Stephan Engels - CFO

Britta Schmidt - Autonomous Giulia Miotto - Morgan Stanley Nicholas Herman - Citigroup Riccardo Rovere - Mediobanca Johannes Thormann - HSBC

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 in the Internet. [Operator Instructions]. Let me now turn the floor over to Stephan Engels.

Good morning, ladies and gentlemen. With our pre-announcement at the end of June we have already delivered some important cornerstones and trends for the second quarter 2017. Today, I welcome you to our regular conference call to provide you with further detail. Before doing so, let me use this call as an opportunity to review the overall strategic progress since we launched Commerzbank 4.0. The clear focus is to further grow with our customer-orientated business model. In addition, we will make the bank simpler, more digital and efficient. This is the basis for higher profitability. The last quarters demonstrate that we can grow. Key measures in Private and Small Business Customers Germany are ahead of plan with assets under control standing at €357 billion, €19 billion higher than at the end of 2016. On top of decent growth across products, assets under control benefited from the positive market performance in securities. Moreover, we have gained already more than 500,000 net new German customers in PSBC since last October. We almost doubled the pace of growth to take advantage of the German market which is undergoing a structural change. This is an investment in our future. The investment does come at the expense of short term profitability and I will come to this in the course of my presentation. However, already today, we're seeing the benefits of our strategy. Net new customers from the past compensate for the negative interest rate environment from today, while a further growing number of customers and volumes form the basis for future revenues. As mentioned in the past, it takes us around 18 months to convert a new retail customer into a profitable customer, ultimately contributing revenues of around €300 a year. Commerzbank has achieved an agreement with the employee representative committees in Germany earlier than originally expected. The agreement is the basis for the personal reductions as part of Commerzbank 4.0. Covering the complete 4.0 program, it leads to a onetime restructuring booking of €807 million in Q2. Overall, the agreement in place will reduce the workforce to 36,000 full-time positions by 2020 and is an important condition to manage down our costs to €6.5 billion in 2020. While we're on track with the strategic realignment in Corporate Clients, the segment successfully onboarded more than 3,100 net new Corporates since the beginning of 2016. Further burns from the negative interest rate environment, generally slower markets in Q2 and the accelerated growth have shown their impact on the H1 results. However, we managed to improve half year underlying revenues by 2.2% year-on-year to €4.3 billion. This includes our continuing efforts in the non-operating segments. With half year expenses of €3.6 billion, our H1 operating result amounted to €515 million, of which Q2 contributed €183 million. Including the restructuring charge of €807 million, the net result for the first half of the year stands at minus €406 million and minus €637 million for the quarter. H1 confirms our healthy risk profile which benefits from a sound macro environment in Germany. The group NPL ratio remains at European benchmark low, 1.5%. H1 LLPs amount to €362 million and include €211 million of ACR provisions. Since the beginning of the year, we have accelerated the ACR rundown in a cost efficient manner, resulting in a reduction of €1.5 billion of Commercial Real Estate and shipping portfolios. This includes successful portfolio transactions in shipping. Despite the restructuring charge, the fully loaded Core Tier 1 ratio has increased to 13%, primarily due to €8 billion lower RWAs across risk categories quarter-on quarter. Our leverage ratio stands at comfortable 4.6%. Moving on with the next 2 slides to talk about the execution progress of Commerzbank 4.0. As I touched on successful efficiency and growth measures already, let me focus on digitalization. We're undergoing a radical change to renew the bank. As you already know, we will digitalize to the maximum extent across all processes. This is not only about apps at the client interface, but more so about our IT infrastructure as a whole and in particular, the end-to-end digitalization and automation of processes. The campus serves as our digitalization accelerator and is now fully staffed as some of you have experienced at our recent workshop. 8 of the 14 master and support journeys have now been started. Since Q2, we have initiated the journeys in customer life cycle management retail and Big Data & Advanced Analytics. Moreover, we have launched applications to enhance customer experience and speed of execution. To provide you with 2 examples. In addition to the launch of our mobile Mortgage App, Comdirect has successfully started its Digital Asset Management Cominvest. This underpins Comdirect's first mover ambition as the bank with comprehensive Robo Advice. At the end of June, assets under management have already exceeded the €100 million mark. Key execution indicators on Slide 3 are proof of our digitalization progress. In line with the go live of our digital consumer loan platform, the digitalization ratio has improved to 41%. To sum it up, the first half of the year proves that the execution of the Commerzbank 4.0 is well on track and we're pleased with the progress achieved so far. Let me now present our financial result and start on Slide 4 where we have updated the overview of exceptional revenue items, whereas the first half of '16 benefited from €312 million revenue one-offs, we have only seen €116 million from hedging valuation adjustments so far this year, with Q2 contributing €8 million. This will change in H2 and I will talk about this later. While Slide 5 summarizes the development of the key financials, a segmental breakdown to the - of the operating results is provided on Slide 6. For the better tracking of clean revenues, we have visualized them accordingly. With no Q2 '17 one-offs in PSBC, the operating result has been driven by our strategic investment into growth. The solid Corporate Clients results can be explained by slower markets and strict cost control. ACR had lower LLPs and less hedging and valuation effects. Others & Consolidation ended up with an operating result of minus €112 million at the better end of our guidance which I would like to leave unchanged for the time being. Slide 7 shows the development of the group P&L that I would like to embed into some broader revenue trends. Main driver of our growth in underlying revenues compared to H1 '16 has been the development of net interest and dealing income which has increased by €165 million. This number benefits from our continuing effort to manage the non-operating segments, Others & Consolidation and ACR. Whereas ACR has been supported by lower funding costs, Others & Consolidation has seen lower PPA effect and the normalized treasury result coming from a slow H1 '16. As guided, Commerzbank will continue to face the NII direct given the unchanged interest rate environment amounting to €100 million a year before mitigation measures. Comparing half year numbers, the additional burden due to declining deposit margins in Germany has amounted to minus €78 million in PSBC. The clear positive is that the segment has fully compensated for this drag-through NII while net commission income increased by €62 million. Key to this success is an increasing customer base and the associated asset growth which fully contributes to revenues with a time lag of about 18 months. Due to low market volatility and declining volumes in FI and legacy portfolios, underlying net interest and dealing income has fallen in Corporate Clients. Coming to the quarterly P&L. And the slower Q2 reported revenues amounted to €2.1 billion. Including the restructuring charge of €807 million and IFRS tax result of €12 million and minorities of €25 million, the net result stands at €637 million minus. The tax result of €12 million is partly due to the restructuring charge which is generally deductible. Opposing taxes expenses stem from the positive results of entities that are not affected by the planned restructuring. For the full year, I expect an effective IFRS group tax rate slightly higher than the normalized rate of 25% to 30%. Slide 8 provides you with a more comprehensive look on cost transition. Overall group cost stands at €3.6 billion after the first 6 months with Q2 accounting for €1.7 billion. The EU Bank levy payment was slightly adjusted in Q2 to a total nonrecurring expense of €186 million in H1. This is €31 million higher than a year ago driven by the newly introduced levy in Poland, mainly due to lower contributions, to deposit guarantee schemes, the item compulsory contribution has been limited to an addition of €23 million. Yet again, higher external burdens have been successfully mitigated while H1 '17 expenses now include the Digital Campus operations. Year-on-year, lower group expenses have been achieved through cost savings of €114 million. This is driven by FTE reductions. Also an efficient management of operating cost has contributed to our savings effort. As guided last quarter, the run rate for investment and growth initiatives will increase over the course of the year. This is already partly reflected in Q2 numbers - in the Q2 numbers with more to come in H2. Overall, the cost transition clearly demonstrates our ability to deliver on our cost ambitions and underlines our commitment to doing so in the future. Our risk profile remains very healthy as illustrated on Slide 9 and 10. Q2 loan loss provisions amount to €167 million leading to half year LLPs of only €362 million, PSBC and Corporate Clients have contributed €151 million. This reflects the continuously benign German economy and the high quality of our loan book. The result is no more than 10 basis points cost of risk for both operating segments. ACR provisions stem from the remaining shipping book and stand at €211 million for the first half of the year, of which €92 million are from the second quarter. For the full year, I do expect group LLPs at around €800 million. Group nonperforming loans have been decreased to a record low of €6.5 billion. As guided with Q4 numbers, that reduction has been driven by Corporate Clients. Let's carry on with the operating segments and start with Private and Small Business Customers on the next 2 slides. PSBC continues its above-average growth track in the competitive German market. A market that is experiencing a structural change. Due to the negative interest rate environment, cost pressure persists. In 2016, competition had to close 6% of their branches almost tripling the longer term average. In line with our growth strategy, we're committed to keeping the number of Commerzbank branches unchanged. And the development of our key execution indicators proves that we can take advantage of the ongoing structural changes as we're gaining market share. Let me start with assets under control in Germany. Across product, total assets under control has increased by more than 5% since the beginning of the year. A higher number of customers and our well-designed product offering clearly have shown its impact here. We have benefited from further organic volume growth in securities and the support from our positive market performance which contributed above 1/3 of the €11 billion increase in securities volumes in H1. The portion of security volumes in premium custody and managed accounts has further grown to 61% in H1. Keeping our strict origination standards in place, the new mortgage sales in Germany have increased by 29% year-on-year. As of June, the German mortgage book stands at €61 billion. Coming to net new customer acquisitions. Since the launch of Commerzbank 4.0, we have gained more than 0.5 million net new customers in Germany, of which 234,000 have joined in Q2 supported by the Onvista acquisition. However, our committed investment into accelerated customer growth had its impact on PSBC revenues. In the first half of the year, the drag on net commission income due to incentives for customer acquisitions amounts to €58 million. Other revenues have been lowered by a migration effect. As the consumer lending joint venture will end in the second half of the year, a €19 million positive at equity result has not been recognized. This will catch up with H2. Adding both effects together, H1 revenues were negatively affected by €77 million, €48 million more than a year ago. Having said that, growth in underlying revenues in H1 shows that we have chosen our strategy for a good reason. The increase in net commission income in H1 '17 compensates for almost 40% of the nonrecurring revenue items we saw in the first half of '16. To talk about our subsidiaries. mBank's proven growth track continues in the first half of this year with both net interest and net commission income significantly up compared to the first half '16. NII benefited from volume growth and margin improvement across deposit and loan product with record new sales in consumer loans. Together with Onvista, Comdirect assets under management increase to €85 billion, €9 billion more since year-end. The continuous growth in securities accounts and corresponding trading activities helped to mitigate lower interest income. Commerz Real continues to deliver stable operating revenues for the segment with lower contributions from appraisals when compared to the first half 2016. IR regulatory cost, in particular, in Poland and investments into the future growth caused an increase of operating expenses in H1 '17. Putting all these drivers together, the H1 operating result for PSBC stands at €336 million with Q2 contributing €142 million. Moving on with Slide 13 and 14 and Corporate Clients. To start with, we're well on track with our target to simplify our structures and increase efficiency. Core of the strategic realignment is to build on the strengths of Mittelstandsbank and combine these with our capital markets offering in order to serve our Corporate Clients to the best extent possible. At the same time, key strategic execution indicators are to optimize RWA efficiency and to add new Corporates to our franchise. H1 RWA efficiencies stands at our full year target of 3.7% and we continue to gain new customers. Since the beginning of 2016, more than 3,100 net new corporate customers have joined Commerzbank. Taking a look at revenue drivers across business reviews a differentiated picture. Mittelstand and International Corporates have seen solid contribution from corporate finance products such as debt and equity capital markets. In the first 6 months, Commerzbank has played a leading role in the execution of several major ECM transactions with our core sector clients. On the other hand, credit and FX trading was impacted by slower markets and muted client activity. Also, the headwinds from the negative interest rate environment have continued despite loan growth in Mittelstand and International Corporates. Financial Institutions revenues have been impacted by our decision to tighten compliance standards. However, the strategic realignment and new set up of the business is well on track which should clearly limit a further drag on revenues. EMC has seen solid client activity across products with strong demand for investment products in H1 2017. Strategic investments and higher regulatory and compliance expenses has been offset by ongoing cost initiatives targeting complexity reductions. Overall, the segment delivered a solid operating result despite a slower Q2 of €502 million in H1. Let me run up the operating segments by moving to Slide 15 which provides an update on loan and deposit dynamics. Led by the strong mortgage business in Germany, loan volumes in PSBC have grown by 7% over the last year which compares quite well with the overall growth in the German market. The increase in deposit volumes of the segment results from the successful net new customer acquisition using the current account as our anchor product. As pointed out in the past, we remain very committed to actively mitigating the negative interest rate environment. And the loan-to-deposit ratio for Corporate Clients stands close to 100% this quarter. As a key measure, Corporate Clients has reduced €2 billion of deposits quarter-on quarter. On the loan side, volumes have remained almost stable, in line with domestic corporate loan markets adjusted for Commercial Real Estate loans, a business that we're no longer focusing on. In other words, low volumes due to the tightening of our Financial Institutions network and rundown of legacy portfolios has been nearly balanced by loan growth in Mittelstand and International Corporates amounting to roughly €1 billion quarter-on quarter. Finally on segments, please turn to Page 16 to have a look at ACR. The value preserving rundown of our non-core portfolio continues. Since the beginning of the year, we managed to reduce the Commercial Real Estate and shipping books by around €1.5 billion. Supported by a weaker U.S. dollar, the accelerated shipping rundown is based on well-covered book and a market situation that has improved over the previous 2 quarters. We have used this environment, not only to structure portfolio transactions, but also to bring them to the market and most importantly, successfully execute them. In total, we have decreased the book by almost €900 million to €3.9 billion, including NPLs. With the option of further portfolio transactions, we aim for a remaining Ship Finance portfolio of around €3 billion by the end of 2017. This comes with a better full year LLP guidance for ACR shipping of around €400 million. With clean revenues benefiting from the reduction of funding cost, the H1 operating profit for ACR stands at minus €115 million. To continue with RWAs on Slide 17. At the end of June, group RWAs stood at €178 million. OpRisk categories has contributed to the quarter-on quarter relief of almost €8 billion. Let me start with credit risk. Thanks to our ongoing active portfolio management, credit risk RWAs have been reduced by €3.6 billion. On top of the non-core rundown, a synthetic securitization in Corporate Clients has led to a RWA relief of €0.8 billion. Favorable currency developments have further supported the reduction. Lower market volatility across all products had a positive impact on market risk RWAs which decreased by €3 billion quarter-on quarter. Besides a lower frequency of internal losses, OpRisk benefited from further roll-offs of external loss events reflected in the industry-wide database. When compared to the previous quarter, this explains about €1 billion lower RWAs. Sorry for the interruption, there's a little fire alarm down in the plaza, but we'll keep on focusing on the call here. On slide 18, we show the increase of our fully loaded Core Tier 1 ratio to 13% despite the restructuring charge, the ratio improved by 50 basis points quarter-on quarter. What are the drivers here? Firstly, the Q1 net profit has not been recognized in the ratio allowing us to partly net off the Q2 restructuring charge. Furthermore, the resulting H1 net loss has been almost balanced out by positive developments of OCI capital items. Pension liabilities benefited from higher long term interest rates which led to an increase of the discount rate to 2.1%. In addition, tighter Italian credit spreads in our AFS holdings had a positive impact on the revaluation reserve. Based on the overall - based on the explained overall stable capital developments Q-on-Q, the CET1 ratio increase is driven by lower RWA's. For the end of the year, we aim for fully loaded Core Tier 1 ratio of around 12.5%, including a moderate IFRS impact effective from January 1 2018. Ladies and gentlemen, let me wrap up the quarter. The execution of our strategy is well on track and is key to our transformation in 2017 and '18. An important milestone is the agreement with employee representatives in Germany, a crucial prerequisite to make Commerzbank more efficient. This has allowed us to book the full restructuring charge early and in the single quarter. The last month since the launch of 4.0 has demonstrated that we can accelerate growth in a changing German banking market, resulting in higher volumes and net new customers. This temporarily impacts the operating results but forms an important basis for future revenues. We will continue with our strict cost management and we have made significant progress in running down our shipping portfolio which we expect to reduce to around €3 billion at the end of this year. Our Core Tier 1 ratio has increased to 13% and provides room for further investments into our strategy as well as upcoming regulatory refinements and the introduction of IFRS 9. To conclude, I would like to provide you with a summary of our objectives and expectations for 2017 on Page 19. Besides further strengthening our market position, we're fully committed to the swift execution of Commerzbank 4.0 in order to further improve underlying profitability. As mentioned, we aim for a fully loaded Core Tier 1 ratio of around 12.5%, including the IFRS 9 impact effective from January 1, 2018. We expect our cost base to be below €7.1 billion. Including LLPs for the consumer loan business in the new setup, we expect total group LLPs at around €800 million, thereof ACR contributes around €450 million. From what I can see today, exceptional revenue items in H2 will exceed €390 million. In Q3, we will include the sale of our stake in the payment service provider Concardis in PSBC. And gains from property sales in Others & Consolidation. This will have an impact on the O&C operating result in Q3. The remainder stems from the termination of the consumer finance joint venture. For further information, we have prepared Slide 39 in the Appendix. Once we have settled the transaction, the IR team will publish a granular overview of financial effects on the website. Despite the full restructuring charge and our focus to transform the bank, we expect a slightly positive net result for the financial year 2017. Thank you very much for your attention and I'm now happy to take your questions.

[Operator Instructions]. And the first question comes from Britta Schmidt from Autonomous.

It's Britta from Autonomous. I've got 2 questions, please. Regarding the revenue outlook, we previously, I think, worked on the assumption that the prior consensus of around €8.8 billion or so for this year is okay. If I strip out the €400 million one-off gains and the €100 million hedging and valuation adjustments, the underlying would point to €8.3 billion. How much of the decline year-on-year from the €8.6 billion last year would you consider temporary versus underlying? I guess, you're saying around €80 million of customer acquisition in the first half, if we double that it could be €150 million from there and possibly €100 million from rates. So would it point to a stable underlying revenue picture year-on-year? That's the first question. And the second question that I have is you've recently had a new large shareholder being added to your shareholder register. Do you have any expectations that this is going to, in any shape or form, impact the execution or the plan of Commerzbank 4.0?

Thank you, Britta. On the revenue outlook, without doing too much of the math that you have been doing, I think in general, at least a stable year-on-year outlook should be a good working assumption for what I can see today. Still Q2 has been, as we have seen, a little bit more muted than expected. And yes, there is the obvious drag on - from the interest rate environment. Normally I wouldn't really comment on specific clients or shareholders. But since it is obviously a matter of general interest, I would say that you can expect that we're in regular contact with both existing and the potential shareholders or investors. And you can safely assume that Cerberus is no exception. And beyond that, I hope you understand that I won't engage in any further speculation or comments on any of the rumors that we have seen.

So if I may just follow-up on the first question. So stable year-on-year revenues, that is reported or underlying, what are you referring to - just to clarify that?

No, underlying. Since you referred in the question to underlying, I was also referring to underlying.

The next question comes from Giulia Miotto from Morgan Stanley.

So my first question is really on cost. So you already booked the €807 million of the restructuring cost and you - so you seem ahead of schedule. So should we still stick to your guidance of €6.5 billion sooner than 2020 or do you think that there is potential to achieve some cost savings earlier than that? And then, my other question is on the PPT guidance for ACR. If I remember well, the last time you provided guidance here was for €1.1 billion loss over 3 years. Would you still stick to that or you think that the improved shipping environment could mean a lowered loss?

Yes, Giulia. Indeed, the €807 million booking of the restructuring program is ahead of numbers and ahead of plan in the sense of timing. It covers the complete program. Nevertheless, the prerequisite to achieve the €6.5 million is not only booking the restructuring charge. It is also really the digitalization that we need to achieve and that follows more an operational pattern and not necessarily the bookings pattern. In that sense, I'd say, yes, all the prerequisites are there. And yes, we can and that is the advantage now fully focused on the crucial execution. But I think I wouldn't expect really any sooner movements on the 6.5 that we have indicated. On ACR, in general, we took advantage of the somewhat more, let's say, nicer markets for shipping in the last 2 or 2.5 quarters. We have used that to run down the portfolio a lot faster and a little bit cheaper than originally anticipated. That's why we have adjusted both the volume guidance as well as the LLP guidance for shipping. The general outlook for the ACR losses until the end of the given period at €1.1 billion, I would still keep at that level. I wouldn't necessarily think that we under - over perform on that one.

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

Three questions, please. Firstly, on IFRS 9. So to get a slightly positive net result for the financial year - for FY '17 it implies a profit in the second half of about €450 million plus or minus. Even with flat RWA, that would appear to be about 13.1% CET1 by year-end. I mean, yes, you'll grow your consumer finance book, but also the ACR will roll-off as you said. And there may even be potential for further Corporate Customer optimization. So you're looking therefore for an IFRS 9 impact of about 60 bps. That's the first question. Secondly, well, 2 questions on PSBC. Thank you for disclosing acquisition costs. So you've acquired about 300,000 new customers in the first half excluding Onvista and this cost you about €77 million. Now if I estimate correctly, that implies more than €260 per customer, is that correct? I believe the guidance from the PSBC workshop was €150 to €250. So should we expect more than €250 acquisition cost per customer in the second half of this year or even thereafter? And finally, presumably, acquisition of new customers will slow in the second half due to seasonality. Given you have already achieved your customer acquisition target for this year, would you expect to manage the P&L and slow the pace of acquisition or would you intend to maintain the momentum as it were and just continue going - achieving this as quickly as you can?

Yes, Nicholas. A lot of demanding questions. Let me start with the little calculation that you provided on ratios. Without jumping now in - too much of your detail, let me say the following. I would expect the IFRS 9 impact that we have in the moderate range. And moderate, I think, is well reflected by the latest study. I think it was given by the EBA which saw it more between 30 to 50 basis points. On PSBC, your little calculation probably needs refinement on 2 positions. One is the €77 million that you mentioned also include the drag from the - not equity - of missing equity result from the CFG joint venture. And the customer number that you took is the net customer number and not the gross customer number. If you would correct these little slips, you would still end up with a €150 per customer acquisition cost that you have also seen on our PSBC workshop. Slow pace. Yes, I think there may be some seasonality in the second half of the year since we have summer break and other stuff. But you can definitely bet that we will not actively drive down the impetus and the move that we have right now. The market is in a change and we need to grab the strategic opportunity.

And the next question comes from Mr. Riccardo Rovere from Mediobanca.

A couple of questions, if I may. The first one is again on IFRS. When you mentioned 30 to 50 basis points, is it a fully loaded number or is it a kind of phased-in numbers, because my understanding is that they might eventually phase in? So just wondering whether the 12.5 percentage that you have mentioned is on a fully loaded basis or on a phased-in basis on IFRS 9 only, I mean. This is my first question. The second question is on RWA. You have mentioned the market risk; you have mentioned securitizations and other measures. Should we expect maybe not at the same extent, but further reduction due to the usage of capital optimization actions in the coming quarters? And the third question I have is on the shipping portfolio. You have posted less than €100 million in this quarter which is pointing to less than €450 million for ACR which is the only - shipping is the only thing that makes losses more or less there. But in the meantime, I see that the coverage ratios on containers and tankers, now actually in tankers and in bunkers have gone down. So I just wonder, on one hand you keep repeating always the same number. But in the meantime, the coverage ratios is going down. So I just struggle to understand how I should understand these 2 numbers?

Yes. Okay, let me quickly answer your IFRS 9 question. Whatever I am talking about, be it RWA, be it capital ratios, be it the IFRS 9 impact, I'm only living in the fully loaded world. So that, I think, settles that one. With respect to RWA development, the second half, we will not actively manage RWA with securitizations or other measures beyond let's say the normal run of business. There will be obviously RWA from shipping reductions from RWA. And on the other hand, we expect our RWAs to grow from above growth in corporates. We will have the new consumer loan portfolio in the balance sheet and so on. Shipping, my - our guidance for the full ACR segment and that still includes Commercial Real Estate is €450 million for the full year. And of that €400 million is our shipping expectation. The development in coverage ratios in the NPL pool is, to certain extent, impacted by transactions that we have closed in the second quarter which means that in some cases ships would better or with higher coverage ratios have left the pool, so to speak and the remainder of the ships has a better quality or the credit has a better quality. I wouldn't over interpret this part, I think you should focus on that we have lowered the overall LLP guidance for shipping in a sense at and again, exceeded the rundown target for 2017.

Okay, that - the explanation on this is extremely clear. Would you - still confident to say anything or what could happen on shipping losses in '18?

Shipping losses in '19 or in '17?

In '18, '18. Next year.

Let me without doing too much of a shipping workshop. In general we still are strong believers in the structural problems about the shipping industry has which means that there are still more ships build and delivered to the market than the market really is looking for. And that is why the general view that we need to offload this complete portfolio is totally valid. We have seen 2 or 2.5 quarters of better charter rates and values and have used that actively to reduce the portfolio quicker than originally anticipated. And in that sense, I wouldn't see any real difference between '17 and '18. It remains to be seen and in that sense '18, if anything looks a little bit better, probably, than '17, whether the balance between demand and supply comes to, let's say, a more balanced view. But again, we have also seen that these things can change pretty quickly. That's why we believe exiting the portfolio is the right thing to do.

And the last question come from Mr. Johannes Thormann from HSBC.

Johannes Thormann, HSBC. Three questions, if I may. First of all could you give a bit more flavor to your outlook for the net interest income in H2? Secondly, be more - a bit more precise on your tax rate guidance. It's slightly more than the 25% to 30%, something around 35% or just slightly some more millions which could also lead to 40%, 50% tax rate, any clues on that would be helpful. And last but not least, on your fee income, you mentioned the acquisition costs which we have seen in the previous quarters or which we should have seen booked in the previous quarters as well. What was the run rate in those quarters? Average figure or range please. And last but not least, the underlying decline in Corporate Clients and in retail or a PSBC business. What has been driving this underlying decline in Q2?

Tax of - probably is the quick one to answer. I would more work with the 35% number. On fees and commission income as I've said in the speech, we have in H2 - in H1 '17 roughly €50 million more in acquisition costs from that new customers than we had in H1 '16. So I think that gives you a good indication and incorp - and you need to keep in mind that in the commission income we're also partly seeing the somewhat slower performance of the consumer lending business from the, let's say, from the shopping mall at the joint venture with BNP, yes. And my guidance for the second half of the year, we don't normally give line item guidance so I would say we need to, let's see what happens.

Okay, ladies and gentlemen. Many thanks for your questions and the discussions. I would like to say goodbye for today and I'm looking forward to our upcoming discussions over the next days and weeks. Thank you very much.