Jose Antonio Alvarez - Chief Executive Officer Jose Garcia Cantera - Chief Financial Officer

Jose Abad - Goldman Sachs Group Inc. Mario Ropero - Fidentiis Equities S.A. Alvaro Serrano - Morgan Stanley Sofie Peterzens - JPMorgan Chase & Co. Ignacio Ulargui - Deutsche Bank Daragh Quinn - Keefe, Bruyette & Woods, Inc. Stefan Nedialkov - Citigroup Carlos Peixoto - Bank of the Philippine Islands Marta Sánchez Romero - Bank of America Merrill Lynch Andrea Filtri - Mediobanca Carlos Cobo - Haitong Securities Britta Schmidt - Autonomous Research LLP Andrea Unzueta - Credit Suisse Adrian Cighi - Royal Bank of Canada Ignacio Cerezo - UBS

Good morning, everyone. Thanks for joining to this Santander Group Q3 2016 Earnings Conference Call. It’s a pleasure to be here again today with you. Well, the structure of this call will be exactly the same as the previous ones. Our group CEO, Mr. Alvarez, will address the group performance for this nine month 2016 period, followed by our group Chief Financial Officer, Mr. Garcia Cantera, who will address the different business areas evolution for the nine months period as well, and the CEO will take the stage for the concluding remarks. Obviously, we’ll have plenty of time for your Q&A, as always through a live session. Therefore, without any other issue, I’ll hand the floor to our CEO. Thank you.

So good morning to everyone. Thank you for attending this third quarter result presentation. Well, we updated you barely one month ago, about how the business is evolving. We are developing the business in a very challenging environment as you know for the retail banking, with very volatile capital markets, intensified after the Brexit. In this environment, emerging markets are doing significantly better than mature markets. In those markets we are seeing a stronger growth, mainly high interest rates that allow us to generate a better revenue stream or growing revenue stream that is much more difficult to get in what we so call mature markets. Going towards into the results of the quarter, in the quarter we got €1.695 billion net profit. That I will qualify as a good performance in the quarter. Probably, this has been one of the best quarters in several years. Within that in the nine months we generated €4.6 billion attributable-profit that is a 22.5% drop compared with the previous year. You need to take into account the one-off positives last year coming from Brazil and negatives this year coming from restructuring charge, plus VISA that we’ll elaborate later on. If we look at the underlying profit it’s close to €5 billion or €4.975 billion. That on a like-for-like basis currency neutral, it’s a growth of 8.4% that I will qualify as a good performance. Well, we are developing the business, as I mentioned before in two different environments. One environment that is difficult - is relatively difficult to grow commercial revenues in mature markets. While in the emerging markets it’s possible to do that. As a result of this combination, we have a growth in net interest income of 2.2%. And we are doing, I will say, pretty well on the fee income where we are growing 8%. And the growth has accelerated this quarter comparing with the previous one, so very good developments in this regard. When it comes to the quality of the balance sheet, we are living in a relatively benign credit cycle, where the quality keeps improving quarter after quarter. And the cost of credit is in line with our expectations. So I don’t expect any change in the coming quarters in relation with this. Probably, the only thing to mention is that this includes naturally Brazil, where the environment was tough in this regard. But we were able to manage inside our expectations to keep the cost of credit between 4.5% and 5%. That was our estimation last year and we are within this range. Finally, on capital, we kept a good track record on building capital. Remember that we are in an exercise that we were commenting with you in the update we had last month, in which we are growing the business, increasing the capital ratio and increasing dividends at the same time. And we are doing this exercise for - I don’t know - two years in a row, that, well, - and we are confident that we can keep going in this regard. The underlying return on tangible equities is north of 11% and this is one of the best in the industry, at least in Europe as you know. Going into - let me go into the business, what is behind these numbers? Behind these numbers we have some growth both in loans and deposits, not significantly different than the one we showed you in the previous quarter, 3%, and 5% loans and deposits, and deposits and funds Now, deposits includes mutual funds. Previous quarter was pretty much the same, a little bit less in funds. But we keep on track growing the business in this line. Our proposition, our commercial transformation is very well on track. I’m particularly proud of this. The loyalty we are building loyalty in our customers, growing in double-digits, both in individual and in companies. And digitalization is progressing very fast. Yes, you see the numbers there, where mobile is growing north of 50%. This probably likely is going to continue in the coming quarters. Pretty [ph] to remember, for the sake of the clarity in the presentation, the one-off we had in the previous quarter in order to do a like-for-like comparison. In the previous quarter, as you remember probably, we had one-off items of €368 million coming from a restructuring charge of €475 million. The VISA gain plus the contribution to the Resolution fund. That was anticipation. You’ll see the opposite in the fourth quarter, once we - because previous year it was in the fourth quarter. Accommodating this into the numbers, we have this quarter pretty consistent numbers quarter after quarter. We are in the region between €1.6 billion to €1.7 billion a quarter, with some growth quarter-on-quarter. And you will see the nine month, you have the numbers at the bottom I already mentioned before. When it comes - sorry, when it comes to the P&L, you have numbers that we’ll provide to you every quarter. You have the nine-month numbers, both in euros and on currency-neutral basis. Let me refer to talk about how the things are going to the currency-neutral, in which the underlying profit is growing at 8.4% as I mentioned before. Well, this is the result of pretty relatively strong, given the times commercial revenues, with operating expenses well in control. So as you know, we launched several initiatives in order to keep the costs well below inflation. I will refer later on to this. The credit cycle I referred before, is relatively benign. You see a pretty large number on provisions, but it comes mainly from two units, the Brazil and the consumer business in the U.S., the subprime consumer business in the U.S. Aside from this, the number is relatively low corresponding to the credit cycle I mentioned before. So at the bottom, we are growing on a like-for-like basis currency-neutral close to 10% the business, the profit in 2016 compared with 2015. Elaborating a little bit on the different items of the P&L, on income we are seeing pretty consistent net interest income growth. This is mainly based in emerging markets. Emerging markets that, as I mentioned before we are progressing pretty well on volumes, but Brazil. Brazil, the [great volumes are not] [ph] growing, in fact the volume of loans is falling. But the majority of our markets are growing pretty consistent. And in mature markets that are fairly resilient. Yes, so we are in a situation in which we are - volumes are relatively flat, but at the same time we’ve been able to match the commercial margins in a pretty consistent way to keep the net interest income growing. On the fee income, I already mentioned before. We continue to see signs of our strategy of loyalty that is producing a consistent stream of fee income that is growing and is still accelerating. On the capital gains, it’s a much more volatile item that this quarter came a little bit weaker than the previous one. But, well, this is, quarter-on-quarter, this is relatively low and the weight is relatively low on total revenues. So given our diversification, we are producing a fairly consistent stream of commercial revenues that are fairly recurring. And that we think that we continue to deliver in this way in the coming quarters. On the cost, you know that our target here is to grow the costs lower than inflation on a like-for-like basis. Well, we think this range with minus 1% excluding inflation on perimeter, so it’s - probably is the best development in several quarters. As you know, we produce some restructuring process in different geographies. As a result of this, we have countries in which costs are well below inflation like Brazil minus 4%, Portugal minus 3%, Spain, minus 3%, UK basically flat. So we are without the costs well in control. But I am particularly proud of the right side of the slide. So it’s not only about cost. It’s cost to income. Cost to income is flattish, 47.8%. We still have a significant advantage compared with our peers in this regard. But the right side is we are doing that, increasing customer satisfaction. And there customer satisfaction has a lot to do with the processes we have, the products we offer and our digitalization. At the end, the digitalization has an angle, an important angle of improvement of the quality of the service and the customer satisfaction. So we had been able to reach what we call operational excellence, in which we are developing, we are able to increase the customer satisfaction, at the same time keeping our advantage in cost to income. Loan-loss provisions, I was referring before. So while lower provisions, generally speaking, in all the mature markets, but SC USA [ph] that is a different business. And in Brazil, that was probably the market that was or at least some of you have some more doubts, our cost of credit remaining below 5%. It’s true that this quarter we increased the provisions in Brazil, but it was kind of one-off more than any change of trends that we are not seeing in the country. We continue to see a better-than-expected behavior on the retail side and we continue to suffer relatively high provisions, compared with expected losses across the cycle in the corporate world. In SC USA, we have higher provisions due to the portfolio is bigger than it was in the previous quarter. When you go to the right side, you see the NPL, coverage ratio, cost of credit going in the right direction. NPL is going down year-on-year, quarter-on-quarter. And we’d be in a position to continue to have these trends in the coming quarters. There is no reason to think that this is going to change. For capital, remember - let me to share with you our principles took for our active capital management. We are targeting the loan growth to be significantly higher than the risk-weighted asset growth. And the profit growth, for sure, growing faster than the risk-weighted assets. We achieved those goals. And our return on risk-weighted assets grew, as a result of this 7 basis points in the nine months. That is a very good achievement. In terms of capital, we generate in the quarter [a 16 basis points of ordinary] [ph] generation was better than our guidance of 10 basis points per quarter, but this has some volatility. This quarter was weaker on the growth on risk-weighted assets, but this is not something that we are going to translate in the future. Very likely in the fourth quarter we’re going to have risk-weighted assets growing. That was not the case in this quarter. But we continue to think that we are going to be able to generate on average 10 basis points of capital per quarter. And keep growing till our - to our target of reaching 11% - more than 11% core equity Tier 1 by 2018. So finally, let me to share with you all the metrics in relation with - we have some targets in relation with shareholders. The return on risk-weighted assets I already mentioned. The return on tangible equity, the underlying is 11.2%. EPS is growing. And tangible net asset value per share is growing. Although you know we have volatility here coming from the movement of the currencies. This quarter, the pound went on one way; the Brazilian real went the other way. And as a result, but at the end we got a significant increase in tangible net asset value per share. That as you know is one of the metrics we follow very closely. And I hand over to Jose. That he’s going to elaborate on the different business areas. And at the end I will make some final remarks.

Good morning, everyone. I will now go into a bit more detail on the major units of the group. 50% of our net income came in the first nine months from Europe, 44% from the Americas. When looking at developed and developing economies, 54% of net income came from developing economies, including Santander consumer in this category; because although it is a business that takes place in Europe, it enjoys high margins comparable to what we can find in developed economies. So this diversification and this split between Europe, Latin America - Americas, emerging developing is what helps explain the business dynamics that we are going to see now. The strategy to deepen customer relationships and to gain new customers in Spain is helping us grow customers at double-digit rates, improve the quality of service, we are now a top-three in customer satisfaction in Spain. And also, we are capturing more transactional business from our customers. Fee income in the retail segment is growing 9% year-on-year. In terms of profits, net income was flat year-on-year, €885 million. Net interest income was under pressure in the quarter, basically due to the combination of lower margins, mainly driven by the re-pricing of mortgages, lower ALCO portfolios, and a better - lower volumes in credits. This was however partially compensated, as I said, by better fee income. We are starting to see the benefits of our efficiency plan in the evolution of costs. And also, loan-loss provisions are down year-on-year quite significantly. And these factors help offset the evolution of net interest income, as I said. If we looked at the net income of our business in Spain including the discontinued real estate business and Santander consumer Spain, net income would be up 13%. So the entire Spanish business is growing 13% year-on-year. Lending is growing at very good rates. New mortgage production is up 25% for instance. New consumer loans are up over 100% year-on-year. However, this has not been seen in the evolution of loans that you see is down 3%, due to the fact that the mortgage portfolio continues to amortize faster than new production. And we also have some negative evolution in large corporates in Spain. On the deposit side, our strategy is helping us gain demand deposits. And also mutual funds are performing very well, growing at 11%. The NPL ratio is down 79 basis points over September of last year and the cost of credit down 30 basis points to 41 basis points at the end of September. So, in short, very good results, we are feeling the pressure of very low rates on net interest income. But we are able to more than compensate through the management of the other P&L variables. In the UK, we continue to make progress in reaching our strategic targets. We are growing loyal and digital customers over 20% year-on-year and we are gaining market share in SMEs and medium-size companies. Profits in the first-half, pre-tax profits in the first-half were flat. After the increase in the tax rate, the 8% tax surcharge, our attributable-profit was down 11%. Net interest income flat year-on-year, in the first nine months, basically, offsetting - the lower SVR volumes are offsetting better prices and better volumes. Fee income also doing very well, growing 3%, despite the pressure on credit cards, due to lower inter-change fees. Flat costs. Through the efficiency plans we are able to compensate the added costs of the banking reform. And although provisions are higher, we are talking about a very low cost of credit of just 5 basis points in the quarter. P&L dynamics are positive, as you can see loan growth 2%, deposit growth 6%. The loan growth is mostly driven by our market share gains in the company’s business. Net interest margin, slightly down, as we had anticipated. All in all, we think there are very robust results in the UK. We haven’t yet seen any impact on our business from the British referendum, where it’s too early to tell. We need to wait and see what the evolution of the economy will be in the next few quarters. In Brazil, we had a very strong quarter, driven by a very active commercial strategy. We have new products that are doing very well like ContaSuper or GetNet. We are improving the quality of service to our clients. Right now, 4.4 million customers have biometric - are identified through biometric measurements, and we were chosen as the best place to work in Brazil. Profits growing 12% before taxes, year-on-year, with net interest income growing at 3.5% quarter-on-quarter, which is a very good number, again mostly driven by better volumes and better prices, which we will see in a minute, and fee income growing 15%. Inflation, as our CEO mentioned, growing well below inflation. There is a slight impact in the quarter from the new wage agreement that we reached with the unions, which for the first time in Brazil will be for the next two years. There’s a slight impact on that. But still the cost management in Brazil is very, very good. And provisions are up quarter-on-quarter, due to the coverage of a single name. Excluding that, provisions would have been completely at the levels we had have expected. Loan growth is down, in this case affected in a substantial extent due to the appreciation of the real against the dollar. Remember, 13% of our balance sheet in Brazil is denominated in dollars, so obviously currency fluctuations affect the year-on-year loan growth, but quarter-on-quarter we had positive growth in Brazil. So we think that in terms of loan demand and loan growth, probably, the worst is behind us. Deposits are also doing very well and funds are performing very well, as a result of all these new customers that we are gaining through our strategy. Spreads are up in all sectors, in all segments. The slight change quarter-on-quarter, it has to do with the change in business mix. As I said, cost of credit went up from 4.7% in the previous quarter to 4.9%, due to this single case. Excluding this case, the cost of credit would have been 4.7%. So we are within the 5% range and below the 5% target that we mentioned in our strategic update a month ago. So overall, we think that the dynamics in Brazil are very positive, and we think that we are positively positioned in the country as the economy recovers and normalizes going forward. Santander Consumer, as I said is a business that is benefiting from low rates in Europe. It enjoys relatively high margins. And obviously with the very low cost of credit that it has at the moment, which is 49 basis points, it’s showing very good numbers. It also shows the integration of PSA, which will finish at the end of this year. But even excluding PSA, the underlying trends in the business are very, very good, driven by the new car sales in Europe, which are up, until the end of September 7% year-on-year. The joint venture with PSA, as I said will be completed at year end and has produced the results that we expected. Net income growing 21% year-on-year, pre-tax profits are 26%. So overall, this is a good business. We are leaders in this business in Europe. And again, we think that it will continue to produce good results as the economy in Europe continues to improve going forward. In the United States, we have created intermediate holding company. So we are now operating under a single structure. And here the strategic focus is to gradually revitalize the bank commercially. We are seeing the signs that that is actually taking place. For instance, deposits are up 4% year-on-year and that’s the result of more clients that we are adding to our base. As you can see, digital customers and loyal customers are growing at very healthy rates. And also obviously, we continued to make progress in meeting the regulatory requirements that we’ve been asked in the U.S. When looking at the P&L, net interest income is still affected by the low-levels of interest rates. And also we are seeing a little bit less fee income because of lower servicing fees in SC USA, due to higher retained volumes which are also affecting provisions, which are up. And also, the higher provisions is explained, like we mentioned in the previous quarter, due to higher provisions in oil and gas. So, overall, we think that we are meeting our expectations in the US. Mexico is doing very well, growing at double-digits throughout the P&L. We have a very active bank. We are focus on digitalization, opening different ways of having relationship with the clients and consolidating the franchise in the most profitable segment, basically select SMEs and companies. Some of the new products that we’ve launched this year are the most successful in the market by far. So Santander Plus, for instance has already 700 registered customers. And the agreement - the critical agreement with Aeromexico has attracted 300,000 new customers. So overall, the commercial dynamics that are taking place in Mexico are very positive and these are seen in the P&L that as I mentioned is growing at double-digits all throughout. In Chile, the focus is also on segments of high value-added, basically companies, high-income individuals and demand deposits to lower the cost of funding. We are also improving the quality of service. For the last few months, several months in the last year, we have been perceived as the best bank in client satisfaction in Chile, so we’re clearly improving. The third-quarter profit was affected by higher taxes, due to lower inflation, so we had to adjust the tax rate a little bit. But overall, when you look at the nine months relative to nine months of last year, we see positive dynamics, driven by very good evolution of asset quality. In Poland, we have the most digitally advanced bank in Poland and is perceived to be the most innovative. We are growing the number of digital customers and loyal customers at very high levels, double-digits and also gaining market share in loans and deposits. Total funds are increased 11% year-on-year and demand deposits 20%, while loans are growing 11% year-on-year. Third-quarter profit was €69 million for the first nine months. Net income was €200 million. This is obviously affected by the asset tax. Excluding that, profits would be up 8% year-on-year in Poland. In Portugal, we have the most robust bank in the country. And this is helping us gain market share. We’re gaining market share in clients. We’re gaining market share in assets, market share in deposits. Overall, I think the commercial dynamics and the underlying dynamics in Portugal are very, very good. Probably, you cannot see those in the P&L, because obviously this is including Banif, the integration of Banif, which is progressing as we expected. But even excluding Banif, the underlying trends as I said in Portugal are very, very good. Profits are growing 67% year-on-year. In Argentina, Argentina is one of the countries in the world with the lowest banking penetration. Loans to GDP is around 13%. So we think that a period of stability, that we are - in which we are entering right now, will produce substantial credit demand in the country. We are preparing for that. We are transforming our branch network. We’re opening new branches. We are adding new products to our product suite to be prepared again to capture and to benefit from that growth. The first nine months of the year have been very positive in terms of results with very good dynamics in the P&L, in all items of the P&L. Our competitive position will improve even further after the acquisition of Citi’s retail business, which will add 500,000 clients and 70 branches. Just to finalize with two small countries in Latin America, Uruguay and Peru, both growing 25%, 26%. And again, in these countries, the presence of Santander is clearly being felt more and more. Finally, turning to the corporate center, corporate center now represents 23% of group profits. We are in line to meet the target of 15% or less that we set for 2018. This quarter in particular, profits - the costs associated with the corporate center improved relative to previous quarters, and nine months relative to the previous nine months; very good results, a very good performance in terms of costs. This is the result of the efficiency plan that we launched and we talked about in the previous quarter. The level of provisions and other items is a more normalized level, relative to high levels that we had last year. And revenues are affected by the cost of our currency hedging strategies. Particularly, in the quarter and in the first nine months in the UK and in Mexico, both currencies suffered significant depreciations against the euro. And with this, I will turn it back to Jose Antonio for his closing remarks. Thank you.

Thank you, Jose. Let me to make some comments to check where are we in relation with our targets, yes. What you have in this slide is a review of our main targets. We are progressing very well on our commercial transformation strategy. We are growing, as I said before nicely in loyal customer, digital customers. And the best we can show this clearly in the fee income, that is progressing, as I said before, very well. Well, let me to mention that this progression is very well spread across the board. It’s not happening in one country or in two countries. It’s very well spread across the board. When you review the numbers in detail that we provide to you this is progressing all across the board. On the cost of credit, I already mentioned that are, [we think] [ph] our targets. The cost to income, we are growing less the costs less than inflation. That was our target. And this has - the cost-to-income is relatively flat in a relatively difficult environment to generate revenues. EPS, we are progressing with our targets. Cash dividend per share, we are there. And the tangible net asset value are the same, we are growing, at the same time. We continue to invest in digitalization, yes, so branches, ATMs, product offering, in order to provide better service and better customer experience; and at the same time keeping, as I mentioned before, one of the best efficiency ratios in the industry. Jose elaborated about the corporate center, where as you know our target was to have a leaner corporate center than we already have. And this is starting to reflect in the P&L of the corporate center. Last but not least, our balance sheet is pretty strong, so a strong balance sheet. The risk culture around capital management is now very well embedded in all the activities of the company. And with the generation of the third quarter, we are very well on track to meet our targets also in core equity Tier 1. So as a summary, we are very well on track to meet our targets and to being able to grow the business, to grow the capital base and to increase the dividends as we were committed to you. Thank you. And now, we are at your disposal to answer the questions you may have.

Thank you. Ladies and gentlemen, the Q&A session starts now. [Operator Instructions] We have a question from Jose Abad from Goldman Sachs. Please go ahead.

Yes, hello, good morning. Thank you very much for the presentation. Three questions from my side. First question is on SREP, capital requirements. On the back of the good results that you got in the last EBA stress test, back in July, what are your expectations for SREP next year? I mentioned this, because at least one domestic bank has been suggesting that the SREP for them might come lower next year. So I don’t know whether this is also the case for you. And second question is on CCAR. So do you have any visibility on the fed’s plans for actually excluding banks with less than €200 billion - €250 billion in assets from the qualitative leg of the stress test? I know that your chairwoman announced during the Investor Day, that you would no longer be subject to the qualitative test. But I don’t know whether this is actually fully confirmed, so any update on this would be appreciated. And the third question is on NII. In Spain obviously this came much weaker than we expected, so could you give us a bit of guidance going forward? Thank you very much.

Okay. Let me do the first question of our expectations for SREP for next year. Yes, so, well, probably it’s too early. We are still waiting for the SREP, the final communication of the SREP that comes probably by December this year. But based on our interaction with the joint supervisory team, we think that we are currently in a position to have a comfortable capital position vis-à-vis with our SREP expectations. And the expectations are based naturally in our discussions on our interaction with the joint supervisory team, where we qualify as one of the banks with lower risk. You mentioned this, based on the stress test, as you know, the way they establish the minimum capital is changing. But given our good results in the stress test, this is going to have, and is having, an important impact, or is going to have an important impact, in the requirement of capital in SREP, as long as we qualify or we did better in the stress test than our peers. And thanks to our diversification, we think that we continue to do better than our peers. We are, let’s say, constructive in relation with the SREP. But I don’t have a specific number to give to you on the potential requirements next year in SREP. The CCAR, you mentioned CCAR. What we know, I cannot fully confirm. What we know is what has been made public. There is a proposal going on, in which below, if I remember well, $250 billion assets the banks eventually may not be subject of qualitative CCAR, is what we know. It was announced by a relevant member of the fed as a proposal and we are expecting this to become fully confirmed. NII in Spain, well, Jose already elaborated on this, let me to show you the two different angles of this. One is the quarterly percent and the other is how do we see the NII in Spain going forward. In relation with the quarter, NII fell 35%, due to the lower ALCO portfolio, with less duration. And Jose may elaborate on this later on, if you wish. Another 30% or 35% comes from the re-pricing of the mortgage book to the Euribor. This is a project that will end approximately, if the Euribor remains as it is around March next year, and finally, like 20%, 25% due to lower volumes. So those are the three impacts in the quarter. Going forward and you refer to going forward if we can guide you on the NII in Spain, what we are seeing is a more positive environment for the margins in the front-book. Where the new production is coming tagil [ph] that is very much in line, that last month, with what it was last year. So this is good news compared with the margin pressure we were suffering before. Volumes, while still difficult to grow volumes, we are in some segments been able to grow a little bit, in some others still suffering. So volumes, probably we may see some growth next year, but it’s too early to say. On the re-pricing of the book, as I mentioned before, is going to be negative in the coming quarters at least till March. Other things equal. I am betting on the Euribor remaining as it is. Well, in relation with the ALCO portfolio, this is naturally depends on our hedging policies. Jose, do you want to…?

Yes, just to complete, the ALCO portfolio was around €2 billion less in the quarter than the previous quarter. The average yield is around 1.3% and the duration is 3.6 years. So with that you have an idea of the result of net interest income that came from the ALCO portfolio that was in the quarter slightly more than 10%, while in previous quarters we had something like 14% of total margin coming from the ALCO portfolio.

Question, please.

We have a question from Mario Ropero, Fidentiis. Please go ahead.

Hello, good morning. A couple of questions again on the NII in Spain, the first one is on the 123 strategy. If you could comment, if you are already achieving breakeven, considering the pickup in fees, or if not, when are you expecting this breakeven? And also, the second question is whether you started to account for the TLTRO II cost savings in NII; and if not, please, if you could comment on the main metrics, the size of TLTRO II funds and on potential impact going forward. Thank you.

So in relation with the 123 strategy, we are very happy with how the strategy is working. We show the numbers - I show the numbers for the entire group. But if you look at the numbers in Spain, the growth in loyal customers is faster than the average of the group. This has naturally two effects in the P&L. One, as you know is, we are paying more for those deposits. Well, the average deposit of the 123 naturally, is much higher than the €1,500, so is not - the cost is not too high. And mainly with our fees in retail banking in Spain are growing at 8%, and very much in line with the group as a whole, but retail Spain is growing at 8%. That is the outcome of our strategy of the 123. So overall, we are progressing well in our strategy, and it’s producing is very much in line with our expectations, when we launched this strategy one did - I think it was 15 months ago, or 16 months ago. The second question, I think, was related with if we are doing the accrual of the negative interest rates of the TLTRO, we are not accounting for this, yes. So well, we may account in the future, once we have more visibility on if we are able to reach the requirements to get this minus 0.4%. But according to your question, we are not accruing anything in any unit, so not in Spain, not in the consumer finance in Europe.

Thanks, Mario. Next question, please.

We have Alvaro Serrano from Morgan Stanley. Please go ahead.

Hi, thanks for taking my questions, two quick questions from me. In Spain, on loan growth, obviously, it was down 3% quarter on quarter, and overall the system [ph] data in the other two banks that we’ve seen have reported so far, just still volumes look pretty weak. You’ve given some color, but specifically in corporate, can you give us a bit more detail on when you think the loan growth will happen, and to what extent disintermediation is an issue, or is the elections. And just a bit of color of what part of the portfolio is large corporates unaffected by disintermediation, so a bit more color on that? And the second question is on Brazil. Obviously, provisions were up in the quarter, you’ve explained it’s a single name. But in general, if we look over the next few quarters, when do you - NPLs ticked up, can you update us when you think NPLs will peak? And what’s your visibility on the provision charge for 2017, if you can give a bit more guidance there? Thank you.

Okay. So loan growth in Spain, more detail, well, the loan growth decrease, we discussed in this case. What we have, you need to take into account that in this - what is falling the most is two items, one is the doubtful loans that are falling quite rapidly, and this produce a negative, this is good news. And the second one is institutional lending is falling in a significant way due to the policy of the Spanish [treasury in funding, green,] [ph] some things like that. Those are the items that are falling the most. It’s true that the more we go on the less the impact of those, so probably next year we would be in a position to grow a little bit. We are growing in SMEs, we are still down in mortgages, and we are basically flat in the other lending to corporates. So I would be a little bit more constructive going forward than the actual numbers. Well, you mentioned disintermediation. I don’t think disintermediation is an issue at this point. So well, it’s a limited number of companies that naturally has an effect, but there is a limited number of companies that can dump pent up capital markets, even in a very good environment like in the one we are seeing right now. In Brazil, you mentioned provisions this quarter. As Jose, and I think, I also mentioned, that the provisions went up by - and the specific case. Overall, credit quality in Brazil, we expect the cost of credit to slightly to go - slightly little by little going down. We continue to see very good trends in retail, as we’ve been commenting with you in the previous quarters. We continue to have a significant cost of raising midsize corporates, where we expect this to ease in the coming quarters. So going from the high 4% to low 4% is what we expect going forward in the next couple of quarters, not very much beyond that, below that, because well, assuming that we can keep the same mix, yes, we still have portfolios with relatively high cost of risk. But probably, when you refer to ratios, and you refer to NPL ratio, one thing that you should take into account is the loan book. The loan, probably, at some point, I am more constructive there, and I just think that we are close to a turning point maybe we start to see some growth in the loan book in Brazil in the coming quarters, in these specific areas. We are growing very well in payroll-based lending, we are growing in - we started to grow in September in consumer lending, so we are seeing already some signs that the turning point may be closer than we thought before.

Thank you, Alvaro. Next question, please.

We have Sofie Peterzens from JPMorgan. Please go ahead.

Yes. Hi, here is Sofie Peterzens from JPMorgan. I also have three questions. First of all, there was a paper out from the ECB a month ago or so, on regards to NPLs on foreclosed assets in Europe. Do you expect this to have any impact on your recovery levels, both in Spain and other European countries? And also how should we think about cost of risk in 2018, given that IFRS takes effect? And second follow-up, I was wondering if you did remind us of your sensitivity to the SELIC rate in Brazil, and if that goes down, how much NII improvement we should expect? And my final question is how you view your U.S. operation. Does Santander consider both Santander Bank and Santander Consumer USA strategic? Thank you.

Well, ECB coverage leverage, yes, well, I don’t have in my radar screen any particular impact from - our coverage leverage tend to be relatively high, or high compared with our competitors. I do not see any particular impact coming from this ECB paper, yes. So Brazil sensitivity, well, you have the numbers probably there.

But I have to look for that [indiscernible] so it’s around €100 million for each 100 basis point parallel drop in the interest rate curve.

But is positive in this case.

Positive.

As you know, this is due to the fact that the deposits in Brazil, the reserve requirements are so high that when the interest rate is up it produces this outcome. The final one, the strategy in U.S., there is no changes. We updated you in our Investor Day. Our strategy continues to do the same, to fix the regulatory problems we have in the bank, and at the same time to improve the operations in the ground. Those are the plan in the bank. And in SC USA, well, we are working mainly on the compliance side of the business that we are improving, and we are going to be improving in the next couple of quarters. Financially, business is working well, and we don’t have any particular concern in relation with the developments that are happening in SC USA in the consumer business in the U.S.

Thanks, Sofie. Next question, please.

We have Ignacio Ulargui from Deutsche Bank. Please go ahead.

Hi, good morning, gentlemen. I have just two questions on your side. One hand, how do you see the competitive landscape in Mexico? We have seen the Citigroup rebranding dynamics; do you see completion on the asset side accelerating then? And the second one, it’s on the risk-adjusted NIM that you see for Santander American Consumer Finance. How should we look at this going forward? Do you think is just scope to improve through the provisioning side, or I mean the 49 basis points that you have at this stage is like should be seen as a bottom? Thanks.

Okay. The first question regarding competitive landscape in Mexico, well, in Mexico we are gaining market share consistently. The bonds are very good. You see the market is growing very well. We are growing faster than the market on average, so we’re gaining market share overall. It’s true that some of our competitors are doing significant investments there, as we are doing. So you see our cost base in Mexico, our cost base in Mexico is growing in high-single-digit, around double-digits, and probably in the next couple of years, we’ll continue to see these kinds of numbers, because we are investing there. So we have - I was commenting before we started this presentation that we have a good problem in Mexico that is to accommodate our operational capabilities to the commercial needs, we are having, because we are growing very fast in customers. Very fast, we are capturing significant number of new payrolls. So I am optimistic in Mexico to have a business in the next two or three years, let’s say, growing, being able to grow the revenues well in double-digits. And at the same time, having a cost base growing in the region of high-single-digit, probably, is what, is my best estimate at this stage with a macro scenario in line with the consensus. Naturally, this environment is very good for a banking business, and is not strange that some of our competitors want to improve their positions, because some of them were losing significant market share, as you know. In relation with the NIM, where is it?

Santander Consumer.

Santander Consumer NIM net of cost of risk, I mentioned a couple of times that relatively benign credit environment in Europe, and this is reflected in our cost of risk in Santander Consumer that is now well below expected across the cycle. Having said that, we are in an environment in which the margins, when we adjust margins supposed to have higher rates and higher cost of risk, this generally will mean higher margins and adjusted of the cost of risk probably will - [if you find out,] [ph] the cycle we’ve always been able to being 1.8%, 2% return on risk-weighted assets with higher cost of risk and lower cost of risk with higher NIM, or lower NIM. So what I am telling you is, I do think that we have some capacity to increase prices, naturally, if interest rates go up, but if the credit cycle deteriorates. There is plenty of new players here, particularly marketing with this search for deals. So the case of Germany is clear, we are seeing new competitors coming into the consumer finance with pretty aggressive offers, trying to look for deals. And this is producing some margin compression. When the rate goes up, probably, those competitors that are non-natural competitors in this business will not be as much as aggressive as they are today.

Thanks for questions, Ignacio. Next question, please.

Thank you. We have Daragh Quinn from KBW. Please go ahead.

Hi, it’s Daragh from KBW. Just a final follow-up question on the Spanish NIM, and specifically on the yield on the loan book, just to understand your comments and your outlooks for next year, excluding that tail-end Euribor effect, do you expect to be able to maintain the loan yield, where it is today? Or do you think there could be further competitive pressures pulling that down into 2017? And then, a second question on the UK, just any update on what you’re seeing in terms of new business flows. And in particular, the growth you currently have in the corporate loan book, so how much of a slowdown do you expect in that book into 2017? Thanks.

Okay, I already elaborated about the NIM. Let me to focus in the front book that you are referring to. In the front book, we are seeing the new production is coming at the deal of around 2.7%. That is very much in line with what we had in September 2015. So the front book is quite supportive, at this point of time, in relation with NII, but the negative factors will remain that is mainly the repricing of the mortgage book. So going forward, I’m more constructive on our capacity to keep the spreads on the new production, while on the repricing, as I mentioned before, depends on Euribor. And the ALCO portfolio, well, this is more depending on our hedging policies. But in relation with the front book, we think that with the current mix, we will now be able to keep as it is more or less today.

UK?

In relation with the UK with the NIM, well, we have a - we shared with you, in previous quarters, that we had the SVR as a main negative. The SVR addition is going to stay there. And as a positive, as you know, we changed the terms of 123 proposition in the UK, starting November 1. So very likely, next quarter our NIM is going to go up by around high-single-digit, double-digit in basis points, so the 175 or 675 may go to the 185 next quarter. And afterwards, we have the appreciation coming from the SVR. So overall, we’re going to have a couple of quarters in which our NIM is going to go up as a result of the new terms of the 123. On the other items, aside from the 123 mortgages, the spreads remain basically flat. We are seeing significant competition on the mid-corporates, I think the SME lending that the margins are now behaving - there is some margin compression there.

Thanks, Daragh. Next question, please.

We have Stefan Nedialkov from Citigroup. Please go ahead.

Hi, guys, good morning, Stefan from Citi. Very good cost control in a number of countries, especially, to me, UK, Brazil, somewhat the U.S. Could you give us some more color on what’s driving this really good cost control, especially in Brazil? I think you mentioned a sentence or so on the UK. And going forward, should we be looking at this as a new level of quarterly costs, or are some of these countries more of a one-off improvement? Thank you.

We have a policy, and I said, which are the principles of this policy in the relation with the margin costs. In the quarter, you mentioned specifically Brazil and UK. But I would say, overall on costs that we expect the mature markets to be around zero or negative cost growth, in some markets negative, and this includes UK, Spain, Portugal and U.S. that is going to go from very high cost growth to a much more limited cost growth, if any. And in emerging markets, it’s a little bit more complex to give you an answer. So you mentioned Brazil. In Brazil, in the fourth quarter we have signed the agreement with the unions, as you know, terms of the agreement.

Yes, as I said, we’ve reached a two year agreement is 8% of first year with a one-off payment of R$3,500 per employee, and the second year is inflation plus 1%. In the quarter, this agreement meant a one-off charge, and a cost adjustment of around €10 million in the quarter. So the efficiency plans are even better of what the numbers seem to be showing.

Going forward, having said that, this is something we signed. We think that we’ll be able in Brazil to grow the costs in line with inflation, or less, taking into account that we are expanding our capacity in the country, yes, having efficiency gains in some sites, but expanding at the same time our distribution capabilities in the country.

Thanks for the question, Stefan. Next one, please.

Thank you. We have Carlos Peixoto from BPI. Please go ahead.

Hi, good morning. So it’s Carlos Peixoto from BPI. My first question would actually be on the corporate center. The corporate center NII was negative, or more negative than in the second quarter, at the time, well, with lower interest rates, lower - overall lower funding costs. I was wondering what are the reasons behind this, and if you could shed some light on how this - what are the main drivers for NII at the corporate center? And then, moving to the U.S., in the presentation you mentioned that one of the reasons behind the increase in loan loss provisions in the U.S. had to do with the higher retained balances at Santander Consumer Finance USA. My question here is whether this is a trend to stay, or specific for this quarter. Or putting it in another way, what are your expectations on cost of risk in the U.S. going forward? Thank you.

Okay, in the corporate center, the NII, more negative NII, this is - and I may - Jose may elaborate further on this, mainly due to the hedging costs, yes, when we hedge our expected profits are followed this may increase or decrease depending on the hedging policy is the main reason I think, yes?

Exactly, that’s what I mentioned. I mean, in the quarter, cost of financing was similar to the previous quarter. But we had the depreciation of the pound, of the sterling, which hit us specifically in the quarter. And also the peso, the Mexican peso, as you know, following the developments in the U.S., was hit hard in the quarter. So these two specific currencies are the ones that affected the hedging strategies in the quarter.

Aside from that, the funding costs are falling, yes. So the U.S., question about SC USA, higher balances, if this is here to stay? We think so, yes. So we have - as you know, dealing probably our - we have like two business lines there, one business line is related with the core traditional subprime lending that probably stays flat, quite flattish, and the other is Chrysler-related business that probably, my expectation, is to go up, naturally, it depends. On the trends in the car market in U.S., and also, on the securitization policy, how much do we sell to the market or not. But the relations, probably, the quarter was relatively low compared with our expectations. The cost of risk - I don’t know if you refer to the cost of risk in SC USA or the bank. In the Bank, there is no news. The cost of risk is very low, even we have some releasing provisions that we made for oil and gas in the previous quarters. We release some of them, that some of them still remain there. But the cost of risk in SC USA naturally depends a lot on what we book. So we have, let’s say, the subprime traditional business, where the cost of risk has been relatively stable, and from Chrysler, we have naturally, subprime, near-prime, and prime, and depends on what we book. Traditionally, we sell the prime estates, the prime loans, and we keep in the balance sheet some near-prime loans. These produce some certain volatility quarter on quarter, depending on the book in this particular quarter and the amount of loans we sold to the market in securitizations, or selling directly the loans to third parties. So but overall, the question is because there has been noise in relation with the cost of risk in the car finance industry in the U.S., we are not seeing, at this point of time, any sign of a deterioration in this business.

Thanks, Carlos. Next one?

Our next question is from Marta Sánchez Romero from Bank of America Merrill Lynch. Please go ahead. Marta Sánchez Romero: Hello, thank you for taking my questions. The first one is on the UK. You’ve guided for a flattish net interest margin in 2017, but I was wondering how do you see 2018? And here, if you could elaborate on your hedging strategy, that would be very helpful, and also, your expectations for interest rates in the UK. The second question also on the UK, we’ve seen some PPI top-ups in the quarter, how much do you think we - there are still to come before year end and 2017? I’m sorry, there’s a third question on SC USA. I’m trying to understand the dynamics, going forward. And there is - I know there’s a lot of volatility around quarters, but I think, I’m calculating an increase in gross entries on the NPL side. How do you see that, going forward? Is this just a one-off for the quarter, or do you see NPL deterioration going up? And also on margins, we see - we saw a decrease in the quarter. Do you expect stabilization? Are you shifting? Are you changing your business model and that’s going to have a negative impact on NIM, going forward? Thank you.

Yes, well, in terms of the hedging in the UK, our ALCO portfolio right now amounts to around €17 billion at an average yield of slightly less than 1%, and average maturity of five years. So with that, you have quite a pretty idea of how much this represents of the net interest income.

Okay, in relation with the PPI, there is nothing new at this point. As you know, we had a - we made a provision at the end of last year of, if I remember well, £450 million. We are spending around £10 million a month, so it’s very much in line with our expectations. And we do not - we may need or not, depending on the final point - when the final point happens, but we are expecting for news on this regard. As of today, we feel that we are well covered, yes. In SC USA, there is plenty of discussion about what’s going on in the car finance market in the U.S. potential deterioration in the quarter, potential deterioration going forward, margins - and what we are seeing on a like-for-like basis, we’ve been able to increase a little bit the margins in the previous quarters. But this is a market that is very dynamic. The information comes month after month with up and downs, but we are not seeing a consistent trend to tell you that we are seeing a deterioration in margins, or increase in the NPLs. We are - this is a market that has some volatility, but at each stage around the mean, so it’s not a consistent trend one way or another.

Thanks, Marta. Next question, please.

Our next question is from Andrea Filtri from Mediobanca. Please go ahead.

Yes, good morning. Two questions on capital for me. The first is that risk-weighted assets contracted materially in Q3. How much is from underlying commercial trends, how much is FX related, and how much is from model optimization, in your view? And secondly, there is a lot of concern on the completion of the IRB framework in Basel. What do you consider the most likely outcome? And what concerns you, if anything in absolute more than in relative terms? Thank you.

Risk-weighted assets, you have the balance sheet evolution in the presentation of every single country. We have countries where we’re growing, countries where we’re not growing. So basically, the evolution of risk-weighted assets is mostly the result of the actual performance in the countries. There’s a very little from models or optimization in the quarter, so it’s the actual evolution in the quarter. So that’s why the CEO mentioned that it’s very likely that we will see a different trend in the fourth quarter, so we cannot extrapolate the capital gain, in recurring terms, in the quarter - in the third quarter to the fourth quarter, or forward.

In relation with the IRB, let me to remember that our density is one of the highest in the industry we are in the mid-40s. So in the discussions that are going on in the Basel Committee in relation with the floor, very unlikely it will affect us. We need to go to relatively low levels of floor to have an impact on us, so this is - as you know, this is a discussion that is still going on. There’s going to be a meeting, as far as I know, on the technical details in November, and the decision should be taken on January. But this is not something that we - on relative terms, this will affect us much less than some of - the majority of our European competitors.

Thanks again for you question, Andrea. Next one, please.

Our next question is from Carlos Cobo from Haitong Bank. Please go ahead.

Hi, thank you very much for the presentation. Just a couple of questions from my side. First one on volumes in the UK, and this has been asked for 2017. But I wanted to see your views about what are the earlier stages impacting activity and volumes in the mortgage business, and overall in corporate, as well. And secondly, a quick question on Poland, what’s your perception for the geography there? There are some comments from the government asking some more - some increase in the national control of the banking system, there are some news flow on M&A. So how do you see yourselves participating in that process, either consolidating other smaller banks? Do you see Poland as a core market in your M&A strategy, or not? And also, your views about the impact of new regulatory changes in foreign currency mortgages, how that could impact your bank there. Thank you very much. Sorry, one last question. What will be your ALCO maturities, the security maturities in Spain in 2017 and 2018, please? And if you have the deal [ph] as well of the maturities? Thank you.

Well, volumes in the UK, up to now we are not seeing a change in our perception in relation with volumes. We are growing in the region of 1%, 2%, 3% our loan books in our mortgage book, while SMEs, we are growing in 8%. And in large corporates, well, this is not at all dramatic. But going forward in mortgages, we continue to see the market position, on average, the same volumes. We are not seeing a slowdown, although, if the economy is highly uncertain, the outlook, because the economy grows less, as the majority of the people expect, we may see some impact in the mortgage market, but we are not seeing today. On corporate, on the SME book, as I mentioned before, volumes are still - we are growing much faster than the market at 8% in line with our expectations. But it’s true that we, as I mentioned before, we are seeing some margin compression in this book. Poland, you mentioned a couple of different things, if I understood well, the consolidation going on, and the Swiss francs, and the change in the regulator from the KNF to eventually to other regulator, so let me to comment. Overall, the business in Poland is going well, you don’t see in the P&L, because, well, this new banking tax in relation with taxes. And there is a process going on in which government, or entities close to the government, Pekao and PZU, are apparently following the news, trying to buy other competitors. And this is going to produce some consolidation there, maybe, new consolidation is coming. What I can tell you is we have in the market around 10% market share. We are happy with our franchise that is in terms of profitability, the best in the country, and is performing pretty well. And we are not, at this stage, looking at any particular asset to buy. I don’t allow to look in the future and seeing any other market. This is not our strategy is to grow in markets that are core for us, and Poland is one of them. In relation with the Swiss franc, there is nothing new, plenty of papers coming and going. What is still is the discussions, related discussion, I think they are more conscious of potential impact in the stability of the system. That is good news. But as I said, this is probably too early to call, yes.

I already gave you the detail, so even gave you the amounts of net interest income coming from the portfolio, so I think that’s plenty to build your models.

Thank you, Carlos. Next question, please.

Our next question is from Britta Schmidt from Autonomous Research. Please go ahead.

Yes. Hi, good morning. I’ve got two questions, please. The first one will be on the net interest income development in Brazil. If I look at the local presentation, and arguably, there are some differences between the accounting, but 70% of the increase in net interest income there came from treasury contributions, if I see that correctly. Is that going to be something that you consider sustainable in the future? And are we going to see even a widening of the treasury contribution? And the second one will be on the CET1 guidance. I guess the 10.45% by the end of the year is based on the 40 basis points guidance relative to the end 2015 number. You’re at 10.47% already. I guess, you were guiding that the 16 basis points organic growth is going to be more like 10 basis points, but are there any headwinds that you can see for Q4? And regarding that can you give us an update on when you think the SC USA share purchase is going to close?

Okay, so NII in Brazil, yes, you mentioned naturally, there is less negative contribution from the ALCO portfolio. As the yield curve is trending down, it’s negative, the negative contribution is less. So going forward, probably, in the coming quarters you’re going to see more of this. As did the Central Bank reduce the rates, I suspect, the negative contribution of the ALCO portfolio is going to get reduced quarter on quarter. So for some quarters at least, if the rates go down, as expected, you’re going to have positive news on both sides. Probably, I don’t know if I mentioned before, but we are improving significantly the NII coming from the deposit side. I mentioned in previous quarter, but this is going to be a trend. Several quarters, we’re going to have positive news on this regard, knowing that there is a limited NII that comes from deposit, but is a significant contribution to the marginal increase in NII and has been a significant contribution in the second quarter. To the NII in Brazil, at the end, what matters the most is the trend in the volume in the loan book that as I said, we are a little bit more positive on this. The CET1 10 basis points, I don’t know if I get the question right. In the fourth quarter, we said that in the third quarter we grew, on an organic basis more than expected, because the risk-weighted assets didn’t grow, as Jose mentioned. And in the fourth quarter, we expect to grow the risk-weighted assets. This is the only significant change that we expect. And you mentioned SC USA, and potential buyback by our participation in SC USA. This is not including the quarter, you see it happens, you already have the numbers. I don’t know if you want to elaborate on this, Jose?

No, I mean, clearly, that’s not on the table right now, so nothing to comment about.

Thanks, Britta. Next question, please.

Our next question is from Andrea Unzueta from Credit Suisse. Please go ahead.

Yes, most of my questions have been answered, but just a couple of clarifications. What is the outstanding ALCO portfolio in Spain as of Q3? And also, if you could give us a guidance of the impact you are expecting on operational risk-weighted assets, specifically. Thank you.

Again, going back to the Spanish ALCO portfolio, at the end of September it was €21 billion.

Let me elaborate on the ALCO portfolio, operational risk, you mentioned in the presentation, okay.

Well, last question, please.

Okay. Our next question from Adrian Cighi from RBC. Please go ahead.

Hi, there. This is Adrian Cighi from RBC. Thank you for taking my questions. I have just two follow-up questions, please, one on Mexico and one on the corporate center. Obviously on Mexico, NIM is expanding and loan volumes are growing at double-digits. What is the - can you provide a little bit more detail on the outlook on NIM in light of the sort of increase in rates from Central Bank? And do you see double-digit volumes increasing for the year 2017? And on the corporate center, obviously, we discussed a lot about the higher cost of the hedging this quarter, but can you provide any more outlook for full-year 2017? Do you see continuing negative contributions from hedging in light of the continued volatility in the number of currencies in your footprint? And does the 15% target of the corporate center include the cost of hedging, or is it net of it? Thank you.

Okay. In Mexico, volumes growing double-digit, margins, we are not seeing a particular development one side or another. Overall, the margin will depend mainly on the mix of the new production. And as it remains as it is, I don’t see particular developments there. In relation with the higher rates, it’s true that it may produce - will produce some negative impact in some portfolios, fixed rate portfolios, particularly related with consumer lending. But probably, the positive that comes - probably, now the positives that comes from deposits is bigger than the negative that may affect the asset portfolio. The balance sheet is - the position is towards higher rates, so this is, with the rates going up, good news overall for the business. The cost of hedging the corporate center, well, as you know, the higher the rates in Brazil, led me to give you a rule of thumb, the higher of the rates in Brazil, the higher the cost. So the main costs we are paying in the corporate center for hedging is related with the Brazilian expected profits and the Brazilian capital, yes. So I don’t know if there is another question.

Yes, and whether the 15% target is net of the cost of risk. Yes, the answer to that is yes. The target includes the cost of risk - the cost of hedging.

Is there any other question pending on the line?

We have a last question from Ignacio Cerezo from UBS. Please go ahead.

Yes, just a very quick one on Brazil, actually. How are you expecting lending spreads to evolve in the future? I mean that environment, you’re thinking that you might become a little more constructive on lending growth, provisions might be coming down. I mean, do you think you’re going to square the circle and keep your spreads stable? Or should we expect a decline on the spreads? Thank you.

We are not seeing - as of today, we are not seeing developments there, probably is too early. We are not seeing any competition based on pricing on Brazil; this is competition more based on operational capabilities and other things, not, at this stage, on pricing. Naturally, as the things keep improving in the global - with the global corporate banking businesses, the spread is related with the CDS and the professional markets, as we see the top Brazilian companies, the CDS getting tighter and tighter may have some effect in the global corporate banking in the next couple of quarters. You saw in the last few years spreads going up significantly in global corporate banking may have a negative effect in coming quarters. It’s not to start very quickly, yes. So it normally takes time. But on the other segments, I don’t see any reason, at this stage, for margin compression in the other segments in Brazil in the next couple of quarters.

Okay. Thank you.

Okay, I will leave it here. But, obviously, the IR team is at your complete disposal for any follow up. Thanks very much. And see you in three months. Thank you.