Unicaja Banco Stock

[Interpreted] Good morning and thank you very much for attending Unicaja's 2Q '26 Results Presentation.

First of all, let me confirm that, as we usually do, this morning before the market opened, we have published this presentation along with the rest of the financial information at the CNMV and on our corporate website.

As every semester, we have with us our CEO, Isidro Rubiales, and the Chief Financial Officer, Pablo Gonzalez.

We estimate that the presentation will take us just under 30 minutes to leave enough time for questions. As for questions, first of all, we will give way to the analysts and investors who follow us by phone on the original line in Spanish. And then we will give way to the telephone line in English.

So Isidro, you have the floor. Thank you.

[Interpreted] Thank you very much, and good morning. It's a pleasure for me to be here again today to share with all of you the main items of our second quarter 2026 results, results that mark the halfway point of our 2025-2027 strategic plan.

We first announced this plan during the presentation of our 2024 financial results and subsequently updated it, refining some of the objectives during the 2025 presentation.

Today, we will try to show you the strategic plan, which, as you know, includes an initial effort in investments and continues to move forward in the right direction.

Although its purpose is to lay the long-term basis for Unicaja, we will see how it also allows us to continue improving the bank's business dynamics and financial position in the present.

On Page 3, we show you the usual summary of the key highlights for the quarter. First, I would like to highlight that the business activity continues to improve and accelerate quarter after quarter.

Business volumes rose by 3.5% in June 2026, speeding up the growth rate quarter-over-quarter.

Total customer funds rose by 3.5%, led by mutual funds, which posted growth of over 18%, allowing us to maintain a market share of 10% in net subscriptions during the first Q.

Loans, which have been lagging somewhat in recent quarters, rose 3.7% over the past 12 months.

Therefore, as we have been explaining over the past few quarters, the acceleration in business activity driven by the initiatives and levers of the strategic plan is now confirmed.

In terms of profitability, net income for the first half of 2026 totaled EUR 361 million, up 7% from the first half of the previous year.

This growth is driven by higher revenues and lower provisions, which offset the increase in operating costs, a reflection of the efforts and future-oriented investments that we are making.

Adjusted ROTE reaches 12% with an efficiency of 46%, below the 50% target. And we expect that over the next few quarters and mainly from 2027, we will start to see an improvement as revenues improve, and we continue to crystallize the initial effort that we have made to attract talent, new processes, different agreements, and the set of measures that we have identified to develop the strategic plan.

I would also like to highlight once again the ongoing improvement in the bank's credit quality, given that its recent performance has received somewhat less attention.

But due to the international geopolitical context, we must continue to monitor it closely. Nonperforming loans continue to decline for yet another quarter.

The coverage ratio continues to strengthen to over 80%, and the cost of risk is beginning to stabilize at levels below our initial guidance. So this is why we have decided to improve the initial guidance we provided at the beginning of the year.

In terms of capital management, we continue to have a comfortable solvency position with CET1 at 15.8%, which, among other things, allows us to announce the first interim dividend of EUR 270 million, 28% higher than the previous year.

In turn, we inform you that the Board of Directors has decided to pay the entire additional remuneration for this year in dividends. This will allow us to make free cash dividend payments from 2026 earnings amounting to 95% of the bank's net income.

On the following page, we provide more details about the dividend. As you probably know, shareholder remuneration is one of the bank's priorities, and as I mentioned before, we also confirmed the information on the first interim dividend for the year approved by the Board of Directors, which will amount to EUR 217 million, equivalent to EUR 8.44 per share, and will be paid on the 24th of September.

As I mentioned, the interim dividend represents a 28% increase over the 2025 dividend and more than a 40% increase over the 2024 interim dividend.

This is due to the growth in the company's net income, but also to the higher percentage of net income that we allocate to dividends, a percentage we have been gradually increasing over the past few years.

As you can see, in 2023, the dividend represented 50% of the company's net income. This percentage has risen steadily to 70% last year and will continue to rise this year to 95%.

If you look at the bottom of the page, you'll see that even though the stock value has tripled over the last three fiscal years, the positive trend in earnings and the higher percentage allocated to dividends have allowed us to maintain the dividend yield at extraordinarily high levels between 9% and 11%.

As you can imagine, this has been possible in addition to earnings growth, thanks to the company's strong capital position.

On the next page, we show you another important aspect related to shareholder remuneration. As you remember, at the beginning of the year, we updated the bank's dividend policy, setting a structural distribution of 70% of net profit through dividends to which we add an additional remuneration of another 25% of the result in the form of dividends and/or share buybacks.

As you can see, the Board of Directors has decided that all additional remuneration for 2026 will be made through an additional cash dividend.

Therefore, we will allocate 95% of the 2026 result to cash dividends that we will pay in three payments.

The first interim dividend in September, which we showed on the previous page, the dividend with the additional remuneration in December, and the complementary dividend, which will be paid in April after its approval by the General Shareholders' Meeting.

In total, dividend payouts will account for 95% of the company's net income for the fiscal year, which, based on the current net profit consensus estimate over the average share price for the first half of the year, will represent an attractive return of around 9%.

On the next page, we share some of the advances and initiatives in the context of the strategic plan, which we think are important.

On the innovation side, as many of you know, we are enhancing our technological ecosystem by incorporating Google Cloud together with NVIDIA and Deloitte to accelerate our conversational bank model based on generative AI.

This strategy is complemented by the bank's own AI infrastructure.

We are also working on a hybrid integration of technology by combining dedicated infrastructure and cloud capabilities that provide elasticity, scalability, and improved resilience without compromising regulation or data governance.

NVIDIA AI Enterprise provides a solution on Google Cloud to run open and commercial models, optimizing efficiency and maintaining sovereignty over our systems.

Use cases have been implemented in areas such as insurance, mortgages, software development, claims management, and back-office automation, achieving reductions in response times between 40% and 80%, thereby freeing up time for higher value-added tasks.

I would also like to highlight that we are participating in pioneering tasks of multibank tokenized deposits in Spain and in the pilot phase of the digital euro alongside other institutions, looking at cases such as P2P payments and in-store payments.

We remain customer-focused, increasing the number of direct deposit payroll accounts by 40,000 in the first half of the year, significantly improving the NPS in our digital channels and achieving the top rankings in specialized rankings with our app for both retailers and businesses.

All these initiatives are boosting the strategic plan because the investments that we are making will allow us to grow above the sector in the first half of 2026, as is the case with investment funds and where we are consistently maintaining market shares in net subscriptions that are double our natural market share.

As you have noticed, the company's positive financial performance continued during the first half of 2026, confirming that investments and initiatives that we are undertaking as part of our strategic plan are allowing us to accelerate business growth and boost results.

This, combined with the decision to pay out 95% of the net income as dividends this year, allows us to offer an attractive return to shareholders.

So, in short, we are achieving growth in both our business and shareholder returns, thanks to improved results and a strong capital position.

So I'll hand over to Pablo, who, as usual, will go over the quarter's financial performance in more detail. Pablo, go ahead.

[Interpreted] Thank you, Isidro. We'll continue with the business activity on Page 8. As you can see, total customer funds continue to show positive growth with a 3.5% increase for the year and nearly 2% for the quarter.

Regarding deposits, I think it's important to note that growth is concentrated in demand deposits, which are 4% higher than in June last year.

In contrast, time deposits declined by 5% over the same period. Although these are end-of-period balances, if we look at the average monthly balances, which smooth out some of the seasonality, private sector demand deposits increased by EUR 3 billion or 6% compared to June 2025, while time deposits remained virtually flat.

This movement is also a consequence of the evolution that we see in off-balance sheet funds, which rose by 12.7% in the year, driven by mutual funds, which exceeded EUR 18 billion for the first time after rising by 18.2%.

On the next page, we provide more detail on this trend in assets under management and insurance. As you can see on the left side, assets under management have risen by 13% over the past year.

In the case of funds, growth has been 18%. Particularly striking is the significant improvement that we see in net fund subscriptions, which is shown at the bottom, exceeding EUR 1 billion, equivalent to a 10% market share of net subscriptions in the first half of the year, according to data from Imreco.

On the revenue side, as you can see on the right, both business segments increased their contribution to earnings by 7%, accounting for 19% of the total revenue for the fiscal year.

With regard to lending, as can be seen on Page 10, during the second quarter of the year, growth continued to accelerate. The balance of loans in a normal situation increased by 3.7% in the year and by almost 5% in the quarter, which, excluding the seasonal effect of advances, would be 3.2%.

By segments, the growth we have been showing in corporates continues rising by 2% quarterly and 6.6% annually, a growth that we achieved, among others, as a result of the implementation of certain measures envisaged in the strategic plan.

In the case of individuals, annual growth accelerated to 2.6%, supported by better volumes in the mortgage segment, which increased the balance by 1.3% quarter-on-quarter and 1.8% year-on-year, a growth that is still lower than that of the sector.

But as we have been announcing, it is also gradually improving. Finally, in consumer lending, the loan portfolio rose 8% year-over-year and 3.6% quarter-over-quarter when we isolate the seasonal effect of payroll advances.

In short, a trend of progressive improvement, which we have been showing during the last quarters and which is explained by greater diversification and better commercial dynamics, together with an increase in new production that we show on the following page.

As you can see, new production has improved once again across all segments. In the first half of 2026, new production in the private sector reached EUR 5.515 billion, which is 19% higher than the first half of the year last year.

Growth in the corporate sector was 7% and in the consumer sector, 26%. In the case of mortgages, as you can see, the trend has been improving quarter-by-quarter, exceeding EUR 2 billion so far this year, a 40% increase over the EUR 1.5 billion recorded in 2025.

Therefore, the first half of 2026 has seen new production continue to improve, thanks, among other factors, to the processes, measures and investments we are implementing as part of the strategic plan.

On the following page, you will find some highlights of our ESG strategy. As you can see, we continue to promote sustainable business with a specific focus on corporates with both environmental and social objectives, a portfolio that has grown by 11% so far this year.

In terms of responsible investing, 77% of the funds we offer incorporate sustainability criteria. In the social sphere, we remain committed to financial inclusion, facilitating access to banking services in underserved areas.

Furthermore, we believe it is particularly important at this time to promote access to housing for the younger segment of the population, supported by the agreements we have signed with the autonomous communities.

As a result, nearly half of all of the mortgages granted in 2026 went to people under 35.

We also continue to finance renewable energy projects in green buildings through the issuance of green bonds, such as the recent issuance of EUR 700 million in senior nonpreferred bonds.

These bonds, whose impact, measured in terms of avoided CO2 emissions, is one of the drivers contributing to our decarbonization path, are complemented by the specific targets we have set for 6 sectors within our finance portfolio, which account for 80% of our private sector lending.

In short, this represents a firm commitment to sustainability, and we continue to make progress in this area. We will now look at the income statement in detail in the next section.

Starting with the quarter, net interest income grew by 2%, a rise that is partly attributable to the number of days, combined with an additional impact driven by higher returns on assets.

Although this growth is slow and gradual, this quarter offset a slight increase in the cost of liabilities resulting from the rise in interest rates. The rest of the revenue lines were positively affected by second quarter seasonality, with a significant increase in the contribution from dividends and equity investments, which also offset the seasonal effect on fees, which tend to be somewhat higher at the beginning of the year.

Gross margin rose 8.5% and pre-provision profit rose nearly 15%. Combined with lower provisioning, this brought quarterly net profit to EUR 201 million, 25% higher than the previous quarter and 12% higher than the same quarter last year.

In the first half of the year, revenues rose 2.5%, driven by net interest income and fees. Costs continued to increase at a mid-single-digit rate, in line with guidance, reflecting the investments we are making to lay the groundwork for future growth.

Provisions fell significantly, loan provisions by nearly 25% and other provisions by 8%, resulting in pretax profit of EUR 506 million, which amounts to EUR 361 million after tax, including EUR 10 million from the IMIC net interest income and fee income tax.

This net profit is 7% higher than the previous year. We will now take a closer look at the income statement. Starting with net interest income on Page 15, we show you the trend in customer margin.

As you can see, it fell by 2 basis points during the quarter, driven by the rise in interest rates during the quarter, which was partially offset by higher loan yields, which, as shown, grew for the second consecutive quarter.

This follows the same trend as in the previous quarter, and we expect it to gradually improve going forward. As for the NIM or net interest margin on profitable assets, this improved by 4 basis points to 1.73%.

On the following page, we present another breakdown of the net interest income performance during the quarter, but from the perspective of financial income and expenses.

As can be seen, the margin rose by EUR 9 million during the quarter. Approximately 1/3 of this increase is attributable to the number of days, while the remainder, as the breakdown shows, is due to the fact that higher yields on loans, liquidity and ALCO more than offset the slight increase in the cost of deposits mentioned earlier.

Turning to fees. We can see that this quarter's performance is similar to that of recent quarters, with nonbanking fees continuing to grow at a very strong pace, offsetting the decline in fees from collections and payments.

This trend is a result of the strategy that we have been implementing to move towards higher value-added services such as mutual funds and insurance, which already account for 54% of fee income.

Here, as you already know, the idea is to continue focusing on fees that offer greater value to customers while simultaneously rolling out loyalty programs and waiving fees for lower value-added services such as transaction fees.

This strategy limits fee growth in the short term, but it is also allowing us to improve customer relationships and increase our customer base, which is far more important in the long term.

These loyalty programs are performing very well, so we will continue to implement them going forward. That is why our fee guidance for the remainder of the year is for low growth.

As a result, you can see that in the first half of the year, fees for collections and payments fell by 6%, while nonbanking fees rose by a significant 11.8%, bringing the total increase in fees to 2.6% in the first 6 months of the year.

Continuing our review of the P&L, we now present the breakdown of other income, which reflects the typical seasonality of the second quarter, a period when dividend income and income from equity method investments typically improved significantly.

Total other income amounted to EUR 50 million in the second quarter and EUR 60 million for the first half of the year, up 12.6% from the first half of last year. On the next page, regarding costs.

As we've highlighted over the past few quarters, the 5% increase reflects the investments we are making, including new hires, which we believe are necessary to implement the action plans outlined in the strategic plan. Even so, the efficiency ratio remains at 46%.

On the next page, we continue with provisions, which highlight one of the most positive aspects of the quarter. Loan provisions fell once again to EUR 23 million in the second quarter, down from EUR 25 million in the previous quarter and well below the EUR 32 million recorded in the same quarter of 2025.

This level of provisions implies a cost of risk of only 18 basis points, reflecting the positive trend in credit quality despite the geopolitical context.

On the right, we see total provisions, which include, in addition to credit risk provisions, legal provisions and other impairment charges, which include primarily the results of real estate asset sales.

As you can see, total provisions fell by 24% in the first half of 2026, with declines across all 3 types of provisions.

In the case of provisions related to real estate, as you can see, there was a small release resulting from the proceeds of the sales. In summary, the trend in credit provisions in particular and in total provisions in general was extremely positive during the first half of the fiscal year.

On the following page, we provide a summary from a profitability perspective.

On the left-hand side, we present a chart that clearly illustrates the company's relative profitability. The reported ROTE without any adjustments stands at 10%.

The excess capital with which we operate compared to other similar institutions would improve this metric by an additional 2 percentage points to 12%.

Furthermore, if we adjust for the excess shareholders' equity necessary to offset deferred tax asset deductions, the ROTE would improve to over 16%, a metric that is more comparable to that of other institutions since it isolates the effect of excess shareholders' equity we need to absorb the DTA deductions.

On the right, we show how net profit has evolved. In the first half of 2026, it reached EUR 361 million, up 7% from the first half of 2025 and 23% higher than in 2024.

Over the past 12 months, tangible book value plus dividends has risen 8% to EUR 2.59 per share. We now move on to the credit quality section, which, as we mentioned before, continues to maintain a very favorable evolution.

The balance of NPLs continued to fall for another quarter. The quarterly drop was 4.6%, and the annual fall was 14%, which places the NPL ratio below 2% at a new low of 1.8%.

In turn, NPL coverage continued to rise from 73% a year ago to 83% today. If we consider all nonperforming assets, which we call NPAs, we can see that in net terms, they account for only 0.5% due to the significant 23% drop in their balances over the year, with coverage rising above 80%, a very positive evolution, which, as you can see, continues over time.

Finally, I would like to review the bank's solvency and liquidity position. On Page 25, we show you the quarterly evolution. As you can see, our organic generation through earnings is 68% basis points, slightly higher than the dividends and coupons of AT1, which we are accruing a dividend of 95% of the results, which is a payout we expect to pay this year.

On the other hand, the crystallization of DTAs this quarter represents another 14 basis points of CET1 that partially offset the growth of risk-weighted assets, mainly credit risk RWAs, leaving June CET1 at 15.8%.

On the next page, we show the net position of the entity in relation to its different requirements.

During the first half of the year, we've carried out 2 issues, an AT1 for EUR 500 million and a green S&P or senior nonpreferred for EUR 700 million. Both issues have had a very positive reception as reflected in the order books, which we show here on this slide.

After the refinancing of these 2 issuances, the MREL ratio rises to 27%, with subordinated instruments representing 24.4%.

On the right side, you can see the buffers that we have in front of or with respect to the main requirements, which, as you can see, will continue to be very comfortable.

And at the bottom, we show you the liquidity ratios that continue to be among the highest in Europe, highlighting the liquidity coverage ratio, which continues to be above 300%.

Finally, we show you the details of the debt portfolio. As you know, our low loan-to-deposit ratio translates into a high retail liquidity position, which we invest in this structural portfolio, mainly in the amortized cost portfolio.

As can be seen in the quarter, the portfolio hardly changed in size, also maintaining its profitability and duration. That's all from my side. Isidro, you have the floor.

Thank you, Pablo. I continue on the next page with an update of the guidelines that we expect for the rest of the year, starting with the net interest income.

In the 2025 results, we told you that we expected some growth in 2026, a growth with which we are somewhat more specific following the performance of the first half, we expect that the net interest income will rise between low and mid-single digits this year, accelerating its growth over the coming quarters.

For fees and commissions, we continue to expect low single-digit growth since, although the evolution is somewhat more positive, the loyalty campaigns we are implementing are working very well.

Despite reducing the most transactional bank fees in the short term, they are allowing us to significantly improve the relationship and the future projection of our customers, and we intend to continue implementing them.

Regarding costs, these will continue to grow at mid-single digits, reflecting the investments that we want to make to continue executing the strategic plan as we've done so far.

The cost of risk is another of the guidance items that we updated this quarter. Initially, we expected a cost of risk of less than 30 basis points since the beginning of the year; the evolution has been somewhat better, but we wanted to wait until the middle of the year to confirm this evolution.

We're just consolidating. Therefore, we expect to end the year with a cost of risk between 20 and 25 basis points, slightly better than initially expected.

Business volume, which includes loans, deposits and off-balance sheet funds, reaffirmed an expected growth of around 3%, which, as you can see, is being met, thanks to the progressive acceleration of volumes and the improvement in commercial dynamics.

And finally, as a result of the update of the net interest income guidance and credit provisions, we think that net profit will grow in 2026 by mid-single digits.

To conclude, let me share with you some quick conclusions before moving on to the Q&A. With these results and after 1.5 years, we have reached the halfway point of our strategic plan.

Although we are satisfied, very satisfied, we think that we can still improve since some of the measures and investments that we are making will still take a little longer to crystallize.

In any case, these investments, although they are designed for the long term, are also allowing us to improve business volumes and commercial activity in the present.

Therefore, these better business dynamics are translating into higher results, which also allow us to pay more dividends and maintain an attractive remuneration for our shareholders.

So in short, during the first half of 2026, we have demonstrated that it's possible to invest in the future, improve results, increase shareholders' returns and grow without compromising our solid financial strength.

This has enabled us to generate a total return for our shareholders of more than 300% since the start of the strategic plan, including dividends and share value appreciation.

In short, during the first half of 2026, we continue to lay the groundwork that will allow us to keep improving in the long term. In the short term, we've already managed to crystallize some of the benefits that we are pursuing for the future.

Finally, let me reiterate once again that this evolution is thanks to our employees and customers who are our most valuable assets. Alongside them, we also have the trust and the commitment of our shareholders and Board members; thanks to all of them, we are making progress on all of these areas we've tried to share with you during this presentation.

Thank you very much to everyone. And if that's okay, we will conclude the presentation, and we will move on to the Q&A session. Thank you very much, Isidro. Thank you very much, Pablo. We move on to the Q&A.

[Operator Instructions]. We start with the telephone line in Spanish. The first question is from Maksym Mishyn from JB Capital.

The first question is on the financial margin. Could you share your expectations for 2027? What are your expectations?

And the second one is cost of risk. Thank you very much for updating the guidance. And I would like to know what you expect after 2027, assuming that the macro scenario is kept as it is?

Thank you, Maksym. With regard to margin, we have updated, as you've probably seen, we've updated the guidance for this year, but we won't give guidance for 2027.

Among other reasons, because there's volatility in interest rates and that we still need some time to see how it goes.

But we confirm our positive approach that we will see a continuous improvement of the margin this quarter and the previous quarter; we've seen an increase, and we expect that this trend will continue given the better contribution of the credit contribution in the following quarters.

With regard to the risk cost or cost of risk, the current Spanish financial situation, which has been updated 2.8 Of the GDP on the quarter over the estimated market, is at 2.4%, and it's based on internal consumption with the reduction of public consumption, which makes it even more sustainable.

So these figures allow us to have a more positive outlook. But we want to be prudent. We are in a very complex geopolitical situation, and the impacts of this geopolitical situation can change.

We see a deceleration, and we will see this in the savings rate in families, which has reduced, but it's above average savings rates, which is positive for the resource for the asset evolution. But this has implications for credit quality.

We can have an outbreak in terms of tariffs. There's the energy aspect. So we'd rather be cautious. And given the positive evolution of the credit portfolio performance, we have improved the guidance, but we still want to be prudent.

We move on to the next question. The next question is from Francisco Riquel, Alantra Equities.

You have earned 40,000 accounts payroll in the first half of the year. You're getting new customers via mortgage contracts that go up by 40%.

However, current account balances are stable at EUR 55 billion. The account remuneration is going up, and getting customers is about reducing commission fees.

Can you talk a little bit more about the profitability of the new customers that you're obtaining, whether it's through payrolls or through mortgages, if we can get more detail?

And my second question is: if you can tell us a bit more about the customer spread over the first quarters of the different parts, what kind of deposits can we expect in terms of the credit book between the fixed float hedges and how the logic could develop in the dynamics.

Thank you for your question. We believe in getting new customers so that Unicaja becomes the main bank for them. And this commitment is not a short-term commitment, but a mid- to long-term commitment.

The loyalty of the customer is something that is very valuable. And this increase in the number of payrolls and continue getting new customers through mortgages.

It's a strategy so that Unicaja becomes the reference bank and increases functionality. So it's not a short-term commitment, but it's something mid- and long-term.

We believe that it's a profitable strategy. And in that strategy, striking a balance between the nonbanking financial fees needs to be sustainable. Over time.

And with regard to the customer spread, I don't know, Pablo, if you want to add on that, but our expectation for the following quarters, well, the impact will be bigger on the cost of liabilities than on the assets.

But what we are seeing is that we've seen some increases; the customer spread will increase in the following quarters. I don't know whether Pablo, you want to add something about this.

Thank you, Paco. The customer spread evolution is based on our expectations, as you see. I think that this is the floor, the basis.

And from there, we're going to build up, but always subject to the evolution of the deposits. The credit will go up because the repricing is a little bit slower, and it will need to improve in the future.

Although we see some updates to the reference values regarding the environment and the interest rates, we expect a certain increase in the cost of deposits, but not to the same level as the others because we've done that before.

With regards to portfolio profitability and issuances, the portfolio has allowed the NIM to go up by 4 points, although we've gone down in the customer spread because we have short-term positions to cover fixed positions in accounts, and we also cover some deposits.

With regard to the strategy coverage, we have been covering the long-term mortgages and fixed mortgages to turn them into variable. And we have also done some hedging or some covering of deposits in order to adjust the duration of the asset and liability.

We believe that this will stabilize the positive evolution of the margin for the following years.

I would like to ask about the interest rate on fixed and variable; will this change? Some of the mortgages will continue to reprice, and some of the mixed mortgages will turn into variable.

And in the next 2 years, that 65% could go up to 50%. So we can move on to the next question.

The next question is from Ignacio Lab from BNP Paribas.

I have 2 questions. One is on deposits. During the presentation, Pablo, you said that the average balances are higher than at the end of the quarter.

So you're saying that there's been a drop in the quarter. So how should we understand that the deposits grow and the mix over the second half would perform?

And then the second question, if you can give us more detail on why we've seen an increase in the fees paid. And how is this going to be evolving, and was it a one-off? Or is this something that is going to be followed in the future?

With regards to deposits, I referred to average balances because it's more relevant.

The end of months and end of quarters have a certain seasonality and are less relevant in terms of the evolution. The evolution of the customer deposits, especially the current accounts, we are growing by EUR 3 billion.

So the growth percentage is thanks to the strategy explained by Isidro to grow in customers and in payroll. So it's not a one-off situation. It's about looking at the average evolution of the deposits.

And with regard to paid fees, there's nothing relevant since there are more transactions; the fees percentage goes up as well.

The next question comes from the line of Ignacio Cerezo from UBS.

I've got 2 questions. The first question is a follow-up on Paco's question. Perhaps you can give us more details about the yields in terms of the front book with respect to the back book and the different loan segments.

And also, the second question, I'd like some information or more details about the corporate book. If you have anything to actually balance the mix between corporates and SMEs.

And if you could perhaps give us more details about the sustainability of that specific book, whether these are larger tickets that you're actually establishing or if there's a stronger relationship with the customer which makes sustainability much easier to predict.

Thank you, Ignacio. Well, just a few comments about one of the reasons why we believe that the yields on our investments or lending investments are going to improve with respect to the reference indices. And that's because the front book is actually above the back book.

In terms of second quarter data, it would be almost 40 basis points fundamentally. Well, there are various components I would have to highlight.

Something that we're doing in almost all portfolios is a type of front book above the back book. And with this mix, we're growing more in corporates than in consumer loans and mortgages, where the difference is perhaps less, and the yield in those segments is also higher. So that has an impact.

In terms of the overall front book, it's 40 basis points higher. And we can also see significant repricing due to the maturity of loans with lower rates in the public sector and also in corporates fundamentally. Yes, Ignacio.

I'll ask the other question. As regards our strategy on corporates, well, as you know, as we've shown, there was a clear challenge there for us to strengthen our capabilities in the corporate segment.

It's something that we're doing. And if you look at the evolution, in corporates, in corporates, we've separated or segmented corporates, whether they have more than EUR 10 million or less than EUR 10 million.

And in corporates, we're growing slightly in the SME segment. But for the first time, in the corporate sector, which had fallen significantly, we've reported an international closing figure, which is virtually flat.

So the risk profile for large companies or large corporates is very positive in our eyes. But there's a clear commitment to transactionality and to ensure that we can get closer to the SMEs, given the fact that there are references.

Growth in this sector is clearly much slower over time. But our aim is to grow with the same degree of ambition that we've had in large corporates and to achieve exactly the same thing in SMEs.

That's our ambition, particularly to work closely with our territories and the company, our corporates in the development.

Therefore, the pace of growth is different in each segment but all of the books as the trend has shown in recent quarters, we can see that the pace of growth is positive. Thank you very much.

The next question comes from Carlos Peixoto from Caixa Banco BPI.

My first question concerns deposits. And we can see there being a significant drop in public sector deposits.

I would just like to understand whether that is something specific to the public sector or with other entities that you work with, or have you lost any market share in that particular segment?

Secondly, in terms of the income line and your forecast, what do you think we can expect for the second half of the year and in the midterm?

Well, I'm going to answer your question. Well, I'm going to start with the first question. Well, the evolution of public sector deposits is closely linked to the management of liquidity on the part of public administrations. And that may be affected by a certain degree of seasonality.

It has a greater impact on final balances rather than mid-balances, where the effect is different, and that decrease or fall is not so evident.

So my response would be that all we can highlight is the specific intrinsic seasonality of managing liquidity on the part of public administrations. And I can perhaps answer the second question. We've already commented on this.

One thing that we observe is a positive evolution over the last 2 quarters, and our forecast up to the end of 2026 is that that evolution will continue to be positive during the third and fourth quarters of the year.

With respect to 2027, although you didn't ask me about this specifically, it touches upon something Pablo has asked; as we get close to the year, we'll have a clearer idea of what we can expect in 2027 and be able to offer you clear guidelines about what we can expect in terms of margins for 2027.

As regards other income and other references in the P&L or dividends, and where the equity methods have been applied.

I think that the trend is gradual and positive and particularly linked to our insurance business, which is evolving very, very positively as we highlighted in the presentation. Thank you very much.

The next question is from Sofie Peterzens, Goldman Sachs. Sophie.

The next question is Hugo Cruz, KBW.

Can you hear me? So I have a few questions. So first, you had some release from real estate gains this quarter. Should we assume that will continue in the coming quarters?

Second, can you give more detail on the DTA deductions mentioned in Slide 21, the total amount? And how long do you think it would take for those deductions to go down to 0?

And then third question, can you explain your rationale for preferring cash dividends to buybacks for the additional payout? And should we assume that future additional payouts are also likely to be in the form of a cash payout?

Perhaps I'll start with the third question there. Well, I understand that the question was more to ask for greater clarity regarding the dividend payout.

Well, as we mentioned in the presentation at the beginning of the year, we only had one decision to take, which was mainly the way in which we're going to remunerate 25% or the complementary 25% with respect to the overall objective or target of a 95% dividend.

What we finally decided from all of the different alternatives was to opt for the dividend, the cash dividend.

Therefore, 95% of the earnings obtained in 2026, well, the dividends will be paid out in 3x in September, the first dividend payment in interim dividend then in December, 25%, which was the additional payout and complementary payout would reach that 95% of the total result, which would be at the end of the financial year in April after the shareholders' meeting's approval.

Hugo, as regards the gains from real estate sales last year, we mentioned that we expected that this line would no longer be relevant.

It hasn't been particularly positive either this quarter, but I wouldn't extrapolate this for the future largely because the volume of assigned assets that we have on our balance sheet is extremely low. Therefore, the impact will be immaterial.

We don't expect anything relevant in this respect. It could be net positive in net terms, but only slightly. So, we don't perceive a strong impact on our P&A that would actually prompt us to change our earnings forecast.

And as regards DTA, deferred tax assets, well, the result for DTA will depend very much on the specific circumstances in each quarter.

In some cases, the contribution may be slightly lower. But this is what partly accounts for the difference between our ROTE and the ROCET. This is largely due to the large volume of DTA, and we believe that logically, this is something that will continue for some time.

Operator, we can move on to the next question, please.

[Interpreted] The next question is Borja Ramirez from Citi.

I have two, and apologies if this has been mentioned before, I'm afraid I had another results call this morning.

So firstly, I would like to ask about NII 2027. I understand you haven't disclosed any additional new details in the presentation, but I would like to ask how we should think about the sensitivity to rates in year two, the volume growth, and any other moving parts in the NII.

Then my second question would be if you could kindly provide your latest thoughts on M&A, please?

Borja, I'll respond very briefly. We mentioned that we are not going to provide guidelines on 2027 with respect to NII, net interest income.

But what I can tell you is that the trend will continue to be positive, following in the same lines as in previous quarters. We believe that this will continue for the reasons we've explained due to repricing in a context of higher interest rates and higher volumes; all of this will have a stronger impact on net interest income. We'll give you more details further down the line.

In terms of interest rate risk, this is net positive in the bank. But in the short term, we will tend to hedge to ensure that sensitivity over one year due to interest rate fluctuations that evolve positively is fairly well anchored.

So, during the first 12 months, we're looking at 1% more or less, and it will be between 12% and 2024, and as from year two and three, we'll be looking at somewhere more in the region of 10%. That's just to give you a reference.

But in any case, if we see that the interest rates discounted by the market increase sufficiently and confirm a specific trend, then we will anchor part of that increase.

[Interpreted] With regard to concentration, I think that you are referring to the Spanish financial system.

And when I've spoken about this, I've always explained that I don't see catalysts that, in the short or midterm, there are corporate operations or transactions.

I think that the financial Spanish system was concentrated and there was a degree of sufficient competitiveness, sufficient volume of entities and institutions with the right ability. So, we don't see this in the short or the midterm. So, there are corporate transactions or M&As.

We move on to the next question.

[Interpreted] The next question is Sofie Peterzens from Goldman Sachs.

[Interpreted] Can you hear me now? Okay. Great. So, I was just wondering, there has been some local press news around the Wink card business.

So maybe if you could just comment on the Wink and what you're kind of seeing here? And then the equity method income, I know it was flat year-on-year, but how should we think about that income line going forward given the volatility that we see? Is it just fair to assume Q2 is seasonally higher? Or how should we think about the associate income line going forward?

[Interpreted] With regard to the first question, we think I'm just going to say that the information that we have published was when we announced the analysis of the operation of the CNV.

About the second question, with regard to the equity method, there's not so much volatility. But in the second quarter, we have the Oppidum contribution, which will be increased significantly, and it will be positive.

It will be around EUR 20 million this quarter because there will be the payment of the BP payout, the LP payout, and that generates volatility. But the rest of the components are more or less stable, and they have a very similar performance, except for the outlier in the second quarter; we will expect certain stability along these lines.

[Interpreted] Thank you, Isidro. Thank you, Pablo. We have a last question. We have time for the last question. Please go ahead.

The last question comes from Cecilia Romero from Barclays.

[Interpreted] My question is a follow-up on the previous question with regards to deposits. Is it true that the year-on-year growth of private deposits has decelerated vis-a-vis the previous quarter, and we are seeing this in the sector.

Are you observing greater competition in deposits, both in retail and wholesale? And in thinking of the guidance of the single digit, what assumptions are you having in order to get to the higher end of the mid-single digit?

The customer spread, you've explained that you expect to see an improvement. Where could we stand at the end of the year? And for the ALCO, the liquidity remuneration, wholesale, will it have a positive evolution in aggregate?

[Interpreted] Thank you, Cecilia. I will answer the first question, which is more strategic in terms of how we perceive the evolution of deposits.

Deposit movements are related to the savings rates, which have reduced, and maybe that has some impact at the global level. There's always been competition at this degree of deposits.

Sometimes it's competing with some players, but I don't think there's a different scenario to what we've been experiencing over the past years with regards to the competition position in the sector.

There's always been competition, and we'll have a competition. At the end of the day, financial institutions, we try to help our customers make the best decisions.

And sometimes the deposit structure has movements. We are growing in resources outside the balance. For example, that gives us a balance. So, we are seeing changes in resources in and outside the balance.

For the second question, Pablo?

[Interpreted] With regard to the customer spread evolution, the trend will continue being positive.

It will depend on the deposit behavior, but we think that the lines will be as they are and the repricing; we've been a couple of months with higher interest rates since the Iran conflict broke out.

So we will see an improvement in credit quality. I won't give you a specific number, but the evolution is clearly positive for the next two quarters.

With regard to the other items of ALCO and liquidity, we expect to grow in credit investment in deposits; it will depend on the appetite and the evolution of the markets. The out-of-balance position and the customer appetite for out-of-balance will depend on the market evolution.

So, what makes sense is that the liquidity position is kept. We don't plan to grow the ALCO portfolio because we are already growing in lending, and the idea is to keep it as it is, and the contribution will continue growing, but lower than this quarter.

And between the liquidity and ALCO, they will be slightly positive.

[Interpreted] Thank you very much, Isidro. Thank you, Pablo. Thank you, everyone, for your questions and for your interest in our results.

The Investor Relations team is still available for any questions. And we wish you a nice summer, and we'll keep in contact. Thank you very much.

Good morning, everyone, and thank you for joining us for our first quarter 2026 results presentation. First of all, I would like to confirm that earlier this morning, before the market opened, we published this presentation and the related financial information on the CNMV and our corporate website. Today, our Chief Financial Officer, Pablo, will be the one presenting the first quarter trends. The presentation will last approximately 20 minutes, and it will be followed by our usual Q&A session. Without further ado, I would now like to hand over to Pablo.

Thank you very much, Jaime. I will start on Page 3, where we show the main highlights of the quarter.

Starting with our business activity, I would like to highlight that business volumes have accelerated their growth rate to over 3% year-on-year. This progress has been supported by an almost 4% growth in customer funds and supported by an increase of almost 11% in off-balance sheet funds, mainly mutual funds, where we are showing a 17% year-on-year growth, maintaining a 9% market share in net inflows. This improvement is also supported by a 2.4% growth in total performing loans, which for the second consecutive quarter continued to accelerate their growth.

Turning to profitability. Net income for the quarter amounted to EUR 161 million. Both net interest income and fees showed year-on-year growth, something that combined with lower provisions more than offset the mid-single-digit increase in total cost. The adjusted return on tangible equity remained at 12%, while the cost-to-income ratio stood at 46%. Asset quality remained strong. The net NPA ratio stood at just 0.7%. The NPL ratio continued its downward trend, reaching 2% and its coverage further improved to 80%, significantly above the 70% reached a year ago. The cost of risk also showed a positive trend, declining to 20 basis points, marking one of the lowest levels in recent years and below our initial guidance.

Lastly, we remain focused on value creation. Our CET1 ratio stayed stable at 16% during the quarter as we are allocating capital for shareholder remuneration and lending growth. Two weeks ago, we paid the 2025 final dividend which, together with the interim dividend paid in September reached EUR 443 million. This represents a payout of 70%, resulting in 9% dividend yield.

Looking ahead to 2026, we expect to further enhance shareholder remuneration up to 95% of net income, thanks to our relatively higher capital position and also to our robust organic capital generation. Overall, our tangible book value per share adjusted for dividends was 9% higher than the previous year.

In summary, all trends remained solid throughout the first quarter of 2026, confirming the recent positive momentum. We recognize that uncertainty has increased in the past couple of months, and it may be too early to provide more specific effects. Nevertheless, based on the information available so far and despite market volatility and the possible direct and indirect effects of the current geopolitical risks, we reaffirm all targets and commitments outlined in our strategic plan.

The beginning of 2026 has been better than initially expected, which is obviously great news given the uncertain environment we are facing. All in all, we confirm our initial guidelines for the year.

I will continue with the commercial activity on Page 5. As you can see, total customer funds increased by 3.9% year-on-year. On-balance sheet funds grew by 1.6% or 2.4% when excluding the public sector. Off balance sheet funds rose by 10.6%, driven by a remarkable 16% growth in mutual funds. It is worth mentioning that mutual fund balances have grown from EUR 14 billion to nearly EUR 17 billion over the past 12 months.

On the next page, you can see the details regarding our assets under management and insurance business. As highlighted in the previous slide, assets under management increased by 11% year-on-year with mutual funds showing particularly strong growth of 17% despite challenging environment this quarter. Net inflows reached EUR 468 million, representing a strong 9% market share. On the right hand side, we show the revenues from these 2 business segments, which have risen by 4% compared to the last year and now account for 19% of total revenues.

Now on Page 7. As you can see, loan volumes continue to grow. Total performing loans increased by 0.8% quarter-on-quarter and 2.4% year-on-year, reflecting a positive performance across all segments. Private sector loans rose by 1% compared to the previous quarter while corporate loans posted an increase of over 3%. Lending to individuals maintained its gradual growth trajectory. Mortgage volumes remained stable during the quarter and on a year-on-year basis, whereas consumer loans continued to expand at high single-digit rates like in the previous quarters.

Overall, first quarter evolution demonstrates slightly better trends than previous quarters, driven mainly by improvement in the mortgage and SME segments, both of which showed some growth this quarter, while maintaining positive dynamics in corporates and consumer.

On Page 8, you will find details regarding the new loan production. During the first quarter of 2026, new lending to private sector increased by 10% compared to the previous year, reaching EUR 2.5 billion. As we have just seen, we are delivering growth in the loan book in all main segments. You can see consumer lending maintains very good momentum Mortgages are close to our natural market share level. And in business lending, lower volumes are explained by some large tickets last year, but we are delivering a strong portfolio growth here on much better portfolio and customer management.

Turning to Slide 9. We would like to briefly present some evolution of digital sales and customer acquisition. In the top left, 65% of consumer loans were granted digitally, significantly higher than the 49% in the previous year. It is also worth noting that digital consumer loans amounted to EUR 160 million, representing an 82% increase compared to the first quarter of 2025. In mutual funds, the weight of digital sales grew from 25% to 36%, reaching EUR 230 million, which is nearly 50% higher than last year. Also, as shown in the bottom right of the slide, I would like to highlight that more than 1 million clients use their Bizum with us, which is the instant payment tool most used in Spain, something that is quite relevant for the transactional business as you can only have one Bizum account per fund number.

Also, it is worth noting that in the first quarter of 2026, the acquisition of new salary accounts has doubled, explaining the quarterly increase in the cost of deposit as we will see later. The commercial campaigns include an upfront compensation for the client in exchange for their formal commitment to maintain their salary with us in the future. As you can see, a strategy that is working very well to further improve the transactional business with our clients, which is one of the main commercial focus of the bank.

Moving now to Slide 10. We highlight our continued progress in our sustainability strategy. We keep financing the transition and actively pushing green bond issuance. During 2025, our green bonds enabled the avoidance of 142,000 tons of CO2. Our pool of eligible projects continue to grow together with our ESG business, both green and social. We are well on track on the decarbonization targets over the lending portfolio. Overall, the evolution we are seeing is very positive, and this is clearly reflected in our sustainability ratings that show a consistent positive trend.

We now continue with the review of the P&L in the next section in Slide 12. Net interest income increased by 1.3% compared to the first quarter of 2025. On the quarter, it fell by 1.2%, primarily due to the lower day count. Total fees were 1% higher than in the previous quarter and 3% higher than last year. Overall, revenues reached EUR 520 million, 1% higher than the first quarter of 2025. Total costs grew by 1% on a quarterly basis and 4.5% compared to last year, in line with our mid-single-digit growth guidance. Loan loss charges decreased by over 20%, both quarter-on-quarter and year-on-year, confirming the positive asset quality trends. Other provisions were 9% lower than last year and also significantly lower than last quarter when we booked some restructuring charges.

Profit before tax stood at EUR 232 million. After accounting for EUR 71 million in taxes, which includes EUR 6 million of the banking tax, net income reached EUR 161 million, representing a 1.4% increase over last year.

Now let's review the income statement in more detail. Starting with the net interest margin on Page 13. As you can see, the customer spread remained stable compared to the previous quarter, reversing a negative trend that began in the first quarter of 2024. Loan yield increased by 2 basis points, the same as the cost of deposits, which, as I mentioned earlier, grew due to the impact of our successful salary account campaigns. Net interest margin fell to 1.69% due to the volume effect, driven by higher balances in repo market activity. However, if we exclude this effect, net interest margin stayed stable during the quarter.

On the following page, we show the details of the quarterly evolution of net interest income, which decreased by 1% during the quarter but was 1% higher than the previous year. The lower day count of the quarter amounted to EUR 6 million, while NII decreased by almost EUR 5 million. So, without this effect, NII would have actually increased during the quarter.

As you can see in the bridge, the increase in deposit cost, mainly driven by customer acquisition campaigns and the lower lending income, which is fully explained by the lower day count, were partially offset by liquidity, ALCO, and wholesale funding.

Turning to fee income, the trend observed in recent quarters was confirmed, with a slight decrease in banking fees, which is more than offset by non-banking fees growth, mainly from mutual funds and insurance. Despite the negative mark-to-market at the end of the quarter, fees from mutual funds continued to improve, increasing 19% year-on-year and nearly 4% quarter-on-quarter. Fees related to assets under management and insurance further strengthened their contribution this quarter, accounting for 53% of total fees, up from 48% last year and 43% in the first quarter of 2024.

In Slide 16, we show you the details of the rest of revenues, which also show a relatively stable trend in recent quarters, with a slightly lower trading income this quarter owing to market conditions, but nothing material. Regarding total costs, personnel expenses continue to grow due to salary increases agreed with unions and new hirings. Other administrative expenses also reflect some of the initiatives needed to implement our business plan, leaving total costs 5% above the previous year, in line with mid-single-digit growth guidance. On the right-hand side, you can see our cost-to-income ratio, which grew to 46%, mainly owing to these initiatives that we expect will positively impact the future revenues. Something that going forward will help reverse this trend. All in all, the ratio remains below our 50% target.

On the next page, we continue with the cost of risk and other provisions, which, in my view, are one of the most positive news of the quarter. As you can see on the left-hand side the cost of risk was 20 basis points, which is the lowest since the merger with Liberbank and below our initial guidance of less than 30 basis points for the year. The remaining provisions, including legal ones, were also lower, leaving total provisions at EUR 43 million in the quarter, which is 19% below 2025. Provisions showed a very positive evolution at the start of the year, which is obviously great news and leaves us in a comfortable position for the rest of the year.

Moving now to Page 19, the bank's return on tangible equity continues its upward trajectory, reaching 10% as of March 2026, or 12% when adjusted for excess capital. As we frequently highlight, we consider the return on CET1 to be a reliable benchmark for us, as it effectively isolates the relatively larger accounting equity required due to solvency deductions, mainly from deferred tax assets. In the first quarter of 2026, the return on CET1 adjusted for excess capital stood at 17%.

Lastly, on the right-hand side, you'll find the tangible book value per share plus dividends which has grown by 9% over the past 12 months.

Let's move now to the credit quality section on Page 21. As you can see on the slide, positive trends remain in place. NPLs are down 20% year-on-year, with a coverage growing to 80%. Overall NPAs are also down 26% year-on-year, with coverage also improving to 79%, a very positive evolution that leaves total net problematic exposure at only 0.7%.

If we now move to solvency on Page 23, you have the quarterly bridge. CET1 was very stable in the first 3 months of the year. Quarterly capital generation, including a positive contribution from the stake in EDP, was mainly allocated to shareholder remuneration and lending growth, which are the 2 main users where we plan to go toward our comfortable solvency position, leaving the CET1 stable at 16% in March 2026.

On the next page, you will find our MREL position. As shown, our MREL ratio stood at nearly 27% at the end of March, providing a substantial buffer above the key requirements listed on the right, including an MDA buffer that was higher than 680 basis points. In terms of liquidity, all ratios remain among the highest in the sector with the NSFR at 159% and the LCR at 292%.

Finally, our loan-to-deposit was 69% in March, summarizing the excess of retail funding of the bank that, among others, explains the size of our structural ALCO portfolio that we show on the following page. The yield of the portfolio grew from 2.6% to 2.7%, a small improvement owing to the reinvestment and active management. Duration and size also represented a modest increase in the quarter. It is also worth noting that 81% is public debt and that 83% is included in the amortized cost portfolio.

Finally, as shown on Page 27, despite geopolitical uncertainties, we reaffirm our guidance for the year. We expect net interest income to exceed 2025 figure, net fees to grow at low-single digit and total cost to increase by mid-single digit. Regarding cost of risk, our initial forecast was to finish the year below 30 basis points, which we also maintained despite the strong first quarter of 20 basis points. It is obviously better than expected at the start of the year, but given the current situation, we prefer to be prudent. In terms of business volumes, we remain well on track to achieve the target of 3% growth. Finally, we confirm our expectation that net income for 2026 will surpass the EUR 632 million from last year.

This concludes my quarterly update that as demonstrated, shows a continued improvement in the bank's overall financial position with a stronger commercial performance, enhanced results, consistently high solvency and very positive outlooks for shareholder remuneration. Thank you very much. And I will now hand over to Jaime for the Q&A session.

Thank you very much, Pablo. We will now begin with the Q&A session. [Operator Instructions] Operator, please open the line for the first question.

Good morning, everyone, and thank you for joining us for our first quarter 2026 results presentation. First of all, I would like to confirm that earlier this morning, before the market opened, we published this presentation and the related financial information on the CNMV and our corporate website.

Thank you. Maks. Regarding the cost of risk, as you can imagine, we are in an uncertain environment and geopolitical risks are part of our analysis, and we have considered with our post-model adjustment some impact in the quarter. So, we are quite aware that the potential cost of risk for the quarter was quite good and even below our guidelines for the year, but we want to be prudent for the year and maintain the guidelines for the time being.

The other one, the second one was related to a potential exit scheme because another competitor has announced one. Just as a reminder, in the fourth quarter 2025, we booked some restructuring charges to implement a similar exit scheme, a voluntary exit scheme. In our case, that exit scheme, it is more focused on renewal of part of the staff rather than specific cost cutting. So that was announced in the fourth quarter. It was booked in the fourth quarter, and it will be implemented throughout 2025.

Yes. And was within our guidelines for total cost was considered this scheme.

Thank you, Pablo. Please, operator, can we go to the next one?

Next question from the line of Miruna Chirea from Jefferies.

I just had 2, please, on NII and then one on the salary account campaigns. So firstly, on NII, you are maintaining your full year '26 guidance of NII greater than '25. But if I'm just analyzing your Q1 NII point, I'm already getting to a number that is more than 1% above '25. And presumably, you're also looking at some volume growth and potential further margin expansion for '26. So, it seems that there is some upside to your guidance. If you could just walk us through your expectations for quarterly NII provision? And then on the salary account campaigns, we showed the increase in your cost of deposits for the quarter. Could you give us some color on how successful the campaigns were and then some details on the pricing? I hear your comments about the upfront cost, but is there also a promotional rate? And if so, for how long does it last? And what does the rate reset afterwards? And if you could share any thoughts on the outlook for the cost of deposits for the rest of this year? Thank you very much.

I'll try to give you some information on the NII. We maintain the guidance. If you consider the improvement compared to one year, it's only 1.3%. So, this is quite in line with what we were expecting. So, we maintain the NII. I think for the coming quarters and the expectation on a quarterly basis of what we expect, I think the first thing to mention is interest rate volatility is paramount and will have an impact mainly on 2027 and 2028. In the short term, in the quarterly, the impact of any interest rate shock is always smaller. So, our expectation remains that the first quarter was going to be slightly below last year. But if we consider the day count, it could consider the fourth quarter the bottom of NII. From this onward, our expectation is a gradual improvement, slower in the second quarter and then taking and picking up and having some momentum from the second half of the year and especially in 2027. So, we maintain that expectation, and we will see how this evolves.

And regarding the salary account. I think this has been quite successful, and this is one of the reasons that we have some pickup in cost of deposits, but it's with our strategy to improve the transactional business with our customers and improve the transactional business down the line. And the overall cost of risk this quarter has been quite stable regardless of this impact. And going forward, obviously, we have higher rates on market prices, we will have some impact down the line, but within the expected beta that we have at the moment, and consider that we have only 25% of remunerated deposits in our book.

Thank you, Pablo. Please, operator, can we move to the following question.

Next question from the line of Cecilia Romero from Barclays.

I have two. The first one on NII sensitivity and 1 year have moved higher again. Over a 24-month repricing horizon, how much incremental support can NII realistically receive from higher rates, including out of reinvestment at higher yield relative to the assumptions you had at the end of last year? And in a scenario where sector loan growth is affected by the macro backdrop and lending slows, will a stronger deposit growth support NII?

And the second one on provisions, if the macro environment were to become more uncertain, how would that typically feed through into your provisioning models and cost of risk? I think you have a high weight in your base case. Are you thinking of changing your weight for each scenario? And do you have any overlays?

Thank you, Cecilia. Regarding the NII sensitivity, I think as I mentioned, for the first year, any interest rate shock has very little impact since we started at the end of 2023 to lock in the level of rates for the next 2 years -- 2, 3 years. So, for this first 12 months, the impact will be very small. From a more second year impact, we think we have an impact for 100 basis points parallel movement of around mid- to high-single digit impact in NII.

And this obviously, as you can imagine, will depend a lot on how customer deposits cost evolve. So, it's always with the assumptions that everything, the beta is maintained as it is now, which is -- has been quite stable. So, there's no reason to think in a different way. But obviously, we consider in this analysis that we have some renewed ALCO portfolio reinvestment, and we have also some new lending at higher rates after the shock.

So, this gives us with a positive evolution in the second half of this year, a small one and then picking up some momentum from '27 onwards. Overall, I think it's important to remember that we have quite a significant NII sensitivity in the medium term due to our liability and the deposit -- the transactional deposit base that we have.

And regarding the volumes in the impact of NII, we have given a more stable and constant balance sheet impact rather than dynamic impact. So, we haven't considered in this sensitivity the impact on volumes. I think in the short-term the impact of reducing expected volumes, we were expecting to have around 3% growth in volumes more or less for the year.

So, if maybe anything of this geopolitical risk has an impact of some reduction in lending. Maybe we have an increase in the saving rate that support the deposit side. So, I'm not convinced this is negative or neither positive. We have some NII coming from the lending. The good news is the front book is ahead of the back book, and the deposits are behaving as expected. So, we're comfortable with the guidance that we give for the year and expect to improve next year.

And regarding provisioning and how we consider -- we have a prudent approach in our model. And just to give you some color, the model of our IFRS 9 macroeconomic variables that consider our base scenario, we were expecting only 1.9% GDP growth for the year. And the last number that we have for the first quarter is we have an annualized 2.7%. So, still room for some reduction in the year in the GDP numbers. We consider the situation to have some impact, but not a very significant impact and still maintain positive momentum in the Spanish economy.

And regarding the post-model adjustment and the 1-year cost of risk, I think we already have some buffer on top of this provisioning within our IFRS model, which is we already considered last year, and we mentioned that we consider geopolitical risk as one of the potential impact that our model didn't consider. So, we already have some provision last year, and we slightly increased this quarter, again, our post-model adjustment. So, we are comfortable with our guidance of below 30 basis points for the year, even in some stress scenarios as we are witnessing today.

Thank you, Pablo. Please can we move to the following question please, operator.

Next question from the line of Borja Ramirez from Citi.

I have 2 questions, please. The first is on the payroll accounts, if you could kindly provide more details on the volume outstanding and the average cost? And also, if you could provide details on the ongoing system competition in Spain? And then my second question would be, I understand that you have some ALCO maturities that I think it was between 80 and 90 basis points, around EUR 2 billion maturing this year. If you could kindly reconfirm this number. And I think you also have NII benefit from the maturity of an expensive bond at the end of this year, if I remember well. So, there could be some NII uplift on that. If you can this as well, please?

Thank you, Borja. Regarding the customer acquisition campaigns, I think just to give you some color, we have spent around EUR 6 million in this quarter on these campaigns, which represent the successful of the campaigns, which is more than EUR 4 million more than the previous quarter. So, this strategy is picking up, and we pay slightly less than EUR 500 upfront with compromise from the customer to be with us at least for 2 years. And so, the impact on the cost is within those EUR 500 that I mentioned. And the amount, we gathered more than 12,000 new salary accounts for the quarter.

Regarding the ALCO portfolio maturity, as I mentioned last presentation, we have for this year, slightly above EUR 2 billion. We still have remaining EUR 1.7 billion for the year, and the average cost is very similar to the number for the whole year. So, it's around 0.8%. And this has been considered when we say that we expect to have a slightly higher NII for the year than compared to last year. So, we already took this in consideration. And as you can imagine, we are reinvesting this at a higher level.

Thank you very much, Pablo. Operator, please, we can move to the following question.

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

This is Sofie from Goldman Sachs. So, my first question would be on cost growth. Some of the wage negotiations are coming due next year, if I'm not mistaken. So how should we think about cost growth beyond 2026, more in '27, '28? And what cost pressures do you see kind of on the horizon? And then my second question would be, could you just remind us how much DTA benefits we should be expecting every year going forward?

I think regarding cost growth, I think as you can imagine, it's a combination of different things. As we mentioned within our strategic plan, we have a strategy to diversify our revenue sources. So in order to grow in corporate lending and in consumer lending and import/export lending and private banking and so on, this requires some deployment of IT developments process and people and talent. And we have been hiring some talent. So, you have to consider this on top of the actual salary increase that we mentioned. So, we maintain and we are comfortable with the 5%. I think to talk down the line for '27, '28 is too premature, and we will give more details on the future position for the bank.

And on top of this, we have this, as I said, on top of these new hirings, we have some schemes, as we mentioned, to reduce some of our workforce. So, what we are doing is not a cost-cutting measure, but to renew and to uplift the capabilities of our workforce. And regarding your second question, Jaime, can you comment?

Yes. On the DTAs, very straightforward. I think that you can expect a run rate between 20 to 25 basis points per year of solvency generated by lower deductions from DTA at current profitability levels. That will be probably the summary. So, we can move please operator to the next question.

Next question from the line of Carlos Peixoto from CaixaBank BPI.

The first one would just be a little bit of a follow-up on fee income. Basically, you're maintaining the low-single digit growth for the year. Do you see any tailwinds here or headwinds, sorry, actually from the market -- the recent market volatility or potential hampering of your assets under management business because of this? And then the second one would be on capital distribution plans. So, you have already upgraded payout to very high levels. But I was just wondering whether there are any additional plans to distribute or to accelerate the distribution of the existing excess capital?

Thank you, Carlos. I think on fee income, as we said, we have managed quite well the headwind coming from market volatility. I think that the market is performing quite well considering the geopolitical risk environment. And I think there's still some momentum in the Spanish and our customer base to increase their investment compared to their saving. And so, we haven't changed our expectations on off-balance sheet growth and mutual funds. This obviously will depend on how market evolves. But so far, I think the drawdown that we saw in March is almost recovered now. So, we don't think the customer and the investor base will change their attitude unless we have a more significant impact on the market that we don't foresee in the short-term.

And regarding capital distribution plans, I think we have a quite generous level of 95% shareholder remuneration of net income. And just to recall, we will have a presentation in the second quarter. We will have the update of our interim dividend of 70% in the first half of the year. Then in the third quarter result presentation, we will announce how is going to be delivered, the 25% additional remuneration that we plan. And in the final year presentation, we will have the final dividend. So, we don't think we need to accelerate anything regarding shareholder remuneration, and we stick to our strategic plan.

Thank you very much, Pablo. Can we please move to the following question, operator.

Next question from the line of Ignacio Ulargui from BNP Paribas.

About corporate lending, if you could elaborate a bit more on what has been the plan delivered in the quarter? And how should we expect growth in the future? Do you think that the strong quarter-on-quarter growth that you have delivered could be maintained or there was any specific one-off transaction that distorted the growth? And the second question is on capital linked to the previous question of Carlos. I wanted to understand whether you could use part of that capital for any inorganic growth and what will be the priorities and the capital hierarchy that you will be looking for in terms of businesses, whether you will prioritize fee-based business or whether you would like to, as the guy has been suggesting looking for diversification.

I think I have got both of the questions, but thank you, Ignacio, for your question. I think regarding the corporate lending, although the quarter has been significantly good we think the year-on-year numbers are sustainable, and we will probably maintain this 6% growth for the coming quarters. I think you have to think that we have to catch up in terms of customer activity. We are deploying more resources for this business. And although the level is higher than the market growth, we have to do some catch-up in terms of market share in this business. And so, we still have plenty of opportunities to maintain the growth. Maybe not the growth on a quarterly basis, but the growth on an annual basis could be some guidance for how much we expect to grow in the high-single digit number, between mid- and high-single digit number for the coming quarters as well.

And regarding the capital, on top of what I mentioned of shareholder remuneration, we also mentioned in our strategic plan that we will consider any bolt-on operation in M&A. And this will have a clear view on improving and accelerating our diversification of revenues that we were thinking. And as you can imagine, this diversification spans from fee business, but also in areas where we have a lower market share like consumer lending or other type of specialized lending that we have a smaller market share. So, we maintain that possibility. But I think to be clear, the whole idea of this bolt-on is not something that we need to do to deliver in our strategic plan targets. It's something that will help us to accelerate the process of diversification. But we will maintain hiring people and improving capabilities to do this diversification.

Thank you again, Pablo. Let's move to the following question, please.

Next question comes from the line of Fernando Gil de Santivañes from Intesa Sanpaolo.

I hope you can hear me?

Yes. Go ahead Fernando.

So I see headcount substantially up by 100 persons in the quarter. I just want to get a sense of how should we be thinking about headcount going into the year-end of 2026 and given that you [indiscernible] to be in Q4.

I'm not sure I got your question properly, but I think you were looking at the headcount of employees and how this has evolved in the quarter, increasing slightly. You have to consider that we have 2 different forces. One is we are growing our capabilities in certain areas. In IT, in artificial intelligence deployment and some specialized areas like specialized lending and things like that. And on the other side, we have the redundancy, the voluntary redundancy plan. And in this quarter, we have the first impact, but we have not any impact from this plan. So, net-net, I think the headcount will be very similar, slightly up, but not very significant. So, we maintain our cost guidance of mid-single digit for the year, and this consider the employee and workforce.

Thank you very much, Pablo. Just to double check, I think that we don't have any more questions. But please, operator, can you confirm it?

Yes. There are no other questions at this time.

All right. So, thank you very much, everyone. The IR team remains at your disposal. If you need further info, please do not hesitate to contact us. Thank you very much for your interest and your time.

Thank you very much. Have a good day.

[Interpreted] Good morning, everyone, and thank you very much for attending Unicaja's Q4 2025 Earnings Presentation. First of all, as we usually do, let me confirm that this morning, before the market opened, we published this presentation along with the rest of the usual financial information at the CNMV website and at our corporate website.

Today, we are joined by our CEO, Isidro Rubiales; and our Chief Financial Officer, Pablo González. We have divided the presentation into 3 sections. Isidro will begin with the introduction, which includes a summary of the financial year, and a brief review of the first strategic -- first year of the strategic plan. Pablo will explain the financial earnings. And after which Isidro will return to the stage 2, conclude with some final remarks before opening the floor to your questions. We expect the presentation to last just over half an hour.

After the presentation, we will take questions from analysts and investors who are following us by telephone on the original Spanish line. And then we will move on to the English [ channel ] line. So without further ado, I give the floor to Isidro.

[Interpreted] Thank you very much, and good morning, everyone. It's a pleasure for me to be here again, sharing with all of you the main -- the key highlights of the 2025 earnings, which, as Jaime mentioned, is the first year of the strategic plan. And as you will see, we are making good progress, which is also a beginning to be reflected in the entity's financial performance. The strategic plan is designed for the long term. And many of the results and returns we expect to obtain will take time to be reflected. But it's true that some of these measures implemented are already allowing us to move in the right direction with some clear results in the first year of the plan.

On Page 3, we show our usual summary of the highlights of the financial year. The first item that we would like to highlight is the significant recovery in business activity that we have achieved throughout 2025. Two years ago in the fiscal year 2023, performing loans fell by 9%, the following year. In fiscal year 2024, the decline was 4%. In 2025, despite not growing in the mortgage segment, which is Unicaja's largest book, we managed to reverse that trend and achieved 2% lending growth.

This turning point, as we will see later, is partly as a result of the diversification strategy outlined in the strategic plan that we presented to you a year ago and which is gradually beginning to take shape. Proof of this is that loan approvals have grown by 40% compared to the previous year. Another aspect that reflects the greater commercial momentum is the evolution of mutual funds, which, as you will recall, was one of the strategic levers of the plan with balances rising by 23% during the year and a net subscription market share of 9%, which is higher than our structural share.

This positive performance has also been reflected in profitability, with net profit for 2025, improving by 10% to EUR 632 million, thanks to the growth in gross margin and lower provisioning requirements. The increase in income boost the ROTE adjusted for excess capital of 12% and maintains efficiency slightly above 45%, below our target of 50%.

I would also like to highlight the continuing improvement of the bank's asset quality, an aspect to which the market may be paying less and less attention, but which we have been managing exceptionally well internally. And as a result, their balances have become immaterial, but continued to improve quarter after quarter. NPAs fell by an additional 25% in 2025. And additionally, leaving the net nonperforming asset ratio at a symbolic 0.8%.

Stock fell by 20% during the year, reducing NPLs ratio to 2.1% below the 2.8% reached by the sector in November 2025, the latest data available. NPL coverage also improved during the year, increasing from 68% to 77%. This positive development is also reflected in the P&L with a cost of risk below 26 basis points below initial guidance.

Finally, I would also like to draw your attention to value generation. One of the most important aspects as it's the consequence of all the above. The CET1 ratio driven by earnings ended the year at 16%, 90 basis points higher above last year, which allows us to increase the percentage of the 2025 earnings, which -- that will be allocated to dividends from the initial 60% to 70%. This is a significant increase that will improve the dividend up to EUR 443 million, 29% higher than the previous year. And this is the highest dividend paid in Unicaja's history.

On the following page, we show you how the year ended compared to the initial guidance we shared with you a year ago, we believe it summarizes the year's performance very well. We expected net interest income to be above EUR 1.4 billion, and it finally reached EUR 1,495 million, which is 7% above our initial guidance due to the implementation of loyalty plans with linked customers, we expected fees to remain flat, but they ultimately increased by 3%, driven by growth in investment, in mutual funds and insurance, two of the commercial pillars of our plan.

Costs remain in line with expectations, rising 5% due to investments, hiring and the projects we are implementing to execute the strategic plan. The cost of risk was below our initial forecast as our provisions. Business volume also grew as expected.

As a result of all the above, net income increased by 10% to EUR 632 million, no less than 26% higher than the initial target, which was EUR 500 million, which, as you know, we already exceeded in the previous quarter leaving the ROTE adjusted for excess capital at 12%, which is 200 basis points higher than the 10 initial -- 10% initially expected.

As you can see, these pages summarizes very well the positive performance of the entity in the first year of the strategic plan, which we -- where we met all the guidelines we provided a year ago. And in some cases, we significantly improve on them.

On the next page, as I mentioned earlier, we show how the positive evolution of the entity's financial position and results allow us to present a very important milestone. The Board of Directors has decided to update the dividend policy and increase the percentage of profits we want to distribute in the way of dividends going from 60% to 70%. This is a significant increase in the distribution of earnings to our shareholders, which together with the best earnings will mean the payment of dividends for 2025 of more than EUR 0.17 per share, well above the EUR 0.134 paid for 2024 and compared to around EUR 0.05 that we paid in 2022 or 2023.

The total dividend will amount to EUR 443 million, 29% higher than the previous year. This is a significant increase, which as I said before, has been made possible by the positive performance of the results and the bank's comfortable solvency position.

Now if we turn to Page 6, you will see some of the progress made on the strategic plan in the first year. Although we are in early days, we have gone -- begun to notice a significant change in the dynamics, thanks to the entire team's focus on the plan's initiatives. And we wanted to share some ones with -- that we are particularly excited about with you.

In consumer lending, we aim to double arrangements by 2027. This year, we have already increased by 40%, maintaining our focus on working with existing customers and direct deposit income. With regard to new insurance premiums, we wanted to increase by 25% in 2027. In this first year, we have already increased by 17% and we continue to see room for improvement to achieve our goals.

Another noteworthy aspect is the off-balance sheet weight on total customer resources, where we have increased to 27% in the year with a final target of 30%. We have launched products such as Unicaja Store and reached very important agreements with the management company that will help us to continue increasing and diversifying our income.

In the corporate sector, we are very pleased with the improved performance of the business in the first year of the plan. We have turn around a business that was in decline in the book after falling 9% in 2024, has grown by almost 4% in 2025. To achieve this, we have attracted 70% more new customers with lending increased our own customer financing share by 5 percent points and increased the weight of the current assets from 11% to 14%. All of this driven by our focus on improving customer satisfaction with an NPS indicator, improving by 10 points in the corporate business since we launched the plan.

Across the board, as you will see later, we are working hard to improve our commercial and operational tools using artificial intelligence. We are rolling out tools across the entire organization and loading use cases in different areas, such as sales, customer service, operations, et cetera with efficiency improvements in many cases, exceeding 50%.

Finally, a very important part of our plan is to hire specialized and significant profiles for the bank in order to achieve our targets. In this first year, we have already achieved 65% of the talent acquisition that we have planned. In short, it has been an intense first year of the plan, where we're gradually beginning to reap the rewards of this implementation.

As a result of these advances, on Page 8, we update our earnings expectations for the 3 years of the strategic plan a year ago, along with the annual earnings for 2024. We presented the main details of the plan in which we showed our intention to exceed EUR 500 million in net profit in each of the 3 financial years and an accumulated net profit of more than EUR 1.6 billion, which was 40% more than the [ EUR 1.17 billion ] achieved in the previous 3 financial years from 2022 to 2024.

Today, following the positive performance in the first years of the plan's implementation, we're increasing this accumulated net profit earnings expectations by EUR 1 billion taken to EUR 1.9 billion, which is 70% higher than the accumulated net profit achieved during the previous 3 years.

The interest margin, which we initially expected to exceed EUR 1.4 billion each year, is now expected to exceed EUR 1.5 billion. And net income, which I mentioned earlier, we initially expected to exceed EUR 500 million each year, is now expected to exceed the net income for 2025. This is EUR 632 million achieved last year. All of this will be accompanied by a cost-to-income levels that will remain below 50%.

On Page 8, we provide an update on shareholder remuneration target of the plan. As you will recall, the objective is to allocate more than 85% of the earnings for the 3 financial years to shareholder remuneration. Initially, the idea was to allocate 60% through the ordinary dividend and the remaining 25% through what we call additional remuneration which could be in cash dividends or share buybacks with the intention of concentrating this additional remuneration in fiscal year 2026 and 2027.

Following the updates of the dividend policy from 2025 onwards, we are increasing the structural remuneration from 60% to 70%. This reduces the percentage of additional remuneration for the period to 15% of accumulated earnings. As can be seen on the right in order to achieve the aforementioned objective, the additional remuneration will represent around 25% of the earnings for fiscal years 2026 and 2027.

In other words, for the 3 years of the strategic plan, we will pay 70% of the net profit in dividends, and for 2026 and 2027, in addition to that 70%, will include an additional remuneration of 25% of the profit for those 2 years, which will be either paid in cash dividends or through share buybacks, something we will decide based on circumstances. Therefore, for 2026 financial year, if we pay part or all of the additional remuneration in dividends, we will make an additional payment in December, to which we will have to add the 2 usual dividends for 70% of the result, the first in September and the second in April of the following year once approved in the General Shareholders Meeting.

As you can see, this would be the plan over the 3 years as a whole. Shareholder remuneration represents more than 85% of the accumulated net profit. Finally, and given its importance, I would like to take a moment to mention some areas in which we are making progress in the field of AI, which we show on Page 9. We are convinced that this technology will change the way we do business and banking, not in the future, but right now, that's why we consider it's an absolute priority.

We are making progress in the use cases across all areas, including commercial operations, IT development with very encouraging results that drive commercial activity, improve efficiency and reduce the time required for many tasks. This is facilitated by a hybrid of modular architecture. This is adapted to both cloud on-premise environments with independent components that accelerate system and construction are ready to work with different types of models.

We believe that innovation is essential to get the most of it, which is -- that's why we have created an AI hub with more than 50 multidisciplinary professionals. And we've launched joint chair with University of Granada to promote research and attract talent. In short, we are promoting the adoption of artificial intelligence throughout the organization, which is leading us to achieve efficiency improvements of over 50% in some areas.

In short, as you have -- you will have seen in the 2025 financial year has been very positive. Progress in the implementation of the strategic plan has led to an improvement in commercial dynamics which, in turn, has boosted results by 26% above initial forecast, which together with our comfortable solvency position allows us, on the one hand, to increase the percentage of earnings that we'll allocate to dividends from initially 60% to 70% increasing the dividend by 29%, to EUR 443 million, the highest in our history. And on the other hand, it allows us to improve our future earnings expectations.

So with that, I'll hand over to Pablo, who as usual, who will give you more details on the financial performance for 2025. Pablo, whenever you're ready.

[Interpreted] Thank you, Isidro. Let us now continue with the business activity on Slide 10. As you can see, total customer funds rose by 3.5% in 2025. Private sector deposits increased by EUR 662 million or 1% with a continued shift in the product mix from term to demand deposits that rose to EUR 55 billion, up 3% year-on-year, which explains the lower cost of deposits that we shall discuss later. Our balance sheet performance remains very positive, posting an annual growth of 13.8% driven by mutual funds, which after reaching the market share of 9% of net subscriptions grew by 22.6%. That is in the north of EUR 3 billion.

On the following slide, we disclosed the details of assets under management and insurance. On the left-hand side, you can see that assets under management rose by 14% over the last year. Funds in turn climbed by 23%. Note worthy is the significant increase in net fund subscriptions, as shown at the bottom, these subscriptions rose from 1 point EUR 1,767 million to just over EUR 2.8 billion, accounting for a 9% market share of net subscriptions according to Inverco.

On the revenue side, as you can see on the right-hand side, these 2 lines of business rose by 9% in 2025, accounting for 18% of total revenue for the year. With regard to lending, during the 2025 financial year, total performing loan book rose by 1.9%, which is a very positive trend compared with the declines reported in recent years, as Isidro mentioned earlier.

Broken down by business segment, corporates posted a very positive uptick and after rising 1.7% in the quarter, they reported annual increase of 3.7%. This is one of the most positive business aspects of the year. In fact, thanks to the implementation of certain measures under our strategic plan, we have reversed the negative trend that this segment has been experiencing in recent years.

In the case of individuals, growth for the year was 0.6%. Because albeit, we barely reduced the mortgage book by 0.2%. We were able to offset this with a strong increase of more than 8% in consumer lending. Again, driven by the measures set out in the strategic plan, which aims to diversify revenue streams. In short, this trend points to progressive improvement over recent quarters which can be explained by greater diversification and better sales dynamics, together with a major increase in new production as shown on the following slide.

All new lending book segments grew markedly by 40% over the year as a whole from just over EUR 7 billion to almost EUR 10 billion in 2025. Growth in corporate banking is particularly noteworthy with formalized balances rising by 46% over EUR 6 billion. Mortgages rose by 30% to over EUR 3 billion. This amount leaving the book flat for the year given the pace of repayments. It should be noted that this more conservative growth in the mortgage book is mainly due to the high level of competition in this segment, where prices are very tight.

Finally, although in related times, their balances are less representative, I would like to highlight the increase in new consumer lending production, which rose by 40% to EUR 822 million. In short, this positive growth is in line with the business priorities set out in our plan. On the following slide, you can see how we continue to make progress on our strategic plans, sustainability commitments. This effort is being recognized by ESG rating agencies with 6 improvements having been granted in the latest reviews.

Regarding environmental matters, noteworthy is an increase in the weight of Article 8 and 9 funds, which now account for 72%. We maintain and reinforce our strategy of financing ourselves through green bonds with high eligible collateral, while also advancing in the decarbonization of the portfolio, now targeted at 6 sectors representing 81% of our lending to the private sector already.

We also like to highlight, Unicaja's social commitment, one of our identity hallmarks, which can be summarized in aspects such as customer proximity, commitment to financial education and support for vulnerable groups. A portion of proceeds is returned to society through more than EUR 175 million distributed in dividends to foundations in addition to EUR 371 million in taxes paid in 2025.

We're also committed to our customers by accompanying them in their own transition to this. And we are promoting new functionalities and agreements with third parties as reflected in the growth of the sustainable business where both the portfolio and new production are growing significantly.

Finally, we would like to highlight our commitment to our employees with a focus on creating an environment that prioritizes people, good governance, equality and professional development.

We shall now continue with a review of the income statement in the next section. Starting with the quarter, net interest income grew by 0.8% and as the effect of loan repricing was offset by lower funding costs, both in retail and wholesale. Fee income improved by 4.1% over the quarter, bringing us to gross income of 1.3% higher than last quarter. Costs are rising due to the seasonality of the quarter.

Overall, the quarterly margin before provisions rose by nearly 1%. Provisions as a whole rose sharply over the period, mainly because we have included a provision for restructuring costs in the amount of EUR 27 million. Our aim is to implement a new workforce renewable plan similar to the one we announced last year.

For the year as a whole, profit rose 2.6%, reaching EUR 2.095 billion. Total operating costs increased 5.4%, in line with the previous year and the guidance. Overhead costs rose as a result of ongoing investments, while personnel expenses increased by 4.2% in excess of the percentage agreed in the collective agreement due to new hires and variable remuneration.

The operating margin improved by 0.5%. Provisions fell by 25% during the year, mainly due to lower provisions for legal risks. All of the above, led to a pretax profit of EUR 902 million, which after taxes and minority interests, including EUR 26 million in sector-specific tax amounted to EUR 632 million, up 10.3% compared to the 2024 financial year.

Let us now take a closer look at the income statement. Starting with net interest income on Slide 18, we show the evolution of customer net interest income. As you can see, it fell by 4 basis points over the quarter as the decline in credit yields was partially offset by lower deposit costs. This is the same trend as reported in previous quarters, but increasingly moderated as the downward trend in lending is becoming more limited, albeit we expect it to continue somewhat due to the annual evolution of the 12-month Euribor, which is still slightly below what it was a year ago.

We also increasingly see less room for declining the cost of deposits, which continues to improve due to the mix effect rather than the price effect. In any case, as we always say for an institution such as Unicaja with far more deposits than loans, business performance is better reflected by the net interest margin on profitable assets. And this remains stable during the quarter, as you can see.

The following slide shows details of the margins performance during the quarter, which improved by EUR 3 million or 0.8%. The lower return on loans mentioned above is offset by the lower cost of deposits and wholesale funding as well as by the higher generation of liquidity. This quarterly performance is similar to that reported in other quarters this year. But as mentioned above, it is becoming increasingly moderate.

Moving on to fees. We can see that they continue to perform well in the quarter, growing by 4.1%, mainly due to higher income from value-added services such as mutual funds and insurance. Over the year as a whole fees rose by 2.8%. As we have mentioned in the past, fees for collections and payments, known as banking fees fell by 7% as a result of the implementation of customer loyalty programs. Although some of these fees, such as car fees are already showing positive growth in 2025.

At any rate, this impact was more than offset by the positive performance of nonbanking fees. These fees, which had greater added value rose by 12% in 2025 driven by mutual funds and insurance, which as shown on the right-hand side, now account for 49% of the total, up from 45% in 2024 and 41% in 2023. Let us move on to the P&L account to show the rest of the income captions, which also show a positive trend in the financial year due to the changes introduced in the sector-specific tax, but also due to the fall in nonperforming assets and the growing contribution of investee companies.

On the cost side, as mentioned above, personnel expenses increased during the year due to wage rises agreed with employee representatives, new hires and also as a result of higher variable remuneration in view of the institution's positive performance. As for overheads, the figures are accounted for by the necessary investments we are making largely for the implementation of the strategic plan. In any case, and despite this increase in costs over the year, efficiency remains at 45.5%, below the 50% target we have set in the plan.

On the following page, we continue with provisions, which show another positive aspect of the financial year as they continue to improve. Total provisions fell from EUR 319 million to EUR 239 million. That is a decrease of 25%. The quarterly cost of risk was 27 basis points and the annual cost of risk was 26 basis points lower than initially expected. Other provisions include restructuring costs for workforce renewal in both 2024 and 2025, amounting to EUR 38 million in 2024 and EUR 27 million in 2025. Excluding this effect, they are in line with expectations, showing a downward trend.

On the following slide, we show a summary from a profitability standpoint. On the left-hand side, you can see different profitability metrics, all of which demonstrate the positive evolution of Unicaja's results. The reported return on tangible equity without any adjustments increased to 10%. If adjusted for excess capital above a CET1 of 12.5%, which is a level similar to that of other listed Spanish institutions, shows an improvement of 12%.

At the bottom, we show the same metric calculated on regulatory capital, which shows an improvement of 70% in 2025. On the right-hand side, you can also see the evolution of the tangible book value, which when adjusted for dividends, increased by 9% during the financial year.

We now turn to credit quality. Another positive of recent quarters. The balance of nonperforming loans continued to decline. The quarterly decline was 4.3% and the annual decline was 20%, bringing the nonperforming loan ratio to a new low of 2.1%. At the same time, coverage of nonperforming loans continued to rise from 68% a year ago to 77% at present. If we now consider total nonperforming assets, or NPAs, we see that in net terms, they account for 0.8% due -- both to the significant 25% drop in their balances during the year and to the increase in coverage, which rose from 71% in 2024 to 77% at the end of 2025.

Finally, I would like to review the bank's solvency and liquidity position with you. On Slide 28, we show both the quarterly and annual trends. In the quarter, the ratio fell to 16% due to 2 different factors. On the one hand, we have the impact of the dividend adjustment, which is slightly higher than the quarterly result. Since until September, we accrued a dividend of 60% of the result, which now becomes 70% for the financial year.

Secondly, we have the impact of the growth in risk-weighted assets, which is mainly explained by operational risk and credit growth. Even so the CET1 ratio closed the financial year 2025 at 16%. Over the year as a whole, we generated 90 basis points of CET1. On the positive side, we have the generation of earnings, which net of dividends and AT1 coupons amounted to 55 basis points despite allocating 70% of earnings to dividends.

In turn, we have another 77 basis points mainly from lower deductions and market valuation, including the impact of EDP, which amounts to 21 basis points for the year. On the negative side, we have the growth in risk-weighted assets, which, as we mentioned, are rising due to the impact of the update of operational risk and credit growth.

On the following slide, we show the institution's position in relation to different requirements. The minimum required eligible liabilities or MREL ratio stands at 27%, growing slightly over the year with a greater weighting of subordinated instruments. On the right, you can see the buffers we have in relation to the main requirements, which, as you can see, remain quite comfortable.

And at the bottom, we show the liquidity ratios, which continue to be among the highest in Europe with the LCR standing out and in 2025, about 300%. And finally, we show you the details of the debt portfolio, as you all know, in our case, this is relatively important because the low loan-to-deposit ratio translates into a high retail liquidity position, which we invest in this structural portfolio, mainly in the amortized cost portfolio. As you can see, the portfolio has hardly changed during the quarter with the balance duration and rate remaining fairly stable.

That's all from me, Isidro, whenever you're ready, I give you the floor.

[Interpreted] Thank you, Pablo. Continue on Page 32 with some information about what we expect to see in 2026, which you can imagine it will be fairly consistent with progressive improvements that we hope to see it materialize as a result of the implementation of the strategic plan. Starting off with the net interest income, we expect some growth and therefore, to end this financial year about the level reaching 2025, fees should continue to grow at a low single-digit rate, driven by value-added fees, mainly from funds and insurance costs. And we hope that the fees from the banking will contribute -- costs will continue to grow at around 5%, reflecting the investments we want to make to continue successfully executing our strategic plan.

We expect the cost of risk to remain below 30 basis points. The business volume will be maintained its current pace with growth of around 3%. And finally, as a result of the above, we believe that the net income will continue to grow in 2026, exceeding the result achieved in 2025.

And to conclude, allow me to share a few quick conclusions with you before opening the floor to questions. Today, we have presented excellent results for 2025, reaching a new historic high in both earnings and dividends. But as I also told you last year, we are not satisfied. We want to continue improving something we hope to do by executing our strategic plan, a plan that in its first year is already showing some of the returns we expect.

From a business perspective, the 2025 financial year is a turning point as evidenced by the 2% growth in total loans with some strategic segments rising significantly, such as consumer and corporate loans. This change in trend has been supported by an incredible acceleration in the market of balance sheet resources, which grew by 40% driven by 23% growth in mutual funds, another of the strategic and priority products in our plan. All of this has led to a 3% improvement in turnover above the previous year's level.

As we have mentioned, this turning point is driving results, which are up 10% to EUR 632 million, 26% above the initial guidance, representing an excellent 17% return on regulatory capital, improving by more than 100 basis points over the year. This positive performance together with our comfortable solvency position has enabled us to increase the percentage of profits allocated to dividend payments from 60% to 70% resulting in dividend for 2025 of EUR 442 million, 29% higher than the previous year.

Finally, as we highlighted earlier, this excellent performance means we can improve our earnings expectations for the period 2025, 2027 by 19% from the previous EUR 1.6 billion to more than EUR 1.9 billion, of which 85% will be used to pay out our shareholders, while maintaining a comfortable financial position as we expect to meet these expectations with a CET1 ratio of over 14%. In short, 2025 is once again an excellent year that allows us to lay the foundations for further improvements in the future.

Finally, I would like to thank all Unicaja employees for their unquestionable effort and performance in executing the strategic plan. Without their commitment and support as well as the shareholders and directors, these results would not have been possible. This concludes our presentation. And if you agree, we will now move on to the Q&A session.

[Interpreted] Thank you very much, Isidro. Thank you very much, Pablo. Let's move on to the Q&A session. Let's start with the telephone line in Spanish. Please introduce yourselves. And please limit it to 2 questions so that we can answer the highest number of investors possible. So operator, thank you.

Ladies and gentlemen, we will start the Q&A session. [Operator Instructions] The first question is from Maks Mishyn from JB Capital. Go ahead.

Two questions. One, it's about the restructuring costs. If you can give further detail on what these costs include. And secondly, if you expect have them in 2026. And the second question is on the guidance, on volumes. Can you give more detail on what you expect in terms of loans and deposits outside balance? That would be very useful.

[Interpreted] Maks, thank you for your questions. With regards to the first question and referred to the provisions for restructuring, you know that last year, we did this exercise, these voluntary retirement plans or early retirement plans. We're not looking at saving costs, but improving capacities regarding the environments where we are. Right now, the idea is to run it this year, and we don't expect it to happen the following year in 2027. With regards to guidance and volumes apart from the 3% growth in line with what we've done in 2025, we do see a more balanced mix between the asset growth and the resources customer growth around 3% in both segments.

[Interpreted] Thank you, Isidro. Operator, please, the next question.

The next question is from Francisco Riquel from Alantra.

I would like to ask from NII guidance. Could you talk about the rate scenarios that you have included in the guidance because 1,500 is very flat, and the volumes are growing and interest rates is what it is. And I think it's a very conservative -- if it's conservative, I don't know whether you can talk about the sensitivity in NII in terms of interest rates for year 1 and year 2 and what you have included in the plan vis-a-vis margins.

And my second question is about the use -- how you're going to use excess capital. A year ago, you asked for flexibility to consider M&A opportunities in the first part of the year. We haven't seen anything in 2025. And my question is whether you can give us an update on your ambitions for M&A for the next -- for the rest of the plan and how are you going to use the capital excess?

[Interpreted] Paco, I'm going to answer the first question with regards to the guidance as to whether it's prudent and what hypothesis we have used. With regards to the hypothesis, we've used the curve that we had at the end of November, which will had a Euribor of 2.35% at 12 months is to -- we're around 2.22% at 12 months, and the expectation is to go -- see a rise by the end of the year. The balance sensitivity and the ANI to interest rates at 12 months is quite low. And the volume growth impact is also low. It will be seen more in 2027 than in 2026.

In 2023, we started to reduce the balance sensitivity and we have increased this for 2026. But I think that for 2027, the higher interest rates -- potential high interest rates will have a positive impact. And with regards to the volumes at around 3%, the deposit cost is very similar to this year's -- the deal of the credit investment is going down in the first quarter and will be flat in the second, and will start to go up in the third with the new production and with the repricing, which will have no negative impact which will make the margin behavior to follow that line.

The first quarter will be a bit lower because you have the days effect and it will catch-up up until we see it above. How much above? Well, it depends on the deposit cost evolution and on the volumes evolution, if we are able to grow more in deposits. As we've seen this year in site deposits, this will improve a bit more, and it will depend on those variables. But it will be as from 2027, where you will see a more significant increase of margin.

[Interpreted] Good morning, Paco. As for the excess in the use of capital, I believe that today, we have explained to you how we are going to carry out that payment in excess of 85%. We also said that we are going to analyze new opportunities and if capital is required, well, we will have to analyze its efficiency in 2025. Such opportunities did not arise. We didn't see any clear opportunity of an investment with a good return for our investors. But should that happen, well, we might consider using capital more efficiently. And that's all I can say in this respect.

[Interpreted] Thank you very much, Pablo, and Isidro. Operator, please next question.

The next question is by Ignacio Ulargui from BNP Paribas. Please go ahead with the question.

I have 2 questions for you. The first question is concerned with the growth of deposits. How do you envisage this in 2026? You have shown an increase of 3% as for lending and customer funds, you have also reported some growth. Now how do you think deposits are going to behave in 2026 and in line with the excess of capital question, taking into account the increase of payouts, what capital generation do you envisage going forward and how much of that capital will come from DTAs?

[Interpreted] Thank you for your question. As for the growth in deposits, the first question was already answered. We said that growth is expected to be at around 3%, taking into account the mix between assets and liabilities reaching was striking a balance. In 2025, we draw a distinction between balance sheet items and off balance sheet items. 2025 was an exceptional financial year. And even though we believe that this will continue to grow off the balance sheet. We believe that the mix is going to be more balanced, and we will continue to post growth. And we will continue to do so on the balance sheet.

As for capital generation, concerning this question, next year, we are going to distribute 95% of the results. Therefore, the capital growth lever, as I said before, is going to contribute less than this year, where it stood at 70%, but DTA capacity will also be available whereby capital might be expected to grow over the years. So we expect capital to grow. No doubt that capital growth is going to be lower compared to 2025 due to the fact that the results generation will be paid out to our shareholders, almost as a total.

[Interpreted] Thank you very much Isidro. Next question please.

The next question is by Carlos Peixoto from CaixaBank BPI.

I have a question as to your forecast concerning fees and the growth of fees. Do you think that it's going to continue growing at rate of 3%, in line with the growth of volumes. I'm asking this in order to understand how these products are expected to before? And do you think that there is any room, what ever for fees to grow further in the next financial year?

[Interpreted] Carlos, we couldn't really understand your question 100%, especially the last part. We believe that the fee guidance is quite conservative, taking into account the performance of funds that pushed fees up in 2025. Well, as for our expectations concerning fees, this is based on our aim to continue growing both on the balance sheet and off the balance sheet customer funds, as Isidro pointed out before, we believe that mutual funds will continue to grow steadily due to customer demand, but we believe that deposits on the balance sheet will also continue to grow even more than in the current financial year.

You should take into account that there's plenty of competition on the liability side, and that's why we have these customer loyalty programs in place. Concerning payments, we already see some positive signs such as growing fees and significant card activity. We continue to grow. We continue to enhance transactionality with customers, and that is going to be offset by the different customer engagement or loyalty plans that we are going to continue to deploy to target more customers. So hence, we believe that we should expect this increase in fees. But in the case of mutual funds, we believe that, that growth is going to be even greater.

Thank you very much, Pablo. I believe that there are no further questions. So operator, we can now hand over to questions in English.

[indiscernible] Cecilia from Barclays.

The first one is on the buyback specifically, what would be the likely timing from here and what milestones need to be met before you can execute the next program? Is there a regulatory or any other approvals needed at this point? And then the second one is on competition for both mortgage and deposit. On mortgages, how are you seeing the competitive intensity at the moment, at current pricing levels, what kind of economics are you targeting on new mortgage production? And how important is cross selling to make those returns work? Are you being pushed to accept lower margins to defend volumes?

And on deposits, are you seeing any renewed pressure on deposit costs from competitors keeping attractive offers in the market for longer, to what extent are neo banks and only platforms influencing the competitive behavior on deposits?

[Interpreted] Good morning, Cecilia. I think that in -- with regards to buyback, the buyback from what we've said that the additional remuneration is dependent upon the fact that whether we're going to do it on a cash dividend payout or on a buyback, but what's true is that the decision will be made at the end of December, whether it's cash dividend or within program of payback. We haven't made a decision. But in any case, we're not talking about significant volumes if we get to do it. And it will depend on the -- whether it makes sense to do it on cash or whether to do a buyback program. But in any case, we would be talking about material amounts for those buyback programs.

The second question is related to competition in mortgages. The credit growth in -- the lending growth after having seen negative rates in segments like public administration, is the only segment where we haven't grown, and we've been flat. We've been flat in the mortgage segment, which is the most representative segment. And that's why we've been applying a policy based on 2 things: one, on having a good risk profile. And that's been a standard tradition and how we've granted credits and not going above a certain level of price. And so that's -- we've kept that flat over the year.

The market that has so much pressure for lack of housing, it's having a big impact on competition, on prices. Our expectation is for this to improve -- key solution to improve the housing situation is somewhat complex because the housing is not covering the social demand for new housing. So we will continue with a similar strategy. We will still have the adequate risk profile. And we will continue to generate -- continue along the lines that we've been doing. The idea is to keep the market rationale with regards to -- reasonable with regards to price. And we will be more positive in prices or we will find a balance between the credit given or the ability to link the customer. I think that in that segment, we could be able to compete with price. But if we find -- if we find ourselves in a no way back, we could end up in a scenario that we went through in 2025.

Cecilia was asking on the competition on deposits and one of the offers from other institutions.

[Interpreted] The competition in deposits and how we see the evolution in the deposit cost. As you know, the Spanish market is very competitive with regards to national banks. We've had various specialized banks in attracting liabilities. I think that will be the case even getting higher. And with regards to the strategy and the evolution of fees, we will continue with the loyalty programs. We have developed banks for our customers. We have very competitive digital solutions which are far better than our competitors. In terms of neo banks we have attractive solutions for our customers. And we consider that we keep that level or even going -- will go up in deposits despite the existing competition that we expect.

Next question is from Sofie Peterzens from Goldman Sachs.

This is Sofie from Goldman Sachs. So my first question would be on capital. Do you expect any regulatory headwinds in 2026 or '27 and what are your thoughts on using SRTs? And then the second question, just going back to mortgage lending, one of your peers is guiding for 6% mortgage loan growth or lending growth in '24 to '27. Why do you only see 3% volume growth? How should we think about the upside risk for volumes to perform better than expected?

[Interpreted] Thank you, Sofie. With regards to any regulatory impact for this year, we don't have other jurisdictions like the U.S., where they're talking about deregulation and talking about a reduction of the regulation. We don't think that we're not going to have any negative impact in the following years. I think that the period of increase of capital requirements has gone to a reasonable level and the solvency and the quality of financial institutions in Europe is strong enough to withstand the stress test -- stress scenarios that are analyzed, and we don't consider there's going to be any negative impact in that regard.

And with regards to competition and the growth expectations in the mortgage world, as Isidro has said, we will continue along our lines in the way that we will conduct the most reasonable analysis possible. We will look for customers with high credit quality with linking ability, and will be adjusted in price so that the performance of the customer. I don't think that the market will grow by 6%. That's why we don't have such a higher growth in the credit.

We think that the credit growth, despite that we come from significant deleverage starts to grow, it's still continuing and the nominal growth of the [ bps ] of the GDP. And we -- as Isidro said, we need more production, more new housing, which won't happen in 2026 because it should have happened in the previous years and this evolution will happen in a later stage if it happens.

And we don't think that there's going to be mortgage growth -- mortgage sector growth of 6%, but for us, mortgages are fundamental products to link the product to provide global services to our customers, and we will put our stakes on it. And he was mentioning SRTs, that given the solvency position that we have is not something that we have on the desk in the short term in terms of the SRTs. We look at the different options to improve our capital position. And we also look at the SRT. But in the short term, we don't expect the conduct of any, given the capital position that we hold right now.

The next question is by Borja Ramirez from Citi.

This is Borja from Citi. I have 2. Firstly, I would like to ask on the deposit growth outlook. You mentioned about the digital channel. I would like to ask what portion of your new customers are from the digital channel? And also what percent of your deposit inflows would come from the digital channel? And then my second question would be, if you could provide any -- an update on your M&A strategy, please.

[Interpreted] Borja, well, as far as digital channels is concerned, you should know that we are a bank with a territorial footprint, a strong territorial footprint with let's say, on-site banking mainly. I don't have the exact percentages for the digital channel. However, we are starting out from a lower base. But actually, we have observed a growth in terms of deposits as well as consumer loans, most of our production comes through the digital channel.

We also have plenty of competition in digital channel. However, there was significant growth in 2025, and we expect that trend to continue to grow going forward. We continue to focus on a multichannel model. All channels are interconnected, whether we talk about branch offices and the digital channels as well as the contact centers, any contact point with customers, including the web page, et cetera, everything is intertwined. So we continue to have greater weight in the our brick-and-mortar network. However, we continue to grow in the digital channel little by little.

[Interpreted] Let me add that we continue to grow in terms of the number of customers, the higher deposits through the digital channel, there has been a growth of 5% in 2025, and we expect that growth to continue in future years, as Isidro said, this is going to be important. In the case of deposits, again, we expect growth to be reported in the digital channel.

The next question is concerned with the consolidation of the financial system. Let me reiterate what we already said in prior years, especially since we have embarked upon this new change and since we have set out a new strategic plan, we are now focused on carrying out our strategic plan.

Our shareholders do not want us to lose focus over the strategic plan. And therefore, we believe that we will keep this project unchanged. The achievements over the past years, ratify our strategic vision and the fact that we want this to remain as an independent project. And this is what we have been reiterating again and again over the past years.

The last question is by Hugo Cruz from KW. Please go ahead with your question.

I have 2 questions. First, on the usage of excess capital. If you don't have M&A opportunities, could you do a one-off payment above 100% payout or is the 100% a limit where how far you could go with one-off distributions? And second, on loan pricing. I think you said repricing shouldn't have a negative effect on your NII, but I was wondering if you could give a little bit more detail product by product. So how does front-book pricing compared with back-book pricing for your mortgages, SMEs, corporates, consumer, if possible?

[Interpreted] Thank you for your question. As for the excess of capital related question, as we mentioned during the presentation, we are near 100% for 2026 and 2027. We undertook that commitment back in the day when we presented our strategic plan. And this, of course, means that we have to fulfill our commitment in excess of 85% of the strategic plan. Now that the payout is going to be 70% for 2025, the payout for the next 2 years with stand at around 100%, as you have mentioned.

But now we are fulfilling the commitment that we undertook when present in the strategic plan. For the time being, we do not intend to carry out any other payout other than the one that we announced today during the earnings presentation, Pablo.

[Interpreted] Now as for the pricing impact related question across segments, as for mortgages set at a fixed rate, the value is below what we expect to attain. As for SMEs and corporates, we are already rallying in terms of the front-book compared to the back-book with some differences. However, even though there has already been some repricing, the repricing impact is to be found only in the mortgage book at a variable rate with a moderate impact during the first quarter with some tail effects in the following quarter.

However, we believe that the loan yield is going to -- will remain steady as of the second quarter and will remain so also in the third quarter. We still have some long-lasting loans among corporates and the public sector set at low interest rates. As they mature, the loan yield might be expected to grow even though we expect a greater impact as of 2027 when significant improvement in margins is expected to take place.

[Interpreted] Thank you very much Isidro and Pablo. Thank you very much for attending this earnings presentation. Should you need additional information, please do not hesitate to contact our Investor Relations team, and we look forward to having you again attending this presentation for the next quarter. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Good morning to everyone, and thank you very much for attending our 3 Quarter 2025 Results Presentation. This morning, before the market opened, we published this presentation, along with the rest of the usual financial information at the CNMV and on our corporate website.

For this presentation, we have today our Chief Financial Officer, Pablo Gonzalez. As usual, the presentation will last around 20 minutes, and it will be then followed by the regular Q&A.

So without further delay, I will give the floor to Pablo.

Thank you very much, Jaime. I will start on Page 3, where we show the main highlights of the quarter. Starting with the commercial activity, I would like to highlight that business volumes continue to improve 2% year-on-year, supported by stable loans and deposits and a significant growth in off-balance sheet funds, mainly in mutual funds, where we are growing an impressive 24% year-on-year, making 9% of net inflows market share.

Total performing loans have stopped declining. And as you can see, they were stable in the year-on-year terms, supported by a 39% increase in new lending.

Regarding profitability, gross margin grew by 4%, while total provisions fell 19%, leading to a net profit of EUR 503 million in the first 9 months of the year. That is 11.5% above the first 9 months of 2024.

This is quite positive because I would like to remind you that a bit more than 1 year ago, when we presented our 2027 Strategic Plan, we explained you that the initial idea was to reach a net income above EUR 500 million in each of the 3 years of the plan, and we have already reached that target in the first 9 months of the first year. This improvement has also allowed us to reach a return on tangible equity adjusted by the excess of capital higher than 12%, while keeping the cost to income ratio at 45%.

Recent trends in credit quality have also remained positive. The net NPAs ratio is now below 1% with gross NPA ratio at 3.7%, which is 115 basis points below the one we had 1 year ago, explained by a significant decrease of 25% in the stock of these assets.

Total coverage continues to grow to 75.4%, well above the 70% that we had 1 year ago. The cost of risk also presented a positive trend, falling to 24 basis points in the quarter, which is below our initial guidance, and that is why we are now improving 2025 guidance.

Finally, the bank's solvency and liquidity have also been strengthened. CET1 improved by 27 basis points in the quarter to 16.1%. The tangible book value per share plus the dividends already paid in the last 12 months grew by 10% year-on-year. The loan-to-deposit ratio remained at 70% and the liquidity coverage ratio close to 300%. So all-in-all, as you can see, during the third quarter, the trends remained quite strong, confirming recent positive trends.

I will continue with the commercial activity on Page 5. As you can see, the total customer funds grew 2.9% year-on-year with the on-balance sheet funds stable and off-balance sheet funds growing 12.6%, supported by an impressive 24% growth in mutual funds. Bear in mind that mutual funds balances have gone above EUR 16 billion compared with less than EUR 13 billion 1 year ago.

On the following page, we show you the details of the assets under management and insurance. As I just mentioned in the previous slide, assets under management have grown 13% year-on-year. In the case of mutual funds, the growth has been 24%. The market share in net inflows remain at 9%. On the right, we show the revenues from these 2 business that have improved by 10% in the last year, representing now 18% of total revenues in the first 9 months of 2025.

Regarding loans during the quarter, total performing loans fell owing to second quarter seasonal advances. Excluding such effect, total performing loans fell 0.7% in the quarter. However, they were stable compared with the same month of last year.

By segments, private sector loans fell 0.8% year-on-year with corporate loans decreasing a bit more than 2% and stable loans to individuals. As you can see, total performing loans are more stable than a few quarters ago, owing the improvement on new loan production that we show on the next slide.

Private sector lending grew 39% year-on-year to EUR 7.1 billion, showing positive trends in all segments one more quarter. Business and self-employed segment is particularly noteworthy where formalizations in the first 9 months grew from EUR 3 billion to almost EUR 4.5 billion, representing a 47% increase. Mortgages, new lending grew 24%. And in consumer lending, we grew another 37%.

On Slide 9, we would like to briefly remind you that we continue to make progress in our commitment to sustainability as part of the Strategic Plan. In addition to advances in social and governance matters, here I want to focus on the commitments made regarding the climate transition, where I would like to highlight a couple of figures.

On one side, we have EUR 2.1 billion in green label bonds issued to date, which have allowed us to save 81,000 tonnes of CO2 in 2024 with ample collateral to continue issuing in the green format.

On the other hand, as you can see, decarbonization targets cover a significant part of the finance portfolio, where we are showing strong progress. This is supported by our sustainable business, which we continue to drive by assisting our clients in their decarbonization pathway and offering specific ESG products.

We now are continuing with the review of the P&L in the next section in Slide 11. Starting with quarterly trends. Net interest income was stable in the quarter, growing by a small 0.2% because lower cost of deposits and wholesale funding compensated the ongoing repricing of loans at lower rates. Total fees supported by non-banking fees were also stable despite the usual seasonality of the quarter.

Gross margin reached EUR 515 million which is 5% below the previous quarter, mainly due to lower dividend seasonality. that, as you all know, is relatively higher every second quarter.

Total costs grew 1% quarter-on-quarter, leaving pre-provision profit at EUR 276 million. Total provisions and other results were better than the previous quarter, among others, because we have a capital gain of around EUR 10 million from the disposal of a banking license this quarter. All these left pretax profit at EUR 232 million and net income at EUR 165 million, which is 5% above the third quarter of last year.

In the first 9 months of the year, the net interest income fell 3.5%. However, higher non-interest income, including a 2.8% increase in fees left gross margin at EUR 1.573 billion. Total cost continued to grow at mid-single digit, in line with our guidance, leaving pretax profit at EUR 862 million, 2% above the previous year. The lower provisions booked this year left pretax profit at EUR 708 million, which is 8% above last year and net income at EUR 503 million, 11.5% higher than the first 9 months of 2024.

As I said before, it is worth noting that when we presented our new business plan 9 months ago, we guided for a net income above EUR 500 million for the full year, something that we have already achieved this quarter.

As we usually do, we will now review the P&L in more detail. Starting with the net interest income, on the next page we have the customer spread evolution. As you can see, customer spread fell 8 basis points in the quarter, mainly owing to the ongoing repricing of floating loans that was only partially mitigated by lower cost of deposits. However, our net interest margin grew 3 basis points in the quarter.

As we have explained in the past, in our case, owing to our balance sheet structure with much more deposits than loans, customer spreads only shows one part of our business with clients because it is not considering the income that we do with the excess of retail funding that comes into the P&L through the structural debt portfolio. This is why for banks like Unicaja with a 70% loan-to-deposit ratio, it makes more sense to follow the net interest income margin trends and not only the customer spreads by itself.

On the following page, we show the details regarding the quarterly evolution of net interest income that grew a small 0.2% in the quarter. As you can see, the lower cost of liabilities, mainly of customer deposits, mitigated one more quarter, the negative impact from the repricing of the loans at lower rates. Two different effects of similar amounts that explain the net interest income remaining stable for another quarter.

If we move now on to fees, we can see how they were stable in the quarter and grew 2.8% year-on-year, a positive evolution explained by higher income from non-banking fees, mainly from mutual funds and insurance that are the 2 business where we are focusing our commercial efforts, compensating the lower banking fees that, as you know, are explained by the implementation of loyalty plans.

In Slide 15, we show the details of the rest of revenues, which also shows a positive evolution in the year on all the lines and mainly due to the new banking tax, which, as you know, is now included in the tax line of the P&L, while in 2024 it was booked in other operating charges.

Regarding total cost, personnel expenses continue to grow due to the salary improvements agreed with the unions and new hirings. Other administrative expenses also reflects some of the initiatives needed to implement our business plan, leaving total cost 5% above the previous year, in line with our mid-single digit growth guidance. In the right-hand side, you have our cost to income ratio that remained stable at 45%.

On the next page, we continue with the cost of risk and other provisions. As you can see on the left-hand side, the cost of risk in the third quarter of '25 was 24 basis points, which is below our initial guidance of 30 basis points, one more quarter. This is why we have decided to formally improve such guidance to below that level for the full year. Other provisions that mainly include legal provisions were lower this quarter, but in line with our current guidance.

Finally, other profit and losses included a positive one-off of around EUR 10 million in the quarter from the disposal of the BEF banking license. Overall, total provisions and other results improved from EUR 279 million 2 years ago to EUR 191 million in 2024 and EUR 155 million in the first 9 months of 2025, a very positive evolution that also has helped to further improve the profitability of the bank as we can see on the following slide.

The ROTE of the bank continues to improve, reaching 10% in September 2025 or 12% when we adjust the excess of capital. As we saw before, our net income has improved from EUR 285 million in the first 9 months of 2023 to EUR 451 million in 2024 and above EUR 500 million in 2025, a significant improvement that has increased our return on CET1 to 17%. As most of you know, we believe that in our case, the return on CET1 is a good reference that isolates the relative larger accounting equity that Unicaja needs to have to fully absorb its higher solvency deductions.

Finally, on the right-hand side, we have also included the tangible book value per share plus dividends that, as you can see, it has grown 10% during the last 12 months.

Let's move now to the credit quality section in Slide 20. As you see in the slide, positive trends remain in place. NPLs are down 20% year-on-year with the coverage growing to 74%. Overall, NPAs are also down 25% year-on-year with coverage also improving to 75%, a very positive trend that remains and leaves total net problematic exposure below 1%.

If we now move to solvency on Page 22, you have the quarterly bridge. Retained earnings represented 21 basis points after considering AT1 coupons and the accrual of a 60% dividend cash payout. The mark-to-market of our stake in EDP added another 9 basis points and the rest of the moving parts, mainly higher risk-weighted assets, explain a small negative of 3 basis points in the quarter. All in all, the CET1 fully loaded, reaching 16.1%.

On the next page, we show you our MREL position. As you can see, our MREL ratio stands at 29.6% in the quarter, maintaining an ample buffer against the main requirements that you have on the right-hand side. Among them, I will highlight the MDA buffer that has grown above 750 basis points.

Regarding liquidity, we continue to have a very strong position with a significant amount of liquid assets, a loan-to-deposit ratio of 70%, the NSFR at 159% and the LCR at 295%. All of them, as we used to say, are best-in-class in liquidity metrics.

Finally, here we show the regular fixed income portfolio details that, as you all know, is a structural portfolio funding with excess of retail deposits. The duration of the portfolio has decreased a little bit to 2.5 years, owing to interest rate risk management. However, the yield has remained stable during last quarters at 2.6% despite the lower rates.

To conclude, let me update you on our 2025 guidance in Slide 27. As you probably remember, in the second quarter, we increased our net interest income and fee guidance. This quarter, owing to the recent positive trends, we are improving a little bit further our net interest and cost of risk guidance.

On the net interest income, as you saw during the presentation, the trends continue to be slightly better than initially expected, among others, owing to the fast decrease in the cost of liabilities that has compensated the negative impact of lending repricing. And So we increased our guidance for the year from above EUR 1.450 billion to above EUR 1.470 billion.

On the other hand, as we have mentioned during the presentation, the cost of risk has been lower than initially expected, and we now believe it will be below 30 basis points for the full year. Because of these 2 upgrades, we now expect the adjusted return on tangible equity to be close to 12%, slightly better than the previous 11%.

Finally, let me finish by reiterating that the first 9 months of the year have been very positive. We have been improving structural profitability while further reducing the problematic exposure and generating additional capital. All these, together with positive commercial trends that we expect to continue to improve further in the coming quarters. As a consequence of all these, our shareholders' remuneration has also improved, and it will continue to improve as we have reflected in our Strategic Plan.

Thank you very much. I leave it here. And we can now move to the Q&A. Please, Jaime, whenever you want.

Thank you, Pablo. We will start now with the Q&A. Please remember to ask only 2 questions each one. Also remember to mute your line after your questions. Operator, please open the line for the first question.

[Operator instructions]. And our first question comes from the line of Maksym Mishyn from JB Capital.

Two questions from me. The first one is on the outlook for the NII. Your updated guidance implies a decline in the fourth quarter. Could you please give a little bit more color on what kind of magnitude should we expect? And why should it decline anyway?

And the second question is on the excess capital. You keep on building it. When are we going to get an update on the potential deployment?

Thank you, [ Maks ]. Let me get you through the outlook for NII. As you saw, we have updated our NII guidance for the year from above EUR 1.450 billion to EUR 1.470 billion. That's above that number. You have to think that we still have a couple more quarters of impact from the repricing of the floating rate loan book, mainly the mortgage book. because the reference has a lag of 12 to 14 months. So this will have an impact.

In terms of the offset that has allowed us to offset the impact of the repricing due to the Euribor referenced in these last quarters have been the lower cost of deposits and the lower wholesale funding.

Regarding the lower wholesale funding and deposits, the trend is going to be lower and won't be able to offset fully the impact from the repricing on loans. And the reasons, as you can imagine is both of them are referenced to short term, the 3 months and 6 months more than the 1-year Euribor. And so most of the deposits and the wholesale issuance has already been repriced last quarters. So taking all that into consideration, I think we have still a couple of quarters of slightly lower NII and then recovering from that.

Regarding the second question on the excess capital and the update, we will update on our strategy on the uses of the excess capital. But what I can confirm is what we said in our Strategic Plan presentation at the beginning of the year is that this year the payout is going to be 60%. And for the whole period of the Strategic Plan, the 3-year was going to be around 85%. And regarding the difference between the 2, it could have different forms as additional dividend, share buybacks or different options. And So it gives you with the 2 years 2026 and 2027 with a close to around 100% payout to our shareholders. And to give -- to be more specific, I think we will do it in the whole year presentation.

Operator please, we can move to the following question.

Next question from Carlos Peixoto from CaixaBank BPI.

So if I may, a follow-up on capital. Just on the quarter itself there was a relative impact from RWAs and others of 3 basis points, given that RWAs were slightly up in the quarter. I was wondering if you could give us some breakdown between the effects that are included in there.

A question on the ALCO portfolio. You have a decline this quarter. I'm wondering whether there is a change in strategy? Was this a punctal effect of maturities? Just how should we think about this portfolio going forward?

And then if I may, just a third question on the loan book. You have -- there's a sharp decline in the SME book. I was wondering when could we start to see this trend reverting and also whether this drop is still driven by ICO loans maturing?

Thank you, Carlos. I think you have 3 questions. I'll try to go through the 3 ones. Within the capital bridge, as you can see, we have -- the mainly driver is obviously the retained earnings and the valuation of our EDP position.

And in terms of the risk-weighted assets, why it goes up, if you consider that we have around EUR 100 million in EDP and also in market risk another EUR 100 million. So most of that increase is explained by that. The remaining is explained by the credit and mainly due to mix position.

And regarding the second question on our strategy for the ALCO portfolio, something has changed. The difference in terms of the impact on the average position of the portfolio is very stable. We already said we found some opportunities. But this year, we didn't have much maturities. For the remaining of the quarter, it's only slightly above EUR 200 million. And we have -- and we use some tactical positioning and fine-tuning with the position.

Next year, we have a much larger, above EUR 2 billion maturities on the portfolios. And this will help us also in the NII for next year. And you have to think it's around 80, 90 basis points on yield, the portfolio that mature next year. So we will take opportunity and reinvest most of the portfolio. Obviously, the size of the portfolio will depend on commercial dynamics and the banking books, how the loan book grows and the on-balance sheet deposits evolve in the year. But the most likely scenario is that it's going to be very similar to the level that we have around EUR 29 billion to EUR 30 billion more or less.

And the third question on SMEs. I think on SMEs, which is the segment that comes down more on a year-on-year basis, it comes down around 8%, 9% on a year-on-year. But I think what matters is the trend. If you look at the year-to-date, it only comes down to 3%. And on the quarter, it's only 0.6% in a seasonal low quarter because of the summer. So we are quite confident. We are turning the commercial strategy. We have developing -- we are developing and implementing some tools for our people, some solutions for our customer, so the value proposition for our customers, SMEs, but also midsized corporates is improving a lot. And we are building the value proposition and confident that the turning in the evolution of that loan portfolio is going to keep improving in the coming quarters.

Please operator, let's move to the following question.

Next question from Ignacio Ulargui from BNP Paribas.

I have 2 questions. One on cost growth. How should we think about cost growth going forward and the cost to income outlook for the next couple of years? Should we expect the cost to income to improve further? And on a 9-month basis, you see a small deterioration impacted by revenue. Should you expect a bit of a normalization on that cost growth?

And then a follow-up question on capital. Could you update us on what should we expect in terms of operational RWA inflation into the full year?

Thank you, Ignacio. On cost growth, as we explained when we announced our Strategic Plan, we are in a process of improving and developing capabilities and talent in different segments that we are underrepresented in the market. And this implies and also the technologies that we are implementing and the AI and everything of all the new developments. This require hiring new people. We are hiring new people in areas where we don't have internal people, and this requires some investment in terms of cost. Also developing some platforms and implementing some platform and integrating with third-party platforms as well to develop the business.

So in terms of cost growth, I think the -- we haven't guided the market for next year, but I think we will keep investing in improving our value proposition for our customers and developing capabilities in different areas.

Regarding the cost to income, our guidance was below 50%, and we are below that figure and with some buffer because the revenues keep growing. So the [ jaws ] are still positive, and we will maintain this position down the line.

And regarding the impact of operational risk-weighted assets in the first quarter or at the end of the year, it will be around close to 10 basis points. So it's not significant, and we can absorb that with our internal capital generation.

Please operator let's move to next question, please.

Next question from Sofie Peterzens from Goldman Sachs.

This is Sofie from Goldman Sachs. So one of your peers told us today that they have increased their rate sensitivity. Could you remind us what your rate sensitivity is and if you would consider increasing the rate sensitivity in your book?

And then the second question is around kind of inorganic growth opportunities. We saw a failed deal in Spain. Does this create any kind of opportunities for you to think more about kind of M&A? And if you could just remind us how you think about M&A opportunities?

Thank you, Sofie. Let me go through the 2 questions. I think in terms of rate sensitivity, as we explained, we started to hedge our interest rate sensitivity at the end of 2023 when we got the conclusion that rates were coming down, so we positioned the bank. That has allowed us to have a much lower NII reduction this year than originally expected. And this strategy has performed very well, obviously, within the bands that we can have within the regulatory framework that we have on our balance sheet.

Regarding going forward, we are in a position more confident, and as we heard Lagarde yesterday, now it's more balanced. The ECB is in a good position. The interest rate, I think, is more stable and the optionality could be upside or downside depending on the economic evolution. Our base case is the economy performed well again in Europe, which is the same view that has the ECB, for instance. They consider and they mentioned the improvement considering the evolution of the economy in the major parts of Europe. So we still think we are very stable in terms of rates.

In terms of our positioning, what does it mean? We still this year within that strategy that I mentioned, we have for next year, very flat NII sensitivity, so it's almost close to 0. Very low, very single-digit -- low single-digit interest rate sensitivity for the next 12 months.

Going to the 12 to 24 months, still very low, but in the low to mid-single digit sensitivity. And then due to our -- we haven't renewed, but that's in the third year, obviously. And in the third year, due to our positioning because we have a lot of deposits that had a lot of duration due to their stickiness and the evolution throughout the years. So we, obviously, have more interest rate sensitivity, which we think at the moment is a good position. With a steeper curve and the evolution on rates that we think, we think we are well positioned for the coming years in interest rate positioning. Obviously, we will monitor that. We take decisions every month in the ALCO committee, and we keep trying to do our best to improve what is the original positioning of the bank and manage the interest rate sensitivity.

Regarding inorganic growth and M&A, I think regarding sector consolidation, I can confirm you that we have the confidence and the support of our major shareholders and M&A is not in our road map. Mergers are not easy. They divert the focus of the business. And now we have -- after many years on M&A process, we have sufficient scale and scope to focus on our own business and develop into the full potential of our capabilities. And we still are working on that and focus on that, and we have the full support of the Board and the shareholders.

And regarding other opportunities in M&A, what we are looking all the time it's something that we have to do is within our Strategic Plan, we explained that we want to grow in areas where we have less presence like private banking, like consumer lending. And in those areas, we are developing internal capabilities, looking at new platforms, new agreements and any other type of opportunities in the market. We look at everything if we can speed up that process.

But even if we don't do any bolt-on type of transaction, in this we are obviously looking at anything that has the potential to improve and accelerate our development of those capabilities. And in that sense, we will keep looking at opportunities, always thinking on the shareholder value creation, which is our major objective.

Let's move, please, operator, to the following question.

Next question from Borja Ramirez from Citi.

I have 2. Firstly, on the NII trends, if I understood well, it may have been mentioned that NII may decline in coming quarters. I would like to confirm if this is correct or this is just the customer spread?

And then my second question would be with regards to the strategic targets for market share in various loan segments, I would like to ask if you could kindly update -- provide an update on your market share targets.

Okay. Borja, let's revisit a little bit the NII, as it's quite key for profitability down the line. I think we had a view on NII coming down more significantly in the year than finally it has happened. We have changed our guidance twice and again this quarter. And I think it's mainly due to the steeper reduction in cost and the better performance of the hedging and the strategic interest rate positioning of the bank that we have done in the last few quarters.

Regarding the short term, the next quarter, obviously, even increasing our guidance for the year, we still think that we still have 2 -- at least 2 quarters of a significant impact on repricing in the mortgage -- floating mortgage book. And this will have been offset in the last few quarters by lower funding cost, either deposit cost or wholesale funding. And most of that impact is already behind us. If you look at the, as I said, the Euribor 3 months, in the second quarter was 2.10% in the third quarter, 2.01% and now it's 2.03%.

And if you look at the 12 months, it's going up from the second quarter again in the third quarter and for this quarter it's also going up. So we don't think we have a lot of repricing from the liability that has a shorter duration and still some reposition. Obviously, we maintain a very large position in floating rates, on hedges in the asset side, so that will offset a little bit. But obviously, depending on the evolution on deposits and volumes, we will see. But the most likely is that we have lower NII for the next 2 quarters. And from that onward, we're still working, and it will depend, and we will give you more clarity. But obviously, the most likely is that we have some improvement from that level.

And regarding the second question, it's -- if our strategic targets, I think in loans, we have a clear view that we have to improve. We have been improving in consumer for the whole year. And we, as I mentioned before, incorporates we changed the trend. I think it's important to give you some color.

In the performing loans, the market grew around 3% in year-to-date, and we are growing close to 2%. So we are getting close already in this year, and the trends are changing. Obviously, in mortgages, we still have some reduction in the book. And the problem, as you can imagine, is the fierce competition in pricing, and we want to maintain. Our main target is to improve profitability and not volumes. And so we will maintain the discipline that we hope that is coming to the market, but still challenging to maintain the book in mortgages.

Our target is to maintain and even improve the book. But obviously, this will depend on market conditions, not only on our commercial drive, because we have one of the best platform in mortgages. We are confident that our funnel is very streamlined and very well positioned to take the full benefit of the growth in the mortgage lending in Spain. But obviously, it will depend on market conditions. We hope that we'll get to more sense, but it depends, obviously, on how it evolves.

Please, let's move to the following question.

Next question from Miruna Chirea from Jefferies.

I just had one on fees actually. So if we are looking at year-to-date fees, you are growing very well in non-banking fees. However, the payments and account fees are still very much under pressure. I was just wondering if you could give us an indication of what you expect for next years to look like in terms of growth in fees. And also when should we expect this rebound in banking fees to happen?

And in the non-banking fees, is the level that you have now a sustainable level? Or should we think about a gradual deceleration there in coming years?

Thank you, Miruna. Regarding fees, we updated last quarter our guidance because we are performing as you said, in non-banking fees, especially in mutual funds, but also in insurance. I think we in mutual funds growing at close to 10% market share and new inflows it's going to be tough, but we will try. And so our strategy in diversifying our income from different sources it's fully in line with this, and we are improving the value that we offer to our customers. So we think we can keep improving and growing the non-banking fees.

And regarding the banking fees, we still think it's going to be challenged for 2026 and then improving from that onwards. But obviously, we have to fine-tune. We have done a lot in terms of loyalty programs and developing and having new value for our customer to increase our -- on the point-of-sale devices. So we are growing significantly on that and the SME value proposition will allow us to increase the transactional fees in the future, but probably next year is going to be challenging again. And we are confident maybe in 2027 is when we will see the increase in banking fees. But for the short term, still challenging in the banking fees, but offset by the non-banking fees that will keep growing.

Please operator, let's mover to the next question.

Next question from the line of Hugo Cruz from KBW.

I just wanted to ask you about the cost of risk. It keeps getting better. And I was just wondering if you could give us your latest view of your over the cycle level for cost of risk. So when could we start seeing? Would that be a higher level than what you have today? And when could we start seeing the pickup in the cost of risk?

Thank you, Hugo. I think cost of risk has been another of the good news in the year. We were expecting to be around 30 basis points for the year, and we changed that to below 30 basis points, and obviously, being 24 basis points in this quarter. And the evolution on non-performing loans is quite positive as well, and we still have the view that we can maintain. We are quite confident with the credit quality of the portfolio. We already in the past did the full analysis of all the potential risk.

Obviously, there's still uncertainty in the market. The geopolitical uncertainties is something that we will revisit in the fourth quarter. But going forward, probably the most likely is that we will be slightly lower than even the guidance that we have given. We're confident that our book is very sound and the analysis that we have done. So the fourth quarter is still -- we will review our -- the geopoliticals and the economic uncertainties. But from the actual portfolio, unless we have some economic shock or some geopolitical impact on the portfolio, we're confident that we have a very strong portfolio and cost of risk should be slightly lower in the coming quarters.

We have time for one more question, please, operator whenever you want.

Next question from the line of Cecilia Romero from Barclays.

You were mentioning before that NII may fall in Q4 a little bit depending on loan and deposit volumes. Is there room in there to grow the ALCO to support the NII?

And then I wanted to ask on fees. Q4 last year saw a strong pickup on fees of around 4.7% growth. Could we see something similar in Q4 this year?

Thank you, Cecilia. Regarding the NII, you got the major lines. I didn't mention the other lines on the wholesale funding and the ALCO and liquidity position, I think more or less they will offset. We still -- our view at the moment, obviously, it will depend on the opportunities in the ALCO portfolio. As you know, we are sometimes opportunistic and if we see good levels to get into the ALCO portfolio, some good bonds for the long run, we might do so.

But at the moment, with the numbers and the forecast that we have, it will have a slightly negative impact that will be offset by lower wholesale funding. So more or less, the remaining moving parts of the NII for the next quarter are quite flat. So it's mainly the impact of the repricing of the loans.

And regarding your second question, the fees, if it's going to be better in the fourth quarter, obviously, we always have some seasonality on fees. And we don't have the actual review, but it might be some seasonality as it usually happens. Maybe slightly lower. Last year was a significant one, but we don't know how it's going to be this year. But the most likely is to have some seasonality impact in the fourth quarter.

Thank you very much, Pablo. Thank you all very much. We'll leave it there, and we are in touch. If you need further info, please do not hesitate to contact the IR team. Otherwise, we'll see you next quarter.

Thank you.