that, which also means our share price will go up. And what we just wanted to achieve yesterday is that we make that very transparent so that people know that, that everybody is considering carefully the next step. And we also asked BaFin to look into it because we at least have the feeling that this is not what was originally intended with a public tender offer that you have so much in transparency in the whole process. And I can say so because it's my academic background that I have spent a lot of time in finding out how you do that with minority shareholders, and it was definitely not the intention to create a situation which you currently have.

Yes. Super clear. At this point in time, is there any questions from the audience we should take? Yes, happy to.

Just to pick up on that last point you made in terms of the best-price rule and the contract that UniCredit may or may not have with the banks tendering the stakes, how would that work if they buy them at a premium, who takes the loss when they tender?

That is exactly the question we are asking ourselves as well. And that is something we also want to know who's paying for it because someone indeed needs to pay for the difference. And it's not on us who can figure that out, but we exactly put this question in the [indiscernible] BaFin.

Thank you. Are there any other questions from the audience?

So I would move on with one more aspect in that sphere that is share lending. I think we figured out that there is quite an amount of the tendered shares, obviously from our lended shares or borrowed shares. And I wonder what your take is on this one.

Well, this is a little bit a similar take on what I said on the derivative structure, if it's borrowed and someone is tendering it. In my little word, I found it anyhow totally strange that this is possible, but that is a different thing that still the one who now tendered and has borrowed somewhere still needs to get the shares from the market. So again, that will also put additional pressure on the whole price levels because -- and let me also say one word that even if UniCredit ends up with something between 40% to 50%, and they would have a majority in the AGM. This is what I said, which is the third scenario.

This is a very messy scenario for both sides, not to say also that UniCredit would have a real high negative capital impact, but they also could still not do structural measures because for that, they need a 75% majority. And that's very hard to get if you have a government and probably also some other shareholders against you. So it is really this path of misery we would then see because we wouldn't really be able to move neither party. And therefore, I mean, we can live very nicely as we have proven also the last 20 months with a very large shareholder, but we need to make sure that our team, which has presented really good results and which is working really hard on delivering the future that they feel the stability and also our clients. We are in the lucky situation that our clients are super loyal to us. But you never know how this changed if we come in such a limbo situation.

Yes, absolutely. And maybe for all Commerzbank shareholders that do lend their shares, you should maybe reconsider the policies behind it if you're not wanting them to be tendered into the offer. That's just the Investor Relations view on this one.

Other than that, is there further questions from the audience? Please go ahead.

Two question, is this 40%, 50% limbo base case scenario for you? First question. And second question, is such scenario a drag for credit investors? Did you have exchange with the rating agencies? What do they think about this kind of situation?

No, it's not our base scenario. Our base scenario is -- and I think UniCredit has a similar base scenario, if I follow up on all what they have said when they launched the lowball offer is that they will rather end up above 30%. They will not enact control, and we are a little bit in the situation before 15th of March because it's very clear that nobody wants to have this limbo situation, and then it's much better to arrange again as a very high-performing bank with a large shareholder at their side. And so that's the base scenario for us. The credit investors, we have no indication. I mean we have very frequent interactions. And we also see when we do funding in the moment, we are very successful. We have lots of demand. We come in always with lower rates than expected. So nothing, absolutely nothing what we see currently.

And I could open up for 1 or 2 additional questions if there is demand. And otherwise, Bettina, you want to do some closing words before we finish the session?

Yes. I mean, thank you very much for your attention. I'm pretty sure that you are observing the situation quite intensively. And I can only ask you to do -- to first trust in us that we will do whatever we think is best for the bank, for its stakeholders. And I can tell you, I'm not always popular because I'm saying that also internally because I want that also our staff knows that if we believe that a friendly agreed deal is the best for the company, we would always go for that as a management team because we really want to do what is best for the bank. And keeping that in mind, however, I would say you should carefully compare the different options on the table. And I think it's also very clear that the worst of all options is a hostile takeover because it will destroy a lot of value. Thank you very much.

Thank you.

[Audio Gap]

Regarding the first quarter results 2026. Please note that this call is being transmitted as well as recorded by audio webcast and will subsequently be made available for replay in the Internet. [Operator Instructions] the floor will be open for questions following Bettina Orlopp and Carsten Schmitt's presentation.

Let me now turn the floor over to our CEO, Bettina Orlopp.

Good morning, everyone, and welcome to our earnings call. Carsten and I are pleased to present the results of a very good start to the year for Commerzbank. We have delivered a record quarterly profit, which gives us the confidence to raise our outlook for 2026 and to present an even more ambitious strategic path towards 2030. Our message today is clear, with Momentum we are delivering on our promises, and with Momentum 2030, we are accelerating our transformation to deliver higher profitability after.

Let's start with a summary of the key figures for the quarter. We increased our revenues to EUR 3.2 billion and delivered a record net result of EUR 913 million. The 5% year-on-year growth in our total revenues was broad-based demonstrating the health of our underlying client business. This top line growth, combined with our strict cost discipline translated into an even stronger 11% increase in our operating results which reached EUR 1.4 billion. It highlights the enhanced operating leverage we have successfully built into our business model. The bottom line figures translate into an excellent return on tangible equity of 12.7%, underpinned by a very strong cost/income ratio of 53%. Carving out compulsory contributions, our cost/income ratio is already at 50%. Our CET1 ratio stands at a very solid 14.5%, well above our targeted ratio of 13.5%. This excellent start to the year gives us a conviction and the confidence to raise our guidance for the full year 2026. Against the backdrop of the German economy that is still expected to grow by 0.6% at an average ECB rate of 2.2%. We now target a net result of at least EUR 3.4 billion. We are tightening our cost-to-income ratio target to 53%. Consequently, we are raising our RoTE target to 12%. That remains unchanged. And what is the cornerstone of our equity story is our commitment to a total payout of 100% of the net result after AT1 coupon payments and before extraordinary nonrecurring items. This upgraded guidance confirms the powerful traction of our momentum strategy, which has proven to be highly successful for Commerzbank.

The guiding principle of our Momentum strategy is delivery for all key stakeholders. And this remains front and center also with our upgraded strategy, Momentum 2030. For investors, we will deliver what we promise, continuously improving profitability and ensuring reliable, attractive capital returns. For our clients, we are a very strong and dependable partner, investing in our products and services to provide them with attractive solutions tailored to their specific needs, which ultimately drives our growth. And for our employees, we are fostering an attractive work environment and a culture of ownership for instance, through our successful employee share program. It allows them to participate directly in the long-term success of our company. Today, we have started the subscription period for the next offering of Commerzbank shares to all our colleagues.

This momentum 2030, we are accelerating our strategy with a simple and powerful goal, delivering higher profitability faster. We will achieve this through further profitable growth and an accelerated transformation of the bank towards higher efficiency. On growth, we are scaling up our proven and well-established business models in both our private and corporate client segments. On transformation, we are fundamentally transforming how we operate by leveraging the power of AI and driving further efficiency throughout the organization.

By combining growth and transformation, we will achieve significant scaling effects, including a well-contained cost base and a step change in productivity. This will create a clear and tangible path towards our new targets for 2030. An RoTE of 21%, and net result of EUR 5.9 billion, a cost-income ratio of 43% and a revenue CAGR of 6%. Adjusted for compulsory contributions, our targeted cost/income ratio is planned to reach even 41%. And let me point out that Momentum 2030 is not an excel spreadsheet exercise, but the result of a diligent strategy process. It involved the entire management team who reviewed all business levers to identify tangible transformation and growth cases for their respective areas. And this strategy comes to life in our client segments. In our corporate client business, we will continue our profitable growth by supporting the backbone of the German economy, the Mittelstand and by leveraging our unique global network. In our private and small business customer business, we will increase the growth via our digital channels and expand our high-valued advisory services for our wealth and premium clients. mBank pursues its highly successful strategy full speed ahead and will significantly contribute to our group targets.

Let me deep dive a few important cornerstones of our business model and our strategy towards 2030 and start with corporate clients. A crucial driver of our strength is our international franchise anchored in Germany and connected globally. With our Strategy 2024, we rightsized the international network and realigned the business to full connectivity with our home markets. In Germany, relationship managers and product specialists support the Mittelstand with their domestic business across our entire product range. Internationally, we provide a complete corporate banking offering to support our clients in their cross-border needs with local expertise in important markets. And through [ rep officers ] and corresponding bank relationships we combine local presence with flexibility along key trade corridors in a very efficient way.

I want to be very clear on this point. Our international business is an integral and highly valuable part of our DNA. Our bank was founded 156 years ago with a mission to support German trade globally. This mission is as relevant today as it was then. That [indiscernible] makes us tangible with a typical example that perfectly illustrates the value of our integrated network.

Consider a German engineering firm with a subsidiary in China. They are a long-standing client of Commerzbank in Germany and work closely with our international network. The subsidiary in China wanted to bid on a EUR 10 million contract to supply a plant to an importer in Africa. The process began with a bidding phase. To even participate, our clients needed to provide a [ bit ] bond. They instructed our brands in China to issue this guarantee. Thanks to our established network of several banks than the importer's country, we were able to negotiate the best possible terms for our clients who ultimately won the contract. The next step was the export financing. The construct stipulated payment via a confirmed letter of credit to mitigate the nonpayment risk for our German exporter. The importer's bank in Africa was talked with opening the [ LC ]. Crucially, this bank is one of our correspondents, meaning we were perfectly positioned to handle the [ transaction ]. Our [ Web ] Officer in that African country provided us with up-to-the-minute political and financial data on the country and the bank. This underground intelligence justified the necessary credit lines. After confirmation of the [ LC ], our client started the delivery of the plant and ultimately received the money. This single transaction shows a profitable full chain in action and demonstrate that our international franchise is a unique core asset that strengthens our entire business.

The international franchise contributes around EUR 1.8 billion in revenues. Importantly, this franchise is tightly connected to our core corporate client base in Germany and DAC. It strengthens our ability to support German multinationals, subsidiaries of the German Mittelstand abroad and international corporates with DAC connectivity. We hold a leading market share of 30% in German trade finance and a remarkable 58% of our corporate client's revenues are generated with clients who are anchored in this international network. This is a truly unique value proposition, and we will continuously adjust our footprint to meet the needs of our Mittelstand. Serving the Mittelstand will only mean corporate banking, but also wealth management for the families owning these companies. And this is a perfect bridge over to private clients.

Investable assets in the Wealth Management segment in Germany are expected to grow by almost EUR 1 trillion by 2028. Equally important, Germany is facing a decade of generational transitions in the Mittelstand and we are in the best position to benefit from this potential as we have the strongest access to the family-owned businesses. With our holistic approach as a one-stop shop, we have significant growth opportunities. Our well-balanced product and service offering as well as AI will support us on our journey to become the family office of the Mittelstand.

Comdirect, on the other hand, is well established a digital primary bank and performance broker. It is our successful answer to new brokers. We are investing in the further development of the digital user experience and the value proposition, including the expansion of trading functionalities and AI-based order triggers. We are developing our app further into a content hub, including financial education while consistently driving efficiency gains and AI support for customer service.

The vision for 2030 is very clear. A fully digital banking and brokerage experience that simply works and gives customers maximum autonomy. This is a strong strategic fit with our Momentum 2030 agenda because it combines growth with scalability. The growth strategies in our customer-facing businesses are complemented by efficiency measures on the transformation path of the bank. We are targeting a net cost reduction and higher capital efficiency in Commerzbank [ XM Bank ]. On costs, we will make further use of our well-established shoring and sourcing locations, e.g and Sofia and in Kuala Lumpur. Furthermore, we will reduce external resource [indiscernible] and the use of AI. This comes in sync with the ongoing effort to reduce complexity and optimize processes. On the capital side, we keep steering for RWA efficiency to increase the value accretion of our business. SRTs will further contribute to capital efficiency by freeing up risk-weighted assets.

Now let me talk about AI at Commerzbank. AI is already well established in our banking operations. It is a core driver of efficiency and a creator of new revenue opportunities. We are already applying AI across customer experience, operational excellence and risk management. Let me highlight three recent examples. First, in retail banking, the implementation of an end-to-end process redesign for an optimized complaint management has started by applying agentic AI. Second, in risk management, we have successfully introduced Hawk AI, an AI model that significantly improves the efficiency and effectiveness in generating transaction monitoring alerts. And third, on operational excellence, we start integrating AI into the credit analysis. Very promising examples are AI-based screening of annual reports and the origination of early warning messages. These are all practical applications with practical impact to drive our transformation.

We are backing the AI value realization with a substantial financial commitment planning for approximately EUR 600 million in cumulative AI investments through 2030. We are driving efficiency with 3 key approaches. First, we increased workplace productivity using tools such as MS Copilot and Gemini, and we have established an AI academy to upskill employees. Second, we will use agentic AI to increase product and process efficiency, including the setup of an agentic AI factory. And third, we will make use of agentic software development, which will accelerate the modernization of our application landscape. By those means we will free up around 10% of capacity, but will be partially redeployed to customer interactions. Overall, we will create tangible value of EUR 500 million per annum, of which 70% is assigned to cost reduction. This is what we can quantify today, but the technology and its capabilities are evolved exponentially, and we believe that we will see further upside to these numbers as we progress. In short, AI is a key driver of our Momentum 2030 strategy and supports our confidence in upgrading our targets for 2028.

We have a transparent and credible road map to a return on tangible equity of 17% in 2028, 2 percentage points more than envisaged one year ago. Starting from our expected RoTE of 12% in 2026, the journey is driven by clear quantifiable levers. We anticipate strong contributions from both net interest income and net commission income. NII will benefit from the replication portfolio as well as from growth in loans and deposits. NCI should sustain the strong growth path of 7% each year. Critically, the important -- the impact of our efficiency measures will largely offset inflationary pressures and necessary investments. This is the operating leverage of Momentum 2030 translated into financial outcomes.

And we will not stop there. We see a clear path to an even higher return of 21% by 2030 which comes with a competitive cost/income ratio of 41% when excluding the compulsory contributions. Furthermore, we will continue to distribute our full earnings under our targeted CET1 ratio of 13.5% is reached. The replication portfolio remains a key driver and will still significantly contribute to NII even beyond 2030. Carsten will elaborate on this later in the presentation.

On the cost side, the broad-based deployment of AI will drive efficiency. Hence, we will reduce our cost base in Commerzbank [ XM Bank ] until 2030 despite significant growth in revenues. This comes with a group-wide FTE reduction of gross 3,000 FTEs by 2030, of which almost 50% will be reduced on a net basis. The program will come with around EUR 450 million cost to achieve. The reduction will be largely achieved by applying early retirement schemes as well as making use of natural attrition. With the transformation agreement we signed yesterday, the employee representatives generally support our continued transformation.

The new targets are the next logical step in a long and successful journey of transformation -- the evidence. We have consistently met or exceeded the targets we set for ourselves. From our Strategy 2024 to our Momentum goals in 2025. We deliver what we promise. The steady delivery is the foundation of ability and provides confidence in our ability to also achieve our new, more ambitious goals. And this leads me to UniCredit's offer. After completing a comprehensive review of the offer document, the Management Board and Supervisory Board will issue their full reason statement, including a recommendation. Separately, we have published a presentation today highlighting selected preliminary observations on UniCredit's proposal, including the presentation of April 20. I would like to briefly draw your attention to the most significant aspects from our perspective.

First, UniCredit is using misleading credit [indiscernible] to talk down our valuation. Second, UniCredit's proposition for Commerzbank shareholders is vague [indiscernible] considerable execution risk. Third, our shareholders are asked to give up the upside we just spoke about and control for no premium. And fourth, Commerzbank shareholders who remain invested, retain material upside potential and optionality. I would like to address a few points in particular. Our analysis shows that the clients and assumptions of UniCredit do not pass the reality check. We have improved profitability substantially over the last years, and we have exceeded ambitious financial targets. Within our robust and stable business model, we have a prudent risk profile with strong asset quality. We don't need additional overlays. The risk on our book are well covered.

We are investing in platform and technology and we are significantly scaling AI adoption. We are the leading bank for the German Mittelstand and have a market share of more than 10% across all products with German corporate clients. And I think I made it very clear that our international franchise is a value-accretive unique business proposition.

Against that reality, UniCredit's assumption on cost cutting, revenue effects and investment requirements are not plausible in terms of scale and timing. The claimed cost efficiency potential of EUR 1.3 billion stand-alone for Commerzbank until 2028 is extremely aggressive and would come with significant execution risk and revenue attrition. In our view, the negative revenue impact would be significantly above EUR 1 billion, which you can derive from the revenues attached to our international franchise leaving aside any revenue attrition due to [indiscernible] in overlap, which would come on top. Timing -- agreements and changes for thousands of employees, shutting down parts of the international network, offboarding clients, returning licenses and stopping large growth and transformation projects all at the same time to become effective in 2028. That is not credible in a highly regulated sector and does not reflect the operational reality of the bank.

The same applies to the assumptions around RWAs and investments. The implied reductions and the implied cost to achieve do not align with what is realistically feasible without destroying revenues and client relationships. This is exactly why execution risk is so central in our assessment. In essence, the presented case lacks the necessary willingness to appreciate and reflect our business model. This is all the more puzzling given that we provided the opportunity in more than 10 meetings in the past 20 months to discuss any ideas and also all questions regarding our business model and our financials. Only in the two meetings after the announcement of the offer we verbally learned about the cornerstones of UniCredit's plan. It became clear that we have fundamentally different views on the business model that are hard to reconcile. We were clearly told that there was no room for any adjustment of the proposed model to reflect our core value proposition, especially when it comes to our international franchise. If you're dealing with a counterparty that tells you upfront that they will not adopt the plan to find common ground, what's the merit of doing any deep dives or workshops, in particular, if there is no preparedness to offer premium either. And this leads me to valuation.

As this was the second important topic in our conversations with UniCredit. No matter which metric you pick, UniCredit's offer fundamentally undervalues Commerzbank. Our standalone strategy has proven to be successful. Our tangible and credible path to increasing returns every year is well regarded by the market. It fully justifies our evaluation and a low-ball offer without a significant premium is just inadequate. And with that, I would like to share my key takeaways.

First, we achieved a record Q1 results and have raised our 2026 guidance. Second, with Momentum 2030, we built on a proven strategy. We are committed to our upgraded targets delivering reliable shareholder value with low execution risk. Let me add to this that by 2030, we will return around 50% of our current market cap to our shareholders. Third, we stay open for discussions and [indiscernible] has a real willingness to discuss the issues we flagged. With a clear intention of an attractive premium for our shareholders and that takes the success factors of our business model and our momentum strategy into account, we remain open to sit down again.

To conclude, we have a very strong momentum in our business. We have the strategy, the team and the determination to create significant value and limited execution risk. And with that, I will now hand over to Carsten.

Thank you, Bettina, and a warm welcome also from my side. Given the focus on strategy today and to have sufficient time for Q&A, I will keep the presentation of the Q1 numbers short and will not go through all the slides in detail. Bettina has already given you a summary of the Q1 financials. To start, there's one key point I would like to stress. We have again improved our operating leverage with higher revenues and slightly falling operating expenses -- positive jaws the core of our momentum strategy and our #1 priority. And I will now go through the line items starting with revenues.

Revenues have developed very well. The highlight is the record net commission income that is up 9% year-on-year with strong contributions from all customer segments. Corporate clients increased by 8%, with the biggest driver being bond origination. Private and small business customers, Germany grew by 9%, mainly with the securities business and from higher account fees. mBank increased by 12% across products. This growth is a clear testament to our client-centric strategy and our ability to successfully leverage our market position across all key areas. Net interest income is broadly stable as underlying growth in PSBC Germany and corporate clients was offset by day count effects and rate cuts in Poland. I will now jump directly to slide [indiscernible] on the very strong loan growth in Corporate Clients.

In the last 12 months, Corporate Clients achieved a remarkable loan growth of almost EUR 17 billion or 16% with EUR 5 billion stemming from the first quarter. Risk growth is broad-based. Year-on-year, we saw a EUR 2 billion increase from corporates in Germany driven by investments in working capital needs. The public sector in Germany contributed another EUR 2 billion capital-accretive business. We saw strong demand for green infrastructure financing, adding another EUR 2 billion. The largest driver was our business with German and Germany connected corporates outside Germany. It grew by EUR 7 billion as we continue to support our clients' international activities, particularly in Europe, the U.S. and Asia. Finally, our business with financial institutions also added EUR 3 billion, mainly from trade finance and lending. This performance underscores our strategy to grow profitably with our customer base where we see attractive risk-adjusted opportunities.

This brings me to our NII outlook for 2026. We raised our outlook to around EUR 8.6 billion. The main reason for this is the more favorable rates outlook compared to our assumptions in February as well as the successful margin management of deposits in Q1. This has made us confident that EBITDA should increase to 41% on average for 2026, 1 percentage point less than our original assumption. We have also slightly increased the size of the replication portfolio, which will further stabilize the NII in the next years. Next, I will give you a longer-dated outlook for the replication portfolio.

As you know, the replication portfolio is a very important and very reliable contributor to our revenues with an additional benefit of EUR 600 million in 2026. This will continue for many years. Based on the current size and [ structure ] and applying the current forward rates for the scheduled rollovers, we will have additional revenues in the range from EUR 400 million to EUR 600 million every single year until 2032. This leads to cumulative EUR 1.6 billion in 2028, and EUR 2.7 billion in 2030. By 2032, this increases to EUR 3.7 billion and even beyond 2032, EUR 200 million per year are to be expected.

As you know, we have added to the size of the portfolio over the last quarters. And depending on volume growth and customer behavior, we could potentially grow the portfolio further over the years, amplifying the effect. When looking at the current average yield of the portfolio, you can clearly see where the incremental interest income is coming from. For 2026, we have an average yield of only 1.3%. The current yield level is mainly attributable to the very low yield on all tranches of the 10-year models when reinvesting a maturing tranche at the current yield of around 3%, this leads to a strong pickup every year. The replication portfolio is, therefore, a very dependable revenue contributor for many years to come and a core component of our plan to sustainably increase profitability.

Now very briefly to costs on Slide 34. We have maintained our strict cost discipline. Overall costs are slightly below Q1 last year, although we increased our investments further. Higher compulsory contributions in mBank were offset by lower operating expenses on group level. Within the group, excluding mBank, cost even decreased, supported by a lower valuation effect from equity-based compensation. The combination of strong revenue growth and disciplined cost management resulted in an excellent cost-income ratio of 53% for the quarter or 50% when excluding compulsory contributions. The risk results came in at EUR 142 million. This is in line with Q1 last year, and our outlook as the portfolio remains highly resilient with a nonperforming exposure ratio of only 1.1%. We have maintained our approvals to overlays, and there has been no material change in the outstanding amounts. While there were headwinds from the contract in the Middle East, we maintain our guidance of around EUR 850 million for the risk result for the year. This concludes

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8% in the quarter. For 2026, we expect a tax rate closer to 30% due to a higher tax rate in Poland. I will now jump straight to the outlook on Slide 42.

We expect total revenues of approximately EUR 13.2 billion. As already mentioned, we've raised our outlook for NII further to EUR 8.6 billion. For NCI, we expect EUR 4.3 billion based on 7% growth. We maintain our outlook for the risk result of around EUR 850 million. Based on costs of around EUR 7 billion, we improved our cost/income ratio target again to now approximately 53%. This translates to raised net results target of at least EUR 3.4 billion, leading to a return on tangible equity of around 12%. We confirm our plan for a payout ratio of 100% after AT1 coupon payments and expect our CET1 ratio to be above 14% at the end. After this review of our record first quarter, I will now guide you through the financials of our strategy Momentum 2030 before going into Q&A.

Our planned figures are based on the current forward rates and our economists' outlook for GDP growth in Germany. We assume an uptick of GDP in 2027 and a moderate positive impact from the fiscal stimulus. If reforms should gather steam, there could be an upside, but we have prudently remained conservative. The revenue trajectory is set for a steady increase in both interest income and fee income while we conservatively plan for only modest contributions from fair value and other income as we are -- as these are hard to forecast. Total revenues are expected to increase from EUR 13.2 billion in 2026 to EUR 16.8 billion by 2030. This translates into a compound annual growth rate of 6%. Looking at the interest income in more detail, the picture is very similar to what we have seen last year and expect for 2026. The most significant driver is the predictable replication portfolio, which will contribute an additional EUR 2.1 billion by 2030 as we reinvest maturing assets at higher yields. On top of that, we plan for a EUR 300 million contribution from disciplined loan and deposit growth in PSBC Germany and corporate clients. These positive effects will comfortably outweigh the anticipated headwind of close to EUR 600 million from a steadily increasing deposit beta due to anticipated deposit competition. Expected increases in the ECB rates will add around EUR 100 million. mBank will resume its growth path and at around EUR 600 million overall. This structural predictable growth in NII is a cornerstone of our increasing profitability.

Slide 47 details our strategy in the Corporate Clients segment. Crucially, the focus is on capital efficiency. Building on our already established initiatives, we will continue our strong loan growth, further leveraging the capabilities of our franchise. While growing our loan book, we will be selective and focus on RWA efficiency of the growth. This might also mean selective reductions in the existing portfolio where targets cannot be met. In addition, more contributions from relatively RWA-light areas like the bond business or trade finance are in focus, further contributing to RWA efficiency. All this will be supported by our digital product offering that is convenient for clients and frees up time that our staff can instead use for value-added sales and advisory. The sales activities are furthermore augmented by AI-based models and advanced data analytics. AI data analytics also helps to price our products competitively. Finally, we intend to further increase the use of significant risk transfers. We have broadened our [ issuance ] by extending SRTs to further client portfolios and asset classes. We are thereby freeing up capital to fuel further profitable growth and increase the RWA efficiency to 6.4%.

In our private and small business customer segment in Germany, the focus is clearly on growing our high-margin net commission income. We will scale the securities business of comdirect and expand our relationship-driven initiatives with wealthy clients supported by AI. This will result in 7% annual growth in net commission income until 2028 keeping up with a strong expansion of interest income that is boosted by the replication portfolio. For 2029 and 2030, we prudently plan with 5% to 6% growth.

Let's now look at costs on Slide 49. Our plan is to slightly reduce costs in the group, excluding mBank. While we account for inflation, salary adjustments and [indiscernible], these increases will be offset by significant efficiency gains. These efficiencies are driven by our ongoing transformation program and increasingly by the smart implementation of AI across all processes. In addition to the already committed restructuring, we will implement a further reduction of around 3,000 gross FTE planned to be achieved in a socially responsible manner, contributing to the efficiency gains. We have already reached a transformation agreement with our workers' representatives. Detailed agreements will be reached in due course and expenses then be booked step by step. In total, the cost to achieve for the FTE reduction is expected to be around EUR 450 million.

While maintaining our strict cost discipline and increasing our efficiency, we will continue to invest. In 2026, we have allocated a EUR 600 million [ change in ] the bank budget, nearly EUR 50 million higher than in 2025. We will maintain the level of delivery that we planned for in 2026 also in subsequent years. However, the cost to get this output will decrease over time as we increase efficiency. The 3 biggest drivers are shoring, internalization and AI. The effects combined as we relocate activities into our shoring centers, while at the same time deploying AI to raise efficiency at these shoring locations. Overall, we expect 30% efficiency gains until 2030.

Looking briefly at the risk results. Based on our high-quality loan book, we expect to maintain a cost of risk of around 25 basis points throughout the cycle. For 2026, we plan with around EUR 850 million risk result which translates to a slightly elevated cost of risk of around 28 basis points.

Moving on to risk-weighted assets. We plan with nearly

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2026 to 2028. Credit risk RWA should decline slightly as we plan to compensate higher RWA from volume growth with securitizations and improvements in the portfolio. From 2029 to 2030, we expect a net increase of credit risk RWA by around EUR 7 billion. Thereof, a substantial contribution will come from mBank. Operational risk RWA will rise in sync with our profitability. Our RWA efficiency measured as revenues over RWA will improve from 7% last year to 9% in 2030.

Let me conclude with the expected trajectory of our net results and the capital return. As you can see on Slide 53, our capital return plan is as clear as it is attractive. We will distribute 100% of our growing net profit until we reach our target CET1 ratio of 13.5%. We project a payout of EUR 3.2 billion in 2026, and then increasing steadily every year. This translates into an attractive total yield starting from 7% in 2025 and reaching double digits latest in 2028. We will deliver this through a combination of steadily increasing dividends and the substantial share buybacks, returning around 50% of our current market cap by 2030.

With that, I conclude the financial presentation. Thank you for your attention. Bettina and I are now looking forward to your questions.

[Operator Instructions] The first question comes from Benjamin Goy from Deutsche Bank.

A couple of questions, please. So the first is on your net interest income bridge. Just trying to understand why the contribution from volume growth is relatively low, in particular, considering the growth rates you have shown over the last quarters and years?

And then secondly, on the new cost program, the 3,000 FTEs, will the positive impact be mainly '29 and 2030 or already some benefits before that? And then lastly, just quickly on the RoTE definition, why you have adjusted it?

RoTE definition, I think we have not adjusted, it's just the same. And on the cost program, it will come in 2029 and 2030. You should not forget that we have the Momentum -- that comes into play first and the [ 3,000 ] other ones, which are meant for 2029, 2030 and for the NII, which I hand over to Carsten.

Benjamin, on the NII bridge and your question there. the increase from loan and deposit volumes, if we're looking, for example, towards 2028, is actually based on the growth of our underlying portfolios. Not to be too detailed on this, but if we consider PSBC being largely stable and corporate clients growing at around 8%, this gives you sort of a volume uptick which taken with our average margin, that needs to be reduced a bit by the SRTs that we are conducting. If you're then considering also that we are optimizing the portfolio and reduce fuel low-yielding assets, then you are actually ending up with an amount that's added to the revenue uplift from deposits actually ends up with EUR 200 million to EUR 300 million to '28. And then in a similar session beyond '28 as we are being prudent with the growth towards 2030 declines a bit. The rest you see in the uptick coming from the replication portfolio.

The next question is [indiscernible] from Bank of America.

Just a follow-up on the NII and loan growth. Can you share with us what's the expectation for loan growth term or more the timing between now and '28 and then '28 and 2030? And how much of the potential fiscal stimulus you've embedded in your numbers?

And then on costs, I mean, I hear you about preserving revenues and being realistic about taking out costs. But don't you think you can actually would have pushed the boat a bit further and do more or you suggest that there is actually -- it's very conservative and you probably could beat that?

And lastly, just on the SRTs, can you update us on how much has been done of the EUR 13 billion of the momentum plan and see you have EUR 5 billion of securitization in 2028. And is that on top? Or what remain to be done from the previous package?

[indiscernible], let me go through the questions one by one. First of all, your question on the loan growth. Until '28, we continue with the expected loan growth in terms of volume of around 8% per year and then trail off a bit after that. Regarding the fiscal stimulus that you mentioned, we have included the current expectation of our Chief Economist, which also means that for this year, we will see a rather ample GDP growth of 0.6%. For next year, we will see the GDP growth in Germany recovering to 1.2%, and that is also fueled by fiscal stimulus. But clearly, we are hoping and expecting for more of an impact to come later on.

On the cost side, fully understood that you are seeing us to be able to do a bit more. But let me also point you at the fact that on a group level, excluding mBank, we will actually decline in our operational cost base over the next years with all the efficiency measures, therefore, countering all of the usual updrift in terms of inflation, compulsory contribution, et cetera. And the investments in mBank clearly are linked towards the announced strategy and their business growth plan that they are having also with a low cost/income ratio adding clearly to the KPIs of the group.

And then lastly, on SRTs, Out of the EUR 13 billion that we have announced with the Momentum strategy beginning of last year, we did transact around EUR 4 billion of RWA relief in last year. I expect this year to be in the region of EUR 4 billion to EUR 5 billion as well in terms of execution distributed across the quarters and then likely another EUR 4 billion to come in '28. We will then add another EUR 3 million, not EUR 5 billion from '28 to '30, mostly to also start replenishing the maturing previous tranches in SRTs.

The next question comes from Jeremy Sigee from BNP Paribas.

One detailed question and one bigger picture question, please. The first one on the NII improvement this year. So very short term, you're aiming to you've upgraded the guidance for the full year. Is that a linear progression from where we are today. You were flat in 1Q quarter-on-quarter. Do we start to see NII picking up already in 2Q and then building through the year? Or is it more back-end loaded? So just the timing as we go through this year, please?

And then my second question, it's very useful and interesting that you picked up on the international activities because that does seem to be a point of contention with UniCredit. Your previous business plan back in 2022 talked about refocusing your international activities to purely focus on German clients and their overseas needs. Where are we in that process? I mean, how much of your international activities are linked to German clients? Or are there still significant bits of business that are done for local or other international clients in that international network?

Thank you, Jeremy. So on the first one, it is indeed -- NII will increase quarter-by-quarter. So you will see already in Q2, we expect higher NII. It's very much linked to the increase also of the replication portfolios, which we have done in the past quarters. When it comes to the international activity, we did indeed decided in 2020, back in 2020 to streamline our international network, and we closed a number of branches sold, for example, also Hungary to [indiscernible] and did some more steps. And we also significantly reduced the business, which has no connectivity to Germany, Austria or Switzerland with the maximum extent. And you see that also on the numbers of Page 9, where you see what are the revenues stemming or which are linked to the international business, which is 37% but you also see on the left-hand side that there's very, very few revenues linked to clients who do not have a DAC connectivity. It's basically only the -- 100 million approximately which are linked to selected future-oriented sectors like TMT and others. And so it's a very, very low number.

The next question comes from Chris Hallam from Goldman Sachs.

Just two from my side. So maybe a bit of a long-dated question, but just on distribution. How are you thinking about the right payout ratio in '29 and 2030? So if I look at the RWA growth, you've given us helpfully on Slide 52, I think you're going to need to be increasing CET1 at '29 and 2030 to stay at or above 13.5%. You said you'll stay at 100% payout until you get to 13.5%. So can we assume that after that point, you'll distribute any excess above 13.5%, i.e., you'll just pull back the payout ratio slightly to, say, 80% plus in '29 and 2030?

And then secondly, on efficiency, maybe I missed it in the comments, but just any comments on the timing of the gross reduction, the 3,000 and the [ 450 ], the phasing of that? And a few of your peers have used -- have commented on AI enabling them to use attrition to work down headcount. And I guess we can see that in the 50% net reduction of the 3,000 FTEs. But is there any scope for that 50% replacement to move lower, i.e., like a higher net reduction if AI improvements in workflow has become a bit more tangible? Or is that 3,000 gross reduction basically contingent on a 50% rehiring commitment maybe?

On distribution, you're right and the math right, but you can assume that our distribution will be something shortly above 90% in '29 and 2030. And when it comes to efficiency, I mean, natural attrition is one of the key levers which we use for those programs for the first program coming from Momentum, which we are, in the moment, implementing as we speak and then the additional 3,000 which we assume will happen in the years '29 and 2030 and beta attrition is one mean which we use. We will also use reskilling, which means that we will try to basically redirect people on other jobs and upskill them to

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And we have a demographic situation, where we can use a lot of [ aged instruments ] who are very socially with responsible to do the head count reduction.

And it's, however, clear that, I mean, we see such a speed in the AI technology and the development that we will definitely review the situation basically year-by-year, quarter-by-quarter because we have already seen within a year, and that's also one of the reasons for the update that so many things have happened that have changed our attitude to certain things. And that I assume will continue also in the next quarters.

The next question comes from Riccardo Rovere from Mediobanca.

Thanks a lot for taking my questions. Two or three, if I may. The first one, I've just seen -- some headlines from Bloomberg, they say that the -- if I understand it correctly, we have agreed already with trade unions around job cuts. I just wanted to have a confirmation around that. This is the first question.

The second question I have is for Carsten, I guess. How can -- you have deposit beta again going up in your region, NII, ECB rates have been EUR 100 million, deposit EBITDA taken out a couple of hundred million, if I'm not mistaken. How can this be possible? I mean your NII -- when rates went up, NII went up and the deposit EBITDA is 40%, 45%, 50%, whatever it is. It's not 100%. How can be EUR 200 million versus EUR 100 million, that's not clear to me.

The second question -- the last very question I have is your target net profit for 2028 is EUR 4.6 billion, which is not too far away from the consensus you have uploaded on your website. So the question here is, is there any kind of prudence in the EUR 4.6 billion target for 2028 and if there is, what's the point of being prudent at this stage?

Riccardo, so on your first question, yes, we signed a transformation agreement with Worker's Council. Yesterday where we agreed also already on what type of social plan we will apply. And then it is, as always, there were subsequent negotiations about the details where exactly the reduction will happen. But overall, we have an alignment and the support, and that's very important, the support of our colleagues from the workers' council.

On the second point, we are conservative people. So when it comes to the deposit better, we just take into account that there is a lot of deposit competition ongoing. And therefore, we are staying cautious on that, and that's clearly also some upside, and Carsten will probably reflect on that in a minute, even more.

And then on the last point, on the EUR 4.6 billion. First of all, I mean you see it also in the difference in the consensus. The consensus has 15%. We have a 17%. One reason for that is that we clearly have a little bit higher net income that's rounding. So consensus comes from the lower end. We come from the upper end of the EUR 4.6 billion because we have indeed a much higher operating results in our calculations. And that is one reason why we end up with a 17% plus capital is a little bit lower in our calculation given that we took into account already the EUR 450 million restructuring costs. And also, we never assume any cost -- capital allocation during the year. That are the key reasons. And I mean there is upside as always, but you also know us that we will only put something out where we now, from this perspective think that this is achievable that we can deliver what we promise and I think it is good -- it has been a good strategy, and it's also a good strategy for the future.

Yes. And Riccardo, adding to what Bettina already said on beta, which is basically the ongoing positioning that we're having, we're [indiscernible], you cited explicitly the bridge that we're having. We currently have a negative EUR 100 million for the full year in it. And please bear in mind that this is always the movement from last year's NII. So it's a delta view towards end of this year's NII. So last year, we had an average beta of 40%. We are now calculating with around 41%. That used to be 42% beginning of the year. So we are now coming down within the year, but we're still having a slight increase in beta expectation from last year to this year. So that is basically why we have a slight decline in this.

Why are we now more optimistic? A, it is our deposit management and the margin management that we're seeing and we also had runoffs of high beta tranches on the personal customer side. So that, in essence, is moving our view on this end and towards '28 and '30, as you know, we do yield the market and the competition landscape and hence, expect a slightly increasing [indiscernible] years.

The next question comes from Flora Bocahut from Barclays.

I have two, one on NII, one on risk-weighted assets. On the NII, obviously, a lot of, if not all, of the NII increase to 2030 is coming from the replicating portfolio given I think you're considering volume growth would be largely offset by the deposit competition. Can we just talk about the potential risk if the rate curve would move in there? Because looking at the Slide 33, where you show the detailed evolution of your replicating portfolio, I can see that only 15% is invested in two years or less. I can see that 55% is invested in 10 years or more. So would it be fair to say that even if the rate curve will move versus your expectations, it wouldn't lead to a significant deviation for your replicating portfolio contribution towards 2030?

And then the question on RWA, I'm just trying to understand how aggressive or not the securitization targets that you present are. Can you just give us maybe something like how much of your RWA relief you already have today in euro billion from securitization? Or how much of your CET1 ratio release in basis points from securitization that would be helpful. And just on the portfolio management, what do you mean there?

All right. Let me start with the NII. I think your interpretation of the NII and the functioning, the mechanics of the portfolio are absolutely correct. The portfolio is a long-standing portfolio, and we have different tranches in it. The split is exactly on Page 33, and you can expect that with every monthly role in the portfolio, we adjust to the current yield curve. And for the long-standing tranches, that means we have a relatively high pickup every single month, if we're rolling, especially coming from the older tranches that come out of the negative or low interest rate environment. And that also means that if the yield curve changes, clearly, the whole portfolio is moving very slowly. To put it differently, it also -- you can see that on that page takes us quite some time to bring the current average yield of 1.23%, up to market level. So to the upside, it's also dampening, but the positive is if there is a change in the yield environment, this is also going to be dampening and stabilizing. So we have a really reliable and structurally sound contribution over the next years, as you can see.

Then secondly, on the RWA and the SRTs on that, as per end of last year, we had a total relief in the group of around EUR 9 billion in RWA, EUR 2 billion coming from mBank, EUR 7 billion coming from Commerzbank AG. And then together with the relief that I've cited earlier in Chris's question, I think that was -- we will see another EUR 4 billion to EUR 5 billion this year and another EUR 4 billion next year. mBank is going to be relatively stable, and then we're mostly working against roll-offs in the following years.

You had another question on -- Sorry, you had a question on portfolio optimization. In terms of portfolio optimization, what we are looking at when growing our business, clearly, we're also constantly reviewing our portfolio in terms of efficiency of the underlying business. And when we're talking optimization, we're mostly looking into also exiting engagements where we have a lower efficiency business

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connected business that we can actually achieve with it. So that's the major part of the portfolio optimization. So it's business oriented, much more than model oriented.

Can I just follow up on the question on the SRT contribution. Basically, what was the stock of SRT you already had before the contribution that you described on this call, was it 0? Or did you already have some contribution from that?

Yes, we did indeed actually already have contribution. So SRTs means that we've been using for years. I think we had around 5 or 6 transactions ongoing already before we started with momentum beginning of last year and we had around EUR 3.5 billion, if I'm right in remembering this from relief already before we started into momentum. So we started picking up the pace a bit. But as you all

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how we see this in light of the overall portfolio. And we think we have a prudently small amount that we're looking at. And what's important to mention, we use expertise exclusively to also free up capacity that we're having in order to redeploy these resources. So we started with that before and have now pretty much double digit since start of Momentum.

The next question comes from Borja Ramirez from Citigroup.

I have two. Firstly, I would like to ask a high level on the strategy, I saw that you should have very strong growth in corporate loans. I think it's plus 16% year-over-year. I would like to ask how do you prioritize organic market share growth? Maybe could you consider any bolt-on M&A? Because I think you still have a bit of excess capital by 2028, above that 13.5%. So maybe that could be an option.

And then my second question would be on the deposit growth. So I see you have a conservative assumption on deposit beta, 44% in 2028 and higher in 2030. I would like to ask how do you see the growth in the deposit volumes going forward? So if you could provide some color on the overall market dynamics in the German deposit market, please.

So on the -- I mean the corporate loan growth is clearly part -- a crucial part of our Momentum 2030 strategy when it comes specifically to corporate clients. And I mean the growth on a year-on-year basis was 16%. If you compare a quarter-on-quarter basis, it's still 5%, which is also very important. And what we expect for the coming quarters is probably a little bit of shift again towards Germany, given that our expectation is that investments in Germany will start as hopefully also the reform exercises of the government will progress. And we have, as you rightfully say, we have enough space for growth, and we are absolutely determined to use it. However, it must be RWA efficient growth. That is one of the requirements which we have. When it comes to the deposit growth, it's a conservative assumption so it's an adjusted 2% growth, which is very much in line with the market.

The next question comes from Anke Reingen from RBC.

I just wanted to ask about the cost slide 49 and your confidence about delivering this absolute cost level. I think the inflation salary adjustments in the past probably was an area that provided some volatility versus guidance and I think this is like maybe like 1.4%, although I think your embedded inflation in the plan is more like 2%. And if inflation comes in higher, I think in the past, you also had higher costs from employee plans. Should we have the confidence that you'll be able to offset those headwinds with additional efficiency gains?

And then just a question on Q1 in terms of the corporate bank. I understand that Q4 NII was obviously very strong. But if we think about the Q1 level, is this like a run rate you expect to jump off for? And should it be improving? Or is it more, given the uncertain economic environment? Would you think that's something that you see some near-term headwinds?

So Anke, thank you very much for your question. So our confidence is very high. If we can't do something, then we can manage cost, and we took into account. Clearly, the inflationary effects, both in Germany [indiscernible] locations abroad and it's also very clear if you see differences, then we will manage against that. So high confidence in delivery on that. And you have seen it also in the past. I mean the only thing that we can't really control and which is a good thing is if our share price is increasing further because then our available long-term compensation will increase. That is something which is hard to predict, but that I think is a good signal because it just means that we are overdelivering also on all our other targets.

When it comes to Q1 and NII for the corporate bank, yes, so it's a structural increase, which you can assume, and that is also true for our corporate clients.

The next question comes from Stefan Stalmann from Autonomous Research.

I have one [indiscernible] question and one big picture question. So on the numbers, and I apologize if I missed that already, the EUR 450 million cost to achieve, are you planning to spend that in 2029 and or 2030? Or could it already happen earlier than that? And the big picture question, you mentioned earlier that the 12.7% RoTE in the first quarter was excellent, and I think that's true. But you almost plan to double that return to 21% in coming years. And you assume that basically most, if not all, of your AI efficiency gains are flowing to the bottom line. And the only competitive impact that you explicitly allow for is on the deposit beta. It looks like you are assuming that neither your clients nor your competitors are reacting in any way to the efficiency gains that they will probably also achieve from. So I guess the question is, how do you think about the competitive threat to your medium-term targets given these aspects?

Thank you, Stefan. So first, on the restructuring costs, I mean, it very much depends on the speed and progress and how we do the negotiations with the workers council. So in the moment, there might be assumption that it could happen in 2027, but it might be also that it's spread across years so that we're very much dependent on the negotiation. When it comes to your second question and the RoTE and how do we get from 12.7% for first quarter to the '28 and 2030 numbers. First of all, I think it's very important to say that this is not hockey stick, and we have a miracle happening in the last year, but it's a step-wise year-on-year improvement, which we assume. And it's broad-based. It's -- on the one side, it's clearly revenues, and we basically see growth in our net commission income, and that is true for mBank. It's true for corporate clients and private clients, and we see a lot of upside here. I talked about the wealth management business as one example but it's same when it comes to our brokerage business when it comes to capital markets business and so on. We have not assumed that competition will lighten. We did not assume any improvement of margins, not at all, [indiscernible] contrary when you think about the deposit better. And on the NII side, I think it's pretty clear that given what we have done with the replication portfolio, we just a year-on-year improvement on the NII, coupled with the growth rates, which we expect specifically on the corporate side. And if you just think about the investment programs all necessary in Europe, and I mean we have so many reports about it. [indiscernible] you report or others and we also see what is needed, for example, in Germany, we think that there is a lot of growth in the system, and we intend to participate in that despite all the competition we are fully aware of. And this is coupled with lots of cost discipline. And AI will help us. It will help us on the customer experience side. It will help us on the revenue side, but more importantly, it will help us on the operational excellence side. And we see it already today with all the use cases which we have in place that it's freeing up capacity. It's freeing up capacity for doing even more client meetings, but it's also freeing up capacity and the back office function to organize the growth. So one of the assumptions also that we have more growth, more business, more clients to serve but still, we can do that with a very similar amount of people. And therefore, we think it's a very viable way and a very reliable path. It's aspirational but absolutely achievable.

The next question comes from Tobias Lukesch from Kepler Cheuvreux.

Also three questions on my side. One on the SRTs, one on the RoTE drivers and one on the efficiency gains again. On the SRTs, Carsten, I think we talked about that over the last quarters. Could you remind me if you say 16.5% in RWA benefits against the [ potential ] 210 base, that makes 7.5% to 8%. Again, and with the developments, where would you see a potential threshold in terms of -- or ceiling in terms of RWA gains from these SRTs? Is it 10%? Is it a 15% or 20%?

And secondly, on the RoTE drivers, Page 16. I was wondering what the 1 percentage point of the [ capital ] means if I look at the RWA growth and understand that, that might be from the RWA growth, it will explain, let's say, 50%, 60% of that. That would be interesting.

And secondly -- thirdly, on the efficiency gains on Page 49, the EUR 0.5 billion between '26, '28 and the additional EUR 3.3 billion of '28 to '30. Could you maybe put a bit more flesh on the bone here, where this is coming from, how we could expect that?

Let's start with the SRTs. The question, which level we are comfortable with and how far we could go to sort of further RWA release, I would answer we're probably fine and comfortable with the level that we had at the moment. We think we can extend that a bit further, but there's two aspects playing into this. One is the absolute amount that we are having, and I think there could be a bit more room above what we're having. But we're also keeping a clear eye on the rollover of maturing tranches. So we are looking into the full sort of maturity range over the next years, which is also why we said we're going to extend other -- the SRT issuance beyond '28, but to a slightly lower degree than what you see today in order to replenish what is becoming maturing at that point. So current level, we're very comfortable with slight room to grow beyond that.

Then you asked on the RoTE and the 1% in the bridge towards the longer end. I mean, first of all, we are now into a few extra charges that we will be seeing by restructuring expenses, which also means that we might be returning more than the 100% level technically given that we are excluding this according to our capital return policy, and that, in turn, would mean that we are actually having slightly lower RoTE on that end.

Then last point on the efficiency gains in the bridge again in the corporate client portfolio and the portfolio overall. When we are talking about efficiency gains, I mean, there's always two ways to look at this. One is efficiencies in the RWA by model adjustment. This is what we are doing only sort of on a prudent level according to the general update of the models also in full accordance with what the regulator discusses with us. But most importantly, we are constantly looking into optimizing the portfolio when it comes to flushing out, let's say, lower yielding and lower efficient business and exchanging that with higher-yielding business. So I think this is the question that you had.

Yes. Carsten, if I may. On the efficiency question, it was a bit more on the bridge on Page 49. On the cost bridge, How are these EUR 0.5 billion, EUR 0.3 billion efficiencies are being reached?

Well, this is a combination of showing efforts, head count and therefore, head count reduction, it's about the reduction in external costs specifically on the IT side, and that's very much driven also by AI and the replacement of, for example, external software developers in the application environment. and things like that. So multiple levers. And specifically, on the external side, we expect already some steps pretty early. Take, for example, our call center capabilities. We have a lot of call center -- external call center capacities and through the introduction of agent assist last year, we expect quite some impact short term at this end.

And let me just add on the 1%. I think one point Carsten did mention, and that is prudence. So we really wanted to make sure that we have a reliable RoTE target out there. So there is also some prudent assumptions which are embedded in the 1%.

The last question for today is once again, Riccardo Rovere from Mediobanca.

Thanks for taking my quick follow-up. When it comes to the common equity Tier 1 target, the 13.5% in the previous strategy was supposed to be achieved in 2028. Now I see that, that has been moved to 2030 or 2028. Now you said the 13.7%, if I'm not mistaken. I was just wondering what is the reason why the 13.5% has been moved by further two years? And what is the reason of having 14%, 14.5% or whatever the number is, throughout such a long period of time? So it's like saying that 13.5%, again, has been moved by a couple of years. I was wondering why.

Riccardo, great question. I mean, first of all, on the target of 13.5%. I mean we just simply do not have another number yet. So it is clear that there could be a rightful expectation that with this increasing profitability, our MDA might come down. But for the time being, we just planned with our actual MDA. And therefore, I think it's prudent to also assume that for the time frame, but I would also share the view that at a certain point in time, that could come down given the strong profitability we are currently showing and will show in the future.

And when it comes to 2028, yes, I mean, it has also to do with our increasing profitability and the fact that we have restricted that to the 100% payout before extraordinaries, and we will see it's a dialogue, which we have to have with our [ work ] later. And before we haven't had a dialogue, we stay very much to our capital return policy, which we have put into action.

So Bettina, sorry, if I understand it correctly, it's like saying that your profit is kind of EUR 400 -- maybe million higher in respect to the previous targets but that should be paid out completely by your RWAs? Maybe and I haven't checked I admitted maybe with the SRTs will be a bit lower than initially foreseen in the previous Capital Markets Day. Is that the case why the 13.5% go to 13.7%?

Yes, it's just -- I mean it's an equation out of many things, including also RWA growth expectations and stuff like that. And with the increased profitability, the capital generation on the one side, but also the RWA development and our RWA efficient growth. That's basically what's happening. But I can ensure you, we understand the expectations from the market. And I think if you just sum it up what we have returned already, but what we will also return in the coming years. I think it's a good story.

Thanks so much, and we'll receive the one final question, which will conclude the Q&A session from [indiscernible] from Bank of America.

Just last question, please. So now you presented your plan and your vision for the bank by 2030, you answered to UniCredit's comments and statements. So you mentioned that you stay open for discussions and you publish your reasoning statement in due course. But I just want to understand if you are now in a mindset of let's extract maximum value. The trade will happen because it's up to shareholders, but your job is to extract the maximum value or you are more in the camp of we still have a chance to stay independent. And in this case, what tools you can actually bring beyond what you presented today?

Thank you, [indiscernible]. So I mean, first of all, our job is to present a strategy and to present alternatives for our shareholder. I think you have seen that we are very convinced of our Momentum 2030 strategy, which puts at very, very good results for our shareholders. But it is at the very end, the decision of our shareholders to decide what they want to do. Our job is to, first of all, keep the business model stable to create value for our shareholders but also for our clients. And to move forward and to not let us or our staff get distracted by anything. But it's also very clear, as we said that we always stay open for discussions with UniCredit. We, however, have two key requests and one is that one should take into account the strength of our business model and of our franchise. And second is that there is no sense that our shareholders give up their shares of Commerzbank and the upside attached to it without a premium. And that are the two things. But besides that, we are always willing to sit down again.

Okay. So yes, thank you very much for your attention. We are delighted to ask or to answer any questions after this call again, our Investor Relations teams is ready for you. And otherwise, I wish you a beautiful weekend later on. Thank you.

Hi. Good morning, everyone. I'm pleased to be joined today by Bettina Orlopp, CEO of Commerzbank. Thank you for being with us, Bettina.

Thank you, Giulia.

I have plenty of questions for you. I'm sure the room has as well. But first, as always, we start with a polling question. If I can have it please. Okay. So not related to UniCredit. We will get to UniCredit in a second. But what is the best use of excess capital for Commerzbank beyond the planned 100% profit distribution.

One, pitch for additional buybacks of the regulator; two, pursue bolt-on acquisitions. Three, pursue organic growth; or four, invest into AI and further cut costs. Buybacks. Okay. We will get to this in a second, but let me start with the topic of the day. UniCredit announcement yesterday, their intention to increase the stake in Commerzbank. Can I hear your thoughts?

Yes. Thank you, Giulia. It's clear that this is topic number one. So let me just do three statements at the beginning, and then we probably dig deeper into it.

So first of all, it came as a surprise for us. It was again not pre-aligned. There was no pre-information, anything. So we learned it yesterday, same as everybody else, by the ad hoc. And it was a surprise because it was again a change of narrative when you compare it to the February messaging. The other surprising thing in relation to it is the offer itself because it is at a very low price if you compare it to our target prices. And it comes with this messaging, where we want to go beyond the 30%, but we do not want to get control, which per se is not fitting together, and therefore, it feels a little bit like a tactical move.

And the second point belongs to that, and that is this messaging that this is the mean to get us to the table to discuss. And I mean, I don't get it basically because we have said since the beginning of the year since October 2024, we clearly said that we would sit down and evaluate a proposal, discuss a proposal if we get one and compare that in the interest of our stakeholders, starting with the shareholders, with clients and employees, the stand-alone strategy with the combination.

But for that, we need something in our hands. And one would expect that someone who has moved now so far has something in the drawer, which they can share with us. And that is the ask which we have. We have now since 15 months, we always said that. I also say that publicly and also with colleagues that they need to be aware that if we get a proposal and we sit down and this proposal makes sense, we will recommend that.

But as long as we do not have a proposal, we are back with our stand-alone strategy, and that is my third point, this very promising and successful stand-alone strategy called Momentum, which we are in implementation. We have delivered in 2025 is a record result. We have a very good start for 2026, have a very nice guidance out there for 2026. have good targets out there for 2028, and we will present updated and upgraded targets in the course of this year, not only for 2028, but 2030, making specific use and that fits to this pole by our investments into AI. So all in all, for us, it's strange and brings us back to the question, why not putting a proposal on the table?

So let's expand on that the proposal. What would you like to see?

Well, what you would always see, and I mean, we have said that also several times, and that is a normal behavior if someone is knocking at your door and say, should we do something together?

Normally, you come with a draft. And in our case, this draft would include clearly the topic of synergies. What are the expectations on revenue synergies, probably negative revenue synergies given the overlap -- but then clearly, positive cost synergies, restructuring costs, speed of integration, integration structure, price related to that, very important for all the ones sitting here as our investors because our target is to create value for our shareholders, for our stakeholders, and that means we need to know what is the potential premium, which we can see.

And then it relates to governance, organizational structure. One should not forget that a combined entity would have as biggest market, the German market, given the sizes. And then it's also because we have not only the shareholders and stakeholders, but we have also clients and staff. There are the stakeholder issues and social topics one need to address.

And the thing is that I think we all agree to the fact that takeover integrations are always difficult, and you should only do them if they are value creating. But it's also very clear that it's very, very tough to do it not jointly, but in a hostile environment.

Yes, absolutely. And can I follow up on stuff? It must be difficult to motivate people when these type of headlines are out. So how do you achieve that?

But I think putting a lot of focus on why we are here and what we are doing is -- and we made it very clear from the beginning on that we really need to stay calm first. second, that we really need to focus on our role. And our role as Commerzbank is to be there for our clients and to create value for clients and clearly for our investors, for our shareholders.

And that is the thing and the task, and that is also what -- where we -- the whole organization is focused on that. It is full steam of integrating the different topics we have from momentum, implementing that. We are now, as we speak, we are thinking about the elements of our AI strategy and how that can even accelerate the profitabilization of the bank because we have made very good experience over the past year with a number of AI use cases, and that one is now to be embedded in our future plans.

And it's really focus, but clearly, yesterday has been a distraction. And clearly, you go out and you then try to calm down people, but it takes a while to get people back on track.

Yes, I can imagine. So in the absence of a proposal, let's focus on defense strategy, maybe the best defense would be to push the share price up. And typically, that happens when beat raise. So let's discuss -- you have an ambitious 15% ROTE target, but then you like the word floor, I guess. So how can we see -- when do we see the upside?

Yes. I don't like the word defense actually in this context because we are not doing defense, we are doing value creation, and that is our task. I mean, we have the commitment to create value for our stakeholders and it starts with the shareholders. And what we have proven with all we have done over the past quarters is that we are committed to create value by moving bank forward, by increasing the profitability, by increasing capital return, and that is what we also intend to do in the upcoming quarters.

We have already aspirational targets out there with a 50% ROTE and the 50% cost income ratio. But we made it already clear 4 weeks ago that is, as you said, it is very likely that this is more a floor when it comes to the ROTE and the cap when it comes to the cost income ratio given the movements we currently see and given also what we see already for 2026, where our original plan just a year ago was to reach a cost/income ratio of 56%, and now we are already down to 54%.

And therefore, it is very clear that we think about different measures. It's on the growth side also because we see that AI can free up relationship capacities and stuff like that, and that can lead to further growth. But then clearly, also on the efficiency side, when you think about where we can be much quicker, where we can avoid costs through applying AI. And then clearly, some other elements in place, the interest rate environment, which is at least currently an attractive one for us, and we see that also in the development of NII in the past years and also in our guidance for the coming years. But then it's also the point of the stimulus in Germany, where still there is more to come and we probably have not seen yet the full amount.

Thank you. And I want to open it up to the floor. I will do shortly, but let me just ask a couple more. So from a geopolitical perspective now, the German fiscal stimulus also European focus on competitiveness is great. On the other side, you've got, however, an Iran war, which impacts, I would say, Germany, perhaps more than other countries. So how is that impacting your clients and your business at the moment?

Well, short term, not yet. It's very clear because our exposure to Middle East is also very limited. But clearly, the second round effects are the ones where we also now focus on. So if the energy prices still stay up we see more inflation that will -- and that is also the assumption of our economic team is it will put a drag on our GDP growth assumption. We still currently assume that there will be a 0.9% GDP growth for Germany this year.

If the war is longer and the energy prices stay up and there is more inflation, there is a risk that this will be a significant lower like reduced by 0.4%, still grows, but then very limited again. And then the question really is what does it mean for us? Is there an impact on the loan growth question mark because we have shown also last year, when we had a 0% growth in Germany that we produced a 10% loan growth. So that one is to be seen.

And then the second part is clearly on asset quality. What does it mean for our loan portfolio. And there, we are anyhow always a little bit cautious population. So we have laid out this risk result guidance of EUR 850 million, which is already a little bit an elevated level when you also now compare it to 2025, where the number was lower, but this gives us a certain flexibility, but clearly depends also on the length of the crisis.

Perfect. And actually, since you mentioned the EUR 850 million, that does sound conservative. Consensus is below that. But every week, we have a different topic ping up on the asset quality side. One is oil, we just touched upon it. There is software, there is private credit. So where do you see the risks to this guidance to the upside or to the downside?

But the truth is we have a very well-diversified loan portfolio. But what we all know is what can happen is we finance a lot of medium-sized corporates. And just for that alone, you have one or two more defaults in this larger bucket. risk result can come in higher in a quarter or also for a full year.

So it's just very conservative to rather stick to the higher end. When it comes to private credit, our exposure to the U.S. is not there, a direct exposure. So that's at least assuring. But there are other parts, and that is the exposure to German corporates. We know that not all industries are progressing in the same way. But that is reflected in our risk models, and that is also reflected in our risk result guidance. So that's really how we manage the things.

Perfect. And if I can come to the more positive part. So Germany is stimulating and the defense spending is definitely there. Hopefully, the infrastructure is coming as well, and Commerzbank is uniquely positioned with your Mittelstand franchise. So how are you positioned to benefit from that? And what are you seeing on the ground? Because I think on paper, you are definitely positioned to benefit from it. But then the Mittelstand are quite cautious and not to necessarily invest

While the board clearly didn't help to increase the investment plans of German Mittelstand. What we currently see is clearly already effects unfolding when it comes to defense to infrastructure, numbers are developing exactly as planned, and that then has spillover effects, positive ones on suppliers and manufacturers. So that one is clearly there.

The topic which we have, and it is also a public debate is about reforms besides the stimulus. And there, there has been progress, but there is more to come, and there's also the ask of German economy, and we do that via the Made for Germany initiative to really see more reforms so that people are really moving and feeling prepared to also invest in Germany because truth is and we see that also in our loan portfolio that people invest specific larger ones, but they do that outside.

They do more localizing of business, which also has a reason because of the tariff situation, but it's also about this belief that reforms are sustainable in Germany, and we need to see more to come. And then it would be great if we do not have every second week another crisis. because if you're an entrepreneur who is having a family-owned, not listed company and the fortune of your family and most likely also some larger part of family is dependent on that, you will be always more conservative than some others.

Clear. Let me see if the audience has questions. I wasn't expecting that. So let me ask you another one. In Q4, you commented that Q1 was off to a good start on revenues, but also on the cost side. How has that progressed since the last time?

Yes. I mean we feel comfortable with our guidance. So I mean, February is always a short month. So that one is always a little bit different to all the other months, but we had a very good start in January. March, I mean, volatility also helps. So very confident with respect to the guidance we gave. And more importantly, we also made very good progress on the AI side when it comes to really rolling out several programs to our complete staff and other things.

Yes. And I actually was going to ask you about AI next because I think you are passionate about this topic, you are deploying it. So can you give us some example of the value you are able to extract in AI?

I mean, AI is a really important topic for us, and there are different perspectives we need to take as a bank. One is the one which you all as investors also do with other industries, and we do that as a lender. We really need to figure out what does it mean to our loan portfolio. So who's exposed and who's benefiting from AI, who's less impacted by AI, who's very quickly in adapting, who's probably a little bit slow in adopting.

So that is an important topic for us, and that is something for the corporate client and the risk side. The second part is really coming from the client perspective, how clients look at AI, how will they use AI to get in contact with us -- and then we also need to keep in mind that we have very different client groups. We have the super digital native clients who jump on every tool we offer them like we have an Avatar and [indiscernible] app where you can easily ask questions with the avatar, you can block your credit card and things like that. Beautiful.

But unfortunately, it can be only used by the ones who have mobile credentials, which is in many countries, I know already not and not a problem. But in Germany, we still have a lot of analog clients who even do not have mobile credentials for the mobile banking. So that is something where we also put a lot of focus this year on how to get more clients onto the digital channels and to really help them in doing their basic services on the digital channels.

And the third part is the part which you asked for is where can we apply it. And truth is when looking at a bank, you can apply it basically everywhere. Not always it makes sense because there should be always a business case and one should not forget that there's cost attached also to AI and dependent on whether it's a high-risk process, you need to make sure that you have enough control, human touch control against it.

And sometimes it might be that it doesn't make sense, but we see that we will apply it, and we're already applying it in every corner of our bank. It's for the relationship managers preparing and wrapping up the client meetings. It's for the advisory centers where we have already introduced an agent assist who's transcripting calls, providing solutions, summarizing the call for the client history and all these things. We use it in complex processes like KYC, alert monitoring. We use it in detecting fraud when onboarding clients. And we use it also in the central functions like we have just introduced it for contract management and the legal department. And I could go on and on and on.

And what we now try to figure out what does it mean for our cost and our revenue base for 2028, but also for 2030 because the developments are much faster than we thought last year when we announced the momentum strategy there would be. And the good part is we are not newbies to the whole thing. We started with big data and analytics back in 2017, 9 years ago. We had our first large language model doing large analytical work in 2019.

We have lots of use cases, and therefore, we have a very good starting position to work with that and to accelerate that because we are also not too complex, and we have still -- because we are in a high-cost location, we still also have a cost/income ratio, which gives you some room for improvement actually, which is less easy when you're anyhow in a very -- in a low-cost location.

And then last but not least, and that is also very important, and it's equally important to the client part. And that is the part that AI technology only works if you make sure that the people are applying it. So one of our key tasks for this year for leadership, but then also for complete staff is to make sure that people are using the tools. We have rolled out large language models to all employees that they are using it, that they see the efficiency, that they see the benefits out of it, that they are not scared about it, but that they are skilled on it.

So we train a lot. And it's really -- that is a cultural change we all need to do in the coming months and rather quicker because the development is at such a speed, which we currently see. And that's how we look on AI. So it's a full program, but it's very different perspectives you need to take.

Absolutely. So if I can unpack some of that. On the cost side, I think you have a plan to offshore some people. But in fact, perhaps AI can help. with part of that? Is that one of the potential upside?

Yes. I mean, it's always a question what do you do? I mean, do you now -- because we have a reduction program planned in Germany, and we are also recruiting our size because we also need certain skills, IT skills, et cetera. But to some extent, we really need to know are we really building up additional capacities?

Or is that not something which we can now be dealt with the AI. Same holds true. We have external call center capacities we use as an overflow and to make sure that we handle the volumes. It's pretty clear that the first ones, we will reduce our external call center capacities.

Perfect. And the other aspect that you touched upon is how do you assess your corporate loan book? Because when we lend to corporate and the corporates might be significantly disrupted by AI, that's a risk. How do you go about that?

Yes. I mean we have anyhow a strategic portfolio review, which is done and performed by corporate clients together with risk management, and they do that basically every month where they really go through the portfolio to figure out what might be the impact. I mean, it was very important during the pandemic to understand what the impact is. It was very important when the Russian invasion started to understand with every new topic, we need to understand where our clients are.

And same was true for the ESG topic and where are they moving and are they moving at the right speed and the right direction. And then clearly, for the larger ones, they anyhow have their own programs and concepts and AI programs. But specifically for the medium-sized corporates, it's also our task to help them to put a connection to centers to provide, I would say, best practice examples to make sure that they move in the right direction by best practice sharing. And then clearly, it's also not a secret that we will adjust our lending strategies according where we see industries moving to.

Perfect. Let me check back in the room if we have questions. We have one over there.

And at the Capital Markets Day for 2028, you gave us guidance for cost/income ratio, but you also mentioned a range of EUR 6.5 billion to EUR 7.1 billion of costs as an aspiration within that. Does that guidance still hold? And if not, why not?

You're referring to the absolute cost growth versus cost-income ratio. I mean, given that we now constantly improve on the one side, our cost/income ratio and bring it down. I mean, one part is clearly the revenue side, which is developing more nicely than we thought. And that will be one part of the equation.

The other part is clearly what happens on the cost side and why we had this increase of the cost side up to 2028. That is one point what we are currently examining. Is this cost baseline still holding the same? Or is it developing differently? Clear is that the 50% is the minimum we want to achieve and the likelihood that we will stay below the 50% is pretty high, and that will be the result of higher revenues and probably even more cost discipline.

Great. Let me see if there are other questions. Okay. So we managed most of the fireside chat without even talking about NII. So finally, we get to an important topic. Comdirect launched a deposit campaign in Germany in January and the guidance is for 42% pass-through, which is up from 40% to allow for this type of campaigns. On top of that, I would say the competitive environment has always been fierce in Germany, but it's, of course, getting perhaps even tougher with Credit Agricole, Chase openly talking about entering the market. So how profitable are these campaigns? What value does this add to your top line?

Yes. I mean that's a fair question. And I mean this attacker product, which you see basically since the year is very different to the first attacker products, which we had seen at the beginning of the cycle because at the beginning of the cycle, we saw basically attacker products, which were still below the ECB rate. So producing regardless on how many clients would stick after that with you as a bank would be profitable because you were just still gaining money.

Now it is different because many of the attacker products are far above the ECB rate, which means that this is only a smart case if you have enough interesting options you want to fund with, which create a certain profitability or that you also make sure that there is a stickiness in the deposits so that people, even if you reduce the interest rates on the attacker product, they will still stick with you. And I think everybody is currently figuring that out. And I think it is important to stay really vigilant and cautious on that.

What we observe currently is there is this group, which we call the interest rate surface, hoppers, you name it as you want, yes. I'm not sure whether I like hoppers or surface more, but it's the same group. It's a group which is digital native because we see it more in our case, for comdirect brand and then clearly with the ING, DKB and also the neobanks and the new players coming on the scene because you need to be digital native because you must be prepared to open up an account, then move your call money to that, then when the attacker product ends, they move to the next online account.

So you need to be some kind of digital nature to do so. And it's also very important to note that people do not move around with the key accounts, so house bank accounts because nobody really is prepared to every 6 months tell his employee or her employee that the account details have changed again. So what is important to note that everything which is on current accounts, the side deposits, is normally not touched by this account or deposit war. It is really about the coal money.

And there, it's about the coal money or a specific group, which is prepared to move money around and do this extra effort for, I don't know, 1% advantage on a EUR 30,000, EUR 50,000. And that is certain type, and this competition is clearly getting a new player, whatever JPMorgan is entering this chase. But it's -- they are all hunting, I would say, in the moment very similar group of clients.

Great. Just a follow-up on that. The market has been testing this theory that with the AI agents actually, the trend that you described will become way faster in therefore deposits way more competitive. Do you subscribe to this view?

Well, I mean, one, again, need to -- I mean, it's a regulatory environment. So we have already today the platforms like Raizen who are helping clients in picking the best interest rate offer, which is in the market available. But truth is also that the clients still sit with each and every bank they are moving to. So you have to open up an account and then you have to move the money to that. So this platform idea and whether it's done by an AI agent or it's by a platform, it's very similar. You have that already today. The thing is that to do it really more quicker, you only have -- I mean, you only have still the situation that the clients need to open up with each and every bank they want to move the money to, they would have to open up again and again and again an account.

And why is that so? -- because we, as a bank, cannot accept any money from someone we haven't KYC and have under close monitoring. The alternative would be that the company providing the AI agent is acting as a bank with all consequences when it comes to regulatory environment, leverage ratio, liquidity ratio requirements and stuff like that.

But then they would also need to onboard each and every client and KYC it and make a transaction monitoring, everything when they would then like to send liquidity to different banks. So it's -- the one thing is not very dissimilar to the other one. And the other thing I can't see that someone is really prepared to really get into the banking license game.

Yes, we had raising here yesterday for our Fintech Day. So exactly. That's also the answer I think about. It already actually exists. Yes. Okay. And then another question on fees instead. So you had quite nice growth in '25, 6% and then consensus is expecting 6.5% CAGR over the next few years. So what are the key levers for growth here?

Yes. And I can say that also 2026 is progressing exactly in the direction we want that. So very much in line with the guidance. And the levers, and that is a good part on it is really multiple. We have on the one side, we have clearly mBank, which was more focused on the payment side, but what is now and also Poland is getting a pension reform to increase the investment culture in Poland and mBank is well situated to also take a benefit out of it, whether this is already the case in 2026, not sure.

But this is also a growth area for mBank. Then we have our corporate client side, where one should not forget that with every loan growth, there is also a link to net commission income growth, but it's not only about NII when it comes to loans, but there's also an NCI part in nearly all the loan agreements. And you clearly have the capital market business where we all know that some kind of volatility helps in the moment, no surprise. The whole FX business is a good one. And then you also have payments business also in place for corporate clients.

And then again, when you look at private clients, it's multiple levers. It's the payment side, specifically when it comes to the small business clients we have as part of the private clients, but it's also account fees. We have just changed the model for all account fees, which drives net commission income.

But then you have Comdirect, which is very much driven by transactions and no surprise. Lots of volatility means lots of transactions. And then you have the wealth management, the discretionary portfolio management with more wealthy clients on the private and the wealth management side, private banking and wealth management side, where, yes, constant increase in volumes also helped to drive revenues.

And then there is something which we're driving a lot and where we also have the expectation that the upcoming pension reform will put an additional booster on it, and that comes to -- for the mass market, the whole topic of also security savings plans and things like that, which are small at the beginning because people are saving, I don't know, EUR 50, EUR 100 every month.

But if you then, first of all, you roll it out to many, many clients and then it's piling up over time. And that is also one of the concepts in the pension reform to support more the -- what we call the column 3 in the pension system, which is what people do privately and subsidize that with tax advantages so that people are getting more and get more the courage in not only saving the money on the current account or in the call money or at home, worst case, but to really invest that.

And that the security savings plans are a good mean. And they are also one lever which helps us specifically midterm and long term to secure the revenues we expect on the net commission income side. So multiple levers.

Yes, quite a few. And if I follow up there, so you are optimistic about the pension reform. -- potentially, we get something more in June, I guess. And also, we just heard from Commissioner Alb on stage about the efforts on the savings and investment unit. And I know you're close to the regulators, of course. So what is your ask? And how confident are you that we get close to that?

Yes. I mean for us, as banks, one is really important and that is where we also talked a lot to the regulator, and that is the securitization framework. it's very complex, lots of regulation and there are now proposals out there. There are some kind of divulging when you look at the one which came from the commission and you have the rapporteur who did something, you have the -- then you have the council, it's moving in the right direction. It will hopefully support the, yes, revitalization of the securitization market in Europe, which is still very, very small in comparison to the U.S.

And the other part is really the part which we have just discussed, and that is -- I mean, our capital market in Europe will only get deeper if we make sure that we unlock the potential sitting on our deposits. And Germany is not a great example. I mean we still have only 70% of German savings, of which only 40% currently are investing in securities. The good news is that Gen Z is much smarter than the rest. So they are much higher in their numbers, but still.

And we are, however, not an exception in Europe because there are other countries who are doing the same. And what we really need to make sure is that we put enough incentives out there as banks with attractive products, but then also from the governance to make sure that people feel supported in doing investments and therefore, not only securing their retirement plans, but also in making the capital market much more deeper because the more capital we have, the biggest disadvantage we have when you look to the U.S., but also to Canada is they have this huge, huge pension schemes, which can invest a lot of money, and we don't have that. at least in large parts of Europe. There are some who have been a little bit smarter than others.

Great. I'll check one last time. No? Okay. So then my last question. I would like to close the way we started. So with the polling question. How do you agree or disagree with the results?

Yes. I think -- I mean, at the very end, we will do and we currently pursue all the four things. So they are important for us. And I would start the order differently. I think the most important part is how to push organic growth.

That is something which is -- and that is linked to the fourth point, which is investing into AI because AI is there to foster growth, but also to support efficiency gains. So that comes together, and that is the organic part which we have. And that will be always our first question, what do we do with our profitability? Do we have ideas on how to invest and how to even increase further our profitability. That is always question number one.

Question two is then, are there any interesting acquisitions out there that they need to fit to the requirements which we have when it comes to profitability and also the possibility to really integrate smoothly. And then the last part is capital return. And then on capital return, we have two different options.

Apparently. We have dividends, and we have share buybacks. And the thing is that dividend, we understand we want to have a very nice track record of increasing dividends but no up and down. So we really want to have a constant track here.

So that leaves us for the rest of share buybacks, and we will continue that. And I think it's also worth to note that share buyback program -- share buybacks from our side are also not a problem for our largest shareholder because there is no way that someone is getting kicked above 30% without not being able to put some countermeasures in place. That's also very important to state because there's always a couple of months of prewarning, number one.

And even if for whatever reason, it happens, then there is a grace period of the regulatory authorities where you can go below the 30%, again, if you don't want to be kicked above the 30%. So what we will do is still in the interest of our shareholders, and we think attractive capital return is part of our story, and that is beneficial for all our shareholders.

Excellent. Thank you very much, Bettina.

Thank you.

Hello, and welcome to the Commerzbank AG conference call regarding the fourth quarter results 2025. Please note that this call is being transmitted as well as recorded by audio webcast and will be subsequently made available for replay in the Internet. [Operator Instructions] The floor will be opened for questions following Bettina Orlopp's and Carsten Schmitt's presentation.

Let me now turn the floor over to our CEO, Bettina Orlopp.

Good morning, everyone, and welcome to our earnings call. You already saw the bottom line and capital return yesterday with our pre-release. And today, we are pleased to present the full picture of our Q4 and full year performance 2025. I will present to you our overview of the year and share our strategic and financial view going forward. Afterwards, Carsten will walk you through the detailed financial performance of the fourth quarter.

We can report on a very successful year for Commerzbank. We achieved our growth targets and in many areas, exceeded them. We delivered a record operating result and will return even more capital to shareholders than originally planned. This is a clear proof to the fact that our Momentum strategy pays off and drives profitable growth.

In 2025, we created significant value. On the financial side, we achieved an operating result of EUR 4.5 billion, an increase of 18% compared to previous year. Our return on tangible equity before restructuring expenses reached 10%. This is the highest return since the global financial crisis, and hitting this double-digit figure is an important milestone. It demonstrates the improved strength and profitability of Commerzbank and sets our new baseline for growth from 2026 onwards.

This is complemented by a capital return of EUR 2.7 billion for 2025, higher than we thought back in November, and bringing the total since 2022 to EUR 5.8 billion. This financial success translates into value for all our stakeholders. For our shareholders, the market has recognized our growth path and our transformation. Our share price has more than doubled in 2025, reflecting the confidence in our strategy and its execution.

For our employees, our success is also their success. We launched an employee share program and saw a high participation rate of 90%. This creates a culture of ownership and aligns the interest of our team with the long-term success of our bank. And for our clients, our growth is a reflection of their trust. We grew our corporate loan volume by 10% and our securities volume by 9%. This shows that our clients value our partnership and our expertise, in particular, in the current economic environment. We are a reliable partner for our clients, especially in the German Mittelstand.

A more detailed look at the financial performance underpins the positive trend across our key metrics. Our total revenues climbed by 10% to EUR 12.2 billion. This was driven by good performance across the board, particularly by a 7% growth in our net commission income and the strong results from our Polish subsidiary, mBank.

Even in an environment of lower benchmark interest rates, we kept our net interest income nearly stable, reflecting our successful NII management. At the same time, we have maintained our consistent cost discipline. We improved our cost-income ratio by 2 percentage points to 57%, achieving our target for the year. This was accomplished alongside strategic investments as well as absorbing one-off effects such as higher valuation of equity-based compensation due to our share price performance. This combination of revenue growth and cost control led to the 18% increase in operating results. This demonstrates the improved earnings power of our bank.

Our net result stands at EUR 2.6 billion. If adjusted for the restructuring expenses, it rose strongly by almost 13% to EUR 3 billion. This underlying profitability is also reflected on our net RoTE before restructuring expenses, which, as mentioned, reached 10%, exceeding our target. I already touched on capital return, and we'll come back to it shortly.

But before that, I would like to draw your attention to the execution of our Momentum strategy. We have delivered on our strategic milestones in 2025, driving both growth and transformation. On the growth side, we have leveraged our franchise for capital-accretive loan growth, demonstrating our strong client relationships. Furthermore, we have taken a smart analytical approach to deposits. By using AI, we improve savings retention, apply sophisticated pricing schemes and grow volumes through reactivation of existing customers. The strong focus on client needs has supported the growth in our fee business across all customer segments, contributing to our revenue uplift.

On the transformation side, we have implemented the new enhanced service model for our private customer. As one key element, we have created more capacity for high-quality advice in private banking and wealth management. This is a key step to further grow our fee income.

Our restructuring program is on track with the ongoing shift to sourcing and shoring locations progressing as planned. An important component of this transformation has been the introduction and expansion of AI-based capabilities. We are already realizing initial efficiencies and improve both customer and employee experience. This is happening as we speak, and I will come back to this in a minute.

Overall, we are very pleased with the success of our Momentum strategy, which paves the way for 2026 and beyond.

Our priorities are clear. First, we are fully committed to delivering on our 2026 to 2028 strategic and financial targets. We have a clear plan, and our 2025 results give us all the confidence that we will achieve it. Second, we will continue our growth path. This will be supported by an expected modest recovery in the German economy and the government's stimulus package. Further catalysts from 2027 onwards will be the pension reform in Germany, which comes with government-subsidized securities savings plans.

Third, we will further increase the usage of artificial intelligence to transform the bank. We will increase the investments in AI to drive efficiency, enhance customer service and create new revenue opportunities. Fourth, we will continue the execution of our Asset Management Growth strategy. This is an important building block to achieve our targeted growth of 7% annually in fee income. And finally, we will strive to optimize the deployment of our excess capital, including the ongoing screening of inorganic growth opportunities.

Let me expand on 2 of these key priorities, artificial intelligence and asset management, starting with AI. AI is a fundamental driver of our ongoing transformation. We have built a solid starting point in 2025, moving from concepts to concrete applications that deliver benefits. Let me highlight a few of them.

In our advisory and customer service center, our AI-powered agent assist provides real-time call transcription, generate summaries and recommend suitable solutions. Workplace tools like cobaGPT make information retrieval and content creation for our employees significantly faster. Our in-house tool Fraud AI helps to automatically detect fraudulent activities. And in our banking app, our virtual assistant, Ava, combines generative AI with Avatar technology to assist customers with their banking needs. The benefits are already visible and will increase every year.

In 2026, we will expand and enhance the use cases we started in 2025. We will also introduce additional GenAI applications such as for legal contract generation and annual report analysis for risk assessment. Furthermore, we will continue piloting agentic AI in collaboration with our strategic partners to drive further process transformation.

In conclusion, AI will change banking, and we are well underway in this transformation. We have increased our change budget for 2026 from originally planned EUR 500 million, to almost EUR 600 million and an increasing share of this is allocated to AI.

The key lever for growth, particularly in our fee income is our Asset Management strategy. Our strategy is based on a combination of in-house asset management offerings and partnerships, creating a platform that provides a wide choice for our clients. Our in-house capabilities cover a broad range. This includes discretionary portfolio management and liquid strategies at Commerzbank and our specialist manager, Yellowfin. And in the areas of private markets, we have the expertise of Commerz Real in real estate and infrastructure as well as Aquila Capital in clean energy and sustainable infrastructure. Combined, our in-house units managed EUR 67 billion.

Currently, we see more inflows in liquid assets and the more challenging environment for less liquid assets. Regarding early-stage investments into renewable energy projects, Aquila faces market challenges, which put pressure on 2 specialized institutional funds. Hence, we have pulled forward the full depreciation of the acquired capitalized client value. Going forward, we fully focus on developing our existing business and adding new business to meet the demand of our clients.

The in-house offerings are complemented by our partnerships, which provide a full set of standard fund and ETF solutions with a volume of EUR 95 billion. This setup is designed to expand our business with our clients. It will further strengthen our position as a comprehensive partner for their investment needs.

Let me move on with a central element of our equity story, our commitment to delivering capital returns to our shareholders. For the 2025 financial year, we will return EUR 2.7 billion to our shareholders, EUR 200 million more than originally planned. This reflects a 100% payout ratio before restructuring expenses and represents a total yield of 7% based on the market capitalization at the start of the year. Regarding the mix and given that we trade well above book value, we have decided to put more emphasis on the dividend. Hence, we intend to propose an increase to EUR 1.10.

On share buybacks, we have decided yesterday to start another buyback of up to EUR 540 million tomorrow. This comes on top of the EUR 1 billion buyback, which was completed already in December. Looking forward, we continue targeting a payout ratio of 100% of our net result after AT1 coupon payments. We intend to further grow the dividend share towards 50%, establishing Commerzbank as a reliable dividend stock. This capital return policy comes with a total yield increasing to 10% in 2028 and remains a key cornerstone of our strategy.

Our performance and strategic execution give us confidence for the year ahead, and January has already been a very good start. Hence, we have increased our outlook for 2026, which confirms the traction of our Momentum strategy. We anticipate a supportive, albeit modest macroeconomic environment in Germany with government stimulus supporting the economy. This is reflected in a GDP growth of 0.9% and an inflation remaining close to the 2% target. Furthermore, we expect ECB's deposit rates to remain at 2% throughout the year.

Against this backdrop, we have set clear targets for 2026. We are aiming for a net result of more than EUR 3.2 billion. We will continue our strict cost management and plan for a cost-income ratio of 54%, which is 2 percentage points better than originally planned. And we are targeting a return on tangible equity of more than 11.2%. And as I just mentioned, we are committed to a total payout of 100% of the net result after AT1 coupon payments.

Finally, I would like to provide a transparent view of our path towards our 2028 RoTE target of 15%. Starting from our 2025 adjusted RoTE of 10%, we have a credible road map to reach our goal. The journey will be driven by several key factors. The diminishing burdens from the FX loans in Poland will provide an uplift, and the positive impact from the restructuring will also contribute in terms of cost measures. The main drivers, however, will be loan growth and the replication portfolio lifting net interest income and the target 7% annual growth in net commission income.

We also see potential upside. The steep yield curve, a stronger-than-expected German stimulus and an accelerated impact from our AI initiatives could all provide additional tailwinds to our profitability. They are not yet reflected in our 2028 plan but form tangible drivers with a very good likelihood to materialize. Of course, we are also diligently monitoring potential headwinds such as geopolitical risk, trade tensions and intensifying deposit competition.

However, we are confident that we have a very robust and credible plan to navigate these challenges and deliver on our 15% RoTE target. And to use one of my favorite words, you can consider the target as our floor.

And with that, I hand over to Carsten for a detailed look at the financials of the fourth quarter. Over to you, Carsten.

Thank you, Bettina, and good morning, everyone. The results of the quarter speak for themselves, strongly contributing to the excellent results for the year. In Q4, the net RoTE reached 10.1%, slightly above the level we reached for the whole year before restructuring expenses. This is driven by a near record operating result that is in turn based on very strong revenues. The CET1 ratio remained unchanged at 14.7%.

I will now go through the details, starting with revenues. Revenues were exceptionally strong in the quarter, up 6% compared to last year. Net interest income has exited the trough that was induced by the ECB rate cuts and will continue to grow in the next quarters. Net commission income is the best ever achieved by the bank in the fourth quarter. The net fair value result reached EUR 74 million. The EUR 27 million increase compared to Q4 last year was driven by a higher fair value result, mainly at mBank, offsetting lower interest income. Other income, excluding FX loan provisions, reached EUR 79 million and mainly stems from a positive hedge result.

Now to net commission income in more detail. All customer segments grew their business year-on-year, resulting in a record fourth quarter. This is a clear testament to the excellent work done by the teams. Corporate Clients continues to grow in trade finance year-on-year on the back of our strong market position and despite the ongoing weakness in German exports. The biggest increase, however, came from lending where fee income linked to loan origination has continued its upward trajectory as we have maintained good volume growth.

Private and Small Business Customers in Germany continue to expand the securities business, both from securities volumes and transactions. The better payments business is driven by higher account fees, while the cards business contributed less this quarter. We have continued to increase the share of customers who have signed up to the new account model to around 65% and have only lost customers with low revenue contribution. As last year, the discretionarily managed portfolios performed very well in the quarter, contributing a significant portion of the revenue increase compared to the last quarter.

Let's move on to the interest income. With ECB rates unchanged to Q3, a strong loan business in Corporate Clients and successful deposit management, interest income in Commerzbank grew slightly in Q4. Conversely, in mBank, the effect of materially lower Central Bank rates is visible in net interest income. However, the effect has been partially offset in net fair value. As rates in Poland are well below last year and might be reduced further, this will also have an effect in 2026.

Looking at volumes, growth has continued across the board. Corporate Clients has again increased loan volumes in all customer groups. As customers improved their liquidity positions towards the end of the quarter, the average deposit balance was EUR 2.7 billion higher than in Q3. Therefore, both loans and deposits contributed to the increase in revenues.

In PSBC Germany, loan volumes have been stable. Deposits are up based on inflows in both sight and call deposits. The deposit beta has come down in the quarter as high rates offered for new retail deposits in the summer started to expire. While we will have more expiries in Q1, comdirect has initiated a new deposit campaign with attractive rates in January. We, therefore, will have offsetting effects in the beta.

On the next slide, I will give you more details on the loan growth in Corporate Clients. In 2025, Corporate Clients achieved a EUR 10.9 billion loan growth, of which EUR 2.4 billion was achieved in the fourth quarter. The mix in 2025 has been weighted towards the international business. In Germany, we had only moderate demand from corporates. However, we did see growth from the public sector. Corporate demand has been across sectors with the 2 largest being energy and consumption.

New business has been good in Q4. The new loan agreements signed will be drawn over time and start contributing to the net interest income in the next quarters. Looking into 2026, January has started well. We have seen some pickup in demand in Germany and have continued demand outside of Germany. We are, therefore, confident that we will continue our profitable growth trajectory in 2026.

This brings me to the next slide with the outlook for NII. We raised our outlook to around EUR 8.5 billion for 2026. The main reason for this is the more favorable forward curve in combination with the increased size of the replication portfolio. Due to these, the replication portfolio will contribute an additional EUR 600 million in 2026. ECB rates are expected to remain at the current level, slightly lower than in 2025. In combination with the effect of moving more deposits into the replication portfolio, we anticipate an impact of around minus EUR 200 million from the deposits invested at floating rates. For the beta, we expect an increase from 40% on average in 2025 to 42% in 2026, leading to EUR 100 million lower interest income. This should be more than compensated for by growth in loans and deposits.

Finally, interest rates in Poland have come down significantly and are forecast to go down further. We, therefore, expect interest income in mBank to be lower in 2026. Based on the current business mix and our assumptions for the deposit beta, volume growth and the forward curve, we expect further increases in interest income in 2027 and 2028 with a clear potential to reach around EUR 9.4 billion in 2028. Of course, there could be more intense deposit competition than anticipated or lower rates, particularly in Poland, than assumed, which would lead to slower revenue growth. Conversely, the environment might become more favorable.

Now to costs on Slide 21. We have reached our target cost/income ratio of 57% for 2025. This is based on strict cost management as we had to compensate 2 larger unplanned cost items in 2025. One is the doubling of the share price and its impact on share-based compensation. The other is the accelerated impairment of intangible assets. Together, they represent 3% of our cost base. Excluding these items and due to our cost management, costs increased by only 3%. The main cost drivers have been general salary increases, investments and the build-out of our shoring and sourcing centers. The cost increase in mBank is mainly due to business growth but also higher compulsory contributions are a significant factor.

We will maintain our strict cost management approach in 2026 and are therefore confident that we will reach our improved target cost/income ratio of 54% for the year. While not part of the regular cost base, we had final restructuring expenses of EUR 9 million related to our Momentum strategy in the quarter.

The next slide covers the risk result. The risk result came in at EUR 207 million. This is better than expected and in line with the previous year. The portfolio has proven to be very resilient. We have maintained our approach to overlays. There has been no material change in the outstanding amount, which stood at EUR 147 million at the end of the quarter. The risk result for the financial year reached EUR 722 million, well below our guidance of less than EUR 850 million.

Nevertheless, for 2026, we again guide for a risk result of around EUR 850 million. In 2026, the German economy will leave a 3-year phase of stagnation and should show moderate GDP growth. But given the ongoing structural changes and higher default rates, we prudently plan with a slightly higher risk result, which is equivalent to 25 to 30 basis points cost of risk.

This concludes the view of the key line items. I've already covered the main drivers of the excellent operating result and will therefore focus on the net result.

Full year taxes and minorities are higher in 2025 than in 2024, reflecting material changes in the tax codes in Germany and Poland as well as a better profitability in mBank, increasing the minorities. For 2026, we expect a tax rate at around 30% due to a higher tax rate in Poland and further rising minorities as the profitability of mBank should continue to increase.

The next slides cover the results of the operating segments, starting with Corporate Clients. As already mentioned, Corporate Clients had a very good fourth quarter. Revenues benefited from the ongoing healthy loan growth and the good capital markets business. Also, the increase in deposit volumes contributed. This is clearly visible in international corporates with 13% higher revenues.

Institutionals again reached a very good level of last year. Mittelstand also increased revenues in the loan business. However, year-to-year, this could not fully compensate the effect of lower rates on deposits. In PSBC Germany, our new client advisory model has become fully operational in Q4. This has come with the reassignment of some customers. Due to these changes, the Q4 revenues of the 2 units can be only compared in combination to the previous quarters.

Looking at Private Customers and Small Business Customers in aggregate, revenues have increased substantially in the quarter. The biggest drivers have been the securities business and the deposit business. While asset management overall showed better revenue than in the previous quarters, the asset management subsidiaries have lower Q4 revenues compared to the previous quarters as these benefited from transaction fees, which tend to be lumpy and not evenly distributed over the quarters. For the financial year, revenues of the asset management subsidiaries have been only slightly lower, reflecting a partially more difficult market environment.

mBank has maintained its good profitability. The customer business has held up well despite being impacted by the lower interest rates in Poland. As expected, provisions for FX loans have again been lower than in the previous quarter. For 2026, we maintain our outlook that the burdens from FX mortgages, which have been EUR 483 million in 2025, should no longer be material. mBank should further increase its contribution to our result in 2026 and plans to resume paying a dividend.

Others and consolidation reported a small operating loss in the quarter. For the full year, the operating result is plus EUR 32 million, in line with our expectation of a neutral result for the full year. For 2026, we again expect a more or less neutral result.

Now to the RWA and capital development. The CET1 ratio was stable at 14.7%. Overall, minor RWA and capital changes largely canceled each other out. In total, we have dedicated EUR 2.7 billion for distribution to shareholders. This is equivalent to 154 basis points of the CET1 ratio and represents a yield of 7% based on the market capitalization at the end of the year. In 2026, we intend to again distribute 100% of the net result after AT1 payments. Therefore, as in 2025, we will not include the net result in our CET1 ratio calculation.

As already communicated with the Q3 results, we have received the SREP letter from the ECB. Our 2026 capital requirements were lowered by 10 basis points as we must hold only part of the regulatory capital requirement as CET1, the MDA will be reduced by around 6 basis points effective since January.

This brings me to the outlook for 2026. As already mentioned, we have improved our outlook for NII from EUR 8.4 billion to EUR 8.5 billion. As in 2025, we target 7% growth in net commission income and expect a risk result of around EUR 850 million. Based on the improved revenue outlook compared to our original momentum strategy, we target a cost/income ratio of 54%. This is well ahead of our original target of 56%. The same applies to the outlook for the net result, which should be above the original EUR 3.2 billion target. As mentioned, we confirm our target payout ratio of 100%.

The CET1 ratio at the end of the year should still be above 14%. And the RoTE should increase from 10% in 2025 to more than 11.2% in 2026. For '28, we confirm all targets laid out in our Momentum strategy and, as Bettina has pointed out, with clear upside potential.

Thank you very much for your attention. Bettina and I are now looking forward to taking your questions.

[Operator Instructions] Several questions are incoming. The first question is from Jeremy Sigee from BNP Paribas.

Two questions, please. Firstly, thank you for all the guidance on the outlook and that kind of thing. Could you talk about your expectations for costs in absolute terms? You've obviously given us a cost-to-income ratio, but could you talk about the absolute amount of costs that you expect in 2026?

And then second question, you mentioned loan demand limited so far from German domestic corporates. But I think you said you'd seen a pickup in January, unless you're talking about something else, I think you said you've seen a pickup in loan demand in January. And I just wondered if you could give us an update on how corporates are behaving and how they see the German stimulus and reforms coming through? How much action you're starting to see on that front?

Yes. Thank you, Jeremy. So on the second question, with respect to loan demand, I mean, we have seen a very good start actually into January. But this is again very much broad-based. So it includes international locations but also Germany. If it comes to Mittelstand, they are still hesitant. They are still waiting for more reforms to come. There are always exceptions. But overall, and I mean, you see it also in the GDP growth, which is now at 0.9%, but we also expected it last year a little bit higher that this hesitance and you see it in the sentiment index, that we still wait for the turnaround [indiscernible] because we also support our clients going abroad.

And on costs, I hand over to Carsten.

Yes. Thanks for the question, Jeremy. So on the cost side, as you know, our main sort of driving principle is the cost/income ratio, which we are aiming to improve to 54% this year. With regard to the absolute cost target for the year, which will also keep firmly inside clearly, let's start from -- coming from '25. We are looking at EUR 6.9 billion in '25. And as lined out, we had around EUR 200 million of extraordinary effects, which we compensated with our strict cost discipline last year. So deduct that. If you add 3% to 4% of the updrift in cost that we have by general salary increases and potentially another EUR 100 million for additional investments we intend to make this year into our strategy, then you arrive at something that should be nearing the EUR 7.1 billion from below.

The next question comes from Benjamin Goy of Deutsche Bank.

Two questions, actually follow-ups to what you said. The first one is, Carsten, you mentioned net interest income will continue to grow in the next quarters, specifically wondering about Q1 where you obviously face some headwinds from day count. So also Q-on-Q up in Q1, then steady growth after that?

And the second question is on the very strong start to January. I mean you commented on loans but also wondering about any comments you could do on deposit campaigns, how the retention went on -- at comdirect and also on the fee income side, what you're seeing so far?

Yes. I mean, January has been strong across all dimensions, actually. I mean, risk result, you would anyhow not expect anything in January. But on the cost side, high cost discipline on the revenue side, a very, very good start on NII, and Carsten will dig deeper into that in a minute. But also on the net commission income side, it has been an excellent start.

Yes. And Benjamin, looking into the NII, you had a few questions. So first of all, I think what we've seen in Q3 last year was what we call the trough of the NII development. So we've seen an uptick already in Q4, and we expect this to also carry into the coming quarters. As mentioned earlier, we are looking at a slightly lower beta at the end of the year given that we had campaigns running out, and we are now starting a new campaign. So let's see actually how that potentially impacts the beta movement. But generally, you should expect the net interest income to steadily increase throughout the year and towards the new guidance of EUR 8.5 billion.

With regard to the campaigns, we started, as we usually do beginning of the year with a campaign in comdirect. And you also asked around the retention rates of the previous offers that we had out. I mean those fluctuate, as you know. The purpose that we have with these offers is to bring the money and the customers in in order to ideally then also transform them into other quality products like asset management, investment, securities volume. So it's always a bit tough to say how much is actually flowing out, but we see this as a very good means to actually increase volume also on that side and then also support our commission income.

The next question comes from Kian Abouhossein of JPMorgan.

The first question is just on the beta. What gives you the confidence? You mentioned 40% for '25. I think I saw 41% in the fourth quarter average and 42% for the year '26. Just if you can discuss where that confidence is coming from. Clearly, you have delivered in the past. Just trying to understand the deltas, both on the corporate side, where I think last quarter, you also discussed a little bit more pressure, but not this time around, from what I listened to.

And in that context, can you just talk a little bit around your funding profile. I can see there's some funding coming up not just this year, but over the next 2 years as well. And I'm just trying to understand how you -- how should we think about duration of funding and cost of funding on replacement, if I may?

Yes, Kian, thanks for the questions. Let's start with the beta. You're, of course, as always, absolutely right on the beta figures, also for last year. We had an average of 40% last year. What makes us confident that we are planning well with the 42% is that, A, we will see a slight updrift, as I just mentioned, given that we are running new campaigns. Also, we are aware that usually beginning of the year, we see the market being quite competitive. We had a similar discussion last year.

But if we are looking a bit into sort of what we base our confidence on, number one, we have proven actually for ourselves last year that managing the deposits and also the pricing of the deposits, is including our AI-based approach, i.e., we are also making improvements in how we price, what we have in the books and how to retain these volumes. So that actually puts us into a confidence space that we can use this to also counter a bit of the challenging environment we might be seeing.

And you mentioned the corporate side specifically, as you might have heard also in my speech, we had quite significant volumes coming in also on the corporate side. And this actually gives us, at this point in time, also support. So at the moment, this is what puts us very confident for the beta development.

Then when it comes to sort of the funding profile over the next years, I mean, we are looking at around EUR 12 billion that we are going to fund this year. As you know, we have a funding plan that is usually rolled out over the next years, and we are trying to keep our well-established and good mix. We are currently looking into slightly longer tenors that we are issuing, also making sort of benefit of the current market environment. And clearly, credit spreads are beneficial for us. So funding profile that we have improved since last quarter with a bit of prefunding last year already and also going into the next should actually help us to further positively manage our funding costs.

The next question is from Tarik El Mejjad from Bank of America.

Two questions from my side, please. First, on the net interest income guidance. You've done a beat and raise in every -- literally every quarter since your CMD. And I think there's more to go, but you haven't really updated on '28. So when should we expect guidance change or update in '28? And should we see the same dynamics so far being applying in the long term as well there with the volume component?

And then my main question actually is on the cost-to-income and on your investments. I've noticed actually in Slide 9 on the payout ratio for '26, you say that this is before restructuring expenses -- potential expenses for '26. Is it fair to think that the whole your increased focus on AI, and you've -- Bettina, you've highlighted as really a critical driver for better efficiency in the longer run, should we expect a lower than 50% cost-to-income in '28 coming from investments from this year that will be actually removed from the payout ratio? So in other words, you basically be able to pay more than 100% payout with shareholders not paying for the cost of this restructuring and also you lower by then your CET1 ratio? Is my reading correct?

Thank you, Tarik. So on your first question, it's pretty simple. EUR 9.4 billion is the latest expectation for 2028, assuming that the yield curve stays intact as we see them currently. When it comes to the cost-to-income ratio, and the guidance for 2028, we said that it's really -- it's -- for the cost-to-income ratio, you could say it's a cap because we definitely want to achieve the 50% and might go even below given that we will use specifically the year 2026 and the upcoming strategic dialogue and multiyear planning process to evaluate the effects we currently see. And as said, and you know that from us, whenever we are done with the planning, we also come out with updated numbers. So you can expect that this year as well.

When it comes to the payout ratio, I mean, investments into AI are clear investments. They are shown in the cost line and nowhere else. So there is no real possibility to exclude that one from the payout ratio. We are increasing our investments as we speak. So already in the 54% guidance for this year, we have an increase in investments from the original EUR 500 million planned for change into -- up to EUR 600 million. So we absorb it basically in our cost targets.

So the payout reference is really restricted to real one-offs and something like real restructuring charges. But at least with the latter one, we are definitely done and -- except for the Russian topic, which we always raise, we don't see also any potential one-offs luckily.

Okay. And the strategic update is usually -- always you do it in September, right?

Yes. I mean, I think normally, we come out with the Q3 numbers, but something around that, yes, you can expect.

The next question comes from Borja Ramirez from Citi.

I have 2, please. Firstly, on the hedge. I would like to ask the increase in the hedge in the 4Q. What were the duration of that and also the average yield? And also your -- the hedge benefit that you disclosed, I would like to ask, is that based on the current forward swap rate?

And then my last question would be, I think based on the ECB data, the yields on your mortgages are around 100 basis points above the 10-year swap rates. So I think there's maybe some benefit in your NII from this as well. So I would like to ask if there's also some upside compared to the target on this point as well, please?

Yes. Borja, thank you for your questions. Let me start with the replication portfolio, so the hedge portfolio that you referred to. In Q4, we did increase the size of the portfolio. As always, we are looking at the overall amount of deposits that we're having and then the amount that we can model. The amount that is available for modeling is slightly above EUR 200 billion, and we decided in Q4 to actually enhance the size of the portfolio by EUR 9 billion.

Together with that, because we've invested that indeed at current rates, you see an uptick in the average yield of the portfolio of around 9 to 10 basis points on the full portfolio, and we're now at around 1.14%. So that is up from the levels we discussed in the previous quarters last year. So with that, actually, we will have positioned ourselves nicely in the current market environment and also slightly to the longer term in the investments.

Then second question you had on the mortgages. Let's just assume the rates that you mentioned. I think the ingoing factor for us is the volume of the mortgage book, and you will have seen that this is stable if you look at the volume bars in our presentation. In Q3, we saw a very healthy front book of EUR 2.7 billion. In Q4, we saw another EUR 2.1 billion. And as you know, these will roll in with time. So it will take about a few quarters until we see the full volume. That clearly stands against some of the early repayments. But overall, that book and the front book comes in at good margins and should be supportive for our NII.

And just to confirm, the replication portfolio benefit in NII guidance, that's based on the current forward curve?

Yes, that's correct, Borja.

The next question comes from Riccardo Rovere from Mediobanca.

2 or 3, if I may. The first one is, Bettina, throughout the call, you and Carsten have repeatedly stated that there is some degree of prudence or upside potential here and there within your 2026 outlook. Could you please list all the areas where you think you might have been prudent in setting the 2026 guidance?

The second question I have is 2 -- a few days ago, UniCredit in its UniCredit Unlimited update set the cost trajectory down in absolute terms. I was wondering whether this puts pressure on you to achieve more efficiency throughout over the next few years?

And then I have -- sorry to get back to the steepening of the yield curve. It's not clear to me whether a steeper yield curve is included in the EUR 8.5 billion NII guidance, if that's the case or not?

And the last question I have is on the capital. Again, you have a target of above 14% but technically, the target is 13.5% at some point in the future. I was wondering what prevents you to bring it down to 13.5%. And on this topic, I was wondering if you could update us where you are on the SRTs on the RWA optimization because especially on the corporate side, I remember you had a fairly large amount of risk-weighted assets reduction related to securitizations.

Thank you very much, Riccardo. Lots of questions. I hope we get them all. So with respect to upside potential for 2026, where are we prudent? And you know us, we are normally always conservative to make sure that we deliver. I mean, to start with, clearly, we have the risk result. Again, we are guiding it for EUR 850 million. And you have seen in the past years that we always come in below. So there is upside potential, hopefully there -- if things are developing as planned.

Number two, it is -- we always have the problem with the fair value, and you know that -- to predict that correctly, so we are always a little bit cautious on that one. Why we are very convinced about the EUR 8.5 billion NII? That is, for us, always a starting point to say it like that. And also on the net commission income, the 7% is an aspirational target, but we are strongly convinced that we can deliver that.

And when it comes to the cost side, you have seen that we have maintained a very high cost discipline this year. So we could really also balance out some of the extraordinary burden, which we have seen, and we intend to do that. Also, I have to say that, in 2026, we still have also some doubling effect because we are building up capacities in our shoring locations on the one side. And on the other side, we still have also some people still running the business here to really, really ensure smooth transition.

When it comes to competitors, I mean, we really focus on ourselves. Every competitor is different. So for us, it is important that we drive with the right path for our organization. It is very clear that we are committed to efficiency to transformation. It's part of our strategy, Momentum, growth and transformation. And as I said, I mean, we are now in the second year of the strategy implementation. We now start the normal process as we always do. We didn't do it last year because we just had the presentation of the strategy. But this year, we start with our strategic dialogue process, which then ends an updated multiyear plan figures. And clearly, we take into account all the learnings and experience we gathered specifically from our AI use cases which seems to be very promising. So there is -- as also said in the speech, there's upside on that.

When it comes to capital, I mean, it's a path, as you know, we have already lowered our CET1 ratio. The target CET1 ratio stays at 13.5%, but we do it, as always, in a path, which is fully aligned also with the regulatory authorities. And the final target, however, stays the 13.5%.

And when it comes to SRTs, we have done transactions in the fourth quarter, and we currently have an RWA relief because of SRTs of approximately EUR 9 billion.

And on the yield curve, I hand over to Carsten.

Yes. Riccardo, on the yield curve and the EUR 8.5 billion target for the NII, that's on the current forward curve. So if there's a movement, of course, there is potential. But you also have to bear in mind the portfolio is set up in a way that we stabilize the net interest income, which also means that we do reinvest slightly above EUR 3 billion every month in the rolling tranches. So you will have an averaging up effect in any case. And if there's a change to the forward curves with that amount, we will then also see additional pickup also pending potential decision to invest more in it. So that would be the upside potential in this.

Sorry, Carsten, to get back to this. So the first bullet point on Slide 11, steep yield curve and corresponding benefit for replicated portfolios, this would be, like say, in a steeper yield curve than the one that it is today because it is already a bit -- there is already a bit of steepening.

Yes, absolutely. And then you're absolutely -- yes. Sorry. But you're right.

No, no. Okay, okay. And the other -- sorry, to get back to RWA 1 second. Am I right in saying that what is left in terms of SRTs in '26 should not be enough to compensate for the normal lending growth that you are expecting? Am I right in saying so?

Yes. As you know, we're using SRTs to manage RWA. If you want also a bit of the risk profile, what we're looking at in 2026, is around EUR 8 billion in volume and an RWA effect of around EUR 4 billion. And that you can see actually, if you look at the volume growth we have set out for ourselves on the corporate side, is helping us to free up resources but not countering the growth.

Last question for today from Stefan Stalmann, Autonomous.

I wanted to ask you about the trends in sight deposits, please. PSBC Germany, that number has been basically flat for almost 2 years now. Is that something where your existing clients are shifting the mix away from sight deposits? Or are you losing actually market share in sight deposits in the German market?

And also in Corporate Clients, the number tends to be quite flat [ this year ] by the occasional seasonal side at year-end. And I was wondering if you're actually raising any corporate sight deposits outside of Germany, given that you're doing quite a bit of lending business with [ out of Germany ].

And the second question regarding Aquila, the impairments that you have done in '25 are roughly half of the total intangible assets that came with Aquila. Do you think there could be more to come? And are you seeing any problems with the funds and [indiscernible] and whether or not this could impact the behavior of your clients and the willingness of your clients to invest in new funds?

Yes. Thanks, Stefan, for the question. So first of all, on the deposits and the deposit side, you're right. If you look at actually the last 8 quarters, we have a stable sight deposit volume across the personal customer space, which, given the markets actually, is what we've always been talking about. We are defending our market share that we're having there and making sure that we have this also at reasonable rates, from our point of view. And overall, you see a slight growth in the portfolio.

So we see no structural shifts from sight to term or call deposits. But what we are doing, as I mentioned earlier, is we are also attracting these when we go out with our offers in order to allow us to transform them into other and usually then commission income-bearing products.

On the corporate side, also stable. This is always depending a bit on also the economic cycle and how corporates use their liquid assets, if we can call it that, for the time being. And you're right, we see slight fluctuations, especially in Q4, we saw a good inflow on that end. You also asked on the international portion of this, we have smaller portions coming in from corporates internationally when it comes to deposits but not to a structural degree. So it's in line with the business that we're doing with these customers abroad.

And when it comes to Aquila, I mean, first of all, our Asset Management strategy is clearly a combination of 2 things, in-house and partners. And you see also on the Slide 8, the distribution of volumes and significance. And what we have observed in the past quarters is there is, yes, some skepticism in the moment on illiquid assets, and it's a cycle, but cycles normally also have the benefit that they change. So we stay basically on path here.

And when it comes to the depreciation, we did the full depreciation of the intangibles. So nothing more to expect because the rest is embedded in our goodwill of the Private Client segment, and we do not expect any write-downs there.

And I think that -- was this -- I think we have had the last question. So I wish you all a very successful day, and I'm looking forward to seeing you soon again. Thank you.

Great. Thank you very much for joining us on the last day of the financial conference in London. I have with me Carsten, Commerzbank CFO. First of all, it's a great day to have you with us because this is the day a year ago, you were announced as CFO of Commerzbank. So it's a perfect timing to give us an exact update after 1 year of announcement. And maybe Carsten, I can start there.

Can you give us a little bit of your impression considering you were at Commerzbank, left and came back, how things have changed, but also kind of what are the top-down issues for Commerzbank at this point, more from a top-down strategic perspectives that are a focus for you and the management team?

Yes, very happy to do that. And Kian, thank you very much for having me also in this fantastic hall here. So indeed, it has been exactly 1 year since my announcement. I started beginning of this year, so there was a bit of time in between, but quite a bit has changed during that period of time.

You asked around what strategically has changed also from possibly the time that I experienced in the bank before I rejoined. I think the firm at the moment is really best described as fully focused and unified in its voice from management to the employees to our employee representatives in actually getting our strategy and active that we're having.

And talking about that strategy, we announced our strategy beginning of the year, focusing on '28, focusing on growth and transformation. And that probably is what is accompanying us every single day, seeing how we can grow the business further for our customers, and strategic points we are clearly looking at, at the moment is also what's happening economically in Germany. So I would say this is pretty much what we're looking at mostly.

And starting on Germany and German stimulus, clearly, a lot of questions of how do you see that actually feeding into your numbers? What are your expectations? There's also a lot of concern, maybe it's more delayed, and as a result, there's maybe over-excitement on German stimulus when you talk to investors. Can you give us an update how you think about it? What are your expectations? And how does that impact the bank?

Yes. Look, the stimulus package came to life earlier this year, and I always like to go back to the very beginning of this year when we didn't have a stimulus package at all, no government actually at that point in time. So quite a lot has happened since beginning of the year. And I think that from the get-go is a very positive thing to look at.

Looking a bit at our expectation for the stimulus package and the impact it will have also for the economy in Germany, we are currently looking at a 1.2% GDP growth next year, which admittedly is not the highest. But if you consider the last years, actually, this is a quite big step up now.

And a good portion out of this, actually close to 1 percentage point, 0.8 is what we think is going to be fueled by the stimulus package and all the investments and then follow-on investments that we are seeing. So for us, clearly being so ingrained in the German economy via our customers, clearly, it will have an impact. It shall have an impact once these packages actually come to life via actual spending.

And if we go maybe a level down and we now look a little bit at net interest income and how that gets impacted by also the top-down environment, you've given a guidance of EUR 8.4 billion for 2026. You actually increased that at your last investor update.

Can you tell us the path to that? Your guidance has been EUR 8.2 billion for this year? And the kind of the environment and the potential of improvement that you see further considering you went on a path of continuous beating that number clearly in terms of expectations?

Yes. Well, we started into the year actually with a target of EUR 7.7 billion, so even lower, and we upgraded that in summer. The reason why we went into the year expecting a number that is apparently now lower than the strong performance we have seen, I think was, first and foremost, coming out of a relatively okay-ish, high-ish interest rate environment in the last years, knowing that we were going into a slight rate cut cycle.

So expectation was to, first and foremost, keep the interest income stable. We did this throughout the full year and managed our books quite intensively also via having a stabilization. We have a good portion of the deposit base that we're having invested in, in what we call replication portfolio.

So stabilizing longer-term portfolio, which supports the NII, and doing this throughout the year, we saw actually that we are having more stable and structurally sort of consistent output out of these portfolios, which effectively brought us to this upgrade. For this year, we are now expecting EUR 8.2 billion for the year. For next year, as we said, we are upgrading this to EUR 8.4 billion.

Reason why we did this at this point in time before we actually guide for the full year in February with all the other line items was that coming out of our strategy, it's clearly already above what we originally anticipated for '26, and in terms of the stability of this portfolio, for us, again, we are seeing this coming in, in a quite stable and strong way.

We are on an upward trajectory for net interest income in any case in our strategy towards '28. And we'll see, I think, towards February, what this will also mean for the follow-on years, but it will definitely be supportive.

And is there a possibility that we should be looking at a further update on NII in the full year results for '27-'28?

Well, we've so far not really split out the '27-'28 figures for NII. We have a target for '28 out. I think what I can say is already with the structural changes we made to our book in summer, it became clear that we will have an add-on for the follow-on years, which will carry through also to '28.

So I think it's fair to assume that a good portion of the uplift that we've seen throughout the year will also carry stably throughout the following years. And in February, I think we will -- not only for '26 but we will see actually what we can guide for. But in general, it's not wrong to assume that part of this uplift will carry through and basically add on to the full series until '28.

But you're generally comfortable with the consensus that you're seeing, especially for '28, where you have given a guidance, but there's -- the numbers are already well above that from what I can see.

Yes, given what we've seen this year and for next year, I think the direction is the right one. Yes, yes.

And if we unpack NII a little bit more between lending, so asset side, liability side and clearly structural hedge in that context. Can we talk, first of all, about loan growth?

Mortgage growth in Germany hasn't really picked up. You mentioned, I think, in the third quarter call, a little bit of an improvement. But corporate client growth has been very strong at 13% year-on-year. So how should we think about the lending picture going forward within your operations?

Yes. Let's start with the mortgage side, which actually was pretty strong in our books, especially in Q3. So as many of you know, we've come out of a phase where, given housing prices, interest rate levels, there was a bit of a depressed mortgage market, but this has been continuously picking up.

So in the third quarter, we actually saw a quite healthy front book, close to EUR 3 billion actually, also considerably higher than in Q2. Overall book, back book declined a bit. That is also what we showed in Q3, but that is mostly because we have early termination rights for customers usually in the middle of the year. So there's a technical effect.

And then the new mortgages will be drawn upon and then basically roll into the book the next quarter. So from that perspective, also the mortgage side is stable to rather inclining again. I should also say at prevailing rates and margins. So there's no change in the appetite or margin expectation from our end.

When it comes to the corporate side, we did actually have a super strong sort of year-on-year 13% growth in the book mostly fueled by our customer business pretty much split half-half into international business, but also German business. And that we see a quite broad range of loan demand coming in.

What you will have seen in Q3, particularly, we see a heightened demand from the public sector in Germany, which we interpret as the first signs of the investment packages, the infrastructure packages, which are drawn upon from the public side, if you want so, and hence, the loan demand from that end.

And with that, we see really good sort of risk-adjusted returns in terms of margins on this portfolio. But this, I would expect to skip a bit more into the classical corporate book next year once we see the stimulus packages really kicking in.

So to your question on how do we see the loan growth continuing, we have a loan growth expectation that is quite strong over the full strategy cycle. Clearly, the growth we've seen over the last year is super healthy. Let's see how that carries on, but especially the corporate book, I expect to come in strongly next year.

And in corporate segment, you guided towards 8% per annum growth. So we are on track.

Yes. Absolutely, yes. We're on track. And as always, with the strategy announcement, I think it's fair to assume that there's always a bit of a structure also when it comes to volume growth.

So starting off, especially at a time when the German economy is still a bit sluggish, and where there's a lot of positive momentum now and impulse and also we're getting this feedback from our customers that there is a more sort of forward-looking view, clearly, it helps a lot to start into the strategy cycle with such a strong year of growth, yes.

And can you talk a little bit about the lending margin? You mentioned on the mortgage side, still attractive, both mortgages and on the corporate side. How are mortgage -- how are lending margins behaving as I assume it's a competitive environment out there for banks to participate in that growth?

Yes. Yes, absolutely. Especially, I think on the mortgage side, the German mortgage market is a heavily competed one or competed for. So margins on that end have been stable actually for us. I think I can also say that margins and the front book that we're seeing at the moment is really healthy. So it's not only holding, but rather having slightly positive tune in it.

On the corporate side, really depends a bit what part of the book we are looking at. All parts by themselves are stable in terms of margin or slightly positive/attractive at the moment. If we're looking at the distribution of the loans that we have been seeing in terms of growth, given that there's a good portion of public sector in it.

So municipalities, but also municipality near business, which is often from a margin perspective, a bit closer to corporates. This is what I meant earlier by good risk-adjusted returns because it also comes at super low risk clearly.

But this, I would, again, expect to rather shift into the sort of more margin healthy portion of the book next year. But overall, rather stable and positively tuned margins, despite the competition.

Yes, sounds positive. Yes. And maybe moving from there to the liability side, deposit growth, you had some very successful campaigns of getting deposits in. How should we think about deposit growth in terms of volumes?

And also in this context, can you talk about is there a mix shift happening between checking, savings accounts, so to say, or term deposits? And clearly, you've given beta guidance. So if we package that all together, you guided to, I think, 43% beta in the fourth quarter stage. And just wondering how you think -- how you see that developing?

Yes. Yes, then let's start with the activity we've seen and we've been active in ourselves. I think especially beginning of the year was pretty heavily competed for. We saw quite large promotional offers by the competition actually attracting quite a lot of deposit inflow. That was a period of time in Q1, Q2, we didn't want to participate in that market.

It also became a bit more subdued towards summer. In summer, we went out with a larger promotional offer ourselves. We collected EUR 8 billion within a few weeks at the conditions we wanted to actually have.

So clearly, that's always a bit more expensive than collecting the deposits on a regular basis. But we have quite good behavioral, let's say, data on what customers also do, how sticky these deposits are once the promotional offers run out.

So for us, in short, I would say this was a rather regular sort of activity we had in the market, targeted to the amount we wanted to collect within the budget we wanted to spend, and that's probably also it for this year so far.

General development also over the next years is clearly an incline. We want to continue growing sort of the deposit base. I think competition has always been high in that space, but that's what we're aiming for.

And in terms of beta, you're still on track.

Yes. On the beta, I think when we went into the year, we were cautious in seeing where would especially this year's development go. On the personal customer side or personal customer deposits, clearly a question of competition. On the corporate customer side, always an interplay also with what is required for them from an economic perspective, depleting the deposits versus taking in loans.

But from a beta perspective, we've actually seen very good margin management on our side. You correctly said we are guiding for 43% in Q4. The overall year, we'll be averaging out more towards the 40% range. And then we'll have to see how this trends into next year.

So I think Q4 is probably the, I call it, the exit velocity, if you want so, on the personal customer and the corporate customer side, and personal customers will be dominated by whatever competition is out there. Corporates likely stable at this relatively high level, if you want, so mostly because of the current interest rate level altogether.

And what is the risk that considering -- I mean, Germany has excess deposits as a system. But what is the risk that lending picks up, especially in the corporate side, and also on the mortgage side, it starts to come through on a net basis that there could be more customer deposit pressure, so to say, or competition, I should say, to finance that?

Yes, absolutely. I mean I think that's definitely a scenario that could kick in, especially if you consider positively that all of the stimulus will have an effect at some point. So it's not an unlikely scenario.

And if you want to, I mean, we're having around EUR 280 billion of deposits altogether collected via corporate customers, personal customers. So we are quite active in the market, and we have a pretty good overview of what's happening and which economic cycle, how do the customers behave, what are the pricing points we have to put out.

So from that perspective, you see me rather curious and relaxed to see what's coming in collecting deposits. If the demand is really picking up heavily on the loan side, that's clearly also what we can manage.

I mean we have the resources at this point in time, also very conveniently supported by securitization transaction. So in terms of capacity to further grow, I think we are exactly prepared for that in line with our strategy.

And customer behavior on the retail side hasn't changed materially between more term deposits and checking accounts?

Not really. What -- I think what you will always see in a rather rate declining cycle, even at this moment where it's not coming from super high interest rates levels, but we are in a slight decline, so the lower the rates are, let's say, the less selective retail customers are also when it comes to differentiating between current account and term deposits.

So there's always a drift towards more term deposits and more attractive offers, the higher the rates are. So this is clearly having a bit of a mark, but no structural shifts we are seeing.

And maybe we finish then on the structural hedge. Structural hedge is EUR 147 billion. You have mentioned in the past that it could go based on your modeling up to roughly EUR 200 billion, in that range. I mean why not move there quicker, considering your deposits are expected to grow as it would help your NII quite significantly?

Yes. I think that's a prudent management of the overall book. The slightly above EUR 200 billion you mentioned, that's technically what we could model from a modeling perspective. So we're looking into all of the deposits that are coming in. We look at the stickiness levels, EUR 208 billion is basically what we can model.

What's then coming out of the models in terms of expected depletion rates, drawdown rates, et cetera, is having quite a structure. So the EUR 147 billion which you can expect to likely be adjusted rather upwards a bit with the deposits we're having, but that is basically what we are happy to have also as a bit of a cushion towards what's happening in the market. If there's quick drawdowns, I don't have to unwind the stabilizing portfolio so quickly. So let's call that prudent.

I guess that's a difference between running a bank and running a spreadsheet, so on the analyst side. It's always easy for us to say.

If we move to the fee side, you have a guidance of EUR 4.8 billion by '28. So it's about 6% annual growth, but you're already running at 7%.

Yes.

So things look pretty healthy. Could you talk about what is driving that and unpack a little bit the fee side, what should drive it going forward?

Yes. So what we set out in our strategy to '28 was basically a CAGR of 7% on the commission income side. And again, my earlier comments, running or going -- entering into a strategy cycle, I should say it this way, always comes with a bit of a structure. So you have to ramp up and then you sort of roll into the run rate.

So having this strong start into the strategy cycle with 7% to date this year already is a really good start, fully fueled by our underlying client business, and that's the positive thing. So we basically see increases in every single product category and customer area.

And if I take this apart a bit also in terms of what's coming in the next years, on the personal customer side, I think this is now reaping a bit the fruits also from previous changes in the setup, in the advisory setup, which we triggered years ago, but also which went into last month, completing sort of reshaping our advisory model towards customers, focusing much more also on to value-add products, products for customers with more complex needs when it comes to securities advisory, wealth management, et cetera. So that's fueling it.

Pretty prominently this summer, actually, we changed our fee model for current accounts and actually charging the better part of -- actually the full part of our accounts in the main brand now, and contacted 2.5 million customers and actually asked them to please pay up for the accounts going forward.

And the return rates actually of accepting this or bringing in further funds to actually make certain thresholds to not pay is coming in quite nicely. So this is all underlying business that is fueling the commission income.

And then lastly, on the corporate client side, what we are clearly seeing is, yes, revenue that is coming in, fees, commissions that are coming in, in line with our loan growth. So it's usually connected to actual customer activity plus then, of course, our trade finance and markets business, which also brings in a bit.

So in terms of growth in the next years, as this is all linked towards the customer and volume growth we are seeing coming in at the moment, I'm actually very much looking forward to the 7% growth.

Yes. It feels like it's just ramping up, so to say. And in that context, you mentioned clearly lending growth has an impact, et cetera, as well on the fee side. You talked a lot about lending and stimulus impact, et cetera. But on the fee side, is there anywhere for us as analysts think about, okay, how can I translate German stimulus into fee? Should we do it through lending? Or is there other measures that we should look at to get a feeling of what is the potential?

That's an interesting one to fill the spreadsheet. Yes, I mean, first and foremost, looking at the corporate customer side, I mean the logical sequence would be stimulus actually is coming to life. You see additional activity in terms of production, in terms of providing services, takeout of loans, but clearly also increased trade and trade finance business coming out of this.

So I would say, on the corporate side, it's not wrong to go via general volume growth and then also seeing how the stimulus really sort of affects GDP going forward.

On the personal customer side, I would always say this is really dependent on customer activity, which we're continuously ramping up. But also, I mean, once if we follow that logic, once the economy actually becomes more stable, clearly, this will have a slightly delayed impact, but impact also in every single person's pocket. So ultimately, we would expect that this is coming in.

Then another point, probably still a bit on the horizon, but there's also political initiatives at the moment in Germany to rather fuel securities-based investing also for personal pensions in the end, a discussion that I think is long overdue in Germany, but it's at least now gaining speed. So if something like this comes in, I think that is also something to consider for in a few years because this clearly fuels a lot of the investments.

And maybe we then move to net fair value results, which were minus EUR 60 million on the 9-month stage in '25, but you're guiding towards EUR 500 million in '26. And there's been some question, how do we get there. Maybe you can explain what happened and how do we see that delta?

Yes. So there's two ways to go about this. I can come from this year or I can start actually with next, and I'll start with next year. So we have a net fair value guidance of EUR 500 million for next year. And if you disseminate the net fair value line, there's a few components in it.

The most important component is our customer-driven business. So usually corporate client side business, which is fueling the net fair value. That is coming in at a fair and stable rate, and this is effectively underpinning this EUR 500 million.

What we then have in addition is in a year like this, and this explains a bit the difference to the 9-month result at the moment, net fair value result also has counter positions of interest rate hedges that we had in the book. So clearly, there is a portion that came in this year, which stands partially against net interest income.

So you see a bit of a distortion of the underlying sort of base client business. This, I wouldn't expect next year, given the interest rate environment. So that should actually leave that clean, if you want so. And then there's another component, which usually stands against the other income, which is inefficiencies and hedges from an accounting perspective.

So there can always be a bit of a noise level around the net fair value. But if you look into next year and if you take out these effects for this, then effectively, next year, the EUR 500 million is the underlying business. Ideally, we see this growing and then potentially a bit of fluctuation against other income from the hedges.

And if we then move towards cost, you guided to 50% cost income by '28. We have a forecast of 57% this year. Should we think about the cost income improvement kind of a linear movement in terms of continuous improvement to get there? And tell us about the drivers that are impacting your cost base?

Yes. So then let's start with the movement. It won't be exactly linear. Our strategy in itself is a growth and transitioning strategy. So you will see that over the years, the aim is not to -- besides diligently managing the cost base, clearly is not to run down the cost base, but it's rather have an incline in business activity and in income.

And if you look at the measures that we've taken, we see a slight structure where we will see additional costs or, let's say, costs that run down a bit slower, especially next year, the following year. So for this, we have 57% as a guidance for the cost/income ratio. For next year, it's 56%. And then it will drop off towards 50%.

Main reason is that within the strategy, we are transforming a good portion of our staff base from within Germany, especially headquarter, especially operations based into our near-shoring or shoring in-sourcing hubs. And there's a period of time where we want to, a, allow for a handover of tasks, hence, a slightly sort of a delayed decline or stronger decline of the cost as was planned.

And then secondly, we want to also facilitate the reduction of head count in Germany in a socially responsible manner, which we fully negotiated and contractually signed off with the workers' council. So hence, you see a bit of a structure.

But I think the important thing on the cost side is base costs managed very diligently and staying stable/coming down and then the cost income ratio is fueled by income.

And in the context of cost, clearly, a large proportion is still always with the branches. Should we think about further branch measures in terms of potential reductions?

Yes, you're talking to the CFO now. But on a serious note, we've pretty much transformed the branch setup we've had over the last year significantly. If you consider a few years back, we had 4-digit number of branches in Germany. I think the number of 1,000 branches was hovering around for quite a while. We've reduced this now to 400 branches and transformed the branch setup in itself.

So it's not so much the classical branch where a customer comes in and we basically have inbound business. A good portion of these branches are now outbound advisory hubs, which we've positioned so that we are using this much, much more for active customer advisory or outbound calls as well if we need to.

So the branch structure has changed quite a lot. At the moment, this is a good mix. But clearly, we are very much looking into exploring also digital channels via our brands. So I think time will tell what size is the right one. At the moment, this is exactly what we need for our advisory setup.

And moving towards asset quality, you have a guidance of 25 basis points by '28. Do you see any major issues on the credit side? It feels like there is not much concern in the market at this point, either on CRE or other areas from your perspective, any...

Yes. Well, I mean, we're very selective in what we have in our book. Let's put it this way, there's areas which we were active in, in very past times that we're also deliberately not active in that much anymore. So our book in itself actually is really stable what we're seeing this year.

And we could also demonstrate that in the Q3 numbers is effectively a stable book with no surprises in it. Risk guidance or risk result guidance for this year, we just took down because we expect at the current rates and still pending Q4 and everything that we don't see any extraordinary movements.

The interesting discussion clearly is how is the economy in Germany continuing to develop. But again, on that end, I'm rather on the slightly more positive side because I think the signaling and the stimulus that is actually coming in must leave a mark.

The investment packages are too large. The current commitment to actually changing also some of the conditions around it are so concrete and this will leave a mark and hence, should hopefully also support the credit book going forward. But on our end, you're absolutely right, we're running very stable also towards '28. Nothing I would have to cautiously warn you on here.

And if you look at capital, which is very healthy, above your guidance, clearly, and you have a payout ratio target or guidance of 100% by '28 continuously. What would trigger a change? I mean what is it on your side that you say, okay, we want to go above that? And secondly, what do you have to illustrate to your regulator in order to get a approval to get to a level of above 100%?

Yes, it's -- I think that's one of the favorite questions the last month. Capital base is strong.

14.7%.

Yes, at the moment. We took it actually up from an original guidance for this year of 14%. So actually, we've come in quite strongly, perfectly in line with how business generally is developing for us. And you saw that in the numbers.

So we've basically planned out a path of returning 100% over the next years in line with our strategy to arrive at a target capital ratio of 13.5%, which we, at this point in time, deem the right level to underpin our business and also be able to yield proper returns for our investors.

So consider the next years until '28 also as a path towards that target ratio. The discussion with the regulator is, of course, a regular one on this. And clearly, there's different positions that the parties are looking at. I would tend to say that if you look at it from a regulatory perspective, there's always an ambition to keep capital in the system to rather sort of stabilize more than less.

There's no benefit in actually encouraging too much of a flush out of capital. And then from our perspective, I think we are very much focused on having the exact right level of capital in order to also have a proper return.

So if we were to have a discussion with the regulator to go above the currently agreed levels, then I think that really depends on the current state of, a, the overall system, and then clearly, our own health. But the second I would always assume is then there, otherwise we wouldn't ask. And we have to take that year by year.

And in terms of finishing the -- before we're opening up to the audience, you -- just in terms of your interaction with your main shareholder, maybe you can talk a little bit how is that different from any other investor? How does the interaction work?

And in that context, clearly, a potential -- I mean your defense from a potential bid, the way I understand it from the wording is basically, it doesn't make a lot of sense to do that because considering where the numbers don't stack up, a lot of it is related to that in terms of your overall defense at least the way I interpret it.

Can you talk about that? First of all, what are the interactions and what is, so to say, your defense mechanism in that sense?

Yes. So in terms of interaction, I think you can consider the interaction being the exact same as we have it with every shareholder that we're having, regular investor relations meetings around the quarterly figures, absolutely professional. So nothing out of the ordinary. That's one thing we don't discuss clearly in these meetings. But apart from that, nothing out of the ordinary.

When it comes to the defense, as you call it, I wouldn't put it too much towards only hinting at the spreadsheet, so to say. That's the result. What we're actually focusing on is generating a lot of value with our strategy and implementing that one. And I think that is what we've demonstrated.

If you look at the market capitalization, at the share price incline, at the business and the numbers that are coming in, that is, if you want, so not our defense, but this is what we're focusing on, providing and then creating value for our shareholders.

And that, in turn, gives us the benefit of having a market capitalization that I think at this point in time, puts a question mark behind value accretion for investors in a potential change of the setup.

We open up for questions. Yes, please. There's a mic on the table, yes.

And there's a growing fashion in Germany for retail deposit collection to be price led and you talked about that yourself. Is there any evidence that there is a growing proportion of the deposit base which is becoming price-sensitive? Or should we think about this as the same part of money, which is price sensitive, but rotating between the banks?

Yes. Thanks, [ Ian ]. Good question. So the activity we have seen this year certainly was interesting to watch because we have seen deposit collection by competitors and also us that were marked by really attractive offers for customers. I can only talk for ourselves.

We are doing this because we have a pretty good set of, let's call it, behavioral data on what's happening with these deposits afterwards. So when we are going into the market with attractive rates, it's also to attract the full customer relationship. So the offers that we had out in the market were high, were also partially going beyond ECB deposit rates, but only if you brought your full customer relationship actually to us.

So there is a point of not only attracting the deposits but also longer-standing customer relationship. We know that works for some customers; for some, it doesn't. Some are indeed actually very, let's say, fluent in picking the banks they deposit their money with because they are very sensitive to where the rate is, and we don't really see this portion to increase, at least not in our numbers.

So there's always a portion of depositors that jump for the next highest offer. But with every single run that we collect deposits on, we have a relatively high sticky quota even once the promotional rate drops off, and we managed to keep a good portion of those customers in.

Those that move on, we usually see a similar amount of customers moving on and then coming back. It really depends a bit on where this is going in the next years, clearly. I think the market is growing, but it's also becoming more competitive. So I think we'll have to watch that space.

In terms of our competitiveness level, I always like to also highlight that we have a quite large depositor base and also good channels with our two brands in the German market to collect deposits. So we know quite well what's happening at which point in time in the market also regarding competitive offers. And we're watching this, of course. So I think we have to take that quarter by quarter, Ian.

Can you remind me when you do a deposit campaign, price-led, what proportion of those deposits you assume remain with you on the other side of the [indiscernible]?

Yes, we usually don't put that number out. But if I say the better part, then it's literally the better part. So consider that really depending a bit on where we are to be in the upper part of the 100%. So it's not less than half. It's not much more.

Great. Thank you very much, Carsten. Thanks for joining us. And it looks like a very much operational gearing going all in the right direction even beyond, from our perspective, at least the guided numbers here.

Perfect. Thank you very much, Kian. Thank you.

Thank you.

Hello, and welcome to the Commerzbank AG Conference Call regarding the third quarter results of 2025. Please note that this call is being transmitted as well as recorded by audio webcast and will subsequently be made available for replay in the Internet. [Operator Instructions] The floor will be opened for questions following Bettina Orlopp's and Carsten Schmitt's presentation.

Let me now turn the floor over to our CEO, Bettina Orlopp.

Good morning, everyone, and welcome to our earnings call. Our growth story in Commerzbank continues, and we have achieved the best 9 months operating result in the history of Commerzbank. This strong momentum also drives our outlook. With increased expectations for net interest income, we are very confident to deliver on our targets in 2025. I will present to you the financial overview after 9 months of this year and the key strategic topics before Carsten will walk you through the financial performance of the third quarter.

Let me start with our view on the last 12 months. It was a special journey that we embarked on. Based on an exceptionally good team spirit, we created a very strong momentum for Commerzbank. We developed our momentum strategy with ambitious targets for 2028, 50% cost-income ratio, 15% return on tangible equity and 100% payout each year. In this process, the extremely high commitment of everybody involved was as important as the bare numbers and targets. And this has translated into strong focus on delivery.

The success is impressive. 13% loan growth in Corporate Clients, 8% growth in fee income and a 11% increase in total revenues are proof of the strength of our Team Yellow. This is, however, only possible because we have a strong and robust business model that meets the needs of our clients. We further strengthened our client franchise and are proud of the deep relationships -- deep client relationships, I have to say, that are underpinned by many awards we have won.

The very good performance and positive prospects have also driven our share price, which has almost doubled in the last 12 months. Based on our team spirit, our well-established client relationships and with some support from macro developments, I see a lot of further potential to be lifted. Our focus on shareholder value will also be further strengthened by the employee share program, which has started in October and aims to make every employee a shareholder of Commerzbank.

Now let us have a look -- a closer look at the 9 months financial performance of this year. The material growth in fee income and around EUR 500 million higher revenues in mBank, including less burdens from the provisions of FX loans have led to the record operating result after 9 months. Together with high cost discipline, this growth is reflected in the cost-income ratio of 56%, which is exactly where we wanted to be on the path towards increasing efficiency going forward.

In terms of return on tangible equity, we have achieved 10% after 9 months when excluding the restructuring charges. The double-digit return level is our new baseline for growth from 2026 onwards and demonstrates the significantly increased strength of Commerzbank. The high revenue growth of 11% is based on our significantly increased fee income. But equally important is a very successful management of net interest income in an environment of significantly lower rates compared to last year. The decrease of just 1% in NII provides us with lots of confidence for the next quarters.

At the divisional level, the somewhat lower net fair value result in Corporate Clients has been broadly offset by the strong fee income in PSBC, and the group overall benefited from the strong trajectory in mBank. So the first 9 months have been very successfully -- successful financially. And this also applies to the implementation of our strategy.

Let me highlight five areas in which we have made significant progress. First, on customer focus. Since last month, the new client coverage model in PSBC Germany is live. Key elements are personal one-on-one relationships for affluent clients and more time for high-quality advice in wealth management. Second, on growth. Based on our deep client relationships in Corporate Clients, we are the leading go-to bank. This has led to significant capital accretive loan growth of 13% in the last 12 months. Carsten will further elaborate on this. Important to note is that this growth is thanks to strong ties with our clients rather than any pricing concessions.

Third, on AI. We already reported on use cases such as fraud detection and AI-assisted documentation for advisory calls with Corporate Clients. One of the latest applications is the AI enhancement of our KYC processes. Fourth, on costs. The implementation of the restructuring program is fully on track. The latest milestones have been the successful completion of all negotiations with the workers' representatives and the offering of part-time early retirements to a selective group of people. The acceptance rate of almost 50% is very high.

And fifth, on capital. In Q3, we have successfully completed our first SRT of the year. The EUR 3 billion notional and EUR 1.6 billion RWA relief came at low cost in the area of 1% of RWA. This is very capital efficient. And in placing the first loss, we also achieved some risk mitigation. We plan for further SRTs in the weeks to come. All these achievements and the financial performance contribute to the confidence of the regulators into Commerzbank. This is reflected in our improved SREP results with a 10 basis points relief in Pillar 2 requirement.

Looking into the next years, our regular planning update has confirmed our strategy. A few topics of special strategic importance have been identified and addressed. First, we stay focused on our growth path and pay special attention to the German stimulus package. This is a meaningful additional catalyst for our financial performance. Second, AI is one of the most important drivers to transform our bank and ensure increasing efficiency levels. What we have seen so far is just the beginning, and we will further invest heavily into AI. One example is the support of our staff in the advisory center. Live transcription of calls, proposals for client solutions and support for outbound calls will contribute to increasing efficiency and client satisfaction.

And third, we strive to optimize the deployment of capital above 13.5%. Besides capital return by means of dividends and share buybacks, this includes the exploration of further organic growth opportunities as well as inorganic options such as bolt-on acquisitions. In an ongoing screening, all options must meet our investment criteria in terms of business fit and value accretion.

Now back to macro and the German stimulus. The German investment package for defense and infrastructure, combined with legislative changes such as taxation relief and depreciation rules will significantly support our growth ambitions. Within our GDP forecast of 1.2% for 2026, we expect a considerable fiscal stimulus of 0.8% of GDP. The recently weaker German economic data do not contradict the expectation that a more expansionary fiscal policy will boost the economy. The budget for 2025 and the law on the extrabudgetary fund only came into force at the beginning of October. Hence, the positive impact will only be visible in future economic data.

Furthermore, the federal government has shifted a considerable amount of investment spending from the core budget to the extrabudgetary fund in the budget for 2026. This increases the federal government's financial leeway and it can quickly increase other expenditures. This will help the economy in 2026 and 2027, even if the extra spending is partially directed at consumption instead of investments. The halving of the ECB deposit rates to 2.0% also points to higher economic growth. The positive view into 2026, however, still needs to translate into higher economic activity of corporates and especially the German Mittelstand.

In this regard, the highest business expectations since 2022 according to the [ ifo] survey are positive. So sentiment has improved, the Mittelstand still remains cautious when it comes to investments in Germany. Bureaucracy energy prices and shortage of skilled workers still weigh on the business prospects of many corporates. Government-induced reforms to tackle these issues are important to unfold the huge potential of the stimulus package.

Now let's move on with our own capital return program. We are very well on track and plan for a steady increase in capital return. Our currently active EUR 1 billion buyback program for 2025 is progressing well, and we have applied for a second tranche of up to EUR 600 million. Once we have a clear view on the full year results, we will decide on how much we will propose as dividend for 2025 and what the exact size of the second share buyback will be. Both steadily increasing dividends and the flexible use of buybacks will remain integral parts of the capital return program. Returning 100% of net profit after AT1 translates into attractive capital return yields of 8%, increasing to 11% over the next years. This is a key element of our strategy and our equity story.

Let me now conclude with our outlook for 2025. Based on the strong performance after 9 months, we raised our outlook for net interest income from EUR 8 billion to EUR 8.2 billion. Furthermore, we improved our expectation for the risk result to below EUR 850 million. We stick to our cost-income ratio target of 57% and our target for the net result of EUR 2.5 billion, which translates into EUR 2.9 billion when excluding the restructuring charges. And we consider this to be the floor of our full year expectations. And we maintain our expectations for the CET1 ratio of at least 14.5% at the end of this year.

Looking at 2026, our view is also very positive. The strong NII trajectory and the macro tailwind from the German stimulus forms significant support for our momentum strategy. With the presentation of our full year results next February, we will provide the full view on our outlook for 2026.

Now let me hand over to Carsten for the financial performance of the third quarter. Over to you, Carsten.

Thank you, Bettina, and good morning, everyone. It is my pleasure to present the results of the quarter. Let's start with a brief overview. Based on strong revenue growth, the operating result is up 18% compared to Q3 last year. The net result is lower, but only due to a one-off tax effect from DTAs driven by the reduction of the German corporate tax rate from 2028. Net RoTE thus came in at 7.8% for the quarter. For the whole financial year, we are on track to reach our RoTE target despite the tax effect; thanks to the good underlying performance of the business. The CET1 ratio of 14.7% is 18 basis points higher than in Q2 and fully in line with our target of at least 14.5% by year-end.

I will now go through the details, starting with revenues. In the quarter, we achieved a 7% increase in revenues compared to last year. Net interest income is holding up very well, being on the same level as Q3 last year despite significantly lower ECB rates. In net commission income, we have maintained our momentum with income growth in line with our target of around 7% year-on-year. While opposing effects are largely canceling out, the net fair value result is marginally negative due to a minus EUR 34 million valuation effect from our holding in eToro. Other income, excluding FX loan provisions, mainly stems from a positive hedge result.

Now [Technical Difficulty] in more detail. All customer segments grew their business year-on-year with mBank additionally benefiting from a one-off from the cards business. Corporate Clients generated good revenues in the generally slower summer quarter. Trade Finance has increased revenues despite the ongoing weakness in exports, and Capital Markets had a very healthy syndication business. The biggest increase came from Lending, where fee income linked to loan origination was significantly higher, in line with volume growth. Green Energy was especially strong.

Private and Small-Business Customers in Germany continued to grow the fees from Securities business, both from securities volumes and transactions compared to last year. In Payments, the higher account fees that were introduced at the end of Q2 are starting to contribute. We have finished the first round of reach out to customers with a good acceptance rate. It has also resulted in customers increasing volumes. Asset Management benefited from higher transaction fees at Commerz Real and growth with wealth management products. With our ongoing initiatives, we have maintained momentum and are on track to reach our growth target for the year.

Let's move on to interest income. We again had some headwinds from rates. In Q3, ECB rates were on average 25 basis points and Polish rates 50 basis points lower than in Q2. Nevertheless, net interest income is nearly on the same level as in Q3 last year. This clearly demonstrates the resilience of our business model. In Corporate Clients, net interest income is up compared with Q2 and Q3 last year. Lower funding costs for trading positions and higher income from the lending business were the main drivers. The lower funding costs linked to lower ECB rates are, however, partly offset in net fair value of trading book positions.

In PSBC Germany, net interest income is up year-on-year and on the same level as in Q2. The effect of lower ECB rates and our investment in promotional offers for new deposits were offset by increased contributions from the replication portfolios and mortgages.

In mBank, the lower NII results mainly from the cut in policy rates. The effect has been offset by higher net fair value from derivatives. In Others & Consolidation, NII is also lower, mainly due to rate cuts. Again, there is a positive offset in the net fair value result from derivatives.

Looking at volumes, we had a very strong quarter. Corporate Clients has continued to grow the loan business with all customer groups. The loan volume is now up 13% year-on-year. The deposit volumes have been stable. PSBC Germany has maintained stable site deposit volumes and increased call money by almost EUR 8 billion with the promotional offers in July. This strong inflow has led to an expected uptick in the average deposit beta to 42%.

In the mortgage business, the volume of new contracts has increased further, indicating a recovery in demand as house prices have stabilized and interest rates have reached a steady level. The outstanding volume is somewhat lower due to seasonally higher early repayments.

On the next slide, I will give you more details on the loan growth in Corporate Clients. As mentioned, Corporate Clients is well ahead of its 8% annual growth target and achieved this growth based on our diversified franchise. This franchise extends to customers worldwide who have a connection to Germany. It also includes the foreign activities of German companies. As expected, with the sluggish German economy, there has been only moderate growth with corporates in Germany. In contrast, demand from the public sector has picked up over the last quarters. Another area of growth has been green infrastructure, both inside and outside of Germany.

We have steadily grown the portfolio over the last years. We expect this to continue despite the changes in the political environment, given the economic attractiveness of the projects we are involved in. Also, demand outside of Germany has been healthy. Around 80% of the growth has been equally spread across Europe and the U.S. and the rest came from Asia. The new business has been diversified by sector with the largest demand from energy, chemicals and consumption. Finally, in line with our Momentum strategy, we expanded our relationship with Institutionals, especially financial institutions in emerging markets in loan and trade finance products. All this business has been generated at attractive risk-adjusted margins as we maintain our focus on the RWA efficiency of our client relationships.

Looking into 2026, we expect demand in Germany to pick up as the extra spending by the German government should start stimulating the economy. The significant growth we have seen in renewable energy and in financing for the electricity grid as well as guarantees for the defense projects are first halving us. We are, therefore, confident that we will maintain our profitable growth trajectory.

This brings me to the next slide with the outlook for NII. On the back of the successful loan growth and deposit management of the last quarters, we again raised our NII outlook from EUR 8 billion to around EUR 8.2 billion for the year. We believe that we have reached the trough in interest income in the second half of this year. For Q4, we do not expect significant deviations of the main drivers and net interest income should therefore be on the same level as in Q3.

We anticipate an ongoing increase in contributions from the replication portfolio, offset by slightly higher deposit beta and continued volume growth. The contribution from mBank will be somewhat lower due to the expected rates development in Poland. 2025 proves that our business model is holding up well even during a rate cut cycle with ECB rates on average around 1.5% lower than in 2024. While lower rates have reduced NII in 2025, we also had a positive effect in the net fair value of around EUR 300 million. For 2026, we expect ECB rates to remain at the current level. We, therefore, do not anticipate the contribution of positions that are rate sensitive to ECB interest rates to change significantly, neither in interest income nor in the fair value result.

With an expected EUR 2 billion NII in the fourth quarter, we, therefore, start with a baseline of EUR 8 billion NII for 2026. From this starting point, the main drivers of net interest income in 2026 will be rising contributions from the replication portfolios and continued growth, partially offset by headwinds from the beta and rate cuts in Poland. In total, these drivers should contribute approximately EUR 400 million, resulting in an expected net interest income of around EUR 8.4 billion. This is a good basis to reach our profitability target for 2026 and subsequent years.

Now to costs on Slide 19. We have continued to manage our operating expenses in accordance with our target cost-income ratio of 57% for 2025. The main driver of costs, excluding mBank, has been personnel expenses. Half of the increase is attributable to planned increases and half to valuation effects of a higher share price on equity-based compensation. Additionally, in H1, we had impaired intangibles of EUR 65 million of Aquila Capital, which is reflected in the cost line.

mBank has, as planned, a higher cost increase from significant investments in business growth. Additionally, compulsory contributions were higher. For Q4, we expect higher costs than in Q3 as there will be some seasonal effects, further growth in mBank and higher personnel costs as we continue to ramp up shoring and sourcing centers to transfer further tasks currently done in Germany. After booking the momentum restructuring expenses in Germany in the first half of 2025, we booked the majority of the provisions for staff reductions at our international locations in Q3. In Q4, we expect an additional booking of less than EUR 20 million.

The next slide covers the risk result. The risk result came in at EUR 215 million. This is fully in line with our expectations. The portfolio continues to be resilient. And while the -- while we expect a somewhat higher risk result in the longer fourth quarter, we are very confident that we will end up below EUR 850 million given the good performance so far. As this has been a topic recently, we have added a slide on our NBFI portfolio in the appendix. This portfolio mainly reflects our well-established Institutionals business in Corporate Clients, which we are very comfortable with. Our exposure to private credit is not noteworthy. We have no direct exposure to U.S. private credit markets. This concludes the view on the key line items.

I've already covered the main drivers of the excellent operating results and will therefore focus on the tax rate. With 36%, the tax rate was well outside our normal range of 25% to 30%. This is primarily due to a change in the German tax law. From 2028, the corporate tax rate will be reduced in 1% steps from 15% to 10% in 2032. While this will be positive long term, it reduces the current value of future tax credits. We, therefore, had to reflect this in the DTAs that we hold and is a one-off event. In case the proposed tax increases in Poland come into law, we will have an opposite effect in Q4 with a write-up of Polish DTAs. Overall, we expect the 2025 tax rate to be rather in the upper half of our expected range of 25% to 30%.

The next slides cover the results of the operating segments, starting with Corporate Clients. As already mentioned, Corporate Clients had a good performance in the quarter, increasing the operating result by 15% year-on-year. Revenues benefited from the strong loan growth and the good Capital Markets business. This is most visible in International Corporates with 14% higher revenues and the strongest loan growth. In Mittelstand and Institutionals, the business has also performed well. However, the effect of lower rates on deposits could not be fully compensated. And finally, the risk result has remained well contained, supporting the operating result.

PSBC Germany has also improved its operating results, both year-on-year and quarter-on-quarter. As mentioned, the main revenue drivers have been the Securities business, the new account fees as well as some contribution from loans and deposits. In Private Customers, the investment and promotional offers had the expected impact in Q3 and will start to pay off in 2026. Asset Management held revenues on the level of Q2 in the rather slower summer months.

mBank has maintained its profitability nearly at the record level of Q2. As expected, provisions for FX loans have been lower than in the previous quarter, and we expect Q4 to be the last quarter of sizable provisions. In September, mBank published its new strategy until 2030. mBank targets continued growth with the ambition to reach a 10% market share in Poland. With this growth and a target cost-income ratio below 35% before banking tax, mBank will materially contribute to the financials of the group. For 2026, mBank aims to start paying a dividend. This will ultimately benefit Commerzbank shareholders as it supports our capacity to distribute capital.

Others & Consolidation reported an operating loss of EUR 53 million in the quarter, nearly on the same level as Q3 last year. Year-to-date, the operating result is plus EUR 66 million, in line with our expectation of a more or less neutral result for the full year. Revenues are slightly higher than Q3 last year with lower NII compensated by the fair value result. Compared to Q2, there has been some additional valuation effects. Most noteworthy has been our stake in eToro. In Q2, we booked a gain of EUR 63 million following the IPO, while we needed to book a valuation loss of EUR 34 million in Q3 as the share price fell during the quarter. We will also see some effects in Q4 depending on share price performance.

On the next slide, I will cover the RWA and capital development. The CET1 ratio stood at 14.7% at the end of the quarter, up 18 basis points from Q2. There were two main drivers. Risk-weighted assets are lower as RWA from loan growth were more than offset by an SRT issuance and model effects. We plan to issue further SRTs in Q4, optimizing the return from the loan book of corporate clients. At the same time, capital has increased as the deductions from Prudential Valuation were lower due to decreased market volatility after spiking up in spring of this year. In line with our distribution target of 100%, we have not included the quarterly profit for the calculation of the CET1 ratio. In total, we have already dedicated EUR 2.1 billion for distribution to shareholders in the first 9 months of the year.

The MDA has gone up from 10.2% in Q2 to 10.4%. The reason is the introduction of a countercyclical buffer in Poland. A similar impact is expected in Q3 next year when the Polish countercyclical buffer is increased further. Finally, we have received the SREP letter from the ECB. Our 2026 capital requirements were lowered by 10 basis points. For us, this is a recognition of our solid business model and our increased resilience in recent years. As we must hold only part of the regulatory capital requirements as CET1, the MDA will be reduced by around 6 basis points effective from January.

The outlook for 2025. As already mentioned, we have improved our outlook for NII from EUR 8 billion to EUR 8.2 billion and for the risk result from around EUR 850 million to below EUR 850 million. We confirm all other targets. We continue to expect growth of the net commission income of around 7% compared to last year, a cost-income ratio of 57%, a net result of around EUR 2.5 billion, and a CET1 ratio of at least 14.5%. We will provide our outlook for 2026 alongside the full year results in February. We clearly see upside of NII -- on NII compared to our original plan that we published in February and expect support from an improving macro environment.

Thank you very much for your attention. Bettina and I are now looking forward to taking your questions.

[Operator Instructions] The first question at this point comes from Benjamin Goy, Deutsche Bank.

Two questions, please, on net interest income. The first, thanks for Slide 17, the breakdown on the Corporate Clients growth, but maybe you can speak a bit more about your growth expectations for corporates in Germany and when this is going to inflect, whether it's early '26 or a bit later? And then secondly, you also mentioned that your '26 NII is likely impacted by higher deposit beta, which you consistently -- I think, conservatively assumed. So just wondering what increase you have expected? And how much was actually the comdirect campaign in July increasing the deposit beta last quarter?

Thank you, Benjamin. So I mean, what is the outlook for corporates in Germany? You see that the growth is also already now in Germany when it comes to public institutions and also partly Green Infrastructure. But the majority we expect for 2026, one factor will be clearly the stimulus package of the German government. But then also given the improving business sentiment, which we see, there should be also more activity, specifically from Mittelstand clients for Germany. And there is apparently also the Made for Germany initiative, which means to have significant investments in Germany in the coming years. And on NII 2026, I hand over to Carsten.

Yes. Thanks, Benjamin. Let me start with the increase in the deposit volume that we've seen in the third quarter. As you asked for it, so in July, we increased our deposit volume by around EUR 8 billion from the offers that we had out via comdirect. This led to an increase in the beta. On the personal customer side, we expected this, which is why you also see the beta coming up in Q3 to 42%. We've now said that we expect a slight increase into Q4, which is not stemming from the personal customer business, but rather from the Corporate Clients side. Given the generally lower rate environment at the moment, it becomes harder to actually fully transmit the rate cuts into the client business. And hence, you have a structural increase of the beta from that side.

So for the full year, we are still expecting an average beta of around the 40% mark we indicated beginning of the year, potentially minimally higher. And for '26, as you asked for the development towards the EUR 8.4 billion NII, for '26, we expect that the current rate environment actually will come with the same strain on the corporate client beta. On the personal customer side, as mentioned, we expect this to come down again in Q4 and then manage it as we go in the quarters of next year.

The next question comes from Tarik El Mejjad, Bank of America.

Just a couple, please. On cost savings, can you update us a bit on the progress on the different initiatives you've launched with your CMD earlier this year and how you're confident to deliver especially the trajectory on that? And second one on the capital. So if I understand well, by year-end, we will have a better view on the mix between the cash and buyback. So you say paying 100%, is it possible to pay more than 100% if you are above 14.5% CET1? Because we know that it will be EUR 1.6 billion or so of buyback, and then the components on the cash, given where you trade, could that be higher to lead you more than 100% from this year? Because I think that now what we need to look at is the 14.5% CET1.

So Tarik, thank you for your questions. On cost savings, we make very good progress. First, when it comes to the restructuring program itself and the headcount reductions, we concluded all necessary negotiations with the workers' council, and we have already announced all structural changes, and we are in the process of implementing them. And we also started with one instrument, which is kind of a part-time retirement program, which has a benefit that people stay on for the next 1 to 3 years, so you can really manage transition and then they will go in the passive retirement phase. And we had a very high acceptance rate higher than we expected with 50% of the people we address that to. And then all other social instruments are also now available. And therefore, we are very much developing according to plan.

When it comes to the necessary measures, when it comes to efficiency, streamlining, AI showing, we are also showing exactly the progress we expect. We are delivering AI use cases day by day. One can really say there's a lot of speed in that. And also the sharing activities are ongoing. We have already hired a number of people in Sofia, in KL for the different teams. So all well underway and on track.

When it comes to capital, actually, I mean, we are paying more than 100% because we have the benefit that we can exclude the restructuring costs from our payout ratio. So if you take really the net result after restructuring costs, we will pay out more than 100% this year. But we will stick with 100% net income after AT1 before restructuring costs because that is exactly what we aligned also with the regulator as a basis for our share buyback requests.

But the clear mix between dividend and share buybacks, we will finally decide. When we see the results, it's clear that we want to show a very attractive dividend as well. We now had EUR 0.30, EUR 0.65. And apparently, we want to have a further increase also given that share price has nicely improved over the last months, and it will be very attractive, and it will be a very attractive mix. And as said, the EUR 1 billion share buyback program is currently underway. The next one we have just applied for and then the rest, we will update in February.

The next question comes from Jeremy Sigee, BNP Paribas Exane.

Two questions, both on capital, please. Firstly, is there anything specific coming in Q4 that would bring the 14.7% down to 14.5%? Or does the sort of greater than 14.5% mean actually it could stay at 14.7%? So anything specific you're expecting in Q4? And then the second question I had was on your Slide 6, when you talked about sort of future strategy elements, topics of special strategic importance for the coming quarters, you mentioned optimizing deployment of capital above 13.5% target. Are there any new ideas that you have in mind or any new areas of focus? Or are you just reflecting something that's already a core plank of your strategy?

Thank you, Jeremy. I mean on capital, we always know that a 0.1% up and down can also be just reflected by currency changes, FX changes and stuff like that. But overall, we expect more growth to come in Q4, and that will have an impact. There will be also more SRTs to come, but that's the whole story around that. When it comes to future capital deployment, I mean, we're thinking about investments all the time. The whole discussion around AI, specifically Agentic AI is accelerating. So we definitely also think to invest more into it to accelerate certain things.

And then we explore -- as we have said beforehand, we explore different M&A opportunities to make sure that we can strengthen our business model. But the problem is they have to meet very strict criteria because we have very clear targets out there when it comes to 2028. So it needs to be value accretive and supporting our growth ambitions, but also our profitability ambitions for the years to come.

The next question comes from Kian Abouhossein, JPMorgan.

The first one is related to loan growth in the Corporate Clients where you have given very helpful details on Slide 17. Can you talk about the asset spread margin environment in the different areas? And what are you doing differently versus peers, which is driving this very strong growth rate that we are seeing? And the second question is on PSBC deposits, where we've seen also very strong growth. And should we be looking for more flattish growth going forward? How should we look around deposit growth in PSBC? And in this context, you mentioned that the structural hedge could grow from EUR 147 billion, which was flat. Wondering how should we think about the deposit growth and in conversion, the structural hedge? Is there any guidance you can give us?

Let me start off with the PSBC deposit growth. I mean, the deposit growth has been very much supported by the attacker products, which we have seen in July. We now have stopped them. But overall, when you look in our plans, that has not changed. We plan for an average deposit growth of approximately 2%, and that is also very much coming by what our clients do, but also we definitely want to grow with our client base.

And for the rest, I hand over to Carsten.

Yes. Maybe to then also add to your question regarding the structural hedge position. We have an unchanged position regarding the replication portfolio coming from Q2 to Q3. And as you know from the slides, we have EUR 147 billion currently in this portfolio. Given the changed deposit structure that we're having now or size of the portfolio, we will, of course, look at potentially increasing this. So this is something we'll decide during Q4 and then update you on it. I would also like to remind you that we have in total EUR 200 billion plus in deposits that we can model and always sort of remain a distance to what we actually have in the model. So there is room to look at that, and we will do this during Q4.

Then on your first question regarding loan growth on Corporate Clients and the margin development, I would like to pull this into two directions a bit. First and foremost, you've seen that we saw a healthy loan growth, especially on the International side. We grow the portfolio on that end, as mentioned, has good margins. The business is contributing. So we are actually seeing a healthy increase. And it is mainly coming, quite frankly, Kian, from our point of view, coming from the deep relationships we have with our customers and the international presence that we are offering with our outlets internationally. So that basically allows us to accompany them whenever there's financing needs coming up.

And looking a bit more into the domestic part and the growth, especially when it comes to the public sector, to the municipalities, we interpret this as the first pickup of the infrastructure packages that also have been announced by the government. This business is a fantastic business when it comes to the risk position of the book. It, of course, also comes at slightly lower margins. But I would also like to say that in this space, municipalities -- or not necessarily only the municipalities, but also municipalities [ operates ] like suppliers, et cetera. And those usually from a margin perspective, go a bit more into the Mittelstand territory. So hence, growth in the book at good margins and rather accreting to the RWA efficiency of the book.

The next question then comes from Borja Ramirez with Citi.

I have two, these are on the NII. Firstly, I would like to ask on 2026, could you disclose the deposit beta that you are assuming? Because I think there was some comment on corporate deposit beta rising maybe because of higher -- of lower margins. But then also the retail deposit beta, I think maybe that's maybe improving as your attacker products are repriced at lower rates. So that would be my first question.

And then my second question would be if you could kindly provide a bit more color on the moving parts in the 2026 NII. For example, I think there is -- I think you guided for EUR 300 million of benefit from the replication portfolio in 2026. In NII, I have slightly higher EUR 400 million because you [indiscernible] and also you increased the portfolio. So if you could kind of add more details there, please?

Borja, thank you very much for the questions. Let me start with the first one on the deposit beta. Again, I would like to start with 2025. You've seen that we came sort of from a low level, which was steadily increasing over the year as expected. Q3 is now a bit higher coming in mostly because of the attacker products we had out in July. And as mentioned, we expect actually the private customer beta to come down again in Q4. So the main driver for the slightly higher beta that we expect for the end of the year comes from the Corporate Client business.

All in, the beta, as mentioned earlier, will remain actually at a level of 40%, maybe 40.5% for the year as we expected. And running into '26, the beta from an expectation perspective will likely be driven by the Corporate Client side, where we see basically an unchanged beta landscape compared to Q4. You mentioned briefly sort of the impact from our attacker products on the personal customer side. I would like to make the point, the deposits that we actually got in beginning of July are term deposits. And while that always has a short-term impact on the beta, the longer-term benefit of actually having these deposits in the bank actually will be contributing in '26.

Then the second question on the EUR 400 million increase of NII in '26. We will expect for '26 a pretty much unchanged at least ECB rate environment. So expect this to be flattish. The replication portfolio actually will be the driver with the investments and the position we have in the replication portfolio, we do see the stabilization effect. And as you've also seen in the last quarters, we continuously actually increase the average return out of that portfolio. So that will be the main driver. And then, of course, we will see growth effects and a slight negative coming from mBank given the Polish rate environment and expected a slightly higher beta next year. But that's the main drivers for the EUR 400 million so that we will see a positive development from EUR 8.2 billion, sorry, to EUR 8.4 billion next year.

Okay. Then I think the next question comes from Tobias Lukesch, Kepler Cheuvreux.

Also quickly touching on the NII again and the outlook for '26. You guided for this EUR 8.4 billion. I was just wondering what the net fair value expectation is in your old strategy at the CMD at EUR 0.5 billion, but you also had EUR 0.4 billion for '25, which is now still confirmed at EUR 0.3 billion. So I was just wondering if this still holds up and what your total view on this combined revenue contribution is.

And secondly, basically on the cost side. So if I understand your guidance correctly now for '25, you have this EUR 200 million more in NII. At the same time, a EUR 70 million tax effect leaves us with EUR 140 million, which is more or less eaten up by higher costs. On the share price, I mean, one could hope it, but it's rather unrealistic to see the same compensation potentially for next year. So I was just wondering like what you see in terms of like this kind of cost development, how it will come back and how you will steer that basically into the future?

Yes. Thank you very much, Tobias. Starting with the NII for '26, and you referred to specifically regarding the net fair value. So for '25, so for this year, we have a net fair value contribution, which is linked as we always refer to it to the NII to the degree of EUR 300 million. This is a change coming out of last year. So the reason why we listed this explicitly when going into the year and guiding for the NII was that in the rate declining environment, we wanted to also express it's not only the NII, but also partially contribution from derivatives that help us on the NII side.

Now going into '26, we are guiding the NII for EUR 8.4 billion, but we expect a flat rate environment and hence, also no significant movements on the net fair value result stemming from the NII position. Hence, EUR 8.4 billion and at the moment, flat, so no additional contribution from the net fair value for '26.

Then towards your second question regarding the cost side. I think you went through that quite nicely. We have some effects that you listed, which we also mentioned in the speeches regarding our '25 development. When we look at the operational, let's say, cost level and development that we're seeing in the bank, we're seeing a very disciplined way the bank is managing its costs at the moment. So looking into '26, we are basically very confident that we are running with the level that we have guided in the Capital Markets Day. As you know, we're steering for cost-income ratio. 56% is the target that we set for next year. And at this point, we hold clearly towards that 56%.

If I may, again on this net fair value. I'm a little bit puzzled, to be honest, because with the CMD, you guided for EUR 8 billion NII in '26 and EUR 0.5 billion net fair value, which makes EUR 8.5 billion. If I understand you correctly, now you're guiding for a combined EUR 8.4 billion only for next year. And also again, on the '25, I don't get this unchanged EUR 0.3 billion net fair value result. I mean we're at a negative minus EUR 60 million, if I'm not wrong. And that would indicate a kind of EUR 350 million contribution in Q4. So how is that to read and to square?

Yes. I think that's a super fair question. So first of all, Tobias, on '26, to be absolutely clear, we have EUR 8.4 billion expected NII and unchanged net fair value expectation of EUR 0.5 billion. So that stands. I was referring mainly to the net fair value we expect from the NII side. So for '26, no change in the net fair value guidance to be absolutely clear here. Then coming back to '25, the net fair value, in essence, is made up of multiple positions. One position is the net fair value, which we have from interest rate-related positions. That is the EUR 300 million that we mentioned. These are included as one portion of the net fair value, and they hold. We see them at the moment in the books. And given the current rate environment, we don't expect them to change towards the end.

What's also included in net fair value is then the positions from our Capital Markets business, that is contributing to it. And the third position, which is contributing to net fair value is general valuation effects. And those have to be seen in combination with the other income. And if you combine those positions, so the net fair value that we have as a run rate at the moment, the other income and if you exclude from that the FX mortgage provisions which we hold for mBank, then you actually end up with a value around the EUR 250 million mark for '25. And hence, we stand with that guidance.

The next question comes from Riccardo Rovere, Mediobanca.

Again, on NII. If you look at the loan book, EUR 263 billion at the end of the 9 months is -- this is the average, is 2.5% higher than the average since the start of the year. And then in 2025 -- '26, you're going to have a support from the fiscal boost in Germany, 1.2% in GDP. This is real, then you add 2 percentage points from inflation. So the loan book will continue probably to grow in Germany. I don't know if it's 3.5% or something like that is reasonable or not. And then you have Poland, which is supposed to grow more than that, while your NII is supposed to grow 2%. So you are implicitly plugging in a fairly decent, I would guess, margin compression. While the rates are supposed to be stable, at least in Europe, but Europe is 70% to 75% of your business and Poland is 25%, 30%.

So given that in 2025, your NII guidance went from 7.8% to 8%, then 8.2%. I'm just wondering whether the approach you have in the 9 months '25 when you set the 8.4% is with some caution, some prudence as you have constantly done throughout 2025. This is the first question. The second question I have is on the call money, core deposits in PSBC. As I understand, the promotional offer was in July, if I understood it correctly. So that means that the impact on NII should more or less be fully visible in this set of numbers. More than that, why are you gathering this -- why you're doing this promotional offer still?

And then the other question I have is on the medium- to long-term funding, the amount has gone up dramatically over the past -- since the start of the year is almost, if I'm not mistaken, kind of EUR 20 billion or so, kind of EUR 18.5 billion in debt securities. It went from EUR 45 billion, something like that EUR 53 billion to more than EUR 70 billion. What is -- why has this gone up so much? And what is the spread that you get? Because the feeling I have is that then you invest in debt securities on the asset side. And I was curious to know what kind of debt securities this amount of money is invested in. That's just to have an idea.

Yes. Thank you, Riccardo, for your questions. And specifically the first one, as you know, we like this wording of floor. And yes, we are always conservative, and you know that. So when it comes to next year, what are the driving factors? So first of all, we plan for another 8% loan growth in Corporate Clients. That's for sure, and that will be also supported by everything we see in the moment when it comes to the stimulus package. And I think we have proven nicely that we are able to organize that given the 13%, which we have shown year-to-date.

However, what you need to keep in mind is two things. One is clearly Poland, which will also see nice growth on the loan side, but we will -- we expect a further decrease in interest rate levels there that will have a negative impact. And what Carsten said before on the deposit beta that you need to take the fourth quarter basically as something which will also drive then the full year 2026, and that will be a slightly higher deposit beta on [Technical Difficulty] which we have seen for this year. That is at least our assumption, and that is also the assumption which we have embedded in our plans back at the Capital Markets Day. If you look in this document, we always spoke about 41% for this year. Now it's 40% most likely, which would then go up to 44% until 2028. And that's just a reflection. It's lower than we thought, but there is still some increase in the deposit beta.

When it comes to the -- so yes, you can say that the EUR 8.4 billion is clearly, again, a floor number and nothing else. And when it comes to the call money, we have that in July. We stopped the program actually after 3 weeks because we had so much inflow. But most of this money runs until January, February. And in the moment, we do only have our normal offers out there and nothing specific.

And on funding, I hand over to Carsten.

Yes. On the funding side, Riccardo, we had planned -- in terms of debt instruments, we had planned for around EUR 10 billion-plus for the full year, and we're currently standing at around EUR 11 billion in terms of funding. In terms of the spread across different instruments, we actually had a wide variety in the market this year from AT1 to AT2 issuances, et cetera. So basically, we had the full spread and made use of the market environment to do our regular sort of refunding activities.

So actually, the funding plan is pretty much in line with our plan. We extended it a bit in Q4 effectively to make use of the current market environment. And also, I should say, looking a bit back into the first half of the year, we know that the markets are not always there when you want them to be there. So we basically looked a bit into stabilizing the funding position, but pretty much in line with the plan, maybe a bit on the upside. Also, given the current market environment and the spreads that we are seeing -- attractive spreads for the re-issuances, so generally, you can expect that we improved our funding cost position overall in the book throughout this year. And given that we hold the margins actually on the asset side steady, this will be contributing to our business plan.

Very clear. Just maybe a quick follow-up. On the loan growth in PSBC Germany, the book is fairly stable at EUR 125 billion. Do you expect that the easing by the ECB is going to have an impact at some point in 2026 here?

You mean on the private client side?

Yes, exactly. On the retail side in Germany.

Yes. I mean what we currently see is already much more activity again. So the mortgage activity has increased. Basically, it's back to the levels which we have seen pre-COVID. And there's just a time effect in there because people start a mortgage, but then until they really take the money, it takes a while because its most of the time, just paced in construction. So yes, we expect a loan growth for next year also on the PSBC side.

The next question comes from Anke Reingen, RBC.

There's two areas, please. The first is just coming back on the very strong corporate loan growth in Q3. Some of this seems to be a bit more short term in nature as in Working Capital and Trade Finance. And given Q4 is normally seasonally a bit weaker, I just wanted to confirm that you expect there shouldn't really be a reversal in Q4 from these levels. And then secondly, you talked at the beginning about your wealth management initiatives. And I just -- I'm sorry, I'm not -- can't really fully remember, but what you mentioned, is this incremental to your plan? And maybe can you just sort of give us an indication of how much it currently contributes to your revenues and what you sort of like size as an opportunity?

First, we do not expect any reversal on the loan growth for the fourth quarter. And second, on wealth management, I mean, this is a core element of our Momentum strategy. So it's fully embedded in the plans. It's -- I mean, one of the factors which should drive our net commission income, the 8% or 7%, the 8%, which we have seen year-to-date, but also the 7% we expect for the years to come. And what we have now done is we basically intensified the coverage of clients. So there are more relationship managers to cover these groups of clients. We have wealth management centers. We also have new locations. We opened a number of new locations in Germany this year, and they will be a significant driver for the net commission income growth. We do not really say how much percentage-wise it is.

The next question comes from Máté Nemes, UBS.

I have two of them, please. The first one would be a follow-up on deposits, specifically the strong call money inflows. Can you talk about the retention rates that you've observed on such attacker products once the high interest period ends in the past 1 to 2 years? Would love to know what is your experience on that front, how sticky those new funds are?

The second question would be on the risk result or risk costs and specifically your guidance. So in the first 9 months, you had EUR 515 million in risk results. And clearly, you revised your guidance down for the full year to below EUR 850 million. I'm just wondering what prevents you from being more specific on the full year risk results. It seems like there is an awful lot of room between the current result and the upper end of the guidance. Would you expect anything sort of inorganic in the fourth quarter, any model changes? Why not, let's say, a somewhat more precise lower guidance?

Well, thank you. Yes, on the call money, the inflows and now you're asking what do we expect. I mean we can only speak for the past programs because the attacker products, which we have laid out in July are running, as I said, until January, February. So we will only see in the new year how sticky it is. You really have to differentiate between the two client groups, Commerzbank clients and comdirect clients. Commerzbank clients actually, whatever we get there is more sticky than on the comdirect side. And at the comdirect side, we also have more of these, I call them, interest rate hoppers. But still, we have been pleasantly surprised by the stickiness of how many clients still also keep their money with us. That is also due to the fact that most of the time, we also couple that with really client onboarding. We have a very attractive brokerage offering at the comdirect side, and that is clearly something which we combine also with new clients.

So overall, so far, we have been rather pleasantly surprised on how much call money stays with us after the attacker products. But the risk result, I mean, totally clear, we see it the same. However, it's a long quarter, and this is why we, as always, stay a little bit cautious. We do not see anything specific. We do not expect anything specific, but it is a long quarter, which runs until February. So we're just leaving a space. There are not specific model changes planned or something like that. I mean there's always a time there are model updates, but nothing specific here. And that's also very confident. I mean, we wouldn't have changed it to below EUR 850 million if we would not believe that it comes lower than the EUR 850 million, which we originally laid out. But how much in total, we really will see in February when the quarter ends.

So I think we are at the end of this call. Thank you very much for your questions. We are looking forward to further discussions with you and wish you now a great and sunny day. Thank you.