Ladies and gentlemen, welcome to the Emirates NBD 2022 second quarter results call and webcast for analysts and investors. Today's call is being recorded. Please note that this call is open to analysts and investors only. Any media personnel should disconnect immediately. I will now pass the call over to our host, Mr. Shayne Nelson, Group CEO of Emirates NBD. Thank you, Alex, and welcome to our results call. First of all, I'll touch on the operating environment within our footprint. Over the last six months, we have seen many economies return to the new normal, learning to live with COVID. Inflation has re-emerged, driven by pent-up consumer demand, with the conflict in Ukraine exacerbating the rise in food and energy costs. As inflation reached multi-decade highs, central banks have increased global interest rates at a faster pace than it was expected just a few months ago. The Federal Reserve has already raised rates by 225 basis points and is expected to increase rates by another 150 basis points before year-end. Further rate rises are becoming a fine balancing act between fighting inflation and avoiding the risk of recession. For the UAE and the GCC, higher oil prices will push budgets into surplus and reduce the need for sovereign debt issuance this year. Central bank statistics show that the UAE's economy expanded by 8.2% year-on-year in the first quarter of 2022, led by higher oil production and strong 6% growth from the non-oil sector as the country benefited from increased travel and tourism, coupled with the positive impact of Expo 2020. Inflation in the UAE has increased but remains below the rates seen in many other economies. Egypt and Turkey have seen a strong surge in services inflow and tourism revenue as global travel resumed, which is offsetting some of the impact from rising energy costs and the current account deficit. Against this background, I'm very pleased to report that our profit jumped 50% to AED 7.2 billion before a new Turkey-related inflation adjustment. More on that from Patrick shortly. Some of the key highlights during the first half are all 5 business units delivered an increase in profit before tax, demonstrating that the Group's diversified business model continues to deliver. The fully digital IPO platform was rapidly delivered and provides a seamless paperless solution for onboarding to subscription and payment. This has proved a great success in both the recent DEWA and TECOM IPOs and underlines our credentials and value add in the equity capital markets. Lending grew by 1% in the first half, with new lending growth quite strong. Key sectors include manufacturing, trade, transport, and communications. Utilities and personal lending all delivered strong growth, which was more than offset in sovereign lending. This retail and renewed commercial growth reflects a more optimistic economic confidence across a broad range of sectors. Higher interest rates are now feeding through to margins. Given the expectation of further rate hikes, coupled with widening margins at DenizBank, we raised our margin guidance by 50 basis points. This has enabled us to accelerate our investment in digital and our international operations. Asset quality improved in the first half, and a lower cost of risk reflects a stronger economic environment. We've seen a healthy level of write-backs and recoveries. It is particularly pleasing to see strong recoveries in Turkey, helped by very strong demand for property. The group's strong results and solid balance sheet helped secure a Moody's upgrade of the bank's short-term, long-term, and base credit ratings. This upgrade is even more pleasing given the challenging global conditions. On the back of our digital transformation, we have significantly increased the number of customer interactions performed without any human intervention. 93% of new product or servicing requests are now fully automated, and this 5% improvement on last year has eliminated 4 million manual interventions annually. I'll now hand you over to Patrick to go through the results in some more detail. Patrick? Thank you, Shayne, and a very good afternoon to all of you. Let me start with the usual summary financials for H1 on page 4. On this page, we thought it would be more helpful to present the group results for H1 together with ENBD and Deniz on one page, so you can more easily see the drivers of earnings. Just running down the numbers. Total income, total H1 income of AED 14.2 billion was up 23% year-on-year. Within that, both NII and NFI are up. As you can see, Deniz Bank was particularly strong relative to H1 last year, up 42% year-on-year despite FX depreciation. Interest margins in both ENBD and Deniz have widened significantly, and in a moment I'll update the NIM guidance. Non-funded income was up 40% year-on-year, helped by strong customer FX and interest rate hedging, volume growth in both ENBD and DenizBank, and wider transaction margins in Turkey, and hedging gains on DenizBank's balance sheet. Costs increased 8% year-on-year, supporting very strong business volume growth, particularly in retail and as we accelerate our investment for the future, including, as Shayne mentioned, our international network and digital capabilities. The cost-income ratio at just under 29% remains well within the 33% long-term guidance. Impairment allowances are down 28% year-on-year, reflecting the improving operating environment and strong recoveries in the UAE as well as Turkey, especially in the property sector, which is now in high demand in Turkey. The tax charge has stepped up on the back of strong earnings in Turkey, while the effective tax rate remains fairly stable. That gives us a very strong H1 profit after tax of AED 7.2 billion, up 50%. Finally, the new hyperinflation adjustment for Turkey takes AED 1.9 billion of H1 earnings. Just to be clear up front, this is a non-cash notional charge and is fully offset by a credit to equity via OCI, so capital neutral. That gives us a final profit number of AED 5.3 billion, up 11% for the first half. Touching on the Q2 picture on the next page, yes, particularly strong income. NII lifted from rate rises that started in Q1 coming through into Q2 and NFI growth from increased business volumes and 2021 Deniz mark-to-market gain reversals not recurring in Q2 2022. This has boosted the profit to AED 3.5 billion, up by 42% year-on-year and 28% quarter-on-quarter, despite the new hyperinflation charge in Turkey. In the bottom summary table, you can see the balance sheet metrics are in good shape, with assets up 3%, deposits up 2%, capital and liquidity ratios strong, and the NPL ratio improving, supported by strong recoveries. Now turning to net interest income on Slide 6. The bottom chart shows that margins in Q2 improved by 65 basis points year-on-year, and the first half NIM up 41 basis points year-on-year, helped by improving loan yields at Emirates NBD and wider margins on new lending at DenizBank. As Shayne mentioned earlier, global interest rates have risen more quickly than was expected even a few months ago. As a result of this and improving margins at DenizBank, we have revised our full-year NIM guidance up by 50 basis points to 3.2%-3.3%. This includes total rate rises of 375 basis points this full year, so 150 basis points more after the Fed announcement yesterday. This guidance also factors in some offsets applied to loan pricing, reflecting the competitive market landscape. On Slide 7, we see that gross lending increased 1% during the first half, with EI's lending growing by AED 5 billion or 11%, retail also growing by AED 5 billion or 8%, and DenizBank delivering 26% loan growth in local currency. We saw strong new lending in the first half in retail and renewed commercial loan growth across a broad range of key sectors, reflecting increased economic confidence, which more than offset a reduction in sovereign lending. We witnessed a small drop in CASA balances in Q2, with retail CASA continuing to grow and partially offsetting a drop in corporate CASA. This was expected, and we had guided at the beginning of the year that some corporate CASA may move to fixed deposits as interest rates increase. It also reflects encouraging signs that corporates are rebuilding inventory and increasing investment. The transition to term deposits so far has been modest, reflecting strong liquidity in the UAE banking sector, and CASA remains at a healthy 62% of group, total group deposits. The bottom right chart shows the progress we're making in improving the diversification of the loan book across product and geography. On Slide 8, the NPL ratio improved by 0.3% to 6.1%, helped by strong write-back and recoveries in both the UAE and Turkey. The annualized net cost of risk for H1 of 79 basis points is below guidance and well below the 124 basis point costs for 2021, reflecting the improving economic environment. Coverage rose by 5% to just over 133%. The chart on the bottom left there shows that Stage one coverage is broadly stable. Stage two and three ECL allowances increased, increasing the Stage two and three coverage to a very strong 23.5% and 95% respectively. Now, just before I hand over to Paddy, I thought I would provide some further detail on the Turkish hyperinflation adjustment. I have included a slide in the appendix, so perhaps let's just jump to Slide 14 for a moment. I guess there's a generation that has not really seen the higher levels of inflation that are being experienced in many parts of the world today, let alone hyperinflation, but that is now today's reality in Turkey. Turkey has registered more than 100% inflation over the last 3 years, and as such, it triggers hyperinflation accounting for our group IFRS accounts. In super simple terms, there are really two parts to this. Firstly, DenizBank's non-monetary assets and liabilities like property are adjusted by index inflation rates to the extent recoverable to approximately what the current purchase cost would be in today's money. For a bank, that is a relatively smaller part of the balance sheet and the overall adjustment. Secondly, a bank has mostly monetary assets and liabilities. These are already at their current measuring unit, but they have lost their purchasing power. We don't adjust the monetary items on the balance sheet, but we do book a charge to P&L and a corresponding credit to equity via OCI. It really is a notional non-cash representation of the loss of purchasing power of the net monetary item. Given the offset in equity to this charge, it is capital neutral. The table on the right side shows the Deniz Bank's profit movements year-on-year before and after the hyperinflation adjustment. Current earnings after covering this adjustment, but actually the reason they are down by half is the FX translation from Turkish lira to AED, which is down 49% year-on-year. Earnings would have been around AED 0.9 billion if using the prior year rate. I'll now hand you over to Paddy to take you through the remaining slides. Thanks very much, Patrick. If we go back to slide 9 on non-funded income, we see that fee and commission income was up 11% year-on-year in the second quarter, mainly from increased local and international retail card business at both ENBD and DenizBank and strong investment banking revenue. Other operating income was up significantly due to higher retail foreign exchange volumes as customers took advantage of the strong dollar and increased remittance. A pickup in SME activity and increased flows due to the move to a Saturday-Sunday weekend. There were also strong gains from DenizBank's balance sheet hedging, and there were some mark-to-market gain reversals for DenizBank in Q2 of last year that did not recur this quarter. On slide 10, we see that costs increased 10% year-on-year. Just moving on to slide 10. We see that costs increased 10% year-over-year. Staff costs are higher as we invest in software engineers, digital specialists, and data scientists. As was mentioned previously, the higher income enables us to accelerate investment in our international network and digital capabilities. Moving to slide 11 on funding and liquidity. We see that the group continues to operate with strong liquidity with an advances-to-deposits ratio of just under 91% and an LCR well over 150%. The small drop in LCR is a function of a greater deployment of liquidity in higher yielding interbank deposits this quarter. Debt capital market issuance globally has been quiet in the first half. We issued AED 3.7 billion of term debt in H1, with DenizBank successfully rolling over and upsizing its one-year syndicated loan in June. We have AED 6.7 billion maturing in the remainder of 2022, and we remain comfortable with this given the significant excess funding issued in both 2020 and 2021. Moving to capital on slide 12. We see that the Common Equity Tier 1 ratio was stable at 15% during the first half. AED 4.8 billion of net earnings offset a 7% increase in risk-weighted assets as we experienced strong new loan growth in retail and a diverse range of corporate sectors. The Common Equity Tier 1 ratio is 14.5%, excluding the ECL regulatory add back. As Patrick explained earlier, the hyperinflation adjustment is capital neutral. Moving to divisional performance on slide 13. We see that RBWM income improved 17% year-on-year. It was a record half year for card acquisitions, fee income and balance sheet growth, helping nearly AED 5 billion lending growth and over AED 15 billion of CASA growth. ENBD and EI combined retail have close to a 30% market share of debit and credit card spend within the UAE. CIB income declined 6% year-on-year on lower lending balances. Profitability was boosted by higher fee income and lower provisions. MCAP remains very prominent in the capital markets and helped ENBD play a lead role in both the DEWA and TECOM IPOs. EI's income grew 16% year-on-year, financing and investable receivables and deposits grew by 11% and 15% respectively. Global markets and treasury net interest income jumped year-on-year on higher income from balance sheet positioning, hedging and an increase in banking book investment income. Non-funded income was substantially higher on a strong trading performance. DenizBank's income was up 42% or AED 1.4 billion and impairment allowances were AED 0.6 billion lower on strong rate backs and recoveries. This helped offset a AED 1.9 billion hyperinflation adjustment. With that, I'll pass you back to Shayne for his closing remarks. Thanks, Paddy. To summarize, these strong results and ratings upgrade demonstrate the resilience of our diversified business model and the strength of our balance sheet. The positive outlook enables us to accelerate our investment for the future, supporting our next stage for growth. With that, I'd like to turn over to Alex to open the call for questions. We know a lot of you have a hard stop at 3:00 P.M. for a competitor's call, so we will have a hard stop at 3:00 P.M. With that, Alex, please open the call for questions. Thank you. Thank you, Mr. Nelson. We will now begin the question and answer session. If you wish to ask a question, please press star one on your telephone keypad and wait for your name to be announced. If you wish to cancel your request, please press star two. To participate in our recent Q&A, just type your question into the Ask a Question text area, then click the Submit button. Once again, press star one on your telephone keypad if you wish to ask a question. Our first question for today comes from Waleed Mohsin from Goldman Sachs. Waleed, your line is now open. Yes, thank you much. Good afternoon. 3 questions quickly from my side. The first one on Turkey, and you know, acknowledging a very strong performance in the second quarter with very strong NIMs, almost top 200 basis points quarter-on-quarter. A net write back. I was just wondering, the second half macro outlook, at least for Turkey, looks very challenging. You know, given where inflation is, but deposit rates are less than 20%, and there are a number of dollar maturities for bonds falling due for different banks, other banks in the sector. So just want to get your thoughts on what you think is a more sustainable net interest margin for DenizBank as deposit rates continue to move up. What do you think would be a more sustainable cost of risk, for DenizBank? Any comments on how you plan to navigate the more challenging second half macro in Turkey would be very useful. That was my first question. Then two very quick questions. One on cost income ratio. We see that you haven't upgraded your guidance on that front. Just wanted to get your thoughts on if you're missing something in terms of the upgrade to your cost income guidance. Then lastly, loan growth. What opportunities do you see currently in the local market, especially on the corporate side? Thank you. Thanks. Thanks, Waleed. It's Patrick here. Just on Turkey, just on the sustainability of margins and the cost of risk. Just first of all, on the cost of risk. Turkey did benefit in Q2 from some quite strong recoveries. Their non-performing loans has dropped down. If I had to pick out a sector in particular, it was the you know, the property sector, where there has been a lot of strong international demand for property. So anything that was in the non-performing loan category and secured by property, we're seeing some good realizations there. The overall NIM guidance, we haven't actually changed from 100-124, but if we continue to see good progress like that, I would hope it would be towards the lower end of that guidance. Obviously, quarter to quarter, you can get. You have retail low cost of risk coming through, and then you have your corporate new non-performing loans, often offset by recoveries as well. It's never gonna be perfectly linear. I think Q2 was particularly strong, and it's more likely there'll be something of a higher cost of risk in the following quarter, specifically for Turkey. Just on sustainability of margins. You know, we know the macro monetary policy is not as conventional as it might be. The rates in the current market, there are wider spreads on new lending, whether it's in lira or foreign currency. That has seen a nice step up in the second half. That's sort of partly also aligned to the sort of global trend of the cost of funding as well. It's taken a nice step up. Will it go up more in the second half? Possibly, but I couldn't estimate at this point, you know, exactly how much that would be. We have estimated that overall for the full year margin guidance, I mean, you can run the math actually, you know, Turkey might contribute 20 basis points of that. I think I'll just elaborate slightly. I'd say we shouldn't underestimate how difficult the first half was for Turkey. Very difficult operating environment, and yet they produced some, you know, very strong results. I think the management team there are very good and agile at reacting to the market pretty quickly to maximize profitability and reduce problem loans there. We haven't seen very much in the way of, especially in the corporate side, new problem loan formation. I think I've made this comment many times too. You know, we went in early, we went in hard there, and you know, we are seeing recoveries from that conservative approach, that we did early on in the piece. It's a very, you know, you can't underestimate it, that it's not a difficult operating environment because it is. We have a strong management team there that is very good at managing through these difficult circumstances. On liquidity, I think from ourselves, when our loans mature, I think, there's certainly an element of our ownership helps with their liquidity. Yeah. So far, we've received no indication that their own liquidity is under any pressure at all. In fact, we monitor it as part of our normal group outcome position. Yeah. That's underpinned by the fact that they were able to upsize the syndicated loan that they did in June, which for a Turkish bank was quite an achievement this quarter. The first question. The next one was. Cost income ratio. Yeah. Well, the 33% is our top end long-term target, so it's, we operate within, under, lower than, whichever way to describe it. You may recall for one year, two years, we increased it to 35%, more reflective of a significant loss of income after the rate cuts, as we went into the pandemic. We've been able to restore that guidance back to our long-term 33%. We don't give a specific number. We give you some indicators on the income. You can see our trend on costs on the cost page by quarter. That's just where we are today. The last one was on loan growth. What was the specific part about loan growth? Local opportunities for loan growth. Within corporate in particular. Yeah. Yeah. Well, I mean, let me start with retail, then I'll flip to corporate. Retail has been super strong. The first half we've been, you know, absolutely both in Emirates Islamic and in ENBD, both engines are absolutely firing in the consumer space. You know, we continue to take market share in there, and you would be writing record card numbers or new credit card numbers that we just haven't seen before. So I think on that side, it's very strong. On the corporate side, actually their growth has been super strong, offset by the sovereign. You know, we still see opportunities in things like pre-IPO financing, stuff like that coming through. We're seeing new projects now coming more to fruition than we have seen. Some in property, but a whole range of different areas we're seeing demand come back from our corporates, which I honestly couldn't have said probably in the last quarter. I don't think I did say in the last quarter that the appetite was pretty low at the moment from our customers. We are seeing a return of demand from our corporate customers. If you look at the financial statements, Waleed, you'll see the growth has been right across a range of sectors. Utilities and services up, transport, communication, personal, manufacturing, enterprise management, real estate. It has been right across the board. Thank you. That's very helpful. Just one last follow-up from my side. On the increases in rates, are you expecting or are you seeing any signs of an impact, early signs of an impact on retail demand being tempered by higher rates? So far, no. In fact, the opposite. I've been pleasantly surprised, to be honest. I think one of the things that we're seeing is, you know, there is population growth in the UAE at the moment. We are getting new businesses opening. We are getting population movement and investment into the country. At the moment, no, we're not getting any pushback on loan growth because of rates. Now, will that continue in the future? Obviously, there's gotta be an inflection point, but at this stage, no, it's not impacting our capacity to grow in the space. I think in the corporate side, because of the liquidity in the system, we are seeing margin pressure on new corporate loans. I don't think there's any doubt about that. where, you know, the whip hand on the corporate side is more on the customer than it is the banks, given the liquidity in the market. Got it. Thank you so much. Very helpful. Thanks, Waleed. Alex, we'll move on to the next question. Super. Thank you. Our next question comes from Waruna Kumarage from SICO Bank. Waruna, your line is now open. Hi. Hello. Hi. You can hear me, right? We're getting you. Yes, yes. Sorry. I have three questions. The first question is on the loan mix. As you have mentioned, the sovereign, you know, repayment has been offset by private sector and personal. I want to understand the margin, you know, the improvement, and as for even the guidance, is that a sort of kind of factor in this, considering that typically yields on sovereign loans are low? That's my first question. Second question is on the- Let's take that one. Let's take that one before you get to your second. Yeah. I think it's fair to say that the new corporate bookings, because as I said just earlier, have lower margins generally than we've been experiencing historically. However, you know, because of our 62% CASA, you know, with the Fed lifting rates and then followed by the central bank here, obviously we're getting higher spreads out of that just by our funding mix. You know, I think one of the things that you need to remember that was. It's not like we accidentally found this CASA. We've been building this up and talking about it for many years now, that it was a strategic objective for us to build CASA for these very eventualities of higher interest rates. It hurts us when rates are going down, but there's a huge pickup on the way up. Just one additional point there, Shayne, is the retail side EI growing AED 5 billion, ENBD retail growing AED 5 billion. That new origination is also at a higher margin than you would see in corporate lending as well. That's adding to the margin growth. I wouldn't like the participants on the call to think that our profitability is only driven by rate increases. That is not true. It's the volumes also that we've been driving through, especially in the retail space. That's what I was trying to get at. I mean, not necessarily rate increase, but the mix change of loans, would that have helped the margin expansion? Yes. To a certain extent? Yes. That's my- Obviously, the retail side has much better spreads than the corporate side. First question- Okay. Yeah. Thank you. You added a third. Sorry. Go ahead. Two more quick questions. One, the first one is on DenizBank. Even this quarter, you have seen, you know, significant hedging gains. So I was wondering whether, I mean, going forward, how do you, how can we, you know, think about how do you see it going forward? Can we consistently see these kind of gains being made? That's my second question, and I'll ask third one as well. Third one is to see whether there was any positive impact from any CPI linkers that DenizBank was carrying, that would have offset this net monetary loss? Thank you. Maybe if I can just take both of your questions. Okay. Just on the consistency of gains, I think we, you know, the environment there, we're seeing strong loan growth. The costs, it's been really well managed. There is an inflationary environment that inflation hasn't really come into the numbers. It's been offset substantially by foreign exchange. On the income side, we do get some variability from quarter to quarter over the last two years. I think we've been articulating what some of the ups and downs are, including some of the hedge mark-to-market gains and losses that can come on. That was added, was a part of the increase for DenizBank this quarter. Some of that, if the curves were to settle down a bit and with U.S. rates going up, that might not be the factor into the next quarter. Some of that could revert. Underlying some of that mark-to-market variability, they do have really strong client flow increases as well. Some of the customer spreads and foreign exchange, for example, has been widening over the last year. That's helped contribute to it. How much further it grows, I couldn't say specifically right now. On your point on the CPI linkers. I think the Turkish government issued $4.5-$5 billion of CPI linkers through February and March. These are bonds that have 10- to 15-year maturities, and rarely zero coupons, but are tagged to the CPI increases. Yes, part of the interest income has an element of an increase in that. It's not part of the book that we break out separately, but that indeed, among a number of other revenue streams did help the earnings for DenizBank in this quarter. Okay, got it. Thank you very much, gentlemen. Thank you. Our next question comes from Aybek Islamov from HSBC. Aybek, your line is now open. Yeah. Thank you very much for taking my question. I think I want to ask like a couple things really. The first one, on your monetary loss, if you look in your P&L. Uh. How much of that is used? Aybek, we can't hear you. You're breaking up. You're on mobile. Can you start again? Yeah. Can you hear me better now? Only just, Aybek. Go ahead, Aybek, and we'll see. Yeah. Okay. Slightly. Yeah, that should be better now. I want to talk about your monetary loss in the first half. Yeah. How much of your monetary loss is due to the reindexation of the P&L in Turkey, and the balance sheet revaluation, so to speak? That's the first one. Obviously, I guess your core revenues have been impacted by this reindexation of the P&L in Turkey, so very difficult to understand the real underlying core earnings trend in the group. That's why I'm asking this question. The second question is, looking at your loans to the public sector, quite a steep decline in the second quarter. Why is that? Was there any reclassification of your corporate loans between the public sector and the private sector in the second quarter? That would be my second question. Yeah. Thanks. Hi there, Patrick here. Just on the monetary loss. We have set out in Note 2 the impact of indexing in the P&L so that you can see. The net P&L before the inflation adjustment is just on AED 200 million. That then reverses in the hyperinflation row itself. You should be able to then see what an excluding indexing number is for Turkey as well. It does come back out. Just on your part on public sector, I'm not sure where you're getting that from specifically. Well, I think I know. I understand what he's getting at. For example, if you looked at DEWA, that once that is publicly listed, that comes away from being government once it's publicly listed. Is that what you're getting at? Well, I guess that could be that, you know. You have your, like, sectoral breakdown of your loan book. And you have in there public sector loans, which are AED 124 billion in the second quarter. In the previous quarter, they were AED 139 billion. So, so- Maybe that has to do with the listing of the companies. I mean, some of the financing is pre-IPO financing, right? Any company that's going to list makes sure it has the right amount of leverage within the entity itself. Yeah? Some of it would be pre-IPO financing, but not all. Aybek, look, both private and public sector's been increasing. You can see in our notes the GRE lending is up to 10%, so you know that 10% of the AED 422 billion book is AED 42 billion. You can see how much in total that's gone up. Corporate has gone up about AED 23 billion. Three quarters GRE, one quarter private sector. We haven't got any reclassification. Okay. I think I've I will, yeah, send you a follow-up after this call. Yeah, if you need any clarification. I think the last question, if I may. Yeah. Just one follow-up question. Another third question, if I may. It looks like you are having provision write-backs in Turkey in the third quarter. Is that right? And, and yeah, what's driving the provision write-backs, if that's the case? Yes. Yes, indeed they did. In Q2, they saw some very strong recoveries, particularly with loans collateralized in the property sector. Very strong demand in that sector. You know, obviously that's not. We don't have client-specific information for you. Yeah, they did. It was a very good quarter for them. In fact, their P&L had a small credit in the impairment line for Q2. Understood. Yeah. Thank you. Thanks, Aybek. Alex, next question. Thank you. Our next question comes from Alok Nawani from Cobas Trading and Investments. Alok, your line is now open. Good afternoon, gents, and thanks very much for the call. Couple of questions on Turkey. The first one, for Deniz. If you could quantify the amount of any one-off impact that might be there in the non-funded income in the first half, for Deniz alone, that would be helpful. The other question is, would you be able to give us any color on the NPL levels and the NPL coverage levels that you have in Deniz, and how close that might actually stand to the ENBD consolidated levels? Generally speaking, we're looking to get some sort of a view on how you expect cost of risk to evolve for the next 12 months in for Deniz. I mean, the second quarter can't really be reflective of reality with such high inflation. Just wanted to get a more balanced view from yourself. Okay. Hi, Alok Nawani. It's Patrick Clerkin here. Maybe if I can just do that in reverse. Just the NPL coverage there. At the point of acquisition, I think the stage three was around 50%-55%. Over the last two and a half years or so, actually longer now, has increased to the 70-75 level. We've been building up that provision, and that's one of the drivers of the higher cost of risk within the 400s in our first year of acquisition into the 300s, now dropping down into the 200s. As we've built up that coverage and got comfortable with that, I think that level of cost of risk has been declining. I couldn't give you any specific guidance on what the longer term rate will be other than the long-term guidance. Or sorry, not long-term, the current year guidance that we give for the overall group of 100 to 125 basis points. As I think I said a little bit earlier, if we see continued positive progress on recoveries in Turkey, and they were building up provisions over the last two years, then I would hope that tends to the lower end of that guidance. Just on NFI one-offs, we don't give specifics on one-offs. You can see how much on the NFI on page nine. Page nine. That we have gone up from AED 1,188 in Q1 to AED 1,552. That's not all, DenizBank. DenizBank was a big part of that, yes. Not all of it's one-off as such because they've got strong underlying customer revenue also. It would only be, it wouldn't be more than AED a few hundred million of mark-to-market type gains that may or may not reverse in future quarters. From memory, Patrick, DenizBank's balance sheet P&L is on their website, right? Yeah. You could actually go and pull the whole thing off if you'd like. I wasn't able to find the second quarter numbers, but sure. Perhaps I'll look into it. Sure. Can I just ask? They'll be out very shortly. Yeah. Yeah. Sure. Can I just ask a general sort of question on Deniz? What is kind of driving the kind of asset growth that we're seeing for Deniz in local currency terms at the moment? You know, how sustainable is this? Are they trying to? It's widespread growth between their cards business, their SME business, and their agricultural business. The corporate growth there has been negligible. Okay, Alex? Oh, okay. All right. Yeah. Thanks much. Thanks. Alex, go ahead please. Thank you. Our next question comes from Naresh Bilandani from JP Morgan. Naresh, your line is now open. Thank you. Hi, Shayne, Patrick, Paddy. Thanks. It's Naresh from JP Morgan. A few questions, please. One, two are on IAS 29. It would be very helpful if you could please give us some color on how should we think of the quantum of the IAS 29 charge on the P&L, going forward. I know it depends on the inflation rate, but based on current expectations, would appreciate if you can offer some insight into how should we think of the quantum for the rest of the year. Also, it would be very helpful if you can please explain what should be the criteria for Turkey to shift out of IAS 29, for inclusion. It was a cumulative inflation of 100% for the past three periods. It would be very helpful if you can tell us for how long can it stay and what makes it move out. Also, just to- These are definitely. -reconfirm, uh, if- These are definitely Patrick questions. All right, maybe one more for Patrick then. It would be very helpful if you can please reconfirm, did you include DenizBank AG also for hyperinflation adjustment, or was it not included at this stage? Two much more generalized questions. One was, it would be very helpful if I can gauge some early thoughts from you on the impact to the franchise and the economy from application of corporate tax next year. Is there any clarification on application of 9% or 15% corporate tax for the UAE banks? Any thoughts you can provide that would be great. Finally, Shayne, if you can please, as always, throw some light on the operating metrics for Liv, especially the performance in Saudi Arabia, that would be great. Thank you. Thanks. Thanks, Naresh. As always, I think I counted five questions there. Maybe I'll count down the first four and then hand over to Shayne. Sorry for the long list. I apologize. No problem. No, they're all good. Thank you. The IAS 29 in H2. Page 14, you can see it is based on the index. In the first half, inflation went up 42%. It is a ratchet on the way up as the index increases. I think the Central Bank in Turkey put out a publication, was it yesterday or the day before, suggesting they've lifted their full year view to 60%. Research teams might indicate 70%. You could do a pretty good estimate of what our H2 number would be with a little bit of pro-rata proportionate to that increase. If it's 40% this half, 30% or 20% next half, you would expect it to be somewhat lower than the AED 1.9 billion that we've passed through for this half. On the criteria to shift out, it's a little bit similar on the way in. I think you have to see less than 100% over a 3-year period before you stop hyperinflation accounting. It could be around for a couple of years to come. And the third one on Austria, is that included? No, it's not. We only index and apply the indexing to the Turkish lira balances. Corporate tax. Yes, it's either 9 or 15. As a larger entity in the UAE, we would fall into the 15% bucket. This new corporate tax won't apply to us until January 2024. The actual rules and guidance has yet to be published, so we don't know exactly what an effective tax rate might be because you don't know what's assessable and what's deductible entirely at this point in time. That's one for us to think about through next year. Just a comment on corporate tax. You know, following the new OECD guidelines that there is a global 15%, I think it was only prudent for the country to adopt a 15% rule, or 9% and 15%. Because if you think about it, let's say it's Amazon. If they make a profit here and they don't pay the 15% here, they're gonna pay the 15% somewhere else. Profit generated in the country will now be taxed that they would have been taxed in an offshore location. To me, it is absolutely right that the country should be earning its fair share of the tax base that would then be paid somewhere else. I think from that perspective, it's a fair basis for the country to adopt this. Certainly we have not seen any country or companies coming to the country say, "Well, I don't know if I'll open here because the tax rate's too high." Because if you look at it in global terms, 15% is extremely low. It, you know, it's still a very low tax base. You know, I've worked in many countries throughout the world. 15%, and I'm sure most of you have, 15% is a very low corporate tax rate for anywhere in the world, and 9% is even lower. Okay. That was the fifth question, Shayne, on Liv. On Liv. in Saudi, you asked in particular on Saudi. Saudi is picking up about 3,000 new clients a month. That's about where it is. It's out of the sandbox now. We've got the no objection certificate from the Central Bank now to bring it out of the sandbox. We are actually doing a strategy review on Liv. at the moment. One around the functionality build, target clients. I'm hoping by next quarter we'll be able to sit down and talk to you a bit more in detail about Liv. as to where we see our future. We're doing a technology rebuild on it at the moment. That's underway at the moment, moving it to the new stack versus the old stack. I think you know, watch this space. I think we've got some new exciting functionality and products that will come to Liv. over the next 6-9 months, inshallah. Providing the digital guys Thank you. To get all the build done. Yeah. I mean, I think one of the problems that we do have is, I mean, our digital demand on our poor IT guys is huge. Trying to slot everything in that we want to get completed is actually quite difficult. As I'm sure all of you know, getting those resources into the UAE is not easy, given the competition. However, there is light at the end of the tunnel for us at least from a crypto winter because now and a technology winter, because now we're seeing jobs lost in those industries that is now providing us with more talent than we would've had the capacity to attract historically. We are seeing now an uptick in the capability to recruit. Excellent. Thank you very much for the color. Appreciate it. Thanks, Naresh. Alex, we've about eight minutes left. We did promise we'd wrap up at 3:00 P.M. If you can just go ahead, we'll try and finish off these last questions. Thanks. Super. Thank you. Our next question comes from Shabbir Malik from EFG Hermes. Shabbir, your line is now open. Hi, thank you very much. My first question is on the repayments that you've seen from the sovereign. Do you have any visibility? Do you think this is a secular trend or this is just a one-off that we saw in the second quarter? Second question. We've seen one of your peers taking something called a CVA risk charge in their capital calculations. Does this apply to ENBD as well? Finally, we've seen also some of the regional banks taking mark-to-market losses on AFS portfolios because of challenging market conditions. I don't believe it has been that material for ENBD. I was wondering what's the reason for that. Finally, there used to be a DenizBank business overview slide in your presentation. I didn't see it this time. Maybe if you can share that later, that would be great. Thank you. Shabbir, Patrick here. Maybe if I can just take those in reverse order. Just on the DenizBank page. What we did instead of that page was bring Deniz further up the deck to page four and include the composition of the P&L of ENBD plus DenizBank to give the consolidated results, to make it easy for you to see. So that's on page four. I think there were a couple of other data points there before that, weren't necessarily useful or meaningful. So we'll take that feedback, but we thought it would be better if it was up on page four in the consolidated results. Just on the mark-to-market losses on liquidity book. I presume if it's, if you're looking at other banks, investment portfolio, the vast majority of our investment book for liquidity management held at amortized cost. We are likely to have less going through the fair value OCI, let alone fair value P&L. I think you can see those on page 10, note 5 of the accounts as well in their respective classification to support that. On CVA, yes, that was the finalization of Basel III for the CVA RWA calculation. Yes, we have some of that. Part of our increase in the RWA and the capital build for Q2 included some of that. It was less than AED 10 billion for RWA, which would equate to 25 basis points or less. You can see that we've easily been able to absorb that with our strong earnings for the quarter. As for repayments, yes, the government's finances are in good shape, and they have taken the opportunity to make repayments. They started those repayments through 2020, quarter by quarter. Yes, there have been more in this half. We wouldn't know specifically the payment profile. If we did know, we wouldn't be able to comment because it's a client. Yeah. Sure. Thank you very much. Welcome. Thanks, Shabbir. Thank you. Our next question comes from Chiradeep Ghosh of SICO. Kiro, your line is now open. Yeah. I think most of my answers are, most questions have been answered. Just one very quick one is. Sorry, you're too quiet. Can you hear me? Sorry, can't hear you. Can you hear me? It's very- Can you hear me? Yeah, that's better. Yeah. Yeah. Go ahead. Yeah, just a very quick one. The non-monetary assets calculation, does it apply also for the collateral? No, these are simply the non-monetary assets in Turkish lira on DenizBank's balance sheet. It's not any collateral. It's things like plant, you know, property and premises and non-banking financial instruments. Okay. Another one, very quickly. The other income gain which you made on the derivative side, I know you answered it, but is there any counter exposure against that so once things stabilizes, will you see a pickup in earnings from the other side to balance it or it will only normalize or, like, only decline? In DenizBank, they have been managing the interest rate risk on the liability side. Looking ahead, they were anticipating rate rises, so they were locking in lower rates. When you do that, on a derivative basis, then you are going to get a mark-to-market gain. That would really reverse if the yield curves came down at the longer end. With the monetary policy there at the moment and rising dollar rates, we don't see that happening in the near term. It would be nice if it did. Okay. Okay. That's all from my side. Thank you very much. Thanks. Thanks, Chiradeep. I think we've got time for one more question and then we'll jump on. Yeah. Yeah. We lived with our points. Last question, Alex. Thank you. Our final question for today comes from Edmond Christou of Bloomberg. Edmond, your line is now open. Hello. Hi, this is Edmond Christou from Bloomberg Intelligent Research. Just a quick question on the CET1. The net earnings you consider here 4.8. If you just give me some highlight on how this is being calculated in terms of the net earnings compared to the one you report on income statement. I think there is adjustment of IAS 29 here. The second one is on IAS 29. Is it possible to give what is the level of net monetary positions and what is the CPI linker portfolio there? Just to be able to see what is the gap and how much you can add CPI linker to the portfolio. Thank you. Just on your first one on the CET1 build on page 10, you can see the net earnings, AED 4.8. The composition of that is the total comprehensive income that comes from page 4 of the account, so that's AED 5.2 billion. We take off from that the AED 1.1 of the hyperinflation adjustment. AED 1.1 represents the non-monetary revaluation, so that doesn't count for regulatory capital. We get to add back 0.7 for the loss on cash flow hedges. AED 5.2 billion minus AED 1.1 plus 0.7 gives you the AED 4.8. On the second- I'm thankful that you had gone to that one. Happy to oblige. The net monetary position, how much is the net monetary position? Yeah, I'm just trying to establish what is the gap between your CPI portfolio and net monetary position, because this has become important for ROE going forward. I'm not sure you're going to get it from. We are CPIs. We are not messing with that. I think you'd be able to find that in the DenizBank financials, which should be released fairly shortly. Okay. Fair enough. Thank you. Yeah. Thanks. I'm conscious there's a few questions that we haven't been able to answer, but we've run out of time. If you wanna reach out to me, Paddy Clark at Investor Relations, I'd be happy to answer those offline. Okay? Cheers. Yeah. Thanks, Paddy. I'd like to thank you all for joining in the call today. I hope you recognize the very strong set of results that were produced. With that, back to the operator. Thanks, Alex. Thank you. For any further questions, please contact our investor relations department. These contact details can be found on the Emirates NBD website and on the results press release. A replay of this call and webcast will also be available on the Emirates NBD website next week. Ladies and gentlemen, that concludes today's conference call. Thank you for your participation.