Ladies and gentlemen, thank you for standing by. I am Dani, your Chorus Call operator. Welcome and thank you for joining the Alpha Services and Holdings Conference Call to present and discuss the second quarter 2022 financial results. [Operator Instructions] At this time, I would like to turn the conference over to Alpha Services and Holdings management. Gentlemen, you may now proceed.

Good afternoon, everyone, and a very good morning to those of you dialing in from the U.S. Welcome to Alpha Bank's second quarter results call for 2022. This is Vassilios Psaltis, Alpha Bank CEO, and I'm joined today by Lazaros Papagaryfallou, our chief financial officer; our chief economist, Mr. Panagiotis Kapopoulos; and Iason Kepaptsoglou, the Head of IR. Let's start by looking at the micro picture with Page 4, please. There, you can see that Greece delivered robust real GDP growth for the first quarter of this year of 7% on a year on year basis, and this was supported by strong product consumption growth, the continued rise in business investment as well as the strong base effect given that in the first quarter of 2021, the Greek economy was under lockdown. First real GDP growth focus have now been revised upwards from 3.2% last March, which was to reflect the Q1 GDB that showed unexpected strength amid high number of COVID cases early in 2022 and the start of war in February. The economic outlook for the rest of these year remains positive and above expectations for Eurozone growth. The Russian-Ukraine war is expected to impact domestic economic activity, however, there exists evidence of pickup and demand mainly supported by firstly, further deployment of investments, and secondly, the revival of tourism related revenues in the pot pandemic environment. This envisaged resilient growth is also evidenced in the evolution of several leading indicators in the second quarter of the year. Hard data reveals some positive signs for the domestic economic activity. For instance, as depicted in the upper left hand graph, [indiscernible] increased in real terms by 7.1% year on year during the period of January to May, 2022, while manufacturing production index rose by 3.6% year on year in the same period, and by 3.9% year on year in June. Furthermore, the dynamics of private building activity growing by 13.8% in terms of volume remain resilient over the first quarter of the current year, synchronizing with increasing residential real estate prices. On the contrary, as seen in the graph soft data, mainly the economic sentiment indicator and PMI are moving downwards, reflecting the highly uncertain environment in geopolitics and energy security. Inflation accelerated further to 11.6% in June this year on account of the infusion of the mainly imported inflation on domestic economy from fixed channels, energy costs, inflation expectations pass through and with euro. As depicted in the graph of the lower part, inflation for housing recorded, the highest increase in the first half of 2022, compared to the same period in 2019, followed by transport, food and nonalcoholic beverages. Therefore, the downside risk to the growth outlook in 2022 are primarily related to the monetary policy which is tightening as the ECB is now taking a hobby shift, which may press growth to the extent tax revenues again underperform. The impact on the borrowing cost of the widening of the 10-year grid government bond spreads in an international environment characterized by elevated uncertainty as well as the adverse effects of persistently higher energy prices, especially on the part of Russian gas. However, the impact of the latter on Greece is expected to be milder, as the Greek infrastructure is less energy consuming, Greece faces a mild winter and exhibits lower reliance on Russian gas compared to other large European countries. Let's turn now on slide 5. Despite this challenging backdrop, we have been able to deliver the final leg of the inorganic reduction of NPEs. This quarter marked a major milestone for us as we have been able to reach a single digit NPE ratio after a decade long dislocation in our balance sheet, our balance sheet has been revamped with using the stock of problematic assets by circa 90% through a combination of outright sales, securitizations and a meaningful organic reduction. The journey is not complete. We expect a further improvement in our asset quality to take our metrics towards the European average, but evidently the task account is much more manageable, not only due to the greatly reduced stock, but also for 2 fundamental reasons. Firstly, the main organic reduction will be simpler to achieve as we can enjoy the benefit of experience and have now developed a superior capacity to resolve NPEs. And secondly, our NPE reduction strategy was designed to divest the worst part of the book and leave us with a task of managing predominantly for core secured retail exposures. On Slide 6, you can see 1% of our strategy is rolling out a new operating model. And this is necessitated specific actions on the business development front to ensure that we have a streamlined platform focusing on the parts of our business where we can add the most value, whilst at the same time, leveraging the expertise and capacity of industrial partners to enrich our product offering. This quarter, we have made further strides on this direction. As we have completed the sale of our merchant acquiring business to NEXI with a launch of NEXI Payments Greece, and we hosted a relevant press conference with NEXI's CEO here in Athens. The distribution agreement that is in place and the envisioned success fees will contribute positively to our profitability as will make market leading products available to our clients. Additionally, we are in the final stages of completing the divestment of our real estate portfolio, having selected a binding offer, allowing us on the one hand to focus on the core of our business and divest our real estate exposure, whilst at the same time, capturing the upside from the activity in this segment through the provisions of real estate management services. Let's now focus on loan growth on Slide 7. In the second quarter, we have been able to maintain our momentum in growing our business loans. Credit to businesses expanded by EUR 1.3 billion. This quarter, showing that we maintain our leadership in the sector for a second consecutive quarter. We are delivering this growth in a sustainable manner. We ensure that we underwrite profitable exposures and where necessary, syndicate part of the loss we originate to retain our prudent risk management policies. Syndication of exposures has amounted to EUR 4.6 billion this quarter, a very sizeable number, while it so happened that we have not been on the receiving end of any notable ticket from our peers. This means that post syndication, our business loans grew by EUR 4.7 billion this quarter. Year to date, we have been able to deliver a net credit expansion of EUR 1.7 billion, that is 77% of our full year target. Together with the growth we saw last year and accounting for trends in the remainder of the book, we have already delivered in 6 quarter, 37% of the 4-year target were presented in our business plan last year that envisaged an EUR 8 billion growth in our loan booking Greece. This had been the culmination of the strategy we have put in place to leverage upon our strong franchise. Our tireless efforts have reestablished Alpha Bank as the leading bank in business lending in Greece, having seen a remarkable growth of 44% in our performing balances since the end of 2018. Now, let's focus on how that translates into value creation on Slide 8. Our aspirations for creating value for our shareholders remain intact and we continue to make progress towards that goal. Our tangible book value is now on an upward trajectory, recurring profitability has resurfaced and last but not least, our capital levels are progressing according to plan. Times are fairly uncertain and we continue to navigate a challenging macroeconomic environment, but we do so from a vastly improved position. Since our technical and liquidity position are relatively shielded from the current anticipations, that quality of our balance sheet has been completely revamped and [indiscernible] makes us optimistic on the prospects for growth as well as for the improved profitability. We have a diversified business model. Segmentally we have the leading franchise in corporate as can be seen by the levels of growth we are generating. We also have a strong presence in the affluent segment with 10 billion of assets under custody and a network that was able to deliver even at this highly disrupted environment, positive net sales in the quarter. We are also diversified geographically, with our international presence in Romania, Cypress and the UK, with the former having twice the population of Greece, experiencing a similar influx of investment and having the potential to grow consistently for a prolonged period. Our strategy has positioned our franchise to maximize value accretion. We continue to build up on our track record and are resolved to deliver on our promises, and that has been strengthened by the progress we have been able to deliver so far. And with that, I would like to turn the floor to Lazaros to present our financial performance in the first quarter of the year.

Good afternoon, everyone. This is Lazaros Papagaryfallou, Alpha Bank CFO. Let's start by taking a closer look at first and second quarter number. Heading to Slide 10. This quarter, we are reporting a positive bottom line of EUR 117 million or EUR 243 million for the first half. We've had 2 effectively counterbalancing notable items this quarter. One, we have taken the vast majority of the remaining loss budget in order to affect the reduction in non-performing exposures. And two, this quarter has also seen the gain from the sale of our merchant acquiring business to NEXI, which we show here net under discontinued operations and other. Excluding the above and other one-off items, normalized profits also carry in positive at EUR 73 million or EUR 207 million for the first half. Our NPE ratio has fallen by 4 percentage points to 8.2% on the back of the transfer to help or save this quarter of a series of NPE portfolios. On capital efficacy, our total capital ratio stood at the end of the period at 16%, accounting for the risk rated assets released from transactions. Now turning to Slide 11 to look at the underlying trends. Our net interesting income has grown this quarter as expected, and is of better quality as the contribution from non-performing exposures decreased further down to 11% from 30% a year ago. Season commissions stood at EUR 101 million with second quarter seeing growth in [indiscernible], robust loan origination, and sustained performance in wealth management. Operating expenses were stable this quarter, but down on an annual basis, as we continue to improve our efficiency with further benefits to come. Custom risk remains on a path to normalization at 70 basis points for the first half, in line with our full year guidance. The quality of our earnings continues to improve with our core pre-provision income at EUR 173 million this quarter, up 6% over the first quarter. Moving down to the next slide to look at the growth of our loan book. The strategy we have put in place continues to deliver tangible results. Looking at the chart on the bottom right of this slide, our performing loan book was up 3% this quarter and is up 7% year to date. Our origination capacity remains strong, while at the same time, we ensure that our concentration limits and our profitability thresholds are well observed. We have, and we continue to monitor closely the structure of the deals we underwrite and the nature of the projects with finance. We have and will continue to syndicate part of the large tickets procured ensuring that we are the owners of the relationship with our counterparties while retaining our prudent risk management policies. The risk-adjusted return on capital for disbursements has remained above our 15% threshold. Year-to-date, we have delivered a EUR 1.7 billion net credit expansion for business loans, [indiscernible] our target of EUR 2.2 billion for the year in the context of a changing microeconomic environment. Lending spreads on performing exposures for individuals were up again in the quarter while the reduction of corporate spreads is effectively due to the moving reference rates. This quarter, we have also seen meaningful growth in our securities portfolio as per our strategy of capturing opportunities in the non-commercial space now that the risk report balance has shifted favorably. Year to date, we have added EUR 1.7 billion of high quality securities to our book at good rates of circa 1.6% and with very low risk-weighted asset consumption. We are adding securities at maturities that naturally match the profile of our funding base, thus optimizing our balance sheet structure. Importantly, due to the active management of our book, we have been able to curtail the volatility to our capital base from turbulence in the market. The DV01 of our fair value through CI book currently stands at below 200,000 euro, while the contribution of our securities book to our asset base currently stands at 16% below the peer average. Turning now to deposit gathering, on slide 14, the group's deposit base increased by EUR 1.6 billion in the quarter, driven by portfolio deposits. Combined with increase in our loan book, our loan-to-deposit ratio has stabilized around the 8% level. Our commercial funding surplus that is deposits minus net loans has also remained stable at roughly EUR 10 billion over the past year, showing the deposit growth is funding the expansion of our loan book. Liquidity drawn from the ECB's TLTRO facility stood flat at EUR 13 billion and changed Q-on-Q. Let's now see the drivers of our NII performance during the first quarter in more detail on the next slide. Sorry, the second quarter. Net interest income in the second quarter stood at EUR 302.7 million, up by 6.9% from the previous quarter. The quarter benefited from one more calendar day, while also shows a minor negative impacts from transaction and the new pricing of TLTRO funds at the tail end of July. On an underlying basis, net interest income was up 6.7% in the quarter. Growth in performing loans and higher security balances drove alongside the repricing of a part of our book at high rates. Interest income from non-performing exposures stood at EUR 33 million this quarter with circa 40% of that coming from the NP transaction center. A completion of certain NP transactions will create some volatility in the numbers going forward, and we are no longer enjoying the beneficial 1% rate of TLTRO funding. Given the growth in our loan and securities balances and increasing rates, we feel comfortable in revising our guidance for net interest income at circa EUR 1.2 billion. Turning to slide 16 and fee income generation, we have had another resilient quarter with growth in cash and payments alongside robust loan origination and sustained performance in wealth management. The quarterly moving fees is mainly attributable to base effect. As in the first quarter, we have benefited from larger project finance fees. On a yearly basis, we're clearly up across all categories, highlighting the progress we're making in diversifying our revenue pool and capturing the growth opportunities in the segment that we're targeting. The commercial performance of our asset management business was quite resilient this quarter, seeing positive net inflows of EUR 25 million euro against an extremely challenging market environment for the industry. Our commercial strategy has resulted in a positive AUM mix shift as fixed income outflows were, to a large extent, redirected to balanced funds inflows, better placing asset management for a market recovery. Nevertheless, inflows were moderate, but positive due to market volatility, and mutual funds AUM balances decreased by EUR 239 million, or 6% in the quarter, due to a negative valuation effect. Lastly, as we show here, our merchant-acquiring business contributed EUR 8 million to fees this quarter, a figure that will disappear following the sale of the business to Mexico. On the other side, on slide 17, we show that second-quarter recurring operating expenses, were flat quarter on quarter, but have improved year on year due to material savings in staff costs. We have also shown here the split between our Greek and our international businesses in Romania, Cypress and the United Kingdom, as well as the contribution we make to the resolution fund. Post there aforementioned savings, our operational efficiency metrics will be best in class increase. Our international business continue to rescale and is showing tangible signs of progress. Lastly, the resolution fund chart is expected to tail off in the medium term. The inflationary pressures we are witnessing on our cost base are not meaningful, and we don't expect a significant impact this year. The anticipated closing of certain agreed transactions, as the consolidation of respective costs, will deliver the anticipated benefits to a good extent in 2022, but fully phased in 2023. Looking forward, we expect to materialize savings from sale of the merchant-acquiring business, as well as the transaction in non-performing exposures in real estate, resulting in a proforma quarterly run rate of EUR 228 million or EUR 212 million without the contributions to the resolution funds. On a like-to-like basis, proforma for the impact of these transactions, we expect recurring costs to trend EUR 100 million lower than 2021 full year costs, at EUR 850 million for the group or EUR 680 million for Greece only. These numbers exclude contributions to the resolution funds, which amount to circa EUR 6 million annually and are expected to phase out in 2024. Moving onto asset quality on the next page. With regards to asset quality trends in the quarter, there is very little to mention. NP formation in Greece was zero with a minor uptick in inflows and upflows at similar levels to the first quarter. We have yet to witness any signs of deterioration in the portfolio and continue to expect an organic NP reduction in the second half of the year. On the right hand side of the slide, you can see further information on our cost of risk evolution. The cost of risk came in at 0.9% over net loans in the second quarter, with the first half coming in at 0.7% in line with that annual guidance that we maintained. As we mentioned previously, we have taken a significant charge this quarter in order to affect the reduction in NPs through transactions. This is probably a good bridge to the next slide. As you can see, our stock of non-performing exposures is now reduced to EUR 3.2 billion, driven by transactions mainly, as we have transferred EUR 1.6 billion of non-performing exposures to the health of sale with a full P&L impact incurred this quarter, leading the NPL ratio to a single-digit level of 8.2%. Despite uncertainty, our main asset quality target for 2023, to reach a single-digit NPL ratio, has been delivered ahead of plan. Looking forward, we continue to anticipate net [indiscernible] formation for the second half of the year, leading the stock of NPs towards the EUR 3 billion level. On slide 20, it is important to highlight that our NP reduction strategy has worked on 2 fronts. Evidently, we have reduced the stock vastly through sales and securitizations, but also through a meaningful organic reduction. What is not immediately apparent is that the quality and composition of what remains behind is also greatly improved. We have opted to sell the worst part of our NP portfolio, and as a result, what remains behind is of better quality. 78% of the remaining stock is secured NPs, while 86% of the total is retail exposures. Our NPL ratio stands at just 2% while our international business has effectively already fully normalized its balance sheet. 43 of our NP book is forborne exposures under 90 days past due, predominantly mortgages that will drive [indiscernible] and organic reduction of the stock going forward. We are thus comfortable with our current standing. With that, let's turn to the last slide and look at the evolution of our fully loaded capital position on the lower part of the slide. Our organic capital generation was positive this quarter, showing that we're able to fund growth through internal means. We have added 22 basis points to our capital position through our profit and loss account and more than offset the recurring impacts from PTC amortization and [indiscernible] deposit growth. Our capital ratios are also proving resilient in the context of market volatility as a result of our active management of the book to ensure that we're correctly positioned for the current environment. This quarter, we have seen a minor 5 basis points impact from the lower reserve of the investment securities portfolio measured at fair value through other comprehensive income. The improvement in the quality of our capital is self-funded. Transactions added the total of 26 basis point during this quarter as the impact from the sale of the merchant-acquiring business more than offset the lost budget for NP transactions. The upcoming RWA relief from transactions will further increase our capital ratios by 78 basis points showing that the overall impact has actually been positive. Our reported fully-loaded common equity tier 1 stood at 11.1% at the end of the quarter, up by 18 basis points versus the first quarter, while proforma for the anticipated RWA relief from transactions, our fully loaded common equity tier 1 ratio stands at 11.7%. Other than the cumulative impact we have incurred on our investment securities portfolio, our full year guidance still stands. It is worth highlighting that we currently have circa EUR 2 billion of deferred tax assets not included in the regulatory capital. As our capital base expands, given organic profitability, there will be room for more deferred tax assets in the regulatory capital calculation to further support common equity tier 1 in the coming years. With that, let's now open the floor to questions.

[Operator Instructions] The first question is from the line of Alevizakos, Alevizos with AXIA Ventures.

Congrats for the presentation and for the great set of results. I've got a couple of questions, if I may? The first question is, I got all the good detail about the cost guidance moving forward and the tail down of the resolution fund. But I wanted to ask what's the guidance for the year 2022 versus the previous one, which I recall was around EUR 940 million recurring costs? And the second one, you've already done a huge 1H in terms of the net lending expansion, but still didn't up the target for the full year. So I was wondering, what's the pipeline like, and why don't you up the disbursement targets?

Alevizos Alevizakos, I'll start with the latter. You are correct in pointing out that all the effort that we have worked over the past couple of years has started to materialize us from the beginning of the year. I think developing net credit expansion increased to the tune of EUR 1.3 billion over these first couple of quarters is really a remarkable achievement, and speaks also for the dynamic that currently we see in the market. Because it's not just us, you have seen also that the other Greek banks also are causing strong growth and mind you that so far, what we have not yet seen is the RF kicking in. We are all building our pipeline, but obviously it takes a bit of time in terms of incubating those deals and coming them into fruition. I think more meaningful of that would be starting from the fourth quarter and into next year. So having said that, and given also the fact that we are writing these new credits at good levels, we have been able actually to up-size our guidance for the full year. Now we are north of 1.2. I would say that we are going to be definitely something like EUR 70 million higher in terms of net interest income, vis-a-vis the guidance that we had at the end of last year for 2022. And with that, I'll pass the floor to Lazaros for the cost question.

Coming to costs, I refer to the plan and what will be the impact from the transactions we are doing that are going to fully phase in 2023. On the back of this transaction's performance, the carry cost base will be EUR 100 million lower compared to the one we posted back in 2021. So from 950 to almost 850 after the phase in of transactions, all other things being equal, of course, and excluding the costs for the resolution funds. Coming to 2022, the operating expenses that we're going to report, we see a transitionary impact from the timing of the completion of certain transactions that I have referred to, as well as the retention of our U.K. operations. That is however net neutral, given the associated revenue. The inflationary pressures that we're experiencing are minor, less than 1% of our cost base. So we expect our total cost base to be down by approximately 20% this year, while recurring expenses should come in 5% lower year on year, with our cost to income improving by 8 percentage points to 54%. And with a further 5% reduction already locked in from the transactions that are pending completion and have referred to.

Alevizos, let me come back to one point that I think I omitted answering, which was about the EUR 2.2 billion target that we have posted for this year. And indeed given the progress that we have seen so far, we are in all likelihood going to be able to up-size that by roughly EUR 0.5 billion more. So again, this also has to do with the timing of certain syndications, but give or take, I think this is where we're going to be able to end the year.

Oh, so up to EUR 2.7 billion for the year, for the full year in terms of the net lending.

Yes. Yes.

The next question comes from the line of Sevim, Mehmet with JPMorgan.

Thanks very much for the presentation and congratulations on the results. Just a follow up on the guidance from my side as well. So how should we think about the 6% RoT target for the full year? Putting everything together, given the NII improvement, which is very clear so far and the other lines as well. And also, do you have any color to share on the 8% guidance for next year at this point? And just second question, if I may. On the coverage now, given the transactions that have been accounted for, how should we think about the coverage levels from here, which has dropped to 40% this quarter? What's the trajectory for the next quarters and maybe also what's the level of coverage in the midterm that you would target?

This is Lazaros. Now on guidance, and I will refer to the main P&L items starting from the top line. There are a number of tailwinds that have already materialized in the first half of the year, giving us sufficient confidence to advise our guidance on net interest income from EUR [ 1.15 ] billion to circa EUR 1.2 billion. The majority of expected net credit expansion has already come through and multiple [indiscernible] has allowed us to capture higher yields in our growing securities portfolios. Our efforts and policy actions are thus bearing fruit. And additionally, we have some positive developments on the monetary policy front with higher interest rates being an obvious tailwind. And to be clear, any further increases in policy rates beyond the 50 base points already announced by ACD would only have a minor impact in the top line due to the lack in the repression of our loan book. On fees, there is nothing really new to report. We've shown that we have positioned the business to capture growth in an efficient and profitable manner whilst leveraging our strengths on originating in launch and delivering right products to affluent clientele in asset management. And the model has proved resilient despite the market turbulence, we're comfortable that the guidance of approximately EUR 400 million we have given still stands. On operating expenses, as I explained previously, we're targeting 5% lower with carrying expenses cost base or 20% lower reported cost base. And as far as provisions are concerned, our guidance for 70 basis points this year still stands and our performance in the first half of the year is relatively in line with that number. The data we have on asset quality flows continues to come in effectively in line with our expectations, with no signs of deterioration thus far. Our risk models do not suggest the need for further efforts, but we are conscious of the fact that the current mix of microeconomic variables might not be adequately captured given the lack of historical precedence. And this quarter, we have taken a close look at our book to make an assessment and have reflected that on our provisions, but this should curtain any risk to our cost of risk guidance from a potential deterioration. So bottom line we have given you a target for profitability of 6%, and this is increasingly likely that we will land somewhat higher than the number would suggest. As you can appreciate, given the heightened level of uncertainty, especially for this coming winter, we will need to wait and see what happens before we can reasonably provide any guidance for 2023. And the second question on coverage. The drop in the cash coverage in the second quarter is attributed to the consolidation of sales portfolios that naturally carried a higher cash coverage, including RMS, which is a corporate and SME secure portfolio. And what stays back is predominantly retail. Retail mortgage MPEs amount to EUR 1.5 billion while securities, small business loans amount to EUR 0.7 billion. So EUR 2.2 billion out of the EUR 3.2 billion is retail secured mainly on the residence. And this portfolio, naturally which is more diversified, commands a smaller cost coverage. Now, as I said in the second quarter, we've taken a closer look on the portfolio and we have deliberately increased cost coverage of certain cohorts of the portfolio to enable management actions for us to further reduce the stock of non-performing exposures. We maintain the guidance on cost of risk for the full year at 70 basis points, and we expect our cost coverage, given the movement that we have taken so far will enable a further reduction in the stock of non-performing exposures. Going forward in 2023 onwards, we expect cost coverage to increase towards the 50 and 60% levels respectively.

The next question is from the line of Iqbal Nida with Morgan Stanley.

My first question is, if you can please remind us again of your NII sensitivity to rate hikes and just to confirm the NII guidance of EUR 1.2 billion assumes just 50 bits of ECB rate hikes. Secondly, on loan growth, 1H has been very strong, but given macro uncertainties, what are you seeing in terms of demand for, for the second half and 2023? And also, how are you thinking about tightening credit standards given the potential macro uncertainties ahead. And thirdly, just how do you see households and corporates getting impacted by inflation and higher rates, and how are you thinking about asset quality getting affected by this into 2023?

This is Lazaros. I will answer the first question regarding the sensitivity on interest rates. In our first quarter guidance, we have indicated that our fully phased in NII sensitivity, that is loans versus deposits, is approximately EUR 60 million from minus 50 basis points to zero, and another EUR 120 million from 0 to 50 basis points. Namely, a total EUR 183 million of NII improvement. From the next 50 basis points that is above the positive 50 base points up to 1%. We expect the sensitivity to become less steep as we would gradually see the better pass through in depots, to increase with the switch from first demand to time deposits, adding an extra EUR 50 million to NII. That is a total benefit of EUR 231 million fully phased-in annual effect. That was what we presented in the first quarter. And by mind that 90% of our loan book is floating rate, 70% of which has floors at zero, whereas 80% of our deposits are first a month. The current 3 month arrival is at 26 basis points and 6 month at 65 basis points, therefore loans have started to see the benefits of higher drive or fixing rates, while deposit rates remain predominantly unchanged with the debt facility rate still at zero. Updated 2022 net interest income guidance incorporates approximately EUR 40 million NII improvement from interest rates benefiting mainly our loan portfolio to incur within the second half of the year, and mainly the fourth quarter, which materializes in line with the sensitivity analysis we have presented in the first quarter results. Now, let me take your second portion as far as what we see in the market in terms of loan growth. I think so far, there is practically demand across the board to be witnessed both in terms of working capital at the levels of increase in the Greek GTP. Thus far, I think you can appreciate that. And on top of that, we have seen a vivid interest in order to put investments to work. You have seen that last year, we have seen a marked increase in terms of penetration of investments to GDB to 12.9%, which still is something like 60% of the average of Europe. But also it was the strongest FTI year. If one compares back to time only in 2006, you would have found a stronger year. So I think in the first half, what we have witnessed has been very strong growth. For the remainder of the year, I think what is important to report at this stage is that we don't see any of our customers withdrawing from investment plan. They're all hanging in there. Obviously they are recalculating certain CapEx budgets, given the volatility that it is in the material, but we see both the interest for investment loans that would go into the RF picking up and gradually going into the next stage, as well as also other investment projects, which are focused in a few but strong areas in the hospitality area, in infrastructure and energy and in the food sector. Now for 2023, I think it's very difficult to predict if we're going to be experiencing another strong year as we had this year. But having said that, I think there are 2 important points to keep in mind. The first is that the ROI for grants will take place, and these projects, they will be delivered by contractors that will have a working capital needs. And that would at least create some incremental demand. The second is that the way that the ROI for loans is taking place is in a first, in first out. So currently we have the first EUR 1.6 billion for 0.35% fixed for up to 12 years. And then there are a couple of chances which still are very favorable terms. The first is going to be up to 0.6, and the other one is at 1%. So there is a clear interest from people to conduct this investment as soon as possible, both in absolute, i.e. according to their planning and also in relative terms that they are faster than other companies in order to be able to take benefit of that. So I think this is as far as we could get at this stage in terms of predicting the 2023, given the binary nature of a couple of important things that could really take us to the one or the other direction. Coming to us are quality trends in light of inflationary pressures, indeed, this is a risk that Europe and the Greece of course is facing. Currently, these inflationary pressures are not reflected in what we see in our books. As you remember, the first half has recorded in our portfolios, negative organic formation, with outflows outpacing inflows. We expect organic formation to be negative also in the second half of the year. However, the truth of the matter is that the past is not necessarily a good indicator about the future. That is why we have also, as I said, looked in our books and have taken an incremental charge in the second quarter results as a management post modal adjustment to reflect a potential risk from inflationary pressures on asset quality and the need to employ management actions on all stages in order either to reduce MPs within our plan, or sustain new flows into stage 3. Having said that, there are a couple of points that are specific to Greek households and Greek corporates that are worth mentioning. The truth of the matter is that disposable income has been increasing in Greece. And according to the most recent data by the statistical service in 2021, we have witnessed a 5.8% increase in the disposable income of households, whereas in the first quarter of 2022, the annual increase was 3.8%. And this upwards course in the disposable income is driven by significant employment gains, which are recorded from April, 2021 onwards, with employment rate reaching 88% and employment rising by 6% in May, 2022. Government spending interventions, orientated towards tax and social security contribution cut and increases in subsidies for both households and corporations. The rise in nominal compensation of employees by 1.7% with wages in salaries growing 2% in 2021. Real compensation of their employees increased marginally in 2021, but still it was positive, following respected positive growth rates in both 2019 and 2020 respectively. And the minimum wage has gone up 2 times from 650 to 663 at the beginning of the year. And in May from 663 to 713, that is 2% and 7.5% respectively. So there are tailwinds in the disposable income of households that should help them face the current turbulence. Also, I need to emphasize that the households entered the energy crisis with stronger balance sheets, as they have delivered significantly during the last decade. Private debt levels have fallen as a percentage of disposable income. That was the peak in 2009, the peak was 83%, that is mortgage outstanding credit as a percentage of gross disposable income, that was 83% in 2009. And in 2021, it has dropped down to 32%, and you can compare this to other European countries, the 32% mortgage debt to GDP. Italy is 34%. Portugal is 65%. Spain is 68%. German is 67 and so on and so forth. So it's relative low on a European scale. Also, big households have accumulated savings through the pandemic. We have seen deposits increasing by EUR 16 billion, and we can assume that overall, the lockdown related accumulated savings have been around EUR 20 billion. That is a spending buffer, that is worth approximately 11% of GDP, which again, can help households sustain this difficult period. And of course from a liquidity point of view, you have seen the loan to deposits ratio having improved significantly for the system as a whole. Similar metrics can be recorded for corporates. For example, when it comes to non-financial corporations, based on the recent historical data, we have seen corporate lending as a percentage of GDP dropping considerably from 52% in 2009 to 32% in 2021, which again, is the lowest compared to other European countries like Italy at 38, Portugal 57, and so on and so forth.

The next question is from the line of David, Daniel with Autonomous Research.

I've just got a quick one with regard to issuance and MREL. I can see on your slides of MREL, there's other liabilities that are included in your MREL stack that say they're subject to approval. It'd be good to just give a background of what's included in that 90 basis points, and then also your thoughts on issuance and H2, whether you'll be looking at markets, or if it's best to sit out from that, given the volatility you've seen. Thanks.

This is Vassilios. Thank you very much for your question. I think there are a couple of points to make, the first is if we must issue, and this resides obviously to our relationship with the SRB. Now this is something which we are discussing with SRB. The SRB understands perfectly well what is the situation, and we have been able to meet our binding targets last year. Therefore, we are in a mode of preparing ourselves for issuance, having everything ready and following very closely market activity, and thinking about pockets, which given the circumstances in the markets, which as we all know, are a very volatile one, could be more prone for such an issuance. Therefore, there is nothing to report at this stage, other than that we are vigilantly monitoring the market.

Okay. And then just the other MREL eligible liabilities are included, is there anything to say there?

Can you repeat the question, please? We're not sure we heard you right.

Sorry. On Slide 49, you've got in the MREL ratio, there's 90 bps of other MREL eligible liabilities. I was just wondering if you could maybe let us know what's included in that, because I guess it's different to the capital stack and the senior preferred.

On these 90 basis points, they are relating to a discussion that we have currently with the SRB on them accepting that these 4 within the MREL [indiscernible] these are practically assets of ours that we do believe, and we have procured all relevant arguments to the discussion to the SRB that would fall within the perimeter. And so, what we can say at this stage is that the SRB is very constructively looking at the market.

[Operator Instructions]

Okay, great. Thank you very much for joining in. Hopefully we've helped you with your holiday bringing the results forward this time. If you have any questions, the IR department is available. Thank you very much.

Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for calling and have a pleasant evening.