Grupo Financiero Galicia SA (GGAL) 2020 Q2 法說會逐字稿

Welcome to the Grupo Financiero Galicia Second Quarter 2020 Earnings Release Conference Call. This call is being recorded. At this time, I'd like to turn the call over to Pablo Firvida. Please go ahead.

Thank you. Good morning, and welcome to this conference call. I will make a short introduction, and then we will take your questions.

Some of the statements made during this conference call will be forward-looking statements within the meaning of the safe harbor provisions of the U.S. federal securities laws and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed.

According to the National Institution of Statistics, multi-economic activity estimator or MI in Spanish, the Argentine economy recorded a 19.6% year-over-year contraction during the second quarter of 2020 from a 5.4% year-over-year contraction in the first quarter. April, in particular, displayed an abrupt contraction [plummeting] a monthly 17.6% in seasonally adjusted terms as a consequence of the COVID-19 pandemic and the implementation of mandatory social distancing in order to reduce the risk of contagion.

In May, the economy recovered 9.7% against April, and in June, the economy picked up 7.4% when compared to May. During the quarter, the primary fiscal balance amounted to ARS 734 billion deficit or 2.7% GDP. As of the end of June, the accumulated fiscal deficit for the year rose to 3.3% of GDP, resulting from an increase in public spending and contraction of fiscal revenues.

This was a consequence of the implementation of the fiscal stimulus package mainly consisting of direct transfer to the unemployed, social plan beneficiaries and informal sector workers as well as are paid to companies in the form of labor tax reductions and in partial payment of salaries. In the case of revenues, the reduction was caused by the economic policies during the month of social distancing measures.

During the second quarter of the year, the consumer price index recorded a 5.4% increase. On the monetary front, the monetary base fell by ARS 127.6 billion, a 5.6% reduction against the first quarter of 2020. This resulted from a contraction during April, ARS 425 billion, that more than offset the Central Bank's monetary expansion that took place between May and June, ARS 297.4 billion.

The expansionary trend continued in July and was mainly prompted by transaction of the Central Bank to the treasury for a total amount of ARS 1.16 trillion between April and July to finance the fiscal stimulus package, partially compensated by operations with Leliq.

Meanwhile, the official exchange rate average ARS 69.54 per dollar in June, a 10.2% increase against the average for March 2020 and 58.8% from June 2019. The average interest rate from peso-denominated private sector time deposits for up to 59 days was 29.51% for June, 0.24 percentage points above the average recorded last March.

Private sector deposits in pesos amounted to ARS 4.3 trillion in June, increasing 25.2% during the second quarter and 79.9% when compared to June 2019. Transactional deposits in pesos rose 28.9% against March 2020 and increased [116.5%] in the year. While peso-denominated time deposits increased 25.4% in the second quarter and 49.3% year-over-year. As of the end of June, peso-denominated loans to private sector amounted to ARS 2.26 trillion, recording a 14.3% increase during the quarter and a 46.6% increase when compared to June 2019.

Turning now to Grupo Financiero Galicia. It is worth to remind you that since the beginning of 2020, reported figures are adjusted by inflation and applies expected credit loss model for provisioning. Taking this into consideration and going through information for the second quarter, net income amounted to ARS 5.6 billion, down 43% from the year ago quarter. This profit was mainly due to gains from Banco Galicia for ARS 4.8 billion, from Sudamericana Holding for ARS 364 million, from Galicia Administradora de Fondos for ARS 296 million, and from Tarjetas Regionales for ARS 18 million. The annualized return on average assets was 2.7%, and the return on average shareholders' equity is 16.5%. Comprehensive income attributable to Grupo reached ARS 7.5 billion, 25% lower than the ARS 10 billion reported in the same quarter of 2019.

Going to Banco Galicia. Net income for the quarter decreased 48% from the year ago quarter as a consequence of a 34% decline in operating income, mainly due to a 50% lower net income from financial instruments and 61% higher operating expenses, offset by a 1,275% growth of net interest income. Interest income for the quarter increased 9% as compared to the same period of 2019, while interest expenses were down 47%.

Average interest-earning assets were down ARS 19 billion or 3% year-over-year mainly due to the decrease of dollar-denominated loans and of government securities, partially offset by the growth of the peso-denominated loans and of other interest-earning assets. In the same period, this yield decreased 872 points -- basis points primarily due to lower yields on other interest-earning assets in pesos and in dollars and in government securities, offset by the higher average yield on government securities in foreign currency due to price increases.

Interest-bearing liabilities decreased ARS 66 billion or 12% from the second quarter of 2019 primarily due to lower balances of dollar-denominated deposits and its cost decreased 861 basis points, mainly as a result of a lower average interest rate on other interest-bearing liabilities in pesos and in peso-denominated time deposits.

Net fee income increased 5% in the last 12 months, being the fees related to credit card activities the ones that stood out. Net income from financial instruments decreased 50% because of lower holdings and yields on Argentine central bank paper. Profits from gold and foreign currency quotation differences amounted to ARS 865 million, including a ARS 986 million gain from foreign currency trading. Provision for loan losses was 78% higher than in the same quarter of the prior year mainly due to the evolution of the parameters used in the expected credit loss model.

Personnel expenses decreased 5% as compared to the year before, in line with the decrease in the headcount. In addition, administrative expenses decreased 3% mainly due to lower fees and compensation for services.

Other operating expenses reached ARS 12.5 billion, increasing 61% as compared with the second quarter of 2019, mainly as a consequence of higher provisions related to the evolution of the impact of COVID-19.

The bank's financing to the private sector reached ARS 419 billion at the end of the quarter, up 5% in the last 12 months mainly due to the increase of loans in pesos that was partially offset by lower dollar-denominated loan. Net exposure to public sector increased 7% year-over-year, and excluding Leliq, it represented 6% of total assets from 35% at the second quarter of 2019.

Deposits reached ARS 593 billion, up 2% in the year, a peso-denominated deposits increased 44%, wherein dollar deposits fell 55%. At the same time, there was an improvement in the mix of peso deposits, as current accounts grew 71% and saving accounts 91%, while time deposits increased 11%.

The bank's estimated market share of loans for private sector was 12.9%, 230 basis points higher than at the end of the year ago quarter. And the market share of deposits from the private sector was 10.4%, decreasing 25 basis points in the same period.

As regards asset quality, the NPL ratio ended the quarter at 2.7%, recording a 171 basis points improvement as compared with the 4.4% of the second quarter of the prior year. And the coverage of NPS with allowances reached 152.5%, up from 81.4% from a year ago. As of the end of June 2020, the bank's consolidated computable capital exceeded by ARS 74 billion or 139% the ARS 53 billion minimum capital requirement. And the total regulatory capital ratio reached 19.6%, increasing by 260 basis points from the end of the same quarter of fiscal year 2019.

In summary, during the second quarter of 2020, Grupo Financiero Galicia has shown good results in a very challenging and volatile market environment, keeping liquidity, solvency and profitability metrics at good levels. We are now ready to answer the questions that you may have. Thank you. Jennifer, please.

(Operator Instructions) We'll go first to Ernesto Gabilondo with Bank of America.

My first question is related to the creation of higher charges for additional provisions that were recognized in other expenses. Shouldn't they be recognized in provisions as write-offs? What is the rationale to include them in other expenses? Also, we have seen that you created high year-over-year charges or write-offs of around ARS 4.6 billion. So how much additional provisions do you expect to reduce during the next quarters? And can you elaborate on how much of the total loan portfolio has been reprogrammed or restructured? I think it will be interesting to see how much of additional provisions in other expenses represented of the reprogram or restructured portfolio.

And then my second question is on the regulation on banking fees. I believe you cannot charge the withdrawals in ATMs and you cannot reprice this until next year. So just want to see your view on these. And how do you expect to mitigate the impact?

And then my last question is on the cap on credit cards. I believe this has been offset by the lower deposit requirements. However, thinking about next year, do you think this could have an impact in margins?

Okay. Well, too many questions. Let's go with the first one. As you know, this year, we began with the expected credit loss model, and the provisioning we have in the line of loan loss provision is what comes from this model. And we also have this flexibilization in the regulation that the Central Bank put in place when the pandemic began, but basically needs 60 more days to consider a loan that is not current or bad loan.

So -- and also, I would say, answering part of one of your questions, part of the credit card balance that was due at the end of March, beginning of April was reprogrammed. Roughly 70% of that payment due was paid. So considering all this, we made some anticipatory provisioning that is not in any specific loan or it's not even in the balance sheet, is off balance sheet. For example, all the unused balances of credit cards of -- are overdraft, so we've decided to have this additional provisioning there.

And so then going to -- going now with the asset quality, let's say. When we look at the numbers of the bank, the 2.69 NPL ratio without this flexibilization in the regulation would have been around 3.8%. That's why also the coverage increased to 150-plus percent. So going forward, we think that once the loans that were reprogrammed will be payable, we will see some further deterioration in the NPL. And the cost of risk for the full year, right now, we are estimating at around 5.5%. So I gave you a lot of different explanations on asset quality. Any follow-on question is more than welcome.

Regarding banking fees, at the beginning of, again, this period, the Central Bank prohibited banks to raise prices of the services we grant at the beginning until June 30. Then they postponed it to December -- the end of December this year. So basically, what we are seeing is some improvement in net fee income, basically, I would say, saving in fee-related expenses. And we are growing, I would say, cross selling on a number of operations, not prices. The way we mitigate this lack of adjustment on prices is with the, I would say, cost control on the administrative expenses. But as you saw, they were, I would say, very limited in terms of the growth evolution.

Regarding the cap on credit card financing at 43%, really, we are seeing all this, I would say, even in today a very important drop in all the credit card -- the interest rates, beginning with Leliq or even BADLAR and all the active interest rates we charge for the different loans. Really, what will have more pressure on margin will be the minimum interest rate we are paying for time deposits. So yes, we foresee some kind of margin compression mainly in the third quarter. Perhaps in the fourth quarter, we could see some kind of recovery as we expect inflation will pick up a little bit more, and also, we are forecasting some increase in all these interest rates that I mentioned, Leliq, BADLAR and the interest rates and I would say, the average active interest rate.

Just a follow-up in the reprogrammed portfolio. So if I am not mistaken, you mentioned 17% in credit cards. And what about the rest of the products or your expectation of the total reprogrammed portfolio as a percentage of the consolidated loan book?

70% was actually -- around 70% was actually what was paid in credit cards when the statements came due at the beginning of April. With a 43% interest rate used to a 3 months grace period and all the balance paid in equal 9 monthly installments, many people decided to take that advantage. Later, some people decided to recancel what they have refinanced. So really, it's not that big. I'm not really comfortable telling you a specific number that is not that relevant. And some -- beginning in August, we will see what will be the payment behavior of -- because the first installment comes due. So we will see really the net effect at the end of this month or beginning of September.

The other line that grew, and it was not really reprogrammed, was the line granted to SMEs at 24%. That, as of the end of June, represented roughly 11% of total loans. We consider that this will be paid very good because, really, the interest rate is low and definitely negative in real time.

So really the, I would say, the challenge is to see how the back to normal or to certain normality appears in the next 2 quarters and see the impact on GDP, real salary, inflation and so on. So basically, we are estimating the peak of NPLs at the end of the third quarter, perhaps something flattish at the end of the fourth quarter. But really, it's, I would say, a complicated moment to give specific and accurate guidance.

The next to Juan Recalde with Scotiabank.

I have 2 questions, 1 on the profitability outlook and 1 on Tarjetas Regionales. So regarding the outlook, inflation is expected to pick up in the second half of 2020. I think that consensus is around 40% inflation for the full year 2020, and year-to-date inflation, I think it has been around [16%]. So with that in mind, can you talk a little bit about how the group is preparing to protect profitability from the expected increase in inflation? And should we see ROEs remaining at mid-single digit for the rest of the year? Or how do you think that's going to evolve?

And the second question would be regarding Tarjetas Regionales. So we saw profitability decline in there. The ROE was almost 0% in this quarter. So can you talk a little bit more about the main drivers of that deterioration? And if you -- how should we think about profitability at Tarjetas Regionales evolving in the next coming quarters?

Well, first, in our expectation on inflation right now is 37%. Then the rebound in inflation shifted for the first month -- or last month of this year and first month of next year. So we are currently forecasting a higher inflation for next year, say, around 45%. So 37% this year, 45% next year.

Profitability, when we look at ROE for Grupo Financiero Galicia was around 27% in the first quarter, 16.5% in the second one. For the first half, is something around 21%. We are seeing some slight reduction in the following 2 quarters in terms of ROE, but definitely, we see for the full year a 2-digit return on equity. Of course, this is real. In the past, the question was why we had very high nominal ROE inflation in spite what is the real one. Now all these numbers we are speaking out is the real one.

In terms of Tarjetas Regionales, this has many different moving parts. I would say that they also made [NPC quarterly] provisioning, in their [K], was around ARS 500 million because the -- again, the expected credit loss model brought -- originated a lower loan loss provision. Also, during this month, the use of credit card was lower. They didn't increase this in order to, I would say, to help their clientele. And also, there were some additional expenses with all the Naranja ex development to the -- on this, I would say, virtual wallet, is investing in order to get new releases or better new releases or a better user experience. So going forward, we think profitability should return to the levels we saw in the first quarter.

We'll go next to Jason Mollin with Scotiabank.

Juan already asked some questions, but maybe you can just talk about what goes into Galicia's expected loss models. What's your base case at this point? You mentioned that there might be -- obviously, it's difficult to forecast this, but perhaps we could see a peak in nonperforming loans in the fourth quarter of this year, the first quarter of next year. But what are the base case assumptions? And maybe if you can talk about some of the stress scenarios that could turn -- that could be part of the outlook for Argentina and the group.

Yes. Well, first, this expected credit loss model is, I would say, audited by our external auditor once a year. And also it's, I would say, audited perhaps, is the other right word, by the Central Bank and at least once a year, and each quarter, we update the main macroeconomic variables. That basically are GDP evolution and employment, real salary, if I would say, are the main 3. We have a base case scenario with a 70% probability. And then best 1 and worst 1 with 15% probability each.

The revision we included in June consider a GDP contraction of 13% for the year. In March was something lower. I think, if I recall correctly, it was around 11% or 10%. Unemployment growing to 12.6% from 10.7%, it was the previous number, and real wages contracting on average 10%, considering in March to March because the expectation over the numbers are considering March '19/'20 to March 2021, was around 20% loss in wage power or salary power of salaries. So -- but it also considers the current situation of our loan book, the asset quality. That's why we decided to create this anticipatory provisioning in some of off-balance sheet financing.

If we -- in order to spread -- if we consider, I would say, the worst-case scenario, instead of having a 5.5% cost of risk for the full year 2020, the worst case was around 8%. But really I don't remember the other variables, but really, it was a very bad scenario.

That's very helpful, Pablo. Just thinking about that, that gives us some color on scenarios of the base case for this year. Does it include this base case like next year? I mean looking at expected loss, does it -- does that have a big weighting, the recovery in 2021 or 2022? Or the duration of the loans aren't that long, so maybe it's not that important to longer-term outlook. But how important is it that we get the recovery next year for this outlook?

Well, as I said, the -- from March to March, the estimation of macroeconomic variables in order to calculate the forward-looking, so really, the medium-term expectation didn't have any impact on the numbers. For next year, we are forecasting right now a recovery of around 6.5% of GDP, again, coming from minus 13% this year, but it didn't have an impact on the forward-looking numbers we calculated.

Over the next to Alonso Garcia with Crédit Suisse.

I just wanted to first start with a follow-up on the cost of risk. You mentioned 5.5% for the full

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Hello?

We'll move to the next caller with Yuri Fernandes with JPMorgan.

So what was the size of this provision you book in other expenses? Can you comment on this side? Because you mentioned this was an off balance, so I assume it is not reflected on your allowance on your balance sheet. So how big was this provision? That's the first one.

The second one is regarding the credit card payment post the release. I'm not sure, but in the first question, I guess, you mentioned that 70% was paid. So does it mean that 30% was unpaid? Like what does it mean here?

And my third and last question is regarding your cost of funding that was very good this quarter. But looking to the breakdown, time deposits had a very good quarter despite the average yield in pesos, in local currency was about 20%. So my question is given the regulation that you need to have like a [mini] remuneration for individuals, why you had such a big improvement in the time deposits funding cost? Is it because you have more wholesale funding? Like what [probably is improving] funding costs?

The audio was not very clear. So let me if I understood everything you asked. The first question regarding the provisioning of balance sheet accounts was around ARS 5.4 billion. As I said, these are unused balances of credit cards or overdraft or certain guarantees.

And then you asked about the time deposit evolution. There, basically, the decision of the bank is to pay and accept, I would say, all the retail time deposits. And when liquidity is very high, we many times not [convalidate] interest rates with wholesale investors. What was -- the cost of funding went down because the transactional accounts, basically saving accounts and checking accounts, grew more than the time deposits despite the hike in the new minimum interest rate we pay.

And also, if you look at the consolidated cost of funding, there on margin also what has or its impact is the breakdown between pesos and dollars. All the dollar buckets have been shrinking mainly if you look at the second quarter of the previous year, while the peso bucket has been growing steadily and with very high rate. So I don't know if I missed something else on your questions.

No, I was just concerned on the time deposit because you have the regulation now, right, that you need to pay from 80% to 89% of the Leliq. And if you look to Leliq today at 37, 80, 89, we are talking about something close to 30%. And the yield on the time deposits you reported on local currency was about 20%. So my question is why is this close to 20% and not close to 30%. That would be like the kind of funding cost given the new regulation on time deposits.

Well, because the breakdown of deposits gives you the weighted average, and there, time deposits are the ones with cost that the transactional accounts, saving accounts and checking accounts are basically at 0 cost. So that's why the funding cost is not the time deposit rate. And as I said in a previous answer, the margin compression particularly could come from this increase in the minimum interest rate we are forced to pay for time deposits. But again, the cost of funding is not the -- this 30% or 33% we are paying for time deposits.

Okay. No, that's clear. And the final one, that you missed was regarding the credit card, the 70% repaid, implying 30% losses. Is that correct?

Well, the -- all the credit card fund -- financing that was due at the beginning of April that clients have the chance to refinance at 43% with 3 months grace period and then the balance payable in 9 equal monthly installments, 70% of the clients paid at that moment, 7-0. So we really 30% took advantage of that. And some of them, I would say, couldn't pay perhaps. Others, they took advantage and made an arbitrage or speculated. And actually, in the following months, some people prepaid that debt. And really the -- that refinancing debt, the first installment comes due now in August, so we will see if the people that refinanced or took advantage of that possibility that the Central Bank offered will be paying or not. With preliminary information, we don't see any, I would say, a problem.

We'll go next to Carlos Gomez with HSBC.

My question is also about this reserves, and that is, as you mentioned, off-balance sheet. So we wanted to understand how it will work in practice because if it's not on the balance sheet, if I understand correctly, it refers to also off-balance sheet items. So presumably, if it is used, it will be when these off-balance sheet items become activated and then you can provision against them. Are we going to see any impact on the income statement beyond what we have seen today? And ultimately, why is it -- again, why is it what it is in the costs as opposed to the normal provisions? One more thing regarding this. So this is personally not part of your reserve. Is it also or is it not part of the cost of risk that you are describing?

Well, in this provisioning, that, as I said, is not in the loan loss provision and not in the allowances. It's in a separate account. It's for off-balance sheet, I would say, transactions or financing, and it could be recovered. So you can I would say -- actually, if you look at other operating income in other quarters, you could see some recovery in this kind of provisions.

Going forward, I think that it will be better to try to disclose better this off-balance sheet financing because really created a lot of, I would say, confusion or noise in the way we presented the numbers that really the policy to having the loan loss provision, what the expected credit loss model set and the rest we see within our provisions. In the cost of risk, I mean the coverage is not included in the only -- there is one particular ratio that we showed in the press release, 1 of the first pages that includes this additional provisioning and take the coverage of up 212% -- 214%. But when we look at the NPL coverage or cost of risk, it's without this additional or anticipatory provisioning that we have been discussing.

So again, to clarify, if you included these additional provisions, then you will have recoveries of 214%. But of course, that doesn't include any off-balance sheet risks because they haven't been realized yet.

Sorry, it was not clear, the question, Carlos.

Yes. All right. So and just repeating to which I understand that you said that if we included these additional off-balance sheet provisions in the total, we add them to your nominal reserves, your coverage would be 214%, but it will be 214% on the NPLs that you currently have. Is that correct?

Yes, that's correct.

Okay. And if I can ask one more question, your tax rate is much higher now. We understand that you can only deduct so much every quarter. Should you -- should we expect the same level of tax rate in the coming 2 quarters regardless of what happens to inflation?

Well, there, the effective tax rate was in the order of 40%. If you are comparing it with the second quarter of the previous year, it was much lower basically because in the second quarter of last year, we began with inflation adjustment for tax purposes, and basically, we -- in the second quarter, we made the adjustment of the first half of the year, so 2 quarters. Going forward, there are certain differences between the tax accounting and, I would say, the legal accounting. The network has some differences and also how some tax purposes, the loan loss provision is considered. So I think the effective tax rate will be closer to this level of 40% than the 30% that is the, I would say, the headline number.

Okay. So would you expect that around 40% for this year and [its expert manages] have been also for 2022 and beyond -- 2021 and beyond?

Well, I think that will depend on the evolution on how the adjustment on network is -- the difference between adjustment is between the accounting and the reported accounting and the tax accounting. It has some, I would say, technicalities. In theory, again, we should be higher than 30 but I'm not sure if in 2021 we'll be around 40, really should be above 30 but not necessarily as high as 40.

Next to Gabriel Nóbrega with Citi.

The first one I have is are you looking at any specific segments or sectors that you are exposed to which are being more affected now by the lockdown measures and by the overall macroeconomic scenario as well? And then how are you looking at strategies to maybe mitigate these risks? And my second question is actually looking at efficiency. We have been seeing a lot of banks working very hard on this, especially because of the higher cost which they're seeing. And I would just like to understand what are the bank's strategies for efficiency this year?

Well, regarding efficiency, we have, I would say, limits on the growth we can have on fees and revenues coming from fees because of the price, let's say, cap or control. So we are having, I would say, savings on fee expenses. And the other action we are taking is cost control on the rest of the administrative expenses. Financial income could be, I would say, resilient as we are forecasting positive real growth in loans, while we see some contraction in margins. So efficiency should remain at this level in the coming quarters, of course, with the information we have today and without any additional, I would say, regulation coming from the Central Bank. Sorry, what was the other question, Gabriel?

The other question -- are you hearing me now?

Yes. The economic sectors, we like or we fear. Of course, we analyze on the credit and risk departments analyze permanently the loan book and the clientele. It's easy to see some sectors that are better than others. Typically, agricultural sector is always a good sector, and you saw some growth there in our loan book. Although SMEs loans also grew. As of June, we have granted, as I said, around 11% of our loan book to these SMEs or with this program of 24% interest rate to roughly 23,000 or 24,000 SMEs out of a universe of clients of around 85,000 SMEs. So definitely, this kind of loans are being chosen by the bank.

The -- certain manufacturing sectors are very good. Certain service sectors are very good. Definitely, the ones that are suffering more are, well, all that has to do with tourism and restaurants, cinemas and all this kind of things but really is so small in terms of loan exposure compared with agricultural sector, oil and gas, even construction, utilities or car industry. So really, it's very small, very automized. And the loans, we granted out to the segments we feel more comfortable with. And as I said, April was a very bad month, I would say, across all the sectors. But May and June saw -- we saw a recovery and also in July. So going forward, perhaps some sectors will be not so bad thinking from a risk aversion in terms of lending on the side of the bank.

We'll go next to Pedro Farall with AR Partners.

I believe most of the questions have been answered already. But Pablo, does inflation accounting change in any way your strategy? Do you approach any differently how you manage day-to-day liquidity or which business segments you want to increase exposure to?

The question is the level of inflation affects our strategy?

Yes. And the effect the inflation has on the accounting. If you -- yes, the liquidity management.

Well, definitely, the -- I would say, the accounts you see in the P&L, the inflation adjustment, I would say, is higher as the inflation any quarter is higher. And the way to calculate or try to calculate is basically taking the initial network, deduct the fixed assets on certain intangible assets and some other assets that basically are equity participations. And that liquid network is what is affected by the inflation index. So the higher the inflation in the quarter, the higher the impact on that account I mentioned in the P&L.

That -- when inflation gets higher, there are many moving parts, and what you can do is -- typically, what happens is that interest rates go up both for funding and also for lending and definitely there is still more, I would say, conservative or short-term approach to the asset and liability management. But really the possibility to be hedged with dollar position is limited due to regulations and also the level of fixed assets we have, in my opinion, is good and enough. So really, these are the things we can do.

And at this time, there are no further questions.

Okay. Thank you, Jennifer. Thank you all for attending this call. If you have any questions, please do not hesitate to contact us. Good morning. Have a good day. Thank you.

This does conclude today's conference. We thank you for your participation.