Adams Natural Resources Fund, Inc. Price & Performance (PEO)

And then probably the dividend question will come up. We are committed to dividend payout and the new ones that appeared related to the earmarking to the dividend fund that is still not decided and that results from the conditions of uncertainty in which we have to function and when we have to be prepared for a variety [indiscernible] And you have already described all those numbers better than I can recall them. So I will skip this, part focusing rather than comments, which in my opinion are relevant. With regard to Tier one, it's mainly rebuilding after CR3 through the reduction of burden on operating risk And this decline was linked to the better result of expansion you need to have just the right amount of capital, not too much, not too little of it and we have just the right amount of capital. Cost of risk maybe is a category that evolves And we do that intentionally with very low cost of risk historically speaking. But also have to admit we have the conditions of suboptimal development. As a result, the bank was losing its market share rather than gaining it. We do not want to aspire to get to 100 points.

We will over around 50 plus And that's something that in my opinion with regard to hitherto experience and the numbers you might be used to is changing. But that results from our intentional informed action NPL is something where we came back to 4.5 last year exceeding 5%, we reached a certain dividend related barrier. As for the revival of credit action, well, I would put it this way, it does exist. It is not yet something that would match the appetite of Ernest And the critical point for us is that we are growing in those places where the bank seems to have the potential corresponding to its first share Cash loans. That's the area [indiscernible] our market share is twice lower than our intended for share. And that's where we would like to develop. But also the cost of risk there is different than elsewhere. It all has to be done reasonably. And we are not definitely skewed to borrow We have a deposit oriented customers who [indiscernible] to be [indiscernible] So we need to find an optimal formula that will not disturbed our risk profile while at the same time allowing us to grow faster 22% last year as you were able to see. [indiscernible] MSP is another area where the bank seems to be growing faster, and that's actually has happened.

We can actually say that in any customer segment, was corresponding to our market position, our competitive position in the community of analysts among analysts, I can say that the bank is pursuing its strategy from past years. And has reached all the assumptions formulated earlier. In the environment of lower interest rates, which has to be borne in mind. And if I were to make any comment regarding the strategy, I would say that it has failed to take advantage of the market potential that emerged as a result of some other institutions, which I know quite well. Trying to stay afloat. We can we could have been slightly more aggressive in going towards the market in the past years where everybody else was burdened with the Burden of Swiss franc loans. I think that maybe some other major items that is worth mentioning Now Is that in the retail segment, We have entered miles and miles with some promise We do have this product. [indiscernible] need to be able to take advantage of its potential Therefore, as the message Well, I would like to say that we are still at the embryonic stage, but we have this new world account We are discussing now the pace at which this product should develop.

And these discussions are being held with our partners, so that's something worth highlighting. Then mortgage, again, we are still at a fledgling stage. But it is something that banks unavoidably have to get into. We are quite advanced in this product. With respect to some restrictions that we have imposed First of all, we need to develop this distribution channel that will be then systematically tested. And ESG. Those of you with whom I have had the pleasure of communicating in my previous incarnation know my opinion on this. Staying put the reality seems to be getting close to the message, original message. I talked very clearly about lack of realistic approach too much hype, too much zeal that surrounded all the discussion on the topic. Now it seems that there is some rationalization around the topic. I'm far from agreeing with what I hear from across the ocean. Where they keep saying drill baby drill. And of course, as a result also the attitude of American banks seems even suspicious. On the other hand, good signals come from the European Commission, which yesterday released something as part of the regulation. And that means that the role of banks as institutions responsible for everything We are expected to be policemen experts.

We are expected to put the no on our own neck ourselves. But the role of banks in this regard does exist. And in those conditionals, conditions of rationalization, I feel a missionary against the reality of the bank and the economy because I think all the declarations such as net zero in five minutes, etcetera, well, I believe it's something that everyone now realizes cannot materialize. [indiscernible] given the geopolitical circumstances that Europe has found itself in.

Nevertheless, important steps have been taken We have published our first report to that end. And I do understand that a year ago, most likely, this would be the main focus point of analysts, but still nevertheless, we should go back to the fact that the P and L is important. The balance sheet is important. Equity is important. And ESG is very important, but We have developed a pack of knowledge are reaching out to the clients. We're seeking partners that would help us. We this attitude, that's where we see our strengths. Now what has been a challenge to the previous strategy And summarizing, Is the fact that The bank has had to reinforce Individual client acquisition, especially from in the young pool, The demography is destiny slogan that I've been using for about eight to ten years. My colleague, Ernest has brought this with him to this institution. I believe this has been successful. I appreciate the fact that this acquisition has been a success with We need to make sure is that following this acquisition, we have transactions which is not easy when we have clients we have incurred some costs. In terms of dynamic revenue that's not a very [indiscernible] big perspective, but we need to remember about this.

And I think that during the Italian era, the bank might have overlooked that slightly. During the Italian reign, let me emphasize But that has been taking place systematically. Overseen. And I think that what I can say is that the potential to bring forward to the bank the new generation of clients is there. We have created quite decent apps I appreciate that against the backdrop of my prior experience. I can say That some of the Major Design mistakes for app designers have been avoided That's a very robust solution. The key is to now cover our Total portfolio of clients, to have them covered by the mobile apps. That was one of the goals of our strategy, and it has been attained. However, This is still the coverage is still relatively smaller than in the key Bank. So these are things [indiscernible] bad or less importance to the environment we're communicating with at the moment, but there's one thing that I would emphasize still with reference to the changes that are taking place. [indiscernible] Channels applications, What's key is the business profile. And making it possible to have a dual account that's both for private use and for business use.

Alike, especially for people who have their businesses and who are sole traders, but without that, it will be very difficult to attract such customers. We have some distance against the leaders That must be said. But customers are very sensitive to price these days. Not quite so loyal. So there is some hope that thanks to the changes that have been put in place, we will be able to acquire those customers more successfully and increase that business share. [indiscernible] attaches great importance to that and it needs to be seen Because [indiscernible] consider it important that The apps ensure A customer's good recognition of all the issues that are being dealt with with the bank. So the ability of being able to pinpoint the the location of these pipeline issues in the in the decision making process, that's something that we're looking at to develop. And I don't think that there is a significant gap [indiscernible] compared to the competition. You have a list of transactions that I'm sure you're aware of The ESG strategy back in 2021 has been put in practice.

And looking back of course, gives us a different outlook slightly more distanced one. But but it's These are issues that perhaps we're of a bigger importance two, three years ago than today. You could say that we're covered here. In most of the ratings. The MSCI one that I'm more familiar with [indiscernible] You could say 123 is perhaps not [indiscernible] The 23. It's not a record, but you need to look at the type of bank that we are. And in my inauguration letter, I also outlined that we are a Polish Bank. We have specific types of clients, and we have to assist them rather than abandon them. And that is the difference between the banks that are strongly set in the local market and want to work with account clients and those that have mostly looked at better [indiscernible] So you could say that the declarations concerning environment own emissions, [indiscernible] These have been achieved. And I believe that the focus on [indiscernible] sources of energy and financing has been declared. But also has been illustrated with the transactions that the bank has participated in over the last period of time. So from that point of view, I believe, [indiscernible] Fulfilled And the educational process inside the bank has also taken places.

And I would say that our resources and our communication skills in terms of persuasion, advisory, skills has increased significantly.

And I am convinced that being where we are and looking at the [indiscernible] regulatory environment, the bank will be very well positioned to correspond and assist well the profile of clients that we have in our portfolio. So now We will hear Ernest Testimony concerning our products.

Now for the years to come, The forecast is higher rather than lower as we're above the consensus.

So the first digit is four. When it comes to the GDP dynamics. So It's rhetoric to a certain degree despite the structural problems we can see [indiscernible] There is some kind of a revival. It's a cycle. It's important for the Polish economy.

Now what's important is departing from the Bank Zero in Germany and everything that's happening and whether the EU is being stimulated to spend more, from the [indiscernible] All of that has based some Tremor some meaning, but we have our idiosyncratic factors. We have high deficit And we have quite significant investment needs that have to do with our energy transformation. And that's going to be a slogan that is going to reoccur over the next few years come. It's starting now. We are following very closely How the recovery plan funds are being spent and how the application procedures progressing and how the disbursements are being made. This has already been launched. So I think the end of this year might witness two digit dynamic. We were in the green already the end of twenty twenty four, Also, the consumption pattern from last year will be probably changed. Consumers were mostly frightened and they postponed buying fixed assets. Now it seems that the willingness to buy fixed assets has increased definitely. Last year, it was mostly about supplementing savings. So customers were using the fact that they had high income but high inflation actually brought a gap to the realistic value of people's savings.

So it looks as though using the historical pattern of growing consumption as disposal income is growing and strong investments will be reinforced from one quarter to another, we shouldn't be speaking just about the perspective of this year. Because what's happening in the investment area is looking out to 2026 and '20 That's going to be the main arena for these events and for our bank and for the banking sector in general, as indicated by our CEO, this will be the main component of growth. When we look forward, interest rates are quite high. We never expected them to be lowered for a long period of time than the Authorities' comments have inclined us to think that, yes, perhaps they would cut something in the second semester, but we were far from looking at 200 points. Because it's hard to increase them when you're on a growing trajectory We have also the inflation component In service prices, salary increase has not been filled through that And yet, [indiscernible] strong Zloty is a significant factor, but it's not sufficient yet to neutralize inflation. Interest rates, it would be worth mentioning that are objectively quite high at the moment. Perhaps you could adjust them slightly because they are the highest In Europe, [indiscernible] Most definitely, Aside Ukraine and geopolitical factors, there is an influence of this disparity and that's not without influence for the condition of our exporters.

That's all for the macro update.

Okay. So let's move on to our balance sheet and the structure of our results. If we look at credit vault loan volumes in general, the growth is at 6% and the split between retail and corporate, that's 7% versus 5%. In retail, let's thing to bear in mind is that with respect to mortgage loans at the beginning of twenty twenty four, still was marked by the effect of selling the safe loan So the loan was artificially pushed up by the settlement of that effect. On the side of loan cash loans, we have 10% year on year growth. With good new net sales of 22% year on year. Corporate loans here we have two elements. To mention, MEAD and SME, which grow at 11%. And on the other hand, we have large loans that growth at slightly above 1%. And here, we are expecting projects and the National Development Plan to gain momentum We expect that in the second half of this year, we will have a slightly bigger growth of large loans. With regard to deposits, here, the deposit base increases by 14%, split more or less evenly between corporate and individual investment loans at over €17,000,000,000 This €17,000,000,000 includes about €11,000,000,000 of treasury bonds.

The total of that sales represents a growth of over 50% year on year. When we talk about deposits, I should also quote Else [indiscernible] 239%, loans to deposits 66%. And if we look at our deposit base and deposit offer, [indiscernible] We can see that they were structured to support acquisition of new customers, $338,000 was the net growth of account volume If we move on now to the result on interest. Here, we recorded 9% growth year on year. Let's remember that this happened the environment of lower interest rates. And in this environment of lower interest rates, we we consolidated or increased our margin on interest by six basis points. If we look at how this happened, On the one hand, We had rather selective policy on the deposit side We optimized the costs. We had an increase in current deposits. And we also had a growing share of loan products and fixed interest rates papers. About 30% were those with fixed interest rates. In the new portfolio that the percentages are higher. And we, of course, also pursue a hedging policy. It has already been mentioned that we can expect potential decreases. Our sensitivity to name is about twenty twenty five basis points with each drop of interest rates [indiscernible] 25% of the portfolio of our bonds this year will be revalued, which will have a positive impact at about 10 basis points.

If we move on, Interest bearing assets and interest rate on those assets year on year and in liabilities, twenty twenty basis points down Now another line, which we pay increasing attention to and on which we pay a pin increasing hopes. Quarter to quarter here, we recorded almost 6% growth quarter to quarter. A significant share in this growth came from commissions related to activities in capital market like asset management, brokerage services which grew by about 21%. And as regards assets under management, their value year on year was high by about 33%. Commissions on loans that align [indiscernible] closely and we hope this growth to be somewhat high, especially if there is an increase corporate loans. [indiscernible] If we consider the costs, we can mention two aspects. One is costs related to fixed assets and depreciation. Here, the growth was 3% below inflation. The other thing to consider is personnel costs, which grew clearly more. Year on year. And there are a few elements worth mentioning here. One thing is something that has already been mentioned, the effect of one off bonuses. Paid out for the results of 2023. And the other element, which needs to be highlighted in the category of personnel costs is a voluntary leaving program.

We announced this program in the Bank and about 500 people will leave the company in the upcoming quarters, mainly in the first and second quarter this year. Taking into account the number of people declaring the will to participate and the criteria provision of 60 PLN66 million for this program. The last element which contributes to personnel costs is 34% result here is better than our strategic goal.

Over to Martin now.

Thank you very much. Good afternoon, ladies and gentlemen. As for cost of risk, they are at a relatively stable level Last year, that was 48 basis points. Below our strategic assumptions of reaching slightly over 50 basis points and slightly lower than what we recorded in previous periods. It is worth noting that cost of risk and quarter were to a large extent determined by write offs on one big client in our Capital Group. If we look forward, we assume that cost of risk should be stable. Going forward. Remaining at about 40%, 50 plus base points. On the one hand, we have a lot of positive phenomena that contribute to this positive performance. We have high employment, increasing salaries. We also And you know that enterprises have to grapple with growing cost of energy cost of labor, we expect to remain stable And as Cesare has already said, recently, the bank has been growing relatively well in Unhedged loans, micro in SME, the results are even better, which can naturally affect the structure of our portfolio. As for NPL, which is a ratio very important for the Financial below 5%. So we are able to be flexible in shaping our dividend policy within the adopted strategy.

And the bank will operate so as to keep this ratio below 5%. The action that we took in the fourth quarter on the one hand related to selling receivables and payables [indiscernible] NPL and there were some write offs and defaults dropped as a result. As for capital position, It is in line with our assumption because the target level of Tier one capital ratio is 14%. [indiscernible] That is with a buffer because the regulatory minimum is nine point And we expect this year and next year We expect the buffer for business cycle risk to increase [indiscernible] here keeping a safe buffer in our capital ratios. And if we look back at the end of last quarter, we can see that the ratio dropped from 0.7% dropped by about 0.7%. And on the one hand, this was related to RWA on operating risk. As you might know, this ratio is calculated on the results achieved in the past three years. So we had some change in this transition from 2021 to 2022. Hence, change, then there was an increase in loan portfolio, which was another 2%. We expect the ratio to grow in following quarter by about one percentage point.

We have the impact on our capital market of about 50 basis points and that qualifies as operating risk. So we have a certain reversal of the growth effect in line with those regulatory requirements? And if we keep in mind that some results from the beginning of this year will be reclassified as belonging to the second half of 2024, we will recover our safe position. MREL has a buffer of about 1.5% with respect to the minimum requirement. And we'll continue to build the portfolio.

For the larger liabilities eligible, and covering the requirements of MREL. As you know, the buffer will be growing for the anti cyclical risk. But on the other hand, there is a strong communication to the banks that at least 8% of the Uruguayan should be covered by instruments other than Tier one. Which means that over the course of the next two, three years, perhaps we should increase the volume of these morale about SEK 4,000,000. So SEK 500 Issue of €500,000 issue this year or next year. And now, Dagmar, over to you for brief wrap up. So yes, to wrap up and looking at the repetitive net income, that's SEK 7,200,000,000.0 and that's a historical record breaking outcome for PIKAYO. 6.4% was the minimum. The credit moratorium accounts for the difference and the Swiss franc credits What needs to be said is that we are happy in the revival of the lending portfolio and the increase in the lending by 6%, we have also reinforced our market position and the share on the deposit and the lending side alike. We are safe in terms of equity. And to sum up, our intention is to earmark 50% of our profit towards the dividend and the rest 25 to the dividend fund.

Just a word of common, the dividend fund is at the discretion of the management board and the supervisory board, but still we have no individual recommendations from KNF from the supervising authority for dividend payable for 2024, so hence this proposal on ARPU. Thank you very much. Bank you. So the Q and A session is launched [indiscernible] first perhaps people in the audience, thank you very much for being present. Any questions? Santander, The dividend fund, let me start with that.

So management board, supervisory board and the supervisor authority or not that? And the second question, when will the Board take a decision it only up to Allior when we have clarity then that's when the management board decides? Or is it more complex than that? Will give you a partial answer. Yes, to a certain degree, You could say that this is the Right interpretation of our intention, and this is a consequence of when we are talking about it. So it has a potential to be backed 75% The structure that we are proposing signals that already, but there are certain issues that we need to take into account still. Looking at the circumstances, the stage of where the discussion is about the with PZU, And therefore, we have created a mechanism that's relatively flexible and that allows this payout for KNF. Still KNF, the Supervisory Authority, has not yet issued the instructions on the possibility to pay out dividend. According to the measurements that were applied last year, we 75% Whether these requirements will be modified in one way or another, All that is up to the benevolence of the financial supervision authority can have Okay. One more question, last from me.

Regarding the costs So the overheads Mostly They have been growing for two subsequent years 20% So that's CHF 200,000,000, one of it will be about CHF €3,000,000,003,100,000,000 You can compare it to Santander, which has €2,400,000,000 and Mbank €1,600,000,000 And the intro was only for the purpose of asking you whether this is an area that should be further analyzed at is it Such an important area equally important as many others. Well, as a person that has analyzed A few institutions in the course of my career I can say that BKIO has A certain problem here. That it's having to face in one way or another the cost of hiring the cost of employment is one of the most important components of our cost portfolio. We have collective bargaining tools That The outcome of some negotiations that have that have been done and that were done a few years ago. And it's automatically indexed. It has this win build mechanism. So the way I see [indiscernible] costs of employment grow, well, that's a derivative of that phenomenon. So it's both true for people covered by the collective bargaining and the staff For staff, we have withdrawn from these arrangements.

But for the collective bargaining, we are dialoguing with trade unions are covering a lot of the employees such a rigid [indiscernible] as has been adopted. Well, that's not something I've seen before. So there is a significant challenge there. And to that end, I may say, that There is no structural cost problem Because the terms the conditions in which the banking sector is operating these days are allowing us to manage this. But with a sudden decrease of interest rates, The consequences could be quite serious for the bank. So I will not be hiding the fact that This is something that we are focusing quite a lot of effort on.

The other side of the story is that for years, this bank was under investment. Blame it on the Italians.

I don't have to explain that.

To the people who are present, And I believe that from that point of view, Well, Certain costs that will not be recurring are costs that we need to bear. But the observation that you have shared is quite to the point. There is a challenge there.

Thank you. The fact that we have disclosed [indiscernible] program of voluntary redundancies and 500 people volunteered. That's also the fact to testify the fact that we are mindful of this and mindful of the Bank effectiveness. I can also Ask some online questions here. So in the more in the results category, there is a question concerning the volumes. There is been a change on our side. And the question is what the reason was here, Ernest, for you increased optimism in terms of volumes, especially for the credit loans and corporate loans. In particular, Our forecast is for two digit growth in the last quarter of this year. But whether the dynamic of the loans will come to fruition, it's hard to hard to determine whether it will not perhaps move to next year. We have growing for people.

The initial forecast was that there would be a grand and then there would be a market like lending scheme. But it's now been changed. So the corporate loans have been pushed out from the market by the recovery plan funding. A few questions on the dividend outside of WhatsApp has been said. In our current report, we said about 50% net profit So maybe some [indiscernible] an accurate calculation, 12.6%. It was also said that this requires further dialogue with the financial supervision authority. The dividend fund will also be part of the regulatory capital before the disbursement. There is a question concerning Swiss franc, is it the end of the settlement program? What are the For Swiss francs Bank, until 2024, We signed about 700 settlements Regarding the future, These settlements are going quite well. There's quite a lot of interest [indiscernible] what the law will potentially bring, what the competition will be doing will we will be reacting to that but I wanted to say that we will be continuing the settlement program.

We also have a question about long term funding. Ratio and possibly some comment on this? Well, now this ratio is just under 36%. 40% is the level [indiscernible] will apply from the end of next year. At the beginning of applying this ratio, we will need liabilities at over €2,000,000,000 And that is probably the best prospect at the moment of this becoming effective. Later, it will probably shape dynamically. And there are also a lot of transitional conditions, how capital surplus should be treated example. As of the reporting date, the December, we need to have some elements that will have to be included in 2024. Probably, the sector will continue discussions about how this ratio will play out in the future. MREL, the numbers will also help us in this. In risk, we have two questions. One, about very low cost of in retail in the fourth quarter. Was there any material impact on PLN from the sales of non working loans. Well, let me start with sales. We sold almost 700,000,000 NPLs And the impact was at the level of the group. Because partially, we also had that in mortgage, just under €30,000,000 And as regards A retail The cost of risk in retail consisted of two elements.

We had standard but slightly lower than recorded in the previous quarter as cost of risk. Which is close to the average, but just under it. And here, [indiscernible] decisive element was that we periodically readjust parameters PD, LGD, And as part of this periodical update, we have more beneficial factor risk compared to the previous parameters. Hence, we had some write offs. And regarding results, there was a question whether we would like to share a more detailed estimate regarding the impact of success fee on our business element of commission was surprising.

Yes, it was about 50 or 60,000,000 Other questions from the room, from the audience? I have three brief questions. Provoked to some extent by the ones asked earlier. Settlements in thousands. So you we cannot really get the number of quarters. How many settlements were concluded in [indiscernible] Maybe we will return to you with the exact number. And the second question will be about the forecast for loans. In mortgage loans, you expect a slight growth this year compared to last one. You expect a slight acceleration with a forecast of very moderate decreases of interest rate happening at the end of the year. So should drive this acceleration in mortgage loans? Just as you were saying that lowering of interest rates. And on the other hand, we can see the downward adjustment of housing costs. We wrote this mini essay on this week or two ago, about 300 settlements in the fourth quarter twenty twenty four. And when can we expect your new strategy? We are targeting at the April. That will depend on the developments in PWDU. Because we are an element of the Pizzadeo Group. So naturally, Our ideas have to be aligned with our partners from PZU and As you know, Pizadehu has declared its intention to verify a revised possibly the strategic assumptions announced in December.

So if the These announcements materialize we will, with some delay probably, translate them into revision of our strategic assumptions. However, I would like to underline one point here. I treat PKO strategy as a working tool I call it a test strategy. A way, My vision of PKO which I presented repeatedly is that the bank failed to use its potential in the past years. I have watched this bank for many years now, and I think that in the past, its potential was greater than its market position. So I would like to bring about a situation where we know about ourselves more And within the timeline of two years, assuming as said, growth in the market, we need to Check our capability of organic growth. So it will be a working strategy, as I call it. Of course, we will have to take care of building buy in But it's going to be something with [indiscernible] term effects and that's going to be linked to our Centenary in 2029 It's not very frequent in Poland that there are institutions where a tradition of one hundred years of surviving in the same legal form for a century. So we would like to link this longer term forecast with building new identity and with consolidating our market position.

And the strategy for 2025 and 2026 just rehashed to long term plan. And there is also a question about our attitude to the debt market. From the perspective of T1 and T2. And our plans for issuances. Yes. Martin has already talked a bit about that. We plan one or two benchmark issuances in the European market concerning MREL. That is for 2025. And 2026. And if we look at our capital strategy, we have point 5% percentage point as our Tier two level, So potentially, that would be about €7,000,000 That's what we'd like to issue Probably a similar amount could be issued on T1. But as you have seen so far, our capital position is Okay. Bank with such a market position in Poland taking into account also the potential of [indiscernible] Polish economy and the need to familiarize the market with the need to accept the market, our bank should be a free cast in international markets even if the balance items do not fully justify it as yet. That was my strategy with Bamkantov. That was my strategy. And in Embank. And I think once we get all the calculations done here, that will also mean this kind of presence Bank the bank is flooded with money doesn't change the fact [indiscernible] [indiscernible] position and especially the fact that it's a very serious corporate bank [indiscernible] justifies It's more frequent presence in capital markets Obviously, this strategy needs to be fine tuned taking into account both our balance sheet proportions [indiscernible] [indiscernible] a certain sequence of actions, the developments in the market [indiscernible] Nevertheless, I can freely say that we do have this intention.

We also have a question regarding complex matter. Maybe this will be this is the result about mortgage results. The profit, which is the result of tax differences, we do recognize tax assets linked to Swiss franc loans. But this is a question which would be better answered by email, whether we expect the bank to reach [indiscernible] What the reason Why its profits have been negative for the past years. It's basically one, those Swiss franc loans. This is the only among mortgage banks that does have this portfolio that was from before the merger with BPH. That was not a typical integrated bank. Now the business of this bank consists exclusively in issuing letters that results from excessive liquidity in the market. But the bank is running a project aimed at sorting out the balance sheet which should this project should be completed this year. So that the balance sheet of this mortgage bank is similar to a those of other mortgage banks in Poland. Any other questions from the room?

A question to Ernest and the CEO perhaps summing up this meeting today, gentlemen. If you could please compare your at to the one from our previous meeting regarding the balance of risk and opportunities for the bank and the macro balance, has it changed in assessment changed?

I think it hasn't drastically changed. Since [indiscernible] And I can use this term that this is a favorable environment for the bank. The for the banks. The interest rate parameters will not drastically differ this year. And let's remember that there was quite a significant downtrend since Since the holiday, this was three or four months, for us that it took us to calculate be reassured in the knowledge that these amounts are quite significant. It was first done in November 2023. We saw the potential of the banking and how significant the transformation was.

In the macro Picture we kept 3%.

It was 2.9%, but it's hardly ever this accurate. We have similar forecast for in the as a front digit. When we look out to Europe, Europe is starting to look a little bit better. And there is a elephant in the room, that's Ukraine. And if that drawn to a conclusion like a piece long lasting peace treaty. So whatever happens in Ukraine, there will be a warming up foreign like risk related bonuses, etcetera. Poland could be the proxy for geotopolitical topics and emerging it is already seen a proxy trade of sort. But to sum up, perhaps a little bit more optimistic.

Well, I'm constantly in dialogue with Ernest, so it's not like we can differ significantly in our opinions. I share most of his suggestions. Perhaps I should refer to to the question marks that I can Perceive here. So I share the opinion that, brutally speaking, any type resolution of the Ukrainian conflict should have a positive outcome.

The more long lasting it is at least on the surface, the better for us The question is how it'll translate at all to the relations with the EU. And [indiscernible] means some sort of reconciliation with Russia, well then I believe that would trigger a boom in Europe. Now that of course is a political dilemma and I'm far from trying to form an opinion. But that's how I imagine the markets would receive any change in that regard. Now Another point I would say that things are moving forward a little bit more slowly than I expected because there is this phenomenon of pushing out the banking sector by the distribution of the recovery plan and the BGK Bank Bank, And That's all more or less reasonable. And The client pool will be supportive for the big investment. And if that is the case, there will be more loans issued It's very difficult to predict whether there or not or not this will be the case. And the third aspect What will be the consequences of what's going on in America? When you listen to The U. S. President, you could draw a different conclusion each day.

But the actions that are being taken Up here, let's use [indiscernible] Whatever I have learned before, he's in contrast to that.

So being able to predict the consequences of the customs war that he has now launched is very difficult for me. You need to look At the fact that The U. S. Didn't use to have high customs rates The starting point was relatively low. So it was not going to drastically change the economy, but it definitely is going to change the narrative. And it is not without meaning to the human behaviors. Now what are the what is the point of these of these moves? They could have very short term positive out come, but in the long term, they do not strengthen the American economy. I am convinced that very soon Perhaps this will not sound very [indiscernible] at this point, but the EU It's looking at Being quite a significant net exporter, But and there's a surplus trade surplus, but there's a trade deficit on the side of services. The capacity of the European market has really developed the the market of social media and the services that are linked to The Internet.

So the fact that the world is now fragmented is not going to be beneficial for The U. S. If they threaten with customs or sanctions, every time, everybody will you know, start to go around it and and sort things out for themselves. Let's take Mastercard or Visa. If Well, I can see that happening already. There needs to be a different management model. Globalization ends and there are consequences to this. So ironically, what this could mean is that Europe is going to have to come together and work out its own solutions in different areas. So far, we have not been very disciplined because they did things. You know, our people went and things got delivered, and we have this feeling that things were consistent in the Western Hemisphere and Europe. What's it going to how is it going to impact the the future events? Well, when we look at having customs, for European cars, for example, maybe there's mostly German auto automobiles that we're speaking about, perhaps Volvo. So both Mercedes and BMW well, they sell about 100,000 cars a year.

Don't they? So they'll be more expensive people who buy BMWs in Mercedes in America are people who well, Well, part of them are aspirational, but those are people that have money. It will just be more expensive for them. In mass terms, it maybe have some impact. So [indiscernible] [indiscernible] Donald, We don't have much export to the state. So for us, it's not going to mean anything really. But via the European transmission, this could have an impact. So there's a couple of factors here that could weigh more or less as to where we're going to be So what's happening in the East could have a positive outcome. I do not suspect that this would escalate further into a more negative phenomenon. Correct me if I'm wrong. But on the other hand, on the other side, there are some more question marks there. And I think slowly we can see the overregulation in Europe and This has been discussed in the background as a result of what's happening in the world. There is some reflection happening in this area, and it will have an impact also. So all in all, I would say, in the short term, we sustain our conviction that the Europe's Europe's economy will grow Mid term, we're talking about the possibly impacting factors one factor that could play a role is, I would say, the narrative around the expected decrease of interest rates by the National Bank.

Depending on how balanced it will be, [indiscernible] the CONVICT [indiscernible] Polish SMEs as to whether or not this is the right time to invest because that's where the potential lies.

So It will be a determining factor as to whether or not these big projects financed by the recovery plan and the official sector, whether they will revive the appetite of SMEs squad for the large projects. So Another question. Excellent one that we will address at our next meeting that's devoted to strategy, and that will be in April. I think we're at this trajectory already. Thank you. To be continued.