Dear ladies and gentlemen, welcome to the conference call of Monetza Moneybank regarding 1H twenty twenty five Financial Results. Please note that this conference call will be recorded. This event will have a live presentation followed by a Q and A session. Today's speakers are Mr. Thomas Spurney, Mr. Karl Norman Vecht, Mr. Jan Frischek and Mr. Andrew Gerber. May I now hand over to mister Sporny, who will lead you through the conference call. Sir, please go ahead.
Thank you. Good morning, and gentlemen. I have the pleasure and the honor to introduce today's conference call. First and foremost, I would like to actually express thanks to the management of the bank, to management team, and to everybody in the bank as we report the best ever quarter today. If we turn our attention to page two, the bank generated net profit of 3,100,000,000.0.
The net profit comes in on the strength of our operating income. Operating income grew at 9%, and we reached $6.6800000000.0. Henceforth, we are exactly in line with the full year guidance on the on the operating income issue. Then later on, we will look at the details of solid growth posted in the net interest income category and continued growth of the fee income. Apart from growing revenue streams, we accomplished to contain the operating operating cost base at the level of 2,900,000,000.0.
We call it stable here. It actually expanded by 1.2%, which we consider a good result given everything else. The bank continues to grow. The growth of the bank is driven through deposit taking. If you look at the funding base, the funding base expanded at the level of more than 4% and reached 462,000,000,000.
Here, I would like to note that this is despite deposit repricing. And I also would like to note that 70% of our asset management franchise is funded through transmission of the deposits into into the third party wealth management, which grows 38%. We are continuing in accelerating the lending growth. If you look at our loan loan book position at 284,000,000,000, growing at 4.4%. Majority of the growth is focused on small business and SME as under the CRR fee.
We are actually reducing, as you will see on the next page, the density of risk weighted assets, and we are obtaining a very good capital return on the commercial franchise of the bank. And the total the total balance sheet stands currently at $505,103,000,000,000. If we turn the page to number three, some couple of comments on capital and liquidity. Currently, the capital adequacy ratio stands at 18.5%. Henceforth, we have excess capital at the level of 3.3 percentage points, and the overall excess capital is at 5,500,000,000.0.
Therefore, we are sufficiently equipped with capital to continue the lending expansion. The density of risk weighted assets actually actually decreased by 2.1 percentage points and stands at 33.3. We are in a very comfortable position on the MREL ratio even though the MREL requirement has increased by about 11%. And the liquidity of the bank continues to be to be excellent, continues to be very strong. You will see that we are carrying HQLA assets in the amount of nearly $18,080,000,000,000.
I would like to the following two pages highlight what we aim to achieve this year and what is the main focus of the management. If you look at the lending growth, by the end of the year, we would like to post overall loan book growth in the range of 5.5 to 6%. So for second half of the year, we are aiming to expand the lending activity. In the last six months, we were able to generate growth on the commercial side of 8.7% and on retail 3.3%. In this respect, we are in a relatively comfortable position as we as we command sizable pipeline in mortgages.
As of this morning, the pipeline in mortgages stood at $8500000000.08500000000.0 crowns, and we continue to experience strong demand from both SME and small business franchises that we that we operate. So I think we are on a good path to achieve this target. On deposit growth, we expect to end the year with two to 2.5% deposit growth, and this is due to the fact that we initiate repricing of of the deposits. Most notably, we reduced the rate on savings accounts by 10 basis points, and this is effective August August 1. At the June, the average cost of funding core cost of funding for June stood at a 196 basis points.
And we would like by the end of year, the December average to come in at a 170 to a 175 basis points. This is depending upon the central bank take additional monetary easing step of 25 basis points probably in the fourth quarter. However, the probability probability of that remains uncertain as we see we had seen elevated inflation, and I'll come back to it in the month in the month of May. Net interest margin, as you are aware, we had a negative development due to first end of remuneration of mandatory reserves. And the second negative development as of beginning of this year was the fact that the mandatory reserves were doubled.
Nonetheless, we would like to, by the end of the year, land with the net interest income margin within the range of two point o five to 2.1515% range is dependent upon the monetary easing step to materialize in the in the second second half of the year. We continue during the during the first half of the year to successfully expand expand the third party distribution franchise. By the end of the year, we would like to we would like to accomplish year end volume of 75,000,000,000. We have a good chance of getting there as we have passed 68 and a half billion this week. So the hiccups that came on the back of Liberation Day in The US, uncertainty about the tariff policy of The United States and subsequent volatility in the markets.
We are coming back to better distribution numbers, and we also expanded the distribution capability and asset management. Henceforth, we have a good chance to fulfill this target. We are also taking steps to improve distribution of pension funds. Albeit these make a relatively small proportion of our revenues. And obviously, we are focusing on other categories of insurance to return the current revenues back to growth.
On cost management, by the end of the year, we would like to end up within the range of 41 to 42% of cost income ratio, and we see on the cost side upside of 75 to 125,000,000. So assuming if we come in the middle of this range, we should cap the cost base at somewhere around 5,800,000,000.0, which would be which would be equivalent of last year. And we are successfully absorbing the relate the cost increases related to inflation clauses, which are built into number number of contracts that the bank where the bank procures services or goods. On risk management, we had a good six month run. We came in at 19 basis points.
For the remainder of the year, we we expect or we would like to land within the range of 17 and a half to 22 and a half basis points. This is obviously this is obviously expecting that there will not be any any larger defaults. Nonetheless, we have no evidence of any larger exposures to be underway to travel. And aside from that, we have the best position with respect to balance sheet health. Historically, I would say since the IPO and perhaps since the establishment of of this bank.
Currently, we enjoy very low NPL ratio of 1.2. This is thanks to successful disposal of NPLs during the first half of the year And during the second half of the year, subject to favorable market conditions and prices offered for these assets, we would like to dispose of additional 300 to 600,000,000 of NPLs that the bank generated in the past. So if I look at it in summary, we see 300 to 400,000,000 upside against the minimum target guidance of of 6,000,000,000. Obviously, this is subject to several uncertainties, but we think that the probability of us over performing the minimum target fairly materially in this range of 5% plus is within the reach of the management management of the bank. So we hope to come good on this on this thesis, and we decided to share it share it with you.
With respect to distribution to shareholders, we continue to accrue the current earnings at 9090% level. And if we are able to reach the upside potential that that will have an impact, obviously, on the earnings per share and therefore, on the distribution of dividend in April, May of next year. So this is our position summary of our position right now. Let me make brief comments on the macroeconomic environment if we if we turn to that. If you look at GDP growth, the GDP growth is projected at 2%.
The first quarter number came in at 2.4. So the GDP performed better. The growth was better than expected. We will see the second quarter relatively shortly. And I actually do believe that consumer demand, which drove the number in the in the first quarter or during the first quarter, will continue to hold this this projected amongst other into into the mortgage demand, which remains which remains strong, somewhat expecting over overperforming our expectations.
If you look at indebtedness of Czech Republic and deficit of public of public finance, if I start with the deficit, 152,000,000 billion, excuse me, to date. What is underneath that? If you if you go into detail, it's actually receipts to treasury have increased by 5.7% due to better economic activity, profitability of companies, and also through better tax collections. So I would say on the deficit, if I had to make a statement, I would say mildly optimistic that the current government actually, albeit in relatively small steps, is getting the deficit under under control. We are not at the 2% of the mastery criteria, but the situation is certainly better than in the post COVID and COVID COVID years.
Indebtedness of Czech Republic remains remarkably low. We have elections in November, and I expect that in 02/1927, we will see stronger investment into public assets and infrastructure as we are likely to experience to experience push for the infrastructure. And, we will see more government spending on defense. If we look at unemployment, it remains remarkably low compared to our partners within the EU. On the unemployment, I would say the only negative factor is that if you look at the the numbers of job seekers and the numbers of open positions, there is a negative deficit for for the first time in some some years.
However, the unemployment remains remains low. If we go to inflation, we had seen inflation numbers relatively disappointing at 2.920.9% year on year. It's the latest reported number. The central bank the central bank made an interesting statement, which which effectively says that it does not want to converge to the 2% target, but it it is saying that what happened in the past happened in the past, and the 2% target is valid for the future for the for the future period. So I find this interesting.
Nonetheless, that is the reality. And end of period changed the latest numbers. We have seen 2.6%. So overall, the central bank is more cautious on additional additional monetary steps, and the governor of the Central Bank, mister Mikhos, stated that he will fight inflation vigorously. If we look at the key rate, the key rate now stands at 3.30.5%.
And on the yield curve, we see normalization effectively the lower, the shorter part of the curve coming down, and we see some movement up on the medium and long term of the curve. So we expect that the shape of the curve will normalize and that we will see stability in the interest rates for some for some foreseeable foreseeable future. This should work for us this should work for us positively in context of the upcoming year 02/2026. And why does it work positively for us? You know, if the interest rates stay at the current level, our assumptions on the mortgage repricing will be actually better or the the the reality will be better than what we've assumed in the business plan in the business plan.
And in 02/1926, we will reply reprice nearly 38,000,000,000 of our mortgage book. Henceforth, this should contribute to positive positive future near future of the bank. Let me briefly comment on the operating platform. We have three pillars of the operating operating platform. If I summarize it, we continue to grow the client base of the bank.
We reached exceeded 1,600,000 customers. We are continuing to grow a bit at a slower slower pace. If you look at the branch network, we are continuing on two paths here. We are closing branches that no longer make sense for us from profitability point of view. I believe we have closed 12 or 13 branches in the past twelve months, and we have four additional to be closed by the end of by the end of this year.
So this is one path. The second path, we are actually interesting in those locations that provide us with strong profitability, good service numbers on the on the customers and on customer reach and all of that. We continue to enjoy very strong position in ATMs through our own and shared network. So we operate nearly 4,000 ATMs and have have in ATMs, 30 reached to about 35% share of the machines in the in The Czech Republic. We have reduced the employment base in the bank by 2%.
So currently, at the end of end of second quarter, we employed on full time equivalent basis two thousand four hundred sixty one sixty one colleagues. If you look at the evolution of the front end of the bank, the reduction had been stronger. It's 4% reduction, and this is due to the fact that in about third more than third of the network, We have discontinued cashier services, and we provide those via ATM machines. So we take cash deposits through through ATMs, and we will continue on this path in order to reduce the cost load of of the of the branch of the branch network. The remainder of the employment base is stable, and this actually masks couple of important developments.
With the expansion and deeper attraction of digital channels, we have to add resources within digital and IT professions overall. This is one impact. Second impact, with respect to ESG, we are faced with more requirements on disclosure and on data gathering and some some other aspects of ESG. So we need to add resources there. We also invest in some some other parts of the bank, which create relevant relevant value.
But the trend of having higher demand for data, IT engineers, AI related professions is very visible, notable in the bank. If I turn into the digital platform, we have 1,600,000 users. The user number grows quite substantially by nearly 9%. This is due to the fact that the mobile app now services one and a quarter million customers, and it's visible in some of the metrics. If you look at daily touch points expanding at 6%, 720,000 per day.
So this is the most important channel of interaction with our customers. If you look at the success of the application from transaction number point of view, the transactions expanded 88% and reached nearly thirty nine thirty nine million. The platform is also very important with respect to servicing. We see a stable stable picture, and the servicing demand usually comes six to nine months after the user downloads the application and learns the the the capabilities. We have nearly 2% expansion on loan applications.
And if you examine sales transactions through digital, that is a very healthy increase of nearly 13%. If we then go to the branch network, the branch network, what is the very important very important trend which we are seeking to reverse? However, it's probably unreversible is that low lower portion of our clientele uses the branches. The visits declined by nearly by nearly 18 by nearly 18%. We also have a lower distribution of third party products.
This is partly due to lower demand in the second quarter for asset management products, but it's also function of the fact that many of the third party products, namely a simple insurance is now procured by our customers through the digital digital platform. And we have decline in the loan applications as the key the key delivery is 7070% of consumer lending is now intermediated through the digital platform. 28% of our mortgages are intermediated through the digital platform, and a significant portion of the small business lending is likewise procured through the digital platform. And this, by the way, helps us to maintain the cost picture that the bank enjoyed for the last nine years. If we look at the third element of the of the model, which is contact center, we have added resources in the contact center due to the fact that we would like to improve the NPS so that it's comparable to the bank overall.
On the bank overall, we have 89 in the call center. We have 71 as we have fairly we have been fairly focused on the cost reduction there, implementation of AI, which had proven to be troublesome. So on temporary basis, we add resources before we address some of the inefficiencies of the AI driven instruments that we are using in this realm. Nonetheless, we also see decline of calls into the call center, and this is attributable to the success of self-service utilities provided through the through the digital digital channels. Here, I would like to point out so that it doesn't get lost in the detail that we are extremely successful in distributing insurance products both through the inbound and outbound services that the bank that the bank provides, and this is growing at nearly 2025%.
So we consider it very, very successful part of the telephone interaction with our customer base. And very briefly, on the ATM network, there's not much to report. It remains stable on the key metrics apart from two. What we see is continued decline in cash withdrawals as our customers use cashless payments more intensively, and this is a good development. And second good development is that we see dramatic expansion of usage of deposit services, which we provide through the through the shared network, and we operate nearly nearly 800 machines, which we share with our with our partners.
So again, this innovative contract that we entered into in 2023 now enables us to significantly reduce the cost load of of the branch network. So with that, I will depart, and I will hand over to Hansafrichek. Before I do that, again, I would like to stress that I'm very grateful to the staff of the bank as we posted good result. I think that the good result is substantiated by our ability If we reach the 6,300,000,000.0 minimum benchmark of the upside, we will have increased the earnings of the bank by 500,000,000 against last year. And I consider that worthwhile goal to accomplish, and I am very satisfied with that.
And now we go to Hansa who will walk you through the details of the p and l.
Thank you, Thomas. Good morning, ladies and gentlemen. I am now on Page 16, and it's my pleasure to continue with the profit analysis statement. Let me repeat the key financials. In the first half of the year, Moneta delivered net profit of 100,000,000.0, representing year on year growth of 14.4% and also earnings per share of EUR 6.1 and the return on tangible equity of 23.4%, improvement year on year by 3.4 percentage points.
Operating income of 6,800,000,000.0 is up by 9.1% year on year, and this was delivered on the basis of net interest income growth of 13.7% stemming from the cost of funds reduction and loan portfolio expansion, accompanied by net fee and commission income growth of 11.7%, which is predominantly driven by continued solid performance in distribution wealth management products and fee expense reduction. On the other hand, other income line shows a decline year on year, which is a result of follower income from FX derivatives and also bond sale gain, which we realized in 2024 and was not repeated in 02/2025. On the cost base, we managed the cost base stable within the 2,900,000,000.0 by the within the the 2,900,000,000.0 budget. And together with operating income growth of 9.1%, this resulted in the cost to income ratio improvement to 40.9%. And on the cost of risk line, we incurred a benign result of 268,000,000 or 19 basis points of the average loan portfolio.
Moving forward, on Page 17, we provide more detail to the net interest income development. As you can see, we had excellent second quarter delivering year on year growth of 14.7% and also quarter to quarter growth of 3.6%. Drivers of the development are provided on the right side. If I start from the top, lending interest income is up by 87,000,000 or two and a half percent in the relative terms, and this is driven by loan portfolio expansion. On the other hand, treasury income decreased by 900,000,000, which is fully attributable to gradual reduction of the two week repo rate, which enabled us to continue with the repricing of customer deposits.
And as a result, we reduced cost of funds by 1,100,000,000.0 year on year, which more than offset the lower treasury income. Moving forward, on Page 18, we provide similar view on the development of net fee and commission income. In the second quarter, delivered a year on year growth of 8.8%. And this has two main drivers. First of all, fee income improved year on year by 24,000,000 in both in both reported categories, namely, penalty income up by 10% and transaction and servicing income fee income improved by 4.4%.
Two thirds of the improvement in the fee income category is generated in the mortgage franchise. Secondly, as mentioned last time, improved commercial terms with Visa resulted in the fee expense reduction provided in the bottom bottom right column. On page 19, let me briefly comment in more detail our performance in distribution of wealth management products. We had excellent first half of the year delivering year on year growth of the income by 22.2% on the basis of outstanding amount of distributed wealth management product expansion by 38.4%. On the right, you can see that our customers in the first half of the year invested 10,700,000,000.0 into these products, which is a result behind the last year's performance predominantly due to lower invested volume in April following the liberation date announcement.
Since then, we see we observed the recovery. We observed increasing volumes with June volume nearly doubling with the volume of April. We believe that with the current production, we are well positioned to get the outstanding amount of distributed wealth management funds to 75,000,000,000 level as was mentioned by Thomas at the beginning. On Page 20, let me briefly comment on the performance in distribution insurance products where we delivered only marginal growth of 1.6% year on year on a recurrent basis. This is a combination of improved performance in distribution, payment protection insurance, and also life insurance.
On the other hand, we report a slowdown in the distribution of pension insurance. And on page 21, let me complete this section with the cost base development. As mentioned before, cost base was managed stable or the growth is only marginal within the 2,900,000,000.0 budget. And three out of four reported categories show a cost reduction year on year, namely. Regulatory charges are down by 9.7%, driven by lower contribution to the resolution fund.
Secondly, depreciation and amortization charge decreased by 3.1% year on year stemming from extension remaining use five of several key softwares, what we did in the first quarter. The only the only category showing an increase year on year is the admin costs. The the growth is 11% and predominantly is concentrated in IT and facilities. And last but not least, we achieved the personal cost reduction of 1% year on year, predominantly due to a lower number of FTEs by 2% year on year. So this is all to the profit and loss statement section, and I will now hand over to my colleague, Andrew Gabb, for the Thank you.
Thank you, Yarling.
Good morning, ladies and gentlemen. So moving to Page 23, we take a high level look at the loan portfolio and funding base of the bank. Overall, the loan portfolio grew 4.4% year over year and 2.8% in the first half of this year as we refocused on lending activity. The loan portfolio yield decreased eight basis points reaching 4.83. This is a result of gradual repricing of the floating part of the commercial loan portfolio as rates moved down.
On the funding base, we saw growth of 4.2% year over year and 2.1% in the first half of the year reaching $461,900,000,000 And here, we saw 120 basis point improvement in the cost of funding reaching 2.22% as a result of our ongoing repricing of the loan portfolios as deposit portfolios in response to lower interest rates. Moving to Page 24, we have an overview of the balance sheet. On the asset side, you see the growth is driven by net customer loans up 4.5% and also by investment securities up 21.3%. Looking at the liability side, we see deposit growth of 2.9% year over year and also growth in the in the issued bonds as a result of the Morale bond issued in the third quarter of last year. On page 25, we look at the new lending volume of the bank in the first half of the year.
Overall, lending volumes increased 24.2 year over year reaching $35,900,000,000 as we intensified our focus on lending activities across all products. In retail, the new lending volume was up 21.9% year over year reaching $21,400,000,000 with mortgages up 33.3 and consumer loans up 14.7%. Similarly, in commercial, the overall lending volumes were up 27.7% year over year with small business growing strongly, up 39.3% and SME up 23.8%, also very strong performance. On Page 26, we take a segmental view of the balance sheet development. As I said, overall, the loan portfolio grew 4.4% year over year with retail growing 2.3%, small business up 21.8% and SME up 6.1.
And we have some more detail on the specific development of each of the segments later in the presentation. Looking in detail at the on Page 27 at the detail of the retail loan portfolio. As I said before, the growth was 2.3% overall with mortgages and consumer loans contributing almost equally, mortgage portfolio growing 3.1% and consumer loans 3.4%. The category other, which is declining 9.7% includes the revolving products and the building savings bridging loans, where the latter is the primary driver of the decline as this is effectively a runoff portfolio. Moving to page 28, we look at a similar view on the commercial portfolio where we see small business loan portfolio grew 21.8% year over year and the investment loan portfolio grew 14.1.
And in both cases, this is driven by strong performance in secured lending where we have a very strong and well differentiated proposition. Moving to page 29, we look at the loan portfolio yield. The loan portfolio yield overall was broadly stable, decreasing 10 basis basis points year over year reaching 4.8%. In retail, we had a small increase, up 10 basis points reaching 4.3%. And in commercial, a decline of 40 basis points, which is driven by the repricing of the floating part of the portfolio as I mentioned earlier.
Moving to the funding base on page 30. As I said earlier, the overall funding base grew 4.2% with retail up 2.8%, commercial up 3%, and wholesale growing strongly but driven by the bond issuance last year. On page 31, we look at the detail of the customer deposit base, the cost of funds, and the impact that has on NIM development. And I think what's strong here is that we were able to deliver 2.9% growth in the deposit base while simultaneously reducing the cost of funding by 109 basis points over the period. And that naturally flowed through to NIM where we saw nine basis point improvement in the NIM despite the negative impact of the doubling of the mandatory reserves, which came into effect at the beginning of the year.
So I think overall, it's been a strong performance on deposits. On page 32, we look at the detail of the retail deposit portfolio. And here you see the growth has contributed more or less equally by current accounts up 3.4% year over year and savings term and other deposits up 2.7%. Similarly, on page 33, we look at the commercial portfolio where we see current account deposits grew 12% year over year with saving term and other deposits declining 4.2%. Over here, I would say that this is simply an indication of the the natural volatility that we have in the in the commercial base where we have the larger deposits which come and go at different times of the year.
And this is also the explanation for the decline in the first half of this year. We typically see higher inflows in the fourth quarter of the year and then normalization in the first half of the year. I would say that overall, the trend is broadly positive on commercial deposits in similar way to retail. And finally, on Page 34, we look at the cost of fund development. Overall, the cost of funds decreased 110 basis points reaching two nineteen basis points.
In customer deposits, we saw improvement of 118 basis points to two zero six and in wholesale funding a small increase of 27 basis points. And looking across retail and commercial, we see 123 basis point improvement in retail and 97 basis in commercial as we worked on the repricing of both portfolios. So overall, I think we've had a strong first half of the year, strong performance on new lending translating into solid growth in the new portfolios and growth continued in the deposit base despite the repricing efforts. So with that, I will hand over to Norman who will take you through the risk met mid risk metrics and asset quality section.
Alright. Thank you, Andrew, and good morning. And we continue with the risk section on page 36, where we have an overview of key risk metrics for the first half of this year, last year. Let me start on the on the top left of the page. So cost of risk came in at 19 basis points, which is one basis points higher than the same period in '24.
It's well within the provided guidance of 15 to 35 basis points for the full year. In terms of loan loss provision coverages here, we ended up with a value of 1.37, which is a 30 basis points drop compared to the year before. The main drivers of the drop are the NPL disposals and the partial releases of ECL management overlays. In terms of total nonperforming loan coverage, here, we saw a flat development. If you look at the second the first half number, 113.7% compared to 113.6% at year end. And as mentioned before, the nonperforming loan ratio dropped by 20 basis points to 1.2%, which is a historically low value recorded actually in history of the bank. Let me continue on page 37 with a more detailed overview on cost of risk for the last five quarters. So if we just look at '25 here, we ended up with a cost of risk of a 117,000,000 sheikh crowns. Looking at the two segments, retail, 61,000,000 or 13 basis points.
Commercial, 56,000,000 or 23 basis points. For the first half overall, we benefited also from gains from NPL sales in the amount of $54,000,000 and we also conducted two releases on the ECL management overlay in the amount of $56,000,000 in Q1 and $99,000,000 in the second quarter. On the next page, Page 38, here we have five data points each regarding the development of the loan portfolio, NPL balances, loan loss allowances and coverages. In the top left of the chart, you can see the loan portfolio grew by more than 11,500,000,000.0 or 4.2% year over year, whilst at the same time, the loan loss provisions dropped by around 618,000,000. Out of the total balance of provisions of 3,900,000,000.0, we still have 239,000,000 of management overlays.
Coverage is a common tip before, and the NPL balances dropped by around 500,000,000 year over year with an ending ratio of 1.2% at the end of q two. Moving to Page 39. Here, we show the development of NPL in and outflows since June 24. Just looking at q two of this year, you can see that the NPL balances dropped by around EUR 150,000,000 with an ending balance of slightly shy of EUR 3,500,000,000.0. We benefited from lower NPL formation in the quarter, but also from higher cure rates.
And this takes me to the last page of the risk section page on page 40. Here, we show the evolution of delinquency rates, thirty, sixty, ninety plus since 02/2020. I think the chart is basically pretty much self explanatory. Delinquency rates have remained on a fairly low level. In case of the thirty and ninety plus, we saw even a further drop quarter over quarter in the second quarter of this year.
So summarizing the risk section, I think overall, we have seen a fairly good credit performance with the cost of risk coming in at 19 basis points. We had a positive impact coming from the debt sales with a nominal IFRS unbalance value of more than 600,000,000. We have not seen yet any adverse impact on our customers as a result of the continuing trade tariff discussions, but we'll obviously watch the space. And lastly, the ECL management overlays here. The current assumption is that we will be largely releasing those until the year end unless any significant changes occurred on the market or we happen to have a larger default.
With that, I hand over back to Fritzig on liquidity. Thank you.
Thank you, Norman. So Marcelo recommended on our robust liquidity position. Hence, I will be quick with this section on page 42. We summarize key liquidity ratios. As you can see, loan to deposit ratios stood at 65% and share of high quality liquid assets being at 41% at the June.
And below that, we report the regulatory ratios both are significantly above the 100% regulatory limit. On page 43, we provide the development of the high quality liquid assets position. The position remained broadly stable at 179,000,000,000, while the share of government bonds within the position has has increased from 89 to 115,000,000,000 at the June, which supports our net interest income generation capacity. And then now we can move forward to the capital management section starting on page 45 with key capital ratios on the consolidated level. As mentioned at the beginning, at the June, Moneta report, capital adequacy ratio of 18.5% against the management target of 15.25%.
And also, Tier one capital adequacy ratio being percent against the management target of 12 and a half percent. In absolute amount, excess capital stood at 5,500,000,000.0, the remaining stable since the beginning of the year. While tier one excess capital, this is the distributed portion of the excess capital has increased to 4,300,000,000.0. And risk weighted assets in the last chart on the page reports 3.3% reduction, which is a combination of benefits stemming from the CRR three introduction at the beginning of the year, partially offset by loan portfolio expansion and related risk weighted assets increase. On Page 46, we provide more detail to the regulatory capital position on the consolidated level.
The position as itself remains stable at 31,000,000,000. The only decrease of tier two instrument is attributable to partial red reduction of the efficiency of tier two instrument. Risk weighted assets density improved to 33.3%. And what is what is important to highlight is that Moneta continues to accrue 90% of current year consolidated profit aside from the regulatory capital for the as a for future dividend distribution. And this is kept on top of the excess capital of EUR 5,500,000,000.0.
So altogether, at the June, we maintained available capital of EUR $8,300,000,000 And on Page 47, we report capital position on individual level. The position remains stable at $445,500,000,000.0 with a significant excess of MREL and reclass a over the MREL target. And here, I want to also comment that despite we maintain robust capital position on both levels with the significant excess, there is still room for further optimization. Hence, we seek to raise a €100,000,000 of tier two instrument in the third quarter ideally at the September. So that was the last comment for my for myself to the typical position, and then now I will hand over back to Thomas.
Thank you. If you go briefly to page 49, this encapsulates the medium term guidance. So if I split it into two components, if I look at if I look at 02/2025, as we have communicated today, we see the upside at the level of 3 to 400,000,000. Henceforth, we with respect to growth of net profit against comparable period, we should deliver growth in the profitability of the bank within the range of eight eight to 10%. Majority of the growth is driven by growth in the operating income.
Smaller part is driven through the through the cost containment. And, obviously, we hope to have good performance on the on the cost of risk. If I then take a broader view on the five year five year guidance, where the minimum aim is to deliver a cumulative net profit of 33,300,000,000.0, and I compare that through the calculations that we regularly do, recalculating the plan based on a six month experience of the bank, I would say that we are on a good path to have the ability to overachieve the target the cumulative target of 33,300,000,000.0. I don't wanna go into the details of the factors because it's preliminary. We have to wait for the end of for the end of the year.
But on the positivity scale, we are somewhere at the third quartile of what is possible to be positive positive about. Obviously, the key risk is election year. We don't know what will come with respect to bank taxation and these things or any other structural changes that we saw in the third quarter of last year when the central bank decided to end remuneration of the mandatory reserves and subsequently decided to double them. Henceforth, this is very difficult or rather it's impossible to predict for us. But I would like to underline strongly underline in both letters, we are positive, and we are proud of the result that we have delivered despite the challenges in the second second quarter as those challenges were not internal, but exogenous to the bank, and we can do very little about evolution of the market based on the US administration policies.
So with that, I will turn over to you, and we will answer your questions with the utmost the utmost precision that capabilities afford us.
Thank you. We will now begin the q and a session. And A session. Our first question will come from the line of Thomas Unger. Please unmute locally and proceed with your question.
Yes. Hello. Thank you very much for taking my question. I hope you can understand me well. First, I'd like to ask you on the upside that you see 300 to €400,000,000 net profit guidance for 2025.
If you could break that down into the sources, the drivers of where you see that better performance coming from. I understand that at the end of the presentation just a few minutes ago, talked about most of it coming, from operating income. If you could just, detail a bit more. You you gave specifics on on on the OpEx, and and I'd I'd like to know what what you what upside you see from from, operating income as well as, risk costs. And then, secondly, mister Spoonie, you talked a bit to the press in the morning and, said that you see significant opportunities, from the plan boost in in in defense, spending as well as infrastructure spending.
Do you see, Moneta specifically and directly benefiting, from that? And if so, in in in what areas of your of your business? And then lastly, if I may, on on your excess capital, it was stable at 5,500,000,000.0, in in in the first half of, 2025. I understand that you, used that as a resource to fund your the group the growth of your your franchise. But do you see any scope of additional capital distribution in in in the in the coming in the coming quarters? Thank you.
Right. So let's start from from the back and work our way towards the numbers. On the capital, we will review the capital based on the third quarter result. We will review it in the full at the beginning of fourth quarter, and we will decide whether to retain the capital or whether to take any other step as we did as we as we did last year. And in this respect, we are quite predictable because I think we are consistent.
As a bank, we treat our shareholders very well from disclosure point of view, which is, I'm sure, nice, but we also treat our shareholders well from dividend distribution point of view. Because in the nine years, we have paid on the relative terms, if I remember the number correctly, 88% of our earnings to shareholders. So this is a policy that I have instituted in the bank, understanding that many of our shareholders, if not majority, are dividend seekers, and we will continue to behave in the same manner. On the defense, we have already benefited in the past three years. Mainly, we benefit from defense on the lending side, which subsequently translates into fees, namely on foreign payments, and it also translates into benefits on on FX margin in the bank.
Specifically, I cannot disclose any names, but I'm very proud that we have stood at inception of one of the Czech groups, which is now which is no longer Czech, but it is global, and we have contributed to that. We seek to contribute this group, refers many of their partners, manufacturing or other, and the bank due to the fact that we don't have a Hippocratic policy of the foreign owned banks in the Czech Republic, we have never rejected those customers based on the fact that they operate in the defense realm. This gave us historical advantage over our foreign competitors, and we understand the local environment. We understand the government policy, and we are also committed to support Ukraine in its quest to remain a whole country. So we are benefiting, unfortunately, from the conflict.
And in the future, I'm sure we will benefit from the rearmament in Europe as Czech Republic has traditionally been very good manufacturer of whatever you need for defense. In fact, we actually own significant part of the Austrian defense industry now. And on the upside, the 300,000,000 we own. Norman doesn't like that. And on the upside, 200,000,000 on the revenue, just the minimum increase against the against the target.
If I have my way, then a 100,000,000 on cost base and the rest coming from the cost of risk if we continue on the same path that we are on currently.
Thank you very much.
Thank you. As a reminder, if you have joined the call via Zoom, please use the q and a chat on your Zoom toolbar or the raised hand function. Alternatively, if joined over the phone, please press star followed by one on your telephone keypad. Our next question has been submitted by Louise Miles, who asks, given the strong performance of the credit market, would you also consider issuing AT1 to add your capital management toolkit? And second question, is there any part of your business that you think could benefit from inorganic growth in order to accelerate returns? Thank you.
Let's start with the easy one, which is inorganic growth. Of course, we would benefit from that. It depends on the three significant shareholders that that hold more than 50% of Moneta, and that will be ultimately ultimately their their decision. And I have nothing to add beyond that. What was the first part? 81 issue. 81. Right. On the call.
On on 81, we we consider the opportunity to raise eighty one as a new source of corporate capital several times in the past, but we never found real benefit of the issuance. So at this moment, we seek to raise tier two instrument, and eighty one is not in the plan.
That's great. Thank you. As a final reminder, if you would like to ask a question, please use the raised hand button or the q and a button if you have joined via Zoom, or dial star one now if joining over the phone. We have no further questions at this time. I will now hand over to mister Speroni for closing remarks.
I think we have record participation of the call today. So I'm tremendously grateful to you for your interest in the in the bank. Moneta is our passion. Of the people who sit in this room and of, I hope, majority of people in the bank. We have management conference today where majority of staff participate, and I really am proud of all of the people that I work with because we are in a unenviable position.
The valuation of the bank is high. The pressure for us to deliver is tremendous. And let me tell you that I'm absolutely convinced that we will exceed your expectations. And with that, I will wish you I will wish you a great summer, and I can't wait until we report the third quarter result because it will be even better than the one we presented today. And with that, all of you have a good day and the rest of the summer. Thank you very much.
This concludes today's webinar. Thank you all for joining. You may now disconnect from the call.