Dear friends, welcome to our second quarter 2021 financial results webcast and conference call. This is Ebru speaking, Head of IR and Sustainability of Akbank. Thank you for joining us. I hope that you are all in good health. Today, I have with me, as usual, Türker, our CFO, İlknur from our IR team, but this time we also have our CTO, Altıntaş, with us to answer your questions with regards to our incident in July. Before moving on to our bank's first half performance, I would like to share some insight of the macro environment we are operating in. Despite the negative impact of the ongoing pandemic, the economic activity in Turkey has been trending strong, and we expect this to continue in the second half of the year. Looking at the demand components, domestic demand has slightly decelerated while external demand remains robust. Some macro-prudential measures have been implemented to secure a balanced demand composition in economic activity, as well as curb financial stability risks on both current account balance and inflation. The ongoing recovery in economic activity, as well as relatively higher commodity prices, coupled with the low base of last year, have led to prevailing risks on inflation. With the impact of monetary tightening as well as base effect, we expect inflation to slightly decline towards this year-end. The pace of the deceleration in inflation will be important for the course of monetary policy, which we believe will be kept tight until a significant fall takes place. We believe room for rate cuts will remain rather limited until year-end. On a positive note, current account balance is in an improving trend. We expect full-year current account deficit to decline towards $22 billion, below 3% of GDP. This will be achieved with potentially better trends in tourism revenues, robust export growth, and lower gold imports. We expect overall export growth to outperform import growth for this year. The impact of tight monetary conditions is being felt both in loan growth as well as margin evolution. TL deposit and loan market trends, that being growth and interest rates, have somewhat stabilized. In light of the higher inflation expectations, we expect TL deposit and loan rates to likely remain at current levels. As far as FX loans, demand remains to be weak. So far, funding cost trends as well as inflation expectations have both evolved above our initial guidance. Although the operating environment is expected to be relatively more favorable in the second half of the year, it will still likely remain challenging due to the tight financial conditions. In light of all this, let's move on to our bank's performance. First, I'd like to touch upon a few of the achievements. Our first half reported net income was up by a stellar 43% year-on-year to TRY 4,134 million, a record high. I'd like to also provide some context on our quarterly profit before tax performance, which was up remarkably by 19% quarter-on-quarter, reaching all-time high both on a quarterly and first half basis. Due to the rise of the corporate tax rate to 25% for this year, with the first quarter's cumulative impact, our effective tax rate for second quarter increased to 31%. For the first six months, our effective tax rate was at 26%, and for the second half of the year, we will continue to apply 25%. We had shared at the beginning of the year that our swap-adjusted NIM would be in a sequential improving trend. Due to funding costs rising above our expectations, NIM started the year at a lower level than we initially anticipated. With the increase of CPI linkers and floating rates in our TL securities mix, as well as our loan growth being led by high-yielding consumer loans, core NIM started to improve in second quarter. Our proactive securities positioning and strategic loan mix will continue to be NIM accretive for the second half of the year. With our deliberate loan book and investments in digital banking, we have been consecutively gaining market share in these high margin segments since last year's third quarter in a healthy and well-timed manner. This growth will continue to be a supportive factor, not just for NIM, but for the overall profit mix. Our robust P&L performance in first half, which indicates a clear beat to our full-year guidance, also underlines the success of our growth strategy and diversified business model. Thanks to our proactive and prudent IFRS 9 implementation in previous quarters, net cost of credit has been improving following the second quarter of last year. As always, our robust capital and strong liquidity buffers underline the inherent benefits of our strategic priorities and the strength of our customer franchise. Please note that on this slide, we have shared a link to our cheat sheet, which provides the data used for the presentation. Let's move on to the drivers in more detail. First, with the balance sheet. Our total assets were up 12.4% year to date to almost TRY 538 billion. Net loans increased by 10.2% in the same period to TRY 289 billion, led by TL loan growth. By the end of first half, loans make up close to 54% of our total assets, slightly lower versus year-end. TL business loans were around 39% of total loans, while consumer loans, including credit cards, accounted for almost 24%, up 2 percentage points year to date in line with our growth strategy, which I just shared. FX loans were 37% of our total net loans year to date, higher slightly, driven by TL weakness during the first half. Our securities stood at 21% of our assets with strategic positioning, which I will discuss further in a few minutes. Our balanced and prudent asset allocation, along with our low leverage of eight times and robust capital adequacy ratio of 20%, will continue to drive sustainable long-term shareholder value. As highlighted, our year-to-date TL loan growth was driven and led by the high-margin consumer loans, where we continued to enjoy broad-based quarterly market share gains. More importantly, this performance was not confined to this year. Our market share gains since third quarter last year added up to 115 basis in total consumer loans and 120 basis specifically in GPLs. On this slide, we have shared the market share gains year to date. Accelerating marketing efforts as well as digital initiatives have been key enablers for the noteworthy performance. I will touch base on the highlights of our digital banking performance in the upcoming slides. We also continue to enhance our analytical capabilities, which will further advance our market presence. As for TL business banking, we had a heavy redemption schedule during the second quarter of this year, leading to a slight growth year to date in this segment. Please recall that in order to effectively manage margin evolution, our growth last year was mainly in short-term loans, which is why we had heavy redemptions. To sum up, there is a slight downside risk to our full year guidance of 20% TL loan growth. When looking into the loan mix, our efforts in retail segment had paid off with decent market share gains, which will be supportive for NII evolution. On the other hand, our net FX loans remained almost unchanged at $12.3 billion versus end of last year. Muted demand for investment loans hinders us from establishing more optimistic outlook for FX loans, which is totally in line with our guidance. Our total securities book is up 13% year-to-date at TRY 115 billion. On the TL side, share of CPI linkers and floating rate is now at 77%, underlying a proactive strategic security strategy. In light of the rising inflation outlook, the main increase over the last three quarters took place in CPI linkers, which are now 63% of total TL securities, up by 20 percentage points since the first half of last year. This portfolio will work as natural hedge in higher inflation environment. During the second quarter, we updated our October to October CPI assumption to 14% from 11% of first quarter. Please note that every 1% CPI has around TRY 270 million net income, 6 basis points NIM, and 40 basis points ROE impact. As for the fixed rate side, a significant portion of the portfolio matured in second quarter and was replaced by higher yielding securities. As a result of these strategic actions, TL securities yield increased visibly in second quarter, hence we expect considerable NIM contribution in upcoming quarters. Meanwhile, due to limited foreign currency loan demand, we have utilized our ample foreign currency liquidity in higher yielding Eurobond purchases, which will also be NIM accretive. To sum up, our Treasury's proactive positioning in both foreign currency and TL securities portfolio will continue to contribute positively to NII this year. Our focus remains on well-diversified and disciplined funding mix, as deposits continue to be our main source of funding with almost 61% share. Our total deposits were up by 12% year-to-date to TRY 327 billion. Demand deposits were also up by a solid 14% year-to-date, increasing its share to 32% in total deposits. Sticky and low-cost deposits such as retail, i.e. consumer and SME, reached 76% of total TL deposits, 4 percentage points higher versus end of last year. TL LDR remained quarter on quarter, but still 6 percentage points lower versus end of last year. Our sound FX liquidity with an FX LDR of 49% remains as one of our strong muscles. As a result, our total LDR ended the quarter at a low level of 94%, still below sector's 100%. We have a well-established wholesale funding profile, which is 12% of our total liabilities. Our second quarter average foreign currency LCR was robust at 276%. Our foreign currency liquidity buffer was noteworthy at $13.3 billion versus our next 12-month rollovers at $2.6 billion, of which around $1.5 billion are in syndicated loans. Following our successful first ESG linked syndication in April, we continued our efforts in sustainable finance with the first benchmark sustainable Tier 2 among Turkish deposit banks in June. As you know, we have a call due on our 2027 sub-debt in March next year. Our capital position is already very robust, but as 47% of our assets are foreign currency, in order to keep the capital hedge against currency volatility, we decided to issue a sustainable Tier 2. The timing was very successful as the book attracted around $1.4 billion from more than 150 investors, pricing at 6.8%. This yield is the same as our senior Eurobond issuance of last year, July. The positive impact on CAR is 105 basis points. As a result, the total share of ESG-linked funding in wholesale now stands at around 30%. Due to our ample FX liquidity and low FX loan demand, we will continue to be opportunistic in our bond strategies. Let's move on to the P&L in detail. Our quarterly swap-adjusted NIM was up 34 basis points quarter-on-quarter to 2.74%. For the quarterly performance, significantly higher swap cost was offset with higher CPI linker contribution. Therefore, the improvement in core NIM was led by asset repricing. To put it into numbers, our average short-term and long-term swap utilization was around TRY 49 billion, up by TRY 6.5 billion quarter-on-quarter, led by higher short-term swap utilization. Swap rates also increased quarter-on-quarter. Both higher utilization and higher rates resulted in almost TRY 2 billion swap costs, leading to a 36 basis points quarter-on-quarter negative impact on NIM. Meanwhile, the revised October to October inflation assumption for CPI linkers to 14% led to a 40 basis points quarter-on-quarter positive contribution, offsetting the negative impact of the increased swap costs. That said, looking at the recent realizations, an upside risk for October inflation is evident. Every 1% CPI will have around 6 basis points NIM impact. Looking forward, we expect a gradual improvement in NIM to continue throughout second half. Currently, marginal TL deposit rates are at similar levels to our back book, probably we are at the peak in deposit costs. Positive spread between TL loan back book and marginal still remains significant, hence also positive for asset repricing. 25% of our mainly lower yielding TL commercial loans, excluding overnight, matured in second quarter. In the second half, close to 30% will also be maturing. While 35% of our TL fixed securities redeemed towards the end of second quarter, and of the remaining TL fixed securities, close to 20% will be redeeming in fourth quarter. During the second half, further repricing of both asset classes at higher yields as well as our CPI linkers should be a bolster for NIM. Due to the funding environment being tighter than we initially expected, as well as worsening inflation outlook, there is still downside risk to our full year NIM guidance. Our fees and commissions were up 24% year-on-year at TRY 2.81 billion. Well ahead of our full year guidance. As you can see on this slide, there are many businesses that positively contribute to the revenue base. The increase in payment systems performance is eye-catching, up 48% year on year, predominantly related with the volume growth in both acquiring and issuing, and less so with the increase in interest rates which support interchange and merchant fees. Our credit card sales increased by 11% following our digital-first card launch in September last year. This card enables end-to-end digital acquisition, approval, and immediate usage to customers without waiting for the physical card's arrival. The share of digital-first card in total sales reached to 25% as of first half of this year. Digital cards have four times better early activation rate and 20% higher average monthly spend than non-digital. During the first half of the year, we offered 50% more campaigns and promotional offers, and the increased participation from customers led to higher volumes. Bank insurance continues its strong performance up 45% year on year as a result of new product launches and increase of digital premiums. There was a significant contribution from digital bank insurance sales, which were up 84% year on year as more products are migrated to the digital platform. Money transfer fees were up by 32% due to the strong volume. Our wealth management business continues to grow and support our revenue base with the new ESG and tech-focused funds, as well as new digital features that were offered throughout the year. To give an example, a new product group named Investments of the Future was added to digital channels, which consists of ESG funds, high-tech stock funds, and similar new generation investment products. In only six months, the new digital service received good traction and boosted the client base, almost doubling the AUM of this product group, reaching over 10% of Akbank's total mutual fund AUM. To sum up, looking at the first half performance, there is definitely upside potential in our mid-teens full year fee growth guidance. We continue to leverage our digital capabilities with our 5.8 million active digital customers. As you may see on slide 14, our numbers for interaction and financial engagement reflect a drastic improvement in our digital channels. Monthly mobile app logins increased by 24% since the beginning of 2020, and more importantly, our mobile Net Promoter Score has improved by 15 percentage points during the same period. Our active mobile customers not only visited Akbank Mobile almost every day, but also engage in financial transactions which increased by 56% year-on-year. Value driven from each interaction and engagement also picked up remarkably. Share of digital channels in credit card sales and GPLs have reached 55% and 83% respectively. On the bank insurance side, digital channels also had a solid 48% share. Second quarter of the year, we also witnessed a groundbreaking change for the Turkish banking industry. Customer onboarding process has become digitized end to end as of May 1st. On slide 15, we'll summarize the main points that differentiates Akbank along with some initial performance results. While launching this new digital service, as always do, we place the special emphasis on customer needs and experience design. Extremely simple experience, instant access to all banking products and services, and strong value propositions are some of the key areas that sets us apart. We see digital onboarding as a potential major customer acquisition channel for Akbank. Though early days, initial results also confirm this with predominantly young digital savings that have good credit quality profile. For further information regarding this revolutionary change, please pay a visit to our IR website to watch our video interview with our EVP of Strategy, Digital Banking and Payment Systems, Burcu Civelek Yüce. I'd like to take a moment also briefly to share some information about the interruption to our services that took place between 6th and 7th of July. As we shared at the time, there was not any sort of cyber attack, and our customers' personal data remains fully secure and intact. On Thursday, July 8th, 1.5 times the normal amount of transactions were processed, and our systems operated at its usual high-performance level. Since then, all our systems have been serving our customers without any interruption. Technology is at the core of the bank's strategies in which we continue to make significant investments. Our core banking application runs on the IBM mainframe system, also used by many large banks around the world. As mentioned in our footnotes, we expect the financial impact to be immaterial. Effective cost management is our strong muscle. We have a very low cost base, which gives the bank a lot of flexibility. Still, we continue to look line by line for expense control. Our reported OpEx was up only 11% year-on-year, despite currency volatility. For the full year, despite higher inflation outlook, we remain confident in our mid-teens OpEx growth. The main contribution will continue to be from increased marketing efforts as well as regulatory expenses, both in line with our growth strategy. We expect our low-cost base and solid revenue generation to be supportive of our best-in-class cost-income ratio. Our cost-income ratio calculation excludes foreign currency gains from the long foreign currency positions related to Stage 1 and Stage 2 provisions, as well as our LYY hedge on the income side. We will continue with our disciplined cost management approach while investing in our future. Now on to asset quality. Our Stage 2 loans have increased to 11% of our gross loans, mainly due to a well-collateralized corporate loan, which was restructured and therefore moved to Stage 2. While our Stage 3 loans declined from 6.2% to 5.5%. We had only TRY 41 million write-off during the quarter, which had negligible NPL impact. On a very positive note, third quarter in a row, our monthly average collection performance continues to be above pre-pandemic levels. As a result, we recorded net negative NPL inflow for the first half of the year. As for the BRSA staging forbearances, of our 30 to 90-day files, only around TRY 600 million are in Stage 1 with strong coverage. 90 to 180-day files amount to TRY 1.3 billion. If all of these would be going into NPL, the impact would be around 40 basis points. Looking at the past trends, we expect around one-third of these to become NPL. Also, due to our prudent coverage policy, there will be limited capital impact. Currently, staging forbearances are scheduled to end by the end of third quarter. To sum up, we remain confident in our less than 6% NPL guidance for the year. On this slide, we provide details regarding our deferred loan portfolio. Please recall that loan deferral schemes for customers were extended until end of September, where for the consumer customers, whereas scheme for business banking loans had already ended. Hence, we continue to support our customers in the second quarter while maintaining credit discipline and balance sheet strength. Total deferred risk principal amount to date has reached TRY 34 billion, the outstanding risk has come down to TRY 21 billion by the end of first half. Outstanding deferred loans account for 7% of our gross loans, while total coverage was at 8%, up around 1% year-to-date. It is also comforting to see that 75% of the customers that had matured installments had quite strong repayment performances. NPL migration of these loans have remained consistently low versus the total level, which is also confirms the healthy asset quality of the specific portfolio. Despite the BRSA staging forbearances, we did not deviate from IFRS 9, as in the past, booked necessary provisions for potentially problematic assets even before classifying them to Stage 2 or Stage 3. As a result of our prudent approach, despite our improving cost of credit trend over the last four quarters, our coverage ratios remained at similar elevated levels. Our net provision charges for the quarter were at TRY 427 million. Lowest quarterly since IFRS 9 implementation, which started at the beginning of 2018. Many factors fed into this performance, such as our delivered loan book, prudent reserve builds with our total provisions reaching TRY 18 billion, and better collection performance from both retail and corporate and commercial customer base. As a result, our total coverage remains at 6%, which excludes our TRY 1.15 billion or TRY 1 billion, 150 million free provisions as additional buffer. Our first half net cost of credit, including currency impact, is at 79 basis points, suggesting a much better full year performance than we guided at the beginning of the year. As a reminder, we had guided for our net cost of credit, including currency impact, to remain below 200 basis points. The lower level of net provision charges provides substantial offset to the net interest income headwind. Every 10 basis points change in cost of credit equates to around 40 basis points ROE impact. Our LYY loan risk was hedged last year in third quarter, therefore, the mark-to-market adjustment is offset at the trading line. LYY is not included in our cost of credit calculations. Had we not hedged this loan due to the TL depreciation, there would have been an additional TRY 1.8 billion gross negative P&L impact in the first half of the year. You may find all the provision charges, trading income, and hedge details in our appendix of the investor and IR presentations. Now, onto our bank's distinctive final strength, our capital position. Despite the unprecedented challenges, our solvency ratios remain well above regulatory limits at 20% total capital, 16% Tier 1 and Core Equity Tier 1, excluding the forbearances. Our capital ratio was up by a solid 150 basis points quarter-on-quarter. Let's go over the drivers. New sustainable Tier 2 issuance had a strong contribution of 105 basis points. Positive mark-to-market impact of securities portfolio, which was 35 basis points, mostly compensated for the higher credit risk, which was 39 basis points, stemming from our loan growth. Our solid internal capital generation uplifted our capital by 51 basis points in second quarter. All in all, we further advanced our excess total capital to TRY 32.4 billion and excess Core Equity Tier 1 to TRY 30.3 billion according to Basel III minimum requirements without any forbearances. If we were to include the forbearances, excess total capital and Core Equity Tier 1 would reach TRY 34.5 billion and TRY 32 billion. Our sound capital buffer serves as a shield against unprecedented challenges and volatility and also creates ammunition for sustainable profitable growth. Speaking of sustainable profitable growth, I'd like to mention some of the steps that we have taken to help build a greener, more inclusive future for the next generations. In line with our commitment to ESG strategy, which we announced at the beginning of the year, we continue to offer new products to our customers to support the transition to a greener economy. With our Green Trade Finance campaign, which is a first in Turkey, we offer competitive correspondent bank charges and commissions on letters of credit insurances for the imports of customers with clear environmental sustainability and protection policies. Additionally, pricing and maturity incentives will be provided in correspondent bank commissions for the confirmed import letters of credit after the reviews of IFIs and correspondent banks. We also launched our rooftop solar energy product to support the transition to a low-carbon economy. As you know, Akbank has committed to provide TRY 200 billion of sustainable loan financing until 2030. In line with this commitment, we provided around TRY 11 billion sustainable finance in the second quarter, reaching over TRY 17 billion in the first half of this year. While providing a more sustainable finance to our customers, as I mentioned earlier, we also increased the amount of wholesale funding from ESG-linked structures or sources this year to 30%. In line with our commitment to become a carbon-neutral bank through eliminating our operational emissions by 2025, we took further measures to decrease our environmental footprint. As of the second quarter, 60% of our electricity used for our operations is sourced from renewables, which is up from 20% at the beginning of the year. To further foster our governance and culture, we have prepared and announced three policy documents: Diversity and Inclusion Policy, Human Rights Policy, Zero T olerance to Violence Policy. All three can be reached on our IR website. Last but not least, we are proud to announce that Akbank is now a signatory of UNEP FI, which is a partnership between UNEP and the global financial sector to mobilize private sector finance for sustainable development. Long-term commitments can only be achieved through consistent and coherent efforts. With the full awareness of this fact, we will continue to take new steps and initiatives on our journey to increase our positive impact on the environment and our communities while reducing our footprint in the quarters ahead. To sum up, with the ongoing uncertainties regarding the pandemic, as well as higher global inflation, this year has been another challenging year. We remain confident in our financial strength and operational resilience. On this slide, you may find a summary of our first half performance versus full-year guidance. Having reached mid-year, we also wanted to share indication as to where we may be expecting some positive or negative surprises. Starting with NIM, as shared earlier, tighter funding conditions and higher inflation outlook pressured NIM beyond our initial expectations. To put in numbers, looking at the current trend, there could be around 50 basis points negative deviation from our initial guidance. On a positive note, however, our cost of credit evolution has been significantly better than our initial expectation of 200 basis points, indicating that we could end the year somewhere between 100 basis points-150 basis points, actually, more so closer to the lower end. We expect the better-than-guided performance of cost of credit to fully offset the negative ROE impact of the NII miss. Also adding our robust performance in fees, we are confident in our mid-teens ROE guidance. All in all, we believe our positioning will enable us to leverage our strength while carrying out our priorities for improving profitability this year. This ends our presentation. Thank you for listening. Let's move on to the Q&A. You may raise your hand or type in the Q&A box. For those of you who are joining us by mobile, please send your questions by email to investor.relations@akbank.com. The first question comes from Waleed Mohsin. Hi, Waleed. Hi, Ebru. Thank you very much for the presentation. I'll just ask two questions. Thank you for the detail on the guidance. I just want to get a sense, look, we're almost at the end of July, and as you said, cost to risk has been tracking much better than expected. You did allude that it's going to probably be at the lower end of the 100 basis points - 150 basis points that you think it could be. Maybe you could just talk about what you've seen in July so far and how maybe some of the trends on that are tracking. I'll be also curious to hear why you haven't revised or that particular guidance on cost to risk because it seems as there's good visibility on the credit loss number that it's going to be much better than expected. That was the first question. Secondly, on the loan growth, you alluded to slight downside risk. Just wanted to get a sense of, in July or so far in the third quarter, any particular trends that you're seeing both in terms of loan origination, both TL FX, and if you're still seeing a further improvement on the loan spreads into July. Any comments on these would be very helpful. Lastly, on asset quality, I ask you about cost of credit, but any particular areas of stress which still remain, which are at the back of management's mind at this moment, given that still the 100 basis points-150 basis points range means that cost of credit will be higher than where it was at the end of first half. Thank you. Hi, Waleed. This is Türker. Thank you very much for your questions. Let me start with your first and second questions, actually. We haven't seen the full picture of July yet, we haven't seen a change in the trends so far in terms of cost of credit. Maybe this 100 basis points- 150 basis points range of expectation may be a bit conservative as well. Maybe we may end the year around 100 basis points levels, we'll see. We haven't seen a change in the trend. That's what I can say. Why we did not change the guidance, actually. As you can see from the slide, there are some positive and negative deviations from the initial guidance. All in all, actually, we still think that we will be able to reach this mid-teens of ROE by the end of the year. Therefore, actually, we kept the guidance unchanged. That's the reason, actually, why we unchanged the guidance. With regards to loan growth in July, actually, when I look at the sector figures in July, which have been published recently. Actually, we can only see the first half of July. So far, when I look at the system, so on TL loans, on TL commercial loans, there has been some activity like 1% growth on the commercial loans and roughly 0.5% on consumer loans. No big change actually from the first half of the year. I think with the opening of the economy, with the strong growth expectations, I think in the second half of the year, we may see a bit more activity with regards to loan demand as well. Still, I think there may be some downside risks for full year because as I said, in the first half of the year, our growth was roughly 7%, mainly led by retail loans. I think we will be able to reach our guidance on the retail loan side, and maybe we may exceed it as well because of our strong performance in the first half of the year. Maybe we may stay a little bit behind of our TL corporate commercial loan guidance of high teens because of the growth so far. That's what I can say with regards to loan growth. Since the front book or since the marginal price is above the back book, we are seeing further improvements in our core space. Maybe just to give you some color on that. When I look at the marginal rates on TL loans, these are priced as roughly depending on the type of customer metrics, et cetera, is roughly at 20% levels, whereas the back book is at roughly 17% levels. Therefore, actually there is a big area for improvement. That's on the loan growth side. Asset quality, any particular areas of stress, at least for the time being, we don't have such a signal coming from our portfolio. I think we have done our homework very carefully in the previous periods. That's why actually we are seeing this consecutive cost of credit improvements since the end of the second quarter of last year. Maybe also just to keep in mind, as you may have seen from our presentation, there has been some increase in our Stage 2 loans because we have classified one of our loans from Stage 1 to Stage 2. Some part of this customer was already restructured and was already classified in Stage 2, whereas some portion of the loan of this customer was in Stage 1. We had already provided additional provisionings for that loan at that time. We have just made the classification without any further provisioning need for this customer. These are my answers, actually, to your questions. Any further questions, Waleed? Thank you much. Just one follow-up on this. All very helpful comments. Just one follow-up would be on fee growth, right? On most line items, you've talked about downside or upside risk. With the kind of fee growth that you've had in the first half, I would expected you to say that there would be some upside risk, especially given that first half was impacted by certain lockdowns. Would it not be fair to think that there's some upside risk to the fee growth guidance that you provided for the full year of high teens? That's actually why we have said in the slides that we are expecting a better performance, because as you correctly mentioned, in the first half of the year-on-year growth was at 24%. We are keeping a similar trend. Yes. I got it. sizable upside potential. Got it. Understood. Sorry, I missed that. Yeah. Thank you so much. That is very helpful. You're welcome. Okay. Thank you, Waleed. The next question comes from Gábor. Gábor, you can ask your question. Hello. Can you hear me? Yes, we can. Great. Firstly, on your margin guidance, did I get it right that you were mentioning a 50 basis points lower performance potentially for the full year than the initial guidance, which was - 20, -30? Yes. Right. That's right. In other words, maybe you can put this 50 basis points on top of it. I guess that would mean a significant recovery of at least 100 basis points in the second half. I guess some of it would come from inflation. Can you comment on how would you expect your core NIM to develop, excluding the upside from the CPI linkers? Gábor, first of all, on the funding side, I think we have seen the maximum because the main source of funding are deposits as well as swap and repo funding. Because of the low maturity of these funding sources, actually, we are already at the top of it. In other words, as we have also shared for the system, deposits are priced roughly close to 18% in the system. I don't think that there will be a further increase on the deposit side or other TL funding sources going forward. Whereas the repricing on the TL loan side is going on, because as I mentioned, the back book is roughly at 17% levels, whereas the front book is roughly at 20% levels. Again, close to 30% of our TL commercial loans will be maturing in the second half of the year. On top of it, we have around, again, roughly 20% of our fixed rate securities will be redeeming in the second half of the year as well. Therefore, actually, we expect material core spreads improvement in the second half of the year. Maybe if we can see, as Ebru has explained at the beginning, if we can see also an improvement in the inflation trends, it started from fourth quarter onwards, and which may also allow some rate cuts towards the end of the year. This will be helpful as well because of, again, the low maturity of customer deposits. Maybe it's also important to mention, on the FX side, FX loan demand is weak in the system, which you can also follow from the BRSA figures. Because of the strong FX liquidity we have, we are able to keep our FX deposit costs at very low levels. Actually, we have maybe not very big figures, but in the last roughly one month, we have further decreased our FX deposit pricing by roughly maybe 20 basis points- 30 basis points. Currently, we are paying less than 1% for our FX dollar deposits. We are paying almost nothing for euro deposits. There's also some slight improvements from FX core spread side as well. That's very clear. Thank you, Türker. You're welcome. Just a broader question. What's your appetite to do TL commercial lending in an environment when obviously the inflation is running at a relatively high level? It would be interesting to hear your thoughts on that. Actually, we are comfortable with our lending process. Actually, we would like to grow. Actually, that was what we have shared at the beginning of the year as well. Also during that time, actually, we had a similar interest rate environment. We said, maybe also because of our relatively lower loan book, we said we would like to grow our TL corporate commercial loans by high teens, and we still keep this intention. Maybe we should really look at these rates, that for TL corporate commercial loans, the rates are roughly at 19% levels in the system, margin rates. When you compare it to the deposit rates and the inflation, I don't think that these are very elevated rates. If you would compare it to rates like 30% levels two years ago, I think these are okay. Okay. That's useful. Thank you. You're welcome. All right. The next question comes from Ali Kerim Akkoyunlu. Ali Kerim? Hello. Hi, can you hear me? Yes, we can hear you. Yes. My question is on the system glitch you had a few weeks ago. What was the cost of the total damage, and more importantly, going forward, have you seen any issues with clients and the potential cost of basically keeping those clients? If we can just hear what you have to say about it. Okay. İlker, would you like to start first? Regarding the customer base. Thank you, Ali Kerim. Thank you, Ebru. On the NPS side, on the customer satisfaction side, after the incident, we see a little decrease in our NPS scores. We took necessary actions to quickly cover the impacted customers. Actually, we have solved almost all the customer complaints and compensated for our customers' unpleasant experiences during this period. Now we see it back to the normal levels in our NPS levels, and now it is recovering to the pre-incident levels. On the customer acquisition side, maybe Türker, you can comment on that. Also, Türker, the financial impact. On the financials. Yes. Actually, surely, on these two days, because of the system interruption, there was a really dramatic decline in the number of financial transactions for these two days. When we look at the trends, starting from 8th of July, actually, especially the first day, the number of transactions was, as Ebru has mentioned, 1.5% of a previous normal day. Also, when we looked at the trends after that time, number of transactions from all channels of the bank, we don't see any negative trend compared to the days prior to the system interruption. That's something also we see on our deposit book as well, or a new loan demand. Therefore, actually, as we have also in our disclosures in our financial statements, we have also touched this area as well. We expect the financial impact, so very limited, very immaterial for the system interruption. Really, when we talk to our colleagues, actually, also our customers actually, have been very supportive as well. For the customers who had some complaints, our people have responded to them as soon as possible in the earliest time. Actually, all in all, we don't expect any material financial impact going forward. Thank you very much. You're welcome. Okay, thank you. The next question comes from Alan Webborn. Alan? Hello, Alan? You're all right. Yeah, okay. I guess you were on mute. Okay. Hi, Alan. How are you? Great. Okay. Just two questions from me. When you point to there being some quite significant maturities of your fixed rate corporate lending in the second half, clearly, those must be loans that were done at a much lower rate because you're saying that they're going to be positive. Do you sense any issues at all in terms of asset quality, are you expecting a lot of them to repay rather than roll over? Is that part of the reason why you're a little bit nervy about reaching your corporate loan guidance for the full year? Just some explanation of what you're expecting from that process across the second half would be helpful. That was the first question. I guess the second would be, within retail, are you seeing any signs of your retail customers struggling in terms of income? Are there any early signs of stress? Do you not sense any of that? Do you think that there will be any shift in terms of where the demand in retail has been in the 1st half and where it's likely to be in the second half, given that, I guess, rates are going to be fairly stable, if interest rate cuts don't come at all or maybe just before year-end? Any feeling about the change of dynamics there would also be helpful. Thank you. Hi, Alan. This again, Türker. Ebru, maybe we can go to slide eight. As we have shared with, actually our TL business banking loan growth was limited to roughly 2% for the first half of the year. Actually, one of the major reasons was, as we have already shared, effect shared in the previous earnings calls, we had sizable redemptions in the first half of this year as well. Many of these customers have actually paid back their loans. Therefore, actually, we had to replace those loans. Therefore, actually, we had this limited loan growth. In the second half of the year, some of the loans we should be redeeming will be the ones we have generating rather towards the end of the year. Not like the ones we have generated in the first half of the year. I think, again, some of these loans customers would repay their funding. Therefore, actually, we are a bit more careful with regards to this high teens TL loan growth. Because of trends we are seeing actually, having these redemptions and replacing those loans makes a bit difficult for us to reach this high teens guidance. In terms of asset quality, again, as you know, we had delivered our loan book in the previous year. Therefore, actually, we are rather comfortable with our lending activity. Again, when you look at the rates, okay, these are like 19%, 20% levels for commercial loans. If you compare it with the inflation environment, with deposit rates in the system, I think it's a reasonable level of pricing. It doesn't make us so concerned with regards to asset quality trends. Actually, we haven't seen such a trend so far because of strong repayment performance from our loan book. Actually, the same is also true for, as Ebru has shared, for the loans for which we had granted payment holidays. When you look at the repayment performance of these deferred loans, as we are sharing on page 18, the performance so far is quite strong. I think that's also another signal, actually. All in all, so far we don't get such worrying signals. We should also maybe not forget, hopefully with the vaccination activity, we won't have any further, hopefully, lockdowns like we had in the previous period. Which will be also supportive for economic activity overall. I'm not so sure whether I have understood your question correctly. In terms of trend shift in retail loans. I mean, between the different products in retail. Were you rather asking about rather general purpose loans versus mortgage loans? Yeah. Actually, again, because of our low base, we have been able to gain market share in mortgage loans. When looking at the mortgage loan growth in the system so far, in the first half of the year, so in the seven months so far, it is really limited to roughly 0.5%. So far we haven't seen a high demand on the mortgage loan side. Maybe as long as these rates stay at these levels, I don't think that we would see a major increase in the mortgage loan appetite from our customers. That's actually what we see from the figures of system. Again, just to repeat, because of our low base, in mortgage loans, we were able to gain some market share, and hopefully we will continue with this trend in the coming months. That's helpful. Thank you. You're welcome. The next question comes from Simon Nellis. Hello. Hi, Simon. Hi. Thanks for the call. My first question just would be on dividends. I think it's probably a bit too early, but have you had any discussions with the regulator? Do you think they'll be more willing to let you pay out a higher portion of your earnings this year as a dividend? That'd be my first question. My second question would just be on, is there any hope for de-dollarization? Your TL loan-to-deposit ratio has deteriorated quite a lot. It's a lot higher than it was last year, beginning of the year. Any signs that that's going to improve going forward? First of all, Simon, just to mention, on the TL LDR side, actually, it has improved. If you go to the slide. As you can see, our TL LDR versus year end has improved by six percentage points, remaining flattish on a QoQ basis. Our total LDR is as well flattish, and our FX LDR obviously is slightly higher. That has led to a slight maybe, overall, as you can see here, increase in the total LDR. Maybe we can answer that there. The remaining, I'll leave it to Türker. Yeah. Thank you, Ebru. Hi, Simon. Maybe to start with the de-dollarization trends. Actually, as you know, we have seen such a trend, as you may remember, towards the end of the first quarter. After that time, actually, when you look at the sector figures, actually, maybe from week to week, it may change, but it was rather flattish. Maybe time to time, we have seen some de-dollarization by retail customers and the opposite direction in our corporate commercial customers. All in all, we are not observing such a trend shift yet. As you know, central bank has announced some incentives for TL deposits, or let's say, for TL deposits converting from FX deposits. Whether it could trigger any further de-dollarization, we'll see. What I can say is actually, because of our strong FX stability, we are paying at very low levels to our FX deposits. I think it will be the choice of our customers, actually, based on maybe inflation expectations, interest expectations. They will make this decision. So far, we don't see a clear trend. With regard to dividends, as you rightly mentioned, it's too early. As you know, BRSA makes its position more clear towards the end of the year. At every circumstance, we are expressing our view that actually we have a very strong capital base. We would like to increase our dividend payout. Our official payout policy is up to 40% of net income. In the past, as you may remember, we had paid up to 25% levels, like in 2017 and 2018. We would like to pay our payout ratio, but it will depend on BRSA's stance. Understood. Thank you. Thanks very much. You're welcome. Yeah, just one correction from my side. The total LDR also remained flat. It's only the FX LDR that went from 47%- 49%, just to correct myself. I think I rephrased that incorrectly. The next question comes from Cihan Saraoğlu. Cihan? Cihan, would you like to ask your question? Okay, maybe we can move to the questions from the web then. Oh, no, Cihan came in. Okay, sorry. Go ahead, Cihan. Okay. Can you hear me now? Yes, we can. Okay. I have a quick question about your Stage 2 loans. There's an echo, by the way, if you can Is it any better now? Yes, better now. Thank you, Cihan. Okay. I was checking your Stage 2 loans, and their share in total loans seem to have gone up by about two percentage points or so to 11%. I was wondering whether there is any specific reason behind that. Cihan, as I explained previously, actually, we have a customer, some portion of its risk was already in Stage 2 as a structured loan, and some portion of its risk was under Stage 1. Because the portion in Stage 1 has been also included into this restructuring scheme of this customer, therefore, we have also classified this remaining portion into Stage 2. We had already provided additional provisioning for that customer while it was in Stage 1 last year, actually. Therefore, actually, we didn't have to provide additional provisioning for this customer. It was just a classification of the second portion of this customer's exposure together with its provision. Okay. That's clear. Thank you very much. You're welcome. Okay. Maybe we can answer just maybe one or two questions from the web. Ilknur? Okay. We have a question. What are your views on the impact from the latest decree from mid-July that allow banks to sell both NPLs and Stage 2 loans to asset management companies? Where do you see opportunities for the sale of Stage 2 loans where coverage is considerably lower than 100%? Okay. Let me answer this question. Actually, yes. This latest legislation change, I think it brings an additional flexibility to the banking system. As you know, as Akbank, actually, we're a very strong credit monitoring and collections team, department. Our EVP in charge of this department, she's a very seasoned lady as well. She has a very long experience in the asset management sector as well. Currently, we have no interest for selling our Stage 2 loans. As you know, for our NPLs, again, we are always opportunistic. First of all, we try to reach the best collection performance from the NPL portfolio, and only after that, for the aged ones, with this NPL sales option. That's what I can say, actually, at the moment. Okay. We have another question. This is the last question. In first quarter, you booked Türk Telekom dividend in your fees. Did you book any amount in second quarter? What are your plans for the coming quarters? Actually, no. In the second quarter, we didn't have any income impact from LYY. Türk Telekom is paying its dividends in three installments. Therefore, actually, in the third quarter also and at the beginning of third quarter, as well as at the beginning of fourth quarter, we will have some repayments from our risk, roughly TRY 110 million for each quarter, which will be positively impacting our mark-to-market line in the P&L. Thank you. Thank you all for joining us today. I see that there are no further questions, no further hands are raised. Thank you for joining us today. If you have any further questions, please do reach out to us. You know how to reach us. I hope, again, keeping my hopes up that we get to meet face-to-face again later this year. Have a great evening, and keep well. Thank you very much. Good evening.