Ladies and gentlemen, the management board of NLB welcomes you to the webcast, where they will present the 1st Half twenty twenty one results. Today's presenters are Blas Brodniak, CEO Archbold Kremser, CFO Andreas Burkhardt, CRO. This presentation will be followed by a Q and A session. If you have joined by the webcast, please use the questions tab located above the slides. Before we go on, we would like to draw your attention to the disclaimer on Slide 2 of the presentation.
By this, I pass the word to Mr. Brognjak. Please go ahead.
Thank you very much and good morning everyone. I believe this time we can be pretty short in presenting and more focusing on Q and A because we are bringing good news and That's something we are really happy about and proud of. This is the first half of this year has been really very robust. And when I say so, I mean in practically almost all dimensions of our business, Be it recurring volume origination in terms of retail lending, corporate lending picking up, be it in terms of especially fee income With very strong bank assurance and especially asset management origination and that's something that's really instilling significant confidence. So the influx of deposits, which has been more or less stigmatizing the year and a half more or less, has been a bit moderated now.
On the other hand, we have been of course introducing measures with which we have been addressing. So despite pressure on NIM netting and on January then interest income, We managed to offset this with significant growth of fee income. And talking about operating banking margin practically and total financial intermediation margin, we see actually a positive uptick, Which is what we have been announcing and somehow signaling as the more important measure that necessarily NIM only. We have been solidly progressing in digitalization. Our Capital base has been further improving.
Liquidity remains to be of course ever stronger. But as said, less burning in the last couple of months Since we have been able to actually now position this and allocate some of these funds, obviously, significant growth of retail lending throughout the region, Solid demand for housing loans in Slovenia. This is obviously subdued and decreasing levels of consumer lending given the restrictions of the Bank of Slovenia, but generally solid trends and demand. And finally, corporate investment picking up and that's something that of course is also encouraging. There has been development clearly also in terms of dividend payout capacity The ability, so the ECB has changed the regulation as of end of September.
So of course, this is opening doors For the residual payouts towards the end of the year, which we announced previously during the year. And what is also very important, the integration process of Comercenobanca has been well underway. We feel very confident. So we aim for a fully full operational and legal merger at the end of April 2022, which is pretty much soon. And this is, of course, true in all the markets.
There might be still clearly some divestments on the go, which we have also announced. And there have been of course some process spending in this respect, but nothing yet to formally disclose. When it comes to of course our main strategic focus besides pure economics, We are happy to really be positioning ourselves as one of the really pioneers in broader EAG context, So not only environmental, but of course also other elements of this turf and especially amidst and after COVID, this will become clearly overwhelmingly important And we believe we are very well positioned for that. So, Greg, very solid output in all dimensions. Commerciano already contributing.
So we see already solid progress there Archibald will give you a bit more flash to it. I mentioned the loan growth and especially retail lending in all the Sigiad is in Slovenia, I mentioned it's a very solid demand for housing loans and now there is a remaining hope that Banco Slovenian nevertheless at certain point Mike, we released some of the restrictions to even allow some growth of the consumer lending. We're really happy about this. The market position of NLP's Gladi's Slovenia is already close to 37% market share. We gained almost 2.5 percentage points actually within 12 months The running 12 months and that's amazing progress there.
Of course, our results in terms of bottom line have been affected with some one offs and shapes, so a couple of legal disputes, Some repayments of NPLs that you would see actually under the extraordinary income, some actually regular positive resolutions in the sense of leading them to So, loss provisions and that's something that's clearly that has materially impacted the first half of the year. We still feel confident that the situation general macro Situation is allowing for liquid markets, which means that there might be further cases, but of course, the potential for more tangible ones It has not been that high anymore. Generally, the trends are continuing to be very, very strong also in the running months, so July August, and we are happy about that. The whole group has of course been fully aware of the need of efficiencies, especially the parent bank has really showed and demonstrated significant And that's something that of course is also supporting the full results and of course developments. And really as I mentioned very favorable evolution of the loan books, NPEs and NPLs further decreasing despite COVID situation.
And this is really giving us very, very solid base for the second half of the year with more or less 5% growth For Slovenia and more or less the region on average and very comparable expectations also for the year to come. So this means we are really in the midst of the very positive Part of the economic cycle in which within which you would not expect significant migrations to NPLs. Unemployment is practically at the lowest historical levels almost in Slovenia. Everyone is seeking for talent. So I would call it really a structural unemployment and this is of course also a good indication that we might not be expecting any significant delinquencies coming from retail Thanks as well.
So we're overall feeling very well. And now a bit more details from Archibald and then Andreas. And I'm passing by that the word to Archibald.
Thank you, Plas. Welcome, everybody. And as Plas said, he basically gave away all the key developments, So very strong Q2, actually bottom line exceeding Q1. But admittedly, on the back of some nonrecurring elements, as you know, Q2 is traditionally burdened with regulatory charges. On the other side, we had significant recoveries on which Andreas will give a bit more flash.
And they basically balance each other out. Otherwise, mostly, Blas has mentioned key developments, very Healthy loan demand showing up in all markets, all segments. Specifically, of course, we are monitoring Performance in Commercellnerbunker, and here we will see that there is also now an uptick in volume growth. And so in this sense, I guess, most importantly, we see fundamentally demand for our services. On the other side, we have, I think, shown that we have The pricing power in the fee and commission income dimension and importantly are really improving On the cross sell dimension, especially in Slovenia.
And obviously, these measures will be rolled out in the group subsequently. On cost of risk, clearly, there has been a lot of nonrecurring dynamic. So I'll leave it to Andreas To provide details and by and large really nothing to add other than saying very strong Q2 And pretty much everything in line with expectations, so no surprise importantly as well. As indicated, NIM is in a way flattish, but we See volume driven growth in revenues. And of course, this is against a very, very low cost of risk.
So broadly speaking, of course, contributing significantly also to net income growth. And as mentioned, I mean, we are increasingly focused on the combined margin, as we call it operating Business margin, operational business margin. And here you see that we actually see an uptick, largely helped By both KB contributing and starting to contribute and, of course, by our very robust fee and commission income development. Obviously, fee and commission is very much also driven to some extent by COVID recovery. So we see, broadly speaking, all markets Operating almost normal, if not actually exceeding what the pre COVID levels because of pent up demand.
And so especially payments, ATMs, all transactional type of revenues are very robustly Showing growth. And that's by and large the story On non interest income, obviously, non interest income, we have these 2 significant, let's say, quarterly deviations, one coming from the known Regulatory charge, which traditionally are recognized in Q2. And as mentioned before, We've seen the resolution results. By the way, a part of that coming also from KB, SKB also has quite significant, let's say, NPL recovery potential. On costs, nothing to add.
We have had a couple of minor restructuring charges booked. And Other than that, you see us maintaining discipline overall. Also, of course, it is, I think, fair to acknowledge We are willing and want to invest in high quality skills and people environment. So this keeping to invest in our digital expansion. And that is, of course, increasingly a group wide undertaking.
So we're also looking forward in all the significant, of course, cost savings potential Further down the road, as we will increase, as is shown here, economize on the basically Standard operations, so everything that can be automized will be automized eventually. And of course, increasingly, we will economize So now, physically present as it's shown here both for Serbia, but also for the other markets. In Serbia, clearly, we run pre merger already an optimization program. I think that was mentioned many times In the past, and you see, of course, the effects of that kicking in, in the employment numbers visibly affecting already Q2. And this effort is going to continue.
So we will still have some rationalizations run Pre merger, but eventually, of course, we'll have the merger itself. And by 2023, roughly, we expect In Serbia to have a halfway stabilized situation in terms of headcount as well. I think especially important for us is underlying demand for our core business. That's clearly, of course, The loan operations and here really just good news from pretty much all the markets and all the segments And especially highlight is that we managed Orzo in Serbia to show Volume growth and clearly, there is a lot more
to come.
So it's not that we are yet Done. But the dynamics is absolutely right and that proves the case that There is a lot of potential, both within KB's client base, but also outside of that. Rest of the group, Plas already mentioned, very, very Strong retail demand. Housing, I think, continuing highlight throughout the region. I guess that's not coming as a surprise as we see that in many other markets.
Of course, we are very happy To supply here at competitive rates and to some extent continue to trade volumes for margin s housing is an extremely important anchor product for us. And we are very successfully cross selling into such a client relationship with add on products down the road. Also corporates continues to grow. Here, I think it's fair to say that We are increasingly operating really as group CIB operation. And in this sense, cross border starts to show results So both in our region, outside our region, very good pipeline in that area.
And also, I have to say, actually supporting us in keeping margins up in that space. Capital, really strong position, very Solid outcome from the stress test, ECB stress test as was published. And so we are very, very comfortable In maintaining our dividend guidance and of course, respecting in full ECB's, Let's say, a conservative approach to negative goodwill, which is not meant to be distributed as a dividend, But that's anyway nothing we have envisaged. So our negative goodwill from KBD is shown in the capital base, of course, is available To absorb either growth or losses, but otherwise, it's not meant to be paid as dividend. However, our CHF300 1,000,000 dividend pledge is unaffected from that, as you know.
By that, I would pass on Andreas give a bit more flash on the dynamics in impairments and NPLs.
We're just waiting for Andreas to rejoin the call. He should be on shortly.
Andreas, the floor is yours.
Archibald, thank you. Archibald, thank you. Welcome also from my side. I'm not sure whether that was a short break because I was dropped out, but now I'm back in. Yes.
So on risk topics, I mean, the colleagues already mentioned before The development in the risk area in the first half of the year It's been extremely solid. We have actually, well, despite COVID, being able to reduce NPLs considerably.
So as
you can see from SEK 475,000,000 to SEK 428,000,000 in these last 6 months. So I think that's a good development. We were able to We saw considerable amounts of NPLs. On the other side, we also had some repayments Of clients which were still not booked as cured, but which were on time. That's why you see a little bit also dropping the Amount of the no delays because some of that was also repaid.
Overall, in the first half of the year, we have approximately released €30,000,000 of provisions. That's due to the effects which I just mentioned, but also due to the fact that on the pool Of course, last year, we had a considerable charge. Now due to better macro outlook, we had a partial release.
So part
of that work was built last week, we were able again to release and that contributed to this result as well. The new inflow of NPLs is almost surprisingly low in the first Half of the year, given circumstances, it also don't look that this effect would just Come later in, so it's really a better development. And subsequently, we are also now changing the guidance for the entire year down to 20 to 40 bps from originally 70 to 90. So as you can see, I mean, we are still expecting a fairly Positive cost of risk, currently, it's still negative. So to come as we expect, but Very, very much controlled.
What you can see from the Portfolios which were under moratorium due to COVID is that the big, big part of these moratoriums in the meanwhile has expired. And to a good part, it has expired now for a while so that we really can start flaging For that portfolio, we're correct. And actually, so far, very good news also here. So portfolio is behaving very much in line with expectation Better than expectation. We have still remaining part of some EUR 240,000,000 of Cases in moratorium by end of June.
And actually here, we are extremely conservative. You can see on the right bottom is that basically half of this portfolio As per end of June, it's already staged. So Stage 2 or Stage 3. Obviously, you cannot see it from delays per definition because It's a moratorium, but we are here careful. But of course, you have to see the definition that is somehow the most problematic end of that portfolio Because it had the longest moratorium, new clients, which were just using short moratoriums And after that, regularly repaying, obviously, from that perspective are less problematic.
But also here, I I think so far so good. And the remaining part, we really carefully stage it. But also here, I think, so far so good. And the remaining part, we really carefully staging. So for the overall picture, I have to say, as a CRO, obviously, the It's time, sir.
And the behavior of the portfolio is, in these circumstances, very, very robust, Very much in line with our basic expectations, and we saw a few positive surprises. So some cases which we didn't solve for a while, we solved now. So for this year, obviously, this will make a bit of a difference. Yes. With this, I would conclude for now and handing actually back over to Archibald.
Thank you, Andreas. We will now talk a couple of things happening in time. I have to say the Cooperation with the team, both here in Ljubljana and in Belgrade It's Zach Spardy. He helped us manage the process. And as you see, everything is progressing more or less according to plan.
You always have a few ups and downs in such a process as it is written on all kinds of dimensions from Product reviews and rationalizations, of course, the IT system integration, crucially important, the HR, The more important, I would say, which is the identification of the key leadership team and making sure Key talents are retained. We put a lot of attention on that. We run extensive, let's say, processes Cross those entities, make sure leadership talent is identified and retained. And so ultimately, we pick the best team For, let's say, the combined operation, obviously, also adding talent from the market here and there Yes, ultimately, our ambition is to really be the best in the market in Serbia. And so in this sense, we are really happy about The progress so far, excellent leadership team in place and the others of Social cohesion.
So I think we found a good balanced approach. Team is really excellent in preparing and execution of this quite difficult where that we have continued to increase a little bit our share in In KB, we're buying out minorities to some extent. This is for now on you. Actually, the National Bank of Serbia, This is here also very, very vocal and supportive actually to fully respect legally collected and Kind of making it a sport. So I think that's an area to watch.
We think it's contained. I think the system has recognized under leadership of NBS That this is an issue to be dealt with, and so we are expecting that to be resolved at some point. Otherwise, the HR integration, as mentioned, is progressing very well with the 2 elements mentioned before. IT Process, a very, very, let's say, tedious exercise, hundreds of products to be mapped and made sure that No mistakes to be occurred. But as mentioned many times, we talk about 2 identical almost core systems.
So we don't really expect a lot of trouble coming from that space. Otherwise, I think what has to be remarked is that the team has really achieved Very visible successes in activation of the client base of KB. So a lot is happening. Basically, His remark is that the team has really achieved very visible successes in activation of the client base of KB. So a lot is happening basically besides the integration process.
So we are in the market with Full force in terms of marketing, in terms of new features to be rolled out on the digital space. And obviously, most importantly, activation of sales force. So this shows real results. And so I'm not going to read out all the numbers, but what I can tell is that production activities have been significantly Improved and are showing through in volume growth, which ultimately is the key metric of success. And so in this sense, we are very happy with first results we have seen and are visible Also to the outside world.
On integration itself, the costs and synergies equations are pretty much in place as we Have established them. And so in that sense, I guess, the most important news is there is no real news, And we are progressing as planned. By that, I would hand back to Blas to conclude And produce an outlook. Thank you.
Thank you, Archie, and Andres. As I said at the beginning, this is a really event for us at which we are very, very happy as it produces a significant basis Actually for continuation of these solid trends. And at this point of time, we have actually also changed our guidance to the cost of risk, which is the most Material actually changed to what we have been communicating publicly so far as we begin And there is some chance even to outperform this range. So in this respect, I'm really very, very positive. Given the fact that we are in the really positive part of the cycle, which means that corporates are in very solid shape, Everyone is seeking for talent and there is real initiation or initiation of investment cycle pending.
We see this in pipelines both locally in Slovenia. Public communication is that there would be no lockdowns, but there would be of course infection, vaccination or test requirement for normal public life. And what I'm most closely observing is actually the vaccination rates at the most exposed age categories. And people above 70% to 74%, for example, are vaccinated almost at 82% in Slovenia. And it's a very high rate because there was also very high infection rate in the country in the previous waves.
And this is simply a no damn demonstrated by a fact that despite now a hike in infections, We see actually less people in at intensive care than 2 weeks ago. So we are actually looking at 7 people being hospitalized and at intensive treatment in Slovenian And comparable trends somehow are still somehow monitored also in other countries. So yes, we are, of course, concerned about further increase of infection rates, But the economy, especially in the production site is practically almost full utilization or full utilization of capacities. Today, it was just published that June production compared to last year's June production is practically 19% up, Which is 3rd best in European Union and in a wider context. So the production part of the economy is practically booming.
Service part is coming back. Tourism, you would barely find a room now in a more notorious touristic place in Slovenia. The same is true also for Croatia, obviously, being our market, but it's actually what is promising for us is clearly Montenegro that is significantly dependent on tourism And there are very, very solid records of occupation rates and prices achieved being reported from Montenegro as well. So overall, a very, very positive picture from all dimensions corporate picking up, retail really solid demand. Hopefully, Bank of Slovenia finally realizing that there is really no reasonable reason to actually withhold still relaxation of consumer lending And general creditworthiness of retail population and this would provide additional boost.
NLB is in a very, very good shape for both Solid dividend payout as announced as more or less promised and organicM and A growth. It is really subject to our discussions with the shareholders whether, of course, we are pursuing Some more material M and A opportunities or a bit more moderate M and A opportunities in the coming periods combined clearly with more or less intensive dividend payouts. The bank is still sitting on significant potential for the capital improvements, be it Tier 2, be it AT1, eventual recapitalizations in midterm Future potential to be discussed with key stakeholders to actually fuel the in market consolidation as called by some investors in In the entire region, there is going to be a lot of opportunities and NLB could become a material player in this respect as well. Seating on such a solid capitalization and liquidity, we believe that we are up to it, up to this challenge. We are very, very far in the integration by which we will also demonstrate by a proven track record that we are able not only to acquire, but successfully integrate businesses.
And I believe this is something that is a very good news also for the entire stakeholder landscape. And by that, we They're assisting us at developing one of the most meaningful businesses in the entire region. We firmly believe we have what it takes to get there And we firmly believe we will be there in the meantime future. Thank you very much. And by that, I would To move to the Q and A session, any other questions clearly subsequently to be addressed to our Investor Relations team and of course, ourselves as well.
Thank you very much and gladly responding to your questions.
Thank We currently have no questions on the phone line, so we will move to those from the webcast. The first is from Karim at Dunross and reads, can you please offer an update on the current COVID situation in your main markets and any tendencies for reversal of taxation measures normalization of mobility.
I believe I just more or less responded to it at the last part of my Previous statements. So Slovenian situation is solid in a sense that we have more or less 4 vaccines broadly available And conveniently available for just about anyone, so people can really select the vaccine and timing of vaccination more or less. And as I mentioned age categories exceeding 65 are vaccinated 70 plus percent, more than 70% to 74%, 81.5 Even 82% already. There is still a bit low rate in the age category of above 50% to 65%, but here we are at 55% to 65%. And clearly, this is now a struggle of how actually to animate and motivate people to get vaccinated.
And this has been happening clearly with Positive discrimination because there have been no new measures going are going to be implemented in a sense that all the testing, of course, will be charged. And for attendance on any public more or less event or place, you would have to be either having a certificate of being infected within 66 months being vaccinated or freshly tested and this was I guess stimulate a significant residual part of population to get vaccinated. Slovenia has access to vaccine that is at this point some 700000 to 800000 at a 2,000,000 population, so we can really easily manage the whole process. And now comparable is getting true and becoming true in other countries as well where there have been also very high infection rates in previous waves. So if you combine high vaccine or improving vaccination rates with really high infection rates, you would have really significant part of population immunized.
And we are pretty much close to herd immunity. This is more or less demonstrated evidenced by the very low numbers still at intensive So despite a hike in infection rates, there is no real hike in intensive care treatments needed. So I would not expect further lockdowns. That would be potentially selective of course restrictions of people that will not be immunized. And this is something that everyone is expecting.
But at the end, I believe people will get incentivized to simply get vaccine vaccinated ASAP. And then towards the end of the year, we will see the Solid trends here. We have
a telephone question from Laden Dodik from Erste group. Your line is open. Please go ahead.
Thank you. Congratulations on the results and thank you for this call. Two questions. So first one would be outside of the expected risk costs, my question Lean towards the potential releases from the IFRS 9 overlay models. Could you provide us some details, if any, on this one?
And second is rather local topic from Serbia. Yes. There was recently in the news that last remain state owned banking entity, Postal Savings Banks, is considering to Offer to buy Comercio Banca subsidiaries in Republic of Srpska and Bosnia, Herzegovina, right, and Montenegro. If you can maybe you can give a short comment on this. I might give you For example
Yes. Thank you very much. Thank you very much for congratulations, Malen. So I might give you an update more or less what we can publicly Close on the Kabi and then I will ask Archibald and Andreas to supplement when it comes to the IFRS. So I mentioned before that we don't Excludes eventual opportunities to potentially divest 1, 2 Or more subsidiaries.
In principle, there are 2 subsidiaries and one branch actually of Commerzbanker. I mentioned also that there have been activities in this direction, but I cannot Publicly disclose more at this point of time. And whenever it would be appropriate, it we would obviously come with proper announcements and disclose it. If colleagues can then assist me for the IFRS line, please.
Achibald, shall I?
Yes, please.
Okay. So honestly speaking here from IFRS 9, obviously, this is a question of Continuous work and improvements also. From all of that, I'm not expecting Any major impact? So that's in short. So I wouldn't expect here major changes, no.
Okay. Thank you. Thank you very much.
Thank you.
Your next question is from the webcast. Joe Van from RBI asks, risk cost guidance would imply a significant uptick in second half twenty twenty one to via €25,000,000 per quarter or similar to COVID quarters in 2020. Isn't this a bit too conservative? Do you include here other provisions as well or not? If yes, what would be the credit related risk cost guidance?
Ajwad, just let me introduce some thoughts here. Well, I mentioned before that 20 to 40 is a guidance that we believe is reasonable. And I also mentioned that there is a A pinch of salt of conservatism eventually this number. So might we might positive this positive surprise still. There is a chance for it, but of course, we don't want to misguide in this direction.
Archibald, you might want to supplement that.
Actually, I think Andreas wanted to say something.
Yes. So I guess to become much more optimistic than we originally For the second half of the year, that's, I guess, still a little bit early. We were just discussing before uncertainties also concerning how What we can see so far is simply very positive development. But I'm now working 20 years in risk management, and you don't always just have positive surprises. I think the range which we are giving you is, of course, Fairly conservative but also ask me in a very realistic range.
We might see, of course, as Still further positive surprises, but I would be here a little bit careful. I mean, generally, what you also see In banks, not just in our bank is that sometimes you see a little bit more movements in the second half of the year than in the first half. I think for the time being that the news which we are giving is if you are Because in a COVID year to end up with 20 to 40 bps cost of goods, I think that's very good. And more we have to see, I mean, to reach out further, I think it's still a little bit too early.
There will be some restructuring charge in those still. So on HR provisions and so on, we have published more or less what has been done in the first half. This was the first wave of voluntary leaves. And of course, we plan further restructuring activities. We also publicly announced the level that we expected all the restructuring So some of this will find its way obviously through HR provisions.
But generally, clearly, we remain very positive for the second half of the year as well. Archibald, you might want to add something here.
I would just complement, I mean, clearly, cost of risk is credit risk, so just to be clear on that. So the SEK 200,000,000 to SEK 40,000,000 is a credit risk figure. And what Plas mentioned is, yes, The overall, let's say, dynamics in restructuring charges, which we still believe the majority of which Sure. It's going to be booked this year. And I mean, you'll see us basically summarizing all of that in us basically saying in our press release We are pretty positive that we might or we are very optimistic that we will achieve our In our high single digit ROE guidance for this year or even exceed that.
So I think That tells the ups and downs, that kind of summarizes the ups and downs we have mentioned.
Our next webcast question is also from Jovan at RBI. What are legal risk related provisions of €5,000,000 to, in the case of KB, I suppose not CHF related? And why is HR restructuring provision not part of OpEx?
So I mean, here we are simply transparent in disclosing HR restructuring provisions As a separate position, I mean, we have published a restructuring budget, and we are just tracking relative to that I think the market wants this transparency on the merger process as such. And in regards of the legal provision, we have mentioned that It has become a bit of a sports in Serbia for retail customers, driven very much by Basically by small law firm offices, lobbies to litigate banks for fees, and we have seen a substantial uptick in that. The dynamic has significantly increased in the first half year. So there has been very, I think, Serious considerations of this topic by the regulator as recognizing this as totally undue. But for the time being, we have to recognize that courts rule this way or the other way And not regarding NBS guidance yet.
So I think we have to flag here that this is a matter of concern for us. So it clearly shows up in provision charges at the level of KB and this is something we surely have to do
The next question is from Joe Brenna, RVI. Is there any room for downward revision of management CET1 target? And what is the hurdle for the payment of the catch up dividend to the planned €92,200,000? Thank you very much.
So there is no plan as of now to revise any capital targets. That would clearly be a much Broader conversations, strategically speaking. But I think for now, our targets are well set, established, in line with our risk appetite. And at the moment, we clearly exceed this target. So there is no dilemma in regards of the remaining amount to the SEK 90,000,000 Yes, this amount anyway doesn't even show up in the capital.
So this is only and exclusively subject to us being allowed to pay.
The next question comes from Jasper from Slovenia. Hello. Congratulations on another great quarter. My question is regarding the outstanding shares in Macedonia, Kosovo and Serbia. Are there any plans for a buyout of minority shareholders to reach 100% ownership considering good ROE of those branches?
At this point of time, there are no considerations. So Archibald mentioned before that we have just had a process in place So actually buy out minorities of Commerciano Banker. We found interest for 5%. There was no interest currently for more, and we are fine with that. We are able and We'll know how to live with minorities of listed companies such as Skopje.
And at this point of time, we believe we can coexist And rather focus our efforts and capital in other potential incremental opportunities as well. So I believe this is a reasonable thing to do at this point of time. Of course, we will not shy away. There were very favorable opportunities Actually, buy this out, but we are not pressed by it, and we don't see this as vital for continuation in these countries.
And just to remind us that we have fully recognized all minorities. So from a capital point of view, there is no dilemma. Obviously, we like our own entities, and we have great teams locally Delivering exceptional results. But as Plath said, ultimately, that's a question of supply and demand, whether there is Transactions. And so at the moment, there is no need whatsoever for any deliberation on that.
The next question comes from Dvo from Intercapital. We read about the changes in CHF loan regulation in Slovenia. In April, a new draft CHF law was submitted to the parliament. Some other banks already booked negative one offs. What about NLB?
How many CHF loans did you have in Slovenia? And what impact do you expect?
So if I may give it a shot, we have a relatively limited Size of the book in Slovenia, it's far below SEK 100,000,000. And so from this point of view, we don't consider It's a material issue. What we are, of course, focused on is the benchmark reform and everything going on in that space. And So here we would have hoped or are still hoping to some extent that there are statutory resolutions being put in place, which in our view would help We mitigate, let's say, appetite for litigations. But we are, of course, Prepared for any scenario and in this sense, our IX is dialogue with our customers on the matter.
And but for us as a group, this is not a material topic.
Next question comes from Greso from Inter Capital. By conditions in the second half that will bridge the current COR level and the updated guidance.
So from today's perspective, no, I was very positive when closing our address. So I would not revise that in 15 minutes, Right. So I remain positive. As long as forecast is 5% growth of Slovenian economy in aggregate And we see Horeca finally being opened and there are indications that they would not be locking down again for vaccinated, infected or tested people, Right. I remain very bullish.
So I would not expect a revise to the other end. I said that there might be a positive surprise to the lower end of the range.
We currently have no further questions from the audio conference or webcast.
Well, I guess this gives me a chance to wrap up and thank everyone. As As said, we are enthusiastic, optimistic. NLB is on a very good track. It will in the midterm really position itself as, as I said, one of Most meaningful businesses in our core region. And there are some solid progresses and prospects potentially to open room also in other geographies.
We were mentioning Albania, but there has been diplomatic efforts to potentially also enable our entry into Croatia. And that's something that we would specifically like. But of course, it's not too early to touch as a topic. Overall, very positive sentiment, very positive feelings. Looking forward to report Q3 and we believe very strong full year.
Thank you very much and see you soon for Q3 results. Good day.
This concludes today's conference call. Thank you all very much for joining. You may now disconnect your lines.
Thank you very much.
So we are off, right?
We are off Thank you. I can see already, I think Archibald and They
are correct. Yes. There you go.
Quiet in the rush, no? We don't lose time. Thank you very much. I think everything went well for the stream except we lost Andreas. But from what I know, He's machine crushed, so he has to restart everything.
So I'm going to follow-up.
His signal was very volatile. I was monitoring because I was losing I mean, when he was presenting, I was losing him and then I was looking at his signal and it was jumping from red to nonexistent back to green. So I must say, I have to check what's happening. Was he really online on the deck or was he simply on WiFi because this was weird?
Yes, because You're in the office as well, right? And I Yes.
You're in the next office. I just don't know what happened with his signal. Maybe cable was not connected properly or something. I don't know.
Could it be a cable or could it be machine as well? So maybe I'm going to With Teja as well and I'm going to mention this, so maybe your IT can help and double check his connection or Adapted or whatever it could be. But thank you very much for I'm not going to take any more of your time. That was a pleasure as always, and I will see you for the next one.
Always beautiful seeing you. Take care. Always blessed. Have a pleasant weekend.
Thank you. Same here. Bye.