Ladies and gentlemen, we are currently on hold for the presentation of BNP Paribas second quarter 2022 results, hosted by Lars Machenil, Group Chief Financial Officer. Supporting slides are available on BNP Paribas IR website invest.bnpparibas.com. If you would like to participate in the Q&A session, please make sure to be in a quiet area to maximize audio quality. If noise volume is too high, we may reconsider your participation to the Q&A session. Conference will start shortly. Ladies and gentlemen, good afternoon, and welcome to the presentation of BNP Paribas second quarter 2022 results. For your information, this conference call is being recorded. Supporting slides are available on BNP Paribas IR website invest.bnpparibas.com. During today's presentation, you will be able to ask your question by pressing zero on your telephone keypad. If you would like to ask a question, please make sure to be in a quiet area to maximize audio quality. I would like now to hand over the call to Lars Machenil, Group Chief Financial Officer. Sir, please go ahead. Thank you. Good afternoon from sunny Paris, fine ladies and gentlemen. I'll trust you're doing well, and welcome to BNP Paribas second quarter results presentation. As you will see, BNP Paribas remains on a solid trajectory and keeps on with the robust start of the year. The group has confirmed its ability to deliver revenue growth, positive jaws, and benefits from a prudent risk management. Ladies and gentlemen, in a nutshell, the second quarter results will remind you all that BNP Paribas is an all-weather bank, outperforming the underlying economy, both in cases of economic head or tailwinds. Let's put on our shoes and let's walk through the results. In the usual way, I'll take you through the first two chapters of the results presentation before handing it over to you for Q&A. If we start with slide three, where we see that on the back of its diversified and integrated model, the group delivered a very strong second quarter result, expanding its activities to provide continued support to our clients and the global economy. These performances illustrate our unique positioning in Europe and is based on the strength of our leading platforms, as well as our capacity to generate growth at a greater pace than the underlying economy. If we look at the elements of the P&L, first, the revenues. They increased by 8.5% on the same quarter last year, stemming from all divisions with a strong increase by CIB, very solid growth by CPBS, and a rise at Investment & Protection Services. Supporting the growth in activity, costs have increased by 7.6% and by 4.9% on a like-for-like basis compared to a year ago. As I said, so that difference, 35% of the increase was due to the scope and exchange rates effects. What you can see is that the group continues to benefit not only from a strong potential for growth, but also from a strong operational performance, delivering positive jaws of 0.9 points. As a result, gross operating income increased by 9.9% compared to the second quarter a year ago. Now, from that gross operating income, you have to look at the cost of risk. It stood at 33 basis points over loans outstanding. Again, a testimony to our sound, long-term, and proactive risk management. This low level of 33 basis points too. Compared to the 40 basis points, let's say, over the cycle is embedding an ex-ante provision on our performing portfolio. This in relation to the current macroeconomic and geopolitical environment that was partially offset by releases of provisions from the public health crisis. This is, you know, it. I'll come back to that, but you know, our prudent approach to provisioning. Hence, if you take all that, you see a very steep rise in group's net income. Clocking in at EUR 3.2 billion, up 9% compared to a year ago, and even if you exclude additional items, up 18%. Now, if we turn to the group CET1 ratio, it clocked in at 12.2% in the second quarter, and the ROTE stood at 12.4% as an illustration of our reinforced profitability. A bank in the pink of health, or in a nutshell, a strong performance again this quarter supporting our disciplined growth trajectory. If with this, I can ask you to accompany me to slide number four. You can see that BNP Paribas solid model has delivered since the second quarter 2019, a sustained growth of net income averaging 8.8%, with a well-balanced contribution from our three divisions, and this again, thanks to our diversified but integrated model. With stronger market positions and continuous reinforcement of our platforms, our ROTE at 12.4% illustrates the strength of this model. As shown, we benefit not only from a model generating an ROTE above our cost of capital, but also from a model which is more resilient and performing above the average of the European peers year after year. With this, I can ask you to swipe to slide number five. You can see that our model is providing a solid base for growth with 8% increase in loan outstanding and 7% in deposits. This, thanks to our diversification, favorable positioning, and a very comprehensive product offering, here again with leading positions. As already evidenced by the strong business momentum of the first semester, our potential for growth is driven by additional recurring income we have embarked with our strategic developments finalized in 2021 or at the beginning of 2022. I remind you that it should provide around EUR 900 million revenues as soon as 2022 compared to 2021. You already saw a part of this impact in the first semester. They are here to stay and to be amplified with the reinvestments to come from the capital release by the sale of Bank of the West. Last but not least, let me firmly reiterate that this growth is and will continue to be disciplined with the objective of delivering positive jaws each year for every division. With this, you can advance to slide six. Our long-term, prudent, and proactive risk management policy is a real and proven competitive advantage. Our risk approach is prudent, as illustrated by our cost of risk on gross operating income, which is one of the lowest among European peers. In addition, we have continuously improved our risk profile, and this since the last 10 years, be it by adapting our product mix, for example, personal finance, or exiting gradually certain geographies, businesses, sectors. Last but not least, we have a prudent approach in terms of provisioning. If I come back to the cost of risk, as I referred to, just a couple of slides before, and if we refer to the second quarter this year, we have provisioned EUR 511 million ex-ante. That is increasing stage one and stage two provision. This in relation to the indirect effects of the invasion of Ukraine and higher inflation and interest rates. At the same time, we have released EUR 187 million in provision related to the public health crisis. That's basically IFRS 9 working for us. In a nutshell, BNP Paribas stance makes it well prepared for potential tougher times. These are all elements that bode well for the achievement of our planned target of cost of risk of 40 basis points over outstanding. As you know, as a result of our solid track record, high profitability, and growth potential, we have increased our ordinary payout ratio by 10 points up to 60%, and this since last year in the context of our strategic plan, GTS 2025. On slide seven, and as a reminder, you can find the way we structured our payout ratio. First, we committed to a cash dividend portion of a minimum of 50%, five zero, with a complement by way of share buyback up to 10%, the combination of the two being able 50% + 10%, 60%, right. In addition, as mentioned in December 2021, the sale of Bank of the West will result in an exceptional distribution by way of share buybacks for an amount of around EUR 4 billion, and this to neutralize the dilution of earnings. Therefore, we have put into reserves starting in the first quarter 2022, 60% of our earnings, net of the contribution of Bank of the West. For the same reason, the exceptional capital gain on the sale will not lead to ordinary distribution. If with this, I can ask you to swipe to slide nine, you can see that exceptional items for the second quarter are slightly negative on the whole. The beat that you see is a real and true beat. Moreover, in Turkey, cumulative inflation over three years reached a level of 100%, and the impact of the effects induced by the hyperinflation situation in Turkey are overall very limited for BNP Paribas as a consequence of the efficiency of our hedging. You can find the details in the annexes on slide 64. If with this, you can swipe to slide 10. Once again, you see the strong performance of the group in the second quarter and the draws that accompany it. The financial performance has improved year-over-year on all fronts, all the way down to bottom line, leading to a net income up by a fair 9.1%, or as I mentioned earlier, 18.5%, excluding exceptional items. Looking back at those solid results, the group has delivered a return on tangible equity of 12.4%, way above our cost of equity, and this with an earnings per share up by 13.5% versus the first six months of a year ago. This is basically the group and how the group stands out. If we now look at the divisions that basically you realize this, what do we see? If we slide, if we go... Well, yeah, if you slide to page 11, you can see that the operating divisions in total, they grew by a solid 9.7% year-on-year, 7.2% on a like-for-like. This growth has been achieved on the back of a strong performance of the operating divisions, re-emphasizing the strength of our diversified model and ability to capture growth. CIB revenues grew sharply by 10.6% or 5.6% on a like-for-like basis, consolidating market shares, accelerating with the reinforcement of the businesses and triggering further crossover. 11% on CIB, but also 11% on CPBS, with a strong increase, mainly driven by our Commercial and Personal Banking with the continued improvement in fees as well as the increase in net interest income. This, combined with a very strong growth for our specialized businesses, think of Arval. In a challenging environment, the third division, IPS, delivered an increase in revenues of 2.2%, with good performances in wealth management and insurance, more than offsetting the negative market impact on asset management. If we now flick to slide 12, where we look at costs, they evolve by 8.6% or 5.7% on a like-for-like basis in the operating divisions, generating positive jaws of 0.9 points. This is at historical scope, and if you would look at constant scope of 1.5%. This increase in cost is mainly driven by the strong business growth for the quarter and thus variable costs, topped up by changes in parameter. As such, CIB delivered positive jaws of 0.6 points at constant scope and exchange rate. CPBS delivered also this quarter very positive jaws as a result of its increased efficiency and change in operating model. Lastly, IPS costs were up 6.7% year-on-year on the back of the support of business as well as targeted investments. If we now go to the other element of the P&L, namely the cost of risk, and that's on slide 13. You can see on slide 13, as I mentioned, that it stood at a low level of 33 basis points of loans outstanding, slightly lower than in the same quarter a year ago. This is mainly due to the combination of, one, low impairment on non-performing loans, so-called Stage 3 provisions, and two, an ex-ante provisions Stages 1 and 2 for expected losses in relation to the indirect effects of the invasion of Ukraine and the higher inflation and interest rates context as detailed before. And thirdly, at the same time, we registered a release of provisions related to the public health crisis. Again, making IFRS 9 work. If we now move on to each business one by one, you will see the same pattern of low level of cost of risk with ex-ante provisioning for personal finance and Europe-Mediterranean mainly, and releases of provisions related to the public health crisis. If we now turn to slide 16, you can see our CET1 ratio standing at 12.2%. The contribution of the quarterly net result after considering, I cannot stress it enough, 60%, six zero, ordinary payout and net of the impact pertaining to the organic growth of our risk-weighted assets. That growth, 60% dividend, risk-weighted asset growth, led to a neutral effect on our CET1 ratio. This, as we have again continued to support our clients and the economy, a stepped-up support for the economy in the light also of the upcoming sale of Bank of the West. Also, in a similar way to the first quarter, we continue to see the reversible impact of market prices on OCI, which resulted in an aggregate negative impact of 20 basis points. If you look at the leverage ratio, it's 3.8% this quarter, well above the current requirement of 3%, and I remind you that the group is keeping its 2025 target at 4.2% through ramping up of AT1s. If we then go to slide 17, you can see the usual steady growth of our tangible net book value per share, standing at EUR 78 at the end of June, up EUR 1.7 compared to a year ago. As you know, contributing to a responsible and sustainable economy is at the heart of BNP Paribas' company purpose, and is a key pillar of our 2025 GTS plan. As you can see on slide 18, the group is fully engaged around three major priorities. First, this is about supporting our clients to achieve their carbon reduction goals, and hence being in line with our own net zero trajectory. To do so, every single part of BNP Paribas is working relentlessly on assisting our clients to transition towards a more sustainable and low carbon economy. Second, we aim to foster a group-wide sustainability culture, which comes with the right monitoring tools, processes, and governance to drive this effort. Third, we are determined to deliver the net zero commitment that we have taken. To do so, we need to make sure that CO2 emissions of our clients financed by our lending books will be reduced over time and at the right speed to achieve carbon neutrality by 2050. Besides, not only do we have concrete, innovative financing solutions and top-ranking positions in sustainable bond issues, but we have also set for ourselves near-term reduction targets for 2025, so I will be still around to deliver on them on three major sectors, such as power, oil and gas, and automotive. If we now advance to slide 19, you get an overview of concrete illustrations on how we are mobilizing BNP Paribas' distinctive model on five priority topics contributing to the achievement of the United Nations' Sustainable Development Goals. Sustainable savings and financing, carbon neutrality, biodiversity, circular economy, and social inclusion. You can see with those concrete examples that each of them is clearly embedded in the development of a business. I leave you to peruse slide 20 on internal control and compliance, emphasizing the rigorous and diligent implementation of all the necessary measures to the enforcement of international sanctions. With this, fine ladies and gentlemen, I would like now kindly ask you to advance to the first quarter results by division, and it starts on slide 22 with CIB, which saw another strong quarter, thanks to the new dimension of the setup, building on a diversified and integrated model with a stronger than ever capacity to support clients. Indeed, business activity was robust again this quarter, confirming our leading positions in EMEA, the ongoing development of our platforms, and the successful implementation of our strategic moves that we completed last year and at the beginning of this year. If I walk through the three entities, first, Global Banking delivered a very good performance with revenues at 0.8% year-on-year and demonstrated its capacity to overcome the unfavorable context with activities on the primary market down by 34%. This effect compensating that was driven by a sharp increase in trade finance and cash management, and this in all regions, as well as a resilient performance by capital markets in Europe and higher M&A revenues. In a nutshell, strong resilience for Global Banking with further gains in market shares, in financing in Europe and worldwide, and this with a prudent stance as always. Second division, supported by the continued and strong client activities and the new dimension of our setup. Global Markets saw a very robust growth with, again, this quarter, a high demand for hedging activities across the board, hence a very good performance for FICC with revenues increasing just shy of 15% year-on-year. Our equity activities show a good momentum on derivatives as well as prime services and clocked in at very good levels. In this context, revenues sharply increased by 16%. Our leadership was again confirmed with our number one position on bond issues in euros and the continued development of our electronic platforms. In this context, Global Markets revenue saw a steep increase of 15.3%, well-balanced between FICC and Equity & Prime Services. Third and last, Securities Services saw again this quarter a very high volume of transactions on the back of a strong business drive. This, in a challenging environment where the business saw a very good resiliency of assets on the back of the rollout of major new mandates that were won in 2021 and the beginning of this year. This sustained by a diversified set towards buy and sell side and further boosted by the positive impact of the interest rate environment. All in all, revenues increased by a material 16%, a very strong performance. All this resulted in a sharp increase in CIB revenues, up 10.6% compared to a year ago. Total CIB costs were up 13% year-over-year in connection with the new expansion of the setup and the strong activity. Hence, the growth at constant scope and exchange rate was 5%, generating a positive jaws effect of 0.6 points on a like-for-like basis. If we go down further in the P&L, gross operating income of CIB was up 7.2% year-on-year and accompanied by a low cost of risk. Hence, CIB generate EUR 1.7 billion of pre-tax income at 5% compared to a year ago. To wrap up, a very good performance for CIB as a continued illustration of our leadership position, served by the new dimension of the platform, structuring our ability to match and serve corporate and institutional clients' needs while sticking to our prudent approach. This is first division. The second, Commercial Personal Banking and Services, slides 26-34. As you can see, CPBS maintained in the first quarter a robust trajectory with a sustained business drive and very positive jaws. Commercial and Personal Banking, so one part of it, performed very well, and growth remained strong for the other part, the specialized businesses. In terms of activity, loans were up 7%, deposits grew by 7.5% across all businesses. Moreover, the division continued the transformation of its operating model on the back of further variabilization of cost, like what we saw in BNL and development of technology, for instance, in Luxembourg. Turning to the specialized businesses, Arval confirmed a solid growth with a good organic growth in the finance fleet, 9.5%, and very high used car prices. Outstandings are increasing at leasing solutions with a good resistance in business lines, as well as in personal finance, with the growth amplified by the integration of the buy now, pay later business. With respect to the new digital businesses, Nickel saw a record number of accounts opening this quarter in France and Spain, reaching more than 2.7 million accounts open since inception, of which more than 1 million over the last two years. In terms of P&L, CPBS revenues were up sharply 11% on the second quarter, with steep increase both in Commercial and P ersonal Banking and in specialized businesses. If we focus on the first, Commercial and Personal Banking, the performance was very solid and up 9.4%. Net interest income increased notably in the Eurozone by 8%, supported by France, Belgium, Luxembourg, but also in Europe-Mediterranean by 57% on a like-for-like basis on the back of strong volumes in Poland and Turkey and favorable interest rates. Fees continued to mark a steep rise in all customer segments at +6% in the Eurozone and 28% in Europe-Mediterranean. As a result, jaws were extremely positive in both regions. If we cross the Atlantic and go to the Pacific in the U.S., Bank of the West maintained a robust business drive with a strong increase in loan production, including loans to corporate clients and mortgages, but excluding, in particular, the effect of the end of the PPPs. If we now look at the other part in CPBS, the specialized businesses, revenues were up 14.4%. Arval and Leasing Solutions saw a sharp increase of 33.6% on the back of high used car prices and volume growth. Personal finance saw revenues up 3.9%, topped up by the integration of FLOA, so buy now, pay later, and loan production volume increased by 8.9% on last year. This despite a lackluster environment in the automotive industry. If we look at the cost of CPBS, they were up 6.5%, reflecting the strong business momentum with very positive jaws this quarter, 4.5 points. This is a clear testimony of the capacity of our Commercial and Personal Banking networks to contain their costs and deliver high positive jaws. Similarly, the specialized businesses confirmed their potential to grow at marginal cost with an extremely high positive jaws effect for Arval and Leasing Solutions, 26.7 points. Hence, pre-tax stood at EUR 2.4 billion this quarter, delivering, what else can I say, a distinguished 35% rise last year, including the limited and positive overall impact of the hyperinflation situation in Turkey of EUR 23 million, and thanks to the efficiency of hedging. To conclude on CPBS, a very strong quarter in all businesses and geographies with very positive jaws, a significant increase in gross operating income, and an improvement in cost of risk. Having said all this, let's now move to slides 35-38, where we have Investment & Protection Services. They witnessed an overall good business drive despite the market environment and a very good resilience in results. Indeed, in a difficult context, net asset inflows held up well and marked a good resilience with an overall positive evolution. In wealth management, business activity was good this quarter on the back of very good net asset inflows driven by Europe and growth in transaction fees, particularly in Asia. Despite challenging market conditions, asset management had slightly positive net asset inflows this quarter, with significant outflows in money market funds offset by inflows in medium and long-term vehicles, emphasizing the resilience provided by the business model. Insurance saw a continued business drive with a good momentum on savings and protection. Net asset inflows were good in unit-linked products. Gross inflows were strong in France. Simultaneously, on ESG, the division is rolling out its well-regarded impact offering and continues to develop the distribution of open-ended funds classified Article 8 and 9 in Europe. When we focus on the P&L, IPS revenues stood at EUR 1.7 billion, up 2.2%, and this despite the unfavorable environment. This is the result of good performance on insurance, 2.7%, combined with the resilience on the whole of wealth and asset management, +1.9%, and notably, growth in real estate advisory. Costs up 6.7%, driven by business developments and targeted investments. Pre-tax income up 1.1% year-on-year, a very good performance in the context. To wrap up, a strong resilience for IPS in a very adverse market context. If I can now ask you to swipe to slide 40 and 41 to conclude my presentation. As key takeaway, I would like you to keep in mind, one, the group is on a solid trajectory as demonstrated by the performance for the first quarter. Second, BNP Paribas' distinctive model is clearly supporting our growth in revenues, and our operational performance keeps on being high, resulting in positive jaws. Three, our cost of risk remains low on the back of our long-term, proactive, and prudent risk management, sustaining the resilience of our results. Four, in a nutshell, a powerful model which delivers a strong growth in results, outperforms the underlying economy, and ensures the successful execution of the 2025 group objectives as reminded before. This, fine ladies and gentlemen, concludes the second quarter 2022 results presentation. I thank you for your kind attention, and I'm very pleased to take your questions. Thank you. Ladies and gentlemen, if you would like to ask a question, please press zero one on your telephone keypad. Please lift your handset, ensure that the mute function on your telephone is switched off, and that you're in a quiet area to maximize audio quality. We will take questions in the order received, and we will take as many as time permits. If you find that your question has been answered, you may remove yourself from the queue by pressing zero two. Again, please press zero one on your telephone keypad to ask a question. First question from Tarik El Mejjad from Bank of America. Sir, please go ahead. Hi. Good morning. Thank you for taking my questions, and congratulations for this excellent result. I have two questions, please. The first one on costs. I mean, it's great you have positive jobs in first half, but I would say the tough times still to come. How do you prepare your negotiation of salaries, and where do you see the potential uptick in costs coming from that? I know you guide on jobs, which I agree is something we need to, one should focus on. Given where we see revenues growing and the costs could accelerate, how do you see the costs evolving there? Still on cost, I mean, we've seen other industries and banks, some strikes, some social protests, and pushing, really putting pressure on some sectors to high cost, probably higher than where inflation is visible at. How do you see that in the banking sector? Second question is on the CIB. Last week, or was it this week? They, Credit Suisse, announced exiting some structured credit products. Given your push to CIB and being a bank that offers a whole suite of products, would that be something of interest? Will you be ready to take on EUR 20 billion of RWAs? I guess it's manageable from a capital point of view, but more from a strategic point of view, that's something you'd be keen to take on board. Thank you. Tarik, thank you very much. Yes, apparently you said good morning, so good morning to you as well. If we look first at your cost question, as a quick reminder, if you look at the evolution, half of the evolution is basically variable cost, yeah? Costs supporting the revenues. Those costs will be there as long as the revenues are there. Secondly, basically the other half is coming from the parameter changes, yeah? If you look at the costs, there are things that were not there a year ago. Take ex-ante and what have you not. If you look through that, you basically get a traditional run-of-the-mill of 1.5%, which is in line with what we anticipate to be doing. Going forward, in the environment, why do we feel comfortable? Well, we feel comfortable in the way we said. We operate with operating jaws. What are the elements that we have and that we basically will do more of? There's several things. Why do we feel comfortable to have the jaws? Is because we operate from platforms. If we operate somewhere, or if we wanna add operation somewhere, we don't have to go and open a bank or buy a bank or have a bank and whatever, with all the fixed costs that come with it. We basically use our platforms, and we can grow at marginal cost. That's what we do. Moreover, we are adding more platforms, so there are activities that we did in the past, still, let's say, locally in every city, what have you not, and we're basically moving them on a platform. We keep on growing with the existing platforms we have, and we keep on adding platforms. Moreover, in all the projects that we launched in the planned GTS 2025, we also taken up an impact that it will have to lead to cost savings, and therefore we have seen or we have planned that that will bring EUR 2 billion in cost savings. That's a bit going forward, how we say. We grow by platforms, we have more of those platforms, and we have cost savings in the plan GTS 2025. That's a bit the stance on the cost. When it comes to your concern on social unrest, listen, in the countries where we are, typically, these things lead to discussions and that can be different one country to another, yeah. For example, in France, there might be some constraints on some products, but at the same time, the French authorities are not gonna tax banking, yeah. In some countries, it might be different. There are probably no constraints on products, but there is a banking tax coming. That's what, if you look at what we have been doing in the past in the countries where we are, we have been managing this, I think in a very good way. When it comes to CIB and adding on, I remind you that indeed based on the proceeds of Bank of the West that we would redeploy. Again, our objective is not to redeploy in a bank or what have you not, yeah. What it is, we said basically, there is 3/3 in what we see. There is 1/3 where we basically say it will allow us to grow a bit faster, and that's basically already that we are doing. There is 1/3 where we say we would use it for technology. Yeah, these are the things that what we have done, for example, with the buy now, pay later technology, so that is what we do. There is 1/3 where we can bolt on things, so not a bank, but we buy some activities in an area where it allows us to strengthen, yeah. That is what we look at. It means it has to be bolting on, so it has to be in an area where we already have things. It has to blend in with what we already have. You know, Tarik, I'm frugal, so the price has to be right. That's a bit the criteria that we use. I leave it to that. Those would be my three answers, Tarik. Thank you very much. Thank you. Next question from Delphine Lee from JP Morgan. Madam, please go ahead. Yes. Good afternoon, Lars. Just two questions from me. If we could start with French retail, where we've seen really very strong NII performance. Just wanted to have a little bit of, you know, color around, you know, how much of that was driven by rates versus volume, what you expect with the higher rates which are coming by the end of the year. Any changes to your, you know, interest rate sensitivity, any color would be very helpful. On the second question, that would be on cost of risk. If you could share a little bit your IFRS 9 assumptions. I've seen you've added EUR 500 million for the Stage 1 and Stage 2, but just wonder, you know, if you could explain a bit, you know, the weightings of the different scenarios and also what are the assumptions of your severe scenario. Thank you very much. Thank you, Delphine, for your questions. If we start with France. France, as you know, we are fully focused on supporting our clients. Of course, what we have been doing is we start from last year, which was a bit. I don't know exactly where you were, Delphine, but it was a bit movement in times. We have a bit this return, but at the same time, we are really close to our clients. That basically means that we see that our clients they need lending capacity, so we are there. We are open for business fully, so we provide that lending in the volumes. Moreover, there are demands for fee generating products, which is what we do. That is basically all that we see. With respect to your question on rates, there is no effect in the current results of that. If you look at it in general as a remark, the good thing is in Europe is that, I mean, the fact of negative interest rates was a bit bizarre period. It is something that where it led us to have, like, truckloads of liquidity that we did not know really what to do with. From that point of view, the fact that the rates are no longer negative, that is basically a positive thing. If there will be further step-ups, there might be further step-up in rates, but let's be fair, if you look at the bottom line, those step-ups will be made in order to fight the inflation. Those effects will probably offset one another. That would be on rates. On your question on the cost of risk, I suggest that you go into all the publications that we've made. Where you can see the weightings that we have and we are on a 30% rating or weighting on the favorable scenario. But I let you peruse those, yeah. I can imagine that you know the mechanics that are behind. We apply it to models which are rather conservative, I would say, and that is why we added so many hundreds of cost of risk. I let you peruse the elements, but on your question, the favorable has a weighting of 32%. Delphine, that would be my answers. Great. Thank you. Thank you. Next question from Flora Bocahut from Jefferies. Madame, please go ahead. Good afternoon, Lars. The first question I wanted to ask you is regarding the leverage ratio, which is, you know, this quarter still at 3.8%. I see that the AT1 number dropped to, I think, EUR 7.7 billion in Q2 or just 1% of RWA. The first question is, should we expect that there will be a significant increase in AT1 issuance by the end of this year and therefore higher AT1 cost that will hit the P&L in the coming quarters? Any guidance on this would be helpful. The second question is on the distribution plans around the Bank of the West sale. You had announced, you know, your intention to do a share buyback to offset the dilution effect at the time of the announcement, so back in December last year, you had assessed that this corresponds to EUR 4 billion of share buyback. We'll see, you know, upon closing, but as of today, if we were to update the dilution effect, I think we would land closer to EUR 3 billion, max EUR 3.5 billion of buyback need. So, you know, just to understand how you are thinking about this, do you stick to the EUR 4 billion no matter what the move is, or you will adjust depending on the market cap, capital ratio, everything at the time of closing? Thank you. Flora, thank you for your questions. On leverage and on AT1, just jokingly, I must have fallen a fixed income call, right? But joking aside, no, the leverage ratio we said that over the plan, the trajectory, we would go to 4.2 points leverage ratio. We would be doing this by stepping up our AT1 to accompany the growth. That's what we said. We said we would issue EUR 3 billion in a year. That's basically what we will continue to do. Again, if I looked outside over the last couple of weeks, the market was a bit shaken, so it is just timing. What we will do is basically that EUR 3 billion that we announced, and that's in the plan, and that's in all the figures that we have. That is what we will continue to do. On Bank of the West, yes, there are many ways that you can look at. You can say, "Hey, your share price is now lower." Flora, you're very nice to me, you could also say the dollar is stronger. Yeah? If you look at all of these elements, in the end, EUR 4 billion will be the amount. Very clear. Thank you. Thank you. Next question from Giulia Miotto from Morgan Stanley. Madame, please go ahead. Yes. Hi, good afternoon, Lars. A couple of questions from me as well, please. The first one, loan growth continues to be very strong. Do you see this continuing, or do you see it tailing off towards the end of the year? And where do you see the best pockets for growth on the lending side? That's my first question. And then, going back to the EUR 511 million of provisions related to Ukraine and, you know, forward-looking essentially provisions. Do I understand you correctly that these are based on the division's macro assumptions rather than a bottom-up exercise, looking at which corporates, you know, are exposed to Russia, to Ukraine, to specific supply chains, et cetera? If you have done such exercise, would you be able to share what part of your loan book could potentially, you know, be subject to disruption? Thank you. Giulia, thank you for your questions. If I start with the last one. If you look at this S1 and S2 calculation, it is much wider than just Russia or Ukraine. To be frank, if you look at it, our exposure in Russia is so low, it doesn't really matter. What it is, the way it works is we have a model which basically reflects the customers that we have in the book. It basically reflects the type, it respects their behavior and so forth. What we have said is basically there could be an effect spreading from inflation, all of those other elements. That's the scenario, and that's the scenario we apply. The impact, it is not Russia. Russia is very small into that, given we are such a small player. It's the overall adverse scenario that basically provides us the underpinning of this anticipation. Let's not forget, right, I mean, the same modeling that we applied in 2020 for the COVID led to EUR 1.5 billion, and we basically didn't use any of that, yeah? This to show a bit how the modeling that we have is very conservative. On your other question on loan growth. On the loan growth, yes, it has been strong. It has been strong because it was a bit low last year, and it also has a bit been boosted because on the corporate side, the primary market was not there, yeah? Corporates that were intending to normally go to the primary market, it was closed. They found the phone, they called us, and we helped them. That's a bit this. Now, will this continue? Listen, my crystal ball is broken, but the things that I can say is that at BNP Paribas, if you look at us, I mean, we are very solid, we have liquid like there is no tomorrow and what have you not. We are there to accompany our clients, and we're ready to accompany them in all kind of forms, yeah. Is it primary market? Is it lending? Is it whatever? For us, listen, I don't have a crystal ball to tell you what it will be, but we are there to do so. We see that Europe is putting a lot of sails into ensuring that there are investment happening for the sustainability, that there are investment happening in the sectors where apparently Europe discovered that it was not represented and so on. That's a bit it. That's what I see we see in Europe, and we are very well positioned to accompany that. Giulia, that w ould be my two answers. Thank you. Thank you. Next question from Stefan Stalmann from Autonomous Research. Sir, please go ahead. Good afternoon, Lars. Two questions from my side. The first one, on the hyperinflation accounting around Turkey. You're mentioning this EUR 500,000 benefit to your shareholders' equity from this. Has that become a net benefit to your CET1 ratio as well, or has there been offsetting moves to other parts of the equation? The second question goes back to the Bank of the West sale. Clearly, you mentioned the dollar is a lot stronger. In euro terms, the sales price is worth EUR 1.5 billion more than in December. I know you have said that you have hedged. I would just wonder if you could clarify how you have hedged. Have you literally locked in the dollar rate in December, or have you used an option structure that has protected you against the downside but that retains a lot of the upside? Thank you very much. Thank you, Stefan. If I first look at the hedging or the hyperinflation. In hyperinflation, this is typically something if you look, there are impacts in the P&L and in capital. If you look at the P&L, on one hand, what you have is you have on the liability side, you have your cash. With inflation going up, that cash goes down. You have a negative impact to the P&L. At the same time, you have your assets, which are yielding more because the rates go up. Therefore, if you take those two effects, given the way we are basically hedged, the P&L effect is neutral. Basically, the same is true in capital. In capital, you have indeed again the hyperinflation, who is having a pickup on the side of your equity. However, the Forex effect is basically compensating this. This is. I mean, yes, it's easy to say that hyperinflation at BNP Paribas is basically non-material, but there are several moves that basically compensate those. That's on the hyperinflation. When we look at the EUR 4 billion. Yeah, I mean, the EUR 4 billion, as I said, when we did the deal, our objective was not to now all of a sudden become a trading firm and have those EUR 5 billion or EUR 4 billion to be duly positioned. For us, basically, in what we typically do, if you look at what we have in dollars, there are many moving parts, yeah? There are the activities themselves, there is the capital that we have and so on. There are many moving parts, and so what we basically take as is that overall position is basically not an open position, yeah? We lock in some forward pricing, so it's something where we want to avoid the effect. All in all, let's be fair. That's why I basically say, I don't wanna abuse the fact that the share price has gone down or that the dollar has got stronger. That is why we basically say we will return the EUR 4 billion to you. Okay. Thank you. Thank you. Next question from Jacques-Henri Gaulard from Kepler Cheuvreux. Sir, please go ahead. Mr. Gaulard, your microphone is open. Maybe you are on mute. Maybe I answered his question. Yes, maybe. Sorry, sorry. Can you hear me? Can you hear me? Yes. Apologies. I had indeed closed my mic. Two questions, Lars. The first one, I just wanted to understand the mechanics of the ex-ante provision and the cost of risk of the bank generally. In effect, you provision EUR 465 million of Stage 3, then EUR 511 million of Stage 1 and 2, net of EUR 187 million of release. Is that the right way to look at it? As you've released from the public health provisioning, just to have a view about what the stock of the public health provision is. That's the first question. The second question, yes, you were mentioning that in one of your answers about the one thing which has been completely alarming, frankly, has been the Spanish bank stats together with the Turkish moratoria. All these things whereby, you know, governments who are very happy that they can just take on the cash of the banks and actually make themselves happy politically. There's probably a bit of a relationship here with your own risk premium, which remains insanely high considering the type of results you deliver. Aren't you afraid, to put a long story short, Lars, in all your different markets, that you're gonna be taxed again? How comfortable do you feel now that your SRF going to zero, which is a key part of your plan, is really gonna go to zero more or less by 2024. Thanks a lot. Jacques, thank you for your questions. Now, if we look or go again through the ex-ante provisions. Indeed, if you look at the numbers, there is, let's call it S 1, S2 to be the forward-looking, and then the S3 on the other ones. The S3, that is what we see. We have companies, counterparties, individuals that run into difficulties, and that we provision in the normal way. The amount that we have provisioned is rather low because at this stage, we don't see many of these things happening. Then you have the ex-ante. In the ex-ante, that's basically how it works. The way it works is that you can at some point in time have a scenario which is negative going forward and for which you provision. That's what we did in 2020, saying there is the COVID, which will have an impact, and therefore we basically provisioned EUR 1.4 billion. The way it works under IFRS 9, every quarter, you basically have to look how your scenario is realizing. What we see, for example, this quarter is that the COVID scenario that we had in mind, the fraction that we thought that would be realized this quarter is not realizing. That is why we had to write back roughly that EUR 200 million. Now, at the same time, there is a new scenario that we think we can imagine is that what we said earlier is that there will be a spillover effect of what we see in Eastern Europe and so forth. If we do that, then we basically step up EUR 500 million. All in all, if you bring that together, you basically get like a tad more than EUR 1.4 billion in reserves, which is partially stemming from the COVID period, partially stemming from this period. That is the dynamic, but they are both forward-looking and of course should be available if things happen. That's basically where we stand. On your question of the activities. Indeed, there are some observations that you can see in some countries, but it also depends on how the overall infrastructure is in place. If you look at some of those countries, they are basically the pricing is relative, so therefore the pricing will go up and interest rates go up, and therefore that can trigger some governments to do something. Now, if you look rather in the countries where we are, you basically see that the products themselves that banks have already contain some protection for customers. That is why I anticipate, like in France, where basically clearly the finance minister has said that there would be no additional taxes on these kind of things. We feel comfortable that in the countries where we are, this will be okay. Moreover, on your question on the Single Resolution Fund, let me remind you that this is a total different ballgame. The Single Resolution Fund is there because a law has been voted, and that law is basically saying it ends in 2023. Who am I to say? Yeah. That will basically end, and that's basically where we stand. Jacques, those will be my answers. Thanks a lot. Thank lot. Thank you. Thank you. Next question from Matthew Clark from Mediobanca. Sir, please go ahead. Good afternoon. A couple of questions. Firstly, on the French retail banking, oh sorry, it's not called that anymore. The net interest income was up very steeply versus the first quarter. Just wanted to understand, is this a sustainable run rate and what products specifically have driven that increase, if it is a sustainable run rate? Sorry, there was a bit of noise. Sorry, can you rephrase your question? I missed the beginning of your question. Sure. It's a question on net interest income in the French customer and personal banking division, which increased, I think it was 8% or 9% versus the first quarter. I just wanted to understand whether that second quarter net interest income level in that division is sustainable, or if there are some lumpy items in there going forward. The second question is on your disclosure of revenue and cost growth at constant scope and FX within Global Markets. I just want to understand whether you are only adjusting for the Exane acquisition, or are you also adjusting for the DB Prime acquisition? If you are only adjusting for the Exane acquisition, could you give us the impact on revenue and cost year on year from DB Prime? Thank you. Yeah, yeah. Thank you. You know, let's not forget the Prime Brokerage transfer. It already started a year ago, so it's not in the perimeter effect. So the effect in what we call a constant scope and exchange rate. So the scope is Exane, and then of course there is the dollar and the Turkish lira and what have you not. So the Prime Brokerage is not considered as a scope change. Then on your net interest income when you look in France. So the net interest income is depending on things like what volumes and what kind of transactions that we are having. Again, if you look at it has been, if you look at the volumes, they have been solid and therefore that as well. Overall, I would rather say there is this mix of kind of services that can step up, and sometimes it can be more interest income, sometimes it can be more fees. Overall, I would look at the total income rather than just that sub-line. That will be my two answers. Can I just come back on. I understand that you haven't included the DB Prime in your adjustment, but presumably that has been a material contributor year-over-year because you hadn't transferred any clients across this time last year. Can you give us some guidance on that impact year-over-year? Remember, we basically phased it in during last year, and that meant that we were not able to have clients on board, yeah? And then on top of that, when you look at it, several of the clients basically switched into the systems that BNP Paribas had. That is why the element of just singling it out is that. That's basically that. If you want the total number as a reminder, we guided that prime brokerage would be full year EUR 400 million in revenues. Can you give the cost impact for you? Listen, that's. It's typically a run rate at 60%. Thank you. Next question from Mate Nemes, from UBS. Wait a second. I don't know if you heard me. I basically said it's a 60% cost-income ratio. I don't know if that came across. Thank you very much. Thank you. Next question from Mate Nemes, from UBS. Sir, please go ahead. Sir, your microphone is open, you can ask your question. Apologies. Good afternoon and thank you for taking the questions. I have two questions, please. First one is on provisioning. I wanted to go back to the ex-ante provisioning that you described the plus more than EUR 500 million in Q2. I'm just wondering, does that amount also include potential provisions for scenarios including energy rationing in certain markets, for example, Poland or Italy? Or that amount is simply a function of certain scenarios, inflation and interest rates. That's the first question. The second question is on the French bank. I'm just wondering if you could give us a sense what the recent increase of Livret A to 2% could mean for NII in the second half. Thank you. Thank you. First of all, on the provisioning. Indeed, as I mentioned, what we do is we run several scenarios, yeah. Don't ask me to tell you that this is then for what we guide. We have a whole set of scenarios that we run, and that basically lead to a deterioration, which allows us to provision this. That's a bit the way it works. The kind of models and the kind of things that we run doesn't imply anything on what we see that is the likely scenario. We run a whole set of them leading to this kind of impact. That's on the provisioning. When you look indeed in France, the Livret A is basically a deposit product that basically has a return which is linked to inflation. If you look at BNP Paribas, as I mentioned, we are basically a bank focused on corporate, commercial, affluent and the like. Our market share within that is rather small, yeah. We have less than 5% in market share in that in France. Therefore, if you look at this year, you basically see no impact because it's part of our overall hedging that we talked earlier. That's basically where we stand. I wanna, if I may, have one further clarifying question. It basically, I get whispered in my ear that in the answer to Stefan, I maybe was not totally clear. Stefan asked a question on the hyperinflation, and I said there were positive and negative effects both in the P&L and the capital that compensate. In the P&L, there is the liabilities that go down in value and the assets that go up in value in the P&L, and they basically compensate. When you look at the capital, in the balance sheet, there is the positive effect of the hedging, and the hyperinflation, and there is the negative effect of the Forex. They basically offset in the capital. That is what I wanted to clarify going forward. Operator, next question. Thank you. Next question from Anke Reingen from Bank of America, of Canada, sorry. Madame, please go ahead. Yeah, thank you very much, and thank you for taking my question. The first one is on the cost of risk. I just want to understand, the 40 basis points, you mentioned for this year. Could you actually do better, or are you basically implying, how you currently see the situation, or should we see a step up in the second half to end up at 40 basis points from your current point of view? Then secondly, I just wanted to confirm something you mentioned about the cost evolution, and, I think I heard you saying that half of the cost evolution above your 1.5 percentage point increase is due to variable costs, which seems relatively encouraging, relatively high. Is that basically variable compensation and investments? Should we understand from that point that this part could slow down, obviously, if we see a revenue slowdown in the second half? Thank you very much. Anke, thank you for your questions. If I take the cost evolution first and then the 40 basis points. Yes, when we talked about those variable costs, I call them, it's the variable cost related to the ones that generate revenue, yeah. They typically would disappear with it. Yes, what is it? It can be a point of sale cost, yeah. If something happens in a point of sale, it generates revenues, but it comes at a cost related to that point of sale. That is, for example, all of the activities that we do where we provide our services, not through our own networks, but through the networks of others, yeah. That, for example, and it can also be transaction-related payments and the like. That's the cost. We have intrinsically those costs, if the revenues disappear, those costs disappear. On the 40 basis points, Anke, listen, I don't have a crystal ball, but what I would expect is that I would have expected to have a run rate of 40 basis points. That run rate has been below in the first and the second quarter. My hypothesis in the modeling is I would put 40 basis points in the third and the fourth quarter. Yes, it is not impossible that we end up lower than 40 basis points on the year. Okay. Thank you. Thank you. Next question from Kiri Vijayarajah from HSBC. Sir, please go ahead. Yes. Good afternoon, Lars. Just a couple of questions from my side. Firstly on Bank of the West, is there any impact elsewhere in the group from the sale of Bank of the West? You know, maybe loss of access to cheap U.S. dollar funding, maybe impacting CIB or anything else like that we need to think about. Can I just clarify that you keep access to the Fed window after you lose Bank of the West? You know, overall it's a fairly clean separation. There's kind of no negative synergies we need to think about. Secondly, on the G-SIB buckets and, you know, the more favorable treatment of exposures within the Eurozone, when do you think we're likely to see that benefit actually come through for you guys or the European banks in terms of SREP requirements? Specifically for you guys, does it actually move the needle when you think about your 12% CET1 target? 'Cause I think in the past, you know, that 12%'s been fairly set in stone. Just some clarification there, please. Thank you. Kiri, thank you for your questions. Well, if you look at Bank of the West, if you look in Europe, if you would sell an entity, well, we would have, of course, all those links with all the other parties, like the cross-selling and so forth. Bank of the West being on the, well, two oceans away, the cross-sell is relatively limited. On the contrary, it could be if we have a very good relationship with the buyer, it could basically lead to that. There's basically nothing to lose on that. On the financing, remember on the financing with the arrival of the IHC and the two coasts being regulated, while the banks of the two coasts being regulated by different supervisors, the financing one way or another does not really impact. From that point of view, there is no impact of Bank of the West on the rest of the bank bar the fact that there will be a lot of money available to redeploy in Europe. That's basically Bank of the West. On the G-SIB. T he main driver for G-SIB is the size of your balance sheet, right? If you get larger, you are considered more systemic. There was this peculiar thing in Europe where basically saying if you are in two countries in Europe, basically your balance sheet doubles, yeah, which is a bit ridiculous. That meant that on the trajectory where we were, we could have ballooned into a higher G-SIB score because of that. Now with what has been voted in Europe and with basically Basel is taking on, we will basically not be. European banks that are international will not be negatively impacted. A large European bank will be treated in the same way as Bank of America or whatever bank that is based in the U.S. is treated. Kiri, that will be my answers. Great. Thank you. Thanks, Lars. Thank you. Mr. Machenil, we have no more question by phone. Thank you very much. I want to thank you all for your continued interest. You have seen the strong results of BNP Paribas, how it is there to accompany the economy and will continue to do so. Thank you very much. Wishing you a great weekend. Thank you. Ladies and gentlemen, this concludes the call of BNP Paribas second quarter 2022 results. Thank you for participation. You may now disconnect.