Good afternoon, ladies and gentlemen, and thank you for taking the time to join us today for our Q3 update. I'm pleased to be reporting on a strong third quarter today, which reflects the continuation of the positive trends already highlighted last quarter.

Consolidated profit is now 76% higher year on year driven, not only by lower risk costs, but also by strong recovery in lending volumes, interest rates and fee business. Net interest income for the first nine months is almost even compared to 2020, which we are very encouraged by considering that this year's first quarter was significantly lower than last year's.

Higher volumes and rates are of course the driver here, and we expect this to continue into next year. We're also encouraged by another record quarter in fee and commission income, which are €538 million, mainly driven by excellent business trends and with no significant one-offs included here.

Loan growth accelerated in the quarter with almost 5% higher volumes before Equa and 7% including Equa. Our CET1 ratio is count in basis points in the quarter to 13.2%.

Equa is now fully reflected as in the additional proposed -- as is the additional proposed dividend, which we will have for -- talk about in a couple of moments or I can do it now. We have the Extraordinary Shareholder Meeting on the 10 of November and there we proposed this €0.75 per share.

Good news is also that Moody's upgraded RBI's long-term rating to A2 and Hannes will talk about the adjusted outlook where we first time speak about risk cost in 2022. I think what's also important is that we have an M&A update here today, which is Crédit Agricole Srbija is on track and we expect the closing in Q1 2022.

Equa Bank as I mentioned before, is consolidated for the first time and integration and ING customer referrals are completed. And one more we working on it is the financial calendar for next year.

We, work to be much faster and we intend to give you a very deep insight to the total year already on the 2nd February in 2022. Moving to the next slide, which is Slide six.

Here you have all the details about the third quarter, the income statement and I think what we see here is a slight improvement in the net interest margin. Also, here I repeat that as long as the overall liquidity is part of our business, I think this is a volatile KPI.

Cost income ratio is now at €53.3 for the first nine months and it was €52.1 in Q3. But as you know, there is always some seasonality in invoicing and the way we then have ultimately our OpEx.

So we target 55% for the full year '21. I will discuss a little bit more the revenues on the next slide and on the costs, I would like to make a statement now, which is that for the first time Equa is also consolidated and as you know we started from the 1st of July.

So it's the full quarter, which we do have now in the numbers. And one more element, which I want to outline here as well we come to that on a later slide also, is we took another €40 million probations for litigations relating mainly to the Swiss Franc portfolio in Poland but there is a set, we have a separate slide.

Moving to the next slide, now talking a little bit about the core revenue trends and here you'll see why we are happy with the current trends what we have and I think one important thing is that with the €875 million net interest income in Q3, we are almost at the levels what we have pre-pandemic in Q4 '19 and Q1 '20. I also have to mention here that Equa contributed €16 million in Q3 on the revenue side.

As we are aware that usually there is always a question also to that TLTRO impact on NII. In Q3, this was just over €2 million, and this means in total for '21, €11 million.

We're still not recognizing any bonus for the second special interest rate period as observation date is that 31st of December '21. And should we achieved the second bonus, both at head office and in Slovakia, it would be €43 million, which would be recognized over the coming years.

So currently we are confident that we can achieve this bonus as well. Ned fee and commission income generation was again very strong in the third quarter.

This is reflecting the continued pick-up in activity that we saw in the overall business. The result was driven by a turnover payment transactions and FX business across most markets.

And we're also seeing sustained increase in retail investment products. Overall, the product lines are growing and to a large extent, we believe that these levels are sustainable.

Moving to the next slide, here it's about the loan growth as this is one key driver for our revenues. And what you see here is the very good development, which I have mentioned already throughout the various regions and this is an important impact also to the net interest income.

As I stated before, I think what you should be aware that from the overall increase about €2 billion come from the Equa loan portfolio, which as I said before is first time consolidated. What we also share with you is the sensitivity of key rate hikes and I have to stress this just to be very clear and well understood what we show here, the number.

These are sensitivity numbers, which are like usually in a simplified sensitivity analysis, we assume that assets and liabilities are relative constant. And that also the margins to a large extent do not have a structural change, which means that in the sensitivity area, what we give here.

So 50 basis points in some of the markets or 100 basis points in some other markets. It's a reasonable assumptions.

What you see here. Of course, if the rate would increase significantly more than you do also have to expect some adjustments in the margins, which are allocated mainly in the liability area, where usually if you start from zero or very low than the first one or two moves, you don't have to adjust the deposit rates, but at the later level, if a higher level, then of course, this comes also with this.

And for your comfort, we have estimated the NII impact from this right tax, what we have seen so far and this is about €33 million for the total year in '21. If we move to the next slide number nine, then it's a short update on the developments in the Czech Republic.

So the development is in Czech Republic and here, I think we can show a very good picture, the focus, what we have over the last quarters in our activities in the Czech Republic are now progressing substantially. What we see here is and you are aware of it, we integrated the cost in the Czech Republic, which was already within the group, but now it's a fully integrated into Raiffe as and Czech.

I think this was an important move as these now improves our opportunities to offer additional products, to our customers there and the customer base, what we have here and what we speak about is more than 400,000. We also can report here that the referral project with ING was successful from our perspective.

We have added 144,000 new customers successfully and I think again, there, we will provide a good offer for these customers also in the coming months and quarters and I think from the pure financial perspective one might have my challenged at the point when we made the decision, is this the right point in time to add another €2 billion of deposits in an over liquidity situation, but I think we were somehow lucky with the timing that with raising rates, then also this gets more and more positive. And finally Equa this ads and other more than almost 450,000 new customers to the combined entities and I have to say we are well on track with the integration.

We assume that the leading merger can happen hopefully in January 21 and IT technical merger in the third quarter, but more important thing than this integration is that the business, the loan origination in Equa is still strong and we like this very much. Having said all this, I have -- our deans have prepared one more slide, which I understand that from time to time, you went to see also more details to some of our segments.

We have chosen this time markets and what we quite often explained also in the Q&As that our markets business is less one-off capital markets trading, but it's more -- it's to a large extent a customer-oriented business. This is what you can see on this slide, 92% of revenues, which are attributed to capital markets come from customer business.

And I think what you see here as well, is that the segmentation, so the origination from the various segments, institutional clients, but also retail clients and corporates is well balanced. And what I have mentioned before is also that you see that the asset growth, like, of course, in the whole industry, the asset growth we did in custody or in capital management in our subsidiary is developing very good.

And we are also making progress with some of the products which will support our position in the FX business, providing more comfortable services for our customers. Moving to the next Slide, it's 11, you are that the pain points, what we still have in our portfolio, in our business, the bigger one is the Swiss Franc mortgage business in our Polish subsidiary in our branch, I have to say now and to give you a few ideas the portfolio, so the Swiss Franc part of the portfolio is at about €2 billion, it's close to 29,000 loans.

The amortization is a long-term one, so €100 million a year. The number of litigation cases is increasing still to a high -- with high number of cases.

On average, we recently had about 300 cases per month. And the total number is now more than 6,300.

The provision, I mentioned it already, we added around €40 million is now around €231 million and yeah, the capital usage of this portfolio is high. If you add all the various elements, the high RWAs, you know that, of course also impairments go against capital.

You know, the high operational risk and the litigation provisions. This adds up to more than €900 million.

And from the capital perspective, someone might say it's already highly provisioned, but it's the capital allocation. It's not the P&L.

Here, I refer to the litigation provision once again, above the third €230 million. So a few words to Slide 12, which is an overview, the balance sheet and loan growth, I think I don’t have to comment, maybe as we are proud of, I mentioned the loans to customers, which first time about €100 billion.

So we like this number very much. And I think what I should also elaborate a little bit is that the number is below in the lower left-hand box, where we speak about the origination of loans to customers.

Here you see the good development, what we had in the third quarter. Well, I have to mention that in retail mortgages, we have more than a €1 billion, so close to €1.1 billion.

This is of course, less than the €1.2 billion, what we had in the second quarter, but be aware that €1.1 billion is the second best quarter, what we ever had. So it's a very good development, and of course we see the one or the other signs of reactions by regulators trying to put some brakes on the very strong development in some of the markets and also the margin pressure is felt here and there.

So we are very happy with this development. Moving to the capital ratio, slide 13, it's 13.2%, I think it's not much what I have to command on Slide 13, but we can turn to Slide 14, and here what you see is that development, it's a 30 basis point Equa first consolidation.

We had 23 basis points from the loan growth. Here of course, you immediately will say this is net and I agree, this is net because we had seen some improvements in the asset quality, which had a positive impact by 16 basis points into '23 is the net.

We have some increases in market and operational risk, not that big and the retained earnings lost in those part of the dividends, which we will now discuss on the 10th of November. So it has an impact of nine basis points, which are included here in the retained earnings in support the CET1 ratio.

Talking about 15 now, the coming quarters, our colleagues from has an research share with you with us, their view on the loan demand in the region, the way we see it. What I have reported already that the mortgage business is in a steady development and we also see a pickup in the consumer support for retail lending.

What we also see is that now more and more corporate segment returns to long-term allowance. I know the first few months of this year had been dominated by rather short term working capital financing.

What we can report is that a little, I think the development of loan demand in the coming two years, '22 and '23 is still a very supportive one for our future development. Moving to slide 16, this is an overview of the macro outlook, what we see for this year and the coming two years, and I think we can be very happy with the development, what we have seen in throughout our region and overall I think it's also a very, very good outlook for the coming two years.

Having said all this, we slightly adjust our outlook and our targets and yeah, with this good development in the loan demand, we now expect loan growth of around 11% for 2021. This is excluding the Equa Bank, I've mentioned separately.

Hannes will talk about risk costs in more detail. So here, I just want to mention that we expect now provisioning ratio for 2020 to around 40 basis points.

Cost income ratio, 55% also in the midterm, it's a commitment. You are aware that we will have next year, some special elements coming from the integration costs of Equa Bank.

I mentioned the technical integration, as well as the Crédit Agricole subsidiary, what we also expect to happen to some extent already next year. Profitability, I confirm the 11% for the mid-term and we also confirm that our midterm CET1 ratio should be around 13% and given the various opportunities, what we find in the market, we still want to keep the broad range of pay-out ratio between 20% and 50% of the consolidated profit.

And with this, I hand over to Hannes. Hannes please.

Thank you, Johann. Also hello from my side.

Happy talking to you and sharing some insights on the risk report with you. Year-to-date risk cost of €151 million years, you have seen the split across different categories on the IRS terms, stage three, one of €6 million years.

We have still allocated the €27 million €30 million we have allocated for the sanction, increased sanction risk in Belarus and we have for reflected post-model adjustment in the first quarter of €44 million. In addition, we have an MPE ratio of 1.6% having a coverage ratio of 62.2%.

And I'm sure that there comes the question, what is my risk of guidance for the year end? Well, I've been now on Page 19 and as already indicated, I think the way when we look at the credit cycle, of course, as usual as everybody else would do we look at the macro-outlook and this remains quite supportive for the coming two years to see '22, '23.

Having this strong macroeconomic dynamic, we also see many of our countries that employment rates are recovering back to the 2019 level in some region we see really a super high employment rate. I think also on the third bullet, the theme here of course is nasty, is demanding.

At the same time, I think broad part of the society got used how to handle it and we see again an adjusted way of consumer spending. And if in '22, latest '23, we are here.

I think we also see a sort of normalization when it comes to the saving rates. Order books are full.

Everybody is talking about supply chain topics. While on the other hand side, supply chain is only being challenged if the demand is very high.

So what we see that the order book are quite full and capacity is also being built up. And then another one, two factors, I think, which are very constructive is the next generation fund, the strong political commitment on the ESG transition and sovereigns in banking sector.

We see that the debt level is well, to be managed. Since the Chief Risk Officer is talking to you, I have to add some wildcards.

John is loving. You can't see him, but you know, he said, well, Hannes, do you really need these wildcards?

They are any way obvious. But let's also state the obvious because the question any would come, everybody is talking about inflation.

Everybody's talking about energy prices and supply chains. So the outlook is extremely constructive and the obvious needs to be managed.

I'm now on Page 20, there was so much talk about the gross RBI group was capable to demonstrate. Here you just see it again in the numbers.

If you look at this region, bear in mind it's also including, of course, the Equa exposure. On the right hand side, you can see the different products for our segment.

I would not run you through the details because we have demonstrated a very, very strong performance in Q3. I'm already moving on the Page 21, the IFRS 9 provisioning Q3, in total, we have €42 million, €38 million years in this stage three.

With the integration of Equa and you can recall on this IFRS mess up. it is a one-time impact of €14 million.

So on stage one, you can see some net releases because of repayments and of third improving portfolio composition. I was lagging the IFRS 9 impact from Equa Bank and the post-model adjustment was also one question last time, this management overlay, we were capable to manage it on a quite stable basis.

Total net release was €6 million only. Talking about RWA developments, you can see that we have increased our RWAs from €85 billion to €88 billion, mainly of course, impacted by the credit risk in the strong asset growth.

Partly, it's mitigated by the better performing and better rating. Therefore, we also have a certain mitigating effect by better ratings.

Now, risk is very much impacted by the provisions to be reflected for Poland, but also partly for Russia. Market risk, we have seen volatility coming down on ruble, and we also have slightly reduced hedging in all, therefore we have lower RWAs on this one.

So I think this is the most important things. And on the right-hand side reflect also some organic effect, which you would have to consider in your modeling for 2020.

You know in your world that there is a new regulation when it comes to the structural FX position and this will cause for RBI group an RWA uplift of oh 0.7%. On the retail methodology the headline would be this we see now it changed from point in time presentation of TPD towards through the cycle.

This is causing an uplift of RWAs of €1.5 billion at the same time, having more stable RWAs going forward on the retail side. Corporate BT also changed in the due course of this repair package.

What are the most important topics to talk about? This is this margin of conservatism and the way how you have to reflect the one-off adjustment.

This is causing €1.1 billion uplift. At the same time, we would get the release on RWAs on the market risk side by €0.7 billion.

Coming to my last slide, which is easy one NPE ratio of 1.6%, having a very decent coverage ratio of 62.2%. Yes, we have demonstrated a slight increase in the last quarter, but nothing extraordinary to share with you at this point in time.

So dear all, now we are more than eager to take your questions.

Hello. Thank you very much for taking my questions.

I have three. Firstly, I wanted to ask you about your cost outlook into next year.

We have all seen the wage inflation numbers, which are coming out which are accelerating and in the quarter, the costs were up 11%. And I know that some of this was the Equa consolidation of course, but how should we think about the cost growth into 2022?

Could it be as high as 5% potentially. And also, would you expect that a group level, you can have positive operating doors next year, given that already for the nine months so far, we're tracking close to the long-term goals of its 5% cost income ratio.

Then my second question is on M&A and we have seen you do a number of acquisitions recently. So could you update us on your latest M&A outlook and also what type of targets would be interesting to you in terms of geographical or business mix?

And then finally, I had a question on the Swiss Franc mortgages. We have seen increasing industry discussions about potential voluntary settlement and some other market participants look to be moving in that direction.

So could you tell us what are your views on opening a voluntary settlement scheme, please?

Yeah. Thank you, Isabelle for your questions.

Highly appreciate it. Starting with your first one, which is the cost outlook for '22 and yeah, all these inflation discussions and all what we observe will of course have an impact on wages and therefore on our cost base.

And currently, of course it's early to say how it develops, but currently we would assume a 5% to 6% increase, but this is not always I have mentioned before. We have the M&A transactions, which I have been reporting and we have to be aware that there are integration costs substantially.

And there are also of course the running costs from the targets. Cost synergies will come a little bit later, and of course you are aware that Equa is only half to half year, so the second half of the year.

So you have of course increase that pot for the full year next year. And Sarah be a better, the running costs are around 30 million.

You should also include. So adding up these two numbers, one, let's say you have to add around a hundred million from these M and a activities.

What I want to make yours there is that they feel model the various or the countries. We are currently in a process to, to have a mixed approach in developing new services for customers and software.

And it, it, it will happen that to some extent at RBI head office level costs will increase. And in, in some of the network banks, we were searching for reductions and the idea is that we centrally have to, to build some of the applications and offers and it can then be proudly reused looking at the M and a.

So the second question that the M&A targets here I can confirm what we mentioned to you also in the, in the past to no change, which means the Doggett countries for us are referred to Czech Republic Romania. But I also have to add Slovakia and Serbia in Serbia is busy.

Now we could have more Slovakia, I think, before and we have a good position if at target would fit, we would also like to edit to, to our bank there. And yeah, hungry and Gloria always have to say it would be very good for our bank.

If we could find an improvement in the retail mass retail year, I think the efficiency of our bank could be improved. But yeah, I have to say, as if they, I don't see at target now, but yeah, you ask for what we would be interested in.

And this is my answer in terms of voluntarily Swiss rang settlements. I think what's currently at that table.

So the total framework we do not like we do not like that. There are expectations that the full negative impact from the Swiss Franc development is fully attribute it to the banks.

I think this should be somehow split between all those who have benefited in the past substantially. And of course given the very good performance of the portfolio, there is also a no, no let's say social need or no other from the perspective of can the customer afford it any need.

And the third element is we would need the certainty from the agreement, so that, that if whoever customer VA agree on a settlement, that, that it cannot be challenged in a couple of years, claiming that not all the impacts from, from the legal environment has been understood. So in as Emory currently, it's not, the framework is not ready for a voluntarily set for men, at least from our perspective.

Thank you.

Good afternoon. Thanks very much for taking my question and congratulations on the very strong results.

Just a couple of questions from me, please. First of all, on the fee income and the very strong performance, you mentioned that the momentum should be sustainable.

So a large extent. So for this year, do you think it could reach the €2 billion mark and what would need to happen for that?

And do you have a view on the 2022 and beyond at least in terms of the sustainability of the performance that we are seeing and in terms of NII, maybe to what extent have you seen the positive impact of the rate hikes in Tangri and Russia already? So you mentioned 33 million of positive impact for 2021, which is very helpful.

So how much of the, that is already in the numbers and three Q are you able to give us some more color and finally on the CHF mortgages again, I'm sorry for, for coming back to that topic, but it does look like that the pace of provisioning has accelerated but this quarter, despite still very high number of in cases. So could you please share with us what has brought the quarterly provisioning down and if you can, what's your thinking for the quarters ahead?

Thanks very much.

Yeah. Thank you for your questions.

And your appreciation is also highly welcome. Yeah, indeed, indeed.

The two billions impossible. I think having had the 538 in the, in the third quarter, it's, it's reasonable to assume that let's, let's phrase it differently.

I, I think 500, 500 per quarter is what we can assume fairly. And, and the drivers like always it's the business activities.

So like Hannah said, we have to be aware that the vaccination rate in some of the countries are low, where we are active. I think the positive element is that the governments, the authorities have found a very good, flexible way, how to deal with restrictions with limitations, to keep the infection numbers under control, but still, I cannot exclude that the one or the other month or so could be of lower activity.

And finally I have to say that I don't know if the capital markets will continue as good. They did.

So also the, the overall performance was of course, a strong element in our, for our fee business. Can it continue for a while like this?

I mean, you have better insights than, than I have. So here here's some volatility might come when talking about your second question, the NII so far, I think a little bit more than, than 40 million, we have seen year to date.

And so, so the rest should come till year end. And I think there was your third question was about the Swiss Franc the pro probably the litigation provision if I got it right.

And the cases, what we have, what we expect, which might come. As I mentioned, we have 300 cases now per month as inflow we adjusted because of that higher inflow, we adjusted our model.

The way our model works is we have segmented our portfolio and, and the current model assumes that this, the inflow will over the next couple of maybe not now, but if I take a couple of quarters, then, then this inflow should reduce as those segments where we believe the is higher. We have to a large extent seen these numbers, but still, I would not be surprised if over the next couple of quotas, another 2000 or so would come in addition.

And of course it to a large extent depends what we would see from the, from the Supreme court and, and maybe the one or the other also second instance decisions. Also what we will see from those questions, which had been addressed to the European court of justice.

I think it also, it always depends on the perception of how high the probabilities that the customer will ultimately succeed because, it's bringing a case to the court, not come for free so that there are some, some costs involved as well. And I think the borrowers, they are very sensitive to the development which comes from the court cases.

So that's the current view, what we have. Thank you for your question.

Hello. Thank you for taking my questions.

Congratulations with I have a couple of questions. One question about the provisioning on stage three launch in the presentation, you mentioned that you add some provisions on stage threes and mainly in retail and mainly in Russia was this driven by the regulatory changes or not?

And how do you think the regulation from the 1st of October will impact your provisioning in Russian retail going forward? So this is my first question.

And my second about regions where you operate your, your marker, big picture outlook. I think your, your team has increased GDP expectations for this year still in which regions do low vaccination ratios can be a point of concern for you and can pause the can impact your results in the first quarter.

And in Russia specifically, does the current lockdown impact your business plans in any way, or there is no visible impact given the lockdown as quite short, thank you.

Well, I'm two times very happy. I always thought that the data come there will not be risk questions.

So thanks for also flicking some risk questions. And of course we take your congratulations.

That's very good for the team. State three provisions on, on Russia.

There is not the big story behind this is coming from retail. We have seen in this is a sort of a usual run rate, but, since the numbers are already so small reflecting them explicitly that you also can see, you know, what are the main drivers even on this on these small numbers.

So for me, there is nothing to, to worry about it's the usual run rate on the retail side, that you're always taking the cases early on and doing a, a decent provisioning, the regulatory changes. At least the way I read it on the, on, on Russia is mainly a question when it comes to the risk waiting, because there is of course a quite strong growth dynamic, but the growth dynamic here we are talking about beyond 20% on the rate retail side locally, and the competent local authorities have increased the local risk weights.

And since we are subject to, to the parcel three in environment and European regulation, these local increased risk weights do not have a direct impact to CD one on crude level no on any risk costs. So the, the state re provisioning but we have been explicit that part of it also comes from Russia.

This is more the run rate and the regulatory part is more on the risk rating that the risk weights have been increased to your certain second questions on the, on the macro. Well, I think the outlook, what we have shared with you is a constructive across the region it's constructive across the region.

And I think this shall be the conclusion of today's discussion when talking about the handling and managing the virus situation per country. I think what we have learned from many of our neighboring countries and in the region where we are serving our clients is that a very constructive approach was chosen.

So the production facilities were kept more or less running where we have seen an impact was with the servicing sector, but on the servicing sector. For instance, if you talk about Russia, there was this holidays being provided by the companies are in order to allow the different employees to, to their data working and home office motors.

So I believe that society now has learned also how to deal with the situation in the lockdown situation. And we already have seen first 10 months running in a very favorable and benign environment.

So yes, that could be for the one or other small industry, as we already reflect with the beginning of the and impact mainly on the servicing sector, but on the broader scale, when it comes to a production facility we would not see an impact because of, of, of not a big impact based on, on potential lockdowns.

Thank you very much.

Hi three short questions from me please. First one is on the NII outlook.

I appreciate impressive Q3 performance here. And you are showing the, the positive rates sensitivity is my, my question is, shall we assume for further I momentum on the, on the back of the interest rate hikes or do you see the, the upside being mitigated by the, by the margin pressure you mentioned in some areas the other question is on long growth where you flagged an 11 clean growth this year.

How, do you think about next year? It seems from your from your macro colleagues forecasts that you are projecting quite a bit of a slowdown in some in some markets especially in, in Russia, see you, you are projecting the slowing growth, which is significantly slower than what we see now.

So, so how do you think about the outlook in light of the regulatory force to bring down non growth and just finally on the provisions provisional outlook of 40 basis points? Can you remind us, because this is below the, what you, what you indicated as your normalized level previously what does this 40 basis point assume in terms of macro overlay provision releases?

And, and if you could give us an update on how much is left of the, of the overlay provisions. Thank you.

Yeah. Gabo, thank you for your questions.

I start with your, I, I, and indeed I think we should assume that that what we have seen so far is very positive for our development. I have stated also to an earlier question that, of course they already seen net interest central bank rate increases are, are supportive by another 30 million.

So I think it's good to assume, or it's easy to assume that we might we might see an even stronger Q4 on and if you, if you add these numbers up and see that the that, that we see further positive impact well, what I hope is that we could be up to €3.5 billion AI next year. When talking and this, I think is the second question, what you had is related to the to the first question somehow as well.

So given the outlook, what we have over our markets, I think one can assume a high single digit loan growth number over the next one, two years. That that would be my guidance to these two questions.

And the third of course is with refi KA on the, on the risk cost to 40 basis points. Yes, you're right there.

We once indicated that through the IQ, we believe that we could see risk costs some around 55 to 60 basis points given this macroeconomic environment, which we assume this is the starting point of our conclusions. We believe that we shall be below this, through this IE 55 to 60 basis points.

And also shared with you on, on page 19, our thinking, why we believe that we have a very constructive credit cycle outlook. So this is the main reason 40, 40 basis points.

And it also includes, as I was asked last time I think Ricardo on the, on, on what must happen to see these 40 basis points, I think we see currently times with the one are distortion or volatility. And usually I include in our risk cost for cost one mid-sized bigger corporate fault in these days where we see such big swing.

I was assuming that we could see up to three unexpected corporate defaults. Last point.

We did not assume any releases on the overlay, especially in, not on the non-retail side on the retail side, it's, it goes more with the, with the microeconomic adjustments, but here we have seen the release mainly already in 2021. So there could be the water at a million be left on the retail side for 2022, but generally these four deep basis points is cross hope.

Does this answers your question?

Yes. Thank you.

Can you just repeat the retail overlay provision number, and perhaps also, if you have the corporate at hand?

In total, we have an overlay in total and in John, I still in the call book can back on, on the split of these two numbers, but in total we have some €230 million to €250 million in total as an overlay available.

Understood. Thank you.

On the split, we will come back to you.

Sure, sure. Thanks.

Thanks for your time today. You expressed a little resistance about the, the less interest margin as a, as a, as a K in saying that, are you suggesting to us that it could sort of come back down again?

I hear what you say in terms of relatively high loan growth going forward, but what is your concern there? Because during the presentation you've, you've talked about you know, certainly in the early stages, the rate rises most of the gain going through to the bank rather than to the client in terms of funding costs.

So what's, what's your concern about the trajectory of the NII that would be one question. Secondly, I, understand the 40 bps for 2022, in terms of risk costs you sort of seem to have ignored 20, 21.

And I, I do believe the sort of previous guidance on 21 included three or four corporate problems. You've had 21 bps at nine months.

So, clearly, you're saying to us, I guess that you think that the fourth quarter is going to be again, benign that that would be interesting on your, your shorter term thoughts. And, and I guess finally in terms of the, the supply chain issues that your, your clients are experiencing across the region.

I mean, do you see are there, are there positives or are there just negatives in terms of your own business? Is there any negative impact in terms of your ability to lend I'm thinking of things like Carly sing, for example or are there customers that are not investing because they can't get the necessary components and so on.

Is there a negative or in fact, is it actually accelerate the need for lending in order to improve production, I'd just be interested in your overall view on that. Thank you,

Alan. Thank you for your question.

It was not my intention to express any concerns or to irritate anyone. I would simply confirm from what I know today that we should have around 2% net interest margin throughout next year.

And, and it was rather compared to the past product comment, but no concerns about the next one the 40 basis points for 2022 and cost of risk things also for flaking 2021. Yes, you're right.

I was talking in the last quarterly core about this unexpected around three corporate defaults up to no, we did not see them, which I'm very happy about. And, for the year end of course, if we would not see these defaults to come which would come in consequently lower, please bear in mind two things.

The one is the run rate on the retail side which I think can be modeled pretty straightforward, which is around €50 million the quarter. And so the unknown, unexpected is on the corporate side, but I think this could give you a good feeling where we shall finish on the year end 2021.

The second question on the supply change chain. Yes, of course, we see that some of our clients are being impacted you also ask for the finance and demand and when it comes to production.

Yes, indeed. We see a strong demand on the working capital facilities, meaning, buying the imports selling on maybe also partly financing the exports and, and end the long term aid capacity here, some of the corporates are still a little bit cautious and let's see how sustainable these, these spare is soaring demand currently.

So yes, we see the first hints on also investment financing, meaning long term financing, seven years, 10 years. But it's not yet the biggest demand biggest demand is current on short term to, to finance the working capital.

And this would be my answer to your questions and team was very fast in getting the split on the post model adjustment back to, to the previous question. So the PMA are being splitted for the non, till these €215 million, which we try to carry over to 2020 to two in the 40 basis points.

None of the release of this 250 is in zoom and retail on little is left. It's in total some €50 million, what is still available.

Thank you.

Thank you.

Yes, thank you very much. And well done on a strong set of results today.

A couple of questions from me firstly just coming back to corporate long demand I understand that you're perhaps seeing some, some green shoots of longer term financing meet as well. I'm just wondering, well, what is your working assumptions on these longer term, perhaps investment related loan applications coming through when do these get funded?

Is it a, an age one next year story or this could accelerate already in the fourth quarter, obvious not, not extending any supply change disruptions. Secondly a quick clarification perhaps on fees, retail, investment product fees up 34% year and year.

And I'm just wondering how, how sustainable is this, or are you seeing a, a paradigm shift in terms of retail demand for these products or, or this could prove a bit more cyclical than currently expected and a lot last one, just a technical question. I think in Q4 this year, you're expecting a corporate location to impact capital.

What would be the impact on CD one? Thank you.

Well, if I may, we start with the corporate loan demand. I think you have many ingredients and I again, would refer us back to the page 19, I believe, and I strongly believe because of this next generation new funding and ESG transition that we will see this long term financing need, but you also have seen that the projects have now been ended.

They have been assessed and approved or enhanced and all the projects needs to get started. So we will see the request and the demand for this longer term financing.

So I'm extremely confident that this will come late by Q1 when, when all the bureaucratic stuff is being finished. So this would be my assumption and on capacity utilization, I think this could be could be one shot.

If you adjust your production facility in an ESG conform environment, you also may, may add here and there data capacity to adjust to the higher capacity need To your second question, the retail investment product. I, what, what we hope, what we assume is at that this low rate environment brought people closer to, to being also a long term investor, even with smaller amounts, maybe even month by month.

And and I, we would love to assume that that people keep this behavior. And so we hope that a mid to long term trend, and, and to some extent it's the starting off of a shift that customers and, you know, that, that to a large extent we are deposit based in all our markets.

We, we bring more and more customers also in that direction. So we are overall confident.

And as I said before in total yeah, the 500 million fee income back quarter, I, I hope it's on the, on the lower end. What is achievable quarter back quarter to your third question, securitization in Q4.

Yeah, we mentioned it. So it's more that you are aware that we are working on it and that we will some room for loan growth also in Q4.

But please, please understand that we, as, at this point in time, we do not want to communicate the full package, what we are working on. Thank you.

Yeah, good afternoon to everybody. And thanks for taking my couple of questions.

If I may. I just wanted to get back one second and be sure I understood it correctly.

A few minutes ago, Mr. You mentioned 3.5 billion in AI as a kind of indication for 2022.

Now, if I understood it correctly if I take the third quarter number you just reported in Q3 and multiply it by four, I would let exactly at €3.5 billion. So if €3.5 billion is an indication for 2022, it would mean that the most recent rate, like the one in Czech Republic, most recent in Russia will be passed completely to the positives, or maybe competitions will erode everything.

And on top of that, you also mentioned you should have some long growth. If I understood it correctly, you mentioned high single digit that should bring AI on top of what we have seen so far.

So did I get right €3.5 billion first and second if I get it right, is that a kind of floor, or is a formal indication for 2022, which would sound a bit cautious. Let's put it this way.

The second question I have is on, on the deposit side, the inflows remains strong. What do you do with these deposits?

Do you expect to build up a little bit more the fixed income portfolios investing in longer term securities? How should we think about the way to we deploy the deposits that you've seen so far?

Thanks.

Yeah. To your first question with all your considerations and assumptions, I can only always say yes, yes, yes.

So you are right. It's conservative.

It's I would also say it's rather the floor we, we can here and there expect more also, I have to say that yeah, we, we should not expect that, that the two P expected rate increases will fully materialize in the banks profit. I think in, in some, as I said before, as, as, as soon as the central bank rate is above 1% or so then than of course increases will happen.

Maybe that the corporate part is a little bit more sensitive than the retail part at this level, but, but you would find it then, then at some point or in time also on that Russia, you, you have mentioned as well. So here, I think as we also have shown in, in our forecast, probably we soon we'll see, or, or, or other soon have seen the peak.

And, and maybe also in, in Ukraine, you would also already next, you see some, some decreases after this, this faster and both increase of, of, for bank rates. And yeah, that you are aware that we work what we call model books, where, where we invest and, and part of the inflow is, is invested also in, in midterm products.

Our modeling is not especially long term. You have seen this in the adjustments also in the past, but yeah, the, the recent rate increases as well as the steeping of the yield curve.

I mentioned this already in the Q2 call, this was already support. So yeah, it, therefore not everything.

What we see is rate increase from the central bank goes then one to one in the P L cause because of this, these model books, this investments it, it reduces the volatility in both directions as well. And, and yeah, in some yeah, quarter by quarter, if you look at it, then you see rate increases, usually in the retail asset area, reduces them for a quarter or so the March in.

And then, then it usually comes back to the normal level because sales people request. And especially if you use agents, you are aware of this, they request stable rates what they offer to their customers.

And they don't like if you, if you adjust every, every second to new levels. So this is but again, this is somehow flowing and levels out over some quarters.

Thank you for your questions.

Thank you. If I may a brief of follow up, when I look at slide Nu slide eight, you provide the table with the NII sensitivity for each country, the numbers, the numbers you show in the last column, do they take into account some kind of pass rate to depositors or not?

So then you cost, no, this is all of it.

No, this is the rather stable, stable assumption where you say, what is the way we model, what is the positioning? And, and this was my statement.

When I say this might work for 50 paces point increase is if the level is not too high, but if you take the example of, of the first line check market with currently at hundred and 25 basis points. So if it would happen that by somewhere end '22, we be at 3%, then you should not multiply the 50 basis point sensitivity by the factor.

But then you should assume that we will see impact on the margins as well on the liability side. So it's for small amount, it works.

Cause then you also don't have the direct impact on the margin, but for bigger movements, it's indicated here for some markets, it, it already has then an impact on, and some of it is passed on to the customers. That's for sure.

Thank you. So yeah, so for me to understand, when I look at this table, the more rates go higher, the lower, the sensitivity to each, I don't know, 25 basis points.

So 25 would be, let's take, let's say 75 is less.

Yeah, let's take a simple example. So what we say here, Check Republic.

A rate tag by 50 basis points should improve on net NII by €24 million. If by the end of the year '22, you might assume it's 325, so 200.

So to make it simple for me in calculation four times the 50, I would not expect that it's improving by a 100 million. So here you should assume it's slower.

Hi, thanks for taking my questions. I have two very quick questions.

First one on the Finn the payments the, the payment, the payments FX business, and the retail products have done well, but I was just wondering results were a bit weaker. Is there any specific reason for it?

Secondly what's your tax rate guidance for this year? Thank you.

I'm not sure if I fully understood your questions but, but I, what, what, what I sense from you? Yeah, the, the I would say the it's, it's relatively easy to assume that in terms of FX business, it's, it's strongly correlated with the business activities.

And this is also the case for the payment payments. So one can say that, that because of the good developments, what we had in the, in the recent quarters are the payments and account services are already back on the level, what we had pre COVID.

So if you average 18 and 19, and this, this also gives you an idea about the, the sensitivity. I think FX to some extent, of course, and this is for you as a professional also Nona what we would say in German also.

So a very, very easy, simple, simple one. It's a combination of the business activities I should have said, but, but also the volatility.

Cause as I indicated, it's an to a large extent customer driven and, and, and the other activities of the customers are, are different asset management. I have to figure out yeah.

Here, you should not be so much looking at the, details of the quarter. There was a reclassification between the various lines in Romania and in Bosnia to some extent.

So the detailed numbers are a little bit distorted in distorted in, in Q3. But I confirmed the overall positive development and the X rate the guidance here as of now is 23.5% for this year.

Thank you for your questions.

Hello, everybody. Two questions left from me.

First of all, follow up on the tax rate. If I take your current guide of 22.5 this would imply a strong jump of doubling of tax rate in Q4.

What are the reasons behind it? And secondly, on your dividend payout racial guidance if I take the combined dividend payments this year we are above the 50% guidance.

Should we assume that you also will be used at the append or as you only have a smaller buffer, could you also up for going down to the different payout range, thank you.

Starting with the second one, your payout for this year. This is the payout, essentially for two years, we had these limitations and, and you know that in 19 set aside, we set aside €1 per share, and this was never considered as part of the city one equity, but having seen the very good loan demand in the recent quarters.

And of course also the somehow cautiousness, what, what we had been made aware. This is this is the reason why we why we then reduced it to only €75 per share.

And you are right if you add the, the two payment and the two dividends for this year, then VI path. I, as, as I said before, the, the range, the range is that that, that we see as long as we see such a good loan demand.

And, and of course this, this probably this cycle will also come to an end as we, as we already have seen here and there some, some measures by regulators and, and discussing to limit the, the development in some of the retail areas. It's better to, to, to, to have some power now.

And then, just later, so this is a very simple question, and this is why we keep it so broad. I have to say, I did not fully get your first question on that.

jump assumption, but here, John Carl and his team might, might do a follow up in more detailed with you if this is fine for you. Thank you.

Yes. good afternoon.

There's one question left. Thank you for providing the overview of the markets a business.

So I was wondering especially looking into the institutional clients and the corporate clients how do you think will the demand develop, and could you maybe give a bit of an insight, you know, like how much of product demand there was over the past, let's say six to eight quarters and where could this go going forward, is there more demand potentially on four a is there more demand on, on interest rates, derivatives and also the, our flex platform that you pointed to, maybe you could give a bit of a flavor how much this is contributing profit wise and, and where this might go. Thank you.

Yeah, starting with the last one, the R flex, this is at the very beginning, and this is something which is now introduced for mids small customers. And it I think it has some, some potential for retail customers.

Well it's currently it's launched in Roman and CRO Croatia. So it's at the very beginning.

I hope that within this quarter, still we can launch it in the Czech Republic and Hungary. And of course then probably it's also broader, broader over the next couple of quotas launched in other countries.

So at the beginning, let's say over the next couple of quotas its overall beginning to develop in, I think in the segment where it's launched, we it's positive. So one might say it's if we do it right, it can be 20% up, but it's not for the large customers.

So the institutional and the others, when talking about institutional clients, I think here, what, what helps is and we have it on slide 10 as well, that our services in custody are of course benefiting from the overall positive development of the various market segments. So this is the one of course with this comes some additional service is the overall need for hatches to a large extent as I said, in an answer to a former question comes from the volatility in the markets.

One have to state that overall the bigger part of the corporate business comes from the effect this I can say, but what we have seen in debt capital markets compared to the past the substantial positive development. Yeah, we are perceived as one, the good knowhow provider for green bonds and short China, and whatever, of course we are aware that this market segment is running very, very well.

But of course there are others who are closing the gap other competitors. So, we will not fully get the market positive development.

Oh, hi. Thank you for the call.

I just have one last quick. And that would be, could you just remind us how much dividend DEC accrual from the 21 earnings has been deducted from the capital, if any?

I think it was around 20% of the first half earnings if I remember correctly. And actually my second question would be on the tax rate and minorities in the C division.

Can you give us an indication of what the tax rate should be going forward in the C division now that the structure has changed a bit with the recent M a

Yeah. The, first I can answer very in a very simple way, it's the 20%.

So we, for the planning and in, in also in discussions with the ECP and others, the regulators we do throughout the years, the 20%, so the lower end of the range. So it's €207 million so far, and only at the end of the year, we start and then discussing the final element, what we want to do.

The, second question is again, the text, what you said the '23, '24, I was actually specifically asking about, and I can only, and, and, and also ask you to, to accept the follow up. So I, I don't have the details now in front of me, and it would, if I, I rush through my papers, it it's, it, it will take me longer than I can ask you to accept.

So John will do a follow up with his team. Thank you.

Thank you. Give us a little bit more time.

And I, I, as I interrupted Hannah, I start with one which is M and a activities in Russia. Here the question was what is our strategy there?

Would we, would you seek boost market share in some of core products there, like mortgages? I maybe a little bit more in credit card business.

Here, we would consider if everything fits also and am and data transaction and improvement in our private banking activities as well. I think mortgage production.

We are strong on our own itself. So here it must be yeah, and very rare location that we would consider it as well.

And then I would hand over to harness. There's a question on which I read, and he will answer energy prices and supply chain.

Can you quantify size of your portfolio that is directly at risk from rising energy prices and supply chain troubles.

Thank you for the question. I will focus on the, on the energy price issue, and you know, that we usually like to go with a, an industry approach on looking at our portfolio.

And, and of course, when talking about, about who will be impacted by the energy prices you could distinct between a first level and direct impact and a second medium impact, the second round impact. Needless to say that, of course, it depends on how much of the prices you could pass on to your off-takers.

So, which are the industries, which you really dependent on, on energy prices industry, which are heavily dependent directly on, on, on energy prices is E agriculture IST production, aluminium production is paper packaging and, and some others and in the second round effect, you could have many other companies as well. So what we did assuming that this question may come is we looked at those companies with a, which are subject to this energy price increase as reflecting and looking at the ratings.

And so for those where we believe that they have a direct and a higher impact it's summing up to some €360 million €400 million exposure. A default, if I conclude, because there's also a lot of guarantee business, it reduces down to €233 million.

And if I look at the industries with a medium sized impact it would reduce on the net export level to €867 million, but asset, this is not the total portfolio. This is the portfolio with a slightly weaker rating and, and asset, distinct where we would see a direct high impact and a medium impact.

Always assuming that very important, as long as you can pass on the prices of the high energy prices many of these producers would also define so this is my, my first question on the energy prices, the supply chain. The reason why I reflect the supply chain as one of the, of the wild cuts or things to be watched out is because it reminds me back to our question in, in January, 2020 sometimes it's it could be a little GAT, a little semiconductor on a big machine, which you're missing while you cannot finish the final production of this machine.

So the supply chain impact is, is much more difficult and demanding to rest than the energy price impact. So this would be main answer to the energy and supply is something where you really have to work with client work line to learn and to see what the, the one impact is causing at the same time.

We see that's very important. If you look, for instance, in the car industry, car industry is still capable to demonstrate even with lower volumes, a much better EBIDA margin.

So this would be my very broad answer to your very specific question. And moderator.

I understand there is a final one in the, from the chat, which probably already have answered, but a quick summary of what I have said. We see inflation, we see wage pressure.

It might be the that this might increase our cost based by five to 6%, in addition to debt and made you aware that we have first time consolidation effects by been talking about the full year with EWA, which is in 2021, only for a half year. I recall subsidiary from Serbia, which is not at all included, and we have one time integration cost from I and other elements as well, of course, and this will come to some extent in '22 and maybe it's not, everything might be finished also in 2023.

I gave the indication that if we add the additional running costs and the one time integration costs, you might add the 100 million to the going concern, what we had so far and the cost synergies, what you also expect from any transaction will come over time, not, not so much already next year.

Thank you for all your questions, moderator. It seems that we are close to the meeting and as I haven't any have any indication for further questions, I, I want to thank all of you for being with us, stay healthy PV us also in the, in the already announced full year result, which is on the 2nd of February, 2022.

I love to say it. Thank you.

Have a good afternoon. Bye, bye.