Earnings call transcript: National Bank of Greece Q2 2025 shows steady profit

National Bank of Greece (NBG) reported its second-quarter 2025 earnings, showing a stable profit after tax of €700 million, nearly unchanged from the previous year. The earnings per share (EPS) stood at €1.54, with a normalized EPS of €1.43. Despite a 9% year-on-year decline in net interest income (NII), fee income grew by 14%. The bank upgraded its full-year return on tangible equity (ROTE) guidance to over 15%. The stock, currently trading at $13.64, has delivered an impressive 62.36% return year-to-date. According to InvestingPro analysis, the bank appears slightly overvalued at current levels.

Key Takeaways

• Profit after tax remained flat at €700 million year-on-year.
• Fee income increased by 14%, offsetting a 9% decline in NII.
• Upgraded full-year ROTE guidance to more than 15%.
• Continued investment in digital infrastructure and workforce rejuvenation.
• Exploring potential mergers and acquisitions in adjacent markets.

Company Performance

National Bank of Greece demonstrated resilience in Q2 2025, maintaining steady profitability despite challenges in net interest income. The bank’s strategic focus on fee income and digital transformation initiatives contributed positively to its performance. The Greek economy’s growth, coupled with low unemployment rates, provided a supportive backdrop.

Financial Highlights

• Profit after tax: €700 million (flat year-on-year)
• Earnings per share: €1.54 (normalized €1.43)
• Net interest income: declined 9% year-on-year
• Fee income: increased 14% year-on-year
• Cost to income ratio: 32.5% (normalized)

Outlook & Guidance

NBG has upgraded its full-year ROTE guidance to over 15% and EPS guidance to €1.4. The bank anticipates a continued 9% decline in NII year-on-year. It also hinted at a potential interim dividend in Q4 2025 and is exploring M&A opportunities in adjacent markets.

Executive Commentary

CEO Pablo Milonas highlighted the bank’s adaptability and resilience, stating, "We have demonstrated for yet another quarter the adaptability and resilience of our business model." CFO Christos Christosulu emphasized the bank’s strong capital position, saying, "Our capital buffers remain a key comparative advantage."

Risks and Challenges

• Continued decline in net interest income could pressure margins.
• Macroeconomic uncertainties in Europe may impact growth.
• Potential regulatory changes could affect operational strategies.
• Competition in the Greek banking sector remains intense.
• Execution risks in digital transformation and M&A activities.

Q&A

During the earnings call, analysts inquired about the potential for additional rate cuts in September, which the bank confirmed. Questions also focused on the bank’s NII sensitivity and its strategy for syndicated loans, primarily in Europe. NBG is exploring domestic M&A opportunities to bolster its market position.

Full transcript - Etem (ETE) Q2 2025:

Conference Operator, Chorus Call: Ladies and gentlemen, thank you for standing by. I am Jota, your Chorus Call operator. Welcome, and thank you for joining the National Bank of Greece conference call to present and discuss the second quarter twenty twenty five financial 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.

At this time, I would like to turn the conference over to Mr. Pablo Milonas, CEO of National Bank of Greece. Mr. Milonas, you may now proceed.

Pablo Milonas, CEO, National Bank of Greece: Good morning, everyone. Welcome to our second quarter twenty twenty five financial results call. I’m joined by Frisos Christosulu, the Group CFO Greg Papazlores, Group Head of IR. After my introductory remarks, Fristos will go into more detail on our financial performance, and then we’ll turn to Q and A. As usual, and before I turn to our second quarter financial results, I will briefly refer to Greece’s sustained economic resilience, which requires increased significance in the current turbulent external environment.

The main takeaway is that Greece’s economy remains on a steady growth trajectory with leading indicators suggesting continued growth momentum. Let’s review the main drivers. As regards household, robust labor market conditions support household income and consumption. Specifically, the unemployment rate is at a fifteen year low, dropping below the 8% mark. If you recall, the unemployment rate even in the years before, after we entered into the Euro area, was around 7.5.

So we’re near historic lows. Wage increases are in the mid single digits, double the rate of inflation. So they’re real wage gains. Wealth is increasing rapidly, especially housing wealth through valuation gains, but also through the accumulation of financial assets. On the corporate side, activity remains solid with business investment headed to an all time high.

The drivers behind this performance reflect high capacity utilization rates, while new industrial orders are near a thirty year high. Corporate profitability is also at a multiyear peak and is combined with very strong credit expansion. Credit expansion to corporate is 6x the pace of that in the Euro area. This stimulus is set to continue as market conditions are increasingly supportive with the benchmark rates currently 200 basis points below their mid-twenty 24 levels. And additional boost activity is coming from fiscal policy.

RF funds and other public investments are running at the pace of 6% of GDP. Moreover, RF funds entering the economy expected to be around 20,000,000,000 between now and 2027 and 2028. Furthermore, the operational budget, I. E, the budget excluding capital spending, is also likely to loosen in 2025 versus 2024 given the past year’s primary balance surplus of nearly 5% of GDP. Preliminary indications are there could be tax deductions to the middle class, but that’s yet to be determined.

Lastly, as regards external demand, tourism revenues is back on track and at new highs with both volumes and most importantly, up. Also, good exports have held up well, up around 7% in volume terms despite global uncertainties. I think that you will agree the above describes a quite resilient economy. And in fact, we expect GDP to grow at a pace above 2%, exceeding the year average by more than 2x. Now let me turn to our financial results.

Despite sharply lower interest rates in the first half of the year, we continued to deliver a strong performance. In fact, it has provided us the confidence to upgrade several metrics of our 2025 guidance. Key headlines of performance comprise our profit after tax of $700,000,000 which was practically flat year on year. Moreover, normalized return on tangible equity was 16.3% despite our large capital buffers, I. A very large denominator.

This strong result was mainly due to our resilient income, which reflects the strength of our balance sheet. Three drivers are worth specific mention. First, the impressive pickup in credit expansion in the second quarter, which led our performing exposure to expand by 1,500,000,000.0 in the first half of the year, combined with a strong pipeline of corporate disbursements approved but not yet dispersed, allows us to revise our full year 2025 performing exposure expansion guidance to greater than €2,500,000,000 versus our previous greater than €2,000,000,000 Second, thing worth mentioning. The NII decline in the high single digits is fully aligned with our full year 2025 guidance as our projection for market rate was validated, 150 basis points down year on year in the first versus the 2024. Again, as guided, the rate effect was partially offset by the strong loan expansion, by higher contribution from our structural hedges and by gradual increase in pass through on our time deposits.

Third factor, fees are outperforming our full year 2025 guidance of 7% to 8%. Indeed, adjusting for the safe measures, they grew at an impressive 14% year on year. Notable support comes from investment products, credit origination, deposits and card fees. On the cost side, we continued investing in human capital, rewarding our people with fair increases in remuneration while onboarding new talent so as to rejuvenate our workforce. Our emphasis on being technological and digital leaders continues unabated.

The completion of the replacement of our core banking system, which provides us with significant competitive advantages in speed and efficiency is expected in the 2026 on time and on budget after five years of hard work. As regards credit quality, we continued on our prudent provisioning strategy with the cost of risk dropping to 40 basis points in the second quarter, a direct reflection of benign formation trends and high coverages across all stages, even by European standards. This allows us to revise our guidance positively on this metric as well. These results, I’m sure you agree, are supportive of our fiscal year twenty twenty five guidance and have allowed us to revise upwards key metrics, several already mentioned, but also, and most importantly, our return on tangible equity for this year to greater than 15% from greater than 13% previously as well as our EPS expectation to about EUR 1.4 from previously EUR 1.3. A few words on the key comparative strength of NDG, our capital buffers.

They continue to strengthen in the second quarter of twenty twenty five with our CET1 ratio increasing by 20 basis points quarter on quarter to nearly 19% following the absorption of a 60% payout accrual, the accelerated DTC amortization and the strong credit growth for the quarter. Our confidence in our capital accrual and following our commitments to shareholders, we target to frontload 2025 distributions in fourth quarter twenty twenty five by distributing about onethree of our payout in the form of an interim dividend, of course, subject to the approval of the regulator. Our CET1 ratio currently stands nearly five percentage points above our internal target of 14%, underscoring a disciplined approach to our capital allocation strategy. Our emphasis is clearly to increase shareholder remuneration through higher and front loaded payouts, while at the same time to maintain our medium term strategic optionality. To close, we have demonstrated for yet another quarter the adaptability and resilience of our business model, capitalizing on the strength and resilience of our balance sheet to deliver a set of results, which has allowed us to upgrade our main full year 2025 targets.

We are confident that the allocation of our excess capital will push our performance and our shareholders’ returns to new levels, setting NBG further apart from our competition. With that, I would like to pass the floor to our group CFO, Christos, who will provide additional insight to our financial performance before we turn to Q and A. Christos, over to you. Thank you, Bob. I will start with the key highlights of our profitability on Slide 14.

For the 2025, we delivered a strong set of results that we affirm on full year guidance, creating upside potential across multiple KPIs. Income resilience, despite lower benchmark rates, produced a profit after tax of €700,000,000 nearly flat year on year. This translates into a return on tangible equity of 17.5% before adjusting for excess capital or 16.3% normalized for the strong H1 trading gains, standing well above our original full year ’twenty five guidance of over 13%, which is now upgraded to over 15% as disclosed on our guidance update on Slide 11. From a earnings per share perspective, we generated an EPS of EUR 1.54 or EUR 1.43 on a normalized basis, leading to an upgrade of our full year EPS guidance to circa €1.4 from €1.3 previously. Going into more detail, our net interest income was down 3% quarter on quarter and 9% year on year, a trend in line with our guidance, reflecting the sharp reduction of the average three month LIBOR as illustrated on Slide 18.

Accelerated performing loan expansion of €1,200,000,000 in the second quarter resulted to a net expansion of CHF 1,500,000,000.0 year to date in H1 ’twenty five, partially mitigating the impact of lower benchmark rates on our net interest income. Moreover, an increasing contribution from deposit hedges and the gradual pickup in the pace of time deposit repricing added further support as illustrated on Slide 18 to 20. As a result, our funding cost dropped further in Q2 by six basis points, reaching 65 basis points, the lowest in the Greek market, while our H1 ’twenty five net interest margin settled at two eighty seven basis points, supporting our full year ’twenty five target of two eighty basis points. Fee momentum increased and accelerated in the second quarter, resulting to an H1 ’twenty five growth of 8% year on year on a reported basis or 14% excluding the impact from state measures on payments with strong performance across core businesses, as shown on Slide 23. Retail fees increased by 16% year on year on a like for like basis, driven primarily by fees from investment products surging by 66% year on year as we continue to gain market share in fee generated in finance under management as a result of our successful cross selling strategy, while deposit and card related fees also grew in the double digits.

Notably, our market share in bond mutual funds has increased by nearly seven percentage points year on year and two percentage points year to date, leveraging the propensity of time depositors to switch towards mutual funds, which drove our retail funds under management by circa €2,000,000,000 year on year to nearly €8,000,000,000 as shown on Slide eight. Corporate fees also delivered solid growth, up 13% year on year, led by lending fees, which increased by nearly 40% on the back of accelerating new production volumes. Moving to operating expenses on Slide 24. Costs were up by 7% year on year, up 5%, normalizing for variable pay accruals in the 2024 and the benefit from delayed exits from our December voluntary exit program expected to fully materialize by year end ’twenty five. Our cost to income ratio stood at 32.5% after normalizing for our high trading gains, well inside our full year ’twenty five guidance of circa 35%, reflecting our top line resilience.

The trends in OpEx reflect our ongoing investment in human capital through variable remuneration and the onboarding of new talent and skills as well as our class leading investments in IT and digital infrastructure. The latter includes the replacement of our core banking system, a transformative initiative for NBG underpinning our strategy to enhance efficiency, product quality and client experience. As regards credit risk, the continued absence of net NPE flows and high provision coverage across stages by European standards allowed our cost of risk to settle at 40 basis points in the second quarter, displaying gradual normalization and linked volatility. As a result, cost of risk for the 2025 came in at 43 basis points, triggering an upgrade in our full year guidance to below 45 basis points from less than 50 basis points previously. Our strong profitability enhanced our capital buffers, comfortably absorbing our 60% payout accrual, the accelerated DTC amortization and the pickup in credit expansion in the second quarter of the year.

As shown on Slide 16, our CET1 ratio increased by circa 60 basis points year to date to 18.9%, with a total capital ratio of 21.7%, while our MREL ratio of 28.4% comfortably exceeds the final target of 26.8%. Our strong capital buffers, nearly 500 basis points above our internal target, provide us with a unique strategic optionality for incremental shareholder remuneration and further value enhancement. In this context, we intend to proceed with an interim dividend of approximately onethree of the 2025 payout in Q4 ’twenty five subject to regulatory approval. Echoing the message conveyed by Pablo’s, increasing our short term shareholder remuneration through higher and front loaded payout does not come at the expense of maintaining our medium term strategic optionality, which includes incremental return of capital to our investors as well as assessing growth opportunities via bolt on acquisitions in adjacent markets and value accretive M and A. Now let me walk you through the highlights of our balance sheet summarized on Slide 15.

Our performing loan book was up by a solid 12% year on year in H1 ’twenty five and up by €1,500,000,000 year to date, comparing favorably to our full year ’twenty five trade expansion target, which is now upgraded to over €2,500,000,000 from over €2,200,000,000 previously as disclosed on Slide 11. This revision factors in a strong corporate pipeline for the remainder of the year, while on the retail side, performing loans are already growing in the low single digits in H1 ’twenty five. Disbursements in the second quarter accelerated to CHF 2,400,000,000.0, totaling DKK 4,000,000,000 for the six month period, driven by corporates allocated across key sectors of the Greek economy. This includes energy with emphasis on renewables, hotels, shipping, live manufacturing and transportation. Retail disbursements continue to gain momentum, increasing by nine percent year on year to DKK 800,000,000.0 in H1 ’twenty five, as shown on Slide 19.

On the liability side, deposits returned and resumed an upward trend in the second quarter of the year, with balances ending up 1,200,000,000.0 higher year on year after adjusting for DKK 1,000,000,000 of EFCA deposits transferred to Bank of Greece on July 1. As illustrated on Slide 20, the increase reflected obtained inflows from low cost saving accounts and the absence of further corporate deposit optimization in the second quarter. Our unique deposit mix with core deposits at 80% of the total stock, the pickup in the pricing of time deposits with a pass through of circa 30% against the year end target of around 50% as well as higher income generation from deposit hedges up to offset increasingly the rate induced pressure in our net interest income. Our leading liquidity and funding position is further illustrated on Slide 22. With deposits comprising circa 95% of our total funding, We maintained the lowest funding cost increase, as already mentioned, while our liquidity coverage ratio of 248% is among the strongest in Europe, complemented by a loan to deposit ratio of 63%.

Turning to asset quality on Slides 25 to 27. Group NPE stock amounted to just GBP 900,000,000.0 in Q2 ’twenty five on the back of benign asset quality trends, translating into an NPE ratio of 2.5%, down 10 basis points quarter on quarter and in line with our full year target. Importantly, our leading coverage levers across stages by European standards provide cushion, showcasing another strength and a comparative advantage of NBG’s balance sheet. Concluding, in the 2025, we delivered strong profitability and a return on tangible equity of over 16% despite sharply lower interest rates, allowing us to upgrade our return on tangible target of the for the year to over 15% from 15% previously. This performance demonstrates the strength and the resilience of our business model and the disciplined execution of our strategy, laying a solid foundation for sustained value creation for our shareholders.

Our capital partners remain a key comparative advantage, denoting our capacity for increasing distributions while providing flexibility for capturing incremental organic value adding opportunities. It is important to highlight that our excess capital utilization strategy adds value to our shareholders across all NDSA scenarios. As we move into the second half of the year, we remain focused on executing our priorities with the same discipline and commitment. And with that, I would like to open the floor for questions.

Conference Operator, Chorus Call: Question may press star 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. The first question comes from the line of Kermene Kabol with Autonomous Research.

Please go ahead.

Kermene Kabol, Analyst, Autonomous Research: Good morning. Thank you for the presentation. My first question would be on NII, where your guidance remains unchanged. I believe this would leave room for some incremental NII decline in the second half. Would you expect NII to stabilize here in the coming quarters, or or do you see room for further decline?

And that’s my first question, please. And then secondly, thanks very much for providing your your new slide on the capital deployment. My question here, firstly, on the 60% plus payout, do you see any possible movement in the 25 distribution and or is the 60 plus Is it more of a reference for the for the coming years? And then you flagged up very attractive m and a as one deployment option. Can you talk a bit about your priorities and your and your current pipeline?

Thank you.

Pablo Milonas, CEO, National Bank of Greece: So I’ll take the first question on NII. Indeed, in our past towards the end of the year, we assume that there will be another rate cut in September. So if that materializes, our expectation is that there will be a slight decline in our NII in the following quarter and flat 20 from there onwards. That provides us with the confidence to guide for the 9% year on year decline on NII towards the end of the year. Now obviously, our guidance on increased loan expansion versus the original one as well as any upside, let’s say, on the benchmark rate going forward will provide some upside risk, but most of that benefit will not be materializing this year.

It’s something that will probably benefit next year’s NII. So slight decrease in the next quarter and then continuing from there onwards until the end of the year. Pablo will answer the second question. Okay. On the as you noted on Page 12, we have outlined our capital allocation strategy.

What we haven’t put in here and is difficult to describe to you is timing, okay? For now, we have the 60% payout for 2025. We plan to increase it, but this requires discussions with the regulator. But that is the objective, to increase payouts. Now on the other items on the list, clearly, want to increase earnings organically or not organically.

We mentioned here the international syndications. We mentioned the reperforming assets, which are sort of in between organic and inorganic. And then we have the clear plain vanilla inorganic. Here, we’re looking at transactions which would be value accretive, and they need to be transformational either in terms of their size, in terms of the business, I. E, digital, whether it’s an adjacent market.

We have shown over time that we are we have the patience, and we will not do anything to destroy value. So again, timing is you always want to know about timing. Unfortunately, these type of transactions, timing is difficult to commit to. So I hopefully, that gives you the the direction of travel. Unfortunately, we cannot give you much more on the on the timing.

Kermene Kabol, Analyst, Autonomous Research: That that that’s very helpful. Thank you. Just one small follow-up on the on the payout comment. So you are saying that you might increase it to pay the payout above 60% this year if I mean, from ’25, if your discussions with the ECB moved in that direction? Is this

Pablo Milonas, CEO, National Bank of Greece: a fair Can I alright? Let’s let’s rediscuss this in the next call.

Kermene Kabol, Analyst, Autonomous Research: Okay. Okay. Thank you.

Conference Operator, Chorus Call: The next question comes from the line of with Ambrosia Capital. Please go ahead.

Pablo Milonas, CEO, National Bank of Greece: Hello, many. Thanks for your time. Two on my side. One, trading income has been strong for your peer yesterday as well, but for you as well. Just wanted to get some color if you can on the drivers and what’s the outlook for the rest of the year.

And then apologies if I missed it. Will the q four interim dividend be all in cash? And related to that, any color on how you’re late to start on mix of the distribution going forward? Thank you. So I’ll take again the first question on trading income.

We did have a very nice run with regards to trading income, especially in the first quarter. The main driver of profitability there has to do with some rebalancing on our bond portfolio. And also, tried to optimize a bit on the stimulus of the interest rate, which effectively justifies this very healthy result so far. As we also said in during roadshows in the past few weeks, we don’t expect an equally strong second half of the year. But nevertheless, we’re very happy with the results that we’ve achieved so far in the first seven months of the year.

Okay. The interim dividend will be only in cash. Now going forward, the split between cash and buybacks is to be determined. We will maintain buybacks as long as the as the price of the share is makes it attractive. Thank you.

Conference Operator, Chorus Call: The next question comes from the line of Utkov Mikhail with Goldman Sachs. Please go ahead.

Pablo Milonas, CEO, National Bank of Greece: Good day. Thank you very much for the conference call. I have a few questions. Firstly, one first on a technical one on performing loans growth. So if I look at the slide 19, the year to date growth, the expected one would be 0.8 as it’s seen on the left chart, but the net credit expansion is 1.5.

So what’s driving the difference? Like, where is what of 700,000,000.0 between these two numbers? That’s a first technical question. The other one, as we look in 02/1926, as far as I recall, your guidance is based on policy rate of 2%. Can you give us some sensitivity of your NII to 25 bps cut?

And also, assuming that rates go lower, how do you see do you feel confident in 2026 guidance on NII? And lastly, maybe could you give any color? Is there any progress on syndicated loans and which countries you consider? Is it Europe or beyond? Thank you very much.

Okay. Let me take the questions. So first of all, the brief, let’s say, from the credit expansion of 1,500,000,000.0 to 800,000,000.0 as as you very well pointed out, effectively, you have to do with two things. The first one is the the foreign exchange, especially on U. S.

Dollar shipping exposures. And the other one is something that we also discussed in the first quarter with us. We had contingent a deferred consideration for the transaction that we executed a few years ago. That was repaid in the first half of the year, and that explains the reduction the extra deduction to ESS. Now with regards to NII and our expectations on policy rate, current guidance is assuming that there will be another rate cut in September.

So our base case is 1.75% of deposit facility rate for this year. Given this point of reference, our sensitivity to a falling rate is €35,000,000 for every 25 basis points. You asked whether the rates go further down. I would say that if the rates move below 1.5%, which is not the base case expectation at the moment, we would expect the sensitivity to go slightly up. That’s because we don’t expect the repricing on time deposits to continue with the same pace if rates go up low.

Obviously, as we discussed before, a key supporting item for NII growth going forward is growth, which is coming in stronger than expected. And also other elements of supporting NII have to do with refinancing of our MREL stock at the moment as well as the continued repricing of our time deposits, which is, as we said, picking up compared to the first quarter of the year. The third question, Markus will take. Okay. On the syndicated loan, it is almost all in Europe.

The risk appetite framework allows exceptionally a small amount outside Europe. We’ll see if that changes going down the road, but for the moment, it is mostly European exposure. Good. Thank you very much for the answers. Very helpful.

Conference Operator, Chorus Call: The next question comes from the line of Nelly Simon with Citibank. Please go ahead.

Pablo Milonas, CEO, National Bank of Greece: Oh oh, hi. Thanks very much for the opportunity. I just have a quick question on the capital lock. So I I see that the core tier one increased by over €200,000,000 in the quarter, but 40% of your profit would have been, like, 120,000,000. So can you tell me what’s driving the better increasing of the quarter, one capital over the quarter?

There are two elements that supporting that supported the capital in addition to profits. One of them was the fair value gains on our target to collect and share portfolio. So that was around 10 basis points for the quarter. And the second one had to do with the closing of the transaction we had from Tier three. If you remember, the last securitization of our NPEs.

So closing of that released another 10 basis points also for our capital. So that’s the two elements that support the profitability. Got it. Thanks. Thanks very much.

Conference Operator, Chorus Call: We have another question from the line of

Pablo Milonas, CEO, National Bank of Greece: Would you please just share any comments on what drove this decision already this year? And and whether, yeah, we can see that repeat in in the coming period? And then secondly, just if you could please clarify the one off this quarter. It seems like there has been positive gains, and I see there is a MBG Egypt branch recycling. If you could please clarify what that was, that would be very helpful.

Thank you. Start with the second question, Shalim. So with regards to one of other than the FX recycling on Cairo branch, We discussed also in previous quarters that we our intention is to close that branch. So we’re trying to recycle FX losses that we had in our FX reserves to P and S. So that’s it.

And the other one was closing of transact of an N and P transaction that benefited a bit the P and L. So we reorganized that as a one off. That’s it. There’s nothing new other than this in our one offs. Okay.

On the second one, the interim dividend is a request from investors. So we responded positively. And if it could could be done in the future, yes, I think it could be done definitely in the future. Okay. Very great.

Thanks very much.

Conference Operator, Chorus Call: We have another question from the line of Dmitry with Jefferies. Please go ahead.

Pablo Milonas, CEO, National Bank of Greece: Hi. Just two questions for me. So just on the transformation program and the new core banking platform, can you maybe just expand a little bit on how you have a competitive advantage of your peers in that regard? And secondly, can you just elaborate a little bit more on some of the digital partnerships and strategic partnerships you’ve entered more recently and just kind of the profit or progress that you’re seeing there? Okay.

On the tech transformation, I think, first of all, I want to remind you that we started early on changing all our IT, both core as well as peripheral systems going back four, five years ago. We are near the end of that journey, having spent, I think, about €100,000,000 more than our peers per year. It is leading to us moving up on digital from being the country laggard to being among top European banks as per international benchmarking. On the core specifically, it’s a painful process to do. It gives us great flexibility.

We can introduce products in a matter of days versus previously, which took months. It is more efficient as well in terms of how much it costs us. And it it is also providing a better cloud capability. So it is, I think, I can put it this way, it is it is something that all banks will have to do in Europe. And here, we’re almost at the end of this of this of this difficult road, not just in terms of of costs, etcetera, but in terms of operational risk.

So it is going to be a great relief to be for this to be done. In terms of the partnerships, these are mostly there are two types of partnerships that we have. One is adjacent market partnership, which is the Epsilon Net, an ERP for small businesses that allows us access to these small businesses, and there are about over 100,000 of them who are customers of Epsilon net. The other one was NBG Pay with Global Payments. That’s a JV, NBG Pay.

And there, it’s a question of not being able to be experts in tech everywhere, and we are piggybacking on Global Payments’ expertise in acquiring business to relieve us and to push us having the best acquiring features and functionalities. So those are two. A third one is the another one in adjacent market. We’re in the real estate business. We’ll have a platform which is putting on some of our own and some of our partners’ real estate assets as end to end platform from purchasing either directly or through auction, all the way to everything to refurbishing insurance, etcetera.

So it’s an end to end real estate platform, which I think is timely in in in view of the housing crunch that exists in Greece currently. I think that’s that’s it for the the three main ones.

Conference Operator, Chorus Call: We have a follow-up question from the line of Nelly Simon with Citibank. Please go ahead.

Pablo Milonas, CEO, National Bank of Greece: No. Hi. Just one follow-up. I was wondering what the nature of the 9,000,000 other impairment was? And then maybe a more strategic question.

I mean, this new IT system that you have, I assume it’s scalable. Other banks have to do something similar at some point, and you have a lot of capital. Would you consider domestic m and a? And do you see the opportunities coming in the future? Richard, you take the first one on the line.

Or else you want me to go first? I’ll go first. Okay. Absolutely right on the scalability and the competitive advantage. I think you’ve heard me say before that though we’re finding difficulty in cross border, finding value in cross border M and A, the if there are banks that have not done their homework on their core banking systems, We will have a new expandable core bank system that gives us the an advantage there.

So yes, definitely, is something that we will have. That was it, yes? So on the second one, that’s a few minor things that sum up to 8,000,000, 9,000,000 that has to do with this year provisions on government bonds as well as some others on state guaranteed loans. So that’s it. There’s nothing big there.

The

Conference Operator, Chorus Call: next question comes from the line of Novo Selsky Elijah with Bank of America. Please go ahead.

Pablo Milonas, CEO, National Bank of Greece: Hi. Hi. Just one quick question. One of your peers yesterday said that in the second half, they’ll they’ll have some extra provisioning on step up mortgages, and they have some on Swiss franc mortgages. So are you going to have something similar?

And are there any other cost of risk or other types of one off that we should know about for the second half? Thank you. Let me give you the the quick answer, and Christian will give you some some more details. Very little Swiss franc exposure, And it’s all well performing, so I don’t think there’s going be any issue there. And on the step ups, that was we’ve dealt with those type of products a long time ago.

So there’s we don’t have any issues on that. Yes. So there’s nothing more to say. Our balances on CHF loans are very low. And those that we have are performing nicely.

So any legislative intervention on this would not have any impact for us. And with regard to step ups, as Pablo said, many years ago, four, five years ago, we took care of that issue. So again, we don’t have material balances with regards to step ups at this stage in time. So you should not expect any volatility on our cost of risk going forward. I think I made that clear also in my remarks.

And that’s why we’ve revised, upgraded our guidance with regard to cost of risk from less than 50 basis points to less than 45 basis points. The asset quality trends that we see and obviously, the capital and provisioning process that we have in our balance sheet makes us very confident with regards to what’s expected to come. And with upside risk also to be expected rather than downside

Conference Operator, Chorus Call: Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Milona for any closing comments. Thank you.

Pablo Milonas, CEO, National Bank of Greece: Thank you all for participating on the call. As usual, we’ll be on standby despite the end of the month, the coming of the summer holiday, we’ll be ready for any of your of your questions. And with that, let me take the opportunity to wish all of you a good and relaxing holidays, and we’ll see you all in September.

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

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