Raiffeisen Bk In Unsp/Adr

Good afternoon, ladies and gentlemen, and welcome to the Q2 2026 conference call of Heif Eisen Bank International. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Michael Hollerer, Chief Executive Officer. Please go ahead, sir.

Thank you very much. Good afternoon, ladies and gentlemen. I'm very pleased to speak to you today and I look forward to meeting you personally in the coming months. I also look forward to working closely with you in the years to come. While this may be my first investor call, I'm not new to the bank. Prior to my appointment as CEO, I've sat on RBI's supervisory board for the past four years. Before that, I was RBI's CFO and I've spent most of my career within the organization. I'm humbled by the responsibility and confident in the future that lies ahead. Before we dive into the results and recent developments, I would like to share with you my first priorities for the bank. Since March, I've been meeting with our leaders, both in Vienna and across the network. I've also met with our supervisors and many of our partners. End of May this year, I've launched a strategic review and we are now finalizing our preliminary assessment. In the coming weeks, We will define clear ambitions together with a roadmap with tangible targets and deliverables. At the end of September, this will be presented to our senior management and in the course of Q4, the implementation will begin. I look forward to updating you on these developments at our next results call on the 3rd of November. More importantly, however, we will hold a capital markets day In February next year, following our full year 2026 results. Much of what we present will be based on the strategic review, which I have just outlined. There are some key elements which I can already share with you today, based on my initial assessment and will guide our ambitions and strategy. First of all, RBI is ready for growth. and the time has come to execute on it. I appreciate that for the past four years two major legacy issues have impacted the business in different ways. In our home market, Austria, growth has also been sluggish at times. What I see is that the legacy issues are behind us, that our capital base is strong and our balance sheet is healthy. I see a lot of potential to grow faster in our CE and SE markets and we are ready to reallocate capital to make this happen. Furthermore, I believe that the SME and mid-market segment provides opportunities. In retail, there is huge potential for wealth management products in our region and we will capture our fair share. I also see potential to streamline our products across all our subsidiaries while also making them ready for AI and the future of banking. What I have also observed in our retail business is that we do an excellent job at acquiring new customers. Where we can improve is on the next step, engagement. There will be a particular focus on reducing the churn in our portfolio, and I'm confident that this will transform our retail business. Putting this all together, this means that we will grow our customer base, grow our balance sheet, and improve market share in our key markets. This also means earnings per share growth, which brings me to my next priority, focus on profitability. I am familiar with the impact that the legacy issues have had on our profitability. And in trusting for these, I accept and that the core of the bank is currently capable of earning a 13% ROE. I won't mince my words. This is not enough. Like each one of you, I look to our peers and I see what is expected of us. I won't set targets here today or mention any numbers, but let there be no doubt. Improving the profitability of the core of the business has highest priority. I will take a very close look at efficiency and spending. We intend to review and challenge some of our spending. I've also asked Kamila, our CFO, to review our capital allocation and make sure that we are as efficient as possible here. This will include products, segments, and geographies. It is, of course, exciting to think about redeploying the potential Rasperia rainfall But I first want to make sure that our capital allocation is sound and that we are efficient with the resources that we have. In GC&M specifically, I expect us to be more selective with better focus on cross-sell and wallet share. I believe that growth and profitability will go hand in hand. Our drive for better efficiency will not prevent us from gaining market share. and that better capital allocation will in fact enable better sustained growth where it matters. Technological transformation. In parallel to this, I expect technology to transform how we serve our clients and how we operate as a bank. This is not new and this is not unique for RBI, but I'm sure that we must capture all the possibilities and opportunities available to us. This transformation will also drive growth and efficiency. Our transformation in this respect will focus on three pillars. The first is customer interaction and marketing, where we are already making great strides with our mobile assistance and where customer journeys and experiences will increasingly be enhanced by AI. Marketing and how we approach and engage with new customers will also be transformed. We expect to see a material increase in positive outcomes while simultaneously reducing the effort and resources. Product delivery is already being transformed and we have very promising proof cases. Going forwards, we need to scale this individual success into sustainable delivery across teams and products. In practice, this will mean developing software much faster and with less Finally, we will continue to digitize our processes and increasingly move towards AI native end-to-end processes. We see tremendous potential across the risk and operations chain. I will not spend any more time on these here today. For now, I simply wish to share with you my priorities. Let us now move to my next slide and how we plan to approach the Russia topic. First of all, I would like to acknowledge all the efforts that have been made in the past four and a half years. I could see firsthand how much was invested in sanction monitoring and compliance and how much the business in Russia has been de-risked. With that being said, my priorities for Russia will be as follows. The rundown will continue and will remain our base case until further solutions can be found. All the restrictions that we have placed on our Russian bank will remain in place, and you can expect to see the loan book shrink further. I think the numbers here speak for themselves. Loans are down 80% since the start of the war and deposits are down 40%. Our commitment to shrinking and deregulating Second, we will continue to explore ways to extract value and to recover what we can of our equity, which is trapped there. It is our duty to shareholders. This includes the Raspberry litigation, which I will comment on shortly. I will be reviewing all that has been attempted so far and I've asked my team to double down on this effort. Third, I'm aware of the many negotiations to sell our Russian subsidiary and I understand the difficulty to obtain the required approvals. There is no easy way to execute on this. But we need to keep trying, however, and we will try harder. is also an area where I have instructed my team to double down and you can expect me to follow this very closely. Before we move on, let me give you a brief update on the Rasperia case. Time has come and we took decisive steps. I'm happy to report that we filed the claim yesterday in Vienna. We are seeking 3.15 billion euros in damages, reflecting the 2.4 billion which were taken from us in Russia and including penalty interest and loss of profits. First of all, we are confident that we will prevail in court and we expect a favorable outcome. Our claim is based on European sanction legislation. Second, Because our claim largely reflects the terms of the anti-suit injunction which was pronounced by court in Russia and threatened our Russian business, we have good reasons to believe that the proceedings in Austria will not be acrimonious. This means that we can expect to receive the proceeds within the next 6 to 12 months. There is little more I can say here today and we will keep you updated as this situation develops. Let's now turn to the two acquisitions which we announced earlier this year and which are progressing. Let's begin with our voluntary takeover offer for Adico. On Wednesday this week, we announced preliminary final results of at least 56.18% participation to our offer. In the coming days, we will receive the final numbers. and participation may still increase slightly if there are any last minute instructions which have not been processed yet. In any case, I'm happy to report that our voluntary takeover offer is successful and we can now move to the next phase. In the coming months, we will seek regulatory approval and merger clearance. In parallel, there is an additional acceptance window from August 3rd until November 3rd. Shareholders who have so far not tendered into our offer may still do so. It's my hope that in the coming weeks investors who tendered into the competing offer will now switch to ours. While our offer might not be as financially attractive, we firmly believe that we can provide the execution certainty required to get this deal over the line. We also are convinced that our Offer provides a fair solution to investors who have not received a dividend in years. Let's briefly turn to my next slide and look at our other ongoing acquisition. Concerning the acquisition of BBVA Garanti in Romania, I'm happy to report that the approval process is progressing well. We expect to close in early October and we are already mapping out the integration steps. The merger into our Romanian subsidiary will lead to higher AMREL requirements locally and you can expect Raiffeisen Bank Romania to issue a Euro Senior Non-Preferred Benchmark Bond in the third quarter. There is little more to report today and on our next call I look forward to announcing the successful closing. Moving to my next slide. Allow me to spend some words on business in Q2. Stepping away from Russia M&A and strictly looking at our core business. Record fees, loan growth ahead of our peers in nearly all key markets and products, excellent capitalization. I believe we have many reasons to be excited. We close the second quarter with year-to-date profits of €708 million, with a strong second quarter right around €0.5 billion, and the loan book continues to grow nicely. Across markets, segments, and products. Included in the 5.7 year-to-date is still some short-term business, whereas if we focus on the core customer business, we stand at 5% in the first half of the year. Our CET1 ratio, excluding Russia, of course, is back near recent highs at 15.5%, We are in a great place to begin the second half of the year and close the two acquisitions in progress. Finally, our adjusted return on equity, where we look past our legacy issues, stands at 12%. I will briefly walk you through our current macro outlook before finishing with our financial outlook for the year. Energy price volatility in line with the situation in the Middle East remains the biggest unknown this year. At the same time, sentiment indicators and high frequency economic data suggest resilience in many countries. This is visible in the industrial sector. Also, there may also have been some front-loading of production due to perceived supply chain risks. On the other hand, The services sector has been more reactive to the energy price shock. To summarize, weak external demand, higher energy costs and interest rates, as well as ongoing uncertainties slow down growth, but do not trigger a slump in economic activity. At least in some countries, such as Hungary, domestic factors play an important and positive role. Inflation is expected to remain entrenched in 2026 and 2027. And as mentioned, volatile energy prices defining inflation in 2026. Secondary effects of higher energy costs have been moderate so far, but some cost-driven inflation should not come as a surprise in the coming month. In addition, persistent domestic price pressures and the services sector from decent wage growth in recent years continue to pose mid-term challenges to central banks. Recurring geopolitical headwinds have not altered the overall solid lending trend across the core CE and SE regions. Still, there is a difference between the uniformly stronger retail segment and more uneven corporate lending dynamics. Precautionary monetary tightening may tamper credit demand in the second half of 2026 in larger markets. Which brings me to my final slide, our outlook for full year 2026. We have seen better NRI trends in recent months, and we now expect to land somewhere between 4.4 and 4.5 billion euro. Kamila will expand on this in just a minute. Fee business is broadly sustainable and will remain strong in the second half. I expect fees to land close to 2.2 billion Euro for full year 2026. Now in the OPEX, we are expecting some one-offs in the second half relating to Rasparia litigation. I'm not concerned by these considering the expected payoff. This will take OPEX closer to 3.8 billion Euro in 2026. Accordingly, our cost-income ratio will temporarily rise to 55%. Risk cost up to 35 basis points. And Hannes will walk you through our expectations here. We leave organic loan growth unchanged at present, but in fact, above 9.5%, including already guaranteed BBVA transaction. The CT1 ratio, always assuming the worst case in Russia, is unchanged around 14.3%. This tip is explained by both acquisitions going through our results in the fourth quarter this year. And in any case, our CT1 ratio will remain at a very good level. Our return on equity is also impacted by this slightly higher OPEX and we now guide for 9.5% for the core excluding Russia. Also here, you should note that the respiratory litigation costs will have an impact. If we look at the clean profitability for RBI, we are in fact above 12.5%. I will finish on this. Adjusting for both. Russia and Poland should give a good sense of the future footprint and business of RBI. In recent years, as you can see here on slide 11, that this has ranged between 13 and 15.5% and could continue to achieve these levels. This is not good enough, however, and in the coming months, I look forward to sharing with you how we intend to transform RBI and improve Our profitability. Thank you.

Good afternoon, ladies and gentlemen. Thank you for your interest today. I will be brief. As you just heard from Michael, we are happy to report a strong second quarter in the core of the business. In addition to a very good bottom line, long growth and CT1 ratio that was just mentioned, we also show further top line strength and stable office. Let's go through these one by one before moving to our CAT1 outlook. Starting from net interest income, which is up 3.2% in the quarter and 6% for the half year 2026 versus the same period last year. Interest bearing assets were up 2.5% in the quarter, long growth of course, but also some growth in the treasury bond portfolios with NIEM slightly up. We also saw rate hikes in CZK, although these did not come through to our margins yet. Competition for liabilities among banks remains lively, and I shared it with you last time, we were at times the ones driving this. We had been willing to pay up for the deposits, but always subject to a high number of customer engagement requirements. For one, this has been a successful customer acquisition strategy, and two, we have made a lot of progress in cross-selling. Going forward, we sense that there will be a bit less pressure to reprice, and we expect our liability margins to stabilize. The other market I need to mention is Romania, where we have been running customer acquisition campaigns and offering attractive saving rates. While dilutive to NIEM, we still expect the volume effect to be positive, and I should prove resilience from here. And of course, we are attracting new customers, which is positive in the long term. With that being said, group-wide, I'm encouraged by the long road, as well as the continuing deposit collection trends, especially in retail. As you just heard from Michael, We are now guide for net interest income between 4.4 and 4.5 billion euros, including some euro 50 million upside from rates which we were guiding for the last time. Moving to the fee income, which is up 5.6% in the quarter and over 10% versus the half year last year. As you saw in our guidance, we are now expecting fees close to 2.2 billion, nearly 10% increase versus the last year. I'm happy to see that the growth in the coming is coming from the range of products and businesses and it's with very very few exceptions this appears sustainable into the year end. Loan growth again was very strong up 2.2 percent in the quarter and 5.7 percent year to date. There is some short-term business included here but also euro 700 million decrease in Poland due to accounting policy changes. Putting this all together, our true customer business is up around 5% year to date. Retail demand continues to be very strong. And what is particularly encouraging is that we are growing above the market rates in all of our key markets. New product origination was very strong in the quarter in our key markets. In Czech Republic, we saw record new mortgage production and near record new consumer levels. Likewise in Slovakia, in Romania, and in Hungary. In the corporate segment, we are also very good new business friends, notably in the Czech Republic, Slovakia, Hungary and Serbia. GCNM was a bit slower this quarter after a very strong start in Q1. On the liability side, we continue to see very good inflows, especially in retail, where the margins were more attractive. In Czech Republic, retail deposits are up 4% in the quarter, 7% in Hungary, 2% in Slovakia, and 4% in Croatia. Let us now jump to slide 20 and look at our CT1. As always, the starting point is our price book zero deconsolidation scenario, which assumes a complete loss of Russian business. With 15.5%, we are back to recent highs. and we are still expected to generate around 90 basis points of C81 in the next six months. You are of course aware that we plan to close both of our announced acquisitions till this year, both in the fourth quarter. If you factor in our long growth guidance, dividend and this brings us to around 14.3 at the year end, slightly below our medium term target of 14.5. It is, of course, too early to get into 2027 guidance, but I would simply point out to our solid capital generation and a deco carve out as the clear drivers back to about 14.5%. Needless to say, proceeds from RASP area litigation would come on top of this. Moving on to slide 22, very briefly on our issuance plan. In the coming months, you can expect us to issue Tier 2 out of head office. We have three maturities in the coming years and we look to refinance these. Michael also mentioned Romania, where we will be issuing senior non-preferred for the local embryo requirements. And with this, let us move to my final slide, Poland. We are making good progress in settlements and we have expanded our strategy. Now we offer settlements for Euros as well as Swiss Francs, and we approach borrowers at different stages of the litigation process. Finally, we are exploring new channels through which we engage with the borrowers. The benefits of settlements come primarily from the savings that we realize on legal costs, court fees, and penalty interest. Looking at the provisioning, we guide for around 220 million this year. We introduced an accounting policy change in Q2, bringing us in line with the market practice in Poland with the added benefit that it led to risk cost release of around 24 million. This means that the bottom line impact from provisions in Poland in year 2026 will remain around initial 200 million guidance. This accounting policy change led also to around 400 million credit, risk-related assets relief. Finally, I know you will ask about this. The first half run rate is not to be extrapolated in the second half of the year. The primary driver of the provisions is the inflow of the new cases. and Swiss franc cases are clearly declining, whereas Euro are peaking and also expected to decline from here. There is also a timing mismatch on annulments. We immediately book loss from annulments, and there is a delay in booking a counterclaim, which we will receive from the borrower. This will partly reverse in half year 2026 and second half year 2026. And on this basis, we can confirm Euro 220 million guidance. With that, it's all from my side and I will give floor to Hannes.

Thank you, Kamila. Ladies and gentlemen, thank you for joining us today. Allow me to briefly run you through a few risk trends before we open the floor for Q&A. Starting with risk costs. With four basis points in the quarter and 20 basis points year-to-date, we are running well below our guidance of 35 basis points for the year. Clearly, there is a potential to undershoot here. but the broader economic environment remains sufficiently uncertain. In Q2, we saw two factors behind the risk-costs result, which offset each other and resulted in four basis points or €7 million. On the one hand, we released around €43 million of overlays, partially due to the improvements in our retail risk models and to a large extent simply because events and others have failed to materialize. Romania is a good example. In retail, we had anticipated layoffs, which never happened, and defaults from higher rates and inflation, which also never came through. This is also one or the other case where a corporate default leads to the release of an overlay, which, of course, is more than offset by corresponding new State 3 provisions. We continuously review our overlay portfolio and if we determine that potential risks are sufficiently covered by the credit or macro models, we will adjust. As a matter of principle, it is my preference to see potential risk captured by our credit and macro models. An overlay should only be created as a last resort. The second factor to mention in the quarter is the State 3 development, where we saw a combination of new defaults in line with the usual course of business, but also a few top-ups to the provisioning on existing defaults. See also our improved coverage ratio. Finally, the accounting change in Poland led to the release of around 24 million euros of State 3 provisions on the legacy SwissRank portfolio. Beyond risk costs, our focus remains firmly on the market environment and we keep a careful eye on spillover effects from the war in the Middle East. I mentioned to you last time that we had conducted a review of more than 500 of our corporate counterparts with exposure to energy price volatility and we have continued with this effort throughout the second quarter. The temporary reprieve in energy prices and the moderation of inflation dynamics were welcome. Nevertheless, we still downgraded around 30 names from the 40 which we had previously put on negative watch. Since the start of the war, we have downgraded less than 10% of the names on our 500 name watch list. And as we review our exposure and commitments in detail, I'm confident that as of today this will not affect our portfolio quality in any visible way. Finally, this quarter we have also finalized the geopolitical stress test with ECB publication of their report just a few hours ago. The results are encouraging. RBI reached the prescribed depletion in year one and remains above the minimum requirements. The scenario design and framework were assessed as reasonable and in line with our business model and complexity. Both the portfolio review of energy exposed customers and the geopolitical stress test confirmed that our provisioning is accurate and there was no cause for adding overlays or even any significant stage 2 shifts. On the RWA side, we have optimized the balance sheet with a further securitization and in Poland achieved a credit risk relief. At the same time, these RWAs have been redeployed into customer business across the region. Closing with the obvious but still important message from my side, MP ratio remains stable at 1.6% and at a historical low. and with a 47% coverage ratio. Dear all, having said all this, ladies and gentlemen, thank you for your interest and we now look forward to your questions.

Thank you. Ladies and gentlemen, we may now start the Q&A session. If you wish to ask a question today, you will need to press star 1 and 1 on your telephone keypad. Please ensure that the mute function on your telephone is turned off or we will not receive your signal. Once again, if you wish to ask a question, you will need to press star 1 and 1. We will pause for a moment to allow a queue to assemble. Thank you. We will now begin with our first question. This is from the line of Benoit Petrarch from Kepler Chauvre. Please go ahead.

Yes, good afternoon. So thanks, Michael, for sharing your priorities and your strategy also. I wanted to come back on the Rasperia claim. So what do you think the time frame of the Austrian call decision will be? I think you indicated six to 12 months for cash settlement. But could that be a matter of a couple of weeks, you think, or a much shorter timeframe than six months? And do you expect the settlement to take place in the form of cash or strawback shares? Because in the past, we've seen that a settlement in the form of strawback shares could result in a risk-cured asset number. Also, I'm curious to understand, you know, Basically, the 3.15 billion cash will be redeployed. Do you have any views on that at this stage? Could that be a higher distribution in the form of cash through shareholders, or do you have more MNAs in mind? The following question also is on Russia. I think you want to try harder to exit Russia. Does the RASPERIA court case change your view for a potential exit? Will you consider, you know, to exit at a lower price to book, given that you will get cash from RASPERIA? You know, just wanted to understand your thinking around that. And the last question is on the NIEM trajectory into basically the H2. I think you have Thank you for your questions. Coming back on the Rasperia claim.

and the time frame and the court case in Austria. As I said, we filed the case yesterday and this case is now reviewed by the competent judge and we expect as a next step that the defendant to be notified soon. Then a lot will depend on how much Raspberry decides to oppose our claim in Austria. The legal basis for our claim is in the European sanction law. That is why we are very confident to prevail. As for the settlement, this is not yet decided. What is clear, however, is that we are not looking to become a shareholder of Strabag and we expect the shares to be sold one way or another. And we are seeking for the proceeds of this sale. The RWA offset would clearly be temporary. Coming to a potential positive outcome for RBI and the redeployment of the, so to say, the windfall, I have to say, first of all, we are now taking step by step in this process. We are looking ahead on every single step. As you can imagine, this is a complex way forward. So it is too early to start discussing how we spend, how much, when and where. Looking at our core business, looking at our organic growth opportunities, also looking at perhaps potential inorganic growth opportunities, this would give us here space to go ahead. And finally, we could also consider a special dividend. But as I said before, this is too early to The third question is about the exit from Russia. If these changes are the view on a potential exit, I would say that the Rasperia claim is a very important step forward for us. But I would say exit from Russia is, as I said and I mentioned several times, a very important point, a very important cornerstone for our strategy ahead. It could be a relief for all steps ahead, but now we focus on the Rasparia claim and then take the next steps.

On neem, from here onwards we expect neem to remain stable for the remainder of the year at 2.3%. So yes, NI growth will be a function of volume growth. and in our guidance we have included around 50 million benefit from higher euro rates and this is on the lower rate of the estimate that we were given last time of 50 to 100 million.

Great, thank you very much for that.

Thank you. We will now take our next question. And this is from the line of Gabor Kemeny from Autonomous Research. Please go ahead.

Thank you. It's a pleasure to be talking to you, Mr. Hollerer. In your introductory comments, you mentioned turning more selective in the GCNN segment as an aspiration. Can you share a few thoughts in what ways you think you should be more selective and what timeline you have in mind to divest some of the less profitable exposures? My other question would also be on your introductory remarks and the comment when you said that excluding Russia and Polish FX is a good proxy for your franchise going forward. Does this mean that you exclude existing or entering new markets in the foreseeable future? And here I'm also including some of the Balkans markets where I believe RBI has perhaps less scale than the optimal level. And my final question would be a follow-up on Kamila's comment on the stable NIMH outlook. Can you drill down a little bit and tell us if you factor in any pressure on customer spreads and how you think about your income on hedges and securities? Thank you.

Thank you very much. Coming to the first two questions, the question on GCM. First of all, I've shared today with you my first priorities, the first assessment we did. Now we are working on the strategy ahead. Now we are working on a prioritization. So I will not share today, I cannot share today with you more details, but what is of course very relevant is that we really raise profitability, that we are more selective, that we have an efficient allocation of capital looking the business and especially also to improve cross-sell in this segment, in this regard. Secondly, sorry, it's coming to your second question. If looking to new markets, so far there are no concrete plans to enter new markets. But I would not exclude to do so when we look at the final version of our strategy. But also here we are actually working on this and then coming back at the capital markets day in February with a clear target picture on that. and concerning the Balkans as we have no so far no concrete plan to enter a new market there is also no plan to exit from any market so far thank you

When it comes to our NIEM development and how we are looking at the stability of our NIEM, indeed our security and bond investments will help to stabilize NIEM. As I said, we expect it to be stable from now on around 2.3. Generally, the net interest income development will come from volume growth primarily. You've seen 5% growth in the first half year. We guide for 7% growth. Here, I've already mentioned that we have the 50 million upside potential from the better interest rates. Obvious question would be why we are relatively conservative on our Thank you.

We will now take our next question. This is from Matty Niemes from UBS. Please go ahead.

Thank you for the presentation. I have a couple of questions, please. The first one would be on strategic priorities. Michelle, you clearly outlined priorities on slide four. Thank you for that. I was wondering, would you be able to provide a qualitative description of how you intend to see RBI at the end of your mandate? How would you describe in an ideal condition the bank If your plans pan out as intended, what would be the cornerstones? That is the first question. The second question would be on the CET guidance for Kamila. The CET-1 ratio was at 15.5 in the end of June. You're guiding for 14.3 at year end. There is a 110 basis point M&A impact, and that means there is a guided 10 basis point seed and erosion, despite an implied roughly 600 million net profit in the second half, just judging by your guidance. What is the meaningful offset here? You're flagging some portfolio development, roughly 50 basis points on slide 20. Is this simply organic R&D growth, or are there any inorganic non-M&A type of effects in here? And also, if you could just help us understand why there is significantly higher AT1N dividend coupon dividend impact in the second half, roughly double that of the first half. And finally, the last question, if I may, and that's on deposit trends and deposit pricing. You've clearly flagged some asset price or asset margin erosion, especially in retail. Can you comment on deposit trends, on flows, any shift between side and term savings deposits, and what do you see in the key markets in competition, also beyond perhaps Czech and Romania? Thank you.

So thank you very much for your question. Referring to this now at the beginning of my mandate concerning the strategic priorities, perhaps to start with this. We have to become excellent in our core business. Secondly, we have to do, of course, some homework, especially in some segments that are not on the profitability level we want to see. And thirdly, of course, the transformation from AI, from new technologies Thank you very much for your time. Technology we have to take use of to transform into a more in a stronger a better market position. And finally what I sense and what we can see is Raiffeisen is one of the strongest brands in the region and this we will remain. And this as a result we will see in a better market share in an excellent position on our core markets. This is how I see very short, of course, in the next two years and in a long-term horizon.

On CT1 guidance and development generally, it is outlined on the slide 20. We are largely referring to the long growth in the second half of the year captured by the portfolio development. and in line with our 7% organic growth guidance, there is no any other inorganic moves to be flagged here. All emanate is reported separately below and we have nothing further than BBBA in the guarantee. 20 basis points that you see on the slide 18 and 46 that you see on slide 20 is the difference because in the slide 18 we refer to 20 basis points which is in the second quarter. It's a quarterly accrual. And 46 basis points that you see further, it is a half year accrual that we will have in the second half of the year. So here we are broadly guiding in for the payout ratio of 40%, as we've already indicated in the past. However, the final decision will be made in the fourth quarter once we are ready to settle on our capital allocation. When it comes to the deposits, so happy to comment on that as well. So here, if I take it country by country, in Czech Republic, we are still among top three banks in Czechia when it comes to attractive saving rates offering. As I said, we are quite conscious about it. This is a key element of our strategy to attract new customers. and we aim for the cross-sell to these customers and this is proven to be a success for our Czech operations so far. The high rate is however tied to certain conditions always such as number of transactions per month and so on and so forth. So it ensures quite an active engagement of the customers and means that the average rate for this portfolio is much lower comparing to the external offer that we have.

Overall, we see a liability margin stable here.

When it comes to Romania, we have been offering attractive rates, such as rates, as I mentioned already, customer acquisition campaigns. And this was dilutive to the NIEM. We also see customer moving from current accounts more into the interest-bearing accounts. So here, the pressure on the NIEM is there, but we are expecting it to stabilize from now on. When it comes to Slovakia, Serbia and Hungary, I will put it all together because its development is relatively uneventful. We see very steady deposit inflows in all the markets and more pronounced in Hungary and currently no major shifts in terms of products made from liability side. Anything, does it answer your question or you would like to have further clarification?

It certainly does. If I may, one more follow-up, please. And that is on the 4.4, 4.5 billion NII guidance for the year. Is that delta perhaps between the top end and the low end primarily a function of loan growth? What are the assumptions you have for deposit flows and deposit pricing? It sounds like deposit liabilities and margins is broadly stable. and continue deposit flows. So is it coming back just to long growth?

Yes, this is primarily long growth. Yes, so we guided on 7% long growth. You've seen it 5% in a half year and 7% in the full year. As I said, we will be selective because we see a pressure on the asset margin. However, there might be Thank you. We will now take the next question. This is from Simon Nellis from Citi. Please go ahead. Thanks very much. Many of my questions have been answered.

I do have one follow-up on Rasperia. Just wondering if you see any technical issues in actually getting access to the cash once a settlement is done, as you are, I think, co-suing along with Raiffeisen Bank AO in Russia. How confident are you that you definitely get that cash outside of Russia? On Polish litigation costs, you've given clear guidance for this year, but wondering where you think those costs might go this year. And then for the new CEO, welcome. It was quite interesting to hear your introductory remarks. I think it's what the market wants to hear. I am interested in your experience working in the Landesbanks and If there are any issues around their vision for particularly the GCM business and I mean, at one point that was not part of the Raiffeisen Bank International. So yeah, just wondering if you could comment on that, if you could.

Okay, thank you. I want to start with your first question. I think this is rather clear. As we filed the claim in Austria, the Austrian court, that is clear that we will also keep the proceeds in Austria. And on the third question coming from your side on the GC&M business and potential overlaps whatever with the Austrian Reifers & Banking Group, there I see no disagreeing whatever on our priorities so far. As I said, we have just started to elaborate on this and we have to optimize and have a clear profitable picture on RBI side. So on this side, I would see no disagreeing from their side so far.

When it comes to Poland and the guidance on the Poland cost, I mean, we clearly see decline in Swiss franc cases and it's quite visible and confirmed from our side. and in Euros we have a good reason to believe that the new cases also have peaked and we will decline from here. Roughly we can guide that the litigation provisions in Poland in 2027 will drop by half and hopefully by half again in 2028.

Thank you very much.

Thank you. We will now take the next question. This is from Ricardo Rovere from Mediobanka. Please go ahead.

Good afternoon, everybody, and thanks for taking my question. Two or three, if I may. The first one is on, sorry to get back to Rasperia, but I remember, and please correct me if I'm wrong, that in the last call, Storbl stated that RBI failed to convince Europe that that was the right thing to do. And it also flagged in other occasions the possibility of having legal risks in Russia. I don't know exactly what he was referring to. What comes to my mind, the first thing that comes to my mind is as in the past, they basically imposed 2 billion fines in Russia I was wondering whether they could retaliate and do exactly the same thing they've done, maybe in a larger scale, on your Russian bank, which is still yours. So just because on the Rasperia case, it seems to me a very, very kind of U-turn in respect of only three months ago. This is my first question. The second question I have is on Adico. You now control around, if I'm not mistaken, 56 or something. I was wondering whether the governance of Art Deco that is shaping up at the moment, you're happy with that? It could be an issue for you. And then maybe a question for Hannes. This quarter credit-based card WA are kind of flattish. You mentioned SRPs. I was wondering if you still have room to use this tool. And when it comes to F2 overlays, should we expect this amount to go progressively to zero if nothing horrendous happens on this planet? Thanks.

Thank you for your questions. I will start with Rasperia and Rasperia Block. I think on the European sanctions regime you have to come from two directions. We base now our claim on the European sanctions framework, on the European sanctions regulations. As there was an amendment in front of the Russian court coming from Raspberry on the anti-suit injunction that now allowed us to take the decision to claim in Austria. On the other hand, we always tried, that was also working on this hard as Johann Strobl said in his last call, to amend the European sanction framework to give us without any Russian Amendment, the opportunity to file a claim in Austria. So now we took the first option as this was now possible coming from Rasperia. Second question, the legal risks in Russia. Our claim is largely in line with this anti-suit injunction pronounced by the Russian court. The difference is that we are claiming 3.15 billion Euro, what we believe to be the full damages, and this is higher than the 2.85 billion Euro allowed in the anti-suit injunction. It is so finally possible that our Russian subsidiary will face a claim for the 300 million Euro difference. Beyond this, we do not expect more risks to our Russian equity. Coming to Attico and Attico governance, I think it is premature to comment here. The first step now was successful. We now move to the second step, which means regulatory approval and the closing of the transaction. And we hope to see an increase in the tender participation from here. But the commenting on the governance, I would see at the later stage of this transaction.

Thank you, Ricardo, on your guidance regarding the overlay story. I think, as I also said in my short introductory note, it's a matter of principle and that we only have overlays as a last resort, so where credit risk models nor market risk models are being capable to capture the current environment. I think there is one thing what still will remain for until further notice is our overlay in Ukraine but elsewhere we are more than happy to review our overlays for the next two or three quarters and the only will prevail where it really is well justified so this is I think the best what I can share with you at this point in time hopefully this is good enough for guidance

Yeah, very good enough. And then on SRTs?

Well, I think we have been, as an RBI group, we have been A solid user of significant risk transfers. And maybe Kamila would like to take over because this is a capital matter.

Yes, from that perspective, we have entered in the securitization transaction in Q2. Relief is approximately 1 billion. We intend to enter in another two transactions in Q4, which are covering, which are more or less sister transactions. It's just divided into two due to the currency. So it will be a securitization of the personal loans in Slovakia. And in Czech Republic, overall relief, gross relief is around 720 million. And yeah, it will be in total, the total increase from SRTs would be around 75 basis points in our CT1.

Yeah.

Okay. Okay. Okay. Thanks, Kamila. Very clear. Thanks.

Thank you. We will now take our next question. This is from the line of Ben Mayer from KBW. Please go ahead.

Thanks for taking my questions. I think it's only days, but I'm just interested for your initial views on what are the main drives to the 30 cent ROE look through target that you currently have. Second question is just are there any markets you're particularly excited about, either both in your existing footprint but also outside of that? And then my third question is, the drag from the core percentage still remains quite high. Are there plans to optimize this? Is this going to be a potential thing that's looked at? Thank you.

Sorry, the acoustics were quite bad. May I kindly ask you to repeat the questions? I'm sorry for that.

Norris, the first one was just on what you see as the main drags to the current 13% look through ROE. Second question was on any markets that you were excited about, both within your existing footprint, but also outside of that. And the third question was just on the corporate center drag. It's still quite high. I'm just wondering if there are any plans to try and optimize that. Thank you.

On the ROE and 13% guidance going forward and in terms of what are the drugs going forward, I think we are largely beyond the drugs. So on our ROE, simply because the Poland legacy is coming to the, you know, more Piotr Czajkowski So I see a very actually positive development. We see a very good growth momentum and rather stable margins. Yes, there is a pressure on asset margin and liability margins, but we are very nicely compensating it with the volumes. and we also have entered into quite a good strategic position and our bond portfolio provides us with the stability of our net interest income going forward. When it comes to the new market, I will let Michael to comment on that.

Thank you. As I already answered before on our footprint, first of all, there are no concrete plans at the moment Thank you.

We will now take the next question. This is from Alexander Kantarovic from Roma Capital. Please go ahead. Alexander Kantarovic, Roma Capital. Your line is open. Please go ahead. Checking if you have your line unmuted. Not hearing any response. Let's move on to the next question. One moment, please. Next question from Krishnendra Dubey from Barclays. Please go ahead.

Hi, this is Krishnendra from Barclays. Thanks for taking my question. And Michael, welcome. I guess just starting with the first one on the Russia, I guess you talked about renewing effort to sell the entity. So what are the key milestones that The second question is on fees. I guess you have 2.2 billion of fees for this year, second half roughly 550 million, which is 10-11% growth. How should I think about this in going into the next year? I know you will have a CMD in February. We'll talk about it. Just trying to understand what are drivers for the growth rate for the second half of the year and which division particularly drives it. And lastly, on the risk cost, I guess, Hannes, you talked about this overlay as a last resort. You're still carrying 346. I understand some of them are for Ukraine. You would try and keep it. But in a normal business cycle, how should we think about cost of risk going forward? And I understand this would be answered in CMD, but still trying to gauge what should we look at.

Thank you. So I will start again with Raspere and the questions on Russia. What are our key milestones now? First of all, as also presented, The reduction of SNES, where we have a clear way forward, shrinking the balance sheet, shrinking the business completely in line with the sanctioned framework. Secondly, the Rasperia claim, as we now started this legal process over the next month to go consequently ahead. And third, of course, if there is opportunity, if we have and we will do, of course, intensify our efforts in this respect, if there is a possibility to exit Russia, we will do and we will work on this on the milestone so far.

Upstream plans to upstream dividends from Russia.

As I said, it's, of course, our target to extract as much value as possible out of Russia. But there are no plans in this direction so far I can comment on.

On the fees and the question to the fees, we are seeing a very positive development in the first half and we expect to be quite similar development in the second half. If you ask me if there is a bit of a conservativism in our assumption, To a certain extent, maybe, simply because we usually see the second half a bit better performing. However, we want to be cautious simply because the growth in the first half was quite exciting. When it comes to 2027, I would not comment it. It's too early to comment on how it will look in 2027. However, what I can comment is that we see the fee increase not concentrated neither in the geographies nor on the products. It is spread. It's spread throughout the product, it's spread throughout the geographies, with a slight dip in Southeast Europe simply because there were some one-off events in the previous year, so you would not see it just mathematically comparing the total amount. But overall growth is sustainable and we see it very sustainable throughout until the year end. And I have very positive expectations towards 2027 that it will remain throughout the geographies and throughout the products.

Well, I may take the question regarding the normalized cost of risk to the business cycle. As said in my speech, you know, the 35 basis points, we adjusted our guidance. In Unsp Bk In Unsp Bk The entire business cycle, we have risk costs around about 45, 50 basis points. But for the next one, two years, we could think about risk costs coming in slightly below through the cycle risk costs, but more so to say on the capital market days. Thanks for the question.

Thank you.

Thank you. We'll now take our next question. And this is a follow-up from Riccardo Rovere from Mediobanca. Please go ahead.

Thanks. Thanks for taking my follow-up. Michael, again on Rasperia, at the beginning of the call you mentioned The Trust Area might eventually appeal or take some legal action in case your claim is successful. Could this eventually slow down the whole process in your mind? And then I have another question. A few weeks ago, we read on press about Banks operating in Romania being possibly fined on rubber fixing. I haven't seen anything since then. I was wondering whether this could be an issue if you have taken any provisions. I don't think so. I haven't seen anything in particular, but I just wanted to hear what you have to say on this. And then finally, if I may, Michael, you stated that you expected to get the proceeds from Asperia over the next six to 12 months. Is this the reason why the capital market stays expected to be in February? Are the two things somehow linked? Thanks.

Thank you. I will start with your last question. No, there is no link. We decided to make the capital market stay. Based on the figures 2026, we can show you here also already the steps we could take forward in terms of the acquisitions. Coming back to Rasperia, if a counteraction in Russia would slow down the process in Austria, no, this would be not the case. And in general, it is unknown for us How Rasperia will oppose our claim in Austria. If in Austria they would oppose this claim, this of course could slow down the process in Austria. This could be the case, yes.

So could they appeal in Austria? Could they appeal in Vienna?

Yes, we filed a claim against Transperia in Vienna, so of course they have the right to oppose.

Let me comment on the robot and the effects of it in our P&L. Basically, the investigation has started by the Romanian Competition Council in 2022 and in May 2026 they have concluded and started investigation against all participating banks which are contributing to Robor. So from that perspective they issued a report and concluded that there was a collusion between the banks simply because based on the central bank system the quotes of each and every bank was visible to others. We are one of the banks which were contributing to Robur and part of this investigation. From our side, we have not booked any provisions and to our best knowledge, none of the banks have booked any provisions. At least I don't have any information so far that there were any provisions booked by any of the banks. This is also confirmed by our auditors simply because we are very confident and we expect to appeal this in court and we are very confident that there is no ground for such a provision.

Very clear, thanks.

Thank you. The next question is from Alexander Kanterovic from Roma Capital. Please go ahead. Just trying the line again for Alexander Kantarevich, Roma Capital. Please ensure that you are not on mute. Your line is open. No response from this line. I would like to thank you all for your questions. And if you have any more, please remember to press star 1 and 1 on your telephone keypad to place your question. The mute function on your telephone needs to be turned off so we can get your signal. As there are no further questions at this time, we will now conclude today's conference call. Thank you for your participation.