[Operator Instructions] The first question comes from José Abad from Goldman Sachs. José Abad: I have two questions. The first one is on Spain. Latest high-frequency indicators, including labor market data, point to a significant slowdown, particularly in household consumption. So I guess the first question is whether do you expect that pickup in cost of risk beyond the 41 bps that you reported in Q3 at some point over the Q4 or maybe 2020? And related to this, whether you are revising on the back of this, your expectation for loan growth in Q4 and 2020 as well? And if I may, another question on the upcoming stress test to be run by the EBA next year. Santander has been a top performer in previous situations of the test, mostly due to your regional diversification. Do you anticipate any meaningful change in the macro assumption and/or in the methodology that may change this next year? José Antonio Álvarez: Well, José. Thank you for -- the first one related with the situation in Spain and how this slowdown in the economy may affect the cost of risk. We are not anticipating at this stage, although we share a view in relation with the -- of the macroeconomic situation of the country close to the consensus, we do not anticipate at this level a material change of the cost of risk, and we are not seeing any signs of deterioration in the cost of risk with the figures that we have in mind based on consensus. In relation with the loan growth. I will split -- I will be -- I would like to elaborate a bit more here. As you can see in our numbers in -- well, for several years, and I've been quite open on this, we've been…

The next question comes from Alvaro Serrano from Morgan Stanley.

Two questions. First of all, on capital. José Antonio, you mentioned that there'll be more capital headwinds next year. Can you just walk us through what you expect in Q4? And also, what is remaining for 2020? Because I'm not sure -- I didn't have in mind there was anything material other than the Allianz charge, which is not regulatory. But can you walk us through that? And the second question on the U.K. José, you said there's more to come on costs in the coming quarters. If I look at the U.K. subsidiary, a lot of the restructuring that's happened this year, I think, up to 7% of the workforce was in some shape or form restructured or involved in restructuring, and you've cut 20% of the branches are in the process of doing it. I see the head count is trying to come down materially in Q3. But if I think about that 7%, should we expect costs to be down 7% next year or something in that order of magnitude in the U.K.? José Antonio Álvarez: In relation with your first question, capital, and -- well, the figure is difficult to put when the regulatory impacts come in any specific quarters. There is significant uncertainty there, may change from one quarter to another. But let me to share with you the -- what we already know and to discuss a little bit the regulatory impact overall. What remains to be executed now is Allianz that we already agree, is the custody business that we disposed in the first quarter. It's also Puerto Rico that we announced a couple of weeks ago. So those are the main impact that we already know. In relation with regulatory. We do expect lax in the fourth quarter than we have had…

The next question comes from Sofie Peterzens from JPMorgan.

Here is Sofie from JPMorgan. So I wanted to ask one question on kind of investments and divestments. How should we think about this going forward? You recently announced Puerto Rico, you also did a deal in Mexico. How should we think about potential kind of more M&A or more divestments? What's your view here? And then could you update us on the Basel IV impact that you expect on capital? And also, do you have any plans of changing your hedging strategy, which could potentially have a positive impact on your capital generation per year? José Antonio Álvarez: Okay. The first one, the capital allocation, I mentioned several times on the -- during the presentation. What we are doing here is being much more granular than we were in the past. So we already have an analysis of not only business, that we have had analysis country-by-country, portfolio-by-portfolio, and we have a better view where the profitability meets our targets. And after that, this profitability is due to shorter reasons or long-term reasons in order to take appropriate decisions based on this. I mentioned during the presentation, some activities that in which we are reducing our activity due to capital allocation reasons, and we continue to do so by segments. So our segment is that the profitability may be low due to nonstructural reasons in which we keep going on because we want to protect, at the same time we need to combine the franchise value with the short-term profitability. This is critical and this is probably the main task we have in our table, to take appropriate decisions when the profitability is low due to nonstructural reasons or when the profitability is low due to structural reasons. And we are taking appropriate decisions based on this. You see…

The next question comes from Andrea Unzueta from Crédit Suisse.

The first one is on Spain, where core revenue trends were very weak. You've explained what happened on the -- with the loan portfolio, but your deposits also declined by €6 billion or €4 billion, if I take into account the increase in mutual funds. Are you losing customers? What should we expect there? The other question is on Mexico. If I look at the Mexican peso's numbers, you have loan declines in the quarter, but NII is growing despite customer spreads have been compressed by 20 basis points. So if you could explain what's happening there? And lastly and very quickly, in the U.S., if you could give us some clarity on the cost line, which increased by 4% quarter-on-quarter? José Antonio Álvarez: Okay. Starting with the first question, core revenue trends in Spain. Well, I mentioned before, the core revenues, when you look at the year-long loans, cost of deposits, we are relatively flat quarter-on-quarter and pretty consistent. If you compare with 2 years ago, we increased a little bit. So when it comes to volumes, José already mentioned that we sold a portfolio of €3 billion in the quarter, and also we are being much more selective. When you see the trends in our institutional and CIB books, the reduction in volumes significant is, as I mentioned before, a combination of capital allocation and the prevailing spreads on the markets. We are now losing customers, quite the opposite till you see the deposits. We are growing faster than the marketing in deposits as we are gaining share in mutual funds. Although mutual funds, the average fee is going down due to the impact of the ETFs are having in the industry. In Mexico, well, we are growing accordingly with -- there is some slowdown in the growth…

The next question comes from Marta Sanchez Romero from Bank of America Merrill Lynch. Marta Sánchez Romero: I've got a follow-up -- a couple of follow-ups in Spain. The first one is on your cost of deposits, you're still paying 13 basis points, your peers are around 3. Are you introducing changes into your commercial offer? Are you tweaking your 1/2/3 Account? Where do you see the cost of deposits next year? Also on NPLs, the report card in Spain, your NPL ratio is too high, above 7%. Your coverage is coming down to 40. Do you think you have the right coverage to evacuate NPLs faster? What's your strategy? Are you planning more wholesale NPL disposals? So do you think your -- that guidance of 30 to 40 basis points cost of risk is sustainable? Or we could see an increase on one-off cleanups? And just quickly, sorry, on your defined benefit pension plans. Have you updated the actuarial assumptions this quarter? What's the size now of your pension liabilities? And what's the discount rate you're applying there? And if you expect any further negative adjustments in Q4? José Antonio Álvarez: First question, deposit cost. Well, we said, we're going to keep updating our commercial offers to the prevailing rates in the market. We still have some room to reduce deposit costs, higher than our competitors, and we will do so in the -- at the appropriate time. So we have this -- I tend to see this as a positive vis-à-vis with the others because we can reduce maybe 10 basis points; deposit costs, 8 basis points compared to what we have today relatively soon. NPLs. Our NPLs are higher than the others. We were the lowest in the market before Popular. As a result, the Popular integration…

The next question comes from Carlos Cobo from Societe Generale.

I'd like to ask a couple of questions. And if you -- and ask you to please repeat the explanation on the NII in Mexico, which I kind of missed. So first one on Brazil. Could you explain the performance of NII, which seems to be following the volume momentum, but we've seen some kind of a 35 basis point compression in the customer spread? If I'm not wrong, I would like to understand whether there's been a higher contribution from ALCO on securities? The second one, if you could recap a little bit the whole cost saving story in Europe. You said €1 billion net reduction, which already factoring the €750 million savings in Popular, some cost inflation. So net-net €1 billion down the cost base of the European division. I think I understood that today, you said half of the savings should come from the U.K. and I'd like you to elaborate, if possible, on the other half. And whether you see any material room to cut costs in Santander Consumer Finance, which keeps growing? And I mean, I'd like to understand where should we expect the other half and which measures you're thinking about? José Antonio Álvarez: To clarify, NII in Mexico, I said, your colleague asked why if there is a lower yielding loans and higher cost of deposits. The NII was growing, and I said this is due this quarter to noncustomer business. That was the question that your colleague made before. The second question is about Brazil, where you addressed pretty much the same issue. You say, comparing the yield on loans, if I understood well, with the deposit cost, there's a reduction of, you mentioned 35 basis points. Well, very likely to -- will continue to have in Brazil, a -- some net…

The next question comes from Franciso Riquel from Alantra Equities.

Just wanted to ask a bit more about the U.K. business after the write-down of the goodwill. You é mentioned before that the plan for the cost-cutting, but I wonder if you can elaborate more also on the revenue outlook, you anticipate more pressure ahead. You can update on the SVR accretion and competition dynamics in terms of front book and back book prices. And then overall, if you can share with us, also for the U.K., how have you change your business plan? And you are currently delivering 7%, 8% ROE in the third quarter versus 9%, 11% in your strategic plan. If you can please an update on this -- on the financial targets that you are now considering after the goodwill revision? And what cost of results are you considering under the new plan? José Antonio Álvarez: Okay. Let me do elaborate a lot on the U.K. business, our vision of the market. Our revenue outlook, the main, probably, item that is ahead of us is the whole overdraft issue. That is going to change the revenues coming from overdrafts. That also is going to change the very nature of the P&L, because we're going to lose significant amount of fees. At the same time, we're going to get some of this being offset by higher NII due to the overdraft issue. This is one-off, let's call it that way. When I go to the business, the front book dynamics, the market is not bad -- is not in bad shape today. The front book is coming at decent margins, while the back book will still suffer a slowing down SVR attrition, but it continues to be there. So overall, probably, we're going to -- the net interest income, well, it's going to be holding up with all the things I mentioned, the overdraft and all these things. While the fees, we still see some pressure. But this is only related with the mortgages. In other business, we expect to show growth. We expect to show some growth in corporate, we expect to show some growth in insurance, private banking and the wealth, what we call internally the wealth management business and asset management, we expect to generate new sources of growth there. Overall, with this cost-cutting that I mentioned before, along with the revenue measures and with the situation of the mortgage book, we remain confident that we're going to achieve in the medium-term the cost of equity that is going to go to the -- back to the region of 9%, 10% return on equity that we announced in our Investor Day. This is the overall assessment of the situation. That was the one we use for the impairment we done naturally in the goodwill in the U.K. Sergio Martínez: Thanks, Paco. Next question?

The next question comes from Andrea Filtri from Mediobanca.

A question on capital with a bit more detail then on the U.K. Your quarterly run rate of organic capital generation is well ahead of your 10 basis points quarterly guidance. Can you please detail how much is from balance sheet and model optimization this year? And do you stick to the 10 basis points guidance going forward? What contingencies do you have against these new regulatory hurdles that you just disclosed for 2020? And were these unexpected? And are they from TRIM? Secondly, on U.K., do you confirm your interest to grow further also inorganically in the U.K.? And if so, what would be of interest to you and what would be the rationale? José Antonio Álvarez: On capital, probably, José, you can elaborate this, the evolution of the figures this year and how the TRIM has worked for us, how much come from the models. You can elaborate on this, yes? José Antonio Cantera: Yes. Okay. So this year, remember that we have around 20 basis points coming from IFRS 9 and IFRS 16, and the rest is basically a TRIM. TRIM, we would expect to have this year between 20 to 30 basis points, and another 10 to 20 or so would come from the application of Santander models to Popular portfolios. As José Antonio said, it's very difficult to estimate when some of this impact will come, particularly with regards to the TRIM. So we would expect some to come in the fourth quarter some to be delayed to next year, and that's the overall sort of 80 basis points figure that José Antonio mentioned. When we look at the organic growth -- when we look at organic, which is basically the natural risk-weighted asset growth and its capital consumption and the profitability of the business, that's what generates more or less 40 basis points a year, roughly 10 basis points a quarter. Quarter-on-quarter, you might see some differences because of securitizations, because of risk sharing agreements with, for instance, multilateral agencies, et cetera. The models really don't have -- optimization of models really don't have a meaningful impact on the capital generation, and we wouldn't expect that to be the case going forward. José Antonio Álvarez: In relation with inorganic growth potential -- inorganic growth in U.K., we don't have in U.K. a different policy than the one we have in our core markets and we've been pretty clear on this. In our core markets, we remain open for opportunities if those appear. Are we analyzing anything? We are not, in this case, in the U.K. But our policy, as I said, is no different from other markets, other core markets for us. Sergio Martínez: Thanks, Andrea. Now last question, please?

The next question comes from Ignacio Cerezo from UBS.

A couple of quick ones for me. You can help us understand a little bit better, the run rate in the U.S. business. I mean, obviously, there's 3 different business there. The usual seasonality in the SCUSA saw from there probably €750 million $800 million profit this year. How do you think that number can evolve in the future? And then the second one, quicker, if you have taken or planning to take any charges for the FX mortgage situation in Poland? José Antonio Álvarez: Well, the first one, as you rightly mentioned, is we have 3 businesses there. We have a positive outlook for both the SCUSA and the private banking business, although for CIB that is basically the broker-dealer and the newer branch that are reported under the U.S. umbrella. So all these parties, we have a positive outlook. We are growing well, and we expect to continue to grow well. The negative impact will come from lower rates due to the deposits of SBNA. That is the negative impact. Overall, we remain positive on the development of our U.S. business, and we expect to continue to deliver significant growth in the business. Remember that we are still -- work in progress, our return on tangible equity to achieve our targets, and we remain committed with the targets we established in Investor Day. So this is our view on this. Charges for FX mortgages, in Poland. Let me to -- if I remember well, the total mortgages, FX mortgages in Poland is CHF 2.6 billion in our books. CHF 2 billion are in the books of the bank. CHF 600 million approx are in the books of the Consumer Finance company. As you know, this is a case-by-case. And given the origin of these mortgages, look, we have several different situations. One, the mortgages that come from BZ and the Consumer Finance, and the other that come from KBC. As I said, this is case-by-case. Do I expect significant charges at this stage? No. But if it were the case, we need to go -- probably our portfolio is worth to mention that we have 3 portfolios that may have different outcomes depending -- if they decide to go to the court in case-by-case. But we don't expect a material charge at this stage. And actually, we have numbers, the potential impacts here and there, but you can do on your own. But we don't expect a material charge for this. Sergio Martínez: Okay. We need to leave it here. So thanks, everyone. And obviously, the IR team is at your disposal for any follow-up. Thank you.