Good afternoon, ladies and gentlemen, and thank you for taking the time to join the call. I'm pleased to be reporting on a strong second quarter today, which to some extent reflects an improved economic backdrop as well as a more favorable rate environment.

Consolidated profit posted a 66% year-on-year increase, driven primarily by lower risk costs. Net interest income for the first half was down 8% compared to 2020.

However, it is important to note that it increased by 5% in the second quarter on the back of higher volumes and rate hikes.

Thank you, Johann. Well, I'm very happy talking to you and either you already enjoyed your holidays or hopefully holidays are just ahead of you.

Well, from my point of view, when talking about the way of the CEO main messages, I think it's we're observing and enjoying a very strong economic rebound with strong GDP momentum and these leads also of course, to a strong increase in financial demand, meaning our credit exposure is increasing. If I look at the second quarter, the sum up is easy, we have risk cost of EUR31 million, we have an NPE ratio of 1.7%, we have a very good coverage ratio still best-in-class of 60.3% and having said all this and given these very strong economic environment we're enjoying, it was obvious that we had to adjust our risk cost guidance to around 50 basis points.

Let me now go into the details on Page 17. If I look at the total exposure, which increased on a total sum by 1.5%, but please go with me into the details.

So we have seen as said, but you want global a very good demand on the corporate and on the retail side giving us an uplift of EUR4.4 billion. Given this strong still liquidity inflow and also our merger with Equa Bank, we see and IT taking over the clients, a strong increase of the sovereign exposure of EUR4 billion and it was partly offset by the financial institution exposure.

Here we have changed our approach in all days we have shown on the derivative part, the mark-to-market plus the add-on now it's the mark-to-market plus the potential future exposure on a net basis. Well, if I lost you, I'm sure you will raise the question.

So I move on to the next page on, Page 18. When talking about the provisioning, what you can see and I would like to start the chart from the right hand side, Q2 was showing, we had EUR31 million of provisioning needs in total, EUR23 million coming out of Stage 3.

And we also have allocated another EUR30 million, EUR30 million for the Belarus sanction for the Stage 2. So having said this, the second quarter would be even a zero risk cost if we would have not again used the IFRS environment to pre-provision so to say, part of the Belarus sanction.

If you look at the first half year of the EUR110 million, you could also split up the EUR110 million into EUR30 million for sanction risk in Belarus, EUR21 million on post model adjustment and only EUR68 million of comprising real new defaults, a little bit more pronounced on the retail side, less on the non-retail side. On the non-retail side, we even enjoy repayments also from default clients not to lose on the minus EUR9 million on Stage 1 and Stage 2, this comes because what we see uplifting ratings.

And we also see early repayments, while I move on to the Page 19 talking about Forborne exposure and our Moratoria exposure, while we thought in this quarter, we would like to emphasize a little bit on the Forborne exposure because in the first part of the crisis, of course, we have provided liquidity were needed, we gave our industry assessment. And what we now see for the industries where I would introduce a new letter of the alphabet not anymore VL and U it is K shape, there are some clients who now need forbearance measures, which we're happy to provide because usually in the model sector you have a very good collateral.

What are the typical things, what is being requested? Is it either an extension or a covenant holiday, these are the things what are being asked for, and your bigger part is still that demand when it comes to airports is not yet back on 2019 level, on the lower part of the chart you can see still how declines who made use of the Moratoria, how they're performing?

On the retail side, 93.3% completely resumed repayment. They're in debt repayments scheduled, some 1.9% have asked for further restructuring and 4.8% defaulted on the corporate side from change from the last quarter, we see now that 94 being back on the regular schedule, 4.2 and this is consistent with the increase in the Forborne exposure, 4.2 have asked for further restructurings and 1.3% out of those who have made use of the forbearance of the Moratoria default.

Let me move on to our RWA developments, consistently if you see good credit demand and increase in credit demand, of course also RWAs are increasing. We have a slight effect also because of the migration effects.

So EUR0.6 billion are being caused because of some lower ratings. And the other thing what I would like to make your world if you look at the three is the market risk by another EUR0.5 billion.

And this has given the environment also this distinction language. And in Belarus, we have slightly increased our rubber hedges leading to RWAs by the end of Q2 of EUR84.9 billion.

This brings me all ready to the well-known and last page of my swift presentation to sum up NPE ratio of 1.7, NPE coverage 60.3%, please be aware of that we have a very good coverage, if we would also include Stage 1 and Stage 2 of 89%. And this figure does not include any guarantees or collaterals.

Well, having said all this, we're now more than happy to take your questions.

Hello, gentlemen. I have two questions actually.

So the first one is on, thanks for the presentation. Obviously, the first one is on Page 8.

So when you talk about the Belarus exposure, I was just wondering when it comes to the exposure of rightsizing, i.e. the parent to the Belarus subsidiary, is exposure limited to EUR0.3 billion of equity you have there or there also intergroup loans from Vienna into your Belarus entity, so that's kind of question number one.

Question number two, so I've now listened to more bank conference calls over the course of this week, then I can keep count off. And we are three and a half hours away from the European banks authority stress test results being announced.

Not one bank has mentioned the stress test as being relevant to them or was it a discussion point. And I was just wondering from your perspective, two questions, I guess number one, is the stress test result a relevant factor for you, when you think about your capital planning, and number two, you mentioned before that you've already requested to start discussions with the SSM on the capital return policy, do you expect it to feature in that discussion?

Thank you very much.

Yes, I think you have two questions, put a very broad content when talking about the stress test. I think the reason why banks do not mention the stress test result is at all is a simple one.

And this relates to the methodology. So their methodology says that you deliver in a couple of rounds, according to their scenarios, their results which come from their model, but then they come with adjustments, which are not compliant to your model at all and you have to run it.

So if you ask yourself, is there additional insights coming from the final outcome on your policy, then I say no, there is no because it's a sort of black box. We haven't heard any concerns with our results from the authorities still now.

So there was no heads up, no nothing. So the half hours ahead of this, I assume.

It's also not the big thing. On the other hand, I think the way that way it was designed that knowing when most of the banks will publish their results knowing what to communicate before and after they dropped.

So there is some impact maybe we don't know, I don't expect, so I personally still think that the 13% what we have for CET1 ratio is good. I think that of course, the distressed scenarios, this time are even more severe, if you look at the overall development, what we had over the last years, the two years now, though it's very severe.

I think the outcome, we are not allowed to talk about the outcome, I understood before the evening. But the outcome is in the range everyone expected.

So yes, and I don't know if they will make when we talk about the dividend the reference to the stress test results. We'll see it's just the sequence of events why we're a little bit more careful.

I mean any details would then be given by Hannes. I don't know if he's allowed to say something today already or you can call him after midnight, I don't know.

Well, you have for stated or you have posted two question when talking about the distress test and I think some of you anyway run their own models based on our numbers. We are very transparent, you know RBI very well.

So we see three years extended period of a recessionary environment. Interest rates in this style of scenario even have been slumped down further and what is very especially if you know that you're in a three years waiting to see that just see the crisis making his way over your balance sheet and you observe in a standstill motors.

The second part you ask capital planning, yes indeed we also use in our budgeting process, in our way of conducting our regular business. We use scenarios which we deem sufficiently severe, but also giving them at least a likelihood of some 5% or 10%, and it would look differently our internal stress test converted to the one which was designed by the EBA.

But of course, we don't have to design a stress test scenario style scenarios for 100 plus banks. So I think at this point in time, even if I would be tempted to, I would not like to give more details are on the EBA press, let's wait for 6 P.M.

and let's enjoy the output. On the Belarus Intergroup loans, this is very, very minor, we have another EUR33 million of Intergroup loan provided to Belarus.

Hopefully this answers your question.

Yes, thank you very much.

Good afternoon, gentlemen. Thanks very much for the presentation.

I'll have just one question on the CHF mortgages and the provisions that you're taking there, I totally understand the approach you're following. But at the same time, it's very visible that the trend is worsening there given the cases are going up.

And I guess this is in line with the expectations, of course. But there are also concerns that the date of 2nd September would potentially not bring much clarity and the issue would carry on for the foreseeable future.

So can I ask here, are you concerned that this drip feeding of provisions could potentially impact let's say your dividend payments in a given year or could you see any other resolution to this solution or to this problem? I mean, let's say for example, it reaches EUR100 million a quarter, it's going to be EUR400 million of P&L taken out?

What is your view here and is there an alternative solution that you may consider? And maybe just one more question on NII here can I ask what's your expectation is in the second half of the year?

And how would you see the lending environment given that now we're in a high cycles in many of the countries, do you think that this may affect consumer demand for mortgages or personal loans negatively? Thanks very much.

Yes, talking about the development in the Swiss Francs. I as of today, I still would think that we keep our methodology, which is depending on the inflow of cases.

And this is there's also a forward-looking component in it. But the number of cases which coming in is important here, this is clear.

I think for me, the most important question would be let's look now, what is given the inflow of the speed what we have, I won't say that that we see any or we face any negative impact onto dividend payment capability. So we have built in our mid-term planning in increasing number of cases.

We assume that the speed of the inflow is similar to what we have, so it's digestible. So this is the first part of the question.

I think the most important question for me is, in addition to what the six questions which I addressed to the court, which is if there is an annulment, what is the impact on that because what we already have, I think one important, one important decision by the Supreme Court with seven judges, which is binding to my understanding is that they said the time of limitation. So the question, if there is an announcement, they said there is the two conduction theories.

So the - two then parts of the loan are separated and everyone has to go on its own for that and there is no automatic compensation on each other. So, but then what is the - as bankers we would say, what is the cost of funds, which you can then charge both sides.

But what I understand the terminology shall not be used, because here it's not about cost of funds, but on something else. There's something else there to my knowledge was not decided by judges, and for sure, not by the Supreme Court.

You might be aware that, following the advice of our lawyers, we in one case, which got famous anyhow as it was at the European Court of Justice, we followed what we think are the requirements on the Polish law. And yeah, we need a judgment on that.

So I don't, but we've all what I see - I either, don't think that that it would go much faster. Also, from the customer perspective, no.

So you, I mean, the only negative thing what I have realized so far is that there are now judges who rule that as long as it's not decided at the court customers do not have to make any repayments. So this is a new incentive to customers to act faster with their in.

On the other cases, I think it if you would have asked me, I would rather advise the customer to wait, because currently the perception is that they have an option. And they - why would you really use your options?

So I think this is the question for the customers. And yeah, in our forecast, we have a couple of more court cases already built in.

So will see how big the acceleration will be. But there should be enough room I would say, and no risk for the dividends.

Would we go for a voluntary settlement as it is proposed by PTO and ING? I haven't found any reason why to do so.

It does not solve the problems. And it seems that also not so many customers from these banks are running after that.

When talking about the NII for the second half of the year, I think it's reasonable to assume that maybe EUR1.6 billion or so could go to be possible. And yes, the loan growth we as assume maybe half between five and 10, something like this.

Great. Thanks very much Johann.

Just maybe one follow-up on the first question. So if you want to offer voluntary settlement scheme, and you would convert a CHF loan into a PLN loan, would there be a change in the risk weighting of that loan, just technically?

Or would it still be at 118% on average, because it's still a foreign currency loan from a group perspective?

No, if you convert it into Polish voted and its domestic currency and then ensure to be maximum 35% risk weight or so. And I understand that that you say this is - this might be one additional buffer what you could use when thinking about the overall cost and yes, we do.

And in another occasion I said, yes, there have been countries which came with a solution which I think is not possible in Poland, because of EU law, but with some conversion, I don't know. But it must be something strong.

So if we solve it and change from Swiss franc to Swazi, then we really need certainty. And we then we want to close this chapter.

Yes, but it would be reduced. They are WA.

Our assumption is 35% risk weight.

Okay. That's very clear and very helpful.

Thanks very much for your comments.

Hello, thank you very much for the presentation. I have three questions.

The first one is the dividend. The EUR1, which is the crucial capital at the moment.

A few of your peers have been giving a quite a big message in dividends. Basically saying that if the dividend is already accrued to capital, then the discussion would be CBS more or less to promote you.

And I'm listening to you, it seems like the discussion here might be a little bit more nuanced. Is that a fair understanding of your message?

Or are you fairly confident that the dividend will be paid this year? And, how does we stress thus link into that?

And then my other two questions are more straightforward. So one is on NII, could you just remind us of the sensitivity to rate hikes in Russia.

And how much of a benefit you expect to see already this year from the rate hikes we have seen so far? And then my third question is on the new cost of risk guidance.

Could you share with us what are your assumptions within that regarding the macro overlays, and also the migration of Stage 2 loans? Thank you.

Yes, coming back to your first question. I think we over the years, we sent a clear message to our shareholders, but also to the ECB and all the others when we sat - this EUR1 per share what we what we promised in at the beginning of 2020, for the year 2019.

We never add it to the CET1. So you can see that what our intention is, and I know the reason why we are not stronger than what we had been in the past is that I want to see - we want to see how is the language of the ECB donate around the stress testing.

And then after that, we can talk about it. When talking about the sensitivity of the rate hikes, what we have seen overall in 2021.

For Russia, I would assume that till year end, this should bring additional EUR30 million around EUR30 million have from rate hikes what we have seen earlier, a little bit more came earlier, so in March and in June, and a little bit less than half from what we have seen now in July, so about EUR30 million compared to that 2020 number. And the sensitivity.

I - with the numbers I shared with you already. It's Russia.

And you said the story I have to get your full question. The sensitivity was 100 basis points is about EUR10 million to EUR15 million.

So we're a little bit more sensitive now to rate reductions then to increases so 100 basis point ups might be another EUR10 million. And as I said let me confirm or the rate tax what we have seen till now would add 30 million on the Russian NII.

And then there was one more question I understood, because the phrase guidance, Hannes.

Well, thank you very much for this question. So, all through the high clear risk costs are some around this 55 to 60 basis points, which we have shared with the market.

And states do provisions I would deem fairly stable over the next months to come. The only there, but this is just you could say the disclaimer, let's see if there are any further lockdown needed.

But the way how we look and what is our base case scenario, the vaccinations beat keeps the base. And yes, we could see a higher rate of infection but no further lockdowns.

Having said this, we believe that Stage 2 provision should be fairly stable, because where would the Stage 2 come from. For migration, Well I'm not carry too much about migration on the rating scale, because, we have rerated all our clients more or less already two times.

So here we should be - we should be clear, not pretending that that could not be the one other client, but in looking at the total portfolio, so this would be one potential inflow. In other sanctioned topic.

Well, this anyway, we would flick explicitly, and the other one is affordable small adjustments, I would not deem it necessary. Given that we have done a very robust and decent job when it comes to this post-model adjustment.

Hopefully, this guidance helps Isabel.

Thanks very much.

Hi, a few short questions from me. Would you flag any one of the non-recurring items in your fee income in the second quarter?

Perhaps a quick comment on the second half would be useful. Second one, did you accrue any dividends with the H1 capital ratio and what you're thinking around the dividend payment from 2021 results?

And just finally, if you can give us a sense about these, how you came to this EUR30 million Belarus sanction provision? I understand you have about EUR130 million exposure to the sanctioned entities and maybe EUR600 million overall to the sovereigns.

So would you be able to give us a sense of what's the likelihood of recurrence of these provisions in the next few quarters? Thank you.

Yes, talking about the fee and commission income Gabor. So there are no one-offs in this quarter, we made - if you compare it to the last year's two small changes in the way we represent and the crew.

The one was that in the past we had in terms of credit card payments and so on a rather big booking in the Q4. We adjusted this a little bit.

And just for that, let's say bonifications or whatever would - we would show in the fourth quarter. So it's more now - more like an accrual base.

So if you think about modeling the fourth quarter there is less seasonality than what was in the past. And also not at one time, but let's say a switch between the lines was that in the bank notes business, which in the old before.

Up to last year everything was reported in the trading. Now there is one element which is really rather a fee income is reported here, but you've seen this already in the first and in the second quarter and it will remain like that.

So there is no one time something. Then you ask for the dividend, which has been accrued for the half year CET1 what we do in our capital planning, which is relevant for what we report.

We use the lower end of the range, which means EUR119 million which is the 20% per yard, which was required. And I mean, the define - this is more for planning and reporting.

And the final number will then be decided for the fourth quarter in the January February meeting of the board and the supervisory report. And the Belarus question goes to Hannes.

Gabor, it's in the end of the day, it's not super rocket science, but at the same time also, of course, I think it's robust to open the mind in to think how could you approach this topic. So the method we deployed is we have looked at those company who are being subject to the sanction and sanction risk we went into the single transactions.

And this gives you a total sum, which is slightly below the 14% out of the EUR2.079 billion. And then we have deployed an assumed loss given default of some around 40%, 50%.

So meaning if I look at this four affected names, and if I look at the loss potential per name, with the method described here, then it gives me a number somewhere between EUR25 million to EUR30 million, that was the reason why we came up with EUR30 million at this point in time. Whenever you know that comes further insight, further developments, new sanction to be announced, blah, blah, blah, we would have to adjust any way.

But this is the basic approach what we have done. So looking at those who are being subject to the sanction, we looked for one step deeper one to the single transaction, coming to the average employing a loss given default of 40%.

This leads us to the EUR25 million to EUR30 million that's the way how we have done it. Hopefully it helps cover.

Yes, thank you all. This is very helpful.

Good afternoon. It's Johannes from HSBC.

Two questions, please. First of all, on your LLP guidance of around 50 bps, which is probably double the level we've seen in H1.

So would imply that we see more than double the level in H2. What needs to happen to get there in terms of changes to default and so on, and probably also to get a sensitivity or understanding what would be needed to maintain the current levels of 12, 13 bps risk costs in the second half of the year?

And secondly, could you elaborate a bit if the new Austrian Raiffeisen Bank IPS has any impact on your regulatory cost? Thank you.

Well, Johannes if this is fine for you, I would start with 250 basis point cost of risk guidance. And it would be fairly split equally between retail and non-retail.

In retail is maybe even a little bit easier to do an appropriate forecast because here you have a certain run rates. So you could take the 50 basis points and maybe a little below the 25 - 20, 25 would come by retail, because here you have a certain run rate, what we know from our historic models could be on the lower end, but this is the way how we have thought about.

So 20, 25 coming from retail. In the other one, we kept another 25 for the non-retail for the second half of the year.

Well, a couple of thoughts on this one. Also, of course, if you use the typical method with this PD LGD, and then we have done it bottom up and top down.

So it was done very thoroughly. And what I also included is, you could have one or two mid-sized companies, which would just come as a surprise, because we have seen in the history that some of the companies had a decent good rating, and suddenly you have seen them on the screen announcing that they have financial problems.

So this is what we have comprised in the second 25 basis points for the non-retail part having said this for a corporate part, that's all we are thinking. Well, does it resonate to you?

You would…

Thank you. Yes, and what would be needed if it's like, if everything goes well.

Could you all do…?

Well if everything goes well, we don't see these two, three defaults what I have announced, which could come as a surprise and I think the reason why we have included them is such strong economic impacts are usually also make cause some companies that certainly you see them as I said on the screen. So, if they will not come, then we are even lower.

And if retail clients are performing even better given loan increases, high employment rates are there also the retail run rate may come in a little bit lower, this is my way of thinking when talking about the risk cost guidance.

Thank you.

When answering your question on the IPS, maybe for those who are not so close, we always had an IPS as an institutional protection scheme with a core shareholder, the Landesbanks it happened that Raiffeisen has decided not so long ago, when the deposit guarantee scheme was changed that that Raiffeisen moved to the general one. Yes, after reconsidering with some negative experience by a bigger fraud default, Raiffeisen now went back and make use from the possibility to have its own, Raiffeisen deposit guarantee scheme.

And as a consequence of this, there is now one a little bit broader protection, institutional protection scheme, we're also the other members of the Raiffeisen deposit guarantee scheme are involved. Therefore, the volume increases therefore also the funds for the IPS increased, but this does not change the contribution of RBI.

So the additional funds come from the others one might say the new members, the costs are depending on the - or let's say the floor for such costs are given by the regulator, which currently is 0.5% of the RWAs of the consolidated IPS. So, for us in a nutshell, no change.

Okay, thank you very much.

Yes, good afternoon, good afternoon to everybody, thanks for taking my questions. If I may, I wanted to get back one second to one of the previous question from a colleague of mine.

With regard to the 50 basis point risk cost guidance it's still not clear, not 100% clear to me whether in this 50 basis point you assume to release to use some of the POS model adjustments that you charged in 2000, in 2020, saw this but if you can clarify and if that is the case, I think if I remember, well, the force model adjustments in 2020 amounted to roughly speaking EUR300 million and if that is the number we could eventually use to think about that. The second question, I have is on risk weighted assets.

How do you see the progression in risk assets over the course of 2021? Do you think you have already included most of the headwinds like train EBA guidelines rate, I would imagine rating migration at this point or is there any other motion maybe from regulators that we should take into consideration?

Thanks.

Riccardo, I appreciate very much the question that gives me the opportunity to even walk here. Well, as I said the 50 basis points, let's split the 50 basis points equal into retail and non-retail 25, 25 each.

Well on the 25 retail like I was arguing by their run rate, the second thing what you mentioned is the BMA and booking in 2020. At this time, you can recall, V shaped, U shaped, L shaped way of thinking and if I would be forced to introduce a new letter from the Alphabet, I would introduce this K shaped because within the industry, you will see now the differentiation that some of the clients within the specific industry are performing very nicely that's the upgrade part of the key, but also at the same time, we still see some who is suffering.

So, who is still in the recovery phase so to say, it is the whole portfolio because we mainly have financed, portals are being exposed to the prime locations within the city center? What we know, Riccardo from and we took guidance from the 2002, 2003 SAS environment that the full recovery on the hotel sector in the city halls may take up to two, three maybe four years.

Having said this and you know that big part of our PMA was mainly allocated to do things or three industries the one was everything what comes in with airports, airlines and so on, so forth. The second one was LBO portfolio and the third one was this recommendation hotel portfolio since and when going back to the first quarter, we have not believed that the lockdown will be so much extended there and this the reason why if possible, I would like to carry over part of this PMA and you have been right with around 300, I would be eager to carry over at least part of it to 2022 because as you have seen in our Forborne exposure, so things fit together very nicely.

We have seen an increase of our Forborne exposure in the quarter two of EUR184 million. And then let's see if the Forborne measures what we have conducted are sufficient and if they are not sufficient, of course in those I have to provision them.

And then I would have already the BMA available to allocate the BMA, which is currently abstract to a dedicated case. So that's the way of thinking.

So for the guidance I gave on the 50 basis points besides we would see defaults, especially in this area, I have announced I would try at least to what we as an RBI group would try to carry over a substantial part into 2020, 2022 because as said, this industry may still be challenged. RWA progress in 2021 is the most headwinds included, we have done in two times rewriting cycles of course, you always could say, well doing another big thing to come or is this the full story, yes slightly, there might be a one or a small non-organic impact what you could expect.

But the biggest part hopefully comes because of strong business growth.

Okay, thanks, Hannes. Just to be clear to get back on the first question, my understanding from your awarding is that you expect to keep carrying the EUR300 million or most of it in 2022 and so that and then eventually a decision to be taken in 2022, right?

Yes, sir, yes Riccardo, so we are thinking part of it, I have to release and that's the reason the way we have built it out of the retail, so I cannot carry over the full 300, so it would be reduced by about 100. But part of it, of this 200, we intend given my arguments on the affected industry, airline, airports are hotels, we deem justified to carry them over.

If the Forborne exposure is then turning into a defaulted exposure because then the BMA is exactly serving the purpose that we have done this post-model adjustment for future potential defaults.

Yes, okay, thanks. Thanks a lot.

Hi, this is Christine from Barclays. I have three quick questions actually.

The first one is regarding the recent Czech Republic transaction, how much do you expect to benefit from those in terms of your NIM profile in the country, how would that help you to change it? Secondly, just aligned with that, what is the incremental NII and PBT impact and also is there any upfront restructuring costs that that could be allocated to this And just to add on to this, I think any synergies that you expect from this deal and second question is, given your strong Q2 results, what's your expectation for the ROTE for 2021 and third one, which is a broad and strategy, kind of a question.

I think it's just regarding what's your thinking about the - what's your thinking in terms of growth between inorganic and organic growth in the businesses? And in terms of capital return, what's your view given where the stock trades, what's your view on the buyback program?

Thank you. Thank you very much.

Yes, I'm here with you. So the Equa Bank is not a big one, as you said with EUR2 billion loan portfolio, I think we expect some EUR40 million or so gross income for the second half of the year.

And yes, let's say the EUR40 million on there. NII cost there is almost only NII and I mean the rest of the acquisitions, what we have done will not have any significant impact, when we talk about net interest margin, as I said these are mainly liabilities, what were added from the NTE transactions over here, you shouldn't expect too much.

When talking about the NII, I wasn't sure is it, this was referring to the Equa transaction, is this correct?

Yes, this is regarding the Equa transaction, the incremental thing.

Yes, so this is the - as I mentioned, as there is little fee income, it's almost everything of the EUR40 million for the second half goes into the net interest income. Then the OpEx is I mean the OpEx is maybe about EUR26 million which might be added to the OpEx from that perspective.

And yes then of course, if we talk at the overall then for the next 18 months, there will be some additional integration costs on the combined entity mainly on the check in the second half on first half of next year. I did not fully get your second question.

I think it was somehow about ROE or so but would you be so kind and repeat your question, please?

Sure, sure, no worries. I was just saying given the strong Q2 and the fee check that you guys are suggesting, what is your ROTE expectation for 2021?

The ROTE expectation for 2021, okay, yes you have seen the first half of the year, there is some seasonality in the first quarter. On the other hand, there is some seasonality from the cost perspective, that this is electing the first quarter usually the bigger part of the regulatory costs come in the first quarter.

And in the second quarter, we have little usually more OpEx and maybe also more risk costs. So you probably want to double it, you want to double it.

That's what you usually not do

Sure. Maybe I will just do that because I was looking at 6.5 to 7.5 in ROTE expenses in both of that?

Yes, it will be less precise I would say it should be better than last year, this is clear, is it already double-digit, let's talk a little bit later not yet, then your question was organic growth yes, I mentioned already that what we add is that the Equa from inorganic which is EUR2 billion of loan portfolio and you are aware that the one or the other smaller consolidation targets are in the market. All of them what we're looking at currently not that huge, but something inorganic might come as well.

And then I understood you also have a question on the buyback program. Of course, from time to time, we will look at this as well.

We understand that the broader part of the shareholders are rather in favor of a cash dividend than of a buyback. But I mean if you ask me, would you have a program in the drawer case, it's exceptional times.

And then I said we have brilliant finance people. They have something in the drawer, but I wouldn't expect that we use it this year.

Okay, thanks a lot. Thanks a lot, Johann.

Thank you.

Hi, thanks for your answers on the questions today. I just wondered, in terms of the improvement in your loan growth guidance for the year, maybe you had one or two geographies that have shown quite strong performance in the second quarter, maybe helped a little bit by currency, I'm not sure.

But what for you was the main driver for that improvement in growth, I mean, is it particular geographies, you're really a lot more confident, is it that you feel that you can put a little bit more capital to work because there's always demand in a number of these countries? Could you just give me a flavor of how you feel and why you're confident to push the loan growth target up, that was the first question.

And the second question again, sorry to ask it again. But your provisioning on the Swiss Franc mortgages in Poland is clearly lower than a number of domestic banks.

And as you rightly said earlier, a number of them seem to be a lot more keen to go for a voluntary settlement. But that voluntary settlement seems to be the demand that the majority of operators in Poland accept it and go for it.

Do you feel that you will be able to, if the majority go for a settlement for example, if it's done on the KNF terms, can you still ignore it and go through the courts yourself because clearly, if your clients are getting a less good deal than the others, isn't that going to be rather difficult? So, at the end of the day, will you not really just be forced to follow what the majority go for?

Or do you think you cannot do that and go through the pain of another three years or so four cases? I just wondered what you feel about maybe doing something different as I guess you've tried to do earlier.

So that was the second question. Thank you.

Well, Alan if I can start with the second question when it comes to the Swiss Franc provisioning, as our CEO clearly said, Beco was using a different path, when it comes to their provision, we also know their shareholder structure and their good intention to find a settlement at the same time, there was a little, there was only little and if I look at the other beings who already have announced the quarterly results, we feel very well with our coverage of above 10%, if you look to our bank with some 11%, if I look to Santander with 14%, we have get in for obvious reason with 3%, BMB also being on 10%, BPH 10.46%, so we feel very well hosted in the environment what we have created and of course, each and every bank has a different loan dynamic care and dynamic when it comes to the court ruling. So that's the reason why we have thought that the current coverage of this around 10.2% is very well done.

The other one is, when you were talking about the judgment, when the ruling comes from the Supreme Court, it is a very strong guidance not to say even binding to the local regional courts. But needless to say, different if there would be a new law introduced, each and every individual client would have to go and to sue the bank to get here legally confirmed agreement with the bank.

That is the reason why we take this approach. And we must also not forget and it's another thought.

Currently, there is one industry in Poland, which makes a very good earning out of the whole situation. These are the lawyers and the different core lawyer communities, because if you go the route towards the court, it costs you some 10,000 years plus.

So that is the reason why we believe that there will not be one, so time announcement, but rather, if there is this ruling by the senate of seven or the clear guidance in answering clearly the seven or the six questions that we could see either a slowdown of new cases coming in. And it said, our current provisioning is already assuming a further increase of new cases coming in.

That's our thinking on the second part of your question when it comes to the provisioning and to the coverage on the Swiss franc provisioning. Well, the loan growths are goes across all the regions.

I think we already have confirmed it, these loan growths in the first quarter. You can recall that, Johann last year was already very constructive and positive in the first half year.

Well, if you go across the different regions. Well, I think we seeing very good growths in central and Eastern Europe.

Is it Hungary where it could be double-digit? Also Czechia is constructive, maybe not this pronounced as Hungary slowly curious, somewhere in between Hungary and Czechia.

This is the way I see it when it comes to the CE region. When looking at the SE region is there one country to take out where we can see very pronounced growth, maybe in Serbia, that they killed one of them current research has it that we believe that we could see even a double-digit growth in Serbia, but also in Bulgaria showing a very nice growth dynamic, very favorable.

Also still, when it comes to the Eastern European market, we have seen that in Ukrainian we have been capable to catch some of the market share as well. Here we would be slightly below double-digit in Ukrainian.

But if we look, for instance, in Russia, at least market capacity would show a clear market rose beyond the double-digit. Well and last but not least, just to finish our regional footprint.

I think Belarus is not the market currently to heavily expand our footprint when it comes to financing.

Okay. All right.

Thank you.

Good afternoon, everyone. I have two quick questions.

First a follow-up on the cost of risk. I've noticed that in Bulgaria and Romania, the annualized cost of risks currently at around 80 bps and actually higher than in Russia, which is below 60 bps annualized.

So my question is, are there any country specific drivers in Bulgaria and particularly in Romania that have sustainably driving the provisioning charges upward. And on the other hand, do you consider this level of customers in Russia to be sustainable in them over the mid-term.

So that's my first question. And second question is on the fee and commission income in Romania.

It registered a 20% quarterly increase. So my question is, I can't imagine it was purely due to reopening of the economy.

Because it has been fairly robust even during the pandemic, what has been behind this increase? Was it a one-off or did you change your fee schedule or simply it was related to the customer activity?

Thank you.

Well, thank you for working through the presentation so deeply. I appreciate it very much.

On Romania, of course, this is not the run rate, I have to clearly admit, but I don't know if you followed the latest constitutional court ruling in Romania, when it also comes to the mortgages. And one could say every bonds have discussed in this syndrome of participants when it comes to handing in the keys.

And, we thought that especially on our screen strength portfolio, in Romania, we also teamed necessary to do another post-model adjustment when it comes to Romania, which is summing up in total to EUR8.5 million for this specific subject matter. So this would be my answer for Romania.

You're right. It's elevated, but it's a quarterly number.

So please do not scale it to the full year. The second one is Russia.

I can recall this question, I think multiple of quarters, the 60 basis points what we guide for Russia is derived from the - from all models you could say based on ratings, based on LGD experience. At the same times what we have enjoyed very much is that the local national champions have been capable either to adjuster the business model if they have been challenged or they have been just rock solid.

Yes, you're right. It's very, very low.

If we really can sustain this for the next endless quarters. I don't know, but Russia was always able to surprise us positively when it comes to the risk cost model, would indicate slightly higher than what we can see currently.

But colleagues, local colleagues continuously demonstrated and what we also see that's very positive, that also on the retail side, the forward-looking indicators, is it the three months, 30 days plus, or the 90 days plus and over three months. All of them look quite favorable.

Referring to your other question, which is the fee income in Romania quarter-on-quarter. I mean, it's a combination.

So there are no specific one-offs, what we have seen is or what I would say, I wouldn't expect and if and I tried to be cautious, I wouldn't expect that. It's so easy to repeat their 500 quarter-on-quarter which also means Romania.

But if you look at the fee income in Romania, it was also last year around a little bit above the EUR40 million. So and 45 is I would say exceptionally given also the new loans business in the unsecured lending, which is a very good one and some other activities as well.

So no one offs to mention in Romania, very good quarter. And currently we're very positive to say, I mean there is some seasonality, maybe from the Visa MasterCard.

So if you take off EUR2 million to EUR3 million from this special seasonality then you are any help get the 41, 42 what we had in the last years as well. So I think it's a very good development but not such a big surprise.

All right, thank you.

Yes, thanks. Thanks for taking this follow-up, just on TLTRO, I noticed that you got EUR9 million bonus in a quarter.

Can you remind us where you stand in terms of accounting of the benefits of TLTROs getting a bit complicated, all the differences among the various banks?

I fully agree with you that the accounting is very difficult. And it took my colleague quite a while until they got the impression that I have understood it what we the way how we did, so what we did is first we said let's wait till we have the confirmation down to book any anything earlier.

So we waited till we had the final confirmation. And then we book everything what was accrued for the first step, we're in a sort of accrual mode if I may stop with this.

And what comes on top of this accrual mode is that, we didn't book anything for last year. So these came on top, our volume is not so big, but we would now accrue quarter, or every month, we would accrue monthly and of course it's for the rest of the drawing and it might be around what is it 10.5 year maybe EUR5 million to EUR7 million something like this cost the EUR9 million, this is already with what we also allocated from last year.

But we accrue it over the life of the drawing on a monthly basis.

So this is just an issue of the EUR9 million we have seen in this quarter will more or less pay every single quarter or in the foreseeable future?

No, no, no, sorry. This would be misleading.

So what we have is we had in May, we booked for the first time and in May, we then have to book everything what was in accrual term since this period started where profit of it goes back also already in '20. And now it's a little bit difficult to do cost.

This is a group report what we do. And so you might say that we will have let me think we will have for the first half year, we had a little bit less than EUR4 million.

What we take in RPI and another EUR4 million will come in the second quarter, something like this now, almost EUR4 million. And we had a catch-up of last year as well.

And we have a smaller amount from bank, so I don't know if I was not precise enough. I'm looking around also in the round here people say I'm rather too optimistic.

Maybe I should say just EUR5 million in the second half on the TLTRO and EUR4 million was a catch-up. So if you take the EUR9 million, EUR4 million catch-up of last year, EUR5 million for the first half of the year, and another EUR5 million in the second half of the year.

You see it is rather difficult. Thank you.

Yes, okay, thanks, thanks.

Thank you very much for your participation. If I may join the thanks, I want to wish you all the best not only for the weekend ahead, also probably it might be a late start given the ACP with the announcement of the details of the stress test but nevertheless all of whom who have not enjoyed the nice summer, I wish you all the best, enjoy it.

The banks what you cover, I have seen all report good numbers, will be a good holiday for you and I think also for us. Thank you.

Bye-bye.

Thank you.