Ladies and gentlemen, thank you for standing by. I am Jota, your Chorus C all operator. Welcome, and thank you for joining the National Bank of Greece conference call to present and discuss the second quarter 2025 financial results. All participants will be in a listen-only mode, and the conference is being recorded. The presentation will be followed by a question and answer session. Should anyone need assistance during the conference call, you may signal an operator by pressing star and zero on the telephone. At this time, I would like to turn the conference over to Mr. Pavlos Mylonas, CEO of National Bank of Greece. Mr. Mylonas, you may now proceed.
Good morning, everyone. Welcome to our second quarter 2025 financial results call. I'm joined by Christos Christodoulou, the Group CFO, and Greg Papagrigoris, Group Head of IR. After my introductory remarks, Christos will go into more detail on our financial performance, and then we'll turn to Q&A. As usual, before I turn to our second quarter financial results, I will briefly refer to Greece's sustained economic resilience, which acquires increased significance in the current turbulent external environment. The main takeaway is that Greece's economy remains on a steady growth trajectory, with leading indicators suggesting continued growth momentum. Let's review the main drivers. As regards households, robust labor market conditions support household income and consumption. Specifically, the unemployment rate is at a 15-year low, dropping below the 8% mark.
If you recall, the unemployment rate, even in the years before, after we entered into the Euro era, was around 7.5%, so we're near historic lows. Wage increases are in the mid-single digits, double the rate of inflation, so they're real wage gains. Wealth is increasing rapidly, especially housing wealth through valuation gains, but also through the accumulation of financial assets. On the corporate side, activity remains solid, with business investment headed to an all-time high. The drivers behind this performance reflect high capacity utilization rates, while new industrial orders are near a 30-year high. Corporate profitability is also at a multi-year peak and is combined with very strong credit expansion. Credit expansion to corporate is six times the pace of that in the Euro area. This stimulus is set to continue as monetary conditions are increasingly supportive, with the benchmark rates currently 200 basis points below their mid-2024 levels.
An additional boost to activity is coming from fiscal policy. RRF funds and other public investments are running at the pace of 6% of GDP. Moreover, RRF funds entering the economy are expected to be around EUR 20 billion between now and 2027, 2028. Furthermore, the operational budget, i.e., the budget excluding capital spending, is also likely to loosen in 2025 versus 2024, given the past year's primary balance surplus of nearly 5% of GDP. Preliminary indications are there could be tax deductions to the middle class, but that's yet to be determined. Lastly, as regards external demand, tourism revenue is back on track and at new. Highs, with both volumes and, most importantly, spend up. Also, good exports have held up well, up around 7% in volume terms, despite global uncertainties.
I think that you will agree the above describes a quite resilient economy, and in fact, we expect GDP to grow at a pace above 2%, exceeding the year average by more than 2x . Now, let me turn to our financial results. Despite sharply lower interest rates in the first half of the year, we continue to deliver a strong performance. In fact, it has provided us the confidence to upgrade several metrics of our 2025 guidance. Key headlines of performance comprise our profit after tax of EUR 700 million, which was practically flat year-on-year. Moreover, normalized return on tangible equity was 16.3% despite our large capital buffers, i.e., a very large denominator. This strong result was mainly due to our resilient income, which reflects the strength of our balance sheet. Three drivers are worth specific mention.
First, the impressive pickup in credit expansion in the second quarter, which led our performing exposure to expand by EUR 1.5 billion in the first half of the year. Combined with a strong pipeline of corporate disbursements, approved but not yet disbursed, allows us to revise our full-year 2025 performing exposure expansion guidance to greater than EUR 2.5 billion versus our previous greater than EUR 2 billion. Second thing worth mentioning, the NII decline in the high single digits is fully aligned with our full-year 2025 guidance, as our projection for market rates was validated. 150 basis points down year-on-year versus the first half of 2024. Again, as guided, the rate effect was partially offset by the strong loan expansion, by higher contributions from our structural hedges, and by gradual increasing pass-through on our time deposits. Third factor, fees are outperforming our full-year 2025 guidance of 7%- 8%.
Indeed, adjusting for the state measures, they grew at an impressive 14% year-on-year. Notable support comes from investment products, credit origination, deposits, and custodies. On the cost side, we continued investing in human capital, rewarding our people with fair increases in remuneration, while onboarding new talent so as to rejuvenate our workforce. Our emphasis on being technological and digital leaders continues unabated. The completion of the replacement of our core banking system, which provides us with significant competitive advantages in speed and efficiency, is expected in the first quarter of 2026, on time and on budget after five years of hard work. As regards credit quality, we continued on our prudent provisional strategy, with the cost of risk dropping to 40 basis points in the second quarter, a direct reflection of benign formation trends and high coverages across all stages, even by European standards.
This allows us to revise our guidance positively on this metric as well. These results, I'm sure you agree, are supportive of our fiscal year 2025 guidance and have allowed us to revise upwards key metrics, several already mentioned, but also, and most importantly, our return on tangible equity for this year to greater than 15% from greater than 13% previously, as well as our EPS expectation to about EUR 1.4 from previously EUR 1.3. A few words on a key comparative strength of NBG, our capital buffers. They continue to strengthen in the second quarter of 2025, with our CET1 ratio increasing by 20 basis points quarter on quarter to nearly 19%, following the absorption of a 60% payout accrual, the accelerated DTC amortization, and the strong credit growth of the quarter.
Our confidence in our capital accrual and following our commitments to shareholders, we target to front-load 2025 distributions in the fourth quarter of 2025 by distributing about 1/3 of our payout in the form of an interim dividend, of course subject to the approval of the regulator. Our CET1 ratio currently stands nearly 5 percentage points above our internal target of 14%, underscoring a disciplined approach to our capital allocation strategy. Our emphasis is clearly to increase shareholder remuneration through higher and front-loaded payouts, while at the same time to maintain our medium-term strategic optionality. To close, we have demonstrated for yet another quarter the adaptability and resilience of our business model, capitalizing on the strength and resilience of our balance sheet to deliver a set of results which has allowed us to upgrade our main full-year 2025 targets.
We're confident that the allocation of our excess capital will push our performance and our shareholders' returns to new levels, setting NBG further apart from our competition. With that, I would like to pass the floor to our Group CFO, Christos , who will provide additional insight to our financial performance before we turn to Q&A. Christos, over to you.
Thank you, Pavlos. I will start with the key highlights of our profitability on slide 14. For the first half of 2025, we delivered a strong set of results that reaffirm our full-year guidance, creating upside potential across multiple KPIs. Income resilience, despite lower benchmark rates, produced a profit after tax of EUR 700, 000 m illion, nearly flat year-on-year. This translates into a return on tangible equity of 17.5% before adjusting for excess capital, or 16.3% normalized for the strong H1 trading gains, standing well above our original full-year 2025 guidance of over 13%, which is now upgraded to over 15% as disclosed on our guidance update on slide 11. From a lending per share perspective, we generated an EPS of EUR 1.54, or EUR 1.43 on a normalized basis, leading to an upgrade of our full-year EPS guidance to circa EUR 1.4 from EUR 1.3 previously.
Going into more detail, our net interest income was down 3% quarter on quarter and 9% year-on-year, a trend in line with our guidance, reflecting the sharp reduction of the average three-month Euribor, as illustrated on slide 18. Accelerated performing loan expansion of EUR 1.2 billion in the second quarter resulted in a net expansion of EUR 1.5 billion year-to-date in H1 2025, partially mitigating the impact of lower benchmark rates on our net interest income. Moreover, an increasing contribution from deposit hedges and the gradual pickup in the pace of time deposit repricing added further support, as illustrated on slides 18 to 20.
As a result, our funding cost dropped further in Q2 by 6 basis points, reaching 65 basis points, the lowest in the Greek market, while our H1 2025 net interest margin settled at 287 basis points, supporting our full-year 2025 target of 280 basis points. Fee income momentum increased and accelerated in the second quarter, resulting in an H1 2025 growth of 8% year-on-year on a reported basis, or 14% excluding the impact from state measures on payments, with strong performance across core businesses, as shown on slide 23. Retail fees increased by 16% year-on-year on a lag-for-lag basis, driven primarily by fees from investment products, surging by 66% year-on-year, as we continued to gain market share in fee-generating funds under management as a result of our successful cross-selling strategy, while deposit and card-related fees also grew in the double digits.
Notably, our market share in bond mutual funds has increased by nearly 7 percentage points year-on-year and 2 percentage points year-to-date, leveraging the propensity of time depositors to switch towards mutual funds, which drove our retail funds under management by circa EUR 2 billion year-on-year to nearly EUR 8 billion, as shown on slide 8. Corporate fees also delivered solid growth, up 13% year-on-year, led by lending fees, which increased by nearly 40% on the back of accelerating new production volumes. Moving to operating expenses on slide 24, costs were up by 7% year-on-year, or 5% normalizing for variable payout growth in the first half of 2024, and the benefit from delayed exits from our December voluntary exit program, expected to fully materialize by year-end 2025.
Our cost-to-income ratio stood at 32.5% after normalizing for our high trading gains, well inside our full-year 2025 guidance of circa 35%, reflecting our top-line resilience. The trends in OpEx reflect our ongoing investment in human capital through variable remuneration and the onboarding of new talent and skills, as well as our cloud-leading investments in IT and digital infrastructure. The latter includes the replacement of our core banking system, a transformative initiative for NBG, underpinning our strategy to enhance efficiency, product quality, and client experience. As regards credit risk, the continued absence of net non-performing exposures and high provision coverage across stages by European standards allowed our cost of risk to settle at 40 basis points in the second quarter, displaying gradual normalization and limited volatility.
As a result, cost of risk for the first half of 2025 came in at 43 basis points, triggering an upgrade in our full-year guidance to below 45 basis points from less than 50 basis points previously. Our strong profitability enhanced our capital buffers, comfortably absorbing our 60% payout accrual, the accelerated DTC amortization, and the pickup in credit expansion in the second quarter of the year. As shown on slide 16, our CET1 ratio increased by circa 60 basis points year-to-date to 18.9%, with a total capital ratio at 21.7%. While our Emerald ratio of 28.4% comfortably exceeds the final target of 26.8%. Our strong capital buffers, nearly 500 basis points above our internal target, provide us with a unique strategic optionality for incremental shareholder remuneration and further value enhancement.
In this context, we intend to proceed with an interim dividend of approximately 1/3 of the 2025 payout in Q4 2025, subject to regulatory approvals. Echoing the message conveyed by Pavlos, increasing our short-term shareholder remuneration through higher and front-loaded payouts does not come at the expense of maintaining our medium-term strategic optionality, which includes incremental return of capital to our investors, as well as accessing growth opportunities via bolt-on acquisitions in adjacent markets and value-accretive M&A. Now, let me walk you through the highlights of our balance sheet summarized on slide 15. Our performing loan book was up by a solid 12% year-on-year in H1 2025 and up by EUR 1.5 billion year-to-date, comparing favorably to our full-year 2025 credit expansion target, which is now upgraded to over EUR 2.5 billion from over EUR 2.2 billion previously, as disclosed on slide 11.
This revision factors in a strong corporate pipeline for the remainder of the year, while on the retail side, performing loans are already growing in the low single digits in H1 2025. Disbursements in the second quarter accelerated to EUR 2.4 billion, totaling EUR 4 billion for the six-month period, driven by corporate allocated across key sectors of the Greek economy. These include energy, with emphasis on renewables, hotels, shipping, light manufacturing, and transportation. Retail disbursements continue to gain momentum, increasing by 9% year-on-year to EUR 800, 000 m illion in H1 2025, as shown on slide 19. On the liability side, deposits returned and resumed an upward trend in the second quarter of the year, with balance ascending up EUR 1.2 billion higher year-on-year, after adjusting for EUR 1 billion of EFCA deposits transferred to Bank of Greece on July 1st.
As illustrated on slide 20, the increase reflects the sustained inflows from low-cost saving accounts and the absence of further corporate deposit optimization in the second quarter. Our unique deposit mix, with core deposits at 80% of the total stock, the pickup in the repricing of time deposits with a path through of circa 30% against the year-end target of around 50%, as well as higher income generation from deposit hedges, act to offset increasingly the rate-induced pressure in our net interest income. Our living liquidity and funding position is further illustrated on slide 22. With deposits comprising circa 95% of our total funding, we maintain the lowest funding cost in Greece, as already mentioned, while our liquidity coverage ratio of 248% is among the strongest in Europe, complemented by a loan-to-deposit ratio of 63%. Turning to asset quality on slides 25 to 27.
Group NP stock amounted to just EUR 900, 000 m illion in Q2 2025, on the back of benign asset quality trends, translating into an NP ratio of 2.5%, down 10 basis points quarter on quarter, and in line with our full-year target. Importantly, our living coverage levels across stages by European standards provide cushion, showcasing another strength and a comparative advantage of NBG's balance sheet. Concluding, in the first half of 2025, we delivered strong profitability and a return on tangible equity of over 16%, despite sharply lower interest rates, allowing us to upgrade our return on tangible target for the year to over 16% from 13% previously. This performance demonstrates the strength and resilience of our business model and the disciplined execution of our strategy, laying a solid foundation for sustained value creation for our shareholders.
Our capital buffers remain a key comparative advantage, denoting our capacity for increasing distributions while providing flexibility for capturing incremental organic value-adding opportunities. It is important to highlight that our excess capital utilization strategy adds value to our shareholders across all NBG scenarios. As we move into the second half of the year, we remain focused on executing our priorities with the same discipline and commitment. With that, I would like to open the floor for questions.
Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their telephone. If you wish to remove yourself from the question queue, you may press star and two. Please use your handset when asking your question for better quality. Anyone who has a question may press star and one at this time. One moment for the first question, please. The first question comes from the line of Kemeny Gabor with Autonomous Research. Please go ahead.
Morning. Thank you for the presentation. My first question would be on NII, where your guidance remains unchanged. I believe this would leave room for some incremental NII decline in the second half. Would you expect NII to stabilize here in the coming quarters, or do you see room for further decline? That's my first question, please. Secondly, thanks very much for providing your new slide on the capital deployment. My question is here, firstly, on the 60%+ payout. Do you see any possible movement in the 2025 distributions, or is the 60%+ more of a reference for the coming years? You flagged up value-accretive M&A as one deployment option. Can you talk a bit about your priorities and your current pipeline? Thank you.
I'll take the first question on NII. Indeed, in our past towards the end of the year, we assumed that there would be another rate cut in September. If that materializes, our expectation is that there will be a slight decline in our NII in the following quarter and plateauing from there onwards. That provides us with the confidence to guide for the 9% year-on-year decline on NII towards the end of the year. Obviously, our guidance on increased loan expansion versus the original one, as well as any upside, let's say, on the benchmark rate going forward, will provide some upside risk, but most of that benefit will not be materializing this year. It's something that will probably benefit next year's NII. Slight decrease in the next quarter and then plateauing from there onwards until the end of the year. Pavlos will answer the second question.
Okay. As you noted on page 12, we have outlined our capital allocation strategy. What we haven't put in here and is difficult to describe to you is timing. For now, we have the 60% payout for 2025. We plan to increase it, but this requires discussions with the regulator. That is the objective, to increase payouts. On the other items on the list, clearly, we want to increase earnings organically or not organically. We mentioned here the international syndications. We mentioned the reperforming assets, which are sort of in between organic and inorganic. Then we have the clear, plain vanilla inorganic. Here, we're looking at transactions which would be value-accretive, and they need to be transformational, either in terms of their size, in terms of the business, i.e., digital, whether it's an adjacent market.
We have shown over time that we have the patience, and we will not do anything to destroy value. Timing is you always want to know about timing. Unfortunately, these type of transactions, timing is difficult to commit to. Hopefully, that gives you the direction of travel. Unfortunately, we cannot give you much more on the timing.
That's very helpful. Thank you. Just one small follow-up on the payout comment. You are saying that you might increase the payout above 60% this year, I mean, from 25%, if your discussions with the ECB moved in that direction. Is this fair?
All right. Let's rediscuss this in the next call.
Okay. Thank you.
As a reminder, if you would like to ask a question, please press star and one on your telephone. The next question comes from the line of Memisoglu Osman, with Ambrosia Capital . Please go ahead.
Hello. Many thanks for your time. Two on my side. One, trading income has been strong for your peer yesterday as well, but for you as well. Just wanted to get some color, if you can, on the drivers and what's the outlook for the rest of the year. Apologies if I missed it. Will the Q4 interim dividend be all in cash? Related to that, any color on how your latest thoughts on the mix of the distribution going forward? Thank you.
I'll take again the first question on trading income. We did have a very nice run with regards to trading income, especially in the first quarter. The main driver of the profitability there has to do with some rebalancing on our bond portfolio, and also, we tried to optimize a bit on the stiffness of the interest rate, which effectively justifies these very healthy results so far. As we also said during roadshows in the past few weeks, we don't expect an equally strong second half of the year, but nevertheless, we're very happy with the result that we've achieved so far in the first seven months of the year.
Okay. The interim dividend will be only in cash. Now, going forward, the split between cash and buybacks is to be determined. We will maintain buybacks as long as the price of the share makes it attractive.
Thank you.
The next question comes from the line of Butkov Mikhail with Goldman Sachs . Please go ahead.
Good day. Thank you very much for the conference call. I have a few questions. First on a technical one, on performing loans growth. If I look at slide 19, the year-to-date growth, the explicit one would be EUR 800, 000 million, as it's seen on the left chart, but the net credit expansion is EUR 1.5 billion. What's driving the difference of EUR 700, 000 m illion between these two numbers? That's our first technical question. The other one, as we look in 2026, as far as I recall, your guidance is based on policy rate of 2%. Can you give us some sensitivity of your NII to 25 bps cut? Also, assuming that rates go lower, do you feel confident in 2026 guidance on NII? Lastly, maybe could you give any color? Is there any progress on syndicated loans, and which countries do you consider? Is it Europe or beyond? Thank you very much.
Okay. Let me take the questions. First of all, the brief, let's say, from the credit expansion of EUR 1.5 billion to EUR 800, 000 m illion, as you very well pointed out, effectively, it has to do with two things. The first one is the foreign exchange, especially on U.S. dollar shipping exposures. The other one is something that we also discussed in the first quarter with us. We had a contingent, a default consideration for a transaction that we've executed a few years ago that was repaid in the first half of the year, and that explains the extra reduction to FX. Now, with regards to NII and our expectations on policy rates, current guidance is assuming that there will be another rate cut in September. Our base case is 1.75% of deposit facility rate for this year.
Given this point of reference, our sensitivity to falling rates is EUR 35 million for every 25 basis points. You've asked whether the rates go further down. I would say that if the rates move below 1.5%, which is not a base case expectation at the moment, we would expect the sensitivity to go slightly up. That's because we don't expect the repricing on time deposits to continue with the same pace if rates go that low. Obviously, as we discussed before, a key supporting item for NII going forward is growth, which is coming in stronger than expected. Also, other elements of supporting NII have to do with refinancing of our Emeril stroke at the moment, as well as the continued repricing of our time deposits, which is, as we said, picking up compared to the first quarter of the year. The third question, Pavlos will take.
Okay. On the syndicated loan, it is almost all in Europe. The risk appetite framework allows, exceptionally, a small amount outside Europe. We'll see if that changes going down the road, but for the moment, it is mostly European exposure.
Good. Thank you very much for the answers. Very helpful.
The next question comes from the line of Nelly Simon with Citibank . Please go ahead.
Oh, hi. Thanks very much for the opportunity. I just have a quick question on the capital walk. I see that the CET1 increased by over EUR 200 million in the quarter, but 40% of your profit would have been like EUR 120 million. Can you tell me what's driving the better increase in CET1 capital over the quarter?
There are two elements that supported the capital in addition to profits. One of them was the fair value gains on our held-to-collect and sell portfolio. That was around 10 basis points for the quarter. The second one had to do with the closing of a transaction. We had Frontier 3, if you remember, the last securitization of our NPEs. Closing of that released another 10 basis points or so for our capital. That's the two elements that supported profitability.
Got it. Thanks. Thanks very much.
As a final reminder, to register for a question, please press star and one on your telephone. We have another question from the line of Mehmet Sevim with JPMorgan . Please go ahead.
Good morning. Thanks very much. If I may ask on the planned interim dividend payment and whether this could be something recurring in the coming years, would you please just share any comments on what drove this decision already this year and whether we can see that repeat in the coming period? Secondly, just if you could please clarify the one-off this quarter. It seems like there have been positive gains, and I see there is an NBG Egypt branch recycling. If you could please clarify what that was, that would be very helpful. Thank you.
Start with the second question, Sevim. With regards to one-offs, other than the FX recycling on Cairo branch, we discussed also in previous quarters that we are intentionally to close that branch. We're trying to recycle FX losses that we had in our FX reserves to P&L. That's it. The other one was closing of an NPE transaction that benefited a bit the P&L. We recognize that as a one-off. That's it. There's nothing new other than this in our one-offs.
Okay. On the second one, the interim dividend is a request from investors. We responded positively, and if it could be done in the future, yes, I think it could be done definitely in the future.
Okay, very good. Thanks very much.
We have another question from the line of Demetriou Alex, with Jefferies . Please go ahead.
Just two questions from me. On the transformation program and the new core banking platform, can you maybe just expand a little bit on how you have a competitive advantage over peers in that regard? Secondly, can you just elaborate a little bit more on some of the digital partnerships and strategic partnerships you've entered more recently and just kind of the profits or progress that you're seeing there? Thank you.
Okay. On the tech transformation, I think, first of all, I want to remind you that we started early on changing all our IT, both core as well as peripheral systems, going back four or five years ago. We are near the end of that journey, having spent, I think, about EUR 100 million more than our peers per year. It is leading to us moving up on digital from being the country laggard to being among top European banks as per international benchmarking. On the core specifically, it's a painful process to do. It gives us great flexibility. We can introduce products in a matter of days versus previously, which took months. It is more efficient as well in terms of how much it costs us, and it is also providing better cloud capability.
I think, if I can put it this way, it is something that all banks will have to do in Europe. Here, we're almost at the end of this difficult road, not just in terms of costs, et cetera, but in terms of operational risk. It is going to be a great relief for this to be done. In terms of the partnerships, there are mostly two types of partnerships that we have. One is Jason Market Partnership, which is the EPSILON NET , an ERP for small businesses that allows us access to these small businesses. There are about over 100,000 of them who are customers of EPSILON NET . The other one was NBG Pay with Global Payments. That's JV, NBG Pay.
There, it's a question of not being able to be experts in tech everywhere, and we are piggybacking on Global Payments' expertise in acquiring business to relieve us and to push us in having the best acquiring features and functionalities. Those are two. A third one is another one in the Jason Market. We're in the real estate business. We'll have a platform which is putting on some of our own and some of our partners' real estate assets, an end-to-end platform from purchasing either directly or through auction all the way to everything to refurbishing, insurance, et cetera. It's an end-to-end real estate platform, which I think is timely in view of the housing crisis that exists in Greece currently. I think that's it for the three main ones.
Thank you very much.
We have a follow-up question from the line of Nelly Simon with Citibank . Please go ahead.
Hello. Hi. Just one follow-up. I was wondering what the nature of the EUR 9 million other impairment was. Maybe a more strategic question. I mean, this new IT system that you have, I assume it's scalable. Other banks have to do something similar at some point. You have a lot of capital. Would you consider domestic M&A? Do you see the opportunities coming in the future?
Chris, you take the first one on the line. Or else you want me to go first? I'll go first. Okay. Absolutely. Right on the scalability and the competitive advantage. I think you've heard me say before that, though we're finding difficulty in cross-border, finding value in cross-border M&A, if there are banks that have not done their homework on their core banking systems, we will have a new expandable core banking system that gives us an advantage there. Yes, definitely, that is something that we will have. That was it. Okay. On the second one, that's a few minor things that sum up to EUR 8 million, EUR 9 million that has to do with ACL provisions on government bonds, as well as some others on state guaranteed loans. That's it. There's nothing big there.
Okay, thanks. Thanks very much.
The next question comes from the line of Nov osselsky, Ilija with Bank of America . Please go ahead.
Hi. Just one quick question. One of your peers yesterday said that in the second half, they'll have some extra provisioning on step-up mortgages, and they have some on Swiss franc mortgages. Are you going to have something similar, and are there any other cost of risk or other types of one-offs that we should know about for the second half? Thank you.
Let me give you the quick answer. Chris will give you some more details. Very little Swiss franc exposure, and it's all well-performing, so I don't think there's going to be any issue there. On the step-ups, we've dealt with those types of products a long time ago, so we don't have any issues on that.
Yeah. There's nothing more to say. Our balances on CHF loans are very low, and those that we have are performing nicely. Any legislative intervention on this will not have any impact for us. With regards to step-ups, as Pavlos said many years ago, four or five years ago, we took care of that issue. We don't have material balances with regards to step-ups at this stage in time. You should not expect any volatility on our cost of risk going forward. I think I made that clear also in my remarks. That's why we've revised, upgraded our guidance with regards to cost of risk from less than 50 basis points to less than 45 basis points.
The asset quality trends that we see, and obviously, the capital and provisioning profits that we have in our balance sheet makes us very confident with regards to what's expected to come, with upside risk also to be expected rather than downside risk to be expected.
Thank you.
Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to Mr. Mylonas for any closing comments. Thank you.
Thank you all for participating on the call. As usual, we'll be on standby despite the end of the month becoming the summer holidays. We'll be ready for any of your questions. With that, let me take the opportunity to wish all of you good and relaxing holidays, and we'll see you all in September.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for calling, and have a pleasant day.