Financial Data and Key Metrics Changes - The quarterly profit reached a record of $3.4 billion, making H1 2025 the best first half ever for the company, driven by strong revenue growth across global businesses [5][6] - Revenue grew by 5% in constant euros, supported by a 1% increase in net interest income (NII), or 4% excluding Argentina, and record fees up nearly double digits [6][8] - The CET1 ratio ended the quarter at 13%, at the top end of the 12% to 13% operating range, with a post-AT1 return on tangible equity (RoTE) of 16% [5][50] Business Line Data and Key Metrics Changes - Retail and consumer, representing 70% of revenue, showed significant upside potential with a 3% increase in deposits and a 16% rise in digital sales [10][13] - Wealth management reported a 14% revenue growth, driven by record assets under management and strong commercial trends [33][24] - Payments experienced a 17% revenue increase, with double-digit growth in NII and fees, fueled by higher activity levels [33][27] Market Data and Key Metrics Changes - Customer activity drove revenue growth across all businesses, with double-digit growth in Wealth and Payments, and solid performance in Corporate and Investment Banking (CIB) [11][22] - The cost of risk improved year on year, with the NPL ratio falling to 2.91%, reflecting robust credit quality trends [41][42] - Retail customer deposits grew by 10% year on year, now representing 62% of total funding [20] Company Strategy and Development Direction - The company is focused on transforming into a digital bank with branches, combining technology with personalized support [12] - The ongoing transformation aims to simplify and automate processes, improving operational leverage and efficiency [9][39] - The acquisition of TSB is expected to enhance profitability and connectivity across the group, with a target RoTE increase from 11% in 2024 to 16% by 2028 [57][48] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year profitability targets despite a challenging environment, with expectations for revenue growth to continue [12][50] - The company anticipates stable cost of risk supported by resilient labor markets, with a focus on maintaining profitability over volume [19][52] - Management highlighted the importance of diversification in navigating challenges, with higher interest rates benefiting some retail franchises [11][12] Other Important Information - The company announced a new share buyback program of up to €1.7 billion, with plans to distribute at least €10 billion to shareholders through buybacks for 2025 and 2026 [28][47] - The transformation efforts have led to a significant reduction in operational complexity, improving customer interactions and reducing costs [13][39] Q&A Session Summary Question: NII in the UK and top-up provisions in Brazil - Management acknowledged the UK as a work in progress, focusing on profitability and margin management, with expectations for NII to be slightly up [55][56] - In Brazil, management indicated that the cost of risk is expected to normalize, with a focus on secure lending and a conservative approach to strengthening the balance sheet [62][64] Question: Direction of costs and capital generation - Management reiterated guidance for lower costs in current euros for 2025, with ongoing investments in transformation [70][73] - Capital generation is expected to improve in the second half, with excess capital above 13% to be distributed as share buybacks, subject to regulatory approvals [76][77] Question: Benefits of transformation and consumer segment performance - Management indicated that the benefits of transformation are still unfolding, with expectations for further improvements in cost-to-income ratios [82][83] - The consumer segment is experiencing challenges due to lower car volumes in Europe, but management is optimistic about future performance as conditions normalize [88][89]