FlatexDEGIRO AG (FTK.DE), a leading online brokerage firm, reported a robust financial performance for the first half of the year, with significant growth in net income and revenues. The company's revenues rose by 28% year-over-year (YoY) to EUR 242 million in the first half (H1) of the year, while net income soared over 200% YoY to EUR 61 million.
With strong key performance indicators (KPIs) and a confident outlook, FlatexDEGIRO anticipates a record year in 2024, aiming for the higher end of its revenue and net income growth guidance.
Key Takeaways
- FlatexDEGIRO's revenues increased by 28% YoY to EUR 242 million in H1.
- Net income more than tripled to EUR 61 million, indicating over 200% growth YoY.
- The company expects to reach the top end of its fiscal year 2024 guidance, with up to 15% revenue growth and up to 50% net income growth YoY.
- A dividend of EUR 0.04 per share was approved at the 2024 AGM, marking the company's first-ever dividend.
- A share buyback program for up to 10% of share capital is awaiting approval from BaFin.
- Key KPIs in Q2 showed revenue growth over 30% YoY and a 25% increase in commission income.
- Interest income grew by 47% due to a larger average margin loan book and more cash under custody.
- The company's EBITDA increased by 82% YoY in Q2, and net income more than doubled.
Company Outlook
- FlatexDEGIRO is on track to achieve a record year in 2024, with strong financial results expected.
- The company's operational priorities include launching new products and enhancing user experience.
- Costs related to the AGM and CEO search are not expected to impact the third quarter.
Bearish Highlights
- There were increased administrative expenses in H1, primarily due to higher legal and consultancy fees.
- The costs related to the AGM and CEO search are seen as one-off expenses.
Bullish Highlights
- Gross customer additions grew by 15% YoY.
- Assets under custody reached a new record of approximately EUR 61 billion.
- The company settled 15.2 million transactions, a 16% YoY increase.
Misses
- Despite the positive financial results, the company experienced higher administrative expenses in H1 2024.
Q&A Highlights
- No updates on the BaFin special commissioner's exit, expected by the end of the quarter.
- Personnel costs will increase slightly due to annual salary raises, but headcount will remain stable.
- Marketing spend may see a slight increase but not significantly affect net income.
- The company does not perceive intensified competition or market share loss.
- Margin loan pricing remains unchanged, but a reevaluation may occur if interest rates continue to decline.
- Real estate valuation gain is offset in the depreciation and amortization line item.
FlatexDEGIRO remains optimistic about its future performance, maintaining a strong financial position with promising growth prospects for the upcoming year. The company's commitment to enhancing its product offerings and user experience, coupled with a solid increase in customer assets and transactions, positions it well for continued success in the competitive online brokerage landscape.
Full transcript - FlatexDEGIRO (FTKn) Q2 2024:
Operator: Hello, and welcome to the flatexDEGIRO Analyst Call. My name is Jess, and I'll be your coordinator for today's event. Please note this call is being recorded and for the duration of the call your line will be on listen-only. [Operator Instructions] I will now hand over to your host, Achim Schreck, to begin today's call. Thank you.
Achim Schreck: Thanks, Jess. Good morning, everyone, and many thanks for dialing in. My name is Achim Schreck. I'm heading the IR department here at flatexDEGIRO. And with me today, I have our Co-CEO and CFO, Dr. Benon Janos; as well as our Global Head of Finance and Procurement, Dr. Thomas Lindner; and my colleague in IR, Laura Hecker. We would very much like to welcome you all to our analyst call regarding our H1 and Q2 numbers as we've published them yesterday evening post market close. As usual, we would like to provide a short run through the presentation before we open up for your questions. And without any further ado, I'd like to hand over to you, Benon. The floor is yours.
Benon Janos: Thanks a lot, Achim. Good morning, everyone, also from my side, and welcome to today's earnings call. Let's jump right into the highlights of the first-half of the year on slide three. We are very happy to close a successful first-half of the year and also continue our strong start to the year during the second quarter. We were able to grow both top as well as bottom line during that period, reaching new record results. Revenues increased by 28% year-on-year to EUR242 million in H1, while net income more than tripled compared to the previous year, reaching EUR61 million and growing more than 200% year-on-year. This is driven by commissions and interest income. Based on these results, we are very confident to achieve a record year in 2024 and are still expecting to reach the top end of our fiscal year '24 guidance with revenues growing up to 15% and net income growing up to 50% year-over-year. Moreover, our 2024 AGM on June 4 approved the distribution of a dividend of EUR0.04 per share, our first dividend ever, and we are happy to deliver on our capital allocation strategy to our shareholders. Speaking about capital allocation, the 2024 AGM also approved our plan to pursue a share buyback program of up to a total of 10% of the share capital. I'm sure you saw our ad hoc notification this Monday that we now have applied for the approval of our share buyback program with the German regulator, BaFin. We expect an answer during the coming weeks or months. While we have not communicated the precise volume of our share buyback program yet, let me reiterate what I already said during the Q1 call, that a large portion of the 2023 balance sheet net profit is planned for the share buyback program. As a reminder, our balance sheet net profit for the fiscal year '23 amounted to around EUR72 million. Of course, we will keep you informed about the further progress as soon as possible. Also, as you may have seen, we had some changes in our Supervisory Board recently. Herbert Seuling decided to step down from the Supervisory Board, while our shareholder, Bernd Fortsch, who directly and indirectly owns close to 20% of the company was elected as Supervisory Board member. These changes were effective as of the end of the 2024 AGM. The Management Board would like to thank for Mr. Seuling's contribution to the supervision of our firm over so many years. Now let's have a look at the development of our key KPIs during the second quarter of 2024. We are very pleased to see that all major KPIs showed a nice development. In the second quarter, revenues grew strongly with more than 30% year-over-year. Commission income increased by 25%, driven by a continuously growing customer base, higher trading activity and higher commissions per transaction. Interest income grew by 47%. This can be attributed to a growing average margin loan book, higher amounts of cash under custody and interest rates above the previous year's level. Both the ECB deposit rates and the margin interest rates are around 30% higher compared to Q2 of 2023. Gross margins benefited from positive mix effects with the higher share of interest income and improved by 3%. Our operating expenses stayed more or less flat in Q2 as lower marketing spending and less additions to provisions for long-term variable remuneration mostly compensated higher general administrative costs and an increase in current personnel expenses, most of them still inflation driven. We have also seen higher costs related to regulatory requirements. These are not limited to BaFin findings in general, but occurred because we also drive improvements in related areas that were not triggered by the audit results directly. Moreover, we have some exceptional expenses around this year's AGM and resulting external professional services, for example, for legal advice, communication and proxy adviser consulting as well as for the CEO search. Going further down the P&L, our EBITDA increased by 82% year-over-year in Q2 with a margin growth of 39%. This is attributable to the high scalability of our business model. On the back of this, net income more than doubled with a margin growth of 78%. We continue to manage our costs well while growing new customer account openings by 15%. Driven by the great efforts of our team, we were able to bring the average customer acquisition costs down by another 32% during the quarter. Also, trading activity remained solid with the numbers of settled transactions increasing by 16%. So in a nutshell, we are very happy with the progress flatexDEGIRO made during the past months, and in the name of the whole Management Board, I would very much like to express our gratitude to all our employees who worked very hard every day to achieve this result. Now on to our commercial performance in the second quarter. Gross customer additions amounted to 85,000, an increase of 15% year-on-year. However, this is a decrease of 30% sequentially attributed to our normal seasonality where we see the usual and well-known tendency that many new customers open their accounts at the beginning of each calendar year. Assets under custody reached a new record with around EUR61 billion, therefore, strongly growing 28% year-on-year and 5% sequentially. We settled 15.2 million transactions, growing 16% year-on-year but also being down mid-single digits sequentially due to normal seasonality. Client trading activity across the European online brokerage industry remains relatively stable over the past few quarters with a mild uptick in the first quarter of 2024. In Q2 of this year, we saw an average 21 trades per customer account on an annualized basis for flatexDEGIRO. This puts us right in the middle of the activity of some of our closest competitors. As already mentioned previously, our assets under custody reached a new record with EUR61.1 billion. This is split as usually into two main categories: securities under custody of EUR57.6 billion and cash under custody of EUR3.6 billion as of June 2024. Clients' cash deposits were stable over the past few quarters. This is a positive trend as we were able to keep the cash position steady despite some relatively aggressive interest offerings from competitors in the market. As a reminder, we do not pay any interest on cash held on our platforms. This testifies that we are able to tap the right customer segment in the market, customers that come to us for trading and not necessarily for savings. Our securities under custody grew nicely by around 6% quarter-over-quarter and 30% year-over-year. This is driven by both higher index levels and also fresh client purchases. Turning on to the next slide, you can see our net cash inflows. In the first-half of the year, cash inflows of EUR7.2 billion, compared to cash outflows of negative EUR4 billion, left us with a net cash inflow of EUR3.2 billion. 109% of our net cash inflows were reinvested. The delta to the net investments of EUR3.5 billion was covered by an increase of our margin loan book by EUR0.21 billion or EUR210 million. The cash under custody position remained more or less unchanged. Now as usual, we portray our revenue split in the past quarter. As we already provided a deep dive on the different drivers of the commission and interest income on Slide 4, let us jump directly to the next slide and to our trade monetization. We were able to generate an average of EUR4.33 per transaction in the second quarter of 2024, with a 9% increase from EUR3.99 in the second quarter of 2023. Sequentially, the commission per transaction came down from EUR4.64 in the first quarter of this year. We were very clear on our Q1 financials call that Q1 commissions per trade are typically meaningfully above average due to seasonal effects, so no surprises here. For example, some base fees are typically charged in January or February. We also explained during the Q1 call that we expect the commission per trade to come down in the following quarters of the year. This is what you can see now. But comparing the result in Q2 to other quarters besides Q1, you can clearly see the positive long-term development. Moving on to our profitability. We already discussed profitability in the second quarter on Slide 4. Therefore, let me allow to move on to the next slide, where we will go through our half year results in a bit more depth. Revenues in the first-half of this year increased by 28% year-over-year to EUR242 million and growing 20% compared to the second-half of 2023. Commission income in H1 amounted to EUR141 million, corresponding to an average of EUR4.49 of commission per transaction. Together with a slight increase in the number of settled transactions based on ongoing customer growth, this 10% increase in commission per transaction was the main driver of the 17% growth in commission income recorded in H1 2024 compared to H1 2023. Interest income in H1 of this year amounted to EUR92 million, an increase of 55% year-over-year. The increase results from higher depository rates at the European Central Bank, increased interest rates for margin loans at both flatex and DEGIRO as well as higher average amount of customer cash under custody and an increase in the margin loan book. A few comments on costs. Operating expenses decreased by 10% in the first-half of 2024. Current personnel expenses increased by 17%, driven by salary increases as well as significant hiring of additional employees in 2023 in the context of addressing regulatory findings. However, this was compensated by lower marketing expenses, which were cut by 29% in the first-half with no negative impact on customer account growth, which actually increased year-over-year. Other administrative expenses increased to EUR29 million in H1 2024, compared to EUR27.1 million in the first-half of 2023. This was mainly driven by significantly higher legal and consultancy fees, for example, for regulatory requirements as well as the additional needs around the AGM and the ongoing CEO search. These increases were partially compensated by the absence of any special items such as the payment of a penalty issued by the Italian Competition Authority in the second quarter of 2023 due to the complaint of a single local competitor against which we are taking legal action. All in, EBITDA in H1 2024 amounted to EUR106 million, thereby increasing 120% year-over-year. Net income for H1 of 2024 amounted to EUR61 million, more than tripling compared to H1 of 2023. The very high scalability of our business model is visible in the very strong margin increase. We grew EBITDA margins by 72%, while net income margins soared by 137%. On the back of this, we are confirming our guidance for the full year 2024 to reach the top end of our 5% to 15% revenue growth range and 25% to 50% net income growth range year-over-year. With that, we would like to conclude the financial presentation, and it's my pleasure to hand back to Achim and wait for your questions.
Achim Schreck: Thank you, Benon, for running through the latest numbers. We are now very happy to take your questions on the financials.
Operator: [Operator Instructions] Our first question comes from the line of Ian White from Autonomous Research. Please go ahead.
Ian White: Hi there, good morning. Thanks for taking my questions. A few from my side, please. Just first of all, I wondered if you could help us with a bit more detail around the interest income in the second quarter specifically. I'm sure you'll have seen it some way ahead of your consensus collection price the results. So I'm wondering if you had any thoughts on what we might collectively be missing there. Perhaps you could give us the gross yield on the margin loan portfolio for the quarter or something like that just to help us understand a few of the components, please? That would be helpful. That's question one. Secondly, I just wondered if you could say a little bit more about your operational priorities for the business over the next six months. Now that the BaFin related work seems to be mostly behind you. Are there sort of new product launches we should be looking out for things you're doing to enhance the user experience, engage clients more directly, something -- things along those lines, please? I'd be interested in hearing more about. And just finally, on the costs, you mentioned there were some additional expenses in the second quarter around the AGM and CEO search. I'm just wondering, could we expect to see these continue into the third quarter, given that the CEO search is ongoing? Or is it something more specifically related to the circumstances around this year's AGM, please? That's question three. Thank you.
Benon Janos: So let's start backwards with your third question, Ian, on the AGM and CEO search. I think, clearly, the AGM happened in June. So we currently do not expect any other AGMs happening this year. So those costs are gone effectively. However, there has been no final answer on the CEO search. So we think that there might be still some additional costs, which may come up, but I do not have any details on that. But that's something that -- where the book is not yet fully closed. Your second question was probably a very important one for us or the most important question as to how we transition from being a company that worked very hard to make sure that we comply with all regulation and make sort of the regulator happy so they don't see any issues with what we do. While now transitioning into a state where we are regaining back effectively our ability to spend way more time to look at our products, look at our clients and do pretty much what you alluded to, i.e., spend time improving our platform, enhance our platform, enrich our platform, but also prepare for the launch of potential additional products. Some of them may be small, some of them may be larger. We are in the process of doing that. We have had the tendency in the past to overcommunicate, which we don't want to do. But we are exactly in the process of moving from putting the regulatory topics behind us, while at the same time, preparing for new features/products for our clients. On the first question, the interest income, there are a couple of effects, but nothing really huge. One of the larger effect is that we have this one legacy loan engagement, which we have reported on over the last quarter. And there is really not a whole -- nothing really new to say other than we continue to book interest income for that. However, at the same time, further down the P&L, we subtract the interest income given that it's effectively not booked as a profit for this year. But technically, it shows up on the revenue line and increases the interest income line by EUR2 million roughly. The other effect is just the product mix. We do not have fully static margin loans. They are -- the headline is visible. But in the end, there are always small changes as we managed to increase that slightly. And a 6.5% number is not a bad estimate for the second quarter. I hope that covers...
Ian White: Okay. That's great. Yes, thanks for your help.
Operator: The next question comes from the line of Marius Fuhrberg from Warburg Research. Please go ahead.
Marius Fuhrberg: Yes. Hi, thanks. Two from my side. As the German government is planning a new private pension scheme, are there any plans yet from your side to prepare for that to offer a new product? Or do you have to, let's say, sit and wait until all the final plans are released? And the second one regarding your guidance, especially the net income guidance. I mean, your current run rate points significantly above the upper end of the guidance. Is there any special effect that you expect for the second-half? I mean, the interest rates would probably come down a little bit, but that should not affect the net income development to the extent that just the upper end should be reached. And so, yes, my question is, do you expect the -- only the upper end or is there potential of the giant raise inside?
Benon Janos: Thank you, Marius. On the private pension scheme, I think this is a very important development for Germany, and we will be there. To answer your question, it's both. We are preparing for to the extent that we can, while at the same time, of course, there are details that are lacking in order to make a proper decision or launch any products. And this is something where, given that we are in full control of our systems, our IT, we are pretty sure we can adapt to that very quickly once the details become known. Flatex has to be engaged in that, and we have to be one of the key players to position us for the -- it's the biggest opportunity in Germany probably after World War 2 when it comes to a shift to private pensions. But we don't know the details. And we don't know whether there will be -- or which limits will be put on how much money, whether it will be comparable to the U.S. system. We will be an early adapter for that. It's a very important one. On the guidance, in short, we are prudent. So we have no known effects that would lead to a worse profitability currently. And if the current environment continues through Q3, I think mathematically, what you're saying is fully right that we will have to make a step-up and communicate numbers, which may be above our current top end of the range. But for now, we're prudent, and we're seeing how the summer develops, how August develops. And then once we feel confident that we can communicate something, we will do so. And thanks for your patience on that one.
Marius Fuhrberg: Alright. Thank you.
Operator: The next question comes from the line of Andrew Lowe from Citi. Please go ahead.
Andrew Lowe: Hi, thanks for taking the questions. Just a few from me. The first one, I wondered if you could disclose the share of customers making at least one active trade in Q2. I know you used to disclose that figure in your presentation. It would be great if you could disclose that for this quarter and the past couple of quarters. And then the second question is on the expectation for the margin lending balances going forward. And importantly, what is the split, if you're willing to disclose it between the flatex and DEGIRO margin lending? That's it. Thanks.
Benon Janos: Sure. Let's start with your second question, our expectation for the margin loan. So over the last six months, it grew by EUR210 million. It's not a product -- I mean, we would love for the product to double, but that's not happening anytime soon. So we would love to continue to see a mild growth in the number, but it's a number that moves slowly without any violent moves. On the split between DEGIRO and flatex, very roughly, a good estimate is that one-third of the book sits with the flatex client base and two-third of the book sits with the DEGIRO client base. While that fluctuates, of course, a bit, a one-third, two-third allocation is not a bad estimate. In terms of the customer trading activity in the second quarter and the first quarter, the second quarter number was slightly higher than previously around 30%, which is not higher than in the first quarter, where we were around...
Achim Schreck: The -- in the second quarter last year, we were at 29% and this quarter at 30%. So year-over-year, slight increase. In the first quarter, we've been at a similar 30%.
Andrew Lowe: Great. Thanks so much. If it's all right, can I just follow-up on that margin lending point? So the one-third, two-third split, I know you said that for a while. So -- and the expectation was, I thought that the DEGIRO margin lending would grow faster. So is that the case or they're growing at roughly the same pace?
Benon Janos: It grows a little faster. That's right, but it's not massively changing the one-third to two-third composition. You can see from the numbers that you also see it in the client growth numbers, the platforms don't behave very differently currently, and the same is true for the margin loan business.
Andrew Lowe: Right. That's really helpful.
Benon Janos: Slightly higher growth for DEGIRO, but not hugely growing, right?
Andrew Lowe: Great, thanks so much.
Operator: The next question comes from the line of Christoph Greulich from Berenberg. Please go ahead.
Christoph Greulich: Yes. Good morning and thanks a lot for taking my questions. Three from my side, please. The first one is regarding the BaFin special commissioner. If I remember correctly, your messaging was that he or you expect them to end his mandate in Q3 this year. So one month into the quarter, just wondering if you could give us an update there where we stand? And yes, if you still expect that the time frame that you have described in the past? Then I just wanted to follow-up on the other admin costs. So if I kind of compare the first quarter with the second quarter this year was quite a meaningful step-up, I think, almost 30%, about EUR3.5 million. Is it kind of correct to assume that this is the ballpark number of costs, which are not really recurring, the EUR3.5 million, the increase we've seen between Q1 and Q2? And then lastly, just maybe a quick word on the CEO search. If you can tell us anything how advanced that process is and when we can expect more news on that?
Benon Janos: Yes, Christoph, thank you. Your first question on the special commissioner, thankfully, no new updates, which are different to what we had before. So we continue to believe that there's a very high probability that the special commissioner will exit the building, figuratively speaking, by the end of this quarter. But the checks that are being done by BaFin are still ongoing. So far, there are no negative surprises in any form, but we still have a full month of meetings and checks. So we just expect that they will go well. And if no negative surprises come up, then we will continue to stick to the Q3 time line. On the admin costs, the EUR3.5 million, that's an important one. And that's one as a CFO and my colleague, Thomas Lindner, as Head of Finance, we look at this quite closely. And there are a couple of things to say. So number one, we continue to spend on regulatory services and regulatory issues given that we did not -- do not want to take any risk there. So we spent a bit more still on the regulatory audit topics than we maybe would have thought. We had the additional costs related to the AGM, which are clearly one-off costs. And the CEO search, I mentioned already previously led to some expenses already. And given that no new CEO has been announced, they may continue to be in the second-half. So a majority of the EUR3.5 million, if I look at it on a year-on-year basis are probably one-off, if I teleport myself into next year and look backwards, but maybe not all of them would be my best answer to that. And with respect to the CEO search, I would prefer to hand over to Achim and have him taking the question.
Achim Schreck: Yes, sure. I mean, as you know, we can obviously only talk here kind of secondhand information from what currently is the discussion within the Supervisory Board and the CEO search is still ongoing. There have been candidates identified on which the Supervisory Board has not yet agreed on one. So we're still in the process of identifying the right candidate and then obviously, having the negotiations. So no new news on that front at the moment, and we'll keep you informed as soon as there is anything new.
Christoph Greulich: Yes, great. Thanks a lot.
Operator: The next question that comes from the line of Benjamin Kohnke from KBW. Please go ahead.
Benjamin Kohnke: Yes. Good morning. Thanks for taking my question as well. Benon, I just need to come back on the net income guidance, please, and the sort of implied decline that this means for the second-half of the year. And I mean, I fully understand you want to be prudent at this stage. But can I just confirm some of the indicative budgets on some of the cost lines that you've given before and maybe starting with personnel costs? I mean what you've said in the past is that the sort of hiring on your -- on the compliance front, so staffing your compliance department to comply with regulatory requirements has sort of come to an end, and you expect no further significant step-ups there in the second-half, potentially even the contrary. Is that still valid? And second, on marketing, I mean, you've given that budget of EUR30 million to EUR35 million for the full year, if I'm not mistaken. And if I do the math, it would just mean a significant step-up in customer acquisition costs in the second-half of the year. And just wondering if there's anything behind that. Is there -- do you see any sort of potential signs of an increase or an intensive -- more intense competition here that could explain that? And maybe on that front, if I may, just sort of on competition, I guess. And we've seen -- you mentioned trading activity. I mean it's in line with some of your Scandinavian peers. But just looking at some sort of indirect indicative data that we're getting from the alternative exchanges in Germany that may point to the trading activity at the neo-brokers like Trade Republic or Scalable or so on. It just seems like that is picking up significantly more than what you're reporting, which is essentially no pickup, at least not on a year-over-year basis. So I was wondering if you could comment on that and if that is sort of related to the marketing budget you're guiding for? Thank you.
Benon Janos: So I think the questions are very fair, and I understand your question. So on net income guidance for the year and personnel costs. So first of all, we made clear that we do not want to expand the headcount in our firm this year compared to the end of last year. And we continue to stand by that. So we are currently down in terms of headcount, and we will end the year with less people than in the year before. General personnel costs will probably be a bit higher, but that means -- or that is driven mainly by slightly higher salaries that we are paying to people. That's the normal pattern of annual salary increases effectively. The second factor is that on a year-over-year comparison, of course, some of the people that were added last year were added in the second-half and the year-over-year comparison will have -- will reflect that. On the marketing side of the equation, we do not see any massive or intensified competition. We do not see that. We see trends that we are able to get a bit more bang for the buck. So you see that we are able to decrease the customer acquisition costs, yet grow our client base on a bit higher level compared to last year. And we will see no revolutionary but maybe evolutionary trends in the second-half. We may allocate a few million additional marketing spend if it makes sense. And we are open to that, but it will not radically turn the needle in any way. So the EUR30 million to EUR35 million budget stands more or less. If in the end, it ends up being EUR36 million, that's okay, but it will not be EUR40 million or EUR45 million. With respect to trading activity, we are monitoring, of course, some of the exchange numbers that you report. They also include shifts away from other exchanges, but it's hard for us to really give you an exact number. We do not have the feeling that we lose any meaningful market share in Germany, but I will hand over to Achim, who has some more details on that.
Achim Schreck: Yes. Thanks, Benon. I mean if you look at the segment data we are providing in the report as well, you see the split between DEGIRO and flatex. Now while the flatex segment, obviously, not just the German flatex business. I think it still gives a good indication about some geographic differences here as well. And I think one can clearly say that we're doing pretty well with flatex in Germany. I mean the customer growth we've seen in the second quarter and in the first-half has been roughly 50%, up 5-0 against the previous year's period. And when it comes to the number of trades settled in the second quarter, we were up 20%, close to 20%, which also means that our trading activity for the flatex segment has been up 6% in the second quarter. So we do see a stronger development for flatex currently in that regard as what we see for the European DEGIRO business.
Benjamin Kohnke: That’s fair. Thank you very much, gentlemen.
Operator: The next question comes from the line of Simon Keller from Hauck & Aufhauser. Please go ahead.
Simon Keller: Hi, good morning all. Thanks for taking my questions. I have two. First of all, how should we think about the margin loan pricing going forward? Should we assume a declining margin loan rate in '25 and '26 -- or '26 as the interest rate level overall is declining? And secondly, on the topic of the real estate valuation gain that you mentioned earlier, that is boosting interest income, you said it's canceling out again later on in the P&L. Can you -- or did I understand that correctly, first of all? And secondly, could you name the line where it is canceling out, please? Thank you.
Benon Janos: You were right, it does cancel out again, and it cancels out in the D&A line item, depreciation and amortization, which you will see more details on that when we publish our half year report, where we'll give a bit more clarity on that or you will see it more clearly. On the first question, that's an important one, of course. Our margin loan book is above EUR1 billion, and it's a very important part of our business. So far, we have seen one interest rate move down 25 basis points, and we have had no changes in our pricing -- headline pricing. Frankly, we also had no complaints from clients who said, now you have to do something. So clearly, one notch down has not triggered anything. My/our expectations is that if we move down another two notches, maybe three notches, then my expectation would be that we would have to maybe reconsider that. And you will see a small step down in the margin loan pricing that we offer. Everything -- anything else would surprise me, frankly. So that's not something that will go up next year.
Simon Keller: Alright. Thanks.
Operator: We currently have no questions in the queue. [Operator Instructions] We have no further questions in the queue. So I will hand the call back over to your host for any closing remarks.
Achim Schreck: Thank you very much. Thanks for joining the call today. Thank you for your questions. As always, if you have anything further, please do feel free to contact the IR department, i.e., myself and Laura. Thanks a lot for your time today, and have a great one.
Benon Janos: Thank you very much.
Operator: Thank you for joining today's call. You may now disconnect your lines.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.