Nova Ljubljanska Banka d.d. (NLBR) Earnings Call Transcript

Ladies and gentlemen, good afternoon, and welcome. I'm Lilly, your webcast operator, and I would like to thank you for joining NLB Group's live webcast, where we would like to present and discuss with you our performance in the third quarter 2025. Before we start, I would like to draw your attention to the fact that our system for voice questions is slightly different this time. [Operator Instructions]. Please have a look at the disclaimer on the screen. At this point, I would like to turn this conference over to Mr. Blaz Brodnjak, CEO; Mr. Archibald Kremser, CFO; and Mr. Andreas Burkhardt, CRO. Mr. Brodnjak, the floor is yours.

Thank you, Lilly, very much, warm welcome, everyone, to our traditional regular periodical performance call. This time around, we celebrate quite some successes. It's been first a very robust quarter, obviously, but we have been successful at accelerating our digitization agenda. I'm happy to report that the operational merger and legal merger of 2 leasing entities has successfully completed at the beginning of July, so in Q3. And that we have been really continuously gaining some benefits in form of perception of how we actually develop the digitization agenda in the whole region by actually bringing a couple of services as complete novelty to some of the markets. Apple Pay has been around in various countries for quite some time, but it was actually the end of this effort that brought Apple Pay to 3 countries in 4 banks at the same time in the beginning of July, which was an important reflection of how seriously and generally we actually believe that this region should prosper. At the same time, we launched quite some further attributes that actually are helping our clients, access to their information or, of course, transactions with us. So we launched a couple of other apps for private banking clients, but also trading apps. And we have been successful at really pushing forward the digital penetration, so that really now more than 60% of our clients in group-wide actually are already our mobile clients in a sense that we are able to access their hearts by mobile-first 24/7 easy, but relevant and safe solutions. At the same time, we were also accoladed and awarded for some couple of our improvements in terms of user experience, be it web portals, be it mobile apps perceived as actually the best in specific markets. In terms of the business results, Archibald is going to talk about details, maybe just a couple of focus areas. We are evidencing a strong growth. And that's, of course, different to what you would see in Western European banking universe. We are looking at 12% growth more or less, and it's even more if you analyze it in terms of loan assets, and it goes across the business segments. So it's retail, corporate and state, and it goes across geographies. So we are gaining market shares. We have been gaining market shares in more or less all of the geographies, further strengthening our market position. And this has been more or less a key driver besides of repositioning partly balance sheet, introducing some other measures already last year like hedging and so on, liquidity reserve deployments to actually more or less fully offsetting the loss of rates in the magnitude of 200 basis points, right? So we have basically almost completely or entirely offset this loss. Our revenue base is growing. So we are now looking at stabilization of rates. They have not yet been fully necessarily filtered through the look-through elements of our balance sheet and P&L. But nevertheless, we show growth of revenue. And that's a very important feature in the declining rate environment. And we have been keeping until Q3 at least a very solid and also efficiency ratio still at 46%, leading to what is indeed, of course, a bit lower net bottom line result as last year. But given the rate environment changes, this is still a very robust output and we believe slightly ahead of expectations for the Q3. What we have been evidencing is stabilization of margins. So net interest margin has been more or less flattening, right? And the cumulative loss is manageable given the fact that we actually are looking at -- looking back to 200 basis points reduction. We are talking about just about 36 basis points when it comes to the actual impact on the net interest margin. On the other hand, the cost of risk was still relatively benign in Q3, whereby Andreas will report on, of course, some challenges coming predominantly from the industrial part of our economy, automotive and steel processing, clearly following the situation in Central Europe, predominantly Germany, Northern Italian and Austrian industrial basin. Slovenia has been one of the most open economies in the world, right? And in this respect, clearly not immune to these challenges. And there is some pickup in cost of risk. I will be talking about this later on at the outlook as well. But the returns are still very, very solid. So I'm talking about 16% ROE and in normalized terms, exceeding 20% still. This is a very robust output. In terms of macros, we see a bit impaired growth in Slovenia, predominantly due to high level of industrialization, i.e., of course, certain industries that are affected the most by these current challenges. On the other hand, Slovenia has been a very diversified economy as well. So we believe there's going to be a bounce back in the upcoming period. Whereby in other countries in the region, we still are looking at 2% to 3% growth, which is, of course, significantly north of the Central European levels and Western European levels. And it's catering for significant growth of demand still for loans, which is both true for retail and SME business, especially. There is a bit less bigger corporate investment, but that's something that is somehow attached also to the infrastructural investments that have been missing a bit in order to facilitate again for the renewable production. So now it's about grids, now it's about batteries, and this has some lead time, which we simply have to take into consideration before we can then, of course, again, see a stronger pipeline in terms of this energy buildup and infrastructure buildup, clearly investments. So we've been looking at, of course, various challenges in specific countries such as Serbia, Republic of Srpska, Bosnia and Herzegovina, collectively and so on. We don't believe that the situation is beyond control. We believe that this is going to, of course, somehow phase through this challenge, and we will see a transition into something that is, again, a more predictable environment. But generally, this is still an environment of solid growth and especially growth of banking business. We like it, the situation as it is in the sense that it's not significantly impairing our business. You see some pockets predominantly in terms of cost of risk uptick, especially in Slovenia due to this higher industrialization level. This is what I was mentioning. So healthy growth rates still and forecast for the upcoming 1.5 years, 2 years, are still very solid, and we are simply banking on that, keeping them the growth rates. I will be talking about the outlook later on. So we are currently delivering growth that is ahead of our midterm guidance and other attributes are more or less in line with that or still slightly below towards the year-end and the upcoming years. There will be potentially some uptick in cost of risk, but not a tremendous one. I would not further comment necessarily specific details on the country level. But as I was mentioning, there is still a lot of room for growth. And if you look at the depth of the market, in Slovenia, predominantly, which is the largest market, obviously, but also Serbia, specifically, so our 2 largest markets and North Macedonia and Bosnia and Herzegovina as well. This level is still pretty low in this respect or very low, and this is catering definitely for convergence. And as long as we can see nominal growth rates of the GDPs in high single-digit numbers, we could reasonably expect also from these countries at least double-digit growth of loans -- low double-digit growth of loans. And this is something that even on an aggregate level, delivering this high single-digit expectations for the midterm period. It's coming as set across the board from retail and corporates, and that's a very solid basis for the upcoming periods. By that, I will pass the word to Archibald to guide you through details, and then Andreas is going to talk about the asset quality.

Thank you, Blaz. Welcome also from my side. Drilling down a bit on what has been mentioned, broadly speaking, you all have seen that loan growth is exceptional. We are really happy to see 11% year-to-date, 16% year-on-year and 4% Q-on-Q. So these are very, very robust numbers. And let's not forget, this is in a somewhat muted macro context. So I think that speaks a lot about the inherent potential that we see in our region. And also happy to report pretty solid deposit growth year-to-date 6%, year-on-year 11%. For us, of course, very, very important to fund the growth with our most precious resource, the trust of our customers and then placing their money in our bank accounts. LTD, the balance sheet is still very, very robust, 77% capital ratios, Tier 1, 15% CET1 similar levels. So that's still a very, very robust basis for future growth. Balance sheet itself, plain vanilla, as we tend to say, mostly deposit funded, most of the deposit funding from retail sources and still a very solidly liquid and strongly capitalized balance sheet. We'll talk about details later. Also, the composition of the balance sheet, Andreas will talk about region and sector splits. But that's a textbook bank balance sheet of robust health and lots of potential for the future. We've seen the loan growth really across the region and broad-based, higher, of course, still in our subsidiary markets than in Slovenia, but still very respectable growth in Slovenia itself. And that, of course, is the foundation for our revenue basis. And you'll see later on the income statement that also on a Q-on-Q basis, we actually see pretty solid pickup now on NII. And that is, of course, a very good foundation going into next year when we, in essence, expect the rate environment to remain broadly stable. Talking about rates. So here, you see the asset yields across our geographies. And of course, that's on one side, a function of the rate environment. We basically match it here against the base rate of ECB. You see that the drop is much less sensitive than maybe is somewhat imagined. You see that year-on-year, base rate dropped by 150 bps and the NLB group asset yield by somewhat 80. So that's half of this amount. And so that's, of course, a lot of also smart steering of the business and balance sheet composition. As we have been talking a lot in the past, we have been deliberately putting higher durations in the balance sheet in the long world that simply means more fixed loan production. And you see that the composition is now in retail firmly on the fixed and in corporate increasingly on fixed rate. On the deposit side, as I said, that's our lifeblood, and we are very happy to see robust growth also here. That's the foundation for future growth on the asset side. And of course, we see a little bit of 2 stories for the time being. One is in Slovenia, we are still running a heavily over liquid balance sheet. And of course, are still able to somewhat follow with term deposit pricing, the ECB rates and the swap levels. On the banks in our subsidiary markets, you see that the extraordinary loan growth translates into a somewhat higher pricing, very moderate in deposits simply by also adding terms temporarily to the balance sheet. On the group level, you see a perfectly flat curve of deposit pricing. So I'd say on group level, we operate really in sweet spot territory. So this translates into really quite remarkable resilience on the revenue side. Given the very dynamically changing rate environment. And especially NII now already showing quite visible pickup Q-on-Q 2%. You've seen the Q-on-Q loan dynamic, something like 4%. So that's, I think, very encouraging also going into next year. Also very solid growth on the fee and commission. You see 8% year-on-year. That's still very much driven by exceptional performance also in our nonbank distribution business in Slovenia, which again is a very encouraging sign as we start to platformize these businesses into our most promising next geographies, i.e., Serbia and Northern Macedonia where, of course, distribution of asset management is still in infancy. But that speaks for the potential, of course, going forward. Costs, we'll talk a little bit later in more detail. But basically, the like-for-like cost dynamic is quite manageable these days, just shy of 5%. That's still very much driven by our continued drive to invest in digitization. So that's a given, and we want to continue on that basis. You see headcount numbers are coming down, and that's, to some extent, the leveling off of, as we keep saying, a little bit reduced physical footprint in exchange for a more digital footprint. Otherwise, the quarter itself, robust financial performance. You see a little bit of an uptick already in cost of risk, and we'll speak about guidance later. Overall, a very, very solid performance and normalized ROE, 23%, I think, is still very exceptional. And as I said, most promising with the positive dynamic on NII now combined with very strong loan growth, I think, is providing very promising signs going forward. Not to reiterate too much on the NII, as I said, 2% quarter-on-quarter, respectable 1% year-on-year and a quite resilient margin environment. If you see year-on-year, we lost 150 bps on base rate in ECB. The margin basically just moving by some 30 bps plus. I think that the NII here was mostly commented. Again, the lower chart for me is a bit more interesting as it indicates the potential for future revenue growth. And that is, of course, our ability to continue to attract and to work with the trust of our customers putting their money into our bank, both on transactional and nontransactional accounts. That's our ability to provide excellent service levels. And of course, our, I think, excellent franchise in placing money with both corporate and retail customers. I spoke a lot about the fee income dynamic. And I guess the bright spot really is the excellent abilities of our nonbank services to be increasingly -- well, visibly adding to the revenue. And again, that's basically just the beginning in regards of our region. On the cost side, we have basically this quarter was fairly normal, I would say, not too much nonrecurring elements, 5.5% like-for-like, if you normalize for nonrecurring elements around mergers and some of the HR items, a couple of which are related to revaluing actually the stock-linked instruments as part of management comp. And you see on the employee number, headcounts are coming down. And that's for sure, a trend that we will continue to observe. So the investments in people and technology somewhat mitigated by basically deliberate reduction of some of the physical and transactional footprint. Capital continued story of strength. We run robust buffers to statutory requirement, CET1, 350 bps over P2G. So excellent capitalization levels and also very healthy MDA buffers. If you see MDA buffer on CET1, 433. So that, of course, speaks for our ability to continue funding the growth, both organic and nonorganic. Of course, the organic growth requires a little bit more capital, but there is plenty of buffers to draw from. And on top, there is ability to actually raise incremental funding, especially these days, we are very much focused on exploring opportunities on the AT1 space. As you see on this slide, we are still somewhat underrepresented in this bucket with a fairly small instrument outstanding that's also coming due in 2 years. So here, we are proactively looking for opportunities to stack up here with possibly benchmark sized listed instrument, i.e., some EUR 300 million is something we could easily absorb and accommodate and actually have very good use for deployment. By that, I pass on to Andreas on asset quality.

Archibald, thank you. On the distribution geographically and also between corporate and retail, well, actually not many surprises, not many news. You see the very strong growth, both colleagues were talking already about is well distributed. So basically all segments, SME, corporate and in retail, both housing and consumer double-digit growth. And on the geographical distribution, also no surprises. You saw already before that the group is still growing a little bit faster than us. And of course, that's why you see percentages here slowly, slowly going up and relatively, of course, in Slovenia then going down. Asset quality, well, you saw now in Q3 already a little bit of provisioning. What you also see is both in Stage 2 and Stage 3, some increases in corporate. That's to a good extent, driven by Slovenian cases actually. And if you take the Stage 3 increase, that's actually one bigger corporate to the biggest extent. So it's very contained, but you see it a little bit, whereas in retail, I mean, you saw in June, the jump, which is also due to methodological reasons. We discussed that already in the previous webcast and now actually very stable. Distribution between the industries, very well diversified. And that's -- yes, also continuing. So no big surprises here. I mean what you can see in manufacturing is actually the biggest jump is in food production. That's from the second table, the first subline. That's actually one bigger acquisition of a client, which we supported that was also in the media. So I guess you can guess it. But overall, very stable and very well diversified picture. What we were breaking out here is a little bit automotive. Blaz mentioned already before, where we see at the moment, well, a little bit less happy situation is automotive and steel. I have to say automotive, it's very, very selective. So it's not automotive, but it's more clients with some weaknesses, and you basically see them more or less exclusively here on the right side. So manufacturing of car components. So here, we see some increase in Stage 2 and some increase in Stage 3. That's actually the one bigger client I mentioned before, primarily, whereas in the other 2 areas, so car sales and maintenance, both in the banks and in leasing, very stable situation. And as you can see in all 3 categories, majority is in big part is actually in Slovenia. And the overall volume, if you count all of these 3 together is still very, very moderate. And again, only on this right pie chart, we see now some less favorable developments. Of course, these developments, you see also a little bit in the total volume of nonperforming loans. So since a long while, actually, we are now increasing a little bit. Last year, remember that was primarily driven by the acquisition of Summit Leasing. This year, this is really coming from inside business. And here, predominantly Slovenia. But if you see that in percentages, it's still very, very small. So coming from December last year, 1.6% now to 1.7%. Coverage ratios since the new clients are a little bit less heavy provisioned simply also because they are usually well collateralized. You see here a little bit of a reduction. Geographical distribution still, well, pretty logical actually. Slovenia now, of course, given what I said before, increasing a little bit in the percentage. Yes. And here, you see the cost of risk in numbers, both Q-on-Q and for the year so far. That reflects at the moment, 9 bps cost of risk annualized. And what I have to say is we will see some provisioning in the last quarter. Primarily corporate Slovenia, we will stay well within the guidance. Remember, we were guiding for 30 to 50 bps cost of risk. I'm definitely expecting on the lower end, maybe if we are lucky, a little bit below that. But of course, if you see that we are currently at 9 bps, that means still some provisioning to come in the last quarter. For next year, and you will hear a little bit more than later on also from Blaz, but we will stay in the same range, so 30 to 50 bps. But honestly speaking, for next year, I would not necessarily see it on the lower end of that range anymore. So we see at the moment some developments, which, honestly speaking, are still very, very controlled and very reasonable. But it's, of course, a little bit of change to what we were used to in the last years where we had often either 0 cost of risk or releases. And what you see, if you go here in the details is -- and that's sometimes indeed a little bit surprising that we still have quite some repayments from written-off receivables. This tendency will simply just go year-by-year a little bit back because simply the stock of these cases is getting smaller. And that also, of course, will then contribute to an extent to the developments I just mentioned. With this, I'm handing back over to Blaz.

Thanks. So talking about the guidance, implicitly, we somehow we were saying already that this year is within the expectations and that there should not be major surprises towards the year-end. We are slightly revising relative profitability numbers and cost-to-income ratio numbers given the fact that there is some seasonality Archibald was talking about in terms of, of course, acceleration of the investment in digitization and some effects that are actually good news for shareholders that are coming actually from revaluation of financial instruments that are meant for the compensation of the broader pool of talents and managers actually in the group, which means that in this respect, this is, of course, combined effect, right, benefiting shareholders, but benefiting also people and is figured out, of course, within the cost metrics of the business. The growth is ahead of what we have been guiding for. So you saw this year-to-date growth rate. So now talking about high single digit would be, of course, unrealistic. It is low double digits. It is even closer to be double digits as from today's perspective. And that's a very solid basis for the upcoming period because, of course, as much as volume as we can front-load as given risk appetite within perimetry of our underwriting criteria is a desired business. This is solid growth. This is healthy growth, and this is something we are really, really proud of. And if we are able to combine this with a bit of M&A, we would be solidly and confident in delivering the strategy, right? So 2030 ambition is to come to the EUR 50 billion asset pool, which seems from today's perspective, absolutely doable. And we still keep certain capacity, obviously, given our capital buffers for transactions in form of an M&A. So we have continuously been saying we have been closely monitoring and observing any eventual opportunities within more or less our home region. And if there were any becoming actionable, we would, of course, immediately be able to act upon that. And in this respect, that's why we have been consciously keeping the buffer still. For the upcoming year, it is given the volatility of the whole environment, right, especially beyond January this year, really an unpleasant job actually to guide confidently, so we are somehow sticking to what was communicated so far in sense of the midterm transition. What is a solid fact is that we have seen the rebound of revenue. So the rate reduction has more or less to the predominant extent, found its way through our balance sheet and P&L. And now this growth should start really delivering growth of revenue as well. So this bounce in revenue is obvious. Of course, on the other hand, this will be accompanied by certain still continuous investment and talent relevant positions. On the other hand, we should really now with a real acceleration of platformization of especially client level U.S.-based interactions with our clients, platforms, right, start seeing really benefits in form of reduction of number of employees group-wide. And by that, of course, also address the cost evolution midterm '27 and beyond that would be rather in the mid-single-digit growth territory, combined with high single-digit growth, hopefully then delivering high single-digit growth of revenue as well, right? And in this respect, then opening up the thesis of increasing absolute profitability that would then be finding its way towards EUR 1 billion, which we have been aspiring to achieve in 2030. So overall, the message is Q3 was very strong. We feel very confident. There are some pockets of challenges, predominantly coming obviously from the industrial part of our economy, predominantly in Slovenia because it is by far the most industrialized in relative terms compared to other economies. We are alert when it comes to, of course, other opportunities. So besides this very strong organic output, we are definitely looking and exploring eventually opportunities also through the acquisition space. And it's not only banking, it might be captive insurance. It might be some fleet management-related stuff. It might be some leasing and so on. So we are really using more or less wide open eyes and ears, and we would definitely address such opportunities if they were to become actionable. I would wrap up here, open for questions. Not to forget, please twice a year, test your blood for the PSA. Thank you.

[Operator Instructions]. Our first question today is from Mr. Miguel Dias from Wood & Company. Now I will read it for you. Congratulations on the results. Regarding the guidance on higher costs in 2025. Can you please provide some more color on what are the main drivers that lead to an increase of the guidance?

So we have traditional a bit of seasonality in Q4, and that comes typically from a somewhat traditional time lag in G&A recognition and a bit of seasonality in IT contracting, stuff like that. So that's one typical effect. Also on HR, we see year-end accrual of expected variable payments. So that is expected seasonality. This year, we have been indicating that we are firmly supportive of an accelerated digitization agenda, which, as we have heard in the beginning, starts to deliver visible results. So we are committed to continuing on that. We are not managing quarterly cost/income ratios. We want to accelerate this transition to the largest extent possible. And so in that sense, we rather change a bit the guidance than compromising on this digitization agenda. And the other aspect was also mentioned as share price is evolving very positively, there is a bit of revaluation dynamic in management compensation instruments as they are allocated throughout the group. So in essence, we share, let's say, 0.5 percentage point in market cap increase towards management comp, just to give you a sense. And so all this amounts to this somewhat marginal change in cost income. On the other side, I would highlight, we have also revised upwards income guidance on the back of this really exceptional loan growth. So in that sense, I think it's -- on bottom line, you still see us basically well performing.

Our next question from [ Jean Zadraves, Quantum Capital ]. Congratulations on very solid results. Most of your loan book remains fixed rate and group deposits costs are still low, flat at around 0.5%. However, as you said, we are seeing gradual upward repricing in some Southern Eastern European markets. How sustainable is this funding cost advantage? And as the regional rate environment evolves, how should we think about the impact on net interest margin, particularly regarding deposit mix, competitive dynamics and pricing discipline across subsidiaries?

Pretty complex question. I hope you're doing well. In principle, what we are now really focusing on fully with also this platformization and solutions that are more or less client-facing is new client acquisition and site deposits acquired from this new client acquisition, which is then simply affecting the funding mix as well. In Slovenia, you saw that actually the development is favorable. So we're actually reducing average cost of funding, where in some other countries, obviously, the fight for deposits is a bit more exaggerated. So we are actually trying to develop stuff in an accelerated way, be it mobile apps, be it onboarding processes and be it other relatively attractive features to simply attract more new clients and by that more new site deposits and by that manage average at the total equation. So it is not an easy fix. It's not, of course, doing a doable overnight, but it's really focusing on actually client experience, onboarding and ease of use of our banking services in daily banking terms and by that, attracting more site deposits actually in the total mix because [ insidaries], we have almost half of the term deposits and in whereby in Slovenia, we are at more or less 90% sites. So it's really encouraging the banks in the subsidiary network to really focus on the mix. whereby in Slovenia, the trend is still very, very solid. And we are having actually reduced pressure even temporarily at least. Archi, would, for sure add something.

Just to emphasize this -- I mean, it looks a bit dramatic on the chart, but in absolute amounts, it's a fairly manageable increase in the deposit pricing. And it's really funding an enormous loan growth. We have seen robust double-digit loan growth at a fairly manageable uptick in deposit pricing. So our margin is relatively firm. And going forward, I expect margin to remain kind of stable. If anything, maybe even slightly widening to the positive, given that we managed to keep loan deposit ratios around this 75%, maybe going towards 80% on group level. So we are in a very, very good position, solid position. But in banking, as in any other business, there's no time resting. So we have to do all the things mentioned and get even better in that, but very, very robust position and good outlook.

And focus on fee income, obviously, is, of course, also gradually reducing the dependency on solely net interest income, right? If you look at the progress we've done in asset management and in bancassurance business, and we have, as Archibald said before, been only at the beginning of the journey in subsidiaries landscape. There is enormous room for growth there.

Thank you. So now we will hear from Mladen Dodig from Erste. He's on the line now, I hope. So Mr. Dodig, go ahead.

Although my IT doesn't like this, but anyway, do you have any updates on Croatia? What might be next there?

Not really. I mean the only possibility for us in Croatia in terms of banking operations would be what we tried to do and we were not successful at. So if this was to become actual at a certain point by -- in any way, of course, we would be interested. But this -- for every willing buyer, there has to be a willing seller. So, so far, I cannot comment any progress in this respect. We are looking for other opportunities potentially. I was mentioning before, some other areas like fleet management, will simply be something that is complementary to our listing business and so on. We could think of some insurance, but nothing directly because direct investment and direct asset buildup is prohibitive to us. So we can't actually do that.

But I mean, you don't expect that will change anytime soon, right?

This would require political agreement between both countries. And since Slovenia is in pre-election period, we will have elections, it seems now in second half of March, which is 4.5 months away or something. I wouldn't have high hopes that this will be possible because it would be linked to other big unresolved issues such as the second reactor of the nuclear power plant, the border issues and so on. So there is a bit higher complexity in this respect. So us getting the hurdle of direct entry removed would require a big interstate deal, which would require 2 states basically agreeing on it. And I haven't been aware of any such process actually pending.

Understood. And talking about M&A is some geography particularly standing up right now in your eyes, you were mentioning Albania many times, I don't know, mostly other countries.

Well, for -- I mean, we, of course, are heavily interested. And we mentioned any in-market consolidation within our markets of existing operations and presence is welcome. What is at sale is a different story. So we haven't been aware of any actionable material bank sale, eventually happening in Albania. It seems that existing investors in Albanian banking market are now more or less betting on Albania entering European Union within the upcoming midterm and are not willing to consider exits, it seems. So we are not considering any greenfield actually entries into the market. This would be an uphill struggle for decades. So we would simply be on the watch if there was any opportunity that's material enough with significant market shares surfacing, we would look into it. So Albania is for us, a highly attractive eventual prospect market, but there is nothing that we have come across -- came that we have come across lately that will be actually actionable. Federation of Bosnia and Herzegovina, we always mentioned, is something that we would definitely desire to strengthen our position since we had 6.1%, 6.2% market share in terms of total assets. We are progressing well in housing lending. We are already north of 10%, but we need size. So if there was anything available in Federation of Bosnia and Herzegovina, we would definitely be interested in other markets as well, but as said, there's nothing immediately that would be on the table that we could be discussing with anyone. If there were any opportunities, we would immediately -- could immediately engage. This is what I can say. And Croatia is for us only accessible in direct structures, and there was only one such opportunity by now. And unfortunately, we were not successful.

And finally, from my side, I guess you already answered to the upgrade in revenue guidance for '25. But we have seen recently many regulatory actions across the region, Serbia with the limitation on interest rates. There are some fees, curbs in Bosnia, Montenegro, [ DTIs]. I mean is there any material effects coming from this side maybe in Serbia? Do you have any figures that might affect the...

I can't be precise, but it's below what used to be the housing loan limitation cap, for example, introduction, right? So it was -- it is below really the materiality threshold. So the solid growth level, the solid loan growth actually is offsetting this and more. So we expect actually growth of revenues, right, next year, quite a visible one. We are still guiding for more than EUR 1.3 billion. So I mean, as I mentioned, this is -- we will come up with a refreshed guidance for the '26 with publication of the annual report because in these 3 months, many things can happen. But there is an obvious solid growth of revenue envisaged also from today's perspective.

And sorry, one more extra regarding Serbia. So we will see enormous growth of loans this year. Do you think any similar thing could repeat in '26?

Look, retail, we would hope where corporate, it is a bit of a function of what would be the infrastructure buildup still in the country and what would be sovereign sponsored investments. So I would not count that much on big corporate tickets because we see stagnation now actually in new projects coming in from the energy space. We've been financing a couple of wind parks across the region, but now we see that there is a bottleneck of grid preparation, right? So the grids are no longer sufficient for embracing higher or larger devices. So now we are really focusing more on grid upgrades on battery parks and so on. And this requires some time to actually learn how to do it in a predictable and reasonable way, structured way. So there's going to be, I guess, some hesitation for a year or 2 when it comes to bigger corporates, bigger infrastructural tickets. So we will be more focusing on SMEs and retail. So that's why we are keeping high single-digit growth guidance and not like this year, right? But we are talking about almost 14% or 14% or even 16% year-on-year. So in this respect, it would be moderated a bit, and it would predominantly be coming if you ask me from this corner.