Deutsche Bank AG (DB) Q2 2013 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by. Welcome to the Second Quarter 2013 Conference Call of Deutsche Bank. [Operator Instructions] I would now like to turn the conference over to Robert Vollrath, Interim Head of Investor Relations. Please go ahead, sir.

Good morning, ladies and gentlemen, from Frankfurt. On behalf of Deutsche Bank, welcome to our Second Quarter Earnings Call. We have with us today, our co-CEO, Anshu Jain; and our CFO, Stefan Krause. First, Anshu is going to go over the progress we are making on our strategy and then, Stefan will discuss with you our financial performance in the quarter and year-to-date. Following their remarks, as customary, we'll welcome your questions. By now, you should have access to all of our publications on our website. As always, please be reminded of the cautionary statements regarding forward-looking statements at the end of the presentation. With that, Anshu, let me hand over to you.

Thank you very much, and good morning. We're now halfway through 2013 and nearly a year into Strategy 2015+. Today, I'm pleased to tell you that Deutsche Bank is on course, despite the continued headwinds we face. As you know, when we developed Strategy 2015+, we identified 5 key strategic levers: capital, costs, competencies in our core businesses, clients and culture. I'll say a few words in our journey on each of these. Turning first to capital. We've stated that strengthening our capital position was our most important and urgent strategic priority. A year ago, we started out with a significant capital deficit versus our peers. You told us clearly that this was unsustainable. On our last earnings call in April, I was pleased to tell you that we had taken our Basel III pro forma Core Tier 1 ratio from below 6% to 9.6%. In 9 months, we established Deutsche Bank as one of the leaders in our peer group on this measure with holders, thanks to an equity raise, which was well supported. In this quarter, nearly 2 years early, we reached our 2015 target of a Core Tier 1 ratio of 10%, and simultaneously continued to strengthen our litigation reserves. As you've seen, this includes a reserve of EUR 630 million this quarter. In total in the past year, we've increased reserves by some EUR 2.8 billion before releases and EUR 2.5 billion on a net basis. Reserves now stand at EUR 3 billion, and we expect settlements to accelerate in the coming quarters. Once again, the key to this achievement was solid retained earnings, thanks to strong operating performance, in tandem with sustained asset production. Our Non-Core Operations Unit has now reduced assets by around 40% from launch. It has already surpassed its year-end asset production target. We're pleased to have hit our capital target early, but of course, we remain vigilant. Having delivered on capital strength, let me say a few words now on leverage. We've made progress on this front. In the second quarter, we reduced total adjusted assets by EUR 55 billion. This leaves us with a 3% adjusted fully loaded CRD4 leverage ratio. Now we commit to further reducing our exposures by approximately EUR 250 billion on a CRD4 basis through a series of measures, most notably by reducing our notional derivative exposures. We aim to do this in a manner which enables us to meet leverage ratio requirements, sustain our value proposition to clients and continue to strengthen our business model, without materially impacting financial performance. Stefan will take you through the details, but let me say it clearly, we reaffirm our published strategic and financial targets. We're committed to addressing leverage with the same focus and discipline we apply to capital. Costs are a crucial part of our agenda. Our Operational Excellence program, or OpEx, is all about building a better platform, tightening our control environment, serving customers better and improving the quality and efficiency of our infrastructure. A lot more work lies ahead, but we're making steady progress. In private and business clients, we have merged 2 retail platforms supported by an integrated state-of-the-art operating system. During this quarter, we rolled out simpler account opening processes and better real-time information for clients. So far, we have migrated over EUR 20 million clients onto this unified platform. We've removed over 100 redundant or duplicate products. In Deutsche Asset & Wealth Management, we've launched an integrated global client group with around 800 covered specialists. We also established a single investment platform of 700 experts working as 1 team. So now, our asset allocation process embraces a full suite of products and asset classes. Put simply, clients now enjoy a single point of access to a full range of investment options. This 1-team approach is not only better for clients, it also enabled us to eliminate duplication in research and product manufacturing, consolidate booking centers and simplify our back office. We're also consolidating our global systems infrastructure. We've invested in a world-class IT platform to standardize, automate, consolidate and simplify core operational functions. By the end of this quarter, we've made progress. Derivative trade processing is now 3.5 times faster than 9 months ago. Streamlining applications development has enabled us to eliminate more than 1,000 applications, including more than 250 in the second quarter alone, and we migrated around 2.5 million securities accounts into a single master database. We are reengineering processes across our financial reporting platform. This reinforces controls and speeds up the supply of key management information. Across our infrastructure platform, we're making greater use of nearshoring and cost-efficient locations than ever before. We set ourselves a target cost reduction of EUR 4.5 billion, the largest in Deutsche Bank's history, by 2015. Some of you told us that was ambitious. We agree. But so far, we're delivering on milestones. As at the end of the quarter, we've saved a cumulative total of EUR 1.1 billion. For the first half year, costs are around EUR 600 million below 2012 on an underlying run-rate basis. We promised to continue to focus relentlessly on costs. Many of you have told us how important this is. Investment spending on the OpEx program will increase between now and year end in line with our budget for cost to achieve. Let me now turn to competencies in our core businesses. In Corporate Banking & Securities, our investment banking platform, revenues and profitability were up significantly year-on-year and our franchise was strong. Debt Sales & Trading revenues were below the second quarter of 2012, primarily reflecting lower year-on-year revenues in residential mortgage-backed securities. However, foreign exchange performed strongly, and we were voted #1 in U.S. fixed income for the fourth year running. Our equities business, both trading and origination, performed outstandingly in good measure, thanks to strong revenue growth in the U.S. Our Corporate Finance market share was the highest ever. We also saw the benefits of balance sheet and cost reductions as we position CB&S to perform in the Basel III environment. In Private & Business Clients, we produced a second consecutive record quarter on an underlying basis. In a tough interest rate environment, we succeeded in growing our credit and investment businesses in Germany and other European markets, while simultaneously making progress on the large and complex Postbank integration. I should point out that our P&L in this business included accounting effects from our minority participation in HuaXia Bank in China. Global Transaction Banking produced a solid quarter. The dynamics of this business remained challenging, again influenced by the interest rate environment and intensifying competition. You may be wondering if we can reach our ambitious targets in GTB, so let me address that question head on. Despite the headwinds, we're resolute in our commitment to continue investing in this business and we remain confident of achieving our goals. In my meetings with you, some of you expressed skepticism about our plans to more than double earnings in Deutsche Asset & Wealth Management. That's understandable. This business faces the most significant strategic challenge of all, combining 5 units into a single integrated asset and wealth management platform, while sustaining a strong client franchise. Given that challenge, I'm particularly pleased to tell you that adjusting for cost to achieve, revenues are up year-on-year, costs are down, and for the first half year, our reconfiguration of our platform has enabled us to deliver pretax profits of around EUR 0.5 billion. The business is on course. The journey ahead is still a long one, but the achievement, so far, is promising. Excluding cost to achieve, the OpEx program and litigation charges, our 4 core businesses, together, delivered pretax profits of EUR 2.5 billion in the second quarter and EUR 5.7 billion in the first half of the year. In both cases, significantly higher than in 2012. That reflects the fundamental operating strength of our platform. Now let's talk about clients. You'll remember that when we combined CB&S and GTB's client assets, as part of project Integra, we took a big step forward in serving clients more efficiently. Our reconfigured coverage model in Germany, which we rolled out recently, is a similar step forward. We launched a new private and commercial banking unit within PBC, which offers direct local coverage to around 11,500 of our German Mittelstand clients, which were covered up to now by CB&S and GTB. The new unit takes full advantage of Deutsche Bank's unique offering to these clients, a local gateway to our global network and efficient access, through one source, to our full set of investment banking and transaction banking products. Germany's Mittelstand is highly globalized and export oriented. Local access to Deutsche Bank's integrated global offering via a network of specialist advisory centers is crucial for these companies. So far, we're pleased with the early results. Finally, let me update you on our progress on our vital objective of placing Deutsche Bank at the forefront of cultural change. When we were developing our strategy, you told us that restoring the bond of trust with society was all important for our industry, and impossible without fundamental cultural change. Last week, we announced an important step in that journey with the launch of the 6 values and supporting beliefs, which underpin our cultural change program. These defined the institution Deutsche Bank aspires to be. Over the past 10 months, we consulted widely and deeply. We gathered feedback from our stakeholders, including more than 52,000 staff members. Juergen and I and the entire GEC devoted significant time to discussing this with our senior leaders. The process was intensive, but we wanted something authentic, something that truly came from within Deutsche Bank and something sustainable in the long term. That meant we couldn't take shortcuts. So allow me to say a few words about the values that we have launched last week. Integrity comes first and foremost. We believe trust is something we must earn. We don't take it for granted. To achieve that, we aim to do more than what's allowed. We aim to do what's right. Integrity must be supported by an environment in which it's part of every Deutsche Bank employee's job to provide, invite and respect challenge. We've always had a performance culture and we're proud of it. Now, more than ever, we emphasize sustainability of performance. We recognize that excessive short-term focus can actually go against long-term performance. It's also about how we manage, develop and nurture our talent. We make a shift from client focus to client centricity. The difference is crucial. The interest of the clients come first. It also means selectivity and suitability, serving the right clients for the products and services that are right for them. Reconfiguring our Mittelstone platform in Germany, performing a single client coverage group in Deutsche Asset & Wealth Management and integrating our retail banking platform are some examples of that. Innovation remains a core element of our identity. We're conscious that some innovation was responsible for problems for the banking sector in the financial crisis. Our emphasis now is on responsible innovation, innovative ways to solve client needs and to make our clients -- to make our overall infrastructure better and more efficient. Infrastructure is the spine of Deutsche Bank, innovative approaches will be key to developing the world class infrastructure we need. Discipline is crucial to us in delivering on our targets. That's how we delivered on capital and we'll apply that discipline to leverage and to strengthening our platform. When we use the bank's resources, we aim to think and act like owners. Additionally, we recognize that rebuilding public trust will be about creating an environment for accountability. Finally, we have also evolved from teamwork to partnership. We recognize that we have partners outside Deutsche Bank who may not be on our team but are vital nonetheless. Since we launched our strategy, the debate about regulation of the banking industry has grown ever more complex. It's crucial that we work in a spirit of partnership with the actors in that debate. We have no illusions. This is a long-term multi-year effort with challenges along the way. Between now and the end of 2013, our priority will be to ingrain these values and beliefs into the behaviors of the organization. For example, in the way we measure performance and manage consequences. In summary, we're confident we are well on course to achieve Strategy 2015+. Now let me hand over to Stefan, and after that, we both look forward to your questions.

Yes, thank you, Anshu, and good morning to everybody for joining us here on our second quarter results call. I know it's going to be a busy day for everyone so let me walk you quickly through a couple of slides that we provided to you. As you can see on Page 3, the underlying performance of our operating business was strong this quarter. Each one of our core businesses recorded better year-over-year revenues, while the bottom line was impacted by higher year-over-year litigation expenses, as we continue to build our reserves to address the legacy legal risk that we have always communicated to you. So let's turn to Slide 4. And on Slide 4, obviously, we'll increasingly point your attention to the Core Bank results as the best indicator of what sustainable performance for Deutsche Bank will be. As you can see, the Core Bank continues to deliver consistent revenues, and a very low level of loan losses. On a reported basis, noninterest expenses increased 1% year-over-year. On our adjusted basis, noninterest expenses in the Core Bank decreased 5% year-over-year to EUR 5.4 billion, mostly reflecting the initial savings from our Operational Excellence program. Pretax profitability in the Core Bank, as you can see, was EUR 1.5 billion this quarter or EUR 2.3 billion excluding cost to achieve in litigation. The Core Bank achieved a pretax return on average equity of 13.2% annualized, and 7% on a post tax basis. Let me turn on to Slide 5 now. The revenue environment, as you can see in the second quarter, was decidedly mixed. As you know, for the Investment Bank April and May saw strong direct markets across fixed income and equities and good levels of client activity. However, the Fed's tapering comments in mid-May led to a broad sell off in June across most of the asset classes. And as a result, June market conditions were substantially more challenging. June was characterized by a general repricing of credit and lower levels of liquidity, especially in areas of fixed income trading. Of course, PBC and GTB revenues continued to face headwinds from near 0 short-term interest rates. Both businesses have been able to compensate by increasing volumes in their core products and also by increasing fee income. Despite these challenges, revenues in the Core Bank increased by 5% year-over-year. On Page 6, you can see our provision for credit losses in the second quarter was EUR 473 million, an increase of EUR 119 million from the first quarter of 2013. Despite the increase, we have continued to experience very low levels of provisions for credit losses. The majority of the increase this quarter was driven by higher charges in the NCOU, relating to our IAS 39 portfolio. Within the IAS 39 portfolio, the carrying value to fair value gap has narrowed to approximately EUR 800 million from EUR 3.7 billion in the fourth quarter of 2009. On Page 7, we show you our noninterest expenses. As reported, our cost has increased by EUR 350 million or 5% year-on-year. This includes litigation of EUR 630 million and cost to achieve of EUR 356 million. On this slide, we also show our adjusted cost base, which excludes the effect of cost to achieve, policyholder benefits and claims, litigation, impairments of goodwill, other severances and other disclosed one-offs. This year aligns our external disclosure with the way we manage costs internally. The adjusted cost base decreased by EUR 207 million year-over-year. The comparison of first half 2013 expenses to the first half of 2012 presents a fuller picture of the progress we have made since announcing the Operational Excellence program in July of 2012. Our adjusted cost base has decreased by approximately EUR 580 million. Litigation expenses were EUR 762 million versus EUR 512 million in the first half of 2012. The timing and size of litigation expense going forward are unpredictable. However, as we have said previously, we have assumed a continued headwind from litigation in our budgeting and capital planning for the next couple of years. When we go on Page 8, we show you the progress on our Operational Excellence program. We continue, as you can see, to push forward with our program. The primary objective of the program is obviously to strengthen DB's operational platform. This quarter, we have invested EUR 348 million in cost to achieve related to this program, bringing the total to approximately EUR 570 million in the first half of the year. Please note, we expect the majority of the 2013 cost to achieve to flow through the second half of 2013, as major initiatives are still in the ramp-up phase. On the savings side, the first full year of the program has yielded cumulative savings of EUR 1.1 billion. We are well on track to reach our target of EUR 1.6 billion in savings by year-end 2013. Let me now turn to Slide 9 where we provide more transparency on our OpEx initiatives. We've added this chart to enable you to follow the progress as this will report to you progress on the initiatives. But to start with, as a reminder, the Operational Excellence program is not primarily a cost-cutting exercise. Firstly, we are aiming to strengthen our operational and control environment by increasing flexibility and greater process discipline. In turn, this will help us to eliminate duplication and create efficiencies which then leads to sustainable cost savings. As you can see on the slide, the majority of our initiatives, which represent over half the expected savings, have progressed through the program control framework through the validation and execution phases. In strengthening our platform, we have eliminated more than 1,000 IT applications and integrated previously separate retail platforms. Also the OpEx program is comprised of over 160 initiatives, successful execution of the top 10 initiatives will yield approximately 40% of the targeted savings. Our progress to date in validating and moving initiatives towards execution and final completion gives us confidence that the plan is proceeding on track. Turning to profitability on Slide 10, you see pretax profit was EUR 792 million. Net income was EUR 335 million and in the current quarter, the effective tax rate of 58% was mainly impacted by expenses that are not tax-deductible and adjustments for income taxes of prior periods. On page 11, let me start on capital with the current valid regime which is still Basel 2.5 before I talk to our Basel III ratios. As you can see here, we finished the quarter with a Basel 2.5 Core Tier 1 ratio of 13.3%, 120 basis points higher than at the end of the first quarter of 2013. This increase in our Core Tier 1 ratio reflects our capital raised, but also lower risk weighted assets versus the end of March. The Tier 1 ratio on a Basel 2.5 basis now stands at 17.3%. Let me turn now to Slide 12. Over the quarter, our Basel 2.5 Core Tier 1 capital increased from EUR 39.3 billion to EUR 41.7 billion, principally due to the additional EUR 3 billion from our rights issue. Over the reporting period, we will also achieve a reduction of EUR 10.6 billion in Basel 2.5 risk-weighted assets. Credit risk, RWA came down by EUR 2.8 billion due to our continued de-risking activities and further asset sales of approximately EUR 5 billion, partly offset by business growth in other minor assets. Operational risk, RWAs decreased materially by EUR 3.3 billion, benefiting from BaFin approving the full integration of Postbank related operational risk in our DB Group MR [ph] model replacing the previous simple sum of the parts. Further reductions relate to foreign exchange, EUR 2.1 billion, and market risk down EUR 2.4 billion. Let me now move to Basel III on Page 13. As Anshu already discussed, our fully loaded Basel III pro forma Core Tier 1 ratio for June was 10%, and we achieved this whilst adding further to our litigation reserve. On Slide 13, you find the same reconciliation from Basel 2.5 to Basel III, with phased-in fully loaded as we have shown you in previous quarters. We now report EUR 367 billion risk weighted assets under Basel III, a EUR 52 billion increment to Basel 2.5, EUR 2 billion lower than last quarter. On the capital side, the debtors between Basel 2.5 and 3 are also largely unchanged from prior quarter, also deductions in the fully loaded scenario are now amounting to EUR 18 billion compared to EUR 19 billion in the previous quarter, principally due to lower DTA-related deductions. We go to page 14. I think this is an interesting slide as we continue on the discussion of RWAs and risk-adjusted leverage versus non-risk-adjusted leverage. As most agree, leverage obviously fails to assess the quality of the balance sheet as well as the firm's ability to fund itself. Leverage, in our view, forces banks to run a very different business on the obvious consequences is that -- one of the obvious consequences obviously is the need to originate higher-yielding assets and, by definition, therefore taking on more risk. Our average loan loss provisions have been 20% of those of some of our peers over the past 5 years because of our respective regulatory focus, has led us in a very different portfolio composition decisions with a focus on higher-quality borrowers. This slide evidences the clear positive correlation between RWA density and average loan losses, looking at a selected peer group across U.S. and Europe. This is an important -- this important difference will not obviously be captured by simple leverage definitions. Let me now move to -- before I move on to some key current issues, let me move on to the segment results first. Hold on. So on Page 16, I'll start with Corporate Banking & Securities. As you can see on Page 16, CB&S saw a very good start to the second quarter of 2013 as the positive economic momentum from the first quarter continued, leading to tighter credit spreads, higher equity markets indices, strong primary activity and higher client activity levels versus the prior year quarter. However, comments from the Fed regarding QE tapering in mid-May resulted in concerns about the direction of Central Banks' policies across Europe and the U.S. The spike in money market rates in China in June also had a negative impact on market sentiments. These concerns resulted in a broad decline in activity levels in June 2013. CB&S performance was strong with revenues increasing 9% year-on-year while declining 19% quarter-on-quarter, reflecting the usual seasonality. Excluding the impact of Basel III RWA mitigation of CVA and DVA, CB&S revenues were up 13% year-on-year. Within this environment, CB&S continued to operate at low-risk levels this quarter. VaR declined 7% quarter-on-quarter, and our Basel 2.5 risk-weighted assets are down 19% year-on-year. Noninterest expenses were EUR 2.9 billion, unchanged from the prior-year period. Continuing the momentum seen in the first quarter of 2013, noninterest expenses x litigation CtA were materially lower than the prior year quarter with reductions in both compensation and non-compensation costs, reflecting solid progress on the Operational Excellence program. This reduction was driven by lower headcount, lower infrastructure costs and other efficiency initiatives. As you can see on the next page in the second quarter of 2013, debt Sales & Trading revenues were down only 11% year-on-year despite a marked deterioration in the market environment in the later half of the quarter, which heightened uncertainty and a selloff across asset classes. Rates and flow credit revenues were resilient despite a backdrop of heightened market uncertainty, a lack of liquidity and widening spreads in June, followed by the market selloff. FX revenues were significantly higher than the prior year quarter, driven by another quarter of record volumes resulting in record second quarter revenues. DB again topped the Euromoney FX survey for the ninth consecutive year. RMBS revenues declined significantly compared to the prior year quarter, as decreased market activity resulted in lower volumes, reflecting specific uncertainty on the Fed's QE tapering. EM revenues were significantly higher year-on-year due to a strong performance in flow businesses. This important -- improvement, sorry, was most notably in LATAM where the June market selloff was not as marked as in the other EM regions. Credit solutions performance was resilient across businesses, with revenues only slightly lower than the prior year quarter which benefited from a significant one-off gain. The current quarter performance was notably strong in Asia, particularly in the first half of the quarter. Our debt franchise was ranked #1 in the U.S. by Greenwich & Associates for the fourth consecutive year. On the next page, you can see the equities revenues that increased 55% year-on-year, driven by strong cash equities and derivative revenues while prime brokerage revenues remains in line with the prior year quarter. Second quarter 2013 equity Sales & Trading revenues were DB's highest second quarter equity revenue since 2009. Cash equity revenues were up year-on-year supported by positive market sentiment and a solid performance in electronic trading, amid low liquidity conditions. DB's performance was especially strong in the U.S. and Europe. Equity derivatives revenues were significantly higher year-on-year driven by increased client activity. The business reported strong revenues in the Americas and Asia. Prime brokerage revenues were in line with the prior year quarter reflecting stable client balances. On Page 19, revenues in Origination and Advisory, as you can see, increased by 45% year-on-year, significantly outpacing fee pool growth. As a result, we continued to strengthen the record market share position we attained in 2012. In EMEA, we continued to rank #1, and our market share increased from the first quarter. Higher year-on-year revenues in equity and debt origination were offset by lower year-on-year revenues in the advisory business. In the advisory business, lower market activity, especially in cross-border, resulted in lower revenues. In equity origination, we achieved record market share in EMEA. DB had a very strong performance in high yield and ranked #2 globally. On page 20, I go to Global Transaction Banking. Income before income taxes in GTB was EUR 322 million in the second quarter of 2013. Similar to the last quarter, GTB continues to face pressure from persistently low interest rates in core markets. For instance, [indiscernible] decreased a further 26 basis points year-on-year. As well as increased pressure on margins, from a regional point of view, the pressure is most pronounced in Asia and EMEA due to the difficult economic environment. This quarter's revenue performance was partially inflated by a gain from the sale of our Deutsche Card Services business. In our ongoing businesses, we continue to grow business volumes. For instance, our trade-related volumes increased by approximately 10% year-over-year. Loan loss provisions increased year-over-year mainly driven by further provisions related to the single client credit event in Trade Finance mentioned in the first quarter. Other than this singular event, we do not see any deterioration of the average rates profile of our portfolio. Noninterest expenses including CtA decreased 10% year-over-year, demonstrating the business' ongoing cost discipline as well as the nonrecurrence of integration cost. We expect the difficult market conditions to persist in the second half of the year, but we will continue to support growth in GTB with the goal to attract increased volumes in our core markets and amongst our core client groups. Turning now on the next page to Deutsche Asset & Wealth Management. As most of you have noted, integrating our various wealth and asset management business is one of our most ambitious strategic initiatives. And I can really say that the early indications are very positive. Reported IBIT was EUR 82 million for the quarter. However, this includes EUR 171 million of cost to achieve. For the first half 2013, profitability, excluding cost to achieve, increased to EUR 489 million. This quarter revenue, excluding the Abbey Life gross up, increased by 6% year-over-year driven by higher equity markets and increased client activity. Most encouraging, the underlying cost base is beginning to reflect the integration efforts. Resources have been reduced and streamlined. By example, total capital demand has decreased by 22% year-over-year. Front office headcount has declined 9% year-over-year. Overall, our adjusted cost base is down 6% year-over-year and the adjusted cost/income ratio is 7 percentage points lower. The picture on flows this quarter is mixed. Net inflows of EUR 300 million reflect EUR 3 billion of inflows into the private bank, which were primarily offset by outflows from our fixed income and cash mandates, and to a lesser extent, outflows in retail products. Let me turn now to our PBC business. PBC again achieved a very strong result in the second quarter with a reported IBIT of approximately EUR 0.5 billion which is the second best reported quarter since consolidation of Postbank. Adjusting the reported IBIT for cost to achieve, as well as PPA effects, the IBIT would have been EUR 722 million, which is a record result in this adjusted basis. This quarter IBIT benefited from a positive development in investment in credit product revenues, but also from a few specific items, totaling approximately EUR 100 million, related to Consumer Banking Germany and Advisory Banking International. The strong improvement in advisory brokerage and credit progress were offset by weaker revenues from deposits and payments products, reflecting a continued low interest rate environment and a strategic reduction of deposit volumes especially in Consumer Banking Germany. Our expenses were impacted by higher investments into Postbank integration and other measures as part of our Operational Excellence program. They also contained a positive nonrecurring effect related to the HuaXia Bank credit card cooperation. Overall, our cost/income ratio improved year-over-year and operating cost continued to trend lower. Within the client propositions, let me quickly cover them. Advisory Banking Germany IBIT, excluding CtA, increased year-over-year, reflecting higher revenues from investment products, as well as lower provision for credit losses. In addition, credit product revenues improved, driven by higher volumes in the mortgage business. Advisory Banking International achieved a very strong result. This was driven by a higher contribution from HuaXia Bank and also included expanded revenues from investment products across all major countries. And Consumer Banking Germany IBIT benefited from certain revenue one-off items and reduced risk cost. As we have seen last year, CtA is planned to significantly increase in the second half of the year, so we caution you against annualizing the first half year's results. So let me turn on Page 23 to consolidation adjustments. As you can see, pretax loss in C&A was EUR 205 million this quarter compared to a loss of EUR 72 million in the prior year quarter. Valuation and timing differences saw positive effects related to shifts of the euro and U.S. dollar interest rates curve. The lower level of profitability was also driven by positive effects from the interest income on taxes in the second quarter of 2012. So then let's turn to our last division, which is the Non-Core Operations Unit. As you can see on Page 24, once again, the de-risking in NCOU has positively contributed to the group's capital position. During the second quarter, we successfully reduced Basel III RWA equivalents by EUR 11 billion, which included the sale of the legacy U.S. CRE portfolio by PB Capital, further disposals of low rated securitization assets as well as the rollout of advanced credit rating and operational risk models. Our adjusted assets and pro forma Basel III RWAs have already fallen below the EUR 80 billion year-on-year end target that we originally set in 2012 and reflects an acceleration of our de-risking activities where markets have remained constructive for most of the quarter. NCOU continues to deliver capital accretion for the group, providing a Basel III pro forma Core Tier 1 ratio improvement of approximately 11 basis points in the second quarter, after taking into account the pretax IBIT loss. While asset disposals delivered a net gain in the period, deterioration in market conditions for June has negatively impacted IBIT performance, especially revenues. A significant portions of the assets in the NCOU are fair value accounted and remarked on a regular basis. I ask you to take that into account. The NCOU reported better-than-expected revenues in the first quarter of this year, which were somewhat offset by the weaker development this quarter. So on Slide 25, gives you some more detail on the NCOU assets. I'm happy to confirm that we have now achieved a reduction in both adjusted assets and Basel III equivalent RWAs of almost 25% in the first 6 months of 2013. Added to our successes in the second half of 2012, we have now generated EUR 3.6 billion of capital accretion from NCOU de-risking activities which equates to a Basel III Core Tier 1 benefit of 84 basis points. During the second quarter, our EUR 11 billion Basel III RWA equivalent saving included the following notable transactions, approximately EUR 2.3 billion in relation to the sale of the legacy U.S. commercial real estate portfolio that we inherent -- inherited with our Postbank acquisition, and savings from sales of other wholesale assets accounted for an additional EUR 3 billion reduction. Basel III pro forma RWAs now stand at an EUR 80 billion target. We would expect to continue to reduce RWAs for the rest of the year, of course, subject to constructive markets. From a leverage perspective, we have already showcased our adjusted asset reduction targets and would expect assets to continue to decrease throughout the year. As previously advised, we do expect the pace of de-risking to lessen over time and the sale of assets is resulting in an ongoing reduction in underlying revenues. The reduction of adjusted assets, capital and risk remains at the forefront of our decision-making progress and we will continually evaluate the rationale of exit versus hold to take advantage of market conditions and to optimize and protect shareholder value. So before I cover the last key current issues and let me now move on to 2 special topics. This quarter, we have 2. Before obviously the leverage discussion, a few words in response to a media report concerning Deutsche Bank's involvement in certain enhanced repurchase transactions, the accounting treatment we used for those transactions and the implications of those transactions on our capital position. First, with regard to Deutsche Bank's involvement in enhanced repurchase transactions, these transactions are widely used and offered by banks internationally as part of normal course of business. In a standard repurchase transaction, we buy securities from a client as collateral for a loan and enter into a repurchase agreement to sell back the security at a later date at a higher value, in lieu of interest. In an enhanced repurchase transaction, the bank may sell this collateral and will settle the repurchase agreement normally with cash. Typically, the bank hedges the risk inherent in the collateral by means of selling a credit default swap. The benefit of these enhanced repo transactions to clients is that they offer a reduced interest charge on the borrowing undertaken, as the proceeds from selling the CDS are effectively partially passed on to the client. In exchange, the client accepts the risk. In the case of default, the losses may be higher comparative to a conventional rebook. Based on the nature of these transactions, Deutsche Bank has the obligation to account for the net receivable or payable on its balance sheet according to International Accounting Standard IAS 32. There is no discretion on that. Secondly, with regard to impact of these transactions on our capital position, enhanced repurchase transactions are immaterial for our core ratios. These transactions are negligible for Deutsche Bank's capital ratio or leverage ratio. Total net to trading liabilities, which include enhanced reported transactions, are around 0.5% of total net liabilities. I want to highlight as well that the figures provided in the notes for Q1 and Q2 have not changed significantly over the last couple of quarters. Further, since 2008, these portfolios have never been material as part of our balance sheet. Now that I think I've bored you enough with a lot of results, I really come to the key current topic that you have all been expecting, I guess, which is obviously the discussion of our leverage ratios. So let's turn on Page 27, and bear with me as I walk you through our thinking around leverage. As you know, regulators, politicians and analysts have shifted their focus towards leverage ratios in the past few months. As you know, there are several methodologies proposed by the Basel Committee, the U.S. regulators, the PRI, the FINMA and the EU. Most of the proposed rules are far from final and/or will only apply to a subset of the group. For us as a European institution, the European capital requirements directive and regulation, or CRD4, will be binding. CRD4 was passed in Europe in June this year which does not currently specify any minimum leverage ratio. In fact, the definition of ultimate leverage measure and any potential minimum requirement is still subject to an EBA review in 2016, following an extensive monitoring period. This review will also include a recommendation as to whether leverage should become a hard Pillar 1 requirement from 2018 on or not. The CRD4 exposure, for leverage purposes, largely follows the original BCBS approach as per December 2010. For us, it amounted to EUR 1.583 billion at the end of June as you can see on the chart, including a CRD4 gross up of EUR 413 billion, which includes derivatives based on the regulatory current exposure method, meaning including notional based add-ons, but with no recognition for collateral, neither cash nor securities. It includes secured financing transactions that are treated according to the supervisory volatility adjustment approach, a standardized method used by regulators to calculate counterparty credit exposure for SFTs. Off-balance sheet exposures, notably undrawn credit facilities and guarantees extended and other effects like add-backs for DB claims with regard to collateral paid under [indiscernible] agreements, et cetera. In terms of capital, CRD4 is using Tier 1 capital under the phase-in and phase-out provisions equally included in Basel. Regulatory monitoring of leverage results has already started a public disclosure of the leverage ratio under CRD4 will start in the first quarter of 2015. Given regulations are still in flux internationally, and each with a high degree of uncertainty as of their final definition, we heavily caveat our pro forma numbers. Changes in definitions of the leverage ratio may alter the resulting leverage ratios substantially both up and down. Whilst we monitor against multiple measures, our primary focus right now is CRD4, which is the legal basis in Europe and, obviously, the regulation which will ultimately apply to DB group. I therefore do not want to drive the speculation any further by presenting numbers under a multitude of definitions, but focus instead on our leverage ratio under CRD4. Now, considering the EUR 430 billion CRD4 gross up for end of June, our pro forma CRD4 leverage exposure at the end of the period was EUR 1.583 billion, as I mentioned. With a Basel III pro forma Tier 1 capital of EUR 55 billion, or our CRD4 leverage ratio under the Basel and CRD4 phase-in provisions, amounted to 3.5%. Then, moving to a fully loaded Basel III scenario, but making the assumption that some portion of currently available additional Tier 1 will be replaced with new issuance as the old paper gets phased out, we arrive at an adjusted fully loaded CRD4 leverage ratio of 3%. As discussed, CRD4 does not yet set an explicit minimum ratio nor fix leverage as a Pillar 1 requirement, but a 3% minimum would not be unexpected and also seems to be the typical figure used by the market these days. So on a phase-in basis, we already exceeded a potential 3% requirement some 5 years early. And on a fully loaded adjusted basis again, assuming replacement of still eligible hybrids to new AT1 issuance, we today meet such a potential 3% minimum. As we have seen with solvency ratios, the market has made it clear that fully loaded is the preferred basis. We do not, however, consider that this presents a meaningful picture when looking at Tier 1 capital in the near term. Firms such as ourselves carry a significant volume of existing AT1 capital, which receives regulatory recognition and which will be phased out over a very long time. As this existing AT1 phases out, we will issue new eligible AT1 to support our total Tier 1 capital base. As such, we believe that the adjusted fully loaded capital base comprising fully loaded Core Tier 1 plus all currently eligible AT1 is the most appropriate measure. Let me be clear, this is an illustration on how we fulfill regulatory leverage requirements articulated in the European regulations today, assuming the 3% minimum. But we understand that market expectations and potential revisions to the current regulation may force us to reduce leverage further and we have all intentions to do so. So let me give you some further detail on how our thinking is on the next page. If you go to Slide 29, as I said, we are far from complacent about our leverage position, and we have a significant tool book of actions that we will look to apply over the coming quarters. You will have seen that we have already significantly reduced our total adjusted assets. Relative to the third quarter, we have reduced total adjusted assets by EUR 100 billion, nearly half from NCOU de-risking. While we see further opportunities for reductions in our balance sheet assets, there's also considerable potential to bring down the current CRD4 gross up. Here, we intend to reduce derivatives leverage through more efficient implementation of netting, especially against central clearing houses and a program of derivative tear ups and trade compression. Other measures include closer scrutiny of the volume of unutilized lending commitments. In aggregate, we are committed to reduce, over time, our current CRD4 exposure by about EUR 250 billion. While this does not come for free, we believe that any adverse P&L impact is manageable. According to the due diligence of our leverage task force, we calculate the full impact of utilizing the leverage tool books could be approximately EUR 600 million in one-off costs and roughly EUR 300 million of foregone future IBIT. On the capital supply side, we will see continued contribution from retained earnings, as well as a potential to issue new additional Tier 1 instruments as part of our existing AT1 starts to phase out. We have now implemented a similar process on the leverage side as we had with our Core Tier 1 Solvency ratio, and we expect this new program to be equally successful in delivering meaningful improvements in our leverage position. We are obviously aware that the debates regarding leverage is likely to continue. It is likely we would see further proposals which will influence the regulatory framework. We endorse the goal of building a more resilient financial system. The actions we take now will move our CRD4 leverage further above the 3% mark, giving us flexibility to comply with various regulatory outcomes. We remain committed to our current strategic vision in delivering, obviously, our strategic ambitious agenda and the targets contained herein. So this ends my presentation, and we gladly take your questions now.

[Operator Instructions] The first question is from Mr. Huw Van Steenis of Morgan Stanley.

Can I just ask two questions on leverage? First, when you were talking about the EUR 250 billion possible shrinkage in sheet, does that also include any potential measures you need to take to hit the -- a draft from bank rules in the states? And then secondly, you mentioned a EUR 300 million cost of forgone earnings, so 12 basis points. Could you perhaps just talk us through what -- well, 12 basis points sounds like maybe at the low-ish end but I assume that some of these is repos and the like. Any extra color you could give us on the types of business you might be -- potentially need to shrink?

I'll take your question, first, to the U.S. Obviously, we have the FBO rules. And as you know we put together a plan of asset reduction in the U.S. Some of it, as we have communicated, is effective asset reduction as well that will contribute obviously to our EUR 250 billion. Some of it obviously, in complying with the FBO requirements, we will also take assets out of the U.S. that don't have to be in the U.S. that for historical reasons were booked in the U.S. We have some repo books out of Frankfurt, some repo books out of Tokyo that we booked in the U.S. that obviously don't need to sit there. We consolidate our Mexican subsidiary into the U.S. So these are actions that will not result in reductions, it will just result in geographic redistribution of assets. That was part of the capitalization plan for the United States. In terms of the cost, it comes from a variety of assets. I think if you think about our balance sheet being a portfolio of assets, of course, we had quite a few assets as well that more or less had 100% cost/income ratio and were not performing or had very low RoE. And of course, in a leverage regime, you cannot afford to hold these assets anymore. So most of it is coming that you correct, one of the books is the repo book that also you will have to scrutinize and cut a little bit and focus on. But the rest of the assets -- it's really a big variety of assets. But don't forget the biggest part of the EUR 250 billion is going to come from the CRD4 gross up which really has no P&L impact.

The next question is from Mr. Kian Abouhossein of JPMorgan. Kian Abouhossein - JP Morgan Chase & Co, Research Division: I have maybe 3 questions, if I may. The one is quite detailed, the litigation expenses. Would it be possible to just split them very briefly between divisions? That would be helpful. The second question is on fixed income. Your decline on a quarter-on-quarter basis was maybe slightly weaker than I expected in consensus against peers. Just wondering if you can talk a little bit about the fixed income development, but also how we're seeing the second half with the Fed tapering expectation, how that could impact your fixed income line? And the third question is just on the U.S. legal entity. Clearly, we now have more detailed rules on the U.S. and we know that the Basel III will apply at a minimal 3 of assets of EUR 250 billion. We don't know if that applies to you and I'm wondering if this Basel III calculation would apply to you. If so, you've indicated in the past that assets should come down to EUR 300 billion. Would you shrink them even further in the U.S. below EUR 250 billion if that 3% minimum Basel III would apply to you and the U.S. legal entity?

Okay, Kian, let me talk with the litigation expense. About 30% of our litigation is in the NCOU, to give you that breakdown. The rest is in the Core Bank. And as you know, the largest part of that is in obviously our CB&S business, just to give you a feeling for your -- how to distribute the litigation expense. Now on the fixed income performance, yes, we had a weaker quarter. It's -- we feel that's pretty much in line with what we saw based on the weakening of the European market. We do -- did have the same experience in that geographically the U.S. was stronger and therefore, it was impacted. We don't see this is as an ongoing weakness. We just see this as a quarterly result with obviously everything that happened after the Fed tapering. We actually had a quite good run until that point and see certainly weakening profitability there and weakening activity in the fixed income area since. And then additionally, obviously, are impacted by the situation in Europe. On the U.S. Basel III rules published, we'll be covered in our FBO project. I think that everything we read about the rules that was post does not change our view, our position, or did not have an impact on the plan. We reran our plan. We revalidated what we want to do and it does not affect us. Interesting enough, obviously, in terms of our local size as we are significantly below the EUR 700 billion volume threshold that was given out for some of the leverage adders, we are obviously significantly below that in terms of our U.S. and it leads from that specific regulation would not be subject to any additional leverage requirements at this point. But obviously, we are still expecting changes for foreign banks to occur and we'll have to wait on this. But currently, I can completely confirm our U.S. plan. Kian Abouhossein - JP Morgan Chase & Co, Research Division: Just to follow up, your U.S. plan is based on U.S. GAAP, but there's also in the new FDIC document clarity that banks which reach -- have more than EUR 250 billion of assets have to have a minimum of 3%. And I was wondering if you would likely fall into that category or not?

Yes, probably. We are above the EUR 250 billion but that's the minimum of 3%. But don't forget the -- in our previous plan, we had told you that the constraining factor is not the Basel III capital. The constraining factor is the leverage, so when I discussed with FBO before, it was always the leverage constraint that one that was driving our capitalization, and we -- to be honest, actually use the higher leverage requirement in our assumptions. By the way, we use also this higher leverage requirement when we took the hit to our German books, yes. As I described to you at year end, we used the 5, yes, leverage in our assumption. So therefore, this has not had impact when we ran the numbers after changes made, and our plan is the same and not impact the future.

The next question is from Mr. Jernej Omahen of Goldman Sachs.

I just have 3 very brief questions this time around. The first one is on Page 16 and you point out in your comments that if we exclude the impact of Basel III mitigation, et cetera, revenues were up 13% year-on-year rather than the 9% reported. And I was just -- I wanted to ask you how should we think about the difference between these 13% and 9%? So this EUR 135 million of lost revenues per quarter, is this the cost of risk-weighted asset mitigation which we should think about on a recurring basis or is it something else? That's question number one. Question number two is you've been a very good job and thank you for this, for disclosing the CRD4 leverage ratio. Could you also give us the Basel III leverage ratio as per the most recent proposal? Because I take your point that the CRD doesn't come into effect, we're waiting for the EBA to complete their studies. But on the other hand, I think that you will -- or that every bank will have to start disclosing the Basel III leverage as of Q1 '15. But can you also please confirm that my understanding of that is accurate? And lastly, just a broader question on your targets and profitability, and Anshu made a statement at the beginning saying that he is reaffirm -- or that you are, Deutsche Bank, is reaffirming all the profitability targets communicated last year. And I was just wondering, for your 15% return on -- for your 12% return on equity target in 2015, I guess the share count is now higher by broadly 10% since you've communicated those targets. As I understand it, you've now hit the 10% fully phased Basel III but capital is going to grow further from here. So what is the implied increase of net income i.e., of your profits that allows you -- in this target, that allows you to say that the 12% is still on track given what happened to the denominator?

Well, let me go -- on your Page 16 question, obviously, a mitigation of CVA, DVA is to take out volatility of debt and it's cost of the hedging we do. And in that sense, yes, it is a cost issue if you have to think about of dealing with volatility. As you know, what CVA, DVA will do to any P&L is create lots -- tons of volatility, but over time is meaningless, yes. So in that sense, obviously as we manage that volatility, there is an additional cost associated to that. That's how you have to think about Page 16. Then on your Basel III. Obviously, we recognize that under the proposed and yet to be discussed Basel rules, some exposures get treated less favorable than under the CRD4. But I will be very clear through the actions that I've outlined, we create sufficient buffer to also deal with a 3% threshold under the proposed Basel rules. That's what I can tell you about that. Now in terms of your question on the profitability target of 2015. Our plan always included obviously the view that we will have substantially more capital, yes, and that obviously our plan needs therefore substantially more profitability than the historic profitability. Most of this assumption in profitability was a very conservative approach to revenue growth, which we had in the plan, and obviously, the substantial cost-cutting and efficiency improvements. So if you have to -- if you make your math or if you want to understand how we arrive to that and why we continue to be quite okay because we don't have a plan that's based on more than inflation driven revenue growth, right? So we don't see a risk to that plan. At this point in time, to be honest, on current performance, we rather see an upside to the plan where if I look at our performance versus in the half year, we are significantly ahead of that plan despite the fact that our cost-cutting has just shown first result, but obviously have not fully taken out a significant portion of our profit. So that's why with confidence, I can confirm to you that we stay in line with our targets.

Just on the Basel III leverage, can you at least give us a steer what you think the difference is between maybe -- not even on the ratio, maybe just on the risk capital measure i.e., on the total assets between CRD4 as you show it in Basel III?

Yes, I gave you the indication that within the mitigation that we announced to you, we will be able to deal with this. Think about the mitigation puts us at, and you can calculate at 3.6 CRD4 ratio with this mitigation, and think about that, that buffer then also will cover with the buffer and the reduction will cover our exposure increase under Basel III.

The next question is from Mr. Andrew Stimpson of KBW. Andrew Stimpson - Keefe, Bruyette & Woods Limited, Research Division: Sorry if I missed this but I just wanted to ask you how the AT1 issuance planning is coming along and how the discussions with the regulator are going, when you're thinking you might issue these instruments to replace that EUR 11 billion? And then whether you're willing to talk around a timeline for the mitigation of that EUR 250 billion for the leverage?

Yes, okay. The discussions with our regulators are ongoing. On recognition you know that in Germany, this is still an open topic while in other geographies, already the acceptance of, regulatory acceptance, of these type of instruments has been clarified. And therefore, we will get -- for sure, we will get a resolution hopefully within this year to really understand these structures. And then obviously, as our old issuance slowly run out over time, we will replace them with new issuance as we have articulated. And assume that the residual -- based on the announcement that will assume that the rest of -- we will issue the -- towards until the end of the year of the AT1 so I think we will be in a very good position in a very short period of time. And the timeline for the leverage, obviously we have said by 2015, we will have this asset reductions done but as I described previously, the pace of the more significant ones can be quite rapidly.

The next question is from Mr. Stuart Graham of Autonomous.

I have a few questions. Just on Slide 28, the EUR 11 billion of AT1, is this illustrative or are you actually saying you'll run with EUR 11 billion because I always thought you would not run with more than EUR 6 billion which is equivalent to 1.5% of RWA. So I'm just trying to understand whether you'll really run with the EUR 11 billion? The second question then is on your EUR 300 million profit guidance. Does that include the cost of issuing the AT1 or is that simply the cost of lost revenues from the EUR 250 billion slim down? And then I guess the third question is back to FIC revenues. I know you said you're relatively relaxed about it, but this is the third quarter in a row that you've missed consensus FIC revenues. I can't remember Deutsche ever missing 3 quarters in a row. So I wonder whether there's something going on in terms of your having to shift the business down as you've shed assets et cetera, and we're settling into a lower FIC revenue trajectory than we as the analysts have all thought about.

Yes, I'll take 2 of your questions. First of all, the first question is the EUR 11 billion honestly, my whole calculation is an illustrative calculation, yes. I wanted to show you what the potential is. We are committing to the EUR 250 billion, but then I did the illustrative calculation. So what I used is our current actuals and took the 10% haircut because that's the amount that goes off every year. So that's the basis of that number. Obviously, depending on how the structure comes in, we could issue more or we would not have to do anything that depends now on how our AT1 structures get defined and get regulatory recognition. Now if -- the second question was the P&L, that's the result of the specific EUR 250 billion cut, if I understood your question correctly.

Yes, so it doesn't include the cost of the AT1 then?

It does not include the cost of the AT1. It's only the asset cut. But because the level we have is EUR 11 billion, don't forget in my calculation, I used that, that's my starting P&L includes the cost of the current actuals, which the current actuals minus 10% that's why obviously didn't put in a difference in that. I agree with you, if you were to issue more, then obviously there will be obviously an additional cost to that. But that's why my calculation I wanted to only to tell you with what we have right now, assuming regulatory recognition, it's fine.

Let me take your first question on fixed income, as you might have expected me to. Now, look, we track market share and we track competitive trends very closely. We don't track consensus as closely frankly when we judge our divisions. So I cannot speak for why analysts see things a certain way. By our calculations, in the first half of 2013, I believe all our major competitors have now reported. We finished in third position in FICC. Yes, the gap to #1 has widened, perhaps that's what's driving some of this consensus. And if you ask me to speculate, our market share and the fees are all in line, our peer performance versus average is still pretty good. But it is possible that if there is strong U.S. fixed income performance might have the margin and a slightly dampened European performance might have had an impact, I would not put this down to any loss of competitive capacity or impact of de-risking. But the headcount cuts that we've done, the balance sheet reduction, the usual suspects, we're very sensitive to making sure that those are done in ways that don't impair our performance. And I'm confident the new team is on track.

The last question is from Mr. Michael Helsby of Merrill Lynch.

I've just got 2 quick questions, if that's all right. Firstly, on the -- just along leverage actually, can you confirm that your CRD4 gross up is based on the revised June text and specifically, that you've used the new 40% floors for the PFE calculation? And secondly, sorry if I've missed this. But can you actually break out the EUR 413 billion CRD gross up that you've given us for the derivative SFT and off balance sheet impacts, please?

Okay, Michael, to your first question it's a yes, we have utilized this last definition. And the breakout I will owe you because we haven't disclosed the breakup on this gross up.

The next question is from Mr. Jon Peace of Nomura.

Just 2 final questions, please. The first one is in private and business clients. Can you just remind me what you've said the size of the nonrecurring impacts were this quarter both through revenues and expenses with washer? And then the second question is, given the good progress you are making on Core Tier 1 in leverage, what does that imply to your dividend policy, bearing in mind the regulatory and the litigation challenges you've already highlighted?

Let me start on the core Tier 1. I think that at a point, we have not changed our priority, we obviously have to build capital first. It's very important that we have in our view achieved our 10% which gives us some room to move up and that's the flexibility we get. Now we, obviously, over the next couple of months, based also on our proposal and plan, have to look how our plan on leverage and how the leverage discussion pans out. We are honestly quite confident that with our plan, we will keep the flexibility as we are already in line with the CRD4 requirements to have flexibility around that point. But again, we haven't made any decisions or fixed decision now that we have to continue to observe what this leverage discussion. But from a capital point of view, obviously, the 10% achievement is, I think, a milestone in terms of the question that you asked. In terms of PBC, it was that we only had one nonrecurring item that was a provision release for our business, for a business, a separate business, a joint venture we had with HuaXia and think about the size of EUR 50 million above.

Excuse me, there are no further questions at this time. Please continue with any other points you wish to raise.

Thank you. So this concludes our second quarter analyst call. If you have any additional questions, please do not hesitate to get in touch with us directly in Investor Relations. With that, let me thank you for your interest in Deutsche Bank and wish you all a good day. Bye-bye.

Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.