good afternoon dear colleaguesthank you for joining this conferencecallthis is the conference call for mkb ninemonths 2021 ifrs financial results withthis i'm going to pass the floor to ericdebosham hedogood afternoon ladies and gentlemenwe are pleased to welcome you today atthe call dedicated to finance andbusiness results of mkbfor the nine months ended series ofseptember 2021in the course of our presentation todayour ceo vladimir shubarand our cfo mikhail pavlovwill give an update on the businessdevelopment and will present thefinancial performance of the bankduring the reporting periodour presentation will be followed by a qa sessionso now i turn the floor over to ourfirst speaker so let me please go aheadokay do you hear mehi i hope yesgood afternoon ladies and gentlemen ihope trust that this goal finds youall of you in awell and safe position of course yourfamilies as welland i'm glad to begin our discussion onuh financial results of our bank for thefirst nine month of this yearso uh first of all of course i like tostart with the usualbaseline outlook and macro environmentinrussia in octoberuh this year international monetary fundhas revised up the projection forrussian gdpand uh increased uh from 4.4to 4.7 percentand it wasbasedon stronger gdp numbersand the faster recoveries than it hadbeen expected beforefast and strong recovery uh is empoweredby strongtrojan prices for wide range ofcommodities including oil and gas ofcourseaccording to the ministry of economicdevelopment russian gdpsorry yeahuhrussian uh gdpsorry i have some issues with mycomputer it's disappearing all the timeyeah okay okayuh so uh our our gdp growth in the thirdquarter of this year amounted to fourpercent in annual termsuh currently russ efforts to deal withthe pandemicbring positive result both in economyand virus spreadafter recent lockdown currently currentvirus infections across moscow regionturned downin order to support smes the bank ofrussia adopted decision to allocate 60billion rubles to ensure preferentiallending for sme clientsbesides the government paid businessesfrom affected industriesdue to the non-working day regime theamount of one minimum salary peremployeethat is around 40billionrublesin total for smesand the same measure was uh implementedduring the spring uh2020 lockdownas for monetary policy central bank ofrussia has increased key rate by250basis points from the beginning of theyearincluding the latest move of 75 basispoints uh in october this yearuh the main reasonuh for this uhincreaseof course uh was the current uhinflationand uhexespecially uh expectations about the ininflationuh real interest rates are still uh nothigh enough to push households to shiftfrom consumption to savings inaccordance with the revised forecast cbrexpects the inflation at the level ofpoint four seven point nine percent bythe end of this yearand the key rate at an average level ofseven point three so uh eight pointthree percent uh in the next yearon the on the next slide number four iwill highlight key recent corporatedevelopmentsuh supportive macro environment broughtfruitful fruitful results to ourbusiness development in bothcorporate and retail division capitalmarkets and ibe andin particular uh in september we printedfive-year senior unsecured eurobonduh half a billion and the perpetual uh350 milliondollarsthus continuing expanding our fundingbaseuh capital and presence uh in theinternational debt capital marketsour bank has increased uh its tradefinance portfolio by 92 percent almosttwo times year to date to 1.7 billiondollarsin the third quarter strategicpartnerships were initiated with the newlarge corporate customersuhthe amount of assets under management ofour mkb investments division expandedfrom5.5 billion rubles uh in the first sixmonths of this year to almost 10 billionrobots uhfor the first nine monthsalmost two times as well the bank wasrecognized among top five leadingrussian bondarrangerswe arranged almost 60 issues with totalnominal value of aboutuh 850 billion rubles during the firstnine months of this yearon julysnp global ratings upgradedour rating to double b level from bbminus with a stable outlookthe positive rating action reflects ahigher evaluation of assets quality andsuccessfuladoption to the new operatingenvironmentas can be seen in its high operationalefficiency profitability and assetsqualityslide number five our sustainableachievements are presented here i wouldlike to mentionthe mostsignificant onesfirst of all this week that agencyrights europe upgraded our rating isgenerating uh to athe agency has assigned uh esg score awhich means that the management of esgrelated risks and opportunities is ofhigh levelthe agency emphasizes that mkbeffectively mitigates the risks of itscorporate structure due to the favorableconfiguration ofthe board of directors and stable andtransparent ownership structure as wellas a prudent risk management frameworkbesides analysts point world performancewith respect to natural resourcesmanagement clear strategic targets forthe next three years with respect to itsdirect and indirect impactand the internal taxonomy of greenprojectswe also have completed our target joinedthe unemployed and signed the principlesfor responsible banking to alignbusiness strategy with the society'sgoalsinternational egyptian link syndicatedloan was issued by mkbfor the first time in russiathis is a two-year 200 milliondollars syndicated loan agreementstructured around three sustainabilitykpissustainable financing reduction ofelectricity consumption and managementsystemin the third quarter a quarterprinciples report was issued in linewith the implementation of law andportfolioe and s risk assessmentmkb established esg key performanceindicators for top managementand we initiated an auditof the central offices for compliancewith the national and internationalstandards for green buildingsslide number sixnow i suggest that we move to discussionof the key financial resultsof thegreat bank of moscow for the reportingperiodgrowth accelerationwas obvious across all key businesslines both retail and corporate businessand continue to increase along withimprovement in the asset qualityuh business business and environment uhempowered mkb to boost 17 in corporateportfolio growth and 38 in mortgageportfoliowe issued around150 billion loans to corporate clientsand over 22 billionrubles to retailclients since the beginning of this yearthe growth of interest income was mainlyinfluenced by increase of interestincome of corporate portfoliobesidesit was affected by an increase inaverage rates on ruble loansand compensated by decrease on a fixedloanswe earnedalmost 25 billion rubles45 percent year in year in net profitfor the first nine months of 21.corresponding to a roe level of 16in the list of key achievements i willi will emphasizedynamic net interest income growth plus34and we tighten key interest rategenerally interest rate increases arepositive for mkb performance in acurrent balance sheet composition andtranslate into an extension of netprofitbasel capital increased by seven percentand came to uh more than 350 billionrulesrussian accounting capital adequacyratio and one one achieved 9.4 percenton first of october and that leveldoesn't it doesn't include of courseyou know 81 issuedin septemberso that portfolio expansion andimprovement uh in the financialcondition of clients as well as updatedbank's internal model gave a significantpositive effect on the asset quality ofour loan portfoliofor the first nine months of this yearfinallyin recognition of our achievementsinternational finance year money andfinance granted several top awards tothe bank during the third quarter ofthis yearthank you so much now i would like topass the floor to mikhail for furtherdetails on our financial performancemikhail please go aheaduh thank you vladimirand good afternoon they're allas already mentioned mkb has delivered asolid financial performancein the nine monthsof the year uh total operating incomeincreased byuh 38 and amounted to 52 billion rublesthe increase is attributable toexpanding volume and higher yields onthe loan bookand also to strong price of fee andcommission incomenet interest income searched by34 and reached 57 billion ruble beforeprovisions and after provisions almostdoubledthe growth of interest income was mainlyinfluenced by corporate loans andadditionally supported by the growth ofaverage interest rates83 growth of net fee and commissionincome is related to recovery on fee andsee businessaffected by pandemic in the previousyeara strong growth of financialintermediary business and the result ofconsolidation withuh culturalbankin comparison with nine months 2020interest expensedecreased by 1.4mainly due to decrease of interest paiddue tocustomers the bank's operating expensesamounted to21.3 billion rubles for nine months offor 2021up by35.5 percent a year on yearuh driven by 39increase percent increase in salariesand employment benefitsto14.8 billion rubleson the back of the consolidation the newsubsidiaries in in the first quarter ofthis yearumas well as an improvement ofcompensation packagescost to income ratio stays at the healthlevel of 36 percentthe main part of the other operatingexpenses in the nine months this yearwas formed by the result of effectsoperations mainly slowuh an amount of 11 billion rubles andthe revolution of russian governmentbonds placed in the trading bookratio of net interest incometo risk weighted assets reached 4.8percentnet interest margin improved by 40 basicpoints to 2.6 percent year on yearin the reporting period net income ofthe bank achieved twenty four pointeight billion rublesactually forty five percent growth yearon year delivering return of equityreturn on equity of 16now let's move to the next slide pleaseuhas demonstrated on on on the slideseight the bank's balance sheet has grownsteadily driven by and by an increase inboth corporate business including loanportfolio and deposits and created infinancial organizations and securitiesportfoliomkb total assets increased by 13fornine months of the yearthe share of the loan portfolio came upto 36in the reporting periodthe essential part of the balance sheetreverse repo operations reduced to41.7 percent of total assets in linewith mid-term strategythe bank's main source of fundingcustomer deposits demonstrate steadyexpansions and comprised to64of the liabilitiesthe increase of due to customers waswell drivenby the growth of corporate corporatetournament demand deposit byuh81 billion rubles and current counts by80 billion rublesin dual individual current accountsincreased by 26 billion rublesindividual top deposits increased by 14billion rublesthe growth of assets was supported byfinancing from debt securitiesissued placement of uh us dollardominated bonds in amount of 500 milliondollars in september this yeargenerally current liabilities breakdownreflects good diversification of fundingbase and the bank's throne reputationin the financial marketnow let's move to slide number nine withthe breakdown of the bank's total assets36 percent of total assets since theloan bookis a loan book with the focus oncorporate lending consisting of 87percent of the portfolioduring nine months the year uh theretail loans increased by 90 percent uh22.5 billion rubles and the corporateportfolio increased by 17 percent149 billion rublesindustry breakdown of the loan book ismostly steady with the focus on commerceand trading crude oil production andtrading and constructioncommerce and trading dominates thecorporate book and comprised 21 of theof the bookthe share of retail loan portfolio atthe end of the third quarter was 12.8percentthe portfolio grew mainly due to solidgrowth of the mortgage book uhplus uh 38since the beginning of the year thegross in mortgage loansnow portfolio is mainly due to the newmortgage loans issued by mkb during thenine months of the yearuh the share of reversal cooperations inthe total assets of the end of thirdquarterreduced to41 percentover 95 percent of securities that serveas collateral under employee agreementshaving investment gradesuh 13 of total assets are represented bysecuritiesthe securities portfolio now consists of75 percent of top10 highly liquid investment grade debtsecurities eligible for pledge in thecbrthat serve as a part of the bank'sliquidity bufferduring the reporting period securitiesportfolio increased by nine percenttotal amount of additional unusedliquidity sourcescomprised a very significant buffer ofroughly902 billion rublesuh now i will take a few more minutes todiscuss loan portfolio quality on slidenumber 10.a noticeable improvement in the in theasset quality as well asan update of the bank's internal modeldecreasedlow loans provisions charged by 40percent in comparison with the nine ninemonths of the last yearnow the night for nine months of thisyear provisions charged for creditlosses on loan portfolio came to8.6 billion rublescomprisingthe amount of4.9 billion rubles for the third quarterduring nine months charge for creditlossesamounted to 7.3 percent rubles forcorporate portfolio and 1.3 billionrubles for retail portfoliocost of risk in the reporting periodperiod is1reasonable levelof cost of risk laware empowered by the growth ofhigh quality loan portfoliomost movements in the charge for createlosses for the nine months periodbroughtloans ofposse stage 2 andstage 3.sufficient improvement in the assetquality of the loan portfolio isobserved through npls and stages ratioamid issuance of high rating loans andupdate of rating modeltotal loan portfolio and pl ratioreduced to2the npl level for corporate portfoliodemonstrated the continuing downwardtrend year-on-year decreased to 1.4percentretail portfolio and pl ratio amount 6.5percentas shown on the bottom left diagram thisis the share of stage three and posse oftotal loans decreased steady from fivepercent to three point six percent as ofthe end of the third quarter and theimpairment allowance provides asufficient coverage of one hundred andten percentstage two ratiocame to two percentand now i suggest turning to slidenumber eleven where corporate loanportfolio classificationsin accordance with ifrs9 is providedon the diagram there is an evolution ofcorporate loans grade quality analysisuh total amount of stage one loansincreased from779uhto954 billion rublesuh plus 22during nine monthsof the year due to theorigination of new loansthe share of stage one launchdemonstrated a continuous throneexpansions since nine months of the yearreaching the level of 95 of the totalportfoliouh stage two launched during thirdquarter demonstrated flat dynamicstage three loans decreasedin amount of 13 billion rubles mainlydue to the write-offs share of stagethree loans reduced from four point onepercent inuh first quarter uh 220 to 2.1 percentin the reporting periodfor the impairment allowance provides asufficient coverage of87 percentnow during uh third quarteruh this year postal loans increased byuh half a billionhalf a billion rublesdue to one launch restructuring that wasaffected by pandemic and in the lastyearlet's now move to flight number 12 whichillustrates the funding structure of thebankuhtotal liabilities reflectsuh growth of 12.7 percent during ninemonths with good diverse diversifiedsources of funding59 of total liabilities are representedby customer deposits where the volume ofcorporate deposits comprises to 72percent and individual individual uh toabout 28deposits by credit institutionswhich accounted for about 23 of totalliabilities were mainly represented byreport transactionsaround92as the share of debt securities issuedis uh nine percent with major part of inforeign currencies including the issueof 500 million dollar denominated bondsprinted inseptember that repayment schedule isyou may see in the right bottom corneris comfortable for the bank with thebulk of wholesale funding due from 2025.umlet's move to slide 13.nowifrs capital developments are depictedon the upper diagramsi've raised total capital increased byuh 7 to 355 billion rubles mainly due tocore capitaluh raising as a result of the sporcompleted in may and retained earningsof the reporting periods this is alsosupported by capital adequacy ratiodemonstrated on the righttotal capital ratios of themkb's group calculated in accordancewith the basal 3 requirements hasslightly decreasedin the reported period due tothe decrease of for the additionalcapitaluhdue to amortization of tier 2 capitalamid the solid growth of of therisk-weighted assets by 18 since sincethe beginning of the yearunder frsuh the coreuhcapital ratioreached 12.uh plus 50 basic pointsas of for the end of nine months 2021and under russian accounting standardsthe n11 ratio came to 9.4by october 1stuh the dynamic of russian accountantstandards capital ratio are shown on thebottom half of the slidethe regulatory minimums includingbuffers applicable for systematicallyimportant banks are demonstrated on thebottom left graphsuh need to mention that new81 euro euro bond in amount of 350million dollarsuh issued in september 2021is not included in the nine monthsfinancial statement due totechnicalpeculiarity it will be reflected in thebank's capital at thefirst quarter of the yearuhthese were the main highlights of thebank's financial and business resultsfor nine months of the yearthank you very much for your attentionand now now let's move to q and asessiondear colleagues we see a hand from youyour line isn't muteduh good evening thank you very much forthe presentation uh congratulations withstrong results and very impressive onesg progress um thank you uh and i haveseveral questions um my first questionis about uh your cost of risk so cost ofrisk jumped uh quite um a lower thanthird quarter andit's above one percent which is uh likeon strategy of like more normalizedlevel so is there anything one off hereor uh how do you see then thisnormalized level post all the uh macrouh decreasepost commitlockdowns this will be my first questionuh yes hi thank you for your questionyes expected question so as you saidabout one percent uh because the friskis one factor if you will see i ask thecolleagues to open a slide uh with thestagespleaseyeah you see that uh in a posse there isain 2.9 uh billionuh rubles uh provisionwhich wasn't on this month ifrs uh it'sone of cases one company which actuallycame tosome issues in the very end of septemberwhich we didn't expect so currently weare working with this uh case and uhactually it was some time ago it was uhit was an issue it was a challenge fromthe bank so we managed it finally uh butnow we see that it's once again thecircumstances whichuh brought us to some uhnot very let's say good view about thisloanand we uh practically decided to createprovisions uh in order just not not towork with this in a fourth quarterbut even in the case if uh if we justexclude this one of case we will landsomewhere between 60 and 70 basis pointsin terms of cost of riskwe don't expect that there will be morefor this loan for sure and uh for uhfull year results we are still uhkeeping our target as below one percentso uh my projection something like 80 90basis pointsthank you very much uh and likelong-term normalized what you have in2023 strategy you still see it's arounduh one percent cost of riskyeah below one so we still keep this uhtarget for cost of risk normalized costof riskanddon't see any reasons tochange thisunderstood thank you very muchanother question is on fee andcommission income so there is a quite astrong uh flow from brokerage uhfinancial operationsuh what what is the trigger this quarterfourth quarter why it happened just insuch a strong very strong results maybesomethingwas launched or any umproducts um new products and uh what doyou see like next quarters in terms ofoverall free commissioning what could bedirections from this high baseyeah so uh there is a set of uhcircumstances i i should say like dealswhich happened in the third quarter andactually it's a good success of our cibteam so uh there was number of loans uhwe we arranged number of this of thesyndications we arranged and uh get somefees and number of the deals uh alsoguys arranged on the uhon the dcm market so uh i i cannot saythat it will be the same in you know inin a fourth quarter so we worked onthese transactions uh for like big partof the year so that's why they just cameto oneone period of time uh so nine my uhfourth quarter will be much more in linewith let's say results of the second andthe first quartersunderstooduh thank you and um another question uhgiven like a high interest rateenvironment we are in nowwhat are implications you see goingforward forland and demand corporate mortgagesdo you see any risks thenyeah actually uh just to to today therewas a conference of s p and this wasdiscussed also there the risks ofin the banking sector in terms of thegrowth competition and how ratesincreasing rates can influence thedemand for loans and actually i can justuh tell what wasuh agreed between the panelists i wasalso there so uh in terms of thecorporate uh part of the business wedon't expect any uh slowdown in terms ofdemand for loans becauseuh usually soi'll say the environment the usual uhapproach for corporate customers isfloating rates and as uhpeople much more expecting now that therates will come down uh will go down uhin a year or two to the normal levelsand usually they're funding peopleasking corporate customers asking it'sfor two three four years of course uhit's fine for them that it will be likethis uh under on the retail side andespecially mortgages yes of course itwill push down the demandfromretailuh customers uh because of course uhwhen you see the low the rate like sixseven percent uh it's much morecomfortable tocame in this let's say new new newrelations with the bank with the such arate for like let's say 10 15 years whenit's 10 plus how we see now for examplesome banks already increased rates etcetera of course the level of comfort isnot so high that's why we think thatpeople will wait for i mean thecustomers retail customers will wait formaybe a better environment and of coursei think that uh also there is aexpectations that the prices uhon the market i mean for new uhapartments uh will be stabilized at themoment and uhpeopleanalysts and the marketdoesn't expect that there will be such agrowth rapid growth like we had lastyear and this yearthank you and just a small follow-upwhat is the share of voting rates uhloans in your portfolio and corporate intotallook incorporate idon't have the figure in my mind justexactly but uh it's much more than halfof the bookuh you know it's important also tomention here thatuh the corporate customers much moreflexible when you talk with them aboutthe increase in the rate because of somecircumstances are outstandingcircumstanceslike changing of the interest rates inthe market etc because wemanaged toincrease the rates uhin 2008 2014 and some other periods whenwe had this rates hike anduhusually customers are fine with theincrease in the rates if it's even ifit's not floating rateuh that's why uh we don't think that uhthere is a risk thatrates will be sticky and we cannotchange them for the corporate side ofcourse retail it's a different story andhere i should say i i should say thatwith our 13of retail loans in the loan book ofcourse we are more on the safe side incomparison to the players which areactive in the retail lending becauseuh of course you know retail uhwe cannot provide money with thefloating rates uh and of course retailis very protected by the cbr by thegovernment anduhthat's why you're just gonna deal withthe idea thatyou can increase the rate for thecurrent uh for the outstandingloansumthank you very much that's it for myselfthank youthank youuh thank you we have a question fromellen ellen your line isn't mutedhi can you hear meyesvery well hi good good thanks for yourtime today umi guess firstlyit looks as if you you had a very niceimprovement in your your loan yields inthe third quarter but your deposit costsreally didn't move and i think we'vesort of seen that from from other banksand are you expecting as we go forwardthat you will have to start paying morefor for deposits so that sort of youknow the the two point i guess you musthave been at about 2.8 um net interestmargin in the third quarter i see yousaid 2.6 for for the nine months in arewe are we at the peak now or do youthink you can sort of you know do alittle bit better given the fact thatyou're being driven by the corporatelending um and you're saying you've gota good degree of flexibility there so iwonder what you think about the thedynamics between your so the fundingcosts um and what's happening in the inthe market um asas we can sort of they absorb thethe more recent rate uh rate rises thatyou've seen so that would be my my firstquestionokay yeah good question actually so lookof course you're right that there is notlike a peak i don't want to call it as apeak but it's of course thefaster uh growth of the interest rateson the asset side in comparison to theliability side but anyway look theliability isjustit's a combination of different sourcesand uh if you talk about the rubledenominated liabilities uh the big partis retail uhdeposits of course uh in some period oftime i think in like three four five sixmonths uh we start tochange the rates for the currentdeposits because it will beexpiring andof course it will be increased in thedeposit rates at the same time on thecorporate sideit's much more short-term boring so weare borrowing money for like two threeuh months six months and that's why theuhuh changes in the deposit rates uh willbe much more quickermuch quicker so the goal we have at themoment of course is to keep uh is tokeep the rates uh to keep the margin atthe current level uh of course it willbe not easy because as we just discussedwill be some uh push from uh from thebottom from the deposit side it will beincreasing in the prices at the sametime it's still you know in the in thein the asset side uh it's still there uhin the third quarter still old ratesbecause as you notice just in octoberthere was another 75 basis pointsincrease in the keywhich already which which are still notuh in the in the in the eye fresh so uhit's not so easy not to predict how itwill work but uhwe counted it by ourselves for our forour needs of course and uh so uh to keepthe current level of net interest marginit's quite manageableokay so so what you're saying is that wecould we potentially you could see alittle bit more upside on the assetyields um but clearly a little bit morepressure coming through on on this yearfor short side yeah for this casefor this year for sure and from startingfrom the first quarter of next year ofcourse it will be uh uha bit quicker growth uh we expect on thedeposit sidefor like also for the short period oftimeokay okay that's that's great um i didnotice that you seem to have quite a uma big jump in corporate deposits in thethird quarter i mean they seem to be upabout 10or so is that anything particular or umjust related to the activity um anythingof note thereit's just activity actually we act wepractically increase the rates uhyou know it was a discussion actually ijust remember remember this thisdiscussion on lm committee about uhexpectation for the rates etc so wepractically increase the ratesa bit above market uh for fixed uhrates uh deposits from the corporateside and of course that's why our uhcorporate colleagues collected uhlong-term deposits like when we co wheni say long-term deposits for thecorporate business is like three sixmonths because short-term it's likebelow one month so uh and that's why ofcourse we uhincreased materially the deposit base uhwhich is quite stable and uhwe'll see how it will work until the endof the year and um[Music]but currently it's not just a couple ofcustomers it's it it was quite uhmaterial uh input from the corporate uhcustomers from many of themand just on on the corporate uh loangrace i mean clearly it was a little bitmaybe there's a bit of currency in therebut it was a bit slower in terms of thegrowth in the third quarter um is isthat is there any reflection in terms ofi mean we we've seen from some of thebigger banks umfar out more corporate activity in thein the third quarter um and and isare you is the complete competitiveenvironment getting a little bit tougheror is this just a sort of a timing issuein terms of pipelines because i meanobviously you're at your sort of 15target for the full year already so iguess you'll go beyond that so i justwondered about the dynamics of thecorporate book in the in the thirdquarteruh it's much more time and issue becauseuh there was a repayment of anumber of loans uhin the third quarter and uhactivity on the uh lending new landingsite was uh quite material but therepayment of some of loans of coursedecreased this activity in the uhcombined numbers that's why uh we don'texpect that will be the fourth quarterwill be the same active as the firstuh first uhtwo quartersand uhjust a second sorrythey will stop to call me and stopso uh yeahand uhso we we we think that the fourthquarter will be much more in line withthe third quarter because uh we did agreat job in the first two quarters anduh you know that our projection wasabout ten percent growth for the yearall year for the corporate site we didalready 17 which is above uh almost twotimes above our projection that's why wethink that uh we would slow down and uhpotentially you knowi will keep some some transactions ifcustomers of course will be happy withthis we'll keep them for the next yearuh but uh if we'll reach like you know20total growth uh for the corporate sitewill be good good result i mean for allthe yearokay umtwo more questions firstly umin terms of the the fx loss um in thethird quarter umi remember in the second quarter i thinkyou you suggested that theabout 80 percent of the fx loss in q2was swap costs and there was also about700 million in negativerevaluation for the perpetuals i meandoes that look similar in in q3 just getan idea of what that um that number sortof containsin general yes of course it can be likeyou know a bit different uh numbers butjust like a peanuts you knownothing mymaterial because uh swaps are still abig part of this uh volume andas the swap costs uh increasinguh at the moment as you know that now wehave wider spreads between the rublerates and hard currencies rates that'swhy of course uh swap costs will behigher but uh also we did a good job interms of fixing their costsfixing rates uh for long-term swaps uhand actually that's why we don't expectthat uhit will be some material jump in thefourth quarter in comparison to thethird quarterokay but the sort of run rate we've seenin the last two quarters isn't it isrelativelyyou think it reflects the environment wehave currently yeahyeahokay all right last last one um on oncosts i mean clearly you did a prettygood job on on costs in the in the thirdquarter um would it be reasonable toexpect some seasonal uptick at the endof the year um or do you think that canbe avoidedlook i i think that's the the the costsin general in the fourth quarter we willbe in line with the third oneso uh because uh there is athere is some some some drivers which uhincrease the costs in the first uh halfof the year so currently they are notworking and uh we did some investmentswhich arewhich you knowso we we spend money we just want tospend and uh so currently i don't thinkthat there will be in like in a bignumbers there will be some growthin the in theadministrativeexpenses in a fourth quarter okaybrilliant that's really helpful thanksthanks a lotthank you so muchdear colleagues in order to ask aquestion you can just raise a hand andwe will unmute your line or also type itin the q auh i see a question from neet nick yourline is unmutednick we don't hear younick you have to unmute your micyeah yes nowsorry yeahum so most of my questions have beenasked by alan and elena but i have oneumi know we talked about the net impressmargin and how it's being possiblyimpacted by the rising interest rateenvironment and very fast repricinginvestors and so on and so on anda lot of the discussion was focused onthe loan part of the book right andripples are still a fairly big chunk ofyour total assets is the ripple bookgetting impacted by the rising interestrates in other words areripple rates completely immune to what'shappening there right now oryou think thatthe rising interest rates are alsobeneficial for the ripple book as wellin terms of profitabilitynick uh thank you for your questionthere is some noise coming when you'retalking if i understood your questioncorrectly i will try to answer if it'snot this question just tell me so you'reasking about the uh the influence fromthe uhgrowing rates on the reaper businessthat's correct yesyeah good so lookof course there is a uhrevision of the rates uhis absolutely in line with thekey rateso if you're talking about rubledenominated uh transactionsand of course uhthere is a changes in the rates of uhthere is some some transactions uh likefor three months uh some transactionsfor the shorter period for a longerperiod but in general of course there isa revision of the rates and uh everytransaction is new one et cetera etcetera so uh i don't see that there is athere there will be some pressure likefor example it was in 2019 i think youremember this when uh we were much morein the long-term relations and thislong-term relations and give us thepossibility to change the rates uhquicker than we want to be for examplethat's why uh answer is simple so wedon't see the risk that it will be extrapressure from the repo side of thebusiness or there on the asset side imeanwhich will uhpush themargin downokay thank you and another question umif you can kind of remind us yoursensitivity toeffects riskspecifically with regard to capital yourcapital issues the only reason why i'masking is becauseobviously political risk is kind ofgetting elevated and that usually kindof impacts the currency and respectivelyyou have the implicationsof your calculationslook uh if i understood that once againyour question correctly uh the fixedrisk uhand uh effects risk linked to linked tothe capitaluh not in the form of just you know uhopen uh balanced position or likeoverall position but in terms of the ithinkuhloans denominated in the foreigncurrencies in hard currenciesthank youyeah okay look there is a the samesensitivity so every for you just toit's easier to count every rubleevery ruble will give us about we'lltake three to fourbasis points from n11thank ratiothank you so muchoh thank youone question uh yeahyes and with me i just wanted to read itfor youi can do it yeah there is a questionabout calzoral and uhif you have any plans to uh what whatwe're going to do with the shares thatwe bought uh within a next session ofcultural so uh as you know of course uhnow the the shares on the treasuryposition of the bank uhif they will be not sold within the nextyear after the uhthe purchase it willof course we have planned to sell themwe just think uh and actually it's notuh it's not material amount with thecurrent prices is below two billionrubles and we think that we just need tofind a good period of time to uhto sell them and it just will be apublic sale it's not like we just willsell themon a daily basisso which will be public sale and ofcoursewhen it will bedecision it will be uh sharedwith the marketand actually we have also the questionuhfrom the same uhuh in investor or analyst anastasiasevilla about the extra provisions i ianswered this this question already sothere is one of case uhwith thein the posse loans uh with 2.9 billionrubles so the company uh went introubles uh in the variant of septemberuh we're trying we're trying to figureout now uh what will be the uh theoutcome the outcome and potential lossesbut we proactively did the provisionswith the amount of almost three billionrubles in order to be on a safe side andif uh there will be aworst-case scenario so the bank will notuh show any other losses with this loanso it's one of case and we care we wekept our uh projection for uh this yearin terms of overall uh cost of riskbelow one percent my projection 80 to 90basis points for all the yearokay any other questions uhfrominvestorsi see nookayi think uh yeah if noyeah please uhclose the callokay thank you very much for joiningdear colleagues thank you mkb from forpresenting the financial results thankseveryone and have a nice dayyeah thank you and uh be on the safeside the usualthank you