Ladies and gentlemen, thank you for standing by. I am Geli, your Chorus Call operator. Welcome, and thank you for joining the Alpha Services and Holdings conference call to present and discuss the 9 months 2022 financial results. [Operator Instructions] and the conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Alpha Services and Holdings management. Gentlemen, you may now proceed.

Hello and a warm welcome to Alpha Bank's 9 months call for 2022. This is Vassilios Psaltis, Alpha Bank's CEO. I'm joined today by Lazaros Papagaryfallou, our CFO; Ioannis Emiris, our General Manager for Wholesale Banking; and Iason Kepaptsoglou, the Head of IR, to update you on our third quarter results. As the global macro situation appears to be precarious, allow me to start off by setting the stage for weak macro before reflecting on our position within that. With that, let's turn directly to Slide 4, please. As you can see, Greece has delivered robust real GDP growth in the first half of 2022, up by 7.8% year-on-year and above the year-over-year average of 4.8%, with a strengthening economic outlook for the rest of the year. The strong growth expansion is driven by 3 elements. First, private consumption growth, up by 11.4% year-on-year, which was the largest contributor to overall GDP growth by 7.9 percentage points on the back of persistent employment gains, some use of accumulated savings and fiscal interventions amounting to EUR 12.1 billion, of which EUR 4.6 billion in fiscal costs and $7.5 billion from the Energy Transition Fund. Second, investment growth, up by 10.9% year-on-year, contributing 1.4 percentage points to overall GDP growth on the back of a remarkable revival of foreign direct investment alongside the hike in corporate lending. And third, external demand, with export of services rising by 34.4% year-on-year, contributing 5.2 percentage points to GDP growth on the back of strong tourist season. Our full domestic and external demand is expected to weaken on the back of the adverse effects of the energy crisis on the purchasing power of households. Private consumption and exports of services are expected to continue to support GDP growth, even if to a lesser extent. However, GDP growth in 2023 is envisaged to be driven by investment, as depicted in the upper left-hand side graph. More specifically, real GDP growth is expected to decelerate to 2.1% in 2023 from 5.3% in 2022 based on the draft '23 budget tabled by the government. And this is supported mainly by investment that is expected to grow by 15%, making it the largest contributor to GDP growth as opposed to private consumption, which is expected to increase by less than 2%; and travel receipts which had the lion's share in the preceding years. There are a number of factors supporting the prediction of an increasing contribution of investment in the future growth mix. First, the remarkable improvement in the business environment during the last 3 years. In the most recent Economist Intelligence Unit report, Greece was reported as the most improved country among 82 economies, moving up by 16 places in the relevant rankings. Second, and moving now to Slide 5, the strong upward dynamics in FDI readings. Foreign direct investment is expected to hit a new record in 2022, as inflows within the first half have already reached more than 80% of the 2021 level. The latter was the highest value over the last 20 years at 2.9% of GDP. Third, a significant injection of investment is expected in 2023 via the public investment program and the recovery in resilience fund amounting to EUR 8.3 billion and EUR 5.6 billion, respectively. The improved liquidity conditions are seen in the top right-hand side graph in conjunction with the banking sector's ability to optimize allocation of funds through RRF loans are expected to support future credit expansion. More specifically, 210 investment projects have been submitted so far for the loan part of the RRF with a total budget of EUR 8.2 billion. These developments alongside the adoption of key horizontal structural reforms, as for example the speeding up of the administration of justice and conflict resolution processes and a stable tax regime are expected to strengthen future investments in the longer-term horizon. The fourth factor is the prudent adjustment of labor cost in the current inflationary environment, which leaves material breathing space for firms to tackle the energy crisis and ensure that the wage price spiral will be avoided. Turning now to Slide 6. We can say that, last but not least, the fifth factor is that the spectacular improvement in debt sustainability is underway, compressing the sovereign risk and increasing business confidence. And lower debt-to-GDP ratio is expected, supported by: firstly the investment-driven growth in 2023; secondly, inflationary pressures, which accelerated to 12.1% in September 2022; and thirdly, the fiscal tightening as presented in the state budget. More specifically, as depicted in the upper left-hand side, the primary fiscal deficit in 2022 stands at minus 1.7% of GDP, better than initially expected. And despite the sizable support to households and firms, a significant part of its cost has been financed through the Energy Transition Fund rather than the state budget, while tax revenues are running above the target in 2022. For 2023, the primary balance is expected to return to positive territory at 0.7% of GDP following 3 years of pandemic-related high deficits, putting downward pressure to the debt-to-GDP ratio, which is expected to decline in 2022 and 2023 to 169.1% and 161.6%, respectively. Downside risk to this growth outlook are primarily related to the impact of a cutoff of Russian gas on the real economy, which however is expected to be milder compared to other countries as the Greek industry consumes relatively less energy. Allow me now to pass the floor to Ioannis to speak about loan growth.

Hello, everyone. This is Ioannis Emiris. I'm the General Manager for Wholesale Banking. Let us now focus on loan growth on Slide #7. In the third quarter, we have continued to grow our book mainly on the back of business loans in Greece. Credit business is expanded by EUR 0.5 billion this quarter, allowing us to reach EUR 2.2 billion in the first 9 months of the year. This quarter, the group performing loan book has grown by 3% increase and by 2% in our international business. Since the end of 2020 that marked the start of our latest business plan, we have grown performing loans by 16% increase and 9% in our international business. Net credit expansion has been front-loaded in 2022, allowing us to meet our target earlier. To a certain extent, this has been circumstantial, with certain large projects maturing early in the year following pandemic-related delays while we also expect further prepayments in Q4 on account of the strong GDP and tourism performance. We are now building our pipeline for next year, ensuring that we will be able to capitalize on our strengths and will continue to capture the investment-led credit growth that is present in our market. As portrayed by Vassilios earlier, growth in 2023 will be supported, among other things, by RRF investments, EU subsidy schemes and the public investment program. And we have a very strong position in the structuring of such transactions with very good penetration in many segments of the market. We are delivering this growth in a sustainable manner, both from a risk and a profitability perspective. Our risk-adjusted returns remained relatively stable despite the high level of prepayments of all the expensive facilities and the presence of certain large tickets that attract competition. And with that, I'll hand it back to you, Vassilios.

Well, thank you, Ioannis. Before I pass the floor on to CFO, on Slide 8, allow me to remind you that our aspirations for creating value for our shareholders remain intact, and we continue to make progress towards that goal. Here you can see that our tangible book value is on an upward trajectory. Our recurring profitability has resurfaced. And last, but not least, our capital levels are progressing according to our plan. For 2022, as Lazaros will explain in a minute in detail, the prospects are improved. We now expect to end the year with a 7% return with a net income of circa EUR 0.4 billion mark, more than 20% above our initial guidance for the year. 2023 might ultimately prove to be a challenging year, but we remain squarely focused on positioning the business so as to be able to navigate through this period of turbulence and deliver on our results. Lazaros, the floor is now yours to present our financial performance.

Good afternoon, everyone. This is Lazaros Papagaryfallou, Alpha Bank's CFO. Let's now take a closer look at this quarter's numbers. Turning to Slide 10. This quarter, we are reporting a positive bottom line of EUR 93 million or EUR 335 million for the first 9 months of the year. There are a few notable items this quarter. First, a trading gain of circa EUR 70 million on the back of interest rate derivatives hedging interest rate risk in the banking book. Second, in other income, we have had a $25 million reversal of insurance provisions from the liability adequacy test at our insurance business as a result of the increased yield of the asset portfolio versus the guaranteed interest rates. Third, we have had a EUR 56 million impact from transactions or, as we show here, EUR 77 million post-tax. And lastly, there's a EUR 3 million reclassification of expenses related to the issuance of credit cards that were previously reported under general and administrative expenses and are now presented under commission expenses. Excluding one-off items, normalized profits came in at EUR 117 million or EUR 324 million for the 9 months. Our NPE ratio has fallen by 20 basis points to 8% on the back of loan growth and 0 net NPE flows. On capital adequacy, our total capital ratio stood at the end of the period at 16.5%, accounting for the risk-weighted assets relieved from transactions. Now turning to Slide 11 to look at the underlying P&L trends. We've seen a solid improvement in net interest income on the back of volume growth and higher rates with improved quality as the contribution of nonperforming exposures fell to 10% from 18% a year ago. Fees and commissions witnessed a resilient performance at EUR 93 million in the third quarter, driven by cards and payments alongside robust loan origination fees, further diversifying the bank's revenue stream. Recurring operating expenses continue to trend lower, demonstrating the improvement in efficiency. And the cost of risk came in at 70 basis points for the 9 months, excluding transactions reflecting benign asset quality flows. Moving on now to the next slide to look at loan growth and pricing. We continue to deliver solid levels of loan growth with a EUR 0.5 billion net credit expansion for Greek business loans, driving the 2% quarterly growth in our total performing loan book. We have added just over $4 billion to our loan book since the onset of our latest business plan, adding 15% of the starting balance and growing the book by just under 10% in the first 9 months of this year. The evolution of loan spreads, both from the business and on the individual side, has been distorted this quarter by the existence of loss in our loan books. What we show here on the lower side is the effective Euribor rate that is in our books for the reference period, the spread on top and the resulting yield in order to decompose the various drivers and draw conclusions of pricing evolution. Yields are up by 12 and 29 basis points for business and individuals, respectively, this quarter, while pricing is so far resilient. Turning now to deposit gathering on Slide 13. The group's deposit base increased by EUR 1.6 billion in this quarter, driven by corporate deposits. Combined with the increase in our loan book, our loan-to-deposit ratio has stabilized around the 80% level. Our commercial funding surplus, deposits minus net loans, has edged above EUR 11 billion this quarter, showing that deposit growth is funding the expansion of our loan book. Liquidity drawn from the ECB's TLTRO facility stood flat at EUR 13 billion, unchanged Q-on-Q. Following the latest announcements from the ECB, from the 23rd of November onwards, the cost of TLTROs will fully match the remuneration received for money deposited of the ECB, thereby effectively eliminating any positive carry. On the other hand, the still low cost of the instrument, given the volatile environment we operate, it hasn't shown attractions. For the remainder of 2022, the end of the carry translates into a flat contribution from TLTRO versus Q3 levels, while the carry will completely disappear in 2023. Clearly, we have excess liquidity and could contemplate early repayment for at least a portion of the TLTRO now that the option is available. And with that, let's look at the evolution of net interest income in more detail on the next slide. Net interest income in the third quarter of 2022 stood at EUR 339 million, up by 12% versus the second quarter. The headline performance was impacted by $15.2 million reduction in net interest income due to the termination in June of the 50 basis points TLTRO preferential rate and $1.5 million negative impact on NII from lower average net loan balances on the back of transaction impairments booked in the second quarter and EUR 3.5 million of positive seasonality. On a recurring basis, though, net interest income increased by 17.1% versus the second quarter on the back of growth in loan and bond balances as well as positive impact from higher interest rates, with the latter accounting for about 1/3 of the increase in NII on a recurring basis. Interest income from nonperforming exposures stood at EUR 32 million this quarter, with circa 34% of that coming from completed NPE transactions that will leave our balance sheet shortly. On TLTRO, we have provided you with a more detailed chart here so that you can see the contribution in detail. From the end of the preferential rate period on the 24th of June and onwards, interest for the TLTRO has been calculated based on the weighted average interest rate for its tranche for the period covering the starting date of its tranche until the reporting date, namely taking into account the effect from the changes of the rates in that period minus 50 basis points until the 26th of July, 0 until the 13th of September and 75 basis points until the end of the quarter. As mentioned, post-ECB announcements, we should see a similar figure to the third quarter in the fourth quarter and effectively 0 contribution thereafter. Given the growth in our loan and securities balances and increasing rates, we feel comfortable now in revising our guidance for net interest income for this year to circa EUR 1.3 billion. Moving on to fees on Slide 15. Again, a reminder that we've made a small reclassification from costs to fees with no impact to the bottom line. This quarter, we have also seen the impact from the deconsolidation of the Merchant Acquiring business following its sale to Nexi. Excluding this one-off, fees were actually up 6% this quarter on the back of growth in cards and payments alongside robust loan origination on 11% year-on-year. Now looking on to costs, Slide 16. Excluding the benefit from the deconsolidation of the Merchant Acquiring business, costs were again flat this quarter. Our headline cost-to-income ratio stood at 45% in the quarter, excluding resolution fund fees, or 44% adjusted for the envisaged savings from transactions awaiting completion. The equivalent number stands at 40% for our Greek operations. Having taken into account our up-to-date estimates for the timing of certain transactions as well as inflationary pressures, we can confirm our full year guidance for total OpEx base at around EUR 960 million. This is a 20% reduction over 2021 reported operating expenses or 5% on recurring expenses. Let's now turn to asset quality on Slide 17. With regards to asset quality trends in the quarter, there is yet again very little to mention. NPE formation in Greece was 0, with a small reduction in inflows and outflows. We are yet to witness material signs of deterioration in the portfolio on the back of higher energy prices and inflationary pressures. And we expect to see a small organic NPE reduction in the last quarter of the year. On the right-hand side of the slide, you can see further information on our cost of risk evolution. The underlying cost of risk came in at 61 basis points over net loans in the third quarter, with the first 9 months coming in at 70 basis points. It is interesting to note that nonperforming exposures above 90 days past due represent 4.3% of total loans. The delta between the 2 ratios is attributable to forborne nonperforming loans below 90 days past due, which are well positioned to procure curings over the next couple of years. On Slide 18, we provide you with a few further data points for our cash coverage ratio. First, our NPE book has fallen quite dramatically. And as you can see on the top right-hand chart, the mix within that book has shifted quite substantially. We have consciously opted in to transact on the worst part of our portfolio, namely nonperforming loans that have been many years in default, denounced loans, exposures under the insolvency loss and high LTV loans. We have divested almost the entire stock of our wholesale nonperforming exposures, naturally carrying a higher cash coverage. And we have retained mainly retail secured exposures collateralized by residential license. As a result of the sales, nonperforming exposures under 90 days past due now represent 46% of the total book versus circa 30% before the cleanup. Within that book of NPEs under 90 days past due, the proportion of mortgages has almost doubled and now accounts for over 60% versus 33% back in 2019, as you can see on the top right part of the page. Our coverage within that book is relatively stable, something that we depict here on the bottom right, with the coverage on mortgages reflecting collateral as well as the probability over performance. We see a good pace of curings out of these forborne NPEs, and we expect more to come in 2023. Since the beginning of 2022, we have launched more long-term restructurings for exposures above 90 days past due, and we see higher responsiveness from clients. The average LTVs of our retained mortgage NPE portfolios are now lower as the increase in real estate prices over the last few years facilitate long-term solutions with clients in accordance with their current affordability. Lastly, on the bottom left part of the page, you can see the evolution of the stock and coverage for the remaining NPE book that is above 90 days past dues. Leaving the vast reduction aside, our coverage per segment has remained relatively stable and is comparable to the levels seen at European peers. On the next slide, following the quantum leap of the previous quarter, our NPE ratio has fallen further by 20 basis points to 8% on account of growth in our loan book. By year-end, we expect the stock of NPEs to fall just below the EUR 3 billion level. On all accounts, we are entering this period of dislocation on a much better footing. As can be seen on the next slide, our balance sheet has been revamped. Our capital and liquidity have been strengthened, and we are now more efficient and more profitable. We should take some comfort in our vastly improved position, but clearly, asset quality is now a topic of heightened focus. So on this front, there are 2 different segments I'd like to touch upon. First, our corporate book is showing notable resilience, primarily because it is built upon the survivors of the Greek sovereign crisis. And as such, our back book is, to put it mildly, weathered. Secondly, because we have purposely built our pipeline over the last few years in a very selective manner, we have focused on growth sectors or segments with good visibility on cash flows. We have underwritten long-term facilities with loyalty [ piece ]. Given the prevailing challenges, we are currently updating our risk analysis, zooming in on sectors that are relatively more exposed to the current turbulence, like construction, transportation, wholesale trade. And we are assessing in a granular bottom-up way what the impact could be in terms of rating migrations and stage 2 transitions. Circa 25% of these more affected sectors or approximately EUR 2 billion of exposures could potentially experience a one-notch downgrade in our systems, triggering closer monitoring and reviewed by our credit committees. The actual provisioning need would be material, on the one hand, due to the starting point for the risk profile of this exposure where the average probability of default stands at 0.7%, and on the other hand, due to the very, very high levels of collateralization. On mortgages, the picture is more nuanced. The fully performing back book is very resilient as it has to survive the Greek sovereign crisis. New production remains very depressed. So as a system, we have not grown into the crisis during a period of low rates. We are very focused on analyzing early warning signals, especially with regards to forborne exposures that may be exposed to the default risks. So far, we have not witnessed a deterioration of payment behavior despite increased inflows in certain cohorts of the books, where pressures on disposable income have been combined with step-ups in payment schedules. We are engaging into proactive actions where necessary, and the response rates are quite encouraging. We have already seen an improvement in asset quality flows in the third quarter, and this has continued in the fourth quarter. Let's now briefly look at the evolution of our fully loaded capital position on the lower part of next slide, that is Slide 21. As before, it is probably best to look at the movements in capital in 3 separate buckets. Our organic capital generation was strong this quarter, as profitability has recovered, allowing us to build our capital base both on the back of the period's profits as well as due to the resulting DTA recoveries, more than offsetting the recurring impact from DTC amortization. We continue to fund growth through internal means. The change in risk-weighted assets was actually a tailwind to our capital position this quarter due to lower market risk-weighted assets as value at risk and stressed value at risk fell due to the termination of the swap and the lower FX position. The increase in credit risk-weighted assets on the back of loan growth was a minor headwind due to increased cash collateralization of exposures. Overall, we are very pleased with the 60 basis points we have added to fully loaded Common Equity Tier 1 organically. Our capital ratios are also proving resilient as there was effectively no impact from fair value through other comprehensive income due to the low sensitivity from book to shifts in the yield curve. And then lastly, on transactions, the benefit this quarter was mainly from the completion of the synthetic securitization and the deconsolidation of our Albanian subsidiary, while the remaining risk-weighted asset relief stems from the various NPE transactions. The combined impact of what we've seen this quarter and what we expect to come is very much in line with the guidance we have given. Our reported fully loaded Common Equity Tier 1 stood at 11.8% at the end of the quarter, up by 70 basis points versus Q1. While pro forma for the anticipated RWA relief from the transactions, our fully loaded Common Equity Tier 1 stands at 12.1% and is up 47 basis points versus the comparable Q2 numbers. Note that we now also have the 2 synthetic securitizations in the pipeline that are expected to add 65 basis points to our capital ratios during 2023. On the next and final slide, we provide you with an update of our guidance. Q4 net interest income should continue to benefit from higher volumes on loans and bonds as well as the continued increase in interest rates, bringing the total for the year to $1.3 billion. As mentioned previously, the loss of interest income from transacted NPEs as well as the loss of TLTRO carry will affect next year's numbers. The recent senior preferred issuance will have a minor impact, given timing. On fees, once accounting for the reclassification from costs to fees, we should be on track to meet our guidance of close to EUR 0.4 billion. We continue to see growth in the medium term coming from loan originations and transaction fees as well as an eventual improvement in the environment for asset management. On costs, we still expect a 20% year-on-year reduction for total costs, mainly on account of lower one-off expenses, with recurring costs down by 5% in the year. Cost of risk, including servicing fees, will likely land at circa 75 basis points this year, as in the fourth quarter, we will likely be negatively affected by staging migrations in the cost of management actions. However, as we have thoroughly explained, we are not experiencing any material deterioration in asset quality and do not envisage a further uptick thereafter. The impact from NPE transactions, net of tax, should be slightly north of EUR 300 million, driven by technical impacts like the effect of the re-tranching of Project Solar or foreign exchange movements. Our tangible book value has been affected by moves in our fair value through OCI book and some FX elements, but it is otherwise evolving according to plan. On capital, we have been able to recuperate this lower tangible book value, predominantly through RWA benefits. Overall, we expect to end the year with a better return than originally expected, approaching 7% with net income at or above the EUR 0.4 billion mark, more than 20% above our initial guidance for the year and with good prospects for further improvement next year. And with that, let's now open the floor for questions.

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

Well done on this great set of results. I've got 2 questions, both of them relating to a lending expansion. I can see -- and I've asked the same question last quarter, but I can see already that in the 9-month period for 2022, you met the lending expansion target for the full year 2022. So I was wondering whether you would like to kind of give us a more comprehensive update for the rest of the year? And then the second question is actually for the year 2023. I heard during the call that there is a pipeline. So I was wondering about what would be the volumes? And what are the latest trends in terms of pricing? Do you see any kind of competition piling up?

Okay. Thank you very much. This is Ioannis Emiris. So the net credit expansion in the months that have passed -- have been front-loaded, so we have achieved our targets for the year, and we expect to stick to those targets for the rest of the year. There is, however, an upside, a series of factors that present upside risks to these targets. Therefore, there is upside potential, in other words. And this may come from the following facts. First of all, syndications. You would remember that we have syndicated circa EUR 600 million in the first few months of the year in certain high profile, I would say, trophy transactions that we have structured. So we would expect in the months to come from competition approximately EUR 300 million in certain transactions that have already been identified. Potentially more to come a bit later in the year. The second is that we have experienced up to now significant prepayments of facilities in certain sectors that have been very positively affected by the very high GDP that we have experienced in the country and the tourist receipts that have been very increased as well as stated schemes that have affected positively many sectors of the economy. Similarly, we have seen sectors such as shipping posting very significant benefits from the current situation. Therefore, we have experienced significant prepayments, which might be lessened for the rest of the year. And the third fact is that up to now, we believe that -- and given the current circumstances, we believe that it is very probable that corporates may wish to retain significant amounts of liquidity that they're already retaining in their books and further to potentially borrow more in order to maintain working capital balances in order to do better balance sheet management. And this is in order to weather the volatility in prices and the very high inflation that we currently experience. Therefore, we believe that these factors might benefit credit expansion. Nevertheless, let me point out that we -- what we are doing is we are not only focusing on what is happening in -- for the rest of the year, but we are also focusing in the next quarters and next year. And in that respect, we are capitalizing on our very good structuring skills and good penetration in many segments of the market in order to attract new transactions. Now as far as 2023, is -- as far as 2023, we would expect that the growth for the year is going to be mainly investment-led. This has happened in 2022, but we also expect that this is going to continue for 2023. And there are certain material reasons that are attributed to that -- that attribute to that. The first one is that we, as you know, are benefiting from RRF that in turn is benefiting many sectors of the economy, ranging from production of energy, distribution of energy, saving of energy, digital transactions and digitalization of many segments of the country and of the business environment since we have lagged Europe for a number of years in that [indiscernible]. Second, there is an ongoing support from other EU subsidy schemes such as the so-called [ ESPA ]. The third thing is that we have -- as you have heard before Lazaros, we have the public investment program that is in full steam, has a number of initiatives, a number of projects that are running currently such as the PPPs, public private partnerships that currently have been tendered out. The other thing is that we have significant M&A activity that we experienced in many segments of the economy that are getting so-called more institutionalized such as the energy sector where you consider a lot of -- you would see a lot of consolidation. And finally, I would mention that the working capital needs of the corporates are expected to remain elevated in 2023, as I noted for the last quarter of 2022, because inflation is still expected to remain very high. Now looking forward, past and during potentially 2023, we also expect additional support from privatizations that are happening and are expected to continue. Now the last bit of your question relates to spreads and to pricing. As you might have noticed in the presentation by Lazaros before, we have not experienced any spread erosion in 2022 up to now. There are pressures to the spreads that are continuing in effect. And this has to do with the back part of the book, all the loans that are getting gradually repaid, and these are coming from very high levels of margins that experienced in -- that existed in the past. This is a phenomenon that gradually is coming to an end. There is some spread compression in some very large transactions. And I'm referring mainly to transactions that are trophy, as I said, very good transactions, mainly structured finance, whereby the structuring dictates that the spreads are low because obviously the securities are very robust and the owners are very good. But in general, I would say that what we do in the bank is that we are trying to maintain very good discipline in the pricing of those transactions. And therefore, we have managed to keep our spreads at very good levels. And what we do is that in general, we are trying to get leadership position in some large transactions, actively syndicate in order to enhance our returns, and obviously, obtain many agency roles that support our margins and our returns on a risk-adjusted basis. So we are currently very satisfied on -- with the yield that we are getting on those transactions. If you look -- and this is the final bit of what I would note, if you look internationally, you would observe that there is some upward pressure in the margins of certain transactions. We are witnessing that because we are active in international syndications in order to get good profitability for our portfolio. And we expect that this is something that is going to slowly evolve in Greece as well. It might take certain time because deposit rates are low, because liquidity is still okay, it's relatively abundant, and pricing has been high in the past. But this is something that we expect we are going to see in Greece as well.

Ioannis, just to be on the record here, with regards to numbers and the expansion of our performing loans book in 2022, we do expect performing loans to increase anywhere between EUR 2.8 billion to EUR 2.9 billion, including the impact of FX and other movements. And we expect net loan additions on a group basis to increase by EUR 2.5 billion to EUR 2.6 billion.

Excuse me, just one clarification. That includes the international expansion as well?

Yes.

Which was for the third quarter, I think you said 2% quarter-on-quarter, correct?

Yes.

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

Also very helpful comments earlier on the loan book. This is indeed a very remarkable NII print at this very early cycle in the rate trajectory. Are you able to provide the latest sensitivity on the ECB rates from here? And this is maybe particularly related to Slide 24 where you show a quarterly jump in the deposit cost as well and some decrease in corporate yields as well. So if you could please tell us whether this was within your initial expectations and how we should see it from here, that would be very helpful. And Lazaros, you earlier mentioned 2 synthetic securitizations in 2023 that would add 65 basis points to your CET1. Can I please just confirm with you whether these are -- these were within your budget, or are these new transactions that we should be baking into our models?

Coming to NII sensitivity, and I will be speaking purely on the back of a static balance sheet analysis that shows us the sensitivity of NII to higher rates on loans and deposits based on certain assumptions. I remind the audience that 90% of our performing book is floating. The repricing frequency is 2.5 to 3 months with usually Euribor as the main reference rate. And we assume a certain pass-through in first demand deposits and time deposits for base rates above 50 basis points. So you should take into account that in the third quarter, the respective reference Euribor was trending at 0 in essence. So from that point onwards, from 0 to 50 basis points, we get an annualized benefit of EUR 115 million. And then from there onwards, every 50 basis points of Euribor increase adds EUR 40 million to EUR 50 million annualized in NII terms. Obviously, this assumes a certain pass-through on deposits and assets. And in our analysis, we assume that above 50 basis points, there will be a gradual pass-through of 80% in time deposits and 20% in first demand deposits. Obviously, playing with these sensitivities on pass-through rates can yield different results. So already in the fourth quarter, we do expect a significant increase of NII as rates go higher than the 0% that was the reference Euribor in the third quarter results. And definitely, we do expect higher NII in 2023 on the back of these tailwinds. Having said that, what I'm relaying to you now is a static balance sheet analysis. NII trending forward will include, obviously, additional items like volume growth in loans and bonds, the impact of wholesale funding, the carry on TLTRO and other ingredients, right? So tailwinds in NII on the back of higher rates, both for the fourth quarter and 2023.

The second question was on the synthetic securitizations in 2023?

Yes. Yes. Synthetic securitizations, this is part of our budget for 2023. We have already effected 2 securitizations of performing loans. We do target additional capital generation through the risk-weighted assets relief by approximately EUR 200 million out of these 2 transactions. We expect to complete these 2 transactions by the end of the second quarter of 2023. And this is a good addition in our capital position for next year as we expect further accretion on our fully loaded Common Equity Tier 1 and total capital adequacy ratio towards the targets we have given in our plan.

[Operator Instructions] The next question is from the line of Memisoglu Osman with Ambrosia Capital.

Two on my side. On the rate side, you touched upon it a bit, but maybe you could give us a bit more color on what you're seeing currently on the deposit side? Are you seeing any further increases and, in particular, any shift to time deposits? And then the second question is just a catch-up on what's the latest on the NPE transactions from a timing perspective, should we assume end of this year?

Well, on the first one on the deposits, I think we should not leave from our side that Greece has been one of the few European countries that actually have not charged customers with negative rates. So if you look at what happened in the European space in the period of mid-2019 to mid-2021, then you would see that the average pricing has been at minus 35 to minus 40 basis points. Here in Greece, we haven't done that. So I think it is only sensible that we get into a slow start, into that pass-through. So far, what we witnessed in the market is no shift among the [ 2 key ports ] between savings and term, as this would be only a derivative of pricing action, which inevitably will come. Now, Lazaros, on the NPE transactions.

Our NPE transactions are on track to be signed and/or closed by year-end. We do expect one transaction to overflow into 2023, but that was initially in the plan. We count on the risk-weighted asset relief, obviously, coming of these actions as this is adding significantly to our capital position.

If I could squeeze one additional question, I just noticed as a clarification. On Slide 21, Q3 transactions of capital. Those were also synthetic or maybe I misunderstood? What do they relate to?

That relates to the loss budget that we have taken in the third quarter in the RWA relief that we have seen from Project Skyline and the deconsolidation of our Albanian operations.

The next question is from the line of Boulougouris Alexandros with Wood and Co.

Congratulations for the numbers. Just a quick question on the asset quality and the outlook for 2023. You mentioned quite a benign outlook, at least based on your legacy book and the resilience following the crisis. Would the current levels of cost of risk, you think, are reasonable to -- for us to assume as well in 2023? Or do you think you can go closer to the numbers you had in the initial guidance during the capital increase, I think it was 65 bps? You're now closer to 75. What do you think we should expect an increase compared to the current numbers?

You have seen that our third and 9-month numbers suggest a flattish formation. And you have seen that inflows have been fully counterbalanced by curings and management actions. We do expect in the fourth quarter to -- slightly negative formation as we are engaging into proactive actions with our customers. Also, it is important to note, we have not witnessed so far any material deterioration of payment behavior or ability to pass -- to pay as a result of the inflationary pressures and higher energy costs. In corporates, we have seen practically no inflows for 6 consecutive quarters. Our loan book, as I have described previously, has grown in the last few years in a very selective manner, focusing on defensive sectors, with very low probability of default and high levels of collateralization. And our risk division is constantly monitoring asset quality trends and has advanced in progressive risk analysis to assess potential downgrades for corporates so that we monitor those corporates more closely, the ones that could be affected by the current challenging environment. And we have sized the potential downgrades in our rating system. And we have also come up with numbers as to potential impact on impairment, which is very minimal because the starting point on the probability of default for these customers is very low and the collateralization is high. We have also stressed our wholesale portfolio for increasing interest rates. And there are some reassuring results since high volumes of exposures are either hedged or granted to customers operating in sectors with high margins and significant cash buffers following the accumulation of liquidity over the years. And for a long time, sensitivity to high rates has become an integral part of our credit underwriting process. In retail, we have experienced some inflows during the year on previously forborne exposures. We have fully mapped those portfolios. We combined demographics with risk analytics to assess a further deterioration for impacted customers. And we are proactively engaging with them on the management actions with targeted campaigns from the very early stages of delinquency with positive results and responsiveness getting higher as quarters go by. You may have seen lower inflows in the third quarter. I expect even lower inflows in the fourth quarter of the year. There could be questions about the impact of increasing interest rates and the burden [ they pose on ] households' available income, especially for our mortgage portfolio. Such an impact, as per our assessment, is rather manageable, given outperforming mortgage book characteristics in terms of origination vintages, average ticket and remaining maturity. An increase -- for an average mortgage of EUR 60,000, which is what we have in our books, an increase of interest rates by 2.5 percentage points would increase the average [ market ] installment by circa 20% or EUR 80. And we have set disposable income thresholds when underwriting new credits under affordability constraints. We feel that this is rather manageable for a book which has been originated many years ago. The production has been very small in the last few years. The indebtedness of households in Greece is low. So that provides some cushion for a potential stress on disposable income because of higher interest rates. Some data points from our services who are managing collections and restructurings and modifications, I have seen from them an improving performance, especially after April. That means higher collection rates, higher cash collections, keep promise rates and all these metrics that signal the effectiveness of the performance as far as cash collections are concerned. I see those trends also continuing in the fourth quarter of the year in our books. So that's why I'm rather optimistic relaying a message of potentially negative formation in the fourth quarter of the year. For next year, I see similar trends, and we expect inflows to be broadly offset by curings and collections. As far as cost of risk is concerned, in the 9 months, it has been mainly affected by management actions and market adjustments in our risk models and, to a much lesser extent, on flows, because as I said, inflows have been counterbalanced by outflows. So this is expected to continue also in the fourth quarter of the year, but would be driving cost of risk to a somewhat higher pace in the fourth quarter of the year so that the annual cost of risk lands at 75 basis points or thereabout. I would expect that on the back of the trends I have described in asset quality, cost of risk next year, including servicing fees, will not be materially different from the one we record in 2022.

The next question is from the line of Nellis Simon with Citibank.

I was actually going to ask about asset quality as well, and I think you answered most of the questions. But just on the EUR 2 billion exposure to companies that you think are vulnerable, what do you think the impact of the downgrade would be? And would you do that upfront in the fourth quarter, or is that more of a 2023 event? I guess the question is, how much kind of upfront provisioning are you taking this year or are planning to in anticipation of deterioration going forward because of the current macro environment?

Thank you, Simon. We assess the risk profile of our exposures on a constant basis. So this analysis happens throughout the year and results either in upgrades or downgrades. As I said, there has been a specific analysis stressing the wholesale portfolio and in particular those segments that may be affected by the energy crisis and inflationary pressures more than other sectors. So in order to closely monitor those more affected clients compared to the others and have our credit committees engaged in more regular reviews of the situation, we are pursuing a downgrade for some corporate customers and who are not downgraded from a very high starting point, though, that will not result in either a material staging to transition or provisioning because the starting probability of default for those customers is, let's say, 0.7%. That is the average probability of default, so staging transition. And that combined with overall collateralization of such exposure does not result in any material provisioning charge, but it raises the flag internally for our risk management and wholesale divisions to engage actively and monitor the situation.

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

I have just a quick one on MREL and, [ I imagine ], the recent trade that you -- the recent deal that you issued. Just wondering, is there anything more to come this year? What are your issuance plans for next year? And how does the recent issuance allow you to look at the call that's coming up? Does the new print allow you to call the [ 2 non-call 1 ] that you did late last year?

Indeed, there is a call in February on our [ 2 non-call 1 ], the EUR 400 million senior preferred that we have issued in December 2021. You may have seen that we issued a EUR 400 million [3 non-call 2 ] a few weeks ago. That theoretically gives us the ability to refinance this call. And as you have seen, we have been quite active in MREL issuance and flexible as far as MRELs are concerned, capturing the right windows in the market to raise MREL. So we are constantly monitoring the market, engaging with investors to assess our options for a further issuance. So -- as far as the EUR 400 million is concerned, we have an ability to refinance, given the recent issuance, and we will be engaging with our advisers to tap opportunities when such opportunities surface.

The next question is a follow-up question from Mr. Memisoglu Osman with Ambrosia Capital.

On the securities book, you've grown it quite nicely with obviously quite attractive yields. Can you give us a bit color on what your plans around the size of this recent trends in Q4? And also just following up on the NPE transactions. You've had some one-offs this quarter. Should we expect any one-offs related to the cleanup in Q4?

As far as NPE transactions are concerned, you have seen a charge in the third quarter, EUR 77 million post-tax. This is 1/3 attributed to the impairment of a deferred tax asset in relation to leasing portfolios that have been included in the held-for-sale. 1/3 of this -- another 1/3 of this charge relates to REO transactions, including Skyline, which has been classified in the held-for-sale. And another 1/3 relates to rather technical adjustments like FX movements in -- that -- and accrued in the rest that had to be reflected in the gross volumes. So that's what we have reflected in the third quarter. As things stand, we do not expect additional charges in the fourth quarter, unless there are additional technical adjustments that need to be taken into consideration. Now on securities, we have been adding securities in our books since the beginning of the year at much better yields. We are talking about HQLAs, high-quality liquid assets, that are re-put with ECB, so they finance themselves at the ECB. This is adding good net interest income to our books. And we continue to add securities selectively also in the fourth quarter of the year. And the distribution, obviously, is diversified, that it's not just GGBs. Actually, it's less GGBs and more European sovereign and other bonds that come at quite good risk return profiles in the current environment. We post all these purchases in the hold-to-collect business model as we are buying those bonds to maturity in order to increase our net interest income.

[Operator Instructions] Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments. Thank you.

Well, thank you very much for your active participation in our 9-month results, and we're looking forward to welcoming you to our full year results into the new year. Thank you very much.

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