Raiffeisen Bank International AG (RBI) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Q2 2026 Conference Call of Raiffeisen Bank International. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Michael Hollerer, Chief Executive Officer. Please go ahead, sir.

Thank you very much. Good afternoon, ladies and gentlemen. I am very pleased to speak to you today, and I look forward to meeting you personally in the coming months. I also look forward to working closely with you in the years to come. While this may be my first investor call, I'm not new to the bank. Prior to my appointment as CEO, I have sat on RBI Supervisory Board for the past 4 years. Before that, I was RBI's CFO, and I've spent most of my career within the organization. I am humbled by the responsibility and confident in the future that lies ahead. Before we dive into the results and recent developments, I would like to share with you my first priorities for the bank. Since March, I've been meeting with our leaders, both in Vienna and across the network. I have also met with our supervisors and many of our partners. End of May this year, I've launched a strategic review, and we are now finalizing our preliminary assessment. In the coming weeks, we will define clear ambitions together with the road map with tangible targets and deliverables. At the end of September, this will be presented to our senior management. And in the course of Q4, the implementation will begin. I look forward to updating you on these developments at our next results call on the third of November. More importantly, however, we will hold the Capital Markets Day in February next year, following our full year 2026 results. Much of what we present will be based on the strategic review, which I have just outlined. There are some key elements, which I can already share with you today. Based on my initial assessment, and will guide our ambitions and strategy. First of all, RBI is ready for growth, and the time has come to execute on it. I appreciate that for the past 4 years, 2 major legacy issues have impacted the business in different ways. In our home market, Austria, growth has also been sluggish at times. What I see is that the legacy issues are behind us, that our capital base is strong and our balance sheet is healthy. I see a lot of potential to grow faster in our CE and SEE markets, and we are ready to reallocate capital to make this happen. Furthermore, I believe that the SME and mid-market segment provides opportunities. In retail, there is huge potential for wealth management products in our region, and we will capture our fair share. I also see potential to streamline our products across all our subsidiaries, while also making them ready for AI and the future of banking. What I have also observed in our retail business is that we do an excellent job at acquiring new customers, where we can improve is on the next step, engagement. There will be a particular focus on reducing the churn in our portfolio, and I'm confident that this will transform our retail business. Putting this all together, this means that we will grow our customer base, grow our balance sheet and improve market share in our key markets. This also means earnings per share growth, which brings me to my next priority, focus on profitability. I am familiar with the impact that the legacy issues have had on our profitability. And adjusting for this, I accept that the core of the bank is currently capable of earning a 13% ROE. I want [indiscernible] my words. This is not enough. Like each one of you, I look to our peers, and I see what is expected of us. I won't set targets here today or mention any numbers. but let there be no doubt. Improving the profitability of the core of the business has highest priority. I will take a very close look at efficiency and spending. We intend to review and challenge some of our spending. I've also asked Kamila, our CFO, to review our capital allocation. and make sure that we are as efficient as possible here. This will include products, segments and geographies. It is, of course, exciting to think about redeploying the potential Rasperia windfall, but I first want to make sure that our capital allocation is sound and that we are efficient with the resources that we have. In [GCNM], specifically, I expect us to be more selective with better focus on cross-sell and wallet share. I believe that growth and profitability will go hand-in-hand. Our drive for better efficiency will not prevent us from gaining market share and that better capital allocation will, in fact, enable better sustained growth variates technological transformation. In parallel to this, I expect technology to transform how we serve our clients and how we operate as a bank. This is not new, and this is not unique for RBI. But I'm sure that we must capture all the possibilities and opportunities available to us. This transformation will also drive growth and efficiency. Our transformation in this respect will focus on 3 pillars. The first is customer interaction and marketing, where we are already making great strides with our mobile assistance and where customer journeys and experiences will increasingly be enhanced by AI. Marketing and how we approach and engage with new customers, will also be transformed. We expect to see a material increase in positive outcomes while simultaneously reducing the effort and resources. Product delivery is already being transformed, and we have very promising proof cases. Going forward, we need to scale this individual success into sustainable delivery across teams and products. In practice, this will mean developing software much faster and with less effort. Finally, we will continue to digitize our processes and increasingly move towards AI-native end-to-end processes. We see tremendous potential across the risk and operations chain. I will not spend any more time on this here today. For now, I simply wish to share with you my priorities. Let us now move to my next slide and how we plan to approach the Russia topic. First of all, I would like to acknowledge all the efforts that have been made in the past 4.5 years. I could see firsthand how much was invested in sanction monitoring and compliance and how much of the business in Russia has been derisked. With that being said, my priorities for Russia will be as follows. First, the rundown will continue and will remain our base case until further solutions can be found. All the restrictions that we have placed on our Russian bank will remain in place, and you can expect to see the loan book shrink further. I think the numbers here speak for themselves. Loans are down 80% since the start of the war and deposits are down 40%. Our commitment to shrinking and derisking should not be questioned. Second, we will continue to explore ways to extract value and to recover what we can of our equity, which is [structure]. It is our duty to shareholders. This includes the [Esperia] litigation, which I will comment on shortly. I will be reviewing all that has been attempted too far, and I've asked my team to double down on this effort. Third, I'm aware of the many negotiations to sell our Russian subsidiary, and I understand the difficulty to obtain the required approvals. There is no easy way to execute on this. but we need to keep trying, however, and we will try harder. This is also an area where I have instructed my team to double down, and you can expect me to follow this very closely. Before we move on, let me give you a brief update on the Rasperia case. Time has come, and we took decisive steps. I'm happy to report that we filed the claim yesterday in Vienna. We are seeking EUR 3.15 billion in damages, reflecting the EUR 2.4 billion, which were taken from us in Russia and including penalty interest and loss of profits. First of all, we are confident that we will prevail in court, and we expect a favorable outcome. Our claim is based on European sanction legislation. Second, because our claim largely reflects the terms of the anti-suit injunction which was pronounced by court in Russia and threatened our Russian business we have good reasons to believe that the proceedings in Austria will not be acrimonious. This means that we can expect to receive the proceeds within the next 6 to 12 months. There's a little more I can say here today, and we'll keep you updated as the situation develops. Let's now turn to the 2 acquisitions, which we announced earlier this year and which are progressing. Let's begin with our voluntary takeover offer for [Addiko]. On Wednesday this week, we announced preliminary final results of at least 56.8% participation to our offer. In the coming days, we will receive the final numbers, and participation may still increase slightly if there are any last minute instructions, which have not been processed yet. In any case, I'm happy to report that our voluntary takeover offer is successful, and we can now move to the next phase. In the coming months, we will seek regulatory approval and merger clearance. In parallel, there is an additional acceptance window from August 3 until November 3. Shareholders who have so far not tendered into our offer may still do so. It's my hope that in the coming weeks, investors who tendered into the competing offer will now switch to ours. While our offer might not be as financially attractive, we firmly believe that we can provide the execution certainty required to get this deal over the line. We also are convinced that our offer provides a fair solution to investors who have not received a dividend in years. Let's briefly turn to my next slide and look at our other ongoing acquisition, concerning the acquisition of PBB Garanti in Romania, I'm happy to report that the approval process is progressing well. We expect to close in early October, and we are already mapping out the integration steps. The merger into our Romanian subsidiary will lead to higher MREL requirements locally. And you can expect Rivers on Bank Romania to issue a euro senior nonpreferred benchmark bond in the third quarter. There is a little more to report today. And on our next call, I look forward to announcing the successful closing. Moving to my next slide. Allow me to spend some words on business in Q2, stepping away from Russia, M&A and strictly looking at our core business. Record fees, loan growth ahead of our peers in nearly all key markets and products, excellent capitalization, I believe we have many reasons to be excited. We closed the second quarter with year-to-date profits of EUR 708 million, with a strong second quarter right around EUR 0.5 billion, and the loan book continues to grow nicely across markets, segments and products. Included in the 0.7% year-to-date, is still some short-term business, whereas if we focus on the core customer business, we stand at 5% in the first half of the year. Our CET1 ratio, excluding Russia, of course, is back near recent highs at 15.5%, we are in a great place to begin the second half of the year and close the 2 acquisitions in progress. Finally, our adjusted return on equity where we look past our legacy issues stands at 12%. I will briefly walk you through our current macro outlook before finishing with our financial outlook for the year. Energy price volatility in line with the situation in the Middle East remains the biggest unknown this year. At the same time, sentiment indicators and high-frequency economic data data suggest resilience in many countries. This is visible in the industrial sector. Also, there may also have been some front-loading of production due to perceived supply chain risks. On the other hand, the services sector has been more reactive to the energy price shock. To summarize. Weak external demand, higher energy costs and interest rates as well as ongoing uncertainties slow down growth, but do not trigger a slump in economic activity, at least in some countries such as Hungary, domestic factors play an important and positive growth. Inflation is expected to remain entrenched in 2026 and 2027. And as mentioned, volatile energy prices defining inflation in 2026. Secondary effects of higher energy costs have been moderate so far. But some cost-driven inflation should not come as a surprise in the coming months. In addition, persistent domestic price pressures in the services sector from decent wage growth in recent years continue to post midterm challenges to central banks. Recurring geopolitical headwinds and have not altered the overall solid landing trend across the core CE and SEE region. Still, there is a difference between the uniformly strong retail segment and more uneven corporate lending dynamics. Precautionary monetary tightening mid-temp credit demand in the second half of 2026 in larger markets, which brings me to my final slide, our outlook for full year 2026. We have seen better NII trends in recent months. and we now expect to land somewhere between EUR 4.4 billion and EUR 4.5 billion. Kamila will expand on this in just a minute. Fee business is broadly sustainable and will remain strong in the second half. I expect fees to land close to EUR 2.2 billion for full year 2026. Now in the we are expecting some one-offs in the second half relating to Rasperia litigation. I'm not concerned by this considering the expected payoff. This will take OpEx closer to EUR 3.8 billion in 2026. Accordingly, our cost income ratio will temporarily rise to 55%. And risk cost up to 35 basis points, and Hannes will walk you through our expectations here. We leave organic loan growth unchanged [indiscernible]. But in fact, above 9.5%, including already guaranted BBVA transaction. The CET1 ratio always assuming the worst case in Russia is unchanged around 14.3%. The -- this dip is explained by both acquisitions going through our results in the fourth quarter this year. And in any case, our CET1 ratio will remain at a very good level. Our return on equity is also impacted by the slightly higher OpEx, and we now guide for 9.5% for the core, excluding Russia. Also here, you should note that the repeal litigation costs will have an impact. If you look at the clean profitability for RBI, we are, in fact, above 12.5%. I will finish on this, adjusting for both Russia and Poland should give a good sense of the future footprint and business of RBI. In recent years, as you can see here on Slide 11, that this has ranged between 13% and 15.5% and could continue to achieve these levels. This is not good enough, however -- and in the coming months, I look forward to sharing with you how we intend to transform RBI and improve our profitability. Thank you.

Good afternoon, ladies and gentlemen. Thank you for your interest today. I will be brief. As you just heard from Michael, we are happy to report a strong second quarter in the core of the business. in addition to a very good bottom line loan growth and CET1 ratio that was just mentioned, we also show further topline strength and stable OpEx. Let's go through this one by one before moving to our CET1 outlook. Starting from net interest income, which is up 3.2% in the quarter and 6% for the half year 2026 versus the same period last year. Interest-bearing assets were up 2.5% in the quarter. Loan growth, of course, but also some growth in the treasury bond portfolios with NIM slightly up. We also saw rate hikes in [Tier Caruna], although this did not come through to our margins yet. Competition for liabilities among the banks remains likely. And I shared it with you last time, we are aware at times the ones driving this. we have been willing to pay up for the deposits, but always subject to a high number of customer engagement requirements. For one, this has been a successful customer acquisition strategy; and two, we have made a lot of progress in cross-selling. Going forward, we sense that there will be a bit less pressure to reprice and we expect our liability margins to stabilize. The other market I need to mention in Romania, where we have been running customer acquisition campaigns and offering attractive saving rate. While dilutive to NIM, we are still expecting the volume effect to be positive to -- and NII should prove resilient from here. And of course, we are attracting new customers, which is positive in the long term. With that being said, group-wide, I'm encouraged by the loan growth as well as the continuing deposit collection trends, especially in retail. As you just heard from Michael, we are now guiding for a net interest income between EUR 4.4 billion and EUR 4.5 billion, including some EUR 50 million upside from rates, which we were guiding for the last time. Moving to the fee income, which is up 5.6% in the quarter and over 10% versus the half year last year. As you saw in our guidance, we are now expecting fees close to EUR 2.2 billion, nearly 10% increase versus the last year. I'm happy to see that the growth in the coming -- is coming from the range of products and businesses. And it's with very, very few exceptions, this appears sustainable into the year-end. Loan growth, again, was very strong, up 2.2% in the quarter and 5.7% year-to-date. There is some short-term business included here, but also EUR 700 million decrease in Poland due to accounting policy change. Putting this all together, our true customer business is up around 5% year-to-date. Retail demand continues to be very strong. And what is particularly encouraging is that we are growing above the market rate in all of our key markets. New product origination was very strong in the quarter in our key markets. In Czech Republic, we saw record new mortgage production and near record new consumer loans, like parts in Slovakia, in Romania and in Hungary. In the Corporate segment, we are also very good new business plans, notably in the Czech Republic, Slovakia, Hungary and Serbia. GC&M was a bit slower this quarter after a very strong start in Q1. On the liability side, we continue to see very good inflows, especially in retail, where the margins were more attractive. In Czech Republic, retail deposits are up 4% in the quarter, 7% in Hungary, 2% in Slovakia and 4% in Croatia. Let us now jump to Slide 20 and look at our CET1. As always, the starting point is our price books year of the consolidation scenario, which assumes a complete loss of Russian business. With 15.5%, we are back to recent highs, and we still expect to generate around 90 basis points of CET1 in the next 6 months. We are, of course, aware that we plan to close both of our announced acquisitions still this year, both in the fourth quarter. If we factor in our loan growth guidance, dividend, and this brings us to around 14.3% at the year-end, slightly below our medium-term target of 14.5%. It is, of course, too early to get into 2027 guidance, but I would simply point out to our solid capital generation and a deco carve-out as the clear drivers back to about 14.5%. Needless to say, proceeds from Rasperia litigation would come on top of this. Now moving on to Slide 22, very briefly on our issuance plans. In the coming months, you can expect us to issue Tier 2 out of head office. We have 3 maturities in the coming years, and we look to refinance this. Michael also mentioned Romania, where we will be issuing senior nonpreferred for the local [indiscernible] requirements. And with this, let us move to my final slide, Poland. We are making good progress in settlement, and we have expanded our strategy. Now we offer settlements for euros as well as Swiss franc, and we approach borrowers at different stages of the litigation process. Finally, we are exploring new channels through which we engage with borrowers. The benefits of settlements come primarily from the savings that we realized on legal costs, court fees and penalty interest. Looking at the provisioning, we've got for around EUR 220 million this year. We introduced an accounting policy change in Q2, bringing us in line with the market practice in Poland, with the added benefit that has led to a risk cost release of around EUR 24 million. This means that the bottom line impact from provisions in Poland in year 2026 will remain around initial EUR 200 million guidance. This accounting policy change led also to around EUR 400 million credit risk-weighted assets release. Finally, I know you will ask about this. The first half run rate is not to be extrapolated in the second half of the year. The primary driver of the provisions is the inflow of the new cases, and Swiss franc cases are clearly declining, whereas euro are peaking and also expected to decline from here. There is also a timing mismatch on [indiscernible. We immediately book loss from [indiscernible], and there is a delay in booking a counterclaim, which we'll receive from the borrower. This will partly reverse in half year 2026 and second half year 2026. And on this basis, we can confirm EUR 220 million guidance. With that, it all from my side, and I will give the floor to Hannes.

Thank you, Kamila. Ladies and gentlemen, thank you for joining us today. Allow me to briefly run you through a few risk trends before we open for Q&A, starting with risk costs. with 4 basis points in the quarter and 20 basis points year-to-date, we are running well below our guidance of 35 basis points for the year. Clearly, there is a potential down the shoot here, but the broad economic environment remains sufficiently uncertain. In Q2, we saw 2 factors behind the risk cost result, which offset each other and resulted in 4 basis points or EUR 7 million. On the one hand, we released around EUR 43 million of overlays, partially due to the improvements in our retail risk models. And to a large extent, simply because events, which had justified the overlift have failed to materialize. Romania is a good example. In retail, we had anticipated layoffs, which never happened and defaults from higher rates and inflation, which also never came through. This is also one or the other case where a corporate default leads to the release of an overlay, which, of course, is more than offset by corresponding new Stage 3 provisions. We continuously review our overlay portfolio. And if we determine that potential risks are sufficiently covered by the credit market models, we will adjust. As a matter of principle, it is my preference to see potential risk captured by our credit and macro models, and overlay should only be created as a last resort. The second factor we mentioned in the quarter is the Stage 3 development where we saw a combination of new defaults in line with usual course of business, but also a few top-ups to the provisioning on existing defaults. SEE also improved coverage ratio. Finally, the accounting change in Poland led to the release of around EUR 24 million of Stage III provisions on the legacy Swiss franc portfolio. Beyond risk costs, our focus remains firmly on the macro environment, and we keep a careful eye on spillover effects from the war in the Middle East. I mentioned to you last time that we had conducted a review of more than 500 of our corporate counterboards with exposure to energy price volatility and we have continued with this effort throughout the second quarter. The temporary brief in energy prices and the moderation of inflation dynamics were welcome. Nevertheless, we still downgraded around 30 names from the 40%, which we had previously put a negative watch. Since the start of the war, we have downgraded less than 10% of the names on our 500 name watch list. And as we review our exposure and commitments in people, I'm confirmable that as of today, this will not affect our portfolio quality in any visible way. Finally, this quarter, we have also finalized the Jubilee stress test with ECB publication of the report just a few hours ago. The results are encouraging. [indiscernible] reached a prescribed depletion in year 1 and remains above the minimum requirements. The scenario design and framework were assessed as reasonable and in line with our business model and complexity. Both the portfolio review of energy exposed customers and the geopolitical stress tests confirm that our provisioning is accurate, and there was no cause for any overlays or even any significant stage 2 shifts. On the [indiscernible] side, we have optimized the balance sheet with further securitization, and in Poland, achieved a credit risk relief. At the same time, these RWAs have been redeployed into customer business across the region. -- closing with the obvious but still important message from my side. NPE ratio remained stable at 1.6% and at a historically low and with a 4% to 7% coverage ratio. Having said all this, ladies and gentlemen, thank you for your interest, and we now look forward to your questions.

[Operator Instructions] This is from the line of Benoit Petrarque from Kepler Cheuvreux.

Yes. Good afternoon. So thanks, Michael, for sharing your priorities and for your strategy also. I wanted to come back on the Rasperia claim -- so what is your thing -- what do you think the time frame of the Austrian core decision will be -- I think you indicated 6 to 12 months for cash settlement -- but could that be a matter of a couple of weeks, you think or a much shorter time frame than 6 months? And do you expect the settlement to take place in the form of cash or Stroback shares -- because in the past, we've seen that settlement in the form of flowback chart could result in a risk-weighted asset number. Also, I'm curious to understand all the basically, the EUR 3.5 billion cash will be redeployed. Do you have any views on that at this stage? Would that be higher distribution form of cash to shareholders? Or do you have more M&As in mind? The following question also is on Rishi. I think you want to try either to exit Russia. Does the Rasperia court case change your view for a potential exit? Will you consider to exit at a lower price to book given that you will get cash from Rasperia. Just wanted to understand your thinking around that. And the last question is on the NIM trajectory into basically the H2. I think you have stable NIM. I just wanted to check with you what you have in mind and whether the NI growth will be a function of volume growth going forward?

So thank you for your questions. Coming back on the Rasperia claim, and the time frame and the court case in Austria. As I said, we filed the case yesterday. And this case is now reviewed by the competent judge. And we expect, as a next step that defendant to be notified soon. then a lot will depend on how much rasperity decides to oppose our claim in Austria. The legal basis for our claim is in the European sanction law. That is why we are very confident to prevail. As for the settlement, this is not yet decided. What is clear, however, is that we are not looking to become a shareholder of Strabag and we expect the shares to be sold one way or another. And we are seeking for the proceeds of the sale. The RWA offset would clearly be temporary. Coming to a potential positive outcome for RBI and the redeployment of the, so to say, the windfall. I have to say, first of all, we are now taking step by step in this process. We are looking ahead on every single step. As you can imagine, this is a complex way forward. So it is too early to start discussing how we spend, how much when and where. But looking at our core business, looking at our organic growth opportunities, also looking at perhaps potential inorganic growth opportunities, this would give us here space to go ahead. And finally, we could also consider a special dividend. But as I said before, this is too early to answer and discuss now as we now do step by step in terms of the Rasperia litigation case. Third question about the exit from Russia. If these changes are the view on a potential exit I would say that the Rasperia claim is a very important step forward for us. But I would say exit from Russia is, as I said, and I mentioned several times, a very important point, a very important cornerstone for our strategy ahead. It could be relief for all steps ahead. But now we focus on the Rasperia claim and then take the next steps.

On NIM, from here onwards, we expect NIM to remain stable for the remainder of the year at 2.3%. So yes, NII growth will be a function of volume growth. And in our guidance, we have included around EUR 50 million benefit from higher euro rates, and this is on the lower rate of the estimate that we were given last time of EUR 50 million to EUR 100 million.

We will now take our next question. And this is from the line of Gabor Kemeny from Autonomous Research.

Thank you. It's a pleasure to be talking to you, Mr. Hollerer. In your introductory comments, you mentioned turning more selective in the GCM segment as an aspiration. Can you share a few thoughts in what ways you think you should be more selective and what time line you have in mind to divest some of the less profitable exposures? My other question would also be on your introductory remarks and the comment when you said that excluding Russia and Polish FX is a good proxy for your franchise going forward. Does this mean that you exclude in entering new markets in the foreseeable future? And here, I'm also including some of the Balkans markets, where I believe RBI has perhaps less scale than the option than the optimal level. And my final question would be a follow-up on Kamila's comment on the stable NIM outlook. Can you drill down a little bit and tell us if you factor in any pressure on customer spreadsm and how you think about your income on hedges and securities?

Thank you very much. Coming to the first 2 questions, the question on GCM. First of all, I've shared today with you my first priorities. So the first assessment we did now, we are working on the strategy ahead. Now we are working on a prioritization. So I will not share today. I cannot share today with you more details. But what is, of course, very relevant is that we really raise profitability that we are more select that we have an efficient allocation of capital looking the business and especially also to improve cross-sell in this segment in this regard. Secondly, the -- sorry, it's coming to your second question. If looking to new markets, so far, there are no concrete plans to enter new markets, but I would not exclude to do so when we look at the final version of our strategy. But also here, are actually working on this and then coming back at the Capital Markets Day in February with a clear target picture on that. and concerning the Balkans, as we have now, so far, no concrete plan to enter a new market. There is also no plan to exit from any market so far.

Thank you. When it comes to our NIM development and. how we are looking at the stability of Indeed, our security and bond investments will help to stabilize NIM. As I said, we expect it to be stable from now on around 2.3. Generally, the net interest income development will come from volume growth primarily. You've seen a 5% growth in the first half year. We guide for 7% growth. here, I've already mentioned that we have the EUR 50 million upside potential from the better interest rates. Obvious question would be why we are relatively conservative on our loan growth, yes, so from 5% to only 7% for the full year. It is clearly the case that we are seeing asset margin pressure, especially in the retail, and we will be selective when it comes to the growth, so we would like to preserve the stability of our net interest margin going forward. I hope that answers the question.

It does, indeed.

We will now take our next question. This is from Mate Nemes from UBS.

I have a couple of questions, please. The first one would be on strategic priorities. Michael, you clearly outlined priorities on Slide 4. Thank you for that. And I was wondering, would you be able to provide a qualitative description of how you intend to see RBI at the end of your mandate? How would you describe an ideal condition in the bank if your plans pan out and intended? What will be the cornerstone? That's the first question. The second question would be on the CET guidance for Kamila. The CET1 ratio was at 15.5% and the of June, you're guiding for 14.3 million at year-end. There's a 110 basis point M&A impact, and that means there is a guided 10 basis points cetanerosion despite an implied roughly EUR 600 million net profit in the second half, just judging by your guidance. What is the meaningful offset here? Your flag in portfolio development, roughly 50 basis points on Slide 20. Is this simply organic RBI growth? Or are there any organic non-M&A type of effects in here? And also, if you could just help us understand why there is significantly higher AT1 dividend coupon dividend impact in the second half, roughly double that in the first half. And finally, your last question, if I may. And that's on deposit trends and deposit pricing. You clearly flagged some asset price or asset margin erosion, especially in retail. Can you comment on deposit trends or inflows? Any shift between side and term savings deposits? And what do you see in the key markets in competition also beyond perhaps Czech and Romania. Thank you.

So thank you very much for your question. referring to this now at the beginning of my mandate concerning the strategic priorities, perhaps to start with this. We have to become excellent in our core business. Secondly, we have to do, of course, some homework, especially in some segments that are not on the profitability level we want to see. And thirdly, of course, the transformation from AI, from new technologies have to bring us. And there, we have to manage to become more efficient and speed up. how I see RBI at the end of my mandate, I think what we have to focus on is passion for business to go into the needs of our customers to deliver best products, best services and the best-in-class coverage. And technology, we have to take use of to transform into a more -- in a stronger and better market position. And finally, what I sense and what we can see is Arvin is 1 of the strongest brands in the region, and this we will remain. And this -- as a result, we will see a better market share in an excellent position on our core markets. This is how I see very short, of course, in the next 2 years and in a long-term horizon.

On CET1 guidance and development generally, it is outlined on the Slide 20. We are largely referring to loan growth in the second half of the year, captured by the portfolio development and in line with our 7% organic growth guidance. There is no any other inorganic moves to be flagged here. All M&A is reported separately below, and we have nothing further than the BBA in the guarantee. Points that you see on the Slide 18 and 46 million that you see on Slide 20 is is the difference because in Slide 18, we refer to 20 basis points, which is in the quarter -- second quarter. It's a quarterly accrual. And 46 basis points that you see further, it is a half year accrual that we will have in the second half of the year. So here, we are broadly guiding in for the payout ratio of 40%, as we've already indicated in the past. So however, the final decision will be made in the fourth quarter once we are ready to settle on our capital allocation. When it comes to the deposits, so happy to comment on that as well. Yes. So here, if I take it country by country. In Czech Republic, we are still among top 3 banks. Here when it comes to attractive saving rates offering. As I said, we are quite conscious about it. Yes, this is a key element of our strategy to attract new customers. And we aim for the cross-sell to these customers and it's proven to be a success for our Czech operations so far. The high rate is, however, tied to certain conditions always such as a number of transactions per month and so on and so forth. So it ensures quite an active engagement of the customers and means that the average rate for this portfolio is much lower comparing to the external offer that we have. Overall, we see liability margins stable here. When it comes to Romania, we have been offering attractive rate, such as rates as I mentioned already, our customer acquisition campaign. And this was dilutive to the NIM. We also see customers moving from current accounts more into the interest-bearing accounts. So here the pressure on the NIM is there, but we are seeing -- we are expecting it to stabilize from now on. When it comes to Slovakia, [Czech] and Hungary, I will put it all together because there's development is relatively uneventful. We see very steady deposit inflows in all the markets and more pronounced in Hungary and currently no major shift in terms of product mix and liability side. Anything -- does it answer your question? Are you -- we would like to have further clarification.

It certainly does. If I may, one more follow-up, please. And that is on the $4.4 billion, $4.5 billion NII guidance for the year. Is that delta perhaps the -- between the top end and low end, primarily the function of loan growth? What are the assumptions you have for deposit flows and deposit pricing? It sounds like deposit liability margin is broadly stable and continued deposit flows. So is it coming back just to your loan growth?

Yes. This is primarily loan growth, yes. So we guided on 7% loan growth. You've seen it 5% in the half year and 7% in the full year. As I said, we will be selective because we a pressure on the asset margin. However, there might be a big upside, and we've already counted with EUR 50 million due to the higher interest rates. So this is the result in this range, EUR 4.4 million to EUR 4.5 million.

We will now take the next question. This is from Simon Nellis from Citi.

Many of my questions have been answered. I do have 1 follow-up on Rasperia, just wondering if you see any technical issues and actually getting access to the cash once a settlement is done, as you are I think co suing along with Raiffeisein Bank AO in Russia. How confident are you that you definitely get that cash outside of Russia. Then I would have a Polish litigation costs, you've given clear guidance for this year, but wondering where you think those costs might go here? And then for the new CEO. Welcome. It was quite interesting to hear your introductory remarks. I think it's what the market wants to hear. I'm interested in your experience working in the London's banks. And if there are any issues around their vision for particularly the GCM and I mean at one point, that was not part of the raise Bank International. So just wondering if you could answer that if you could.

Okay. Thank you. I want to start with your first question. I think this is rather clear as we filed the claim in Austria. The Austrian court that is clear that we will also keep the proceeds in Austria. And on the third question coming from your side on the GCM business and potential overlaps, whatever with the Austrian Raiffesein Bank Group. There, I see no disagreeing or whatever on our priorities so far. As I said, we have just started to elaborate on this, and we have to optimize and have a clear profitable picture on RBI side. So on this side, I would see no disagreeing from their side so far.

When it comes to Poland and the guidance on the Poland cost, I mean we clearly see a decline in Swiss franc cases and quite visible and confirmed from our side. And in euros, we have a good reason to believe that the new cases also have peaked, and we will decline from here. Roughly, we can guide that the litigation provisions in pole in 2027 will drop by half, and hopefully by half again in 2028.

We will now take the next question. This is from Riccardo Rovere from Mediobanca.

2 or 3, if I may. The first one is on sort get back to Rasperia, but I remember, and correct me if I'm wrong, that in the last call, to stated that somehow RBI failed to convince Europe that, that was the right thing to do. And it also flagged in other occasions, the possibility of having middle risks in Russia. I don't know exactly what he was referring to what comes to my mind, the first thing that comes to my mind is, as in the past, they basically imposed EUR 2 billion fine in Russia. I was wondering whether they could retaliate and do exactly the same thing they've done maybe in our larger scale on your Russian bank, which is still your asset. So just more because on the Rasperia case, it seems to me a very, very -- I can [indiscernible] respect of only 3 months ago. This is my first question. The second question I have is on [indiscernible]. You're now control around, if I'm not mistaken, 50 to 6 or something. I was wondering whether the governance of Addiko that is shaping up at the moment, you're happy with that. It could be an issue for you. And then maybe a question for Hannes. This quarter, credit as a kind of flattish. You mentioned SRPs. I was wondering if you still have room to use this tool. And when it comes to us tool overlays, should we expect this amount to go progressively to zero, if nothing or [indiscernible] happens on this planet.

Thank you for your questions. I will start with Rasperia and Rasperia block. So I think on the European sanction regime, you have to come from 2 directions. We base now our claim on the European sanctions framework on the European sanctions regulations. As there was an amendment in front of the Russian court coming from Rasperia on the anti-suit injunction that's now allowed us to take the decision to claim in Austria. On the other hand, we always tried that was also working on this heart as [Johannes Schuster] said in his last call to amend the European sanction framework to give us without any Russian amendment, the opportunity to file a claim in Austria. So now we took the -- we took the -- so to say, the first option as this was now possible coming from Raspberry. Second question, the legal risks in Russia. Our claim is largely in line with this antis injunction pronounced by the Russian court. The difference is that we are claiming EUR 3.15 billion, what we believe to be the full damages, and this is higher than the EUR 2.85 billion allowed in the antifuse injunction. It is so finally possible that our Russian subsidiary will face a claim for this EUR 300 million difference. Beyond this, we do not expect more risks to our Russian equity. Coming to Addiko and Addiko governance, I think it is premature to comment here. The first step now was successful. We now move to the second step, which means regulatory approval and the closing of the transaction. And we where we hope to see an increase in the tender participation from here. But the commenting on the governance, I would see at a later stage of this transaction.