Stephan Engels - CFO

Britta Schmidt - Autonomous Benjamin Goy - Deutsche Bank Johan Ekblom - Bank of America Merrill Lynch Nicholas Herman - Citigroup Riccardo Rovere - Mediobanca Anke Reingen - RBC Capital Markets

Good morning, ladies and gentlemen and welcome to the Commerzbank AG Conference Call. Please note that this call is being transmitted as well as recorded by audio webcast and will subsequently be made available for replay on the internet. At this time all participants have been in a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to Stephan Engels.

Good morning, ladies and gentlemen, welcome to Commerzbank’s conference call for the preliminary figures for the full year 2016. I would also like to take the opportunity today to update you on our execution progress of Commerzbank 4.0 based on a significantly expanded disclosure. Let me start with an overview of the last year on Page 1. In 2016, we achieved a solid operating performance despite a difficult market environment. Continuous growth in retail banking and mBank as well as our sustained leading market position in corporate banking are the basis of our €1.4 billion operating result. Our full year net result amounts to €279 million. This includes the goodwill impairment of €627 million in Q3 and full year restructuring expenses of €129 million. These were mainly booked for ongoing internal process optimization in our Germany-based back office operations and further realignment of our presence in London and New York. To further improve on the line profitability, the swift execution of our strategic agenda is of high importance and we successfully kicked it off. Let me summarize our progress so far. Management structures and steering systems have been implemented. We’ve opened our first city branch and started the branch rollout of our IT distribution at Platform One both of which are first tangible achievements. Most importantly however, key execution indicators as well as milestones have been clearly defined and committed. Coming back to last year, our robust Germany-based business model translates into sound risk profile with a benchmark low NPL ratio of 1.6%. The non-performing loan volume is at historic lows with only €6.9 billion at the yearend. We further strengthened our capital position with a fully loaded core Tier 1 ratio of 12.3%. This is above all SREP requirement. Year-on-year we increased the ratio by 30 basis points and effective portfolio management was the main contributor to this result. Relieved measures include reductions in rundown portfolios, sales of RWA intense bonds in the investment book and a securitization of a corporate loan portfolio. A core Tier 1 ratio of 12.3% is a very solid starting point to manage the upcoming restructuring charges plus any further regulatory refinement on accounting and amendments such as IFRS 9. Also in capital, our leverage ratio stands at the comfortable 4.8%. This is proof for Commerzbank’s customer-driven business model. Since the beginning of the year and amended regulation covering the hierarchy of bank liabilities has been introduced in Germany. As a result, rating agencies have to adopt their methodology towards rating classification. The pleasing outcome for Commerzbank is a single A rating for counter party risks and deposits. This leads to a higher pricing competitiveness and therefore puts us in an even better position to underwrite client businesses. Let me now provide you with an update on the execution of our strategic agenda. Slide 2 summarizes the three cornerstones of Commerzbank 4.0. I will not go through all the details as we have talked about extensively with you over the last month. Let me just highlight the core of it. We will make the bank simpler, faster and more efficient and as a consequence more profitable and competitive. Moving onto Page 3, since I’ve touched on our execution progress already I would like to focus here on our plans for 2017 and start with our Digital Campus. Our key digitalization accelerator is up and running approximately 300 of the targeted 1,000 colleagues started to work on six of the defined 14 Journeys and we will complete two Journeys this year to recall, Journeys are end-to-end digital processes across functions and segments, while the 9 Master Journeys cover key product for our customers, but 5 Support Journeys enhance overall digitalization capabilities. The reduction of complexity and therefore the enabling of efficiency gains is high on our agenda. As you know this includes a significant FTE reduction of gross 9,600 by 2020. Hence, we will start formal negotiations with Workers Council in March already. Once we’ve reached a respective agreement we have an important precondition to book the first part of restructuring charges towards year end. Having said that, a significant reduction in FTE should early be expected after 2017. This year we aim to finalize the setup of equity markets and commodities as a standalone business. This includes the application for licenses required to conduct a financial services business on its own. Further growth will be supported by extending our digital capacity. Let me provide you with some example. We will start the digital onboarding of corporate clients also first used cases from advanced analytics such as churn rate optimization for private customers will be established. And we plan to go live of our consumer credit offering in Q2. As you can see on Slide 4 consumer credit is one of our master journeys. In the past we carried out this growth business in a joint venture. Going forward we have decided to run it in our own balance sheet using a fully digital credit process. Besides benefiting from 100% online availability our customers will only need around 30 seconds from initiation of the process to credit approval. This is what we mean by simpler, faster and more efficient and clearly demonstrate why digitalization will be a key differentiating factor for Commerzbank in the future. On top of this and end-to-end digitalized process also means that up to 100% of the manual workflow can be reduced. Slide 5 lists various already implemented digitalization initiatives within Commerzbank. This except shows that we can build on wealth of experience for the further digitalization of the bank. Let me pick one example that shows how we have increased execution speed and simplified the processes. We established a paperless current account opening process that takes no longer than 10 minutes, in combination with our fully digital current account transfer service new customers joining us from other banks can now be onboarded smoothly and quickly. Progress on delivering our strategic program will be closely tracked by traceable and sustainable key execution indicators for both client segments and the group. These are designed to reflect the cornerstones of our strategy. Slide 6 gives you a granular overview of the development overtime. In comparison to our Capital Markets Day announcement let me focus on additional items and specified target. Central to private and small business customers is further growth. Consequently asset under control is the indicator to measure our market share gain. This figure includes deposits, loans and securities and the envisage growth by 20% until 2020. The heart of our corporate client strategy is targeted growth and improving capital efficiency. To track the first, the customer acquisition target amounts to an additional 10,000 net new customers until 2020. Off these 3,500 shall be onboarded by the end of 2017, the focus here is smaller corporates with a revenue between €15 million and €100 million. These clients will benefit from our local presence in combination with Commerzbank sector expertise and product offering including FX and interest rate hedging. Mid-sized corporates are other main target to grow our German market share in trade finance. We successfully launched our RWA efficiency program to closely monitor allocated capital developments. RWA efficiency is measured as operating revenues over RWAs and the ambition is to increase this ratio to 4.2% until 2020. On Group level, the digitalization ratio follows the progress of our transformation into a simplified and more efficient set up. 50% of our relevant processes will be digital and 40% of our IT investment budget shall be allocated to digitalization projects by the end of this year. The latter will grow to 50% by 2020. I hope that gives you a clear idea of the progress we’re making, now let me present our preliminary financial results. Slide 7 summarizes the development of the key financial figures over the last three years. Slide 8 provides you with a breakdown of the operating result in the new segmental structure. Both segments, corporate clients and private and small business customers contribute in a balanced way to the Group results. Others and Consolidation showed a full year result of minus €453 million with Q4 contributing minus €103 million. This is in line with our quarterly guidance of minus €100 million to €150 million that continues to hold true. If you turn to Slide 9, we can have a look at the development of the group P&L. 2016 was clearly a challenging year due to headwinds from the negative interest rate environment additional regulatory burdens and an ongoing volatile geopolitical news flow. Having said that, we achieved a solid operating result of $1.4 billion of which €337 million was in Q4. However, despite ongoing positive growth trends in PSBC and our strong market position in corporate banking full year revenues of €9.4 billion was supported by non-recurring items. Let me point out that most of them reflect operating success in a difficult market environment which offered some opportunities. Taking out the one off such as hedging and valuation adjustment shown in the appendix, a good starting point for Commerzbank 4.0, our clean 2016 revenues in a range between €8.6 billion to €8.8 billion depending on what you consider as non-recurring. Improving our underlying so to speak run rate profitability is exactly the reason why we initiated our strategic program. At the yearend Group LLP stood at €900 million, €204 million higher than last year driven by worsened shipping market. Thanks to our ongoing split cost management overall expenses were reduced to €7.1 billion as guided we fully compensated external burdens including the new Polish banking tax. With higher than normalized IFRS tax rate for the full year 41% and minorities of €103 million the net results stands at €279 million. Moving to Slide 10, where we have enhanced our disclosure to provide you with a more granular view on cost transition. Thanks to our stringent cost management group expenses are €57 million lower than in 2015. Let me go through the details. Year-on-year we achieved cost savings of €168 million, this is mainly driven by gross FTE reduction of 1,350. These reductions are due to programs agreed in the past and can be to a large extent counted against our 2020 FTE reduction target. In addition, we will pay €100 million law variable compensation reflecting overall group performance and also reduced number of staff. As stated our successful efforts fully compensate negative cost development. But the European bank levy, the Polish bank tax and the deposit guarantee scheme, we paid a total of €372 million last year. This is a year-on-year increase of almost €100 million. Rigorous cost control also delivered room for constantly higher investments into strategic growth projects, regulatory matters and the strengthening of the compliance functions. The latter resulted in €50 million higher costs. The increase in other mainly reflects the depreciation of self-provided software in line with accounting standard. Overall 2016 clearly demonstrates our ability to deliver on our cost inhibitions and shows our commitment to do so in the future. Our risk profile remains sound as illustrates on Page 11 and 12. Loan loss provisions amounted to €900 million well below €1 billion. Group LLP remained at a low level reflecting the stable German economy and the high quality of our loan book. In particular for PSBC the latter is driven by the good solvency of German household. Touching on LLP releases, I can say that they have shown their impact but to a lower extent than last year. Without any doubt 2016 was a difficult year for the shipping industry. The chronic overcapacity persisted and was driven by further fleet growth exceeding scrapping volumes. This resulted in depressed charter rates. In accordance with our conservative risk policy, we address problems as by occur and consequently book higher LLP in a timely manner. With additional shipping LLPs of €240 million in Q4, full year shipping provisions increased to €559 million. This leads to an average coverage ratio excluding collateral of 64% which is we believe among the best in peer comparison. Let me say that the well-covered book increases our scope of action in case of improving market conditions. But also in a difficult market, we managed to successfully rundown our ACR shipping exposure by €1.3 billion including opposing FX effects. This results in a remaining performing book of just €3.5 billion. Year-on-year the NPL ratio remains unchanged at a benchmark low 1.6%. Non-performing loans has been reduced by €0.6 billion in Q4 and now stand at €6.9 billion. This is lower than at the end of last year and especially for corporate clients we expect to further reduction over the next quarters. While the client segments, we only have 9 basis points cost of risk. The increase for the group to 21 basis points can be explained by the shipping exposure. This is a clearly addressed portfolio as I have just explained. Let’s carry on with the new segments and start with private and small business customers on Slide 13 and 14. PSBC had a successful year with a full year operating result of almost €1.1 billion. Let me highlight the visible above average growth track in a competitive German market. Across products, we saw steady increase and assets under control over the last year’s with loan volume growth exceeding deposit growth. Year-on-year German loan volumes across products increased by 8% benefiting from a healthy demand on our proper product offering, the mortgage book grew by more than €4 billion. Volume growth is a key mitigating factor that helps reduce pressure from negative interest rate. In October we fulfilled our original target of 1 million net new customers since then the trend continues. For the accelerated target of 2 million net new customers by 2020, we have already gained 130,000 excluding the acquisition of Onvista. With €2.1 billion of assets under management Onvista has 90,000 trading [indiscernible] clients which fit well to Comdirect. As a measure for customer satisfaction our Net Promoter Score is constantly above 30% for the last year and it grows further to one of the highest among German banks. On the back of the geopolitical news flow, we saw lower client activity in the securities business. This is a major driver of lower net commission income year-on-year. On a positive note, the portion of recurring income from managed accounts and premium depos [ph] has grown to 61% on average for 2016 11% points higher than the year before. The growth path continues also in Poland. mBank delivered on ongoing strong performance contributing a full year operating profit of €327 million. New businesses of customer loans rose by more than 20% compared to 2015 and supported a further improvement of net interest margin. Cost increases is mainly attributable to the Polish banking tax. Last but not least, Commerzbank benefited from very well performing property markets in Germany resulting in higher valuations and successful transactions. Before going through the results for corporate clients on Slide 15 and 16 I would like to spend a few moments on the new set up. In Q4, we started the integration of MSB and corporates and markets with a clear target to further improve our position as to number one bank for corporates in Germany. In addition with our sector expertise we want to gain market share with selective larger corporate in Europe. Although this will not be a quick win, joint force lead to more comprehensive client relationship and synergies as a consequence of the simplified structure to reflect our client-centric business model, we’re reporting sub-divisions based on client groups. The EMC business is disclosed separately to show the setup of a standalone business. Coming now to the operating result which amounts to €1.3 billion. Its drivers require a differentiated view Mittelstand maintained its strong market position resulting in overall stable revenues despite the negative interest rate environment. This is supported by slightly higher loan margins in a competitive market. Financial institutions on the other hand saw lower revenues driven by our business decision. Revenue for financial institutions were impacted by their optimization of our corresponded banks network in line with tightened compliance standards. With regards to EMC volatile equity markets conditions burdening structured product business for institutionals. From the product perspective that capital markets had the strong year and grew revenues by 4% year-over-year in a challenging low interest rate environment. Commerzbank is the leading loan book runner for automotives in EMEA based on around 8,000 clients in the auto industry. This forms a good example of our strategic sector approach which we intend to leverage further. Let me now come to widely discuss topic over the last weeks, the impact of changes in interest rates. Pages 17 and 18 show the impact negative rates had over the last years and the potential NII impact 100 basis point parallel shift of the yield curve might have going forward. Key to Commerzbank’s interest rate sensitivity is our deposit base amounting to roughly €200 billion which can be classed as follows; about one-third of the volumes belongs to either turn deposits or professional clients with minor NII sensitivity as conditions can be passed on. Sensitive to changes in interest rates with remaining volume which consist a similar magnitude of unmodeled overnight deposits and modeled deposits use to refinance our loan. While unmodeled deposits rather promptly react to changes at the short end of the curve, modeled deposits depend on the development of the longer term rates for these impact materializes only overtime. From the €500 million decrease in NII due to lower deposit margins in the last two years. Up to €200 million stemmed from 50 basis point decline in three month Euribor. More than €300 million represent the decline in longer term rates which way on our modeled deposit base also going forward. Please keep in mind that we moved into the negative territory during the last two years and that we don’t charge negative rates to retail customers. Our active NII measures have mitigated the net burden to €212 million last year and include the reduction of €22 billion corporate deposit. Having said that, let’s now take a look at the impact of a potential 100 basis point parallel shift. Overall NII increases up to €1 billion after four years more than half of the NII potential materializes in year one driven by short end rates of this about 50% stem from the move out of negative interest rates as the problem of passing on negative rates no longer exists. The second part of the overall NII benefit only shows its full impact in year four as the impact of longer term rates in our modeled deposits takes time as explained. Let me put this scenario into perspective with current interest rate development and make two comments. Firstly, short and spot rates haven’t really moved up yet and we don’t expect them to do so short-term. Secondly, a steepening of the curve as a longer term NII impact coming from the models part. Finally on segments please turn to Page 19 to have a look at ACR. The full year operating result came out at the minus €514 million of which minus €155 million stemmed from the last quarter. On the one hand Q4 revenues benefited from HETA. On the other hand LLP increased sharply which can be almost exclusively explained by the further deterioration in the shipping markets. On a positive note, we successful reduced our portfolio to €16.2 billion. This year-on-year decrease in EaD of €2.3 billion was driven by €1.3 billion lower shipping and €0.6 billion commercial real estate exposure. At the end of Q4, shipping EaD amounted to slightly below €4.8 billion of which €1.2 billion are non-performing. As mentioned earlier we increased the coverage ratio excluding collateral to 64%. Slide 20 highlights the RWA development overtime. End of the year Group RWA stand at €190 billion more than €7 billion below 2015. The strong year-on-year reduction of our RWA is driven by credit risk. Besides planned reductions in rundown portfolios amounting to €4.5 billion also the sale of RWA intense bonds in the investment book and the securitization of a corporate loan portfolio left an RWA release of combined €3.8 billion. In addition the decision to optimize our correspondent bank network, lower credit RWAs from financial institutions by €2.5 billion. Year-on-year off risk RWA increased by €2.5 billion due to new and increased large external loss events. Both over compensated significantly decreased frequency of internal losses. Finally on RWA let me share my view on the most recent Basel IV development. The postponement of the BIS announcement shows Basel IV won’t come at any price as you’ve probably noticed the intense discussions in the Basel committee therefore we will have to wait for the final outcome rather than speculate on its impact at this stage. Nevertheless I do not expect Commerzbank to be a negative outlier in terms of overall impact. On Slide 21, we show the material increase of our fully loaded core Tier 1 ratio. Quarter-on-quarter the ratio improved by 50 basis point to 12.3. this can be partly explained by a reduction in our RWAs which accounts for an increase of 30 basis points, in addition the build-up of our capital further increase the ratio by 20 basis point. The higher capital base predominantly stands from retained earnings as well as positive effects from the pension liability. With an average duration of about 19 years, the discount rate for pension liabilities benefited from rising long-term interest rate. Other OCI items such as currency translation and revaluation reserves saw only minor movements in Q4. Let’s conclude with our objectives and expectations for 2017 on Page 22. Besides further strengthening our market position we will focus on the execution of Commerzbank 4.0. We keep a fully loaded core Tier 1 ratio stable or greater than 12% balancing out investments, restructuring costs, capital and RWA. We keep our cost base stable and book the first part of restructuring charges for Commerzbank 4.0. Finally, we expect LLP’s for PSBC and corporate clients on the level of 2016, Ship Finance LLPs will be between €450 million to €600 million. Ladies and gentlemen, thank you for your attention and I’m now happy to take your questions.

Ladies and gentlemen. [Operator Instructions] the first question comes from Britta Schmidt.

I’ve got two questions if I may. The first one would be on loan of provisions, you commented that there might still be some releases in the core business in 2017, is there any sort of budget that you can give us for that and a comparable number for the contribution to loan loss provisioning in 2016 and for how long do you think that will continue, what are the main drivers behind that? In relation to that, maybe you can also give us an idea about IFRS 9? What are your expectations for the variance of loan loss provisions and perhaps any idea on the potential capital impact? And the second would be Poland. Could you give us some help understanding how mBank is going to manage the potential FX proposals? Is the bank going to accept higher RWAs or are there some thoughts about conversion of some of the FX mortgages and could there be any impact on the Commerzbank Group as a result of that? Thank you.

Thank you, there were quite a number of questions. On loan loss provisions and releases. Obviously the current positive economic environment in Germany also helps in achieving better results on that. I’m not necessarily prepared to give the number on that one and we would, in a general sense assume that the trend would continue in the sense of the environment is still positive, the nominal contribution to the overall LLP number is obviously getting smaller and smaller. IFRS 9 has obviously two impact, one is that we will have a capital impact our current status that we are pretty pleased with the technical progress on the program. We have still a scope to discuss with our auditors which I think is fine. We expect a moderate negative capital impact starting 2018 and following then we will obviously all have the experience that IFRS 9 will make for greater volatility in LLPs and thereby finally also in earnings per share. Poland, I think we still miss a little bit of crystal ball to know what will be the final outcome of the still ongoing political discussions. There was a statement from the national bank just yesterday which seemed to signal that they’re trying to get to a more moderate approach step-by-step. So currently I would say it’s not on my non-sleeping list and I would think that it will become a manageable topic over the upcoming quarters, but there is still work to be done.

Thank you.

The next question comes from Mr. Benjamin Goy from Deutsche Bank.

Two questions please. Firstly you mentioned you’re going to find EMC over the course [ph] on 2017. Your capital, I would say solid, was 12.3. As you say, Basel IV at least a delay. So is it really necessary to sell the entire bit of EMC or what are your thoughts around IPO versus sale, whether or not it’s an outright sale? If you can comment anything on that. And then secondly, in the revenue breakdown in corporate clients, Mittelstand was quite nicely development in Q4, up €40 million quarter on quarter and year on year. Is there any one-offs in, or is it underlying progress, so to say? Thank you.

Yes, I’ll probably start off with Mittelstand’s question and you know that we have driven a number of initiatives during the year to improve especially on the NII and Mittelstand Bank. We drove off about €22 billion off deposit in the first half of the year and we also introduced the so called facility fees which means that we are basically passing on negative interest rates for our customers, so these two effects about start to show impact and especially the facility fees roll in overtime. On the EMC setup and the related discussions around Basel IV again Benjamin, I think the basic reasoning why we decided to separate this business is not only the Basel IV and RWA discussion, it is also the complexity of the business including IT platforms, regulatory requirement and so on and we definitely believe there might be more appropriate owners than possibly bank for this kind of business. As I also said, we will take the necessary steps this year to separate the business operational and technical and apply for the licenses and then going to market with a company is something which is been planned for 2018.

Okay, thank you.

The next question comes from Mr. Johan Ekblom from BAML.

I just wanted to come back to the interest rate sensitivity and especially on the modeled deposits. So I guess first of all, what kind of duration do you assume for these deposits because I’m struggling to see how the benefit of 100 basis point shift toward essentially translate into you rolling the entire book against that within four years unless you see very, very short duration even on the modeled deposits. So can you may be say what’s the average yield on the investments on the other side of that equation today because clearly a 100 basis point increase in the German 10-year for example would still keep you well below where the average is been for the last seven years or so.

Yes Benjamin [ph] I think we’re not going to have a model workshop here, but our models roughly spread between two to three years and 10 years and they obviously also geared a little bit towards the type of business that we have, I’d say in general we’re probably more on the shorter side with how we have modeled deposit that is why we have come to the full year roll in number of roughly €500 million.

Okay, thank you.

The next question comes from Mr. Nicholas Herman from Citigroup.

Just a couple of questions, please. On the FTE development that you've provided, so you're targeting 42,000 by the end of the year, as part of you’re talking about an 8,000 reduction. Just curious as to where, which of those business segments that will be affecting. Is that just corporate clients or will that also be allocated to other divisions? Some slip [ph] there will be useful. Just also curious on credit RWA so how much of that was due to securitization, and how much was due to rundown? And further, if macro conditions remain as they are, by how much would you expect credit risk RWA to fall in 2017 just due to through the cycle calculation? And finally, in others and consolidation, I was just curious as to why your revenues were quite weak. So if I ex out the property gain sales, other revenues seem pretty weak to me and also NII as well. Some color there would be useful. Thank you.

Okay, I hopefully I got all your questions. I’ll start with the FTE questions, the general numbers are that we want to reduce by 9,600 which will be net 7,300 since we will also have the build-up of roughly 2,300. The split between segments it’s something which I’m not prepared to disclose right now since that is also an important part of the upcoming negotiations with our work of council, so I unfortunately have to ask for a little bit of time on that issue. Credit risk, RWA that is what I said there is a good part coming from the rundown of the portfolio and the securitization that you mentioned is roughly €1.5 billion but also keep in mind that we have sold some RWA intense bonds from the investment book and that the reduction of the financial institutions business also contributed on that one. The third part was others and consolidation and why does the I think NII, the revenue stuff developed slightly less positive. I think that is especially the comparison between 2015 and 2016. 2015 was an exceptionally strong year for treasury. 2016 is still a good year but in comparison to the previous year it looks a little bit less attractive. Have I got all your questions?

Not quite. But thank you, most of them. Just following up on the credit risk, just in terms of next year, 2017 if macro conditions remain as they are, how much would you just expect credit RWA to fall, just due to the through the cycle calculation? That would be useful. And then on the others and consolidation, so for example, other revenues they were €71 million this year. I assume the property gain sales were in there as well. So if you take that out, that was about minus €60 million or something. Just some color there would be useful.

Okay on credit risk or credit RWA. The general aim of our new strategy is basically to keep credit risk RWA stable at group level unless we need to manage them for capital reasons and move some credit RWA so to speak from the corporate client segment towards the private client segment, where we have excellent growth opportunity right now, whereas the corporate guys are more focused on improving RWA efficiency as we’ve also led out in the presentation. Others and consolidation, yes there is positive impact in other from property sales. If you want to discuss more detail I would also let you probably call Michael Klein from our IR department.

Okay, thank you so much. That’s really helpful.

The next question comes from Mr. Riccardo Rovere from Mediobanca.

Just a couple of questions from my side. It’s not clear to me if you have given a sensitivity of your NII to the movement only in the long part of the yield curve as it has occurred over the past few months. And the other thing I wanted you to shed a little bit of light if possible, with regard to restructuring costs that you say will be charged mostly in 2017, do you have any idea of the amount that could burden 2017 and the amount of the burden 2018? Thank you.

Yes, I’ll start with the restructuring charges. I haven’t said that we will book most of it in 2017 that will depend on the progress that we will have on the negotiations with the Workers Council, so far our assumption and that is also been laid out on the Capital Markets Day is that the total restructuring charges may amount to €1.1 billion and that we currently assume that will be split evenly between 2017 and 2018. The NII question, you ask whether and what the impact of the latest movements are, I think we have provided you with this little graph in our disclosure which as part of your question I’m not really prepared to comment now on every yield curve move on NII effect. Nevertheless since the move has been on the longer end of the curve I will take time any way to roll in the only positive direct impact is to change on the discount rate for our pension liabilities which had the slightly positive effect on the capital day.

Okay, thank you very much. Thanks.

And the last question comes from Mr. Anke Reingen from RBC.

Firstly, I wanted to ask about the ACR and I just wanted to make sure you still - the losses in Q4 and the year guidance actually is a bit higher than I thought. So you’re sticking to your guidance but maybe the losses are coming in - accumulated loss of €1 billion is coming in faster than I initially thought. Then, sorry to come back on this interest rate sensitivity. I just wondered, I’ m not a specialist but what are specifically unmodeled overnight deposits? I mean can I think about it like zero interest deposits or how could I think about it? I was a bit surprised that you said the treasury had a good result in 2016. So if this interest rate sensitivity plays out as in the scenario, would we then basically see an increase in the divisions and potentially a decline in the treasury? Or how would the modeled net interest rate sensitivity work at the divisional level? Thank you very much.

Let me start with the ACR part. Indeed we still stick to our guidance of €1.1 billion net operating losses for the segment from 17 to 20. As you rightfully said we kind of had a head start in terms of charges for 2016, so 2017 also will see probably as we said LLP shipping between 450 and 600. But we currently stick to our guidance and as I said before proper provisioning should also allow reduction of the portfolio and if we can reduce the portfolio earlier the following years hopefully will be better. The NII sensitivity, these overnight deposits are classical let’s say remaining balances on classical transaction accounts from payments services and the likes. It’s not big position, it’s just the sum total of smaller positions on a broad number of accounts both from private as well as corporate client. On the treasury question, I’m not sure whether I’m prepared to do a treasury workshop here. But in basic terms, yes there is part of the treasury results which are obviously allocated to the segments because that is where the balance sheet comes from at the end of the day and other than that treasury have not necessarily the same set of interest rate sensitivity than the rest of the setup. But again if you’d like further enlightenment and Michael Klein of course will take - are obviously available.

Okay, thank you.

Ladies and gentlemen, many thanks for your questions and the interesting discussion. I would like to say goodbye for today and I’m looking forward for our future discussions with you. Goodbye and have a nice day and thank you.