Deutsche Bank AG (DB) Q3 2025 Earnings Report, Transcript and Summary

Ladies and gentlemen, welcome to the Q3 2025 Analyst Conference Call. I'm Moritz, your Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Ioana Patriniche, Head of Investor Relations. Please go ahead.

Thank you for joining us for our third quarter 2025 results call. As usual, our Chief Executive Officer, Christian Sewing, will speak first; followed by our Chief Financial Officer, James von Moltke. The presentation, as always, is available to download in the Investor Relations section of our website, db.com. Before we get started, let me just remind you that the presentation contains forward-looking statements, which may not develop as we currently expect. We, therefore, ask you to take notice of the precautionary warning at the end of our materials. With that, let me hand over to Christian.

Thank you, Ioana, and good morning from me. As you will have seen, we delivered record profitability in the first 9 months of 2025. We are tracking in line with our full year 2025 goals on all dimensions. 9 months revenues at EUR 24.4 billion are fully in line with our full year goal of around EUR 32 billion before FX effects. Adjusted costs at EUR 15.2 billion are consistent with our guidance. Post-tax return on tangible equity is 10.9%, meeting our full year target of above 10%. And our cost/income ratio at 63% is also consistent with our target of below 65%. Profitability is significantly stronger than in the same period of 2024, even if adjusting for the Postbank litigation provision, which impacted last year's result. Through organic capital generation, our CET1 ratio rose to 14.5% in the quarter. This reflects our latest share buyback program, which we completed this month and a significant proportion of next year's distributions. Asset quality remains solid. Provisions were in line with expectations, and we had no exposure to recent high-profile cases. In short, we are fully focused on delivering on our 2025 targets. Let me now turn to the operating leverage, which drove our profit growth on Slide 3. Pre-provision profit was EUR 9 billion in the first 9 months of 2025, up nearly 50% year-on-year or nearly 30% if adjusted for the Postbank litigation impacts in both periods. Similarly, adjusted for the Postbank litigation impact, operating leverage was 9% and profit before tax was up 36%. We saw continued revenue growth of 7% with momentum across the businesses. Net commission and fee income was up 5% year-on-year, while NII across key banking book segments and other funding was essentially stable. 74% of revenues came from more predictable revenue streams, the Corporate Bank, Private Bank, Asset Management and the financing business in FIC. Cost discipline remains strong. Noninterest expenses were down 8% year-on-year with significantly lower nonoperating costs, largely due to the nonrepeat of Postbank litigation provisions, while adjusted costs were flat. Let me now turn to our progress on the pillars of strategy execution on Slide 4. We are on track to meet or exceed all our 2025 strategic goals. Compound annual revenue growth since 2021 was 6%, in the middle of our range of between 5.5% and 6.5%. In a changing environment, we are benefiting from a well-diversified earnings mix. Operational efficiencies stood at EUR 2.4 billion, either delivered or expected from measures completed. In other words, 95% of our EUR 2.5 billion goal. Capital efficiencies have already reached EUR 30 billion in RWA reductions, the high end of our target range, and we see scope for further efficiency through year-end. During the quarter, we launched our second share buyback program of 2025 with a value of EUR 250 million, which we completed last week. This takes total share buybacks in 2025 to EUR 1 billion. So together with our 2024 dividend paid in May this year, total capital distributions in 2025 reached EUR 2.3 billion, up around 50% over 2024. This brings cumulative distributions since 2022 to EUR 5.6 billion. Finally, a word on our business on Slide 5. We are delivering strength and strategic execution across all 4 businesses in our Global Hausbank in 2025. All 4 businesses have delivered double-digit profit growth and double-digit RoTE in the first 9 months. Corporate Bank continues to scale further the Global Hausbank model and delivered strong fee growth of 5% in the first 9 months, while recognized as the best trade finance bank. Our Investment Bank has been there for clients through challenging times this year and has seen an increase in activity across the whole client spectrum, institutional, corporate and priority groups. Private Bank has made tremendous progress with its transformation so far this year, with 9 months profits up 71%. Our growth strategy in Wealth Management is paying off. Assets under management have grown by EUR 40 billion year-to-date with net inflows of EUR 25 billion. And in Asset Management, the combination of fee-based expansion with operational efficiency drives sustainable returns of 25%. We are benefiting from our strength in European ETFs and expanding our offering in that area. To sum up our performance in 2025 to date, we have delivered record profitability due to continued revenue momentum and cost discipline. Our 9 months performance is in line with our full year financial goals on all dimensions. We are on track to reach or exceed our strategy execution targets. We have demonstrated strength across all 4 of our businesses. Our capital position is strong and supports our aim of distributions to shareholders in excess of EUR 8 billion payable between 2022 and 2026. Before I hand over to James, I want to briefly address our future. We have built very strong foundations for the next phase of our strategic agenda. And with our positioning in the strongest European economy, we stand to benefit from powerful tailwinds coming from German fiscal stimulus, structural reforms and renewed client confidence. We look forward to discussing this with you at our Investor Deep Dive in London in November.

Thank you, Christian, and good morning. As you can see on Slide 7, we saw continued strong delivery this quarter against all the broader objectives and targets we set ourselves for 2025. Our revenue growth, cost/income ratio and return on tangible equity are all developing in line with our full year objectives. Our capital position is strong, and our liquidity metrics are sound. The liquidity coverage ratio finished the quarter at 140%, and the net stable funding ratio was 119%. With that, let me now turn to the third quarter highlights on Slide 8. Our diversified and complementary business mix resulted in reported revenue growth of 7% year-on-year or 10% if adjusted for foreign exchange translation impacts. Due to the nonrecurrence of a provision release related to the Postbank takeover litigation matter from which we benefited last year, third quarter nonoperating costs and noninterest expenses were both higher year-on-year. The tax rate of 26% in the third quarter benefited from the reduction of deferred tax liabilities due to the change in the German corporate tax rate, which will start to decline after 2027. We continue to expect the 2025 full year tax rate to range between 28% and 29%. In the third quarter, diluted earnings per share was EUR 0.89 and tangible book value per share increased 3% year-on-year to EUR 30.17. Before I go on, a few remarks on Corporate and Other with further information in the appendix on Slide 36. C&O generated a pretax loss of EUR 110 million in the quarter, mainly driven by shareholder expenses and other centrally held items, partially offset by positive revenues and valuation and timing differences. Let me now turn to some of the drivers of these results, starting with net interest income on Slide 9. NII across key banking book segments and other funding was EUR 3.3 billion. Private Bank continued to deliver steady NII growth, supported by the ongoing rollover of our structural hedge portfolio and deposit inflows. Corporate Bank NII was slightly down quarter-on-quarter, reflecting lower one-offs, while it continues to be supported by underlying portfolio growth as well as hedge rollover. With respect to the full year, we continue to benefit from the long-term hedge portfolio rollover detailed on Slide 24 of the appendix and are on track to meet our plans on a currency-adjusted basis. Turning to Slide 10. Adjusted costs were EUR 5 billion for the quarter. Cost discipline across the franchise remains strong. Compensation costs were up on a year-on-year basis, primarily reflecting the higher performance-related accruals, higher deferred equity compensation and the impact of increasing Deutsche Bank and DWS share prices. With that, let me turn to provision for credit losses on Slide 11. Stage 3 provision for credit losses increased in the quarter to EUR 357 million as provisions for commercial real estate continued to be elevated, while the prior quarter included model-related benefits. Stage 1 and 2 provisions reduced to EUR 60 million and were driven by further model updates, which, as in the prior quarter, mainly impacted CRE-related provisions. Wider portfolio performance and asset quality remain resilient. While the macroeconomic and geopolitical environment continues to create uncertainty, we continue to expect lower provisioning levels in the second half of the year relative to the first half year, primarily due to the expected absence of additional notable model effects impacting Stage 1 and 2. We are actively monitoring and managing risks from private credit, which, as outlined on Slide 28, accounts for about 5% of our loan book. Our private credit exposure predominantly reflects lender finance facilities extended to high-quality financial sponsors backed by diversified pools of loans. These facilities are overwhelmingly investment-grade rated internally and are underwritten and maintained with conservative LTVs. We apply conservative underwriting standards, including our assessment of sponsor and investor quality, loan sizes and structural features. We are comfortable with our portfolio. And as Christian said, we had no exposure to recent high-profile cases. As you might expect, we remain vigilant and have undertaken additional portfolio reviews in light of these events. With that, let me turn to capital on Slide 12. Strong third quarter earnings, net of AT1 coupon and dividend deductions led to an increase in the CET1 ratio to 14.5%, up 26 basis points sequentially. RWA were flat during the quarter. As we head into the fourth quarter, let me remind you of the 27 basis point CET1 benefit we still have from the adoption of the Article 468 CRR transitional rule for unrealized gains and losses, which will expire at the end of the year. Also, following revised EBA guidance from June 2025 regarding the calculation of operational risk RWA under the new standardized approach, we must now perform the annual update of operational risk RWA already by the end of 2025, which is expected to lead to a 19 basis point drawdown in CET1 ratio terms. All else equal, therefore, these 2 items applied to the third quarter would lead to a pro forma CET1 ratio of approximately 14%, which is also roughly where we currently expect to finish the year. Our third quarter leverage ratio was 4.6%, down 11 basis points, principally from higher loans and commitments alongside increased settlement activity at quarter end. Tier 1 capital was essentially flat in the quarter as the derecognition of the USD 1.25 billion AT1 instrument that we called in September materially offset the quarter-on-quarter increase in CET1 capital. Let us now turn to performance in our businesses, starting with the Corporate Bank on Slide 14. In the third quarter, Corporate Bank achieved a strong post-tax return on tangible equity of 16.2% and a cost/income ratio of 63%, maintaining its high profitability. Both metrics showed a year-on-year improvement for the quarter as well as for the first 9 months of 2025. As anticipated in the previous quarter, Corporate Bank revenues remained essentially flat compared to the prior year quarter, demonstrating resilience in a [indiscernible] challenging environment. Margin normalization and FX headwinds were offset by interest hedging, higher average deposits and 4% growth in net commission and fee income, driven by continued expansion in corporate treasury services. On a sequential basis, revenues were slightly lower as the prior quarter benefited from one-off interest hedging gains and seasonally stronger net commission and fee income. Loans and deposits remained essentially flat on a reported basis. Adjusted for foreign exchange movements, loan volumes increased by EUR 5 billion year-on-year, driven by growth in the trade finance business and by EUR 1 billion sequentially. Deposit volumes remained strong with underlying growth both year-on-year and sequentially, offsetting the runoff of concentrated client balances. Noninterest expenses and adjusted costs were essentially flat as effective cost management mitigated the impact of inflation and investments in client service. A release of provision for credit losses, reflecting a release of Stage 1 and 2 and a low level of Stage 3 provisions demonstrates the continued resilience of the loan book. I'll now turn to the Investment Bank on Slide 15. Revenues for the third quarter increased 18% year-on-year with continued strength in FIC supported by a material improvement in O&A. FIC revenues increased 19%, driven by strong performance across businesses. Macro products and credit trading demonstrated material year-on-year improvements following strong market activity through the quarter, while financing continued its momentum with revenues again higher than the prior year period, driven by an increased carry profile, reflecting targeted balance sheet deployment. Moving to O&A. Revenues were significantly higher both year-on-year and sequentially, increasing 27% and 22%, respectively. Debt origination was the biggest driver as both leveraged and investment-grade debt grew revenues year-on-year with the leveraged finance market particularly active, having recovered well since the second quarter. Equity origination revenues increased 57%, driven by strong issuance activity, including an improved IPO market. Advisory revenues were essentially flat year-on-year as the industry fee pool moved away from our areas of strength. However, pipeline for the fourth quarter is encouraging. Noninterest expenses were higher year-on-year, primarily driven by the impact of higher deferred compensation and increased litigation charges. Provision for credit losses was EUR 308 million, significantly higher year-on-year, with Stage 1 and 2 provisions materially impacted by further model updates during the quarter and Stage 3 impairments. Let me now turn to Private Bank on Slide 16. The Private Bank continued its disciplined strategy execution and delivered a strong quarterly performance. Profit before tax doubled, reflecting 13% operating leverage in the quarter. Return on tangible equity rose to 12.6%, showing robust growth both sequentially and year-on-year. Revenues increased driven by a 9% rise in net interest income from deposits and lending, while net commission and fee income was essentially flat year-on-year. Growth in discretionary portfolio mandates, specifically in Germany, was partially offset by lower net commission and fee income from cards, payments and postal services this quarter. Growth in Personal Banking was mainly driven by higher investment and deposit revenues. Lending revenues were up slightly, helped by the absence of an episodic item in the prior year. The continued expansion in Wealth Management and Private Banking was supported by solid momentum in discretionary portfolio mandates. Sustained cost efficiency underpinned by transformation benefits led to a 9 percentage point improvement in the cost/income ratio to 68%. Personal Banking continued its transformation with 24 additional branch closures in the quarter, bringing the total to 109 this year. These actions contributed to workforce reductions of 1,000 in the first 9 months, demonstrating continued strategy execution. Business momentum remains strong with significant net inflows of EUR 13 billion, supported by successful deposit campaigns. Underlying credit trends showed improvements with provision for credit losses benefiting from model updates. Turning to Slide 17. My usual reminder, the Asset Management segment includes certain items that are not part of the DWS stand-alone financials. Profit before tax improved significantly by 42% from the prior year period, driven by higher revenues and resulting in an increase in return on tangible equity of 9 percentage points to 28% for this quarter. Revenues increased by 11% versus the prior year. Growth in average assets under management, both from markets and net inflows resulted in higher management fees of EUR 655 million. In addition, performance fees saw a significant increase from the prior year period, primarily due to the recognition of fees from an infrastructure fund. Noninterest expenses and adjusted costs were essentially flat, resulting in a decline in the cost/income ratio to below 60% for the quarter. Quarterly net inflows totaled EUR 12 billion with EUR 10 billion into passive products, including Xtrackers, which also recorded its best day ever this quarter in terms of net new assets. SQI, advisory services and cash contributed a further EUR 3 billion of net inflows, which more than offset EUR 2 billion in net outflows from multi-asset and active equity products. Assets under management increased to EUR 1.05 trillion in the quarter, driven by positive market impact and the aforementioned net inflows. During the quarter, DWS received the necessary licenses to open a new office in Abu Dhabi, strengthening its regional presence and client engagement in the Middle East, reinforcing its position as the preferred gateway to Europe for global investors. For further details, please have a look at DWS’s disclosure on their Investor Relations website. Turning to the outlook on Slide 18. We are on track to meet our full year 2025 targets and remain confident in our trajectory to deliver a return on tangible equity of above 10% and a cost/income ratio of below 65%. Our year-to-date performance supports our revenue and expense objectives. Our asset quality remains solid. And despite uncertainty from developments around CRE as well as the macroeconomic environment, we continue to anticipate lower provisioning levels in the second half. Our strong capital position and third quarter profit growth provide a solid foundation as we head into 2026. We also completed our second buyback, taking total buybacks in 2025 to EUR 1 billion, and we reiterate our commitment to outperforming our EUR 8 billion distribution target. And we look forward to providing you with an update on our forward-looking strategy and financial trajectory at our next Investor Deep Dive on November 17. With that, let me hand back to Ioana, and we look forward to your questions.

Thank you, James. Operator, we're now ready to take questions.

[Operator Instructions] And the first question comes from Tarik El Mejjad from Bank of America.

Two from my side, please. First, I mean, you printed a strong Q3 results, which put you well on track to deliver on your '25 targets being revenues, cost, RoTE or capital. Can you run us through your thoughts on achieving your '25 targets and whether more importantly, Q4 would see similar or better trend than Q3 or on the flip side, we should expect some -- or could be some negative surprises. I'm always asking this because it's very important and it sets the tone for the trajectory and credibility of your medium-term targets to be released in 3 weeks' time. The second question, longer term, can you please discuss how a bank like yours would benefit from the German fiscal stimulus? I mean, how important is it as a lever, sorry, to your medium-term profitability? And maybe you can take an opportunity to update us on how the implementation of fiscal stimulus is going and the merits of it.

Thank you for your question. Let me start on both questions. First of all, we agree with you. It's unbelievably important that we achieve our targets for 2025 to further build up the credibility. But to be honest, we are highly confident in doing so. First of all, let me reiterate again also what James said at the end of his comments. A, we are really happy with the first 9 months performance. I think it really shows our strength. And it also actually shows the continuous improvement, the momentum, the validity of the strategy and in particular, in the times where we are with these geopolitical uncertainties, this concept of the Global Hausbank is actually gathering more and more momentum and clients want our advice, be it private clients, corporate clients, institutional clients. And therefore, to be honest, I'm really confident that we see this momentum also going into Q4. On the revenue side, look, we had a robust, actually, I would say, a very good start in October on the investment banking side. We have a good visibility when it comes to the pipeline on the O&A side for Q4. And the predictable or more predictable businesses are looking very solid for the fourth quarter, in particular, Private Bank and Asset Management. On the Asset Management side, it's not yet over the year, but I can -- actually, I would expect higher performance fees even coming in. So there is even some upside to the already quite positive outlook. So from a revenue point of view, while Q4 is always seasonally a bit weaker than the others, but it's actually in line with our plan, even potentially higher than the plan, and that makes me absolutely confident that we can achieve the EUR 32 billion. I think we know how to manage costs. We have shown that quarter-by-quarter. The same discipline will be applied to the cost line in Q4. And therefore, I think simply from an operating performance, I'm confident that we show another good quarter. From a risk point of view, look, we are there what we told you at the end of Q2 that the second half of 2025 will show lower provisions than the first half. We have started to see that in Q3. And from a credit portfolio point of view, I'm confident. I feel comfortable. We haven't been involved in those cases, which were quite heavy in the media, shows actually the underwriting criteria we have, the discipline we have. And therefore, I'm confident there. And that shows me overall, while there is always obviously some seasonal issues, but looking actually at Q4, it all adds to my high confidence that we will meet and potentially even exceed our targets when it comes to return on equity, when it comes to the cost/income ratio. And also as important actually to our target to shareholder distributions well above EUR 8 billion. And therefore, I think we also have actually a very, very good capital story, and I'm sure James will talk about that. With regards to Germany and how we build this into our plan, now I don't want to be defensive when I refer to our IDD in 2.5 weeks' time because obviously, we will talk about that far more in detail. But also, again, for -- or as an answer to your question, look, first of all, I have not changed my view on Germany and the stimulus program and what Germany will do, so to say, over the next 2 to 3 years. The government is clearly reiterating that growth and competitiveness is at the core of their agenda. And while there is noise about the speed of implementation, which I understand, we all wish even for a speedier implementation, we should also actually think about what has been done next to the, so to say, adjustment of the dead break. And actually, there are very concrete discussions between the government and other institutions, including ours, how to deploy now the EUR 500 billion, be it on infrastructure or be it on defense. But we have seen other reforms on the tax side, the investment booster, initial changes to social and pension reforms. And look, when we discuss with the government, there is clearly more to come. And therefore, we are very optimistic that Germany is able to grow by 1.5% in 2026. I can also see actually that, again, while the private corporates are calling for even speedier implementation, actually, on Monday, it came out that the ifo Business Climate Index was at the highest level since 2022. Now this is also much needed, but you can see that it's going into the right direction. You know about this Made for Germany initiative since the start end of July, when I reported here for the first time, we have almost doubled the number of companies which are participating. We are now at a committed number of more than EUR 730 billion of revenues -- of investments -- I'm sorry, not revenues of investments committed for the next 3 years. So of course, we need to keep the pressure on the government, and that is obviously needed. But I'm actually very optimistic that Germany will leave this flat growth scenario, which we have seen for too long and is coming back to growth. And that obviously helps us and more details on the IDD.

And the next question comes from Joseph Dickerson from Jefferies.

I've got a question first on private credit in a couple of areas. So I've seen your disclosure on Slide 28. And it seems to me that people tend to conflate private credit with other aspects of asset-backed finance and sponsor lending. So I guess, could you just give us your perspective on private credit and the outlook? What are the areas of risk you're looking at? And what are the areas of opportunity that you are also assessing because it seems like only months ago, this was a big area of opportunity for banks. So it would be interesting to have your opinion on the opportunity. And then just on nonbank financial institutions because I know the disclosure in the U.S. is different from Europe, where I don't think there's a precise definition, but how do you assess NBFIs and counterparties in that regard? So that's, I guess, the first question around private credit. And then secondly, on the CET1 ratio with the OCI filter and the op risk, which I think was pulled forward in the Q4. Can you confirm that going forward, you'll distribute capital down to the 14% threshold sustainably? Because I think that's an important point for investors.

Thanks, Joseph, for your questions. It's James. I'll -- let me start with the capital item you mentioned. So the short answer is yes. And we feel -- we wanted to indicate with the pro forma we gave even greater confidence about our distribution path from here. And let me just make sure that our comments were understood. The 2 items that we called out in the commentary are ones that we've talked about before. But we think we're in a position now through the EBA guidance and our own actions to bring both into the year-end ratio. You may recall that we talked about some volatility potentially in the ratio, so a high step off, which would not have given you a clean view of our position going into '26. We think we can now do that. And hence, the guidance of 14%, we think is really encouraging because it puts us in the position to generate excess capital from the start of the year essentially and then potentially distribute that. Now I'd also make the point that with the interim profit recognition that we have, as we sit here today, EUR 2.4 billion of capital is disregarded in the ratio. So the 14.5% excludes EUR 2.4 billion of distributions that are earmarked for distribution next year. And of course, 50% of net income in the fourth quarter would also be ready for distribution based on that 50% payout ratio. And then we would be in a position to exceed that based on earnings above that 14% starting point. So we wanted to send a strong message that we're starting at the top of our range. And that gives us greater confidence even than when we spoke a quarter ago. Just going essentially in reverse order, the NBFI disclosure really isn't very helpful because it captures all sorts of things that investors aren't looking for like clearing houses and insurance exposures and the like. And hence, the additional disclosure that we provided of approximately 5% of the loan book being to private credit. We talked a little bit about the nature of that lending. You asked about the opportunity. Look, we've been in this market for a very long time. So the FIC financing business is not new for us. We've been in structured credit lending for many, many years. And as a consequence, we think we have real capabilities to innovate and take advantage of opportunities in the market as they develop from here. We also have a good track record in terms of underwriting and discipline against our risk appetite. And so while we do see spread compression in the business that's coming from the additional capital going into private credit, whether that's from banks or from private credit industry players, we also see opportunities to innovate and grow the book. We've been very disciplined, as I say, in that business, but it is one that we've successfully and I think, profitably grown in the past. And we think that's continuing notwithstanding the spread compression point I made earlier.

Great. So just to conclude on the Q4 capital position, it sounds like you're creating a position of strength for next year.

Position of strength, absolutely. We talked about the OCI filter starting in the third quarter of last year. It was a feature of CRR3 that we and other banks availed ourselves of. So a temporary protection of about EUR 800 million in unrealized losses on essentially sovereign debt. And then we've also talked about the fact that in the old regulatory guidance, we would only recognize op risk RWA increases in the standardized approach that refer to the prior year's revenues. Based on new EBA guidance, that's expected to be recognized already in the year. And those are the 2 items we're calling out. And the good news for investors is it will take the volatility out of our disclosure, but the guidance of a 14% endpoint, we think, is encouraging.

And the next question comes from Giulia Miotto from Morgan Stanley.

I want to first follow up on the capital distribution point. Is it fair to expect 2 buybacks next year? So one with Q4, of course, and then the second one, I don't know, perhaps towards midyear results given that you start already from 14%, you build excess capital from there and you intend to distribute everything down to 14%. And then -- and to be clear, I'm trying to confirm that there are no potential downgrades to the at least EUR 1.5 billion of buybacks expected in '26 from consensus. And then secondly, thank you for the additional disclosure on private credit. That's helpful. I think you stated that these are exposures to high-quality lenders, investment grade with conservative LTV. Do you disclose the average LTV and also concentration? How big is the largest exposure? Would you be able to give these numbers, which I think could reassure investors even further?

Sure, Giulia, thank you. So again, going to the distribution piece, yes is the short answer. We're all kind of reacting to the rules as they have evolved in Europe as to how to craft the distribution policies and go through the approval hurdles. But in our case, I think investors should expect that in the, call it, the first half, maybe 7, 8 months of the year, we would be in a position to distribute what is accrued, if you like, on the basis of that 50%. And then assuming there is in our capital plan, excess capital, then it would take a second application and second approval process to do that, actually similar to what we ultimately did this year. But obviously, as net income rises and the forward view comes into focus, those numbers essentially increase with earnings. The other thing just to point out is that we talked about last quarter the sort of sustainably above concept. And what I want to make clear is that it means that in our capital plan, that amount of capital above 14% isn't just a flash in the pan goes away. But it also means that opportunities that we see in the capital plan as they materialize also can produce excess capital. To give you an example, FRTB is still in our capital plan and were that to be pushed out or amended that then our capital plan would potentially show additional excess capital. Equally, good news or in the sense of slower demand for capital in the businesses can also create excess capital. So I want to be clear that, that's how it works. But -- and therefore, Giulia, in your framing of it, that's what the second application would then take into account with the passage of time. On private credit, we do disclose on Page 28, the LTV associated with the -- with that 75% block that we refer to as lender finance. So that's the diversified pools of credit that have back leverage against them, and that is below 60% with an LTV maintenance covenant in, I think, most or all of the facilities. And that's actually reasonably typical of the type of lending here. In fact, when you go into other types of private capital lending, say, subscription finance or NAV financing, you find LTVs even lower in the case of NAV financing, significantly lower than that 60%. So we take it to be -- except in the case of fraud and fraud only really hurts you when you're in a single lender facility or single asset facility. And we have a very small exposure to that type of nonrecourse single asset as a percentage, again, of that 5% of the loan book. So hopefully, that gives you some color for what the exposures look like.

This was super clear. Just if I can follow-up, can you quantify the exposure to this single lender facility that you just mentioned?

I think it's less than 5% of the 5% by memory. So it's a very small exposure. And actually, I would add to that, Giulia, that in those cases, given that it's single asset, the oversight that we put and the LTVs we're willing to lend at are even more conservative than when it's a pool. So we -- again, no one is ever going to be perfect in lending, but we feel that these portfolios are very robust in terms of their protection attachment points and oversight.

Great. And the last follow-up. The 60% LTV is on 75% of this private credit exposure. On the remaining 25%, what sort of LTVs do you have?

Average would be lower than the given the composition that I mentioned of what is otherwise there.

Then the next question comes from Flora Bocahut from Barclays.

I wanted to ask you a first question on the op risk comment you made regarding the annual update that is coming at year-end. I just want to understand how much of a one-off this is because you mentioned annual event when you comment on it. So is this something that's going to hit again every year? And if so, do you have an idea of the magnitude? So just to assess how recurring an event this could be? And the second question is on the Corporate Bank revenues. The fee growth is clearly positive, but has been slowing a bit this quarter. The NII declined slightly sequentially, which you commented on. For you to make the guidance for the full year, it would imply a boost suddenly sequentially in that revenues for Q4. So anything you can give us on how confident you are that there is going to be a rebound Q-on-Q in the Corporate Bank revenues in Q4?

Thanks, Flora. Yes, the op risk item is now a permanent feature in the standardized approach to operational risk RWA. It also, by the way, removes the volatility intra-year. So we will record a number in December, and that will be flat through the balance of the year. I think it runs off a 3-year average. So each year, you have to update for that year's new revenue number in the 3-year. On CB, I do think we're looking at a, what I'll call a trough in revenues. Now I think we want to be a little bit cautious about that prediction. But to us, NII should be passing through a trough, a sort of a mild increase going into Q4. But beyond that fee and commission income, there's always -- remember, a little bit of sequential seasonality. Q2 tends to be the highest quarter of the year because of dividend season and what happens in the trust and agency business. So Q3 is always a little bit softer. But this steady build of the fee and commission income streams in the Corporate Bank, we expect to continue in the years ahead. Obviously, we'll talk more about that on November 17. But it has a -- so I would expect to see Q4 continue to show momentum, perhaps accelerating momentum against where we've been very recently. And again, it's a business where you compete for business with RFPs and put on the business. So you have some visibility into, if you like, a pipeline of new activity coming through in Corporate Bank.

Let me just add to the last point. I think this is a really good point James is making. Just take, for instance, the example of Miles & More in Lufthansa, where for the last 2 years, actually, we have invested in the transition now to the Corporate Bank. And that we actually can see on various fronts, in particular, on the payment platforms with supplying new technology. So I would -- as James is saying, I would expect a slightly increasing number in Q4 in the Corporate Bank. But in particular, the investments we are doing for the fee and commission business are building up and building up. So it's actually quite a nice story. Now even more important is that if you -- despite the Q3 number, which was slightly lower than the consensus was, look at the profitability of the Corporate Bank. It again increased, and that also shows that more and more we apply technology, and that means that our process is getting more efficient and cost/income ratio is going into the right direction. So overall, despite potentially a non-beat on the consensus of revenues, the overall development in the Corporate Bank makes me actually very confident.

Actually, probably one thing just to add. I think, Flora, you may have asked for the op risk, the RWA number that we're assuming in Q4, it's about EUR 4.5 billion that would, we think, mechanically come into the denominator for the ratio, just to close that gap.

And the next question comes from Andrew Coombs from Citi.

If I could ask one on the Investment Bank and then one on the Private Bank. So on the Investment Bank, if you take the provisions, you talked about model effects driving higher Stage 1 and 2. But perhaps you could elaborate on that and confirm that that's a one-off model change, you wouldn't expect it to repeat. And then secondly, on the Private Bank, very, very good broad-based strength across both personal and wealth management. It looks like the margin trends you're seeing there, particularly around the deposit book are very different to the corporate bank. So perhaps you could touch upon that. And also the operating leverage in that business. You've managed to grow revenues and still strip out costs at the same time. So where do you think the operating leverage could move to?

So Andrew, I'll briefly take the first item. The -- so look, it was about EUR 100 million of it was in total in Stages 1 and 2. And that was almost entirely driven, I think, by model changes. And it was a probability of default model that we changed this quarter. Last quarter was an LGD model. And Look, we've been updating the models to reflect where we are today in the interest rate cycle, new data that's come in. But to your question, that we're done for the year. The model adjustments that lie ahead are negligible. And actually, over the full year full firm, the model impact will be -- will also be relatively immaterial. So that's what it is in there. So EUR 100 million of the EUR 300 million was model items, EUR 100 million or thereabouts was CRE.

And Andrew, on the second question. Look, if you compare the Private Bank and the Corporate Bank, we have to be fair because the starting point for the Private Bank, obviously, from a cost/income ratio profitability is a completely different one than the Corporate Bank, and we had to expect these improvements. Now the good thing is that Claudio is really running a very, very clear strategy in doing 2 things. On the one hand, continuous growth on the top line, in particular, when it comes to asset gathering. If you look at the assets under management in Wealth Management, but also in the Private Bank with the deposit campaign and strategy, it's really looking well. And I told you in my initial remarks to the first question that I expect actually that the private bankers will also show a very solid Q4. And on the other hand, all the investments we have done over the last years are actually finally paying off in terms of cost saves. And that makes me most confident that next to the nice continuous top line growth, we will see a continued flow of cost reduction because we are going more and more into straight-through processes, in particular, in Personal Banking. You have seen, so to say, month-by-month new items when it comes to digital technologies, whether it's a new mobile app. And you can see that these investments are paying off and that costs are coming down. We are continuously reducing our branches and move into more digital setup. So that momentum, which you see is obviously forecasted and expected to hold also into the next years. But when you compare to the Corporate Bank, we need to be fair. It was a different starting point.

Then the next question comes from Stefan Stalmann from Autonomous.

I would like to follow up on the point that you made, Christian, regarding the Lufthansa credit card portfolio. I think that's now coming basically on board. Could you maybe remind us roughly of what kind of revenue impact we should expect there? And the second question relates to your very helpful disclosure of the daily trading P&L, Slide 26. You have now had a couple of quarters where you have very strong trading days very much at the end of the quarter or maybe one of the last 1 or 2 days of the quarter, around EUR 100 million often. Can you provide any color of what exactly is causing this kind of spike towards quarter end? Or is it a pure random walk?

Stefan, thank you. So I won't give you the detailed numbers because it's a one-to-one relationship, and we shouldn't do this. But a, we are in the middle of the transition from an IT point of view, I think this is very important because we talk about a large transition from one bank to the other. It's going actually very, very smoothly. We started with the pilot at the end of Q2. We have increased the volume then over Q3, and now we are in the middle of moving all clients actually to our offering and very, very encouraging start in October. And overall, it is clearly a revenue increment to the Corporate Bank, which is well in the double digits per year. And in my view, with more upside. And the more upside is actually the cross-selling, which we are able to do in our Global Hausbank from corporate to private clients. I mean this is the strength of Deutsche Bank that we can now actually apply that to 19 million private clients, and that's what we are going to do. Secondly, this is a signal to other operators with similar loyal cards and similar systems that Deutsche Bank can handle that, and that makes this business so attractive you think also when you think about other corporate clients. So on the individual clients, clearly value enhancing and good revenues, but I expect far more actually from cross-selling and with other corporates.

And Stefan, it's a good observation that the markets revenues will often have a strong sort of quarter close. It depends on the quarters. But very often, it is essentially as we evaluate reserves, so day 1 P&L and illiquidity reserves and the like in the business that those determinations are made towards the end of a month or a quarter. That is kind of one of the reasons why guidance in the business isn't always perfect to do. But there's also events during those last, say, 10 trading dates that can influence the result that are part of the, as you say, the actual ebb and flow of the markets. And then there are also some quarters in which we have specific transactions that are taking place and through our systems. that are, if you like, just happening to take place or designed to take place at the quarter end. This is a quarter where, in fact, we had all 3 of those things. So it was a very strong finish. But to your question, it's not entirely accidental that the quarter can finish strong, especially with the reserve releases. And some of this is difficult to predict precisely.

And the next question comes from Nicolas Payen from Kepler Cheuvreux.

I have 2 questions, please. The first one will be on your structural hedging actually. Could you tell us how you think about your structural hedge supporting your NII trajectory for the next few years? Because at the end of the day, it's supposed to become a strengthening tailwind. So if you just could discuss how you think about it and also maybe with your strong deposit performance, especially in PB, could we see further notional increase supporting further your NII trajectory? And the second one would be on your loan development, especially on the investment bank has actually been very strong. And just wondering what drove that strong increase sequentially.

Nicolas, thank you. So yes, and I would point you to the disclosure on Page 24 of the deck, where we show you the hedge amount and the future benefits we expect from the hedge. The answer is we are relatively programmatic about our Caterpillar. So the assessed duration of the deposit books and rolling over the hedges of that. And you can see in the disclosure. And of course, that increases as the deposit books grow and particularly as the Private Bank deposit book grow because it's longer -- it's deemed to be longer tenured or modeled as longer tenured, and it is more euro-based than the corporate bank book. So that -- what we're showing you is essentially what that -- just the model or the hedge revenues will be in the future, and they do benefit from growth. Think of it as a static portfolio here, but growth in deposits will increase that going forward further. I want to make one other point here. I think we asked -- we've talked to this in one of the previous calls, but we also take positions to anticipate deposit growth or protect ourselves from specific market environments that we see. So it is a little bit more dynamic than simply this one 10-year Caterpillar. But in essence, it produces the revenues that you see here. What's driven the loan growth in the Investment Bank? Over the course of the year, it's principally been in the private credit portfolio that we talked about. So we have seen good opportunities to deploy the balance sheet there. But also O&A has seen some growth essentially as the business grows and we see more activity, you've also seen some deployment there.

And the next question comes from Tom Hallett from KBW.

So firstly, I'm just wondering if there are any underperforming assets on your books, which may be deemed noncore? Because I can see some articles on the DWS data center sale in the pipes. There's previously been talked about India and possibly Poland. And then secondly, maybe thinking a little bit ahead and possibly to the Investor Day, but will you look to run the business on a cost/income basis or an operating leverage basis or absolute basis? And what are the hurdle rates for allocating capital out to the businesses? And I kind of say that because I see the allocations continue to increase towards the Investment Bank.

So Tom, I'll take that, and Christian may want to add. Let me just, first of all, say that I don't want to speak to specific actions or events in terms of things we might exit until we're done with that. And -- but certainly, we're looking at the businesses, and we've talked about this since Q4 with this SVA shareholder value-add lens with a real focus on driving more of the balance sheet to being above hurdle and showing real discipline there. Now, there are a number of ways to do that. It can be pricing. It can be, again, reallocation of capital internally. But we do have that discipline, and we'll talk more about that on November 17 when we come together for the Investor Deep Dive.

I think you said it all. And the only thing is, Tom, I think we already started to implement that step by step. You have seen some action already in the German mortgage book where Claudio decided to exit sub businesses exactly for that reason. I think we are now in the position to do this, whether it's on the pricing side, whether it's on the more consequent capital allocation. So as James is saying, you will hear far more on that in November 17, but I can also tell you that we started to do that, and it shows the first very positive impacts like you see in the Private Bank.

The next question comes from Anke Reingen from RBC.

The first is just coming back on private credit. I mean, I guess you gave quite a lot of detail on the credit side. But can you sort of like give us an indication on how much the business has sort of like contributed to the top line business of private credit and driven the growth just in terms of is there could potentially be a risk if that area is becoming under more scrutiny? And then secondly, I know we have your Investor Day coming up in November, but just looking backwards and acknowledging 2025 isn't quite completed. But if you look back on the 2022, 2025 plan, what are sort of like the lessons learned in terms of good and bad when you embark on your new plan?

Goodness. The second is a long open-ended question that I might give to Christian, but we'll both have, I think, lessons learned to share from the last several years. Look, I would simply point to the financing, the FIC financing revenues you see on Page 15. And obviously, it's not all private credit. There are other activities than private credit in there, including incidentally commission and fee income that typically is earned from distribution of assets. So whether it's asset-backed facilities or warehousing of, say, CMBS before issuance. So there's a bunch of things going on. To your point about risk, look, it's a banking book business, which we think is attractive in terms of its stability in the revenues, its predictability in terms of the spread that we can earn and its risk profile. I mean we've been -- as we're preparing for today, we've been racking our brains as to whether we have had a risk event, sort of a loss event, at least in the portfolios we've been talking about today. And I said earlier that we think we've got some really good intellectual property. So is there a risk to the business in terms of a difficulty in the cycle potentially. But to be honest, given the nature of the business, we don't really see that or our own appetite, acknowledging that our appetite has been disciplined and consistent over the years as we've been in the business. So the short version is we like the business. We think we can continue to grow, but we'll grow in a measured and sort of risk-appropriate way.

Look, Anke, really good question. And I actually need to think a little bit longer about that. But let me start with 2 or 3 lessons learned from a good point of view, from a good side, and then I'll give you also one where I think we could have done better. Number one, remember when we did this, that was 10 days after Russia invaded Ukraine. And a lot of people told us, don't go for an IDD, and we did it. And that shows our underlying confidence in this bank, the strength of this bank, that the Global Hausbank is exactly the right strategy and that we continue with that IDD. And to be honest, I'm really proud of this organization, what they have delivered in those years, which were full of uncertainties, but they kept to the plan. The team worked very, very hard. And I think it was at the end of the day, exactly the right decision to go out. And that was the first thing that if you are convinced with something, you should also be courageous, and we did this, and it was the right thing. Number two, lesson learned whenever you do an IDD, you need to take your team on a journey. And it's not only, so to say, for the market and for you, but it's also something where you need to motivate 90,000 people. And I think we did this. Can we do even that in a better way? Yes. And we learned some lessons, and you will see it then on November 17 when we talk about how we carry that out internally because it's a story not only for the market, but for our people because our people are driving this bank. Number three, I think the Global Hausbank strategy in itself, huge success. And as I said, we can see that it's developing better and better from quarter-to-quarter because people want to have their anchor in times of uncertainty, and that's actually we are that European answer to that. Number four, with certain, so to say, portfolio decisions, we could have been more consequential, I would say. And that is certainly a lesson which we have learned. And you know what, there is now time to correct that. And therefore, I'm looking forward to the next IDD.

And the next question comes from Chris Hallam from Goldman Sachs.

So 2 for me. And the first one, once again, on capital. So 14.5% headline CET1, 14% pro forma for Article 468 and the op risk headwinds that you flagged. So you should see around 20 or 25 basis points of cap gen via retained earnings in Q4. So I guess, finishing the year 14.2%, 14.3%. You've mentioned you want to finish around 14% -- so I guess just anything else to flag in Q4, maybe on the RWA side or on an accrual rate above 50%? And then anything you can already see coming early next year? I'm just trying to think about what sort of position you're going to be in by the time we get to Q4 numbers in the AGM. And then the second, which is a slight follow-up to the points you made earlier, Christian. In the Private Bank, you've kind of had this story so far this year of growing deposits but declining loans. And so what's your best sense of how that evolves in the coming few quarters or through the balance of next year because rates are coming down, borrowing is becoming more affordable. The economy is doing a bit better. You've been investing in the digital setup, as you mentioned. But then against that, you've got this capital discipline focus. So I'm just trying to get the balance of perspective there.

Thanks, Chris. It's James. I'll take the first, and I think Christian will do the second. Look, the only thing that is at this point now seasonal, given the adjustments we walked you through is really the share repurchases we do for equity comp delivery in the first quarter. Now the first quarter tends to be seasonally from an earnings perspective, also among the strongest. But otherwise, it is simply the math of organic or net income less the 50% payout assumption and then offset by growth or demand in the businesses. Now sometimes we overestimate demand. And that can, as I said earlier, produce excess capital, but we, of course, wish to support the businesses, support clients with the capital deployment. So we want to be reasonably conservative in our capital planning to ensure that we have that room to grow. You have had lots of changes in rules and methodology and so on over the years. I would see that slowing down now that we're in CRR. That should become more-rare. Now, I want to be careful about a forward-looking statement given how much is built into this. But internal capital generation, all of that considered in a range of about 25 to 30 basis points has been -- if you peel through it all, kind of a norm. And the question is going to be where all of the ingredients fall out going forward. But short version is we do feel we're in a strong position to generate excess capital and do so kind of on an accelerating basis in the years ahead.

Look, Chris, on the Private Bank, we clearly have our plans to continue to grow deposits and use that kind of attractive funding to replace more expensive sources. On the business overall, I would say we expect a flattish loan growth in Private Bank overall. Now clearly, some growth to see in Wealth Management. I think it's an attractive area where we can actually grow, and we have plans to do so. In other areas in the Private Bank when it comes to mortgages, I would say it's rather flattish because, again, we are absolutely measuring that portfolio via SVA. And if it's not value accretive, we won't grow that. And overall, in the Private Bank, like I said before, Chris, if you look out longer for the next 3, 4, 5 years, the real big upside in the Private Bank is on the asset gathering business and on the investment business. And not only with our market position in wealth management, but in particular, when it comes to retail and personal banking. And that's all tied to the plans of the German government because you will see that next to the state pension, there is a necessity that on the private side, people need to do more, and this is where we are looking into. There, we are working on a digital offer. There, we are working on offers for retail clients to grow that business. And if you think about our Postbank clients, which are the majority of the retail clients and their access to those products, it's actually, for the time being, not very much used, and that shows the opportunities we have in that business. So our focus when it comes to the Private Bank is clearly on the asset gathering side.

And the next question comes from Jeremy Sigee from BNP Paribas Exane.

Just a couple of follow-ups, please, on the Private Bank and the Corporate Bank. On the Private Bank, you talked about further cost savings. Are there any step change cost saves still to come through in the Private Bank, particularly from integration-related or system takeout? Any step change? Or is it just incremental process efficiency kind of bit by bit from here? And then second question on the Corporate Bank. You mentioned growth in trade finance year-on-year. And I just wondered what areas that was coming from? Is it Germany, Rest of World, any particular industry sectors?

Jeremy, on the Private Bank, to be honest, let's also wait for the IDD because you get a quite good outlook for the next 3 years, what we are doing there. But it's a continuous improvement. Continuous improvement from actions which we have started to implement. If you think about the plan how to reduce branches and make that business more digital for our clients, then this is something which you plan in '23, '24. And we now see the effects. And therefore, I'm so happy actually with the quarter-over-quarter cost takeout Claudio can do in particular in the personal bank, but that is going to continue because we know already now how many branches we close in '26 and later on. Secondly, we are working constantly on straight-through processing, and that is with regard to payments, that is with regard to the lending process, that is with regard to the investment process. And that is the reason why we have changed the bank initiatives and investments, and you will see that as obviously then cost efficiencies going forward. So I would expect a continuous improvement on that side, but more details in the IDD.

And Jeremy, I'm not aware on the trade finance question, I'm not aware of any particular sort of trend or concentration that we're seeing in terms of where the growth is coming from. You'll recall that we've been sort of waiting for the growth from the balances. We kind of were stuck at that kind of 115 level. We do now begin to see some growth. And the place where our emphasis is in structured trade finance. And so that's really the business that we're seeking to grow.

And the next question comes from Mate Nimtz from UBS.

Yes. Just 3 shorter questions, please. The first one would be on the IB. In the cost base, G&A expenses show about a EUR 100 million increase quarter-on-quarter. I'm aware that some of that is some pickup in nonoperating items, litigation. But any further explanation on that step-up? And how should we think about the year-end from this perspective? Then the second question is still mainly staying with the IB commercial real estate. Could you give us an update on that asset class on that part of the book? Provisions are still at a high level, particularly Stage 3. I think in the commentary, you called out on the slides, West Coast defaulted assets still. Any thoughts you can share on the outlook in Q4 and next year would be helpful. And just the last one on the Private Bank, and I'm cognizant this is something you'll talk about, hopefully, in 2.5 weeks. But we are seeing a return on tangible equity now firmly above 10% for the second quarter in a row, 12.6% in Q3, impressive step-up from a mid-single-digit level in the previous couple of quarters, and that's without much movement, obviously, on lending. Is this the bare minimum level we should be having in mind as a base going into 2026? And any further improvement on the cost side or coming from investment products will offer the upside. Is that the right way to think about it?

Thank you for your question. I take the last one. Look, we clearly expect further operating leverage in the Private Bank, and we will talk about that in 2.5 weeks' time. But very happy that we are above 10%. That's what we promised you. That's what we delivered. And from here, the way is up.

And then, Mate, on the 2 items you said on IB cost base, nothing noteworthy there. There was a bank levy that we booked in Q3 that gets mostly allocated to IB and then some odds and ends in terms of professional services, market data going up and the like, but nothing that I would call out. On CRE, we talked about this going on, I think, 2 years plus. And there's obviously been a cycle and that cycle has taken us close to the severe stress that we initially called out on a -- for the stress tested portfolio. I do -- while I'm cautious about calling an end to this, and I don't think we're there. There's still going to be some provisions, we think that will come in time. But as I've said before, they tend to be valuation adjustments on existing defaulted positions. And in a sense, they're becoming more and more concentrated, as we called out last quarter in the West Coast of the United States in the office portfolio. So as that sort of bleeds out and comes to a steadier level, I would expect to see this begin to fall off in the next several quarters. And you've seen, again, some signs of strength as cautious as I'd like to be on East Coast, I think office has significantly recovered and other aspects of commercial real estate outside of office have been strong. So we're looking at it as we think in a healing process.

And the next question comes from Kian Abouhossein from JPMorgan.

Just coming back to CRE. On Page 29, if I look at the Stage 3 loans in the IB, I guess that's where the -- some of the CRE issues rose. And just trying to understand if you can give a little bit more detail, is the several loans? Is this 1 or 2 loans where you had default issues? And coming back to the outlook question, I mean, if I look at the comment on Page 30, advanced stages on the down cycle reached, but U.S. office headwinds remain, considering most of your book is actually office related. I'm just wondering what gives you the confidence on your previous statement, the last question that actually we're going to see an improvement here considering your low coverage levels? And then the second question is on...

I'm sorry go ahead.

Apologies. Risk-weighted asset outlook. How should we think about the risk-weighted asset outlook? Should we think about it's going to remain flattish going forward? Or should we think about growth, but then you potentially have further optimizations to do, which leads to the flattish number, i.e., growth with this net is what I'm trying to get to.

Yes. So Kian, thanks for the follow-up. Look, it's a handful of loans. And I'd say concentrated in this quarter, say, less than 10. So there was a concentration of events that -- where we saw valuation changes. And one thing I've been tracking now for several quarters is the number of loans that is coming up for refinancing or extensions where we see either events or new appraisals coming down the pike. And Kian, the answer to your question is those things are beginning to slow down, what I'd call perhaps the forward-looking indicators on these things. So again, I want to be cautious now having thought we'd found the bottom and discovered false dawns, but it does feel like it's very late cycle at this point on this down cycle in commercial real estate. On RWA, to be honest, we'd like to see healthy growth just of the businesses and client demand. And as I said earlier, we think our capital plans absolutely accommodate that growth. But to your point, we will continue to work on efficiency and also sort of portfolio collect -- sort of concentration, if you like, or optimization as time goes on. And we think that, that can contribute to even further improving revenue to RWA profiles and more efficient capital usage. And that would be an offset to the simple, if you like, unweighted growth in the balance sheet and business.

And just on -- when you say you're coming to the kind of end of the cycle of these kind of readjustments on the loans, the duration must be quite long in the CRE book, more than 2 years at least. So I'm just wondering why we would think about having reached the peak or maturity of the cycle of making adjustments at this point?

Typically, Kian, 5 year -- the structures typically are 5 years. They tend to be extendable. And so -- and the point to your question is we haven't done a great deal of new lending. So this is a portfolio that's now quite seasoned in terms of either having been extended and refinanced or having gone into default and through sort of a restructuring or into real estate owned. So it's really a question of seasoning of the existing portfolio and a forward look on to loans, as I say, that are coming up to events. But those that are still open are robust properties. And that's other than a handful, and that's really what's giving us a forward view.

So it looks like there are no more questions at this time. And I would like to turn the conference back over to Ioana Patriniche for any closing remarks.

Thank you for joining us and for your questions. For any follow-ups, please come through to the Investor Relations team, and we look forward to speaking to you at our fourth quarter call.

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