Concept of Commercial Bank Brand Valuation

+ Build a correct and reasonable theoretical model of bank brand value

+ Data collected from the market must be large enough, effective and highly reliable.

+ Data analysis and processing must be accurate.

When all of the above conditions are met, the value of a commercial bank brand is determined based on research on market reactions to commercial bank brands. The result obtained from the evaluation process is a ranking of the bank brand based on measuring customer behavior and attitudes towards the bank brand, helping commercial banks get specific customer assessments, from which bank managers have appropriate policies and management measures to enhance customer recognition, trust, loyalty... This is very meaningful to bank managers because it helps them see the position of the bank in the minds of customers, thereby having the most appropriate next plans. This research method should be used in the case of evaluating commercial bank brands in a comprehensive and systematic manner, from which a general report can be obtained for each bank and possibly for the entire banking system.

Determining brand value by the first approach, although very useful, conducting this research with Vietnamese commercial banks at the present time is difficult due to reasons such as: The research sample to conduct the survey must be large enough to represent the awareness and feelings of all bank customers while commercial bank customers can be up to millions with all personalities, education levels, genders, etc., so choosing the appropriate sample is very difficult. At the same time, the cost to conduct this research is not small and the results do not give a specific financial figure for brand value, so determining the brand value of Vietnamese commercial banks by this method is not appropriate.

-Determining the brand value of commercial banks based on the second approach

The birth of determining the value of commercial bank brands in the second way is due to the problem arising when processing brand entries on the balance sheet. Until now, no one denies that the brand is a valuable "asset" of the bank, but the legal basis to recognize the existence of this asset is still not available, so how much is its value recorded based on current accounting standards so that the brand value is recognized as a real asset that creates the overall value of the enterprise in general and the commercial bank in particular?

With this approach, the value of a commercial bank brand is determined based on the financial data of the commercial bank. This research method will give a quantitative result on the value of a commercial bank brand (different from the result of the first approach which affirms the value of a commercial bank brand is qualitative). From there, in addition to the great significance in terms of brand management, this result also helps to record the brand as a valuable asset of the bank on the balance sheet, which can be bought, sold, franchised, and can help tax authorities collect for the budget...

Up to now, there have been many proposals related to the content of brand valuation. From the overview of current research recognized by the world on brand valuation, it shows that the above models all have their own limitations, leading to their results or their applicability not being popular and the reliability of the research results not being high. The main reason is that the studies often use complex algorithms associated with many assumptions, which leads to those research models becoming very difficult to understand, with limited applicability; or there are models that are very costly in the valuation steps; While in practice, it is urgent to require a brand valuation model that meets all 5 conditions: Easy to understand, easy to use, Low cost, high reliability and obtains brand value results with financial figures.

With the above meaning combined with the thesis's objective of determining the value of a commercial bank brand by a specific financial figure, the framework of the thesis approaches the study of bank brand value according to the second approach - determining the financial value of a bank brand or valuing a commercial bank brand.

2.2.1.3 Concept of commercial bank brand valuation

There are many different views on defining brand valuation. This is because the basis or approach of the valuation process is not the same.

- With the school of thought that approaches brand valuation based on the cost of forming and maintaining a brand, the concept of "brand valuation is a way to determine brand value based on the financial costs of a business's marketing activities" [33]

- The "price is better than price" school believes that "brand valuation is the process of determining brand value based on the difference in revenue of the brand compared to other similar brands on the market" [33]

- The school of determining brand value based on expected income from the brand:

Interbrand in the book “Brand and branding – an economist book” introduces the concept of overall brand valuation in all business fields as “the process of determining the current value and future value of a brand” [58]

David Haigh – CEO of Brand Finance – defines brand valuation as “ the process of determining the value of a brand by discounting the future cash flows generated from the brand at a given cost of capital” [43]

The framework of the study agrees with the view that the main objective of brand valuation is to determine the financial value of the brand based on the economic benefits that the brand creates in the present and the future. Therefore, commercial bank brand valuation is conceptualized as:

“Commercial bank brand valuation is a set of tasks to calculate the financial value of a commercial bank brand”

2.2.2 Conditions and necessity of commercial bank brand valuation

-Conditions for commercial bank brand valuation

To apply the theories of commercial bank brand valuation in practice, there must be certain conditions for application. These conditions are different for each model, each market and each commercial bank brand, but can be generalized into some basic conditions as follows:

+ standard definition of bank brand

+ Complete and accurate brand accounting standards system

+ Bank financial data must be transparent

+ Accounting work in banks must be performed accurately and correctly.

+ Strict and effective financial monitoring system

Establishing conditions for each valuation theory is very important and necessary for the results of commercial bank brand valuation to be truly meaningful.

-The need for bank brand valuation

Brand valuation not only plays a role in bank mergers and acquisitions, but it also has great benefits in determining bank value.

At the beginning of the formation of brand valuation, determining the financial value of the brand was of interest in the activities of association, merger, and acquisition. Nowadays, the annual valuation of the financial value of the brand helps commercial banks to partly demonstrate the results or achievements in their business. Especially when commercial banks participate in the stock market, the annual brand valuation helps clearly reflect the real value of the stock.

- Banks have the basis to set the price level for their products from savings to credit based on their brand value. A brand with great value means that it is deeply felt by customers and has emotional attachment, with recognition of all elements of the bank, so when introducing a new product or raising the price of an old product, it will not put too much pressure on customers.

- When the valuation takes place annually with all commercial banks, customers will have a basis for comparison and then make a choice. A commercial bank with high brand value, even if the mobilization interest rate is a few dozen points lower, customers will find it difficult to transfer their deposits to banks with lower brand value because having a high brand means that all factors of the bank are felt and recognized by customers, meaning that the bank has trust. And trust is a key factor in banking business.

- When valuing a brand, the entire bank will have a correct view of the brand in terms of meaning, value and brand management as a truly valuable asset that brings a lot of value. When the bank conducts annual brand valuation, it will help the bank see the development of the brand. When the financial value of the brand increases steadily, it means that the bank's management tools are still effective when customers' awareness and affection for the bank increases, which greatly contributes to the bank's business results. On the contrary, if the brand valuation value decreases, the bank's operating results in all areas from deposit mobilization, credit granting, position in the interbank market... will certainly also decrease. Bank managers must immediately consider the cause and adjust their entire management work.

- The results of brand valuation are also the basis for business and investment decisions of commercial banks. Because when there are results on asset value,

The main asset of the brand means that the brand is viewed as other assets of the bank such as credit, investment, fixed assets... from which there are correct investment, arrangement and distribution decisions based on indicators such as ROI, ROA...

- With financial results of the brand, the bank has a basis to make decisions on using, franchising, contributing capital or investing in the brand. In particular, contributing capital, linking, merging or establishing subsidiaries at commercial banks is common, so at this time the brand is a direct profit-generating asset. With financial data on brand value, the brand will no longer be a free asset, the bank can more easily determine its value at the negotiating table.

- For tax authorities: When recognizing a brand as a valuable asset, recorded on the balance sheet, contributing to generating profits in the bank's business operations, brand valuation is of great significance. The valuation value not only helps banks balance their asset portfolio but also helps state management agencies make tax decisions on this type of intangible asset, especially in bank mergers and acquisitions. Recognizing a brand as a valuable asset on the balance sheet - especially in industries where reputation has a vital impact on all business activities such as banking - will greatly affect decisions related to bank mergers and acquisitions, or establishing subsidiaries, or franchising brand recognition signs such as logos, names, signs, slogans, etc.

Brand valuation also supports franchising, buying and selling brands or elements of brand identity. The trend of mergers and acquisitions in the banking industry is currently widespread in both Vietnam and the world, so re-valuation is even more significant not only for the bank itself but also affects the interests of many related parties.

2.3 Basic model for commercial bank brand valuation

Commercial bank branding and commercial bank brand valuation are new issues. Correct perception of bank branding

To have the right and appropriate way to determine brand value is necessary. The analysis in the above contents shows that choosing the second approach of brand valuation theory has a scale that is not too large with not too expensive calculation costs with 3 specific methods:

- cost-based brand valuation

- market-based brand valuation

- brand valuation based on projected earnings

As analyzed in chapter 1, each method of commercial bank brand valuation has different content, advantages and disadvantages when applied in practice. Especially with the first method - researching bank brand value based on cost - although this method was used a lot in the past, it is rarely used today because if we consider all costs to create a bank brand as the value of the bank brand, it is incorrect. Talking about costs is talking about past figures, and talking about brand value is talking about the benefits that the bank brand brings in the future. At the same time, in many cases, although the cost of creation is small, the bank brand creates a deep impression in the minds of customers, bringing many business opportunities and great benefits to the bank. Especially with bank brands, when all products belong to the service group with high intangibility, measuring brand value by the cost determination method becomes even more inappropriate. It cannot be concluded that any commercial bank that spends a lot on activities such as market research and development, promotion, communication... will have a more valuable brand than banks that spend less on those activities... In reality, customers' perception of a bank comes from the sum of the bank's factors, from the simplest factors such as name, logo, slogan... to factors such as staff, transaction process, product catalog... and not just from the costs for communication, promotion, promotion...

The market-based method of bank brand valuation is a good approach because the brand value is established based on the brand market, only when the price offered by the brand demand side is equal to the price desired by the brand supply side, the brand value is established. The result will be very accurate because the brand value is completely established based on the market (based on the market's demand for the bank brand). A bank brand is highly valued when and only when it is recognized and desired by the whole market, which also means that the bank brand has left a deep impression in the minds of customers. The weakness of this valuation method is that in order to get accurate valuation results, the brand market must reach a high level such as a complete and transparent legal system for the market, information on the market is always balanced, brands on the market are similar in all factors... but the above conditions in reality, especially in underdeveloped markets, are almost incomplete, so the valuation of bank brands by this method often has inaccurate results. In the distant future, when market factors are formed and completed, this will certainly be the main method of valuation of bank brands.

However, the need to evaluate bank brands is urgent at present, while methods such as cost and market are not feasible, inevitably requiring the most feasible method of evaluating bank brands at this time.

The “bank brand valuation based on expected earnings” method determines the financial value of the brand based on the net present value of the bank’s excess benefits or profits or the net present value of the bank’s future cash flows generated by the brand. This valuation method is appropriate when the brand is not or is not intended to be sold, the result of the method reflects the future potential of the brand.

brand to the owner. This evaluation result also has reference value when the brand is traded on the market. The current method is preferred because according to the general assessment of brand appraisal experts, this is the most optimal method in terms of content, ease of use, low cost and accuracy up to this point (Jeff Andrien, President of Finance scholars group)

Table 2.1: Comparison of brand valuation methods of the financial metrics-based approach

Method

Content	characteristic
Cost method	Brand value is based on the total cost of creating or replacing a brand.	Measuring brand value by brand cost is both logically and theoretically unreasonable. theory and practice
Market method	Brand value equals the equilibrium price between the seller and the buyer willing to transact. trademark	Market information about brands is always limited and asymmetrical.
Projected Income Method	Brand value is the present value of future earnings generated by the brand.	Using bank financial figures for calculation => is the most appropriate method up to now to measure value trademark

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• Pre-tax Profit of Bidv Tien Giang in the Period 2011-2015 zt2i3t4l5ee zt2a3gsnon-credit services, joint stock commercial bank zt2a3ge zc2o3n4t5e6n7ts At that time, the Branch had to set aside a provision for credit risks, which reduced the Branch's income. Chart 2.2. Pre-tax profit of BIDV Tien Giang in the period 2011-2015 Unit: Billion VND 140 120 100 80 60 40 20 0 63.3 80.34 89.29 110.08 131.99 2011 2012 2013 2014 2015 Profit before tax (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, through chart 2.2, it can be seen that BIDV Tien Giang's profit is still increasing continuously, and its operating efficiency is currently leaking. This is a contribution of non-credit services, and this service segment will be increasingly focused on growth by BIDV Tien Giang to ensure the highest profit safety because credit activities have many potential risks. At the same time, focusing on developing non-credit services is consistent with one of the contents of restructuring the financial activities of credit institutions in the project "Restructuring the system of credit institutions in the period 2011-2015" approved by the Prime Minister in Decision No. 254/QD-TTg dated March 1, 2012 [14]: "Gradually shifting the business model of commercial banks towards reducing dependence on credit activities and increasing income from non-credit services". 2.2. Current status of non-credit service development at BIDV Tien Giang. 2.2.1. BIDV Tien Giang has deployed the development of non-credit services in recent times. Along with the development of the Head Office, BIDV Tien Giang's products and services are constantly improved and deployed in a diverse manner to ensure provision for many different customer groups in the area: individual customers, corporate customers, and financial institutions. Typical services are as follows: Payment services, treasury services, guarantee services, card services, trade finance, other services: Western Union, insurance commissions, consulting services, foreign exchange derivatives trading, e-banking services,... 2.2.1.1. Payment services: In accordance with the Prime Minister's Project to promote non-cash payments in Vietnam [15], banks in Tien Giang province have continuously developed payment services to reduce customers' cash usage habits through card services and electronic banking services such as: salary payment through accounts, focusing on developing card acceptance points, developing multi-purpose cards, paying social insurance by transfer, paying bills through banks, etc. Chart 2.3. Net income from payment services in the period 2011-2015 Unit: Million VND 6000 5000 4000 3000 2000 1000 0 3922 4065 4720 5084 5324 2011 2012 2013 2014 2015 Net income from payment services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Along with the technological development of the entire system, BIDV Tien Giang has a payment system with a fairly stable transaction processing speed, bringing many conveniences to customers. The results of observing chart 2.3 show that the income from payment services that the Branch has achieved has grown over the years but the speed is not high and the products are not outstanding compared to other banks. Domestic payment products such as: Online bill payment, electricity bills, water bills, insurance premiums, cable TV bills, telecommunications fees, airline tickets, etc. bring many conveniences to customers. Regarding international payment, this is an indispensable activity for foreign economic activities, BIDV Tien Giang is providing international payment methods for small enterprises producing agriculture, aquatic food and seafood that have credit relationships with banks in industrial parks in Tien Giang province such as: money transfer, collection, L/C payment. 2.2.1.2. Treasury services: BIDV Tien Giang always focuses on ensuring treasury safety and currency security, always complies with legal regulations, and minimizes risks in operations such as: counting and collecting money from customers, receiving and delivering internal transactions, collecting from the State Bank (SBV) or other credit institutions, receiving ATM funds, bundling money, etc. BIDV Tien Giang's treasury service management department is always fully equipped with modern machinery and equipment such as: money transport vehicles, fire prevention tools, money counters, money detectors, magnifying glasses, etc. to ensure absolute safety in treasury operations, immediately identifying real and fake money and other risks that may affect people and assets of the bank and customers. In addition, implementing regulation 2480/QC dated October 28, 2008 between the State Bank of Tien Giang province and the Provincial Police on coordination in the fight against counterfeit money, in the 3-year review of implementation, BIDV Tien Giang discovered, seized and submitted to the State Bank of Tien Giang province 475 banknotes of various denominations and was commended by the Provincial Police and the State Bank of Tien Giang province [17]. Chart 2.4. Net income from treasury services in the period 2011-2015 Unit: Million VND 350 300 250 200 150 100 50 0 105 122 309 289 279 2011 2012 2013 2014 2015 Net income from treasury services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) However, as shown in Figure 2.4, income from treasury operations is not high and fluctuates. Specifically, in the period 2011-2013, net income increased and increased most sharply in 2013, then in the period 2013-2015, there was a downward trend. This fluctuation is due to the fact that fees collected from treasury services are often very low and can even be waived to attract customers to use other services. 2.2.1.3. Guarantee and trade finance services: BIDV Tien Giang, thanks to the advantages of the province and the favorable location of the Branch, has continuously focused on developing income from guarantee services and trade finance. Chart 2.5. Net income from guarantee and trade finance services in the period 2011-2015 Unit: Million VND 14000 12000 10000 8000 6000 4000 2000 0 5193 5695 2742 3420 8889 3992 11604 12206 5143 5312 2011 2012 2013 2014 2015 Net income from guarantee services Net income from Trade Finance (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.5, we can see that BIDV Tien Giang's income from guarantee services and trade finance has grown over the years. The reason is: Among BIDV Tien Giang's corporate customers, the construction industry is the industry with the highest proportion of customers after the trading industry, this is a group of customers with potential to develop guarantee services. The second group of customers is corporate customers in the fields of agricultural production, livestock and seafood processing with high import and export turnover in the area. are the target of trade finance development. In addition, BIDV Tien Giang also focuses on continuously developing these customer groups to increase revenue for many other products and services in the future. 2.2.1.4. Card and POS services: As a service that BIDV Tien Giang has recently developed strongly, it can be said that this is a very potential market and has the ability to develop even more strongly in the future. Card services with outstanding advantages such as fast payment time, wide payment range, quite safe, effective and suitable for the integration trend and the Project to promote non-cash payments in Vietnam. Cards have become a modern and popular payment tool. BIDV Tien Giang early identified that developing card services is to expand the market to people in society, create capital mobilized from card-opened accounts, contribute to diversifying banking activities, enhance the image of the bank, bring the BIDV Tien Giang brand to people as quickly and easily as possible. BIDV Tien Giang is currently providing card types such as: credit cards (BIDV MasterCard Platinum, BIDV Visa Gold Precious, BIDV Visa Manchester United, BIDV Visa Classic), international debit cards (BIDV Ready Card, BIDV Manu Debit Card), domestic debit cards (BIDV Harmony Card, BIDV eTrans Card, BIDV Moving Card, BIDV-Lingo Co-branded Card, BIDV-Co.opmart Co-branded Card). These cards can be paid via POS/EDC or on the ATM system. In addition, with debit cards, customers can not only withdraw money via ATMs but also perform utilities such as mobile top-up, online payment, money transfer,... through electronic banking services. In order to attract customers with card services, BIDV Tien Giang has continuously increased the installation of ATMs. As of December 31, 2015, BIDV Tien Giang has 23 ATMs combined with 7 ATMs in the same system of BIDV My Tho, so the number of ATMs is quite large, especially in the center of My Tho City, but is not yet fully present in the districts. Basic services on ATMs such as withdrawing money, checking balances, printing short statements,... BIDV ATMs accept cards from banks in the system. Banknetvn and Smartlink, cards branded by international card organizations Union Pay (CUP), VISA, MasterCard and cards of banks in the Asian Payment Network. From here, cardholders can make bill payments for themselves or others at ATMs, by simply entering the subscriber number or customer code, booking code that service providers notify and make bill payments. Chart 2.6. Net income from card services in the period 2011-2015 Unit: Million VND 3500 3000 2500 2000 1500 1000 500 0 687 1023 1547 2267 3104 2011 2012 2013 2014 2015 Net income from card services (Source: Report on the implementation of the annual business plan of the General Planning Department of BIDV Tien Giang [24]) Through chart 2.6, it can be seen that BIDV Tien Giang's card service income is constantly growing because the Branch focuses on developing businesses operating in industrial parks, which are the source of customers for salary payment products, ATMs, BSMS. Specifically, there are companies such as Freeview, Quang Viet, Dai Thanh, which are businesses with a large number of card openings at the Branch, contributing to the increase in card service fees [25]. Table 2.6. Number of ATMs and POS machines in 2015 of some banks in Tien Giang area. Unit: Machine STT Bank name Number of ATMs Cumulative number of ATM cards POS machine 1 BIDV Tien Giang 23 97,095 22 2 BIDV My Tho 7 21,325 0 3 Agribank Tien Giang 29 115,743 77 4 Vietinbank Tien Giang 16 100,052 54 5 Dong A Tien Giang 26 97,536 11 6 Sacombank Tien Giang 24 88,513 27 7 Vietcombank Tien Giang 15 61,607 96 8 Vietinbank - Tay Tien Giang Branch 6 46,042 38 (Source: 2015 Banking Activity Data Report of the General and Internal Control Department of the Provincial State Bank [21]) Through table 2.6, the author finds that the number of ATMs of BIDV Tien Giang is not much, ranking fourth after Agribank Tien Giang, Dong A Tien Giang, Sacombank Tien Giang. The number of POS machines of BIDV Tien Giang is very small, only higher than Dong A Tien Giang and BIDV My Tho in the initial stages of merging the BIDV system. Besides, BIDV Tien Giang has a high number of cards increasing over the years (table 2.7) but the cumulative number of cards issued up to December 31, 2015 is still relatively low compared to Agribank, Vietcombank, Dong A (table 2.6). div.maincontent .content_head3 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent .s1 { color: black; font-family:"Courier New", monospace; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s2 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: normal; 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• Evaluating customer satisfaction with savings deposit services at National Citizen Commercial Joint Stock Bank NCB Tan Huong Transaction Office - 3

In order to propose a model for approaching bank brand valuation, the thesis will deeply study two models of the expected income method as a basis:

- Brand Finance model

- Interbrand's model

2.3.1 Interbrand's model

The initiator of using financial tools to value brands was Aswath Damodaran in 1996 when he built these tools to value businesses. Discounted Cash Flow (DCF) is a method of determining brand value based on the brand's future profitability - by the total economic benefits it brings during its useful life - converted to the valuation time by the discount rate, the calculated value is the value or net present value of the brand (Net Present Value - NPV). On that basis, Interbrand has developed its own brand valuation model since 1998, every year Interbrand evaluates over 3,500 brands based on the basic principles of marketing and corporate finance including 5 basic steps:

Step 1: Market Segmentation

Brands influence customer choice, but the level of influence varies depending on the market in which the brand operates, so it is necessary to divide the overall market into many non-overlapping and homogeneous groups based on criteria such as products, distribution channels, consumer trends, geography, current customers, new customers, customer difficulty, etc. The brand will be evaluated on each segment and the total value of each segment will create the value of the brand.

Some principles to follow when segmenting the market include:

+ Uniformity of geography, products and customers in each segment to ensure similar relative values ​​when defining target markets

+ Clearly identify each competitor in each market segment

+ Have complete market data to conduct segmentation

+ The selected market segment has complete and valuable information about competing brands.

Step 2: Financial analysis

Identify and forecast revenue and profit from intangible assets for each segment identified in step 1 for 3-5 years. Profit from intangible assets is calculated by subtracting operating expenses, taxes, and capital costs from revenue from intangible assets. This calculation is similar to the calculation of profit in economics.

Data

finance

Data

market

Brand financial forecast

Figure 2.3: Brand financial forecasting diagram

The point to note in this step is that when forecasting, one must take into account possible macroeconomic and microeconomic factors such as inflation, unemployment rate, economic recession, spending behavior, etc.

Step 3: Demand analysis

Next is to quantify the role that the brand plays in the market in which it operates. From there, we determine the percentage of intangible asset value associated with the brand, often called the “brand role” index. This index is calculated by identifying different demand trends for branded products, then determining the extent to which each trend is directly influenced by the brand. In other words, this index represents the percentage of intangible assets created by the brand or how much of the profit earned from intangible assets is contributed by the brand.

Step 4: Determine “brand strength” and “discount rate”

According to InterBrand, brand strength is based on 7 factors and the following scale:

Table 2.2: Brand strength scorecard

Element

maximum score
Leadership	25
Stability	15
Market	10
geography	25
Brand trends	10
Support activities	10
Brand protection	5
Total	100

The “brand strength” score is calculated by summing the scores of the 7 factors above. Then we determine the “discount rate” based on the S-curve with the vertical axis to represent this value and the horizontal axis to represent the “brand strength” score. The higher the “brand strength” score, the smaller the “discount rate”.

Step 5: Determine the net present value of the brand

The value of a brand is the present value (NPV) of all expected future brand earnings, discounted at the discount rate calculated in step 4. The NPV calculation includes both the forecast period and the period beyond, reflecting the brand's ability to continuously generate earnings in the future.

Brand value is the sum of the net present value (NPV) of the forecasted future cash flows from the brand, discounted by the brand’s “discount rate”. The NPV calculation includes the forecast period and the period beyond the forecast period. It reflects the brand’s ability to generate future profits.