Ladies and gentlemen, thank you for standing by. I'm Constantinos, your Chorus Call operator. Welcome, and thank you for joining the NLB Group conference call and live webcast to present and discuss the second quarter 2023 and first half 2023 results. All participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Blaž Brodnjak, CEO, Mr. Andreas Burkhardt, CRO, and Mr. Archibald Kremser, CFO. Mr. Brodnjak, you may now proceed. To the semi-annual webcast. I'm first drawing your attention to the regular disclaimer, then we would move to, of course, these days, pretty complex situation in Slovenia. I'm sure you have all realized that, that we have seen historical floods. The first message from our side is that the situation seems manageable, that, you know, the real impact to the NLB Group is well within reason, and in this respect, we don't expect detrimental impact to the results. We will talk about that a bit later, with Andreas talking about the asset quality and myself then talking about the outlook. Generally, we are looking at a strong set of results. We are improving the guidance overall. Really, you know, this is not something that is surprising. We are looking back to more or less strong performance in all client segments, in all geographies, in all product related terms. This is, of course, partially a result of the interest environment. On the other hand, of course, all the activities the bank have been performing throughout, more or less now a decade. This is continuously simply showing and demonstrating strong results across the entire geography. We've seen obviously a bit cooled down demand for loans, which is logical, which was expected. We have been guiding for mid-single digit growth rates, and we have been achieving mid-single digit growth rates, right? When it comes to housing loan origination, we see a pickup in consumer loan demand, corporates gradually waking up. We'll see how that's now latest. Actually, weather phenomenons will impact that in short term, terms, but in long term, you would expect even accelerated investment, now, given, of course, the impact on the equipment and of course, also the stock, and so on. In this respect, there will be a lot of working capital financing needs. There will be a lot of replacement CapEx, partly, of course, covered by the insurance, but partly, of course, where the credit worthiness allows for it, also by the, by the banks. Slovenia is in a very strong shape as, as a sovereign, as a country, and will be able to support the economy by, by various measures. We've seen two real distressed situations, first Corona and then, of course, subsequently, other phenomenons jumping in, hitting in. In principle, Slovenia has always acted very, very responsibly, has had, you know, firepower on one side when it comes to subsidies, when it comes to subsidizing the, you know, working, waiting for work statuses, other short-term subsidies. Slovenian Development Bank also is standing behind and has set the banking system being strongly liquid, strongly capitalized, and more or less in a daily contact now with the companies and households. Overall impact is absolutely manageable. In this respect, we also are looking back to, you know, what was, of course, a result of the continuous and consistent, and, and consistently applied focus. You know, strong focus on the sales activities, but of course, also very, very focused underwriting criteria applied. This is now being evidenced and demonstrated throughout various phenomenons, and in this respect, simply, you know, showing the resilience of this book, and showing the resilience of the whole business. Capital has been in a very good shape, so the liquidity indicators have been still continuingly very, very strong. What we are happy about is, you know, there is growth of retail deposit base. It is very sticky, and we've seen, of course, also strong support from the economic environment still. We have been talking about the real growth in the entire landscape. At the end of the day, it is what we've been doing throughout the last period, also through our extraordinary measures, such as, of course, insurances of instruments. I'm specifically proud of us pulling off the first-ever EUR 500 million ESG labeled bond, which will be, of course, strengthening our and fulfilling basically entirely our MREL requirements on one side, but really demonstrating a very strong commitment of NLB Group towards sustainable development. These funds, these proceeds, will be, of course, used strictly for upfront envisaged and purposes in sense of, of course, improving energy efficiencies, consumptions in terms of, of course, renewable energy production, and other measures that, of course, can be can be properly eligible within this framework. We have put in production a couple of new services. We are now in a more or less final stage of fully replacing former e-platform, e-banking platform for the retail clients in Slovenia, which is more or less a generic name for this service in Slovenia called NLB Klik. Also, the mobile app that is also replacing more or less, you know, the very successful so far is one, but, you know, the new times are of course, requiring new levels of user experience, and in this respect, we have been moving on. We are in the final stage of integration, so September 1st is the first day at which we will have one bank in Slovenia, so fully merging NLB and N Banka. I will wrap up this part of the presentation with NLB obviously standing by strongly. behind our society in the whole region. The Slovenian weather distress has been addressed by a proper EUR 4 million one-off donation to the most stressed municipalities. By that, we simply, you know, show that we are the responsible pillar of this society. I would pass the word to, to Archibald to talk about macro and performance details, Andreas will also address asset quality, and I will wrap up at the end. Thank you. Okay, thank you, Blaž. Welcome from my side as well. Maybe just to add to the previous segment, we are, of course, enforcing in the preparation of the integration of N Banka. This is going according to plan. It's of course a very challenging, ambitious project for the whole bank in Slovenia in particular. We have received ECB approval for this merger, and we look forward, actually, this weekend starts another dry run, as we call it, and we look forward to a successful merger beginning of September. This is moving according to plan. Regarding the macro, I think, really, not much to be said. This looks pretty much like a soft landing, in our region, as much as in the Eurozone for now, which is, I think, what the, the central banks, envisaged, to tame inflation. We see this playing out, I wouldn't say textbook, but pretty much according to what is envisaged. Our region, Slovenia, but our also subsidiary markets, still showing, economic resilience, starting from a, fiscally strong position, in particular, also in Slovenia which, of course, for the, you know, dramatic event happened, recently, is, of course, a good starting position. Overall, we see the economic environment still supportive to moderate loan growth, which is what we see playing out. As Blaž mentioned, we still look at single-digit loan growth. Q2 was, well, a strong quarter, clearly, by all means. We have moderate loan growth, as was mentioned. We have a strong and resilient deposit base, very important. We'll talk about it as well. Obviously, the rate dynamic is supportive to the rate revenues. You still see a positive dynamic in Q2. Obviously, pretty much a result of the ECB action and our variable rate book, especially on the corporate loan side. You see recurring results pre-provision at, you know, almost approaching EUR 150 million. That is for sure, a very, very solid quarter, and pretty much in line with, well, what I would call now, a two-year kind of revenue outlook as we come to outlook later. We are, we are pretty, close to these numbers, and in that sense, we might see something like a peak, or at least, a, a plateau type of, revenue and, and results environment, for the time being. You see, in essence, strong indicators, not to dwell on all of them, but, clearly, by all means, margins are very, very robust and probably a little bit above historic average. In that sense, with, deposits repricing, funding costs kicking in, we will also see a bit of a leveling off of this. Obviously, ECB rates are supposed to come down at some point. Going a little bit into the, the, the, the drivers itself, you see, as mentioned, a pretty, a dynamic, NIM expansion. As, as we explained, in many previous calls, this is, of course, function of our strong cash position, which, of course, now sits with a well remunerated ECB balance, plus, of course, a variable rate, the book. In that sense, this is, well, I wouldn't say a linear equation, because we also have our deposit repricing. We have, of course, wholesale funding costs, which, in our view, are still abnormally high, and we have to absorb quite significant MREL funding volumes. We'll talk about that. Blaž mentioned our EUR 500 million Benchmark bond. All this shows up also in, in, in margin and, and containing margin expansion or the further margin expansion. Still, by all means, these are very robust and strong numbers. On the fee income, we in essence see a moderate dynamic, that's perfectly understandable and fine. We are, of course, also not aggressively repricing in these days, so prices are kept moderate also to not further increase inflation pressure. In that sense, these developments are expected, and from our point of view, also acceptable. On the cost side, we see still couple of overlays from the integration process of N Banka, as mentioned, on one side. On the other side, as also in previous calls explained, we still have an overhang of some 300-400 staff... maybe even a bit more if you combine Slovenia and Serbia. This is supposed to be reduced over the next two years, and in that sense, the cost inflation we see on the labor cost is somewhat mitigated. Of course, we maintain the cost guidance for the year. We'll increasingly, of course, and discuss intensely, how to ultimately really go about cost containment on a more structural level with a very substantiating our operation across the region. This is work in progress. We invest heavily in new technologies in the data space, be it machine learning or AI is, of course, now a fancy term. Of course, we play and invest in all these technologies. I would claim, you know, at the pace as it evolves. Let's also not forget this is a heavily regulated space, and we are conscious of that. We will be responsible users of these technologies, but for the benefit of our customers, and of course, also to maintain our cost guidance. Loan dynamics, we mentioned that we see moderate loan growth. We have seen some pickup in Slovenia, was mentioned on the consumer loans loan space. Of course, the mortgage production is predictably in this higher rate environment slowing down visibly from last year. As we, as we said, this, this is, it here in front of you, the funding rates are high, also by historic standards, and the funding position, with EUR 1.4 billion now is, of course, substantial now, by all means. In other words, this is for sure, a focus area going forward in terms of investor relation efforts, broadening investor space, also introducing new formats, possibly issuing in dollars, at some point, and in that sense, increasingly, I would say, rationalizing, economizing these positions. Clearly, we will be a player in the capital market space for, well, for foreseeable future or in essence, from now onwards. I talked about the funding rates on the deposit side. Clearly, deposits are also repricing. You see it in front of you, both in Slovenia and in our subsidiary banks. Obviously, we maintain very strong funding positions. You see that especially in retail, we have been able to gain deposits, also particularly in Q2. In Slovenia, we wanted to highlight that actually our offering to retail customers, in particular what we call a savings account, seems to be well accepted. Kind of half of our so-called site deposit base is actually in a conveniently accessible product, where customers can save money conveniently and also at better rates than at overnight. You see this obviously also playing out in our average deposit rate. Let's not forget, this is the average across all deposits on, on this product, you get something close, to 75, 80 pips these days. By that, I, pass on to Andreas on asset quality. Yeah, Archibald, thank you. As mentioned already at the beginning by Blaž, obviously, I will first show you the first half of the year, but then also briefly go on to the flood topic. On distribution, no surprises. Half of our portfolio, as you know, is in Slovenia. The next biggest one is Serbia, and then the rest distributed primarily, of course, through our core markets. You see a little bit of a special effect in the first half of the year on corporates. That's primarily repayments of liquidity lines in the energy sector. All other segments you see solidly growing. Distribution between the industry sectors, very distributed. Also here, no revolutions, no surprises in the first half of the year. When we are talking about staging, very good portfolio quality. You see this, of course, in Stage 3. We have a little bit increase of Stage 2 portfolios in retail. Here I have to say this has three effects, and I told you already previously, it's a change of methodology, it's a change of booking logic, and it's also somehow a little bit increased delays of some clients. Overall, I mean, the change looks, well, quite clear, but honestly speaking, the by far biggest part is here, well, methodology driven, and overall, the numbers are still very, very small. What I said before, you see, of course, now also here, we have total EUR 313 million non-performing loans, out of which, well, 40%-45% don't even have any delays. This is obviously now very good numbers in the meanwhile, and you also see that, of course, also basically unchanged. The coverage is very, very good, and the distribution in the meanwhile, also, fully normalized between the geographies. From P&L impact, a very good two first quarters. We were releasing overall EUR 29.9 million provisions. This is- this has a couple of parents. One is the IFRS nine review. This time we also have upgraded granularity, so we are looking more detailed on, on, on portfolios, so we have more granularity here. This led to a release of EUR 7.3 million in Q2, altogether EUR 7.4 million. Basically, it's all from Q2. Portfolio developments, this, of course, also has to do a little bit with what I mentioned before, the repayment of liquidity lines in energy sector. This, of course, is also releasing pool provisions. On the other side, very, very good results, again from non-performing loan resolutions, both on and off balance. From the off balance alone, you see here in these two quarters, EUR 14.6 million. Yeah, simply very solid. What you can see from fixed versus variable, if you would take the previous charts, which you saw in the previous quarters, that slowly, slowly, of course, we are moving to more fixed loans, especially in retail. Of course, corporate, where you have, more working capital financing, you still have a bigger part in, in, variable, but also here you see the, the same tendency, actually. Of course, if you look on our pricing, this we started telling you, I guess, already now a year ago, that, of course, with increasing interest rates, Euribor is only changing to contractual dates, so we are always running a little bit after, and that's actually for our profitability, good news. We are still not fully on the current level of Euribor, logically, and this means here's still some more good news to come. Yeah, that's it on the asset quality. First two quarters now, of course, we had a flood here in Slovenia. I have to say it's still a little bit early days, so you can imagine that after a few days, we're still analyzing. What I learned so far is that, first of all, retail, honestly, surprisingly low impact. We were looking, for example, on mortgages, which are in, in flood areas. This is very low number, I have to say. So here on retail, I have to say, looks better than I thought initially. And on corporate, very, very moderate exposures, of course, more than, than in retail. The bigger exposures here are with excellent clients, actually, so they have, for sure, strengths to sustain that. Of course, where needed, we will also give liquidity lines, as Blaž mentioned before, for credit-worthy clients. Here, exposures are moderate and, and actually, luckily, if you want like that more for, very good clients, where we're in reality, also not expecting too many troubles. Being a little bit early to give final conclusions, but we just have revised our outlook for cost of risk downwards, and, at least what we can see so far, I feel confident that we will stay with this outlook so that we do not have to revise it upwards. With this, I'm actually handing over to the outlook and back to Blaž. Thank you. Thank you, Andreas. It's indeed the case. The Slovenian economy has been very, in a very good shape, and as I mentioned before, Slovenian sovereign is also in a solid position. We have been also assisted by the European Union. We are very happy about that. The first signals from the eighth, coming from the European Union as well, will help, obviously, for the efficient reconstruction of the infrastructure. Corporate clients and retail clients, you know, in terms of what is actual exposure of the bank, are, you know, not leading to a different conclusion, that we would not impair the what we prepared a couple of days before that, obviously, a new guidance suggestion, which is keeping the cost of risk below 15 basis points. This is, of course, a good news. Generally, given the, you know, strength of performance, and the banking system generally, of course, is also in a very strong capital and liquidity shape to be able to extend financing support that will be needed for the reconstruction, replacement, CapEx, and so on, is going to actually drive, you know, we believe, even now, a bit of, you know, Q3, maybe, you know, a bit lower activity, but Q4 catching up then quickly. In this respect, catering for what we still believe is reasonable to expect when it comes to the growth, so mid-single-digit growth when it comes to both corporates and retail, when it comes to volumes. Of course, these new volumes are generated at reasonable rates. In this respect, this is, of course, providing additional capacity, earning capacity to the banking system. by that, we have been improving the guidance, when it comes to the ROEs, when it comes to, of course, those absolute levels of profits. In this respect, also normalized ROEs, exceeding basically 20%, which is, of course, a very solid value proposition to the shareholders, and also other stakeholders, because this strength has been enabling us to be able to support society also, you know, in distress. On the other hand, this is improving the, the capacity of this business to grow. We, we absolutely stick to the second leg of the dividend and to be suggested to, to the shareholders in December, so the, you know, remaining EUR 55 million to come. Of course, then the natural question, what's happening with the sizing of, the sizing of dividends in the upcoming years? As of today, we are talking about the same EUR 500 million cumulatively, from including 2022 to 2025. We believe there will be room for growth, besides organic, because clearly, we would have been active in case of, you know, M&A. We would analyze, we would get engaged, we would potentially bid, and we would potentially close. I can't be more specific as of today, but we believe there would be opportunities coming our way, and we would be able, actually, actually, and prepared to address them. We will initiate a strategizing process at the end of this year, in December. We will kick it off in December with our supervisory board, with a plan to conclude until the Investor Day, that is going to take place on May 9 next year, where we want to communicate, let's say, a 2030 strategy for the upcoming period, which will then further define horizontal and vertical eventual opportunities for growing the business as a universal financial institution in the upcoming midterm period. We have mentioned on various occasions publicly that, you know, we believe there is value in size. We would want to definitely work in a direction of potentially doubling the balance sheet of this business, right, in a reasonable period, by, of course, performing well on one side through organic activities, and then, of course, be adding value-accretive M&A opportunities, while maintaining very high discipline when it comes to valuation. We would only be doing this in a very accretive way. We are in absolutely no distress. We are in absolutely no, you know, time, under no time constraints, to have to do something. This is by no means the case. We would, however, pursue, of course, opportunities that we would see as really accretive in terms of our position in the region. We have been discussing, of course, various geographies where we have not been present yet, but we have, of course, also been looking at eventual further in-market consolidation opportunities in our home markets. Wrapping up, we are strong, stronger than ever, and we are a vital pillar of the society of the region, and we prove that by our social responsible behavior. We are on good track. There is a lot even better to come, and thank you for trusting us on this journey. By that, we would then now refer to the eventual Q&A questions, and of course, we will gladly answer, all three of us. Thank you. Ladies and gentlemen, at this time, we'll begin the question and answer session. If you wish us to ask a question, may press star followed by one on their telephone. If you wish to remove yourself from the. Quality. Anyone who has a question, may press star one at this time. One moment for the first question, please. As a reminder, if you would like to ask a question, please press star and one on your telephone, or type your question in the box. There are no audio questions at this time. We will now move to our webcast question. The first webcast question comes from Pia with Bloomberg Adria, and I quote, "How do you comment on, on the fact that Italy taxed the banks because of excess profits? Finance Minister of Slovenia has also not taken this proposal off the table. Well, this is pretty populistic question coming from the media, right? First, Italy has not taxed yet anyone. There is, you know, there are rumors about eventual taxation. On the other hand, clearly, you know, we have to understand what would be the gist of this taxation. NLB as the, you know, systemic institution, has on our own, been this year donating EUR 5 million for humanitarian costs. In this respect, we have been contributing to society. I can't comment other speculations in this respect, frankly, right? We believe that we are looking at something that is, of course, now, a bit elevated interest environment. Banks cannot impact monetary policy. As much as we believe that previous policy was, you know, liquidity trap and moral hazard, let's see what this one brings. It has not, you know, been showing effectiveness that everyone was expecting. We believe that, of course, we are looking at the interim phenomenon, so, you know, these profits are looking, of course, excessive, but not. This is by no means the case, if you look at, if you put it in a historical perspective. Who can assure that, you know, 12 months from now, we will not see very significantly lower rates coming from the ECB, and what this will cause then in the bank's balance sheets, we will see in the P&Ls, right? We have been looking at seven years of negative rates where banks were bleeding. And we're, you know, barely earning cost of capital, and half of the systemic European institutions were not earning cost of capital. Now, we see one year of earnings, which will be, of course, quickly gone with these levels, and should we now take the value out of the banking system by this becoming more robust capital and responsible to be able to support the economy? It, of course, is a political question. If you ask me, there is no ground in Slovenia for something like that, but of course, we are not politicians, and we can't comment, possibly, decisions of the governments. The next question is It's a follow-up question from Pia with Bloomberg Adria, I quote: "We have unofficially learned that NLB is in exclusive talks to acquire Summit Leasing. How are potential takeover activities going in Croatia? I'm not sure where you get, get this exclusive information from. NLB has, as mentioned, been observing and analyzing eventual processes in M&A terms that might take place, and if they might take place, we might be engaged in that, and this is all I can say. The next webcast question comes from Nisha with Citi, and I quote, "What are your plans with regards to M&A in the next three years? Any regions you are looking at? Well, we have been continuously explaining that, of course, we are interested. We have been interested in potentially adding a couple of geographies. This was Croatia and Albania specifically mentioned, and we have been, of course, closely analyzing the situation in all four existing markets for potential in-market opportunities. There have been no, no necessarily many assets as of today that have been actionable, but situation might change and might change quickly, right? We have pre-funded, basically, eventual opportunities, which is a good position to be in, because by that, of course, you can act swiftly, and you can act decisively. You know, if there were any opportunities, we could get engaged and could transact effectively and efficiently, and that's all I can say at this point of time. The new strategy debate that we are going to take, that's going to take place with the supervisory board towards the end of the year and then until mid-May next year, will determine whether there is any addition to this strategy that is now strictly focused on this geographic territory and on more or less banking exclusively. Which means, of course, then, I don't know, vertical further opportunities, but, you know, would there be any expansion of that beyond existing geographies, beyond, you know, the, the businesses? This is not on the table as of today, and I cannot possibly comment. We are prepared to, you know, get engaged into acquisitions that are eventually addressing more than EUR 4 billion of risk-weighted assets. In case we didn't find proper opportunities, let's say, in 12 to 18 months, we could always discuss with our shareholders to potentially size up the dividends, because this is, of course, something we can afford out of the existing very strong capital base. For today, from today's perspective, we believe there would be opportunities. We believe that paying out, you know, the dividend that we have signaled so far, stepping up in the upcoming two years, right, is a very solid dividend promise. It's actually a very solid, solid dividend yield, you know, in terms of what this means relative to the, you know, share price still. Of course, we would be, you know, by that, also supporting the future growth in both organic and M&A way. We would be immediately publishing when something would be to publish. As of today, there is unfortunately nothing yet to publish. Of course, I, I can only say what I said for a couple of times today. If there were processes, we might have been engaged. The next webcast question comes from Pia with Bloomberg Adria, and I quote: "What is your plan for issuing bonds in the coming year? Thinking of a retail release? What are the expectations of required returns by investors for potential future assets? I have alluded before that we will be a recurring player in capital markets, and indeed, next year, as early as next year, we will be in the market again with some EUR 500 million, roundabout, in seniors and most likely also subordinated formats. As regards addressing the retail investor base, that's indeed something we think a lot about, whether, you know, that is at some point feasible. From a technical point of view, from a sales point of view, from a compliance point of view, we would love to make these instruments accessible, but we need to find a compliant and safe way to do so. Otherwise, we are extremely interested to address regional investor bases, both in Slovenia and in Croatia. I have to say, I'm very glad that in the last EUR 500 million bond, we had been very successful in t hese efforts. Of course, we will continue to put all efforts and first priority to domestic and regional capital market players, both institutionals and eventually, possibly, also retail. In regards of return expectations, as I said before, at the moment, they are at historic highs, which also speaks to the perceived riskiness of banks and especially small and mid-sized banks like ourselves. This is simply a circumstance we have to live with, so. Which is why I said our funding costs are rising, this is, of course, a very material element in our funding cost going forward. The rate environment, plus spread expectations, whatever this will amount to next year, but for sure, seniors will be still in a 5% range, give or take. Subordinated typically 1 to 100 basis points above that. We'll, we'll cross that bridge when we'll get there. Market circumstances have changed very fast, very substantially upwards, and we have already observed with the last issuance that pricing expectations have somewhat normalized, but still not yet at, let's say, historic averages. The next webcast question comes from Anton with AZ Funds, and I quote, "What kind of damage did NLB suffer in recent floods, and is the bank planning any increased activity related to the financing of reconstruction? I can give you the strategic aspect to it. Andreas explained before that actually the direct impact when it comes to flooded housing loans collateralized by the mortgages, is really surprisingly limited, so really immaterial for the banking group. The companies that were heavily affected are mainly, you know, the ones with very strong background, with very strong performance rating and general credit worthiness assessment, and have been also sitting on strong cash flows up to now. Luckily, August is a bit low season also for production across Europe, so in the supply, the entire supply chain, this is something that is a kind of, you know, a good circumstance in bad times. These businesses will be quickly up. Slovenia has learned how to recover quickly and will be supported by, as mentioned, state support and also European support. Banks will be providing, extending, we have just defined a EUR 100 million line, actually, for the, you know, working capital loans, for, you know, reservation-rated businesses, at reasonable rates, which will be helping them and reestablishing production and capacity to perform services. At need, of course, we will be extending moratoria. There are no signals yet that this might be needed at all. As Andreas also said, it's a bit too early to fully assess the damage. Taking everything together, we don't believe it would impact the business to the extent that we would, you know, be doubting into the predictability of the guidance when it comes to the cost of risk. We still believe the overall annual cost of risk will remain below 50 basis points. Maybe just to add on that, because I think we haven't mentioned it, our own branch network. Here we had, well, you could say unbelievable good luck, but if you ask me, simply, branches are properly positioned. Otherwise, no impact on our branch network. All branches are up and running again since today. Before that, all of them except one, so the last one came back alive today. Also our ATM network, we had two flooded ATMs, so here, of course, we were taking out the money, we replacing the ATMs. All other ATMs from the branch network are fully up and running, so also in this respect, really minimum impact. Yeah, two out of 560 + ATMs. Yeah. The next webcast question is a follow-up question from Anton with AZ Funds, and I quote: "Your outlook for 2025 regarding costs is flat on the 2023 level. Besides reducing the number of staff and branches, you mentioned digitalization. Can you provide more information? You know, that basically the client can actually, you know, get approval without having to talk to anyone and without having to sign a sheet of paper, and that's something that, beyond the integration, now we are completing the integration of N Banka at the end of August. We will then really then put back to the pipeline of priorities to develop. By that, extending more services, to be fully closable, right, online, would, we believe, bring, of course, a stronger origination in fully digital terms. The entire payments universe, cash handling universe, is supposed to, of course, also get, you know, more optimized in a sense that already now in Slovenia, you have 98% of all, you know, transactions in branches, performed digitally. Payments total digitally, and there are barely any cash transactions in branches, whereby, of course, in Southeastern Europe, you would still see significant branch operations with the cash, and that's something that transitionally we want to stimulate, to stimulate the move to the ATMs. We have just revamped for example, the ATM network in Serbia. It's now the most contemporary network in Serbia, you know, so that you can have also the day, night vaults and, you know, the in-cash deposits, and of course, withdrawals at the ATMs and so on. That's a continuous process. On the other hand, we have clearly, you know, been working on the final tails of integrations. Sole fact that we will integrate N Banka into NLB will deliver, you know, from a significant contribution to further reduction of the number of employees, Tibor was mentioning for approximately 400, up to 400 to come in a couple of years. This is going in this direction, right? Flat, to me means, you know, very low single digit, you know, growth that I would still see flat potentially, but, you know, this is in this ballpark, you know, plus, minus couple of million, we believe is a reasonable expectation. It's coming actually from this universe of dealing with processes, dealing with, you know, shift towards digital and actual reduction of the number of employees and further reduction of physical footprint. The next webcast question comes from Pia with Bloomberg Adria, I quote: "Could we perhaps expect a higher dividend based on the results? I tried to explain before that, it's too early. The existing dividend payout is following the midterm plan that was communicating, that is being stepped up in the next year and the year after, which is automatically paying higher dividend. On the other hand, if could this be even higher, is, of course, a function of us being able to bring to the table, attractive opportunities that actually accrete more value than paying cash out to the owners. That's something that is a homework of the management board and the supervisory board to define within the new strategy on one side, and within, of course, the actionable perimetry. What assets would eventually be transactable in the upcoming year or two? If there are no opportunities, you could always size up the dividend, as said, there is a natural step up. If you count, so far paid dividends, within the total EUR 500 million promise, you can see that, of course, what is still to come is higher than this year, right? You have an automatic increase of the dividend. Could this be even more? It could be more if we couldn't find better opportunities to invest. From today's perspective, we believe there would be value accretive opportunities to invest. That's why, for today's perspective, we don't envisage even higher than what is automatically embedded as higher. Of course, you know, this might be, be changing next year if there were no really concrete, you know, possible outcomes. From today's perspective, we believe they will be. The next webcast question comes from Anton with AZ Funds, and I quote: "Can you tell us, how is your lease business going? Can you compare the situation across countries? Sorry, was this a lease? Lease. We are, we are, we are happy with the developments. Slovenian leasing business is, is growing to the extent that we are now already originating more than 10% of new production, which is for, you know, a novice in the market, after two years, a strong achievement. We have never shied away from communicating the ambition of holding a natural market share also in leasing business. Us being at 30%, total asset business in banking, you know, this would be a natural aspiration also in long term for the product of banking, basically. We are gradually moving this direction. If there were inorganic opportunities, we would consider, as mentioned before. We have very strong evolution in Serbia, so we just introduced the business at the beginning of this year, more or less, and it's developing very well, and we're very happy about that. We have just started in North Macedonia, in North Macedonia, it's really the beginning of the journey. We believe that Slovenia and Serbia will grow quickly. We believe that we have introduced now, just in the last couple of day, weeks, new services, where you have basically a so-called leasing button at some, you know, web portals. In principle, you are directly transacting with your clients, and this is the future we believe of leasing business. This is something we, we are specifically happy about, and the team is fully eager on, you know, developing this further. Then adding, of course, the cross-selling perspect- potentials and possibilities with the banking network and so on so. With the distribution power of NLB, we have no doubts leasing will be a highly successful business. The only question is: Is it a purely organic play, or, you know, would there be an, you know, a shortcut to, to one of the leading positions? That's, of course, a function of eventual M&A. The next webcast question comes from Jovan with RBI, and I quote: "Where do you see wholesale funding costs in second half versus first half? Well, it's a relatively straightforward equation. I mean, we've given the full details of the whole funding position. The only change there is, is the EUR 500 million bond that kicks in in the second half of the year, with a coupon of some 7%. You, you do the math. It's, it's very straightforward. Yeah, there are no new issues since planned for this year. First, next is coming middle of next year, and, you know, that's it. As, as I said before, I mean, it's the, the, the cumulative funding cost is then a function of where's the market developing. Are, are rates coming down a bit eventually next year? Are spreads coming down a bit? I've given you a, a rough guess of what senior funding costs might be next year, but, you know, this is a speculative territory. Overall, the balance sheet, the wholesale funding position of EUR 1.4 billion, you know, will, will technically possibly increase by EUR 100 million-EUR 200 million temporarily, because some of the refinancings will be a function of marketability, sizing up in the right buckets, et cetera. It's, you know, broadly speaking, we talk EUR 1.5 billion, and broadly speaking, average funding costs of this position is in the 5% range. The next three questions are follow-up questions from our webcast participant, Jovan, RBI. I quote: "Flooding's impact in your corporate loan book? It is very marginal. Yeah. Underestimate. We have two, three bigger clients which are affected. Luckily, very strong players on the market. Here, first of all, we see considerable capability on their own side. Also, state support, which is already indicated, is very decisive, as Blaž mentioned, very similar to the last years. In reality here, most realistic outcome is no impact on us, honestly speaking. We have a couple of smaller cases, cumulatively, honestly speaking, very, very moderate. Here, of course, we have to analyze still deeper to which extent and in which cases we may see some impacts, but overall, at least what we can see so far, once again, to reconfirm the revised outlook cost of risk, which you see still in front of you, should hold. I n reality, you know, we will be more confident in a few weeks, because then, you know, you see really all the details. But honestly speaking, compared to, the initial shock two, three days ago, it looks already now better because, some of the clients were originally quite pessimistic how long it takes to, reinstall production, and that now looks already, after a few days, much more optimistic. I think the shock is behind them, and, and now they are, cold-blooded, you know, analyzing what it really means. It seems, as we see for now, even less dramatic as, as, as initially, actually. How does salary adjustments on inflation work within the group? How does? Salary. Salary. Salary, I mean, labor cost inflation is a fact, so we, we are talking double digits on, you know, per capita, if you want, basis. This is clearly a function of a runaway inflation we had last year and to some extent still this year. That's certainly something we are watching very carefully. I mean, to the extent that we compete for talent in certain areas. We are, of course, also willing to invest in quality. Quality banking has, you know, is provided by quality people. They simply, you know, here we simply compete with, with not just the banking industry, but with many other players, especially with tech or data-related job profiles, but increasingly also in, in, in sales positions, where we, we compete against even retailers. Here... That's why, of course, we have to first maintain the quality of personnel with repricings. On the other side, what Blaž mentioned before, making sure that increasingly lower value added activities are optimized. That's the way to go, and this is what will keep the price equation in check. Yeah. Otherwise, if we have 12%, 13% inflation in Serbia, you can't expect you will have, you know, 5% growth of salaries. It's simply not, you know, acceptable. KB may cross EUR 100 million profits in 2023. Do you consider upgrading the midterm outlook? Well, this is a function of expected rates, right? You know, we, we see KB originating more or less new loan production at, you know, more or less almost double the market average, which means we are successfully growing the business. The key focus points in the upcoming years will be client experience and digitization. Now we will move, in principle, the processing of cards to our common platform, Bankart, and then we would be able to, of course, introduce modern services such as Apple Pay, Google Pay, Smart POS on mobile phones, and so on. That's something that we have done in Slovenia and now accelerating throughout the region. You know, this is going to bring the bank closer to the also younger population and, you know, more digital savvy population, and by that, we believe we will be able to also push further for the efficiencies. Yes, KB could be making more. That's why we have, you know, changed around EUR 100 million to more than EUR 100 million. Now, how much more? The time will tell. We love the business in Serbia. The first half of the year is, is, is very good and, you know, with these trends, we are really looking forward by a very positive lens applied. The next webcast question comes from Dan with Long Group, and I quote: "Would you be able to offer more details on your prospective bond issuance, following up from your comments on a potential USD issuance? That's Archi what will give you the details, it's first, almost a year remote from today, right? Second, it's very difficult to judge what will be the environment then. Archi... As I said, we are playing with the idea of various formats, and, of course, the US dollar is something that is on our radar because we get feedback from investors, that, you know, would, would wish for such a format. Of course, the U.S. investor base is also, again, very interesting, but it's one of many routes, one of many options, and too early to tell for now. We will do the tours, we will do the investor non-deal roadshows to shape up our views. I think that was the, you know, route to success in our EUR 500 million green bond issuance, where it is a lot of listening to what investors, well, expect from us, to produce, and we will try to put out, again, a good, attractive instruments, as I explained before. The next webcast question comes from Christian with Frontera, and I quote: "In what quarter, quarters will the Europe EUR 4 million flood donation appear on the income statement, and in what expense lines will disappear? It will be Q3. The expense line is the costs, I guess. We will make sure it's disclosed transparently. It is a donation directly to municipalities, and it will be paid out presumably in the next two weeks. It's clearly something like an other expense type of position. It will be transparently shown and commented and disclosed. The next webcast question comes from Marlene with Deutsche Bank, and I quote, "Looking at the tax rate in the second quarter, 2023, it appears to be much higher than in previous quarters. Could you please comment on the drivers behind that increase and whether this 17% should be seen as new run rate going forward? Thank you. This is technically driven by the dividend cash flows that we receive at the parent bank level, and that drive up, of course, the income. In this sense, no, it's not recurring. We have more questions. We are short of time. The final question is from Mladen with Erste, I quote: "Thank you for the call and comments. Congratulations on the results. Where do you plan to hold next Investor Day? Belgrade again? It's going to be Ljubljana this time around. It is our home also, so it's going to be May 9, 2024, in Ljubljana, and you're all cordially invited. Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments. Thank you. Thank you very much. It's been a rich discussion, so thank you for raising many questions. NLB, as said before, is in the strongest shape ever and is a vital pillar of this society, and when I'm talking about society, I'm talking about the regional society. We have clear view on how to continue. The new strategizing process might add some angles. This is going to be discussed, obviously, also then in subsequent events. We will end up this year strongly. We will pay out the dividend, and we are looking into a bright future, despite, of course, these interim turbulences driven by the climate change, which we all have to embrace and adjust to the forces of nature. Thank you very much, and until next webcast. Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling and have a good afternoon.