Thank you. [Operator Instructions] We already have the first question from the line of Francisco Riquel from Alantra. Please go ahead.

Yes. Thank you for taking my questions. First is on NII in Spain, which has surprised positively. We have seen local peers raising guidance. So I wonder if you can update on your guidance for 2024 and detail the main assumptions behind it? And then how big a lift shall we expect in 2025 with the current yield curve? Also connected to this, the NII in the corporate center because the Spanish liquidity, I understand is remunerated here. So you can provide any comment to better assess the combined NII performance of Spain and the corporate center? And my second question is on capital after the 20 bps front loaded in first quarter for Basel IV. You mentioned in the past 30 bps left for January 1, 2025. So, meaning that you're already in line with the 12% pro forma post Basel IV. I wonder if you can update on this Basel IV regulatory impacts and other headwinds that we should expect? And where do you see your CET1 target in the context also of potential countercyclical buffers? Thank you. Héctor Grisi: Thank you, Francisco. Let me explain exactly how do we see NII basically going in Spain. First of all, I mean, we see really good trends as you can see in retail due to the fact that we had really good growth in clients. I basically talk about 630,000 net new clients in just one year. And the trend continues basically very positive during the first quarter as well, which we can basically have been able to add 130,000 new clients. It's important to say, and as I commented, that we see this continued trend also on the interest rates towards the second quarter to continue to go. All the different business basically are doing quite well. As…

Question from Ignacio Ulargui from BNP Paribas. Please go ahead.

Hi, good morning. Good morning, everyone. Thanks for taking my questions. I have two, if I may. The first one is on fees and fee generation in the quarter was quite good when looking to the coming quarters, what should we expect? Should we expect an acceleration of growth, driven by the good performance of CIB and Wealth Management insurance? Linked to this, I just wanted to see if there was any kind of one-off in the fees reported in the US, which jumped out quarter-on-quarter? The second question is a bit linked to the capital debate. And I just wanted to better understand what is the organic generation that you expect, I mean, as profitability improves, I feel that 10 to 15 bps is to be a bit low and you could probably generate a bit more or you would be able that to additional growth of our revenue base? Thank you. Héctor Grisi: Thank you, Ignacio. Okay. In terms of fee generation, okay, we have, as you can see, I mean, a strong Q1, 14% quarter-on-quarter. That's an 18% quarter-on-quarter growth in retail. Retail represents basically half of the quarterly growth, and it's basically solid commercial activity in all the regions and it's continued to do so, okay? You talk about the outstanding performance in CIB, that's 39% quarter-on-quarter. That's record revenue. This is basically what we've been doing in global transactional banking, and there is no one-offs whatsoever in all the bank and in the U.S. It's basically business as usual and client flow from all accounts, okay? In wealth, we have also a very strong recurring activity in private banking. Also, we have higher volumes in asset management. And as well in the insurance business, we have seen a very good trend and probably we see…

Next question from Alvaro Serrano from Morgan Stanley. Please go ahead.

Hi, good morning. I've got kind of a couple of follow-up questions. Héctor, you gave details on the fee performance. I just want to circle back to U.S. again and Brazil. In the U.S. so is this -- I noticed you said there's no one-offs, but is this the run rate we should expect going forward? How is the pipeline looking? I realize there's no one-offs, but there may be seasonality? And can you repeat, you mentioned in Brazil, there was a renegotiation [indiscernible] I suspect that's why the fees have been lower, but if you could repeat that? And then the second question on NII. If you think through your comments on Spain, could I invite you to comment on Brazil and U.K., Brazil, obviously, very, very strong. It sounds like above the sensitivity you gave. Can -- do you expect -- what do you expect for the full year? Can it continue strong? And on UK, just when you think it can bottom? Thank you. Héctor Grisi: Thank you, Alvaro. Yes, as I explained to you, the performance in the US is quite good. And look, we have a very strong pipeline. It's -- and if the markets are there and we're able to execute everything that we have I think we will have a very good trend. But as you know, that will all depend, I mean, how the market basically goes. But what I can tell you is that, the market is basically helping us out in that sense, and we will continue the trend if the market helps us. I'm sorry to repeat myself. In what we're looking at in Brazil is exactly you were saying, I mean, we had a one-off in payments that we had on the first quarter last year, which is…

Thanks. Begoña Morenés: Thank you both Can we have the next question, please?

Next question from Ignacio Cerezo from UBS. Please go ahead.

Hi, good morning. Thank you for taking my questions. There are two, both on the US. I don't think I have seen the slide you used to have in last quarter around the aspirational 15% RoTE target in the US. So if you can kind of update us basically on how quickly you think you can get to that number, and what are the main drivers and the main initiatives I've seen Openbank being launched in the US recently. So just a little bit of color basically on how quickly you can get to that? And the second one is on the asset quality in the US. I mean, you used to give some information around PV's charge-offs in the past as well. I don't think I've seen those actually. So forgive me if I have missed them, but if you can give us a little bit of underlying color of how the US asset quality, delinquencies on the auto businesses are developing from here? Thank you. Héctor Grisi: Thank you, Ignacio. Okay. In terms of the US, a particular thing is, first of all, I mean, as you know, we've been investing quite heavily on that market basically to concentrate ourselves in the most important businesses, which is consumer on one side, which is a business that we have at scale. We have also expanded a little money on the CIB side to be for our presence there. And we're also investing to become domestic in our private banking and wealth management capabilities to do it in a domestic way due to the fact that today, we are just basically for non-US alliance. So those are the things that we're investing in the US to take it to a 15% RoTE. And I believe it's going to be more…

Thank you. Begoña Morenés: Thank you, Héctor. Can we have the next question, please?

Next question from Carlos Peixoto from CaixaBank, BPI. Please go ahead.

Yes. Hi. Good morning. So the first question would actually be on the U.S. on the outlook for NII, how do you see it evolving throughout the year? Should we expect pressure to continue? Or could we also see a recovery trend in there? And then second question, and sorry if you answered it before because I'm not sure you did. On the cost of risk in the U.K., it remains at quite low levels. Do you see this picking up throughout the year? Or should we -- or should we see the first Q level something recurring throughout the year? Thank you very much. Héctor Grisi: Sorry. Thank you, Carlos. First of all, on the outlook of NII in the U.S., I see it flattish, okay? Let's see how volumes basically turn out. And as I explained before, since we are very much focused on profitability and also in capital allocation, I see that it's going to be flattish around there, okay? And in terms of cost of risk in the U.K., sorry. The cost of risk in the U.K., as I told you before, when I was explaining Alvaro, I see it very flattish. I mean the guidance is going to be at around 11 basis points to 14 basis points at the most. So below 2% -- sorry, below 20 basis points. José García-Cantera: So if I may add, we -- as I've said, we see no asset quality pressures anywhere. Labor markets are very strong, new employment, new job creation is also very strong everywhere. So we see really no pressure. There's no signs of asset quality deterioration. So we could extrapolate what we've seen in recent quarters in the U.K., we could extrapolate for the rest of the year. Begoña Morenés: Thank you. Can we have the next question, please?

From Marta Sanchez Romero from Citi. Please go ahead.

Thank you very much. Good morning. My first question is on capital. So the Bank of Spain were to introduce the CCI of 100 bps, that is 25 bps for you, but that would leave your 12% fully loaded core equity Tier 1 ratio, leaving or implying an MBDA buffer of just about 177 basis points, which is pretty low for European standards. So do you think that 12% fully loaded Tier 1 ratio target is still the right one in that event? And the second question is on the U.K. So the bottom line is now 25% smaller than last year. Is the shrinking going to continue? Or do you think you can stabilize earnings at current levels? And just quickly a clarification on a previous question. The revenue growth that you are foreseeing, is that just reported revenues? And is that in constant or current euros? Thank you. José García-Cantera: Let me answer your final question. We are estimating almost or around double-digit revenue growth in constant euros with Argentina in current euros. Obviously, in current euros or in euros with Argentina in constant might be higher than that. But as I explained, we believe this is the best reflection of our underlying performance, eliminating the distortions of hyperinflation in Argentina.

Thank you. Héctor Grisi: In terms of capital, what I can tell you is basically that exactly, as I said, I reiterate that we're going to end up the year at around 12 40 to 12 50, okay? And I really do believe -- actually reiterate that we're going to be above 12% after Basel III. I would be -- that would be the main points. José García-Cantera: Yes. And again, the countercyclical buffer will be implemented in a year's time. So again, the capital target is being decided by the Board. The Board might review that capital target once the variables that led to that capital target might change, but we are going to be comfortably above 200 basis points MDA with our actual capital buffer. Begoña Morenés: Thank you. Can we have the next question, please?

Next question from Britta Schmidt from Autonomous. Please go ahead.

Yes. Hi, there. Thanks for taking my questions. I've got two questions. You sound more optimistic on net interest income in Spain, UK and Brazil. But yes, there's more been no change to the official group targets for 2024. What is the delta here? And what do you think is the biggest delta to consensus? And then secondly, you guided to double-digit customer revenue growth and the group revenue target is mid-single digit. What's the delta here for 2024? Thanks. José García-Cantera: As we saw in the first quarter, just the monetary adjustment in Argentina, in the first quarter was €600 million. We have €1.2 billion monetary position in Argentina, and inflation was 51% in the first quarter. So just that in the first quarter was €600 million. That's what we are trying to avoid by looking at constant. So there are charges to the P&L that obviously we don't control. So that's the reason why we haven't changed the revenue target for, I mean, the total revenue target for the group, mid-single digits, but we believe that the customer revenue growth can approach can be close to double-digits. Héctor Grisi: Britta, in terms of the revenue overall, as you were saying in NII, Yes, I sound optimistic because I'm very optimistic of the trends that we have in front of us. And I reiterate that we're going to meet the 16% RoTE that we basically have announced onwards, I believe that is -- it looks good and it looks promising, but I reiterate the guidance that we have gave you. Begoña Morenés: Thank you. Can we have the next question, please?

Next question from the line of Sofie Peterzens from JPMorgan. Please go ahead.

Hi, here is Sofie from JPMorgan. Thanks very much for taking my question. So I was just wondering about the net cost guidance for 2024. Does it still hold your costs were up 5% in constant euros, 7% in current euros, so how should we think about that as cost guidance that you previously gave? And then my second question would be on rates sensitivity to 100 basis point change in rates, if you could just remind us what that means for Spain, Brazil, the U.K., U.S., all the core markets? And also, if you have any hedging in place to reduce that rate sensitivity? And then my final question would be on Slide 5, you say that your -- you only got 5 million new customers year-on-year. But at the Investor Day a year ago, you targeted, I think, 75 million new customers. Just like a strategic question, maybe it doesn't make it different if you only have 5 million new customers or does it make it difference? And how do you plan to get the 75 million new customers that you guided for at the Investor Day a year ago? Thank you. Héctor Grisi: Thank you, Sofie Let me answer you the last question first. I mean, what we've been doing here is basically, we are cleaning up a lot of our customer bases. And even though we are growing quite hard, we've been cleaning up that and basically that's, at the end, what's going to be telling -- I mean, moving up towards the number of customers that we are able to include. We're going to be working on that. And -- but I mean, the growth of customers basically is very strong in all different areas and in all different businesses. In terms of the cost,…

Next question from Andrea Filtri from Mediobanca. Please go ahead.

Thank you for taking my question. The first is on your profitability targets. You're above 16% RoTE guidance for 2024 implies more than €12.4 billion net profit this year with Q1 on track to hit that with tailwinds in H2 that you indicated in Brazil, in the UK reticketing portfolio in consumer with lower rates. Can you be more specific about your profit target for this year and give us an insight on the 2025 RoTE outlook? Second question, if you could give us a target for 2024, group costs in absolute million? And where do you see them going in 2025? Finally, a quick one on the insurance business, the new banking package improved, the treatment of insurance activities inside banks. Could you consider internalizing this business? Thank you. José García-Cantera: Thank you, Andrea. You're right. I mean, we are confident that we are going to reach the 16% target that we set in terms of ROTE for the year. And as we said correctly in our Investor Day, we said 15% to 17% towards 2025. And we are working towards that, and we are working very hard in order to be able to do it. But today, I reiterate to you that we're going to be at the 16% that we have set, okay? In terms of cost, what we have said is basically around less than 43% in the terms of cost to income. If you see the numbers that we have been, we've been very disciplined in terms of -- and what we have said, I mean, if you said it, is you saw is quarter-on-quarter is around 1% top, and we're going to be very disciplined about it. And if you see the operational leverage that we have on the -- what I presented on…

Thank you. Begoña Morenés: Thank you. Can we have the next question, please?

Benjamin Toms from RBC. Please go ahead.

Thank you for taking my questions. At the full year results, you noted that you do not expect any material impact from the FCA's review of mode's Finance in the UK. And since then, one of the large banks in the UK has made a significant provision in respect to that issue, do you still expect no material impact here? And are there any numbers you can provide us with to help frame the issue? And then secondly, we've seen consolidation in the space in the UK from banks looking to improve their return profiles, your ROTE in the UK is slightly below that of your major peers despite a favorable asset mix, do you believe you can improve returns in this geography using organic methods? Thank you. Héctor Grisi: Thank you. I mean, first of all, on the UK motor finance issue, I mean the resolution of such matters, as you know, is not possible to predict. There are some significant uncertainties that remain with regards to the existence, the scope and the timing of any possible outcome there. So as a result, we're not yet in a position to disclose the extent of any potential impact. And I don't believe until basically this, I understand there is an expert basically running through that. So I don't believe that we can give you an idea. What I can tell you is that so far, we're doing well in the sense of the settlements that we have. And so far, we've been doing better than we expected. In terms of consolidation in the UK, I don't see that we should play in a consolidation at this point. I don't believe that that's a market that we should invest more at this point. That would be my view in that sense. Begoña Morenés: Thank you. Can we have the next question, please?

Next question from Chris Hallam from Goldman Sachs. Please go ahead.

Yes, good morning, everybody. So two for me. So first on Basel IV and then on Argentina. So hope thanks for the color earlier on Basel IV. I mean I suppose it sounds very possible that FRTB gets pushed to align with a revised US time frame, let's say, towards July 1, 2026. And you mentioned the delegated act provision for FRTB here in Europe. So just within your day one and fully loaded guidance, how much is FRTB and how much is all the rest of it, i.e., if we only get parts of Basel IV in January 1, 2025, and then FRTB follows on July 1, 2026, how much would that change the phasing of the capital headwinds you talked about earlier? And then second, on Argentina. So clearly, it has quite a distortive effect on the group figures. And then there's the associated cost of hedging, and it's below 5% of group earnings. So I just wondered whether you've reassessed your footprint plans in Argentina, I guess, especially in light of the announcement that one of your peers is exiting that market? Or are there any sort of interconnectivity with other parts of the group that would make such an exit on economic? José García-Cantera: So the answer to your third question. Yes, when -- we've always mentioned Basel III, but when we gave the impacts, we were including FRTB, you're right. So when we said day one impact of Basel III, was Basel III plus FRTB. FRTB isolated is 10 basis points. So if FRTB gets postponed, we will not have this 10 basis point impact on day one that we were accounting for in our estimates. I hope this clarifies the matter. Héctor Grisi: Thank you. In terms of Argentina, I think that we need to leave our options open given what's going on in Argentina, basically can sustain what's going, and we're trying to be positive about what could happen, I don't believe that we have no downside or upside given the situation. So there are no plans to do anything at this point, and we'll just wait and we will continue operating our business. Our business is doing well. It's very good structured, is one of the best banks that we have in terms of client penetration, in terms of the transactionality that we have from our clients, fee generation. So we will continue to be there and see what our options are later on Begoña Morenés: Thank you. Can we have the next question, please?

The last question comes from the line of Andrea Filtri from Mediobanca. Please go ahead.

Yes, thank you. Just having a second go. Asking for absolute numbers on your net profit guidance for 2024, the 16% rate implies over €12.3 billion, can you be more specific about what number you're actually targeting? And then your own cost, the same story. I'm asking for a nominal euro-denominated group cost target for 2024? Thank you. José Garcia-Cantera: Insufficient numbers and growth rates in the P&L to really estimate what we believe is our most likely figure for net income and cost. So, again, for net income, 13% -- sorry, 16% return on tangible equity gives you a figure in line with what you are saying around 12 -- north of €12 billion, it's what -- it's the conclusion of the 16%, we agree with that. And in terms of costs, we are looking at a cost growth, which is going to be around 2% this year, 2% to 2.5% this year. Going forward, as we've discussed, we are targeting flat costs in absolute terms going forward. That is going to be difficult. Obviously, we are still in a relatively high inflationary environment. We believe that -- well, it is a very ambitious target, but that's the internal target we have. We haven't given any guidance for 2025. But what I'm saying is that long, medium term, our target is to keep costs flat or down in absolute terms. We are not there yet in 2024, close. We think we could be closer there in 2025, but it's too early. We are still in early 2023 -- sorry, 2024. So, we'll give you this guidance in due course. But again, our medium long-term objective is to keep costs flat or down in absolute terms. Begoña Morenés: Thank you very much. Thank you, Héctor, and thank you, José. I believe there are no more questions. Thank you all analysts and investors for your attendance. Our Investor Relations team is, as always, at your disposal for any further questions you may have. Good bye.