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Jakub Cerný: Hello and good afternoon, ladies and gentlemen. Welcome from Komercni banka, and thank you for sharing your time with us. Today, it is the 30th of October, 2025, and we are going to discuss the results of Komercni banka Group for the first 9 months and third quarter of 2025. Please note that this call is being recorded. Our speakers today will be Jan Juchelka, Chairman of the Board of Directors and CEO of Komercni banka; Jiri Sperl, our Chief Financial Officer; and Anne de Kouchkovsky, Chief Risk Officer. Standing by in case you have questions from them are Miroslav Hirsl, Head of Retail Banking; Katarina Kurucova, Head of Corporate and Investment Banking; and Margus Simson, Chief Digital Officer. As always, we will begin with the presentation of results, which will be followed by the questions-and-answer session. [Operator Instructions] Now let me ask the CEO, Jan Juchelka, to begin the presentation. Thank you.
Jan Juchelka: All right. Hello, good morning or good afternoon. Thank you for giving us the opportunity and sharing the time with us for the presentation of Komercni banka results for the first 9 months and for the third quarter. Together with me, there will be Jiri Sperl speaking and Anne de Kouchkovsky speaking either for financial performance or for quality of assets. We can jump directly into Page #4, please. So Komercni, in the first 9 months, was growing nicely its loan book by 3.6% on a year-over-year basis with a strong driver coming from housing loans. Here we were achieving, on a year-over-year basis, almost 50% growth. And we are -- in nominal values, we are coming back to the record high numbers on that particular product. Let me also reiterate for the fact that it's Modra pyramida, the subsidiary which is completely and entirely in charge of this product, and that we have, in parallel with this strong business performance, achieved super high productivity gain when joining together or merging together the 2 product lines, the historical product lines: one from the bank, one from Modra itself. I will come back to it in detail. Deposits were up only mildly by 0.1% on a year-over-year basis. The third quarter, though, injected 2.6% growth. And what we are happy to see is that current accounts are growing by 3.2%, and we hope it's the beginning of a trend, it's not an ad hoc event. Other assets under management, which is, in our case, is pension schemes, insurance schemes, Amundi product, or private banking products were growing by 6.6%. Inside this category, the mutual funds were growing by almost 10%. The bank remained very strong on capital, so 18.4%. Core Tier 1 was 17.6%. Loan-to-deposit ratio in very, I would say, safe territory, 82%. Both short-term and long-term indicators of liquidity being safely high above the required levels. Obviously, and this is something what we will present in detail, there was the asset quality playing important role in the composition of the net profit. The net profit was totaling at CZK 13.6 billion. On reported basis, we are growing by 8.3%. If we take out the one-off effect of sale of our headquarter building exactly in the third quarter of 2024, on a recurring basis, the net profit would be growing at the level of 35.1%. Cost-to-income ratio, also thanks to very strict cost management, was landing at 46.4%. ROE, 14.5% on a standalone basis. What happened also on the side of our business and our financial performance is that we are successfully approaching the very last stage of transferring clients from old to the new world. As of end of September, there was 1.46 million customers already in the new systems, out of which almost 300,000 were newly onboarded customers, so numbers which have never been seen before in the reality of KB. We successfully continue on that front, we are above 1.5 million, and we are above 300,000 newly onboarded clients. On the corporate governance side, we have a new Chairperson of our Supervisory Board, Cecile Bartenieff, also recently appointed Head of Mobility and International Banking and Financial Services at Societe Generale. And we will -- we have announced a new CFO, Etienne Loulergue, to some extent, alumini of Komercni banka because he used to serve as Deputy to Jiri Sperl approximately 5 years ago, will become the CFO of KB Group starting 15 of December, 2025. And as we have Jiri Sperl at his probably last presentation of results today, I wanted to thank him warmly for his professional service, and I am encouraging everyone around this call to enjoy Jiri's presentation today. We were ranked #1 cash management bank in Czech Republic by Euromoney survey, which was conducted in the third quarter of this year. We can move to next page. As we are approaching the advanced stage or very final stage for retail banking of the transformation program, we wanted to refresh everybody's memory of how monumental piece of work is behind us and where is it heading to. So let me say that the light motive of our transformation was simplification. The significant simplification of products and the clients' proposition, including the same users' environment in the mobile phone, in the desktop solution, and in the branch, i.e., relationship manager solution, is one of those aspects. You know, probably, that we have replaced -- we have put in place a new core banking system. We have completely created the analytical layer above that, and as I have already mentioned, these front-end solutions including. The application, which is named KB+, is bringing a new customer experience to either our existing customers or future customers. When a person is equipped by bank ID, which is a dedicated identity, digital identity provided by a joint venture established by banks in Czech Republic, the onboarding takes less than 10 minutes and there is fully functional account immediately at hand to the new customer. The account is, depending on the subscription plan, multicurrency. It's covering 15 currencies and it is holding also, I would say, dynamic exchange rate functionality inside. We are fully equipped with this mobile application by instant payments in Czech koruna, incoming and outgoing, instant currency exchange with preferential rates for those who are paying for their subscriptions. We have terms and saving deposits embedded, building saving embedded, domestic and international ATM withdrawals, and deposits free of charge, travel insurance, insurance of personal belongings, and payment cards. We have a dedicated button for chat and video call. We have virtual assistant insight. We have dividend credit cards, overdrafts, mortgages, consumer loans, loan consolidation inside the solution. We have pension savings, mutual funds, and investment contracts inside the solution. We have periodic cash flow reviews inside the solution, and we will chip in the online brokerage soon in 2026. All of this, because we were launching the new bank in April 2023, was built from scratch, in fact, as a greenfield solution, and I'm very proud of everyone who contributed into this monumental piece of work in favor of our clients. How our clients are liking it? The Net Promoter Score is at 38 positive points. More they use the application, higher the NPS score is recorded. It is #1 most downloaded banking application in the country. We are currently beating also the international challengers and all our competitors. In App Store and Google Play, we are getting 4.3 or 4.5 respectively as a feedback on the quality and satisfaction from the users. One of the less attractive indicators, but super important for us and even more important for our clients is the vital process availability for KB+ customers, which is achieving 99.8%. And again, something what is given or perceived as automatic, I would praise highly everyone who is in charge and who is behind this excellent process stability and availability for the customers. On the side of marketing, we brought to the market, amongst the first banks, the dedicated bracelet for kids and youngsters where they can get the first impression and feelings about taking care of their own money without using mobile phone, without using any other feature. We went out with a series of excellent, if not even artistic set of cards, of payment cards, in co-operation with students of one of the famous artistic universities in Prague. Obviously, as we are staying the ice hockey bank of the Czech Republic, we are also coming out with a dedicated card, payment card, which is dedicated to ice hockey and ice hockey in the Olympic -- in combination with the Olympic Games. Next page is bringing us a bit closer to the numbers and graphs sort of related to the transformation story. So on the left-hand side upper part, you can see that we are sprinting to the finish line of transferring, or migrating if you wish, our retail clients from the old world to the new world. We are almost there. We are confident that we will be delivering what is the key indicator for that, which is 90% of the total number of our clients, whilst onboarding heavily new clients in the system. The predominant share of mobile banking in the new solution is sort of given. So the numbers are very high. 84% of the total interactions with the bank are done from mobile, only 16% from the PC, and 1% from other channels. We are increasing number of clients interactions. So, we have more often and more frequently our clients in the application, which is a great news because it seems that it's designed as more like user-friendly, the ergonomy of the solution is better, and we don't use it only as a service tool, but also as a sales channel. When speaking about sales through a digital solution, let me bring your attention to the lower part of the -- the lower graph at the left-hand side, where we have a school case, if I may say, from both the growth of digital sales and the productivity gain stemming from that. So we have started back in 2020 somewhere around 16.5%. If we moved the X close to 2018, it was probably 14% of our capability of digital sales, which was growing and massively growing after the launch of new era of banking in 2023 to the today's levels of 54%. In parallel with that, thanks to very hard work of our management in retail banking, but also in operations and other parts of the bank, we were constantly pushing down the number of FTEs related to the same activities. So here, you see the results. As far as digital sales per product are concerned, you see that, for example, investment contracts are fully digitized by 100%, overdraft 65% or 66% respectively, et cetera, et cetera, when reading from the right to the left. Starting recently, we are putting the target numbers for digital sales for each of those products individually. Not always, we will be trying to achieve 100%, but what is probably more important that the overall number of 54% will be further growing. And it will be us deciding what is the targeted level. Next page, please. So when speaking about the transformation, it's digital, it's simplification, but it's also searching for other efficiency gain and productivity gain inside the group. One of them, one of the cases was the complete adoption of KB Poradenstvi, which is the network of tied agents originally acting below the name of Modra where we were unifying the brand, where we were simplifying the product portfolio, where we were engaging with the agents and equipping them with the proper proposition, not only from Modra but from the entire KB Group, harmonizing the IT environment for them in order to make them fully integrated into our system, centralizing the -- everything what is back office on that particular activity, and bringing them to the campus of the headquarter of Komercni. We did it also with other companies. Everyone who is 100% owned went through the same process. Modra on its own went through an incredible story for the last couple of years when we were changing the systems, fully digitizing the customer journey, or almost fully digitizing because we don't have still digitized solution for the [ cadaster ] of real estate, but soon to be there. And we have merged everything what was mortgages with Modra pyramida. So instead of having 2 product lines, we are having 1 product line. And again, the achieved productivity gain will be above 100% once the overall transformation is being finalized. SGEF, SG Equipment Finance, Czech and Slovak Republic was fully acquired by KB Group. You probably know that above our heads, there was the disposal of SGEF International by Societe Generale. And as a result, we are 100% owner. So again, the OneGroup principle will be applied, and we will unlock additional potential for both commercial and business activities, as well as the synergies on the side of the back offices. We have picked up also upvest. Why? Because it's a super successful platform for raising money and investing them into real estate development. These guys are able to subscribe high multiples of the previous year, and they do it for a couple of consecutive years already, and we became 100% owner here. So we can move to the next page. And here, I'm bringing you back to the reality of today. So Czech Republic, Czech Republic is a very stable country from both economic and I hope we will confirm also from the political point of view. We are like a couple of weeks after the general elections and the new government is to be established. When speaking about the new government, what we hear from the nominees or from the main representatives of the political movements and parties who won the elections, there should be a fiscal stimulus for Czech economy stemming from this new government. So we will see how that will work. But we very much see investment-oriented -- or public investment or infrastructure investment-oriented group of people preparing themselves to step into the government. If you combine that with the expected or already existing fiscal stimulus for German economy, the overall environment of making business in Czech Republic is being improved more or less as we speak. In combination with that, the representatives of the winners of the election -- of the general elections are also speaking about compressing the energy prices, which might help also with lower level of imposes towards the inflation. So let's see, but at least the first signals are from, let's say, business perspective, pretty promising. The GDP was growing by 2.6% on a year-over-year basis. Industrial production was down, a combination of weakening Germany performance plus a bit of mess on the supply chain part and the impact of tariffs imposed by the United States is bringing a little bit down the industrial production, which is perfectly balanced by strongly growing construction output by 17.1% back in August 2025. This is stemming from infrastructure investments and also pretty booming investments on the side of real estate housing, but not only. The unemployment rates remains very low. On the other side, the wages are growing and beating the inflation. So 7.8% nominal value -- nominal growth, but 5.3% real growth of wages in the country, which is also giving the answer of who is the main engine of the growth of GDP, which is the title remaining in hands of Czech households. The inflation, as I have mentioned, was at 2.3% level in September. Czech National Bank is remaining calm for the time being and is keeping the repo rate at 3.5%, which is minus 50 bps on year-to-date basis, but was not changed for -- at the latest pricing session of the Board of [indiscernible]. Czech koruna is strengthening vis-a-vis Europe and even more vis-a-vis U.S. dollar. Probably, we can move to next page. And this is already the business performance. So as I have already mentioned, the gross loans were up by 3.6%, very strong dynamics related to mortgages and Modra loans, so housing loans in general, 55.2% when you compare Q3 '24 versus Q3 '25. We believe that the finetuning of the capacity of processing the new requests, combined with the fact that the dynamics of the market will remain strong, will bring us to slightly higher market share as KB Group. The rest of the segments were growing at approximately -- we're growing at around 2%, 2.5%, 2.6%, 2.7%. So, I would say, in general, the businesses, the households were taking, let's say, appropriate part of the new financing from KB. When zooming on corporate financing or corporate loans, we are witnessing the growth of 2.7% Q3 versus Q3. Inside that, the SGEF solutions were growing slightly higher than small businesses and corporates. So next page, please. All of this obviously was translated into KB being at and servicing its clients with the main transformative transactions. You can see public sector represented by Elektrarna Dukovany. Also private sector represented by almost the entire rest of the transactions you see in front of you with the exception of 2, which are municipal driven. Everything what is green here represents the format of green financing or green bonds. We can move to the next page, which is bringing us to deposits. It remained stable, plus 0.1%. I would say we would love to see that higher, and we took appropriate measures and established concrete tasks to get higher portion from deposits. When decomposing the deposits on the side of -- by the category, we are happy to see that the dynamics of growth of nonpaid, i.e., current accounts, is coming back to, let's say, better levels, 3.2%, whereas the saving accounts are in competition, mainly with investment solutions. When speaking about investment solutions on the left-hand side, you see that overall, we were growing by 6.6%, the assets under management in mutual funds by almost 10%, whereas the life insurance and pension schemes 2.1% and 2.3% respectively. So next page is bringing us to financial performance, and it's my pleasure to hand over the word to Jiri Sperl. Thank you.
Jirí perl: Thank you very much, Jan. Indeed, a very good financial performance in Q3 and first 9 months of the year. I want to repeat key figures once again. So KB Group generated almost CZK 13.6 billion net profit after tax, which is 8.3% more than 1 year ago. And if we put aside the one-off coming from the sale of Vaclavske namesti in Q3 last year, the growth would be even much higher at 35%. It's visible from the waterfall chart on the left-hand side that basically all categories contributed positively. That's true that highest year-on-year impact is coming from super positive cost of risk that thanks to excellent asset quality of KB loan portfolios and also due to release of part of retail overlay provisions switched from the creation of the provision in 2024 to net release in 2025. And so the impact is massive. It is around CZK 2.3 billion. It's also very much worth to mention that also the top line was growing in first 9 months by almost 3%, while costs went down by 4.3% and thus generating very strong positive jaws. Also the quarter-over-quarter perspective, our trend is positive, that's right upper chart, and growing as seen there, i.e., quarter-over-quarter plus 3.3%. Naturally, the very good P&L result transposed also to the solid profitability indicators, ROTE being at 16.5% which -- and this should be reminded as well. At the same time, strong CET1 ratio at almost 18%, exactly 17.6%. This is bringing me to the balance sheet evolution. So the balance sheet shrink a bit year-on-year by 2.3%, which is, however, almost solely due to the very volatile repo operations with the clients. So if we compare the balance sheets year-over-year, it would be roughly CZK 80 billion less in Q3 this year versus 1 year ago. So this is basically explaining full variation. On the liability side, still, there is not a covered bond worth roughly -- or exactly EUR 750 million that was successfully issued in mid of October. And of course, you will see it in the balance sheet during the Q4 results presentation. On the asset side, there are basically no changes in trends, only to mention that the volumes of the [indiscernible] continue to decline a bit year-to-date as we are preferring for the time being investments into repo with the Czech National Bank, and of course, swapped into longer maturities following the long-term duration of our liabilities. Now let me go briefly through the main categories as usual. Although I would say there are not too many surprises, the positive trends do continue and will continue, including mainly positive jaws generation. So let's start with the net interest income. So, to say, despite the fact that NII was, I would say, severely hit by doubling of mandatory reserve requirement as of January 1 this year, it is growing. It is growing solid pace by 3.3% year-on-year. And it's basically the case both for key categories, [ checklist ]. So what I mean is income from the deposits and income from the loans, and both growing by roughly 4%. The drivers behind are, however, a bit different. NII from deposits is positively influenced mainly by spread effect -- by spreads, supported by improved structure of the deposits, while the income from loans is driven solely by volumes and the spreads remains basically flattish. Similar trends are visible also from the quarterly perspective, that's right bottom chart. On quarterly perspective, NII is growing by plus 1.5%. NIM, the chart on the upper left-hand side, on a year-to-date basis, it is 1.70. It is flattish quarter-over-quarter, but positive year-on-year by 6 bps, which is a positive news after some time. On top of that, we are expecting that the trend of the rise is going to continue also in Q4 this year, and I can touch it during the Q&As if needed. Let's move to the fees income. So income from fees and commissions is also growing by plus 3.4%. And there are, again, the usual suspects in terms of growth, i.e., mainly fees from cross-selling and specialized financial services, both growing on a 9-month basis by 13% to 14%. In the area of the cross-sell fees, it is a reflection of both volume growth of nonbank assets under management, but also improved structure, which is still continuing improving. And what I mean is that there is kind of [indiscernible] from more money market type of mutual funds to more dynamic. Quarterly perspective, that's right bottom chart, it's growing 1.3% quarter-over-quarter, and here almost solely supported by the cross-sell fees. At the same time, we also see first signs of improvements on the deposit product fees where the income from new packages/tariffs are classified. The mirror of course can be seen in the transactional fees. Financial operation is growing pretty dynamically year-over-year by 7.6% again on 9 months basis. And here it is solely influenced by the capital markets activities and mainly boosted by interest rates hedging activities, while the FX income from the payments is more or less flattish. That's the blue part of the chart. The dynamics is even higher on a quarter-over-quarter basis, growing by strong 15.4%. And here both elements contributed strongly, including those of the FX from the structured book growing by a strong 10%. Here, to say the jump in FX income from the structural book was somehow expected due to the seasonality or seasonally strong FX convers as I was somehow indicating over 3 months ago. And finally, before passing words to Anne, OpEx. So on 9 months basis, OpEx is declining strongly by 4.3% year-on-year, supported by -- basically by all components, except the depreciation and amortization. So let's go briefly into the structure. So personnel expenses, it's almost solely down on character by the decrease -- by the increased efficiency of the bank and thus decreased the number of the employees. So year-on-year, the number of FTEs is by almost 6% lower. First. Second, administrative costs also declining by minus 4%. But here, that is not the main, let's say, candidate or driver of the growth of the decline. And basically the savings go across all main categories. Skipping to regulatory funds, it was already commented in detail during the Q1 this year presentation, and the exception is depreciation and amortization. And again, here, no surprise. It is still reflecting main investments in digitization and our transformation in more general sense. All in all, this led to the further improvement of our cost-to-income ratio to the level and here commenting 9 months basis as well of 46.1%, while 1 year ago it was 49.2%. And that's the output of the positive jaws as I was commenting briefly before. Having said that, simply the trends are further continuing even in this chapter, and a good evidence is that the quarterly cost-to-income ratio, that's the very bottom part of the chart, that the quarterly cost-to-income ratio in Q3 into this year is the lowest at least since last 2 years. Now let me pass the words to Anne, who is going to comment quality of the assets and cost of risk. Thank you.
Unknown Executive: Thank you. Good afternoon to everyone. So as it was mentioned, the loan portfolio grew up by 3.6%, and this is in the context of a very stable credit risk profile. So this is attested in several metrics. So first of all, you see that stage 2 is now below 10%. So this is obviously driven by the release of the inflation overlay that was put on the retail in 2024. So we decided to release in Q3 the part related to the small business segment. We also have a very, I would say, stable NPL share at low level, which is at 1.8% this quarter. And together with this NPL provision coverage ratio is very stable as well. It shows that the portfolio is well performing, well covered, and demonstrating the asset quality. If I go in more, I would say, maybe brief details in the segment on SME and small business and consumer loans, it's a very resilient portfolio. And mortgage loans and large corporates, we are in the low -- even 0 default area. So if we can move to the next slide. Cost of risk, as it was mentioned, it's -- release of cost of risk at CZK 328 million this quarter. I already mentioned and it was also mentioned by Jiri that it's very well driven by the release of this overlay that we had on the retail. But it's also driven by some successful recovery on the non-retail exposures, which led us to recover 100% of our exposure and consequently release the provisions. So all in all, we end the -- for the 9 months at cost of risk of minus 20 basis points. And for the next quarter, we intend to continue to release the remaining part of the inflation overlay on the retail, which is still in place for consumer loans, that will be then released for the fourth quarter, and will lead us to the minus low-teens in the cost of risk for the full year probably as we do not expect, as attested by the portfolio quality, any big event before the year-end. So that's about it on my side.
Jirí perl: Yes. Thank you, Anne. And let me complete the presentation with last 2 slides, first one focusing on the capital. So capital remains very strong at 18.43%. There is a slight decline year-to-date, mainly due to the slight negative impact on OCI related to the release of the provisions as commented by Anne, so-called lack of provisions. Still, however, the capital adequacy is safely in the upper part of our management buffer, maybe better said almost at the upper edge of the management buffer, despite accruing [ 100% ] net profit as a dividend and the new methodology, i.e., Basel IV. Also MREL, adequacy is safely within regulatory limits at 28.8%. And this is bringing me to the full year outlook as usual. So there aren't too many changes in the macro, only 2 slight adjustments. First, no cuts of repo rate is expected by the end of this year, which was the case 3 months ago in terms of outlook. And second, there is slightly positive adjustments in the economic growth from 1.9% to 2.1% this year and also for next -- for the years to come. In terms of banking market growth, we keep fully the guidance, i.e., both lending and deposits, at a mid-single-digit pace. In terms of growth of KB, we stick to the original guidance at lending side, i.e., mid-single digit. In terms of deposits, we downgraded the guidance from mid-single digit rather to low- to mid-single digit, but at the same time, the structure of the deposits is expected to improve further. Revenues and OpEx are basically confirmed. Maybe one comment to the top line, probably more precise would be to say lower edge of low- to mid-single digit growth. OpEx as confirmed, i.e., mid-single digit decline -- decrease. And finally, cost of risk guidance, Anne has briefly touched that before, but it significantly improved from around 0 3 months ago to the level of low-teens. Well, that's it. Now before passing word back to studio, probably let me use this opportunity and to say also a couple of words on my side. First, thank you, Jan, for your kind words, and thanks also to all you connected. Indeed, this is my last earnings call in a position of KB's CFO. I have to admit that it has been a great 10 years serving at this position. And I truly appreciated every opportunity to meet with you and discuss the bank's performance and time to time also everything around. As Jan mentioned, Etienne will be stepping into the role as my successor starting mid-December, and I don't have any doubts he will successfully take over. He knows the bank perfect well and has all the qualities needed to help lead KB towards, how to say that, towards its bright future. So, Etienne, all the best in this exciting position. Thank you all once again. And now returning the word to studio.
Jan Juchelka: Okay. Thank you. Thank you, Jiri. I will just conclude the call very -- the presentation part of the call very quickly. So we can say that the combination of strong capital base, the already delivered very strict management of costs, the fact that we are approaching the very final stage of the transformation and we have fully functional, very stable, and attractive solution for our retail clients, combined also with the operating efficiency, further, let's say, simplification and scalability of the new digital platform will create a good base for improvement in the commercial momentum of the bank further on. We believe that the cost of risk, which is in negative territory and is commenting by many of you as the good contributor but not like sustainable contributor into the profitability, will turn into enabler for further commercial and business growth in the next months and quarters. We will also free up additional energy and time of our bankers. They were super busy with assisting our clients with migrating from the old to the new world. They will now put all their energy on sales and servicing the clients in day-to-day reality. This is what is somehow framing our hope for the next -- and determination for the next steps, which will be driven by our activity and our, I would say, full dedication to -- for the growth of the bank on the side of business and commercial and financial performance. Thank you very much. I'm giving back the words to Jakub Cerny, and we are ready to answer your questions. Thank you.
Jakub Cerný: Thank you to all the speakers. Let me add that we have been also joined by Jitka Haubova, our Chief Operations Officer. So we have the complete Board of Directors with us today, and you can ask Jitka as well. It means that in the next part of today's meeting, we will be happy to answer your questions. Let me remind you that this meeting is being recorded. [Operator Instructions] So our first question comes from the line of Mate Nemes from UBS.
Jan Juchelka: We cannot hear you, Mate.
Mate Nemes: Can you hear me now?
Jan Juchelka: Yes.
Mate Nemes: Excellent. Perfect. First of all, I wanted to say thank you to Jiri for years of hard work, transparent commentary and help you provided to analysts in capital markets, and we'll be dearly missing you. My question would be on loan growth. It's good to see that there is acceleration quarter-on-quarter and also year-on-year in loan growth. I think you've been quite clear that that's a focus area for the second half of the year, Jan, to your comments about freeing up time for the bankers, certainly starting to be visible and sales volume of housing loans visibly picking up. I'm wondering if you could give us perhaps some flavor of what you're seeing in the last quarter of the year and expectations also going into 2026. Can we expect this momentum to continue and maybe also see a much awaited recovery in business loan volumes? I think, Jan, last quarter, you were quite positive about potential infrastructure projects and lending towards that. When can we see that in the numbers?
Jirí perl: I can probably start and then my colleagues, the heads of business [indiscernible] will complete me. So a couple of comments on first 9 months of the year. I would say that the retail loans were growing relatively strong. It's mainly the case of mortgage loans. So I gave you through that there is a space for improvement in the area of consumer loans. That's one thing. In terms of corporate loans, to say the growth was a bit subdued, but at the same time, we are expecting by the end of the year relatively dynamic move. Why? Because the pipeline is relatively rich and strong. And I'm sure Katarina is going to comment on that. In terms of 2026, we are providing the detailed guidance at the end of the year results, i.e., end of January next year. But I can indicate that the strategy of KB is very much growing, and it will be very much the case for retail as currently all tools are available. So retail is going to be the market shares growing mid- to high-single digit. In terms of corporate, it will be more about the sticking to the market shares, at the same time gaining a bit, but definitely not as dynamic as retail in 2026. Now I'm passing words to my colleagues who will probably go into deeper details of component to me. Thank you.
Unknown Executive: Okay. So if I might add a few words on the corporate, not to repeat what was already said. We do see strong pipeline. We are actually seeing acceleration in the lending business for the SMEs. So we are pretty confident towards the year-end. In terms of the large corporates, it's kind of a little shaky market because we are seeing a strong and very lively bond market, which is nice on the fee side also for us. But it also has a negative impact because some of the loans are being refinanced by the bonds issued by the big groups, and also there is a strong pressure on the margins arising from the high appetite on the bond side. So on the large clients, we are optimistic more towards the next year because as you mentioned yourself, there is still quite a huge infrastructure project loading up in Czech Republic, and we are confident to be participating in those. And that should be definitely a very nice contributor to the large segment of our clients in terms of both volumes and profitability.
Jan Juchelka: I will probably add one sentence. You probably saw the pages with the tombstones that we were the instrumental bank when financing the preparation of the new nuclear project of the country under the name of EDU II together with other banks, but we were, let's say, the main driving force there. There will be more to come on this side of energy sector. You might recall that there were 2 large transactions. One of them concluded beginning of the year where state was taking over part of the storage capacities and transmission of gas, whereas [ Czech ] as the state-owned -- majority state-owned company was taking over GasNet, which is a distribution of -- regional distribution of gas, et cetera. So we are around these transactions. We will be continuing with that. What is slightly delayed on that front is the transport-related infrastructure project, which partly maybe also because of the elections we're a little bit lagging behind the original schedule and original calendar. The rhetoric of the new representation of the majority in the parliament, at least, is that they will continue intensively on that front, and we want to be part of it as well.
Mate Nemes: That's very helpful. Can I have a follow-up perhaps, as you mentioned, the new forming government? Can you share your thoughts on probabilities around a more effective banking tax?
Jan Juchelka: With strong disclaimer that we don't have the crystal ball and we don't see the future, the reality is that we don't evidence any strong push on that front and/or any traces of planning or projecting that into the budgetary exercise or in the preparation of the budget. So the Czech Banking Association is obviously acting preventively and trying to get the right feeling about -- around that because rightly you are picking up one of the potential risks for the entire market. For the time being, we don't see anything happening.
Jakub Cerný: Our next question comes from the line of David Taranto from Bank of America Securities.
David Taranto: I have a quick one. Are there any regulatory headwinds or tailwinds on the capital side over the next year? Anything that could affect the Board's appetite to sustain the 100% payout aside from the internal capital generation?
Jirí perl: Should I take it, Jan, or you will? Okay. Well, there was a big methodology change starting this year. I mean, implementation of Basel IV. Probably, you noticed that at the end of the day, the impact of Basel IV for KB was basically neutral. Having said that, almost all components of that have been incorporated even before. For the time being, we are not expecting any regulatory changes. But with the same disclaimer like I was mentioning before, we do not have a crystal ball, but currently nothing is on the table. Maybe here to mention that Basel IV was implemented starting from 2025, but not fully, i.e., it was related to credit risk and operational risk. But still the capital needs for market risk is coming, and you will see that at the beginning of next year. I can just indicate that the impact will be rather positive. Thank you.
Jakub Cerný: So the next question comes from the line of [ MC ]. So I would like to ask you to introduce yourself and then ask your question.
Jirí perl: That's Marta Czajkowska?
Marta Czajkowska-Baldyga: Yes. Sorry. No, it's Marta Czajkowska-Baldyga from IPOPEMA. Sorry for that. So I have 2 questions. [ Audio Gap]
Jirí perl: We cannot hear you.
Jakub Cerný: Sorry, Marta, could you unmute yourself? Sorry.
Marta Czajkowska-Baldyga: Yes. I think that it's -- do you hear me now?
Jakub Cerný: We can hear you now, yes.
Marta Czajkowska-Baldyga: Okay. So, first of all, thank you, Jiri, for your transparency and your hard work. And 2 questions from my side. First, on the deposit market and the situation right now. Could you please discuss this? I mean, we hear from the competitors that there is increased competition on this market and KB itself lowered its outlook for deposit growth this year. And could you please discuss this development in the context also of potential pressure on the margin? And the second question is on the cost of risk. Could you please disclose how much of the management overlays related to retail segment do you still have on your books to be released in the fourth quarter? And just related to that, would you say that 2026 outlook would still be below the -- through the cycle level in terms of cost of risk?
Jirí perl: If I may, I will start again about the deposits, and again, no doubt my colleagues will complement. So based on the growth of deposits in first 9 months or even year-over-year was rather subdued. We are partially commenting on that same answer ago. And by the way, it was the case both for retail and corporate. And one of the reasons on the corporate -- on the retail side was that the branch network was heavily migrating according to the plans and succeeded. We are getting -- or the migration is going to be completed by the end of the year. I'm talking about individuals. But of course, it was about not negligible capacities on our side. For corporate, and that's probably what you are referring to, there was -- in the first half of the year, specifically [indiscernible] competition on the market. And our interpretation at the time was that this was linked to the fact that not all incorporated the impact of the doubling of obligatory reserves as of January this year into the client rates pricing. Now it seems it is going to be normalized. And I believe that at the end of Q3, we can see the first fruits of the change. The Q3 dynamics is much higher. On top of my head, that is around 2.6% where both key segments are growing. And to be frank, we expect that this trend is going to continue. Maybe, to mention here one more point. This was also visible in the market shares for the last 3 months. I don't have in front of me September ones. They should be available by the way today, but August, July and June, KB was gaining market shares in terms of deposits. And now I will have my colleagues to comment further. Thank you.
Unknown Executive: So, on retail side, I don't have much to add. Maybe to give you a few details from inside the structure of the deposits, we are doing pretty well on unpaid deposits, current account balances, and you saw it in the presentation. Recently, we stabilized the development of term deposits. So we are now, like, flattish to slow growth again. We are doing really, really well on saving accounts. And I have to admit that some time ago, we probably slightly underestimated the role saving accounts play in collection of deposits. It was all fixed. And now we can see basically week by week how well we cumulated deposits on saving accounts. And we have a few more bullets to shoot to make it even faster. So I'm rather on optimistic side for deposit development on retail.
Jan Juchelka: But probably in more general terms, what we see, what is happening on the deposits, we can probably confirm what you heard from the other players that the hunt for the deposits is more visible on the market, plus the clients have changed their management of spurred money, if I may say. They do search for returns. By definition, we are in the Czech Republic. They are searching the safe returns, if I may say. So saving accounts highly probably will be the field where the whole battle will be happening at the highest intensity. There was also one sub-question on overlays and cost of risk until the year-end. I don't know, Anne, if you want to react on that.
Unknown Executive: Yes. So your question was the remaining part on the retail, right? So I don't know if the amounts were mentioned earlier, but -- yes, it was mentioned earlier. So we have remaining CZK 100 million, if I'm not mistaken. Jiri, please help me because I'm still struggling a bit between euros and Czech koruna, sorry, as I just joined 2 months ago. And as I said, it is on the consumer lending and we intend to release. And then we have still an overlay on corporate, which is in a bigger amount. This is under discussion because it was created as well on inflation assumption that are not, today, really relevant. But still, given the very unstable environment we are living now in, we will intend to keep overlay on the corporate part. But I cannot really comment because it's really under discussion on the, I would say, which amount, but it should be more or less the same as we have today, but on different assumptions, broader assumptions, like more international geopolitical instability, tariff threats, not only inflation.
Jirí perl: Exactly, as Anne was commenting on that. Maybe let me complement by 2, 3 sentences because one of the questions was that the years to come. That [indiscernible] is not sustainable to be in a materialize part data sustainable. So starting from 2026, we are getting back to normal cost of risk, i.e., reverberation. Some of you might remember that according to risk [indiscernible] statement, some are [indiscernible] like through the cycle cost of risk, we are targeting 25 basis points, but it's very likely will not be the case for next year. If I should indicate, you should probably expect, let's say, high-teens in terms of bps.
Unknown Executive: Complement -- as it was mentioned by my colleagues from business, we want to push on some segments that are, by definition, creating more cost of risk, which is small business, I mean, SMEs in the corporate and consumer lending in the retail. So that's why we expect to go back more in our limits that are in the risk appetite of the bank.
Jakub Cerný: So we don't seem to have further questions as through the platform. So now I would like invite participants who are connected through telephone. [Operator Instructions] So, Marta, you have the floor.
Marta Czajkowska-Baldyga: If you could discuss the outlook for remaining part of the year for NII, and if you could be kind enough to tell us if there is any change in that for 2026 going forward?
Jirí perl: Yes. I was talking to [indiscernible]. Well, again, I will start – probably, let's start with the main drivers, which are, first, growing of the client base -- further growing of the client base. Of course, critical will be to make them active, first. Second, material increase of the digital sales. First one I would mention would be the continuing change in the structure of our deposits in favor of current accounts. At the same time, let me be very clear that we are not aggressive in that regard. Of course, 5 years ago, it was current accounts portion, and the total deposits was 80%. Now we are closer to 50 and are using very conservative assumptions. On top of that, we are expecting continuing growth of the volumes basically in line with the dynamics visible in Q3, and it is relevant both for loans and deposits. And probably last point to mention is slight improvement of NIM. If I'm saying slight, I compared to, let's say, year-over-year. It will be around, let's say, 5 basis points plus/minus. And the main drivers here will be already mentioned improved structure of the deposits. That's -- for 2026, the story is a bit similar, i.e., the main driver of the growth in the area of net interest income will be shared volumes. As I was mentioning before, a very dynamic growth of both loans and deposits. And also we will see there, let's say, outputs or results of the improved structure of deposit because it is in the P&L for the time being only partially. So in 2026, we should see more visible impact. So in terms of NPIs, we are expecting mid- to high-single digit, and of course, the main driver of that, at least in absolute terms, will be income from net interest income. I'm not sure. Did it help? Or -- okay, [indiscernible].
Jakub Cerný: So let's wait a few moments if anyone has another question, either through the platform or directly asking via telephone. There does not seem so. So I would like to hand back to Jan for a concluding remark.
Jan Juchelka: All right. Thank you, everyone, for being with us today. It was a big pleasure for us to share with you our views on not only the results, but some of the key aspects of making banking business in the Czech Republic in the context of the macroeconomic reality. And we do believe that going forward towards 2026, there might be new emphasis for the entire market, and we want to play a significant role as we have done until now. Obviously, and thank you again for very precise questions. You somehow spotted the main aspects or points of our interest of -- not only interest, but of our activities. So we will definitely hunt for higher volumes on both the side of financing, as I will just repeat the words of Anne, mainly in those categories where we are lagging behind our natural market share. So it's more like consumer lending and financing the small businesses and mid-caps. On the side of hunt for deposits, we will definitely continue making our improved propositions for the clients, and work on the appropriate balance between paid and unpaid deposits. Speaking about all the means how to get there is mainly, I would say, favorable starting point on the side of cost of risk and the normalization Anne is mentioning is simply stemming from the fact that we are constantly flying below our line of risk appetite statement. So we have space to grow and the space to grow is mainly in the categories I have already mentioned. Let me also reiterate on the fact that we have made very hard work and series of unpopular decisions on the side of cost management during 2025. Some of the effects will be visible a bit later than in the third quarter. But I need to thank all of my colleagues who have implemented the necessary measures on keeping the positive jaws in place. We feel strong on that discipline and we will continue working on it further on. So we are very much looking forward to meeting you a quarter from now or at your request any time in between you would be interested in knowing more about Komercni banka. Thank you very much for paying attention to our bank, and we are super committed, and we are looking forward to speak to you soon. Thank you.
Unknown Executive: Thank you very much.
Jakub Cerný: Thank you. This concluded our call today. You can now disconnect.