Operator: Good afternoon. This is the Corus Call conference operator. Welcome and thank you for joining the UniCredit Full Year 2012 Group Results Presentation Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions.
At this time, I would like to turn the conference over to Mr. Andrea Maffezzoni, Head of UniCredit Group Investor Relations. Please go ahead Sir.
Andrea Maffezzoni - Head of Group IR: Ladies and gentlemen welcome to our 2012 fourth quarter and financial year presentation, before starting if you are from my side I don’t think I need to tell you once again that the macroeconomic environment in Western Europe, I think particularly in Italy remain a very difficult in 2012, leading to a negative impact on lending. And this in addition to historical low, EURIBOR which dropped further in Q4.
It is against this backdrop that I'm very pleased with the way our results (adapt) in 2012. Our gross operating profit remained stable. Thanks to the implementation of our strategic plan actions such as an active focus on cost cutting measure and cost containment, and we made EUR865 million profit in 2012.
In view of the difficult situation in the fourth quarter, we strengthened significantly the coverage of impaired loans to 44.8%, having taken certain loan loss provision of the EUR4.6 billion.
At 43.4% in Italy, we are up 320 basis point quarter-on-quarter and we reached a level that is the highest in the country. This will put us in a stronger position definitely looking 2013. The bottom line impact of this initiative is partially offset as you will see by a goodwill tax redemption, with no impact on our capital which has kept increasing.
In 2012, we were able also to increase our tangible equity by more than EUR11 billion and to reduce our funding gap by EUR33 billion, thanks to EUR25 billion growth in direct funding.
In terms of commercial funding gap, it has dropped overall from EUR117 billion to EUR66 billion, down by EUR51 billion, of which an impressive EUR36 billion in Italy.
Our capital ratios have increased with the Basel 2.5 ratio of 10.8% and the fully-loaded Basel 3 common equity higher than 9%. The 10.8% core Tier 1 ratio does not include the positive impact of the sale of the 9.1% stake in Pekao that we did in January and the proposed disposal of (tier bank) in Kazakhstan, which will take the cost, the innovation to 11.14% from 8.4% one year ago. Let's keep in mind that to calculate our fully loaded Basel 3 common equity Tier 1 ratio we're very conservative and consider a lot of risks that eventually may not necessarily materialize and we also don't consider future earnings impact.
The CEE& Poland once again has confirmed our expectation as the Group profit engine, with gross operating profit jumping more than 15% in the region in Q4 versus the same period of the previous year. To further strengthen the potential of the CEE& Poland we have actively managed our business portfolio in the region, taking a number of measures to streamline to improve efficiency to save costs throughout the area. This involves also among other things the ongoing sale process of Kazakhstan. This is a realization of our operation in Baltics and the creation of our Car financing joint venture in the rapidly expanding Russian market has been done, if you remember with Renault-Nissan.