Alpha Bank Sa

Ladies and gentlemen, thank you for standing by. I am Mina, your chorus call operator. Welcome and thank you for joining the Alpha Bank conference call and live webcast to present and discuss the first half of 2025 and national results. All participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Alphabank Management. Gentlemen, you may now proceed.

Hello, everyone. I am Iasson Kepapsovlu, Alphabank's head of IR. Welcome to the presentation of our Q2 results. Vassilios Psaltis, our CEO, will lead the call, summarizing the second quarter and providing you with a few updates. And then Vassilios Kosmas, our CFO, will go through these quarter's numbers in some detail. However, we will take Q&A in the end, and we should finish within the hour. Vasily, over to you.

Good morning from my side as well, and thank you all for joining. Let's start with financial results on slide four, please. The first half of the year has put us on solid footing to deliver on our main objectives for the year. Profits for the first half of the year stood at $517 million, or $0.19 per share, and up 52% of the target we have set for the year. translating to a 14.2% normalized return on tangible equity. We have also accrued 259 million euros for distribution so far this year. That's 60% of the guidance we have set, and we intend to distribute circa 111 million, which is the first quarter accrual, as an interim dividend in the fourth quarter. Our performance is driven by the defensive nature of a net interest income, that was up 1% versus the first quarter of this year and the continuous growth of our fee income line with a quarterly result up 13% this quarter and 21% versus last year. Our net interest income trajectory demonstrates our ability to position the balance sheet to maximize the value we can extract always within prudent constraints. Fee income growth is the product of the initiatives we have taken over the years that are now bearing fruit both on the corporate as well as on the affluent side of the business. We continue to position the business to maximize the recurring value we can create for our shareholders in a sustainable way. Vasilis will give you more detail on the second quarter results, but allow me to mention one thing. This quarter, we have been fortunate to have a quarter billion windfall gain. Given its nature, we have decided to use most of this opportunity to future-proof our P&L from loading the cost of future management actions. As a result, we can sustainably reduce our cost of risk. This leads to a 2% upgrade of our EPS guidance and thus an expectation for a higher distributable amount. Now, allow me to spend some time on the strategic actions we have taken that are equally important, starting with slide five. In May, we signed the Landmark Partnership with Hellenic Post. Alphabank will offer a full suite of financial services through Alta's 1100 service points nationwide. We are proud to support Hellenic Post in its ambitious transformation journey by offering our tech expertise and state-of-the-art financial products to their customers. As such, by the end of the year, Alta branches will roll out daily banking services and soon enough customers will have the exclusive access to Alphabank's product suite in areas such as lending, insurance, and investments. This is a partnership that promotes financial inclusion, a key priority for our group, for over one million Greek citizens, particularly in rural and underserved areas. For Alfa Bank, the partnership not only increases our physical footprint to over 1,800 locations, which is the most among any financial institution in the country, but financially, it opens up new revenue, and liquidity streams for the group. It is a powerful example of how we can use partnerships to better service our clients and the wider community in a sustainable manner. Let me now turn to our strategic partnership with Unicredit, which constitutes to be a cornerstone of Alphabank's transformation and growth agenda, and this is on slide six. As of May 2025, Unicredit has increased its stake in Alfa Bank to just over 20%, reinforcing the depth and commitment of our alliance. It is not just a financial investment. As Andrea herself has repeatedly stated, it's a strategic partnership delivering tangible commercial, operational, and systemic benefits for both institutions. We have successfully combined our Romanian subsidiaries creating a stronger regional footprint and unlocking synergies in cross-border operations. Our clients now benefit from Unicredits from European network across 13 countries. This positions Alphabank as the bank of choice for over 5,000 wholesale clients in Greece. In wealth and asset management, the launch and expansion of the OneMarket's fund suite has been a major success, with over 600 million distributed to date. We have also issued three unit link products in collaboration with Unicredit, totaling $110 million in notional value and launched five structured node private placements. In wholesale banking and syndications, we have co-led over 200 million signatures of credit and guarantees and approved $300 million in international syndicated lending since the partnership began. Additionally, bilateral FX payments volumes have reached $650 million year-to-date, reflecting strong transactional momentum. In capital markets and advisory, the integration into our investment banking platform is progressing well. Together with Unicredit's advisory franchise, we're targeting joint deal origination across various sectors. Lastly, beyond commercial gains, we are also leveraging Unicredit's expertise in customer experience, process simplification, upskilling and reskilling programs, compliance, and operational resilience, areas that are crucial to our long-term This partnership aligns with Europe's vision for cross-border integration and financial stability. It supports the capital markets union and enhances systemic resilience across Europe. Looking ahead, we aim to scale our syndicated lending and M&A advisory, expand fee-based income, and broaden the distribution of asset management products across Unicredit's network. Our partnership with Unicredit gives us competitive advantage that differentiates us from the rest of the pack, one that we aim to fully utilize to enhance the value that we create for the benefit of all of our shareholders. Our story remains intact, as you can see on slide seven. Our strategic actions alongside our balance sheet positioning will allow us to maintain an upward trajectory to our bottom line for 2025, despite the income from falling rates. Our defensive net interest income profile should now be evident, as the first quarter saw the bottom in net interest income, and we are now amongst the first commercial banks in Europe to see growth in their top line. We continue to dynamically manage our balance sheet. We're capturing the tailwinds of long growth. We're stepping up on our target for fee income generation, and we are seeing the partnership with Unicredit accrue additional benefits quarter after quarter. Our profitability is on an upward path. The structural growth potential of the regions that we operate will allow us to maintain a base of net credit expansion above the 2 billion mark. At the same time, our franchise is strongly positioned to benefit from the long-term uplift in the penetration of fee-generating banking services, which coupled with the partnerships we have put in place, allow us to improve the revenue generation capacity of our business. These factors will work even more so in our favor beyond 2025, where we see earnings growing by 12% on an annual basis, still notwithstanding the impact of any share buybacks. Now let's move to slide eight, please. The trends for 2025 and beyond allow us to maintain a differentiating positive EPS growth trajectory in the medium term. These differentiations should now be apparent vis-à-vis our domestic and European peers. EPS is expected to grow by 9% per annum over the planning period, above consensus estimates, even before accounting for the effect of any buybacks. And then lastly, on my side, on slide 9, please. We have been diligent and clear on how we intend to allocate capital, and our hierarchy remains unchanged. Our first and foremost priority is to fund profitable loan growth. Our capital generation capacity suggests that we ought to be paying no for 50% of profits on an ongoing basis. And last but not least, our excess capital provides us with significant higher power to do more. The pace of capital generation and our strong capital position means that we are comfortably able to fund both an acceleration in loan growth as well as a more generous distribution and Bolton acquisitions to maximize shareholder value. And the users of excess capital to conduct Bolton M&A, an area where we now have established a track record, should allow us to boost earnings and thus increase shareholder remuneration. And with that, Vasile, over to you.

Thank you, Vasile. Hello to everyone from my side as well. Let's first go through the one-off items on P&L in slide 11, please. First thing to note is that this quarter we have had an accounting recognition of additional deferred tax assets. This byproduct of the merger between the holding company and the operating entity that was concluded in June. These DTAs used to sit at the holding company level and were previously written off and sitting off balance sheets. as the holding entity was not expected to generate sufficient taxable earnings to recover them. Now that all taxable earnings sit within the same tax entity, we have reassessed the recoverability of these ETAs and have been able to recognize an additional 245 million euros. Note that there's a good chance that part of this might need to be reversed by year end to the tune of 35 to 40 million euros, most likely in Q4. Appreciate this is unfortunately some volatility towards the results, but this is just how tax accounting works. As you can appreciate, these BTAs are not accredited capital, but they have created additional room in our P&L. So we have used this opportunity to further fortify our balance sheet and future-proof our P&L. First, we have taken a post-model adjustment for paying mortgage customers, CHF loans, and transacted NPE parameters. The proactive management of loans with modifications has been in place for a long time. On CHF loans, please note that this is a small book for us with a relevant perimeter close to just 90 million euros. And second, we have taken a one-off provision for a new NP transaction to the tune of 60 million net. This is in line with our existing strategy to be opportunistic when it comes to inorganic options. With this transaction, we have been able to drive the MP ratio down by about 45 base points in one go, taking us a fair bit closer to the 3% target we have set for the end of the business plan horizon in 2027. With the provisions we have taken this quarter, we have conclusively dealt with the issues of CHF loans and other retail mortgages. As a reminder, we don't have any other pockets of loans with state guarantees, so nothing else to expect from us. As a result, we expect to have a lower cost of risk going forward of 45 basis points, and that includes servicing fees and securitization expenses. With that, let's move to the next slide and talk about the underlying results in the main P&L lineups. Operating income was slightly down quarter on quarter, as expected, due to more normal contribution from trading. However, the underlying picture is solid, with both NII and fees growing sequentially. On cost, we saw an uptick versus a seasonally low Q1, but importantly, total operating expenses are just 1.3% year-on-year, reflecting the benefits from the 2024 VSS program and the full amortization of certain IT assets. Looking ahead, we still expect gradual increase of staff costs and GNAs, less so on depreciation charges. Impairments came in at 40 million for the quarter, bringing the cost of risks shy of 40 base points at 39, reflecting a benign credit environment. And finally, on the bottom line, reported profit after tax rose 31% Q&Q to 294 million, while normalized profits to the 221 million. The strong performance reinforces our confidence in delivering full year guidance and sustainable earnings momentum in the second half. Next slide for the main balance sheet items. Performing loans were up 1% in the quarter and a jump 15% from last year. Customer funds also 2.7% up in the quarter with a year-on-year increase at 9%. Tangible book value was up 5% in the quarter with the annual growth rate of 14% when we adjust for payouts. And then on capital, we stand at 15.7% in terms of fully loaded CT1. On the next slide, slide 14, we saw the two main components of readiness. Net interest income was up this quarter as promised So after five quarters of decline, we're now officially on an upwards trajectory. At 399 million euros, we're seeing the impact of faster rate declines and the dollar depreciation, but it's important that things have now turned a corner on the commercial side, with deposits and funding costs materially down. On the non-commercial side, the securities book hasn't really grown this quarter, so the improvement you're seeing here in its contribution stems from reinvestments of low yielding maturities, something that we have flagged repeatedly in the past. On the fee and commission side, we saw a 13% increase in the quarter. Note that there is a gain from one scheme partnership with Visa. Leaving that aside, fees were still up 3% on account of better business credit related commissions, Whereas first half is now up 16% versus last year, meaning that we're tracking better than the full year guidance. Let's now move to slide 15 to look at loans and customer funds. Performing loan balances reached 34.9 billion euros, 900 million of net credit expansion in the quarter. We're well on track to meet our full year guidance for net credit expansion. with some risks on the upside. Once we account for the negative FX headwind from the weakening dollar, impacting primarily our shipping book, as well as provisions and the reclassification of the MP portfolio to HFS, growth came in at 1% for the quarter. Yet another quarter of strong new dispersions, 2.8 billion euros this time. Same patterns as before with corporates, including SME, driving growth, and pretty evenly spread out across sectors. Spreads continue to be under pressure, but we remain disciplined in our underwriting criteria. As such, we avoid deals or refinancings that do not meet our own credit criteria and are not creative for shareholders. Turning to customer funds, this quarter saw some solid growth with the 900 million of deposits you see here, mainly coming from corporates, going into core deposits. On AUMs, we continue to see good underlying net sales, with this quarter mainly driven by our own factory, although we did see some further growth in one-market funds. Contrary to the local industry, the dominant product tiers are equity and balance funds, with good management fees, down at the typical target maturity products that replicate time deposits. The above reflect the strength of the Alphabank customer franchise. And even though probably nobody was better on this a few months ago, we also had a positive valuation effect this quarter. Slide 16 on asset quality shows that the NPE ratio dropped to 3.5%. This is mainly on account of a circa 200 million euro transaction that has been moved to help for sale. These combined with post-model adjustments I mentioned earlier have driven the coverage ratio up to 57%. Underlying picture remains solid and we're not particularly concerned with flows, as should be evident by the underlying cost of risk that stood at just 16 basis points this quarter. We don't expect any meaningful surprises in the coming quarters, and thus we're changing the full year guidance to 45 basis points. Then on slide 17 on capital to finish up with results. This quarter, We had 40 basic points of capital generation organically, and this includes everything as usual. So PNL, DPA, the usual DPC amortization, and RWA. This quarter has been more normal in terms of the increase in RWA that comes with longer overall, or still very much on plan for organic capital generation. The benefit you see from other capital elements relate to lower intangibles. And then for transactions, On one side, you have the RWA relief from the deconsolidation of GEA, which is, however, more than offset by the P&L provisions we have taken this quarter. As we have mentioned, DTA gains on the P&L is not capital accretive this quarter, but these are DTAs we expect to recover. So by definition, they will increase capital generation in the coming quarters. Finally, there was a dividend accrual of 147 million, taking the total year to date to 259 million, 60% of the target for the year. All in, CET1 ratio stands at 15.7 on a fully loaded basis. Compare apples to apples. Note that the transitional CET1 ratio stands at 16.1, and there's an additional 50 basis points, and when we take into account pending transactions, taking the full number at more than 16.5%. Last one on my side on the 2025 guidance and outlook. Let's turn on slide 18, please. We still expect to deliver more than $2.2 billion of revenues. This is likely going to come with slightly different mix, as we see a better performance on fees and have delivered a strong first half on other revenue lines. That will help offset the marginal pressures from the faster decline in interest rates and the weaker dollar. costs are still projected to land at about 870 million Euro, so no change here. Provisions, if we took up the underlying core provisions, we're running better than the 50 basis points guidance for the year. And the actions we took this quarter allow us to reduce the cost of risk guidance to 45 basis points for the year and going forward. So all in, we expect EPS to land some 2% higher both this year and in the coming years. And that should filter through ROTI and tangible equity. Just note that capital is not expected to land above 15% this year on account of the acquisitions. And now, let's open the floor to questions.

Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may first start, followed by one on the telephone. If you wish to remove yourself from the question queue, then you may press star and 2. Please use your handset when asking your question for better quality. Anyone who has a question may press star and 1 at this time. One moment for the first question, please. The first question is from the line of Sebi Mehmet with JB Morgan. Please go ahead.

Good afternoon. Thanks very much for taking my question. I have two, please. Firstly, on NII, it seems like you're now citing additional pressure from the Eurodollar parity, and that is, I think, in addition, obviously, to the prevailing rate pressures. So can we assume that the previous assumption of flat NII no longer holds? And if that's the case, how should we think about the quarterly trajectory from here? And my second question is on capital. And if you could please make a bridge between the previous guidance of 16.3% plus set one for this year and the new guidance of 15% plus. You are citing the impact of acquisitions, Vasile, as you also mentioned, but I'm unable to reconcile these two figures based on the previously guided impact of the acquisitions. Thanks very much.

I guess both of those are for our CFO.

Great, thank you. On NII first. I think we're pretty clear from now on, quarter on quarter, NII is going to be growing. The trends are clear, at least to me. We have rates that have moved a bit faster. And then, you know, based on our NII sensitivity, that saves off some 10 million from NII, which is not a big number. If we end this year with policy rates at around about 2%, there's really no implication for the future. With regard to the US dollar, you mentioned it, it has been weaker than what we expected at the beginning of the year. Mind you that this week it went up 4%. So it's very unclear to me, you know, your guess is as good as mine what it holds for FX. So maybe that's another 10 million into NII. On the other hand, we have tailwinds, primarily from our securities book, as the yield curve is steeper. And overall, I would say the risk is small, but it's clearly on the downside. Clearly, all this is fully offset by our fee income over performance, so we don't expect any downside on the revenue for the year. Getting now to capital, you rightly mentioned that the 16.3% guidance is somewhat different to what we're currently putting in front of you. Now, remember there's two elements to this. Roughly, the split is 50-50. Some of it is the acquisitions that we've done. So we have guided that the acquisition of FlexFin, Astrobank primarily, and AXIA will have an impact of around about 60 basis points for the year. And clearly, there is the items that we just mentioned on the PMAs, which account for the rest. Mind you that this is only for these years, so these PMAs will be recovered in the coming quarter, so this last piece will be recovered as we see in the coming quarters. Hope this clarifies.

Yes, yes, indeed. In fact, I think the 16% for 2027 is in line with what you were saying previously. I was just wondering about the 15% for this year. That's clarified. If I may just follow up with one more question here based on this. If I look at the impact of the Athena transaction, just the transfer cost of 89 million of provisions here and the gross book value is approximately 200 million, which looks like quite a big capital cost. I understand the P&L impact of DTAs, but from a capital perspective, it looks quite costly. Can you just explain your thinking here, in general, and if we can expect anything further like this going forward? Or do you think that is basically pretty much done now? Thank you.

Sure, thank you. Let me clarify on Athena. Athena, as you rightly mentioned, is shy of a 200 million gross book value. and the cost we have quoted on a capital level is around about 60 million euros, 6-0. I think more importantly, though, what you have to consider is what we have been saying for many, many quarters, that we're very opportunistic when considering such transactions. So we don't see an organic need to do Athena, but as I mentioned, we have this 250 million non-accretive So we took an opportunity to do that. I think the price is right from prior situations. And as I said, Athena, as well as breadth of PMAs, have allowed us to decrease our cost of risk guidance. So in my opinion, this is money very well invested for the shareholders.

Okay, that's very clear. Thanks very much for the colleague.

The next question is from the line of Kemeny Gabor with Autonomous Research. Please go ahead.

Two brief questions from both on capital and distributions. I think you mentioned upside to the 50% payout that you would like to keep the payouts about 50% going forward. Is there any possible movement around the payouts from this year's results at all? And the 111 million interim distribution later this year, did you say that it was a cash dividend or is there a buyback element as well? Thank you.

The second question, the interim dividend will be cash. And on the first question on whether the upside to the 50% payout comes from 2025, Or later, Vassili, if you can take it.

Gabor, thank you. I think the dividend payout discussion, it's an ongoing discussion with the regulators, so it's very difficult for me to give you firm guidance for 2025. I think we are including discussions about that, and I think we will have some more news on this matter in the next, in the coming quarters. But this is not, you know, 50% is not like close deal for 2025. So this is relevant for 2025 and 2026, but I'm not going to give you a more than 50% number now for 2025.

Interesting. Thank you. And just another small question on lending. I believe you alluded to an increased competition. I believe you mentioned being selective on some of the lending deals. How do you see the competitive environment evolving? Has this like a bit? What's your sense here?

I think that is the . Despite having practically five banks in the markets, the competitive landscape, as we have been highlighting, for a few quarters is increasing. The good thing is that it is increasing whilst at the same time there is a strong bid from our customers. You have also other things that play a role, which is that the Greek economy is doing better, therefore the rating of our good clients is improving and that makes you also consider the relationships and its pricing on a dynamic basis. Having said that all, we are utterly focused on ensuring that the underwriting is happening in a certain way that A, we're focusing on the rating of clients which we deem as the right one. Number two is that we are very diligently adhering to the returns that we have committed to our shareholders in delivering. Number three, we are beefing up our product factories both in those that we're working together with Unicredit and also others. so that we are able, and you have seen also acquisitions that we have made to that fund, in order to ensure that we penetrate much better into the wallet of our customers and we offer holistically the full Alphabank services to them. That obviously may shift certain things from net interest income into fees, but what is important is that it augments the services and the value that we deliver to our customers. Whilst the competition is quite heavy, we are very, very focused in ensuring that the relationship between pricing, profitability and rating of the customer is intact.

If I may add to that, Gabor, I mean, just to give you a case study, for instance. We have had, you know, excellent sponsors, shipping sponsors, doing M&A, as a case study, we have a large refinancing linked to an M&A transaction to CRE. When we looked at the project economics, because it is still outlawed, when we looked at project economics, the credit terms looked much more of a private credit situation rather than commercial bank situation. Same applied to the spread. Seems that two of our peers felt different about that, and I think I would wish them every good luck with that. From our side, our team opted to allocate the capital to another project and leveraging the momentum to be selective at good RREs. This might have an impact on our lending expansion Q3. Having said that, that does not move the needle for the annual budget and fiscal year 2025. There's positive momentum in Greece and an abundance of good opportunities for us.

All right. Thank you, Tim.

The next question is from the with Goldman Sachs. Please go ahead.

Good day. Thank you very much for the call. I have a few questions. Firstly, on the cost of risk and provisions. On a cell site call a few weeks ago, I think you mentioned that due to macroeconomic volatility, some of the metrics on macro might be required by the auditors to be revised down. And my reading from that was that this macro assessment can trigger some technical provisions at some point. Is there still a risk related to that or it is now also accounted for your revised guidance? So that's my first question. Second, just quick clarification on the return tangible equity guidance in 27. So I think you previously guided that 13% is achievable including acquisitions. The new target of 13% Is it pro forma acquisitions or it's even excluding them? You expect 13% in the year 27. And lastly, on your previous performing loan guidance, if we look at the growth on a year-over-year basis, it seems that it is gradually accelerating in 26, 27 from 25. What drives this gradual acceleration on a year-by-year basis later on? Thank you.

I'll leave the last question on the acceleration, the apparent acceleration of paid loan growth to Vasilis, although it has to do with decimal places. I think you're overrating this. I'll take the first two. On 2027 return on tangible equity, the above 13% includes M&A. It's exactly what we told you with Q1 results. There is a tiny upside to EPS, as we mentioned, from the reduction in cost of risk, but it doesn't really change the decimals in terms of return on time equity. On cost of risk and provisions, I think you have misread the comments we made on the pre-closed call. What I mentioned was a reminder of what we had said with Q1 results, that we might be revisiting macro parameters. The macro environment remains volatile, so there's always a possibility that that might happen in the future. We haven't felt the need to do it currently or with Q2 results. It's something that we will be assessing and we are assessing as a normal course of business on a continuous basis. So on loan growth for 26 and 27, Vasilis, if you want to take this.

Sure. Thank you, Yasuna. On loan growth, I think we're going to be closing this year, as we mentioned, pretty much on target. As we mentioned, a bit of an upside risk there, which should help our NII for 26 and 27. But going into the volumes, we see a pretty good environment for 26 and 27. I think the economy is still resilient. It's still growing, albeit a bit faster than we have expected. And the very fact that rates have landed to 2% around about six months earlier than what we we're thinking seven or eight months ago means that, you know, our corporate department is a bit busier with pipeline proposals. So I think I will still be sticking to the guidance because we haven't had the time to run the numbers for 26 and 27, but clearly there is some upside risk to that by what's happening on the ground.

All right. Thank you very much.

The next question is from the land of Neil Simon with Citibank. Please go ahead.

Hi. Thanks for the opportunity. I just have some questions basically to clarify the capital walk over the quarter. So if I understand correctly, the tax gain from DTAs, was not occurring to the CET1. Is that right? And then just on the dividend deduction for this quarter, did you take 50% of the 294? Just if you could walk me through the capital, why the capital reduced over the quarter despite the strong result. Thank you.

I'll take both of those questions. As you know, we fit the Basel III threshold for DTA inclusion, so any new DTAs are excluded from capital. So indeed, the DTAs you've seen on the balance sheet are not accretive to capital, as Basileus mentioned. And then we have stated that we are accruing at 50% of reported net profit.

So basically, the earnings that did accrue Just to clarify, so the earnings that did accrue to CT1 were 49 million less the, I guess, 147 million dividend deduction, so it's negative. Is that right? Is that how I think about it?

Let's take it offline, Simon, so I can arrive you through the Euromedia numbers, okay? Okay. Okay.

The next question is Alex with Romer Capital. Please go ahead.

Yes, thank you. Can you please give us more color on fees and commissions in the second half if run rate of the second quarter would be repeated or if there are any deviations?

Thank you. The drive, what has driven the growth in fees in the first half, I mean, the drivers are still pretty much the same as in the second half. So I would say, effectively, we do expect asset management fees to continue to be growing. Second half generally, if you like, on transaction income on the basis that you have more tourism flows in Greece. And then last but not least, in transaction banking, the way our budget is done is that we're building up the volumes in the second half. So back to the yearly numbers, I think if I remember properly, I think we have got it for an 11%. increase year-on-year for the full year. I think we're now at around about 16%, 1.6% in the first half year-on-year. I wouldn't expect to be higher than 11%. That's not easy to guide you to an exact number, be it 13%, 14%, 15%.

That's great. Yes, thank you.

As a reminder, to register for a question, please press star and 1 on your telephone. The next question is from the line of Michel Loutman with Ambrosia Capital. Please go ahead.

Hi, many thanks. Just a quick one. In your NII breakdown, there seems to be a shift historically as well from bonds to loan, PE loans. Just curious what's driving that. Thank you.

There has been a reclassification of CLOs to loans in order to align with peers in terms of disclosure and following the reverse merger, and that is also reflected in the NII breakdown.

The next question is from the line of Negro Alberto with Mediobanca. Please go ahead.

Yes, thank you for taking my questions. I have two technical ones. The first one is you can just clarify and repeat the NII guidance for this year, and the second one is on the PS target for this year on the 37 cents. Is this including the ongoing Sherpa back out of 2024 results? And the last one is it is more strategic. You have an outstanding granular relationship with Unicredit. Last week, the Unicredit CEO stated that they will not move on alpha unless alpha believes is a good thing for them. How do you answer to this? Thank you.

Vasilis Kosmas will take the question on the NII guidance. I think you might need to repeat the second question. It relates to the dividend per share. What we have stated is that dividend accrual will continue at 50% of reported profits. So I think that should answer that part of the question. And then Vasilis Psardis will answer on Unicredit. Let's start with DNII guidance, please.

Thanks, Alberto. I think just to wrap up the numbers on the NII, I mean, I don't have full guidance, but rather than repeating myself a while ago from a question a while ago, let me try to put some numbers behind this. For the total revenue line, we are around about plus $10 million on fees. We are a bit less, maybe let's call it $15 million down on NII plus five on other revenue. That pretty much gives you the flat, the guidance, you know, confirming the guidance, if you like, on revenue. I think we've discussed in another question the drivers of that, and I'm happy to discuss it again, but just to make it quickly, Headwinds on the NII are rates that have moved faster to the 2% than we have expected and a weaker dollar, even though it has strengthened in the last week. On the positive trends, the refinancing of the securities book is even steeper than what we thought of before. And then spreads, we need to keep an eye on how these are going to be evolving. We think that especially time deposit spreads in the second half would move better since we don't expect a very steep move on the rates, if any.

Vasileios, Unicredit?

Well, since we are not the owners of the stake, I think I'm simply going to echo what Andrea said at Unicredit's result recently when asked about the same thing. I mean, on our side, let me reiterate that we do have an outstanding relationship at all levels with Unicredit. And this is not just me and Andrea, it's not just the top management, but it is indeed a wide array of people at Unicredit that are regularly involved with our people as we're doing by now so many things together. We and they, I think we're all excited to do it because it's truly a mutually beneficial relationship. both in terms of the commercial activity as well as exchange of know-how. This is for us very important. The partnership, I can only describe it as outstanding, and also I'm amazed how well it is progressing on all fronts. Therefore, as a result, we at Alphabank, but also I think Greece as a country, we have all welcomed Unicredit to Greece. And as the saying goes, if it works, then don't fix it. But beyond that, I don't think there is more at the moment to say as far as the current state is concerned.

Thank you.

Ladies and gentlemen, there are no further questions at this time. I will now turn over the conference to management for any closing comments. Thank you.

Well, thank you very much for attending this call at the beginning of August month. Therefore, I would like to wish you wholeheartedly that you take some good, relaxing vacations, that you energize yourselves, and you come back with more ideas and more followership on us. We're going to be doing the same. Therefore, we are very much looking forward to catching up with you again on the road. Yasin, the AR team, Lazar, Vasilis, and myself will be on the road meeting many of you. And then we're looking forward to November to catch up on our nine-month results call. Thank you very much, and have a nice summer.

Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a pleasant day.