Operator: Good afternoon, ladies and gentlemen, and welcome to the Announcement of Full Year 2011 Results. My name is Fai and I'll be your coordinator for today's conference. For the duration of the call, you will be on listen-only. However, at the end of the call, you will have the opportunity to ask questions.
I will now hand over to your host to begin today's call. Thank you.
Paul Mylonas - General Manager of Strategy and Governance and Chief Economist of the Group: Good afternoon. Paul Mylonas from NBG, I am here with our CEO, Apostolos Tamvakakis; Deputy CEO, Anthimos Thomopoulos; CFO, Babis Mazarakis, and from Global Markets Leonidas Theoklitos. We will start today with an introduction from Apostolos and then Anthimos will go through the more nitty-gritty of the results, and then we'll have the Q&A. So, let's start with Apostolos.
Apostolos Tamvakakis - CEO: Thanks Paul. Good evening, ladies and gentlemen. In my brief introductory remarks, I would like to provide you with my thoughts on the challenges facing the Greek banking system in general and what NBG's strategy is.
First few words regarding the Greek macroeconomic environment, Greece has agreed with its international partners; Europe and the IMF on the new adjustment program. Through its generous financial support, it provides Greece more time to implement a very ambitious overhaul of its economy. The aim is to return to a primary surplus and positive GDP growth from 2015 and then. The significant debt reduction achieved by PSI Plus is another significant milestone which provides the appropriate condition for Greece to return to a sustainable growth path.
Though a new start was clearly necessary, it is a mistake to ignore what was achieved by the first program. Despite a sharp collapse in output by 14% during the past three or four years as well as a dramatic increase in unemployment to nearly 22% from around 7.5% pre-crisis, Greece implemented in unprecedented amount of fiscal measures equivalent to 14.5% of GDP and achieved a primary balance adjustment of 8% of GDP.
In addition, bold and socially difficult structural changes have been made most notably to the public administration. This will gradually increase the country's efficiency and competitiveness, though there effects are not yet obviously to outside of observers.
International focus has often been on policy slippage compared with targets, rather than on the abusiveness of the targets themselves. No other country has ever achieved so much in such a difficult environment while maintaining social cohesion. However, clearly more needs to be done. The new adjustment program provides a unique opportunity for Greece to complete its task of becoming a more dynamic and more equitable and more competitive economy. I'm sure that Greek society as a whole will seize this opportunity as failure clearly means the loss of several decades of development and the isolation of the country on the international stage.
Let's now turn to the challenges of the Greek banking system. The PSI Plus related losses necessitate unprecedented capital support for the Greek banking system of several tens of billions of euros. Greece has already received €25 billion of disburse as a first tranche, effective immediately.
Additional resources are available if necessary once the final recapitalization needs have been determined by the Bank of Greece. Moreover, the current tranche does not cover any capital requirements arising from the BlackRock loan diagnostic exercise of which NBG will not need additional capital. Clearly, these factors can change the total recapitalization needs by several billions of euros.
Another important unknown is the details of the recapitalization framework. These are yet to be determined and will play a critical role in attracting the private resources necessary to keep the Greek banks under private sector management. These will be clarified soon I hope, after the elections at the latest.
The return to growth of the economy requires a well functioning banking sector to provide credit efficiently to Greek firms and households. The recapitalization is a necessary first step. However, the crisis and its consequences create the conditions for a significant change in the banking sector landscape.
Let's turn now to NBG. NBG has been proactive in the crisis. It has implemented a strategy whose aim has been to enhance capital liquidity buffers, reinforce the capital of the balance sheet through aggressive provisioning and tighter underwriting processes, and improve operational efficiencies. Regulatory capital has been increased by about €3.5 billion during the past 20 months, including €1.8 billion rights issue in October of 2010, €1 billion increase in preference shares issued to the Greek state in December of '11, liability management for €300 million in January of 2012, and a retail placement of subordinated debt €450 million August of 2010.
In addition, we have reduced risk-weighted assets by deleveraging both domestically as well as in Southeastern Europe, i.e., loan reduction domestically by €4 billion on a net basis during the past two years, i.e. minus 9%, and by €1.5 billion in Southeastern Europe during the same period, i.e. 16.5%.
NBG has added €2.8 billion of loan provisions only in Greece during the last two years and €3.4 billion at a Group level, bringing the total cost of provisions at 8.7% of the domestic loan book. As a NBG has a highest domestic provision coverage amongst its peers, standing at 61% and 58% for the Group as a whole.
The results of BlackRock exercise underlying NBG's conservative loan approval processes and provision policy as well as its prudent loan restructuring, as it has resulted in no additional capital requirements. It has to be noted that NBG has consistently being conservative regarding provisioning and accounting and tax provisioning.
For example, it took additional provisions of €1.2 billion on non-PSI sovereign related exposures in 2011 and did not take a tax break associated with PSI Plus related losses amounting to €1.3 billion. So, you have got both – you are ending up with a nice figure of €2.5 billion. I am sure that Anthimos will elaborate on this later on.
In terms of operational efficiencies, operational costs in Greece have been slashed by €250 million during the past two years, an and amount which represents 15% of 2009 cost base and further significant cuts are planned for 2012 and beyond. The top line has been supported by repricing of loans, especially on the corporate side, and increase in the spread of 250 basis points, as well as balanced and moderate pricing of deposits, especially in view of our comparative advantages on deposit gathering, gaining market share in deposits even in this tough environment.
Looking forward, NBG plans to raise significant further capital so as to reduce its recapitalization needs. To this end it has submitted a capital plan to the Bank of Greece. It comprises from the sale of the minority stake in finance bank once market conditions permit, the creation of a holding company and its subsidiaries to the Balkans, we called it NBGI, followed by a minority sale in the holding company, the sale of non-core assets, most importantly the Astir Palace Hotel complex, further liability management exercises, and finally, the reduction in risk-weighted assets through various measures including further deleveraging.
To conclude, 2012 will be the critical year for the Greek banking sector and for several significant structural changes. NBG is a strongest bank in Greece with a longstanding track record. It has been at the forefront of change and will continue to do so in the future
I will now hand over to Anthimos for a more detailed overview of over 2011 annual results.
Anthimos Thomopoulos - Deputy CEO: Thank you, Apostolos. Let me welcome you on this call, and thank you for being with us in a very somber day in the history of NBG. As you've seen, we have posted a stupendous €12.4 billion in losses. PSI clearly dominates our numbers. We have conservatively taken a pre-tax charge of €11.7 billion on a nominal amount of €14.8 billion worth Greek Government bonds and state-guaranteed loans. This represents an 80% impairment of the nominal on a pre-tax basis.
Let me stress at this point, that we have not recognized associated deferred tax assets amounting to €1.2 billion as of December 31 for technical reasons. We account most significantly the regulatory treatment of this deferred tax assets will be revisited in the first quarter results.
In addition to the PSI losses, we have taken a series of one-off charges to clean the slate. We have taken €540 million worth of after-tax charges on other sovereign related exposures ex-PSI, outside the perimeter of PSI. As well as another €630 million of non-sovereign related exposures, mainly securities of Greek banks, stock we own in Greek corporates and certain tax losses that we feel that we may not be able to recover soon.
Finally, we have accrued €135 billion of after-tax charges or sovereign indemnity payments related to the recently passed law that introduces significant flexibility in the labor markets. In total, €1.3 billion of additional impairment charges proactively taken to address the need for increased transparency ahead of the upcoming recapitalization season.
With regard to the capitalization plan, as you heard from Apostolos, the details of the process and the mechanics of private sector in participation are in the final stages of being announced by the official sector and we'll mostly likely be concluded after the 6th of May election. Clearly, the guiding principle of the recap, is to provide significant incentives for private investor participation so that the major and systemic and viable banks in Greece remain firmly anchored of the private segment. What we can also say at this point is that the official sector and the bank of Greece have approved a backstop capital advance of €6.9 billion for NBG through the Hellenic Financial Stability Fund.
This is, as you probably you have heard from our colleagues in other banks that are reporting today, this is a preamble to the full recap, which will follow soon. As we speak, the Bank's business and capital plans, together with our loss estimates from the BlackRock diagnostic are being assessed or are in the final stages of assessment by the Bank of Greece in order to arrive at the final capital plug.
For NBG, although our GDP exposure clearly has dealt a big blow to our capital base, we are (indiscernible) with the results from the BlackRock, so that we anticipate little, if any, impact on our overall capital support out of the ongoing assessment of our business and capital plans. So, we're going to be talking on this capital shortfall issue soon, and hopefully, we will have the opportunity to detail you the exact action plan that will be taken in order to (indiscernible).
In the meantime, we continue to execute our capital plan with a singular focus as markets permit. I'm just repeating what you might have seen. We have completed the liability management at the beginning of the year with €300 million worth of additional core equity. We took another €1 billion worth of state preference sales at the end of last year. All this taken together, pro forma for the €6.9 billion backstop, our capital adequacy stands at 8.3%.
In the next two weeks as the recap framework crystallizes, we expect to be able to provide more details on our plan to further strengthen the capital adequacy within the context of the framework.
Our categorical stated objectives are, to minimize the need for government support, safeguard the private character of the Bank and over time reduce our dependency on state aid. We are confident that the track record of this Bank, its fundamental value and its prospects in Greece and abroad will be sufficient to muster the support of our loyal shareholder base in Greece and abroad.
Going to the organic underlying earnings dynamics of the Group, profit after-tax before the PSI and the (on/off) charges just detailed came in at negative €300 million -- €289 million to be precise, on the back of increased provisions, we jacked our provisions by 48% year-over-year, probably the percentage quarter-on-quarter. For the full year close to €2 billion as, obliviously, the conditions in Greece continue to weigh heavily on our books.
Still the Group continues to generate significant pre-provision earnings. At the tune of €2 billion for the full year, that's pretty good result on the back of resilient organic revenues and drastic (indiscernible) of operating expenses.
As you heard from Apostolos and I will repeat it a few times in this presentation, over the last two years, this Group has managed to slash operating expenses in Greece by a pretty significant number, €250 million, 15% of the total OpEx base and there is a lot more to be seen and heard from as the full impact of the adjustment process in Greece is being felt in the banking sector as well.
On the international front, our international subsidiaries, especially Finansbank, continued to support the Group's bottom line, contributing close to €370 million worth of profits, obviously Finansbank being the bulk of it. Considering the fact that Turkish lira has depreciated by 18% the Finansbank number, profit contribution is €365 million, it was a pretty good result.
On the asset quality front as I mentioned before, delinquency flows deteriorated significantly in the quarter, as a direct result of the dramatic contraction on the Greek economy as well as few a lumpy corporate accounts in Bulgaria and Romania. Overall, the Group's 90 days delinquency climbed to 12.2%, pretty much in line with our expectations and guidance.
With the cash and liquidity, post PSI completion, the acute deposit drain that we have experienced since the beginning of this crisis has significantly slowed down. As a matter of fact, since the beginning of the second quarter, we have seen an increase in customer deposits in Greece as panic has clearly faded our way. Nonetheless, our reliance on Eurosystem funding is still significant, but stable and just over €31 billion.
Turning to Page 3, a very quick look at the revenue growth and revenue developments of the Group; Group income declined by 6% to €4.4 billion in the year, stripping out away the effect of the Turkish lira devaluation that I just mentioned. The group income is practically stable, a decline by just 1%.
Similarly NII is held up plus 4% year-over-year down. On a group basis the margin is pretty healthy, 377 basis, mostly due to the resilient top line performance in Greece and Turkey. In Greece, it is worth nothing NII was slightly up for the quarter €635 million, NIM picked up 15 basis, so 330 basis. Please note that this is a real NIM, has been adjusted for the sharply lower into the end of the year as a result of the PSI adjustments. So it tracks the true dynamics and obviously is explained by ongoing pricing and the continuing support of the Bank from the Eurosystem.
In Turkey NII increased to TL529 million to TL550 million, as we continue to grow in the high-yielding segments and reprise the asset side responding to the one of the conditions in the country. NIM continues to expand, it has picked up 10 basis, climbing all the way up to 510 basis, clearly the highest margin performance among all of our private sectors peers in the country.
In Southeastern Europe, both NII and NIM declined in the quarter, at 377 basis of margin impacted by the continued deleverage albeit moderate of our loan book in the region.
On Page 4, on OpEx, I just mentioned that that's the third time we've saved at least €250 million worth of OpEx decline during the past two years. It is worth noting that the increase in domestic personnel is down 8% year-on-year, G&A is 9%, and as I mentioned before, this is only a taste of what is to come as the full impact of the structural form starts affecting the banking industry.
In Turkey, OpEx was flat year-on-year, obviously helped by the depreciation on Turkish lira. In constant lira exchange terms, it's gone up 16%, which is tied and pretty much in line with the expansion mode of business in Turkey with loan growth of 16% and continue increase of footprint with new branches and new operating capacity. In SEE, we continued to decline expenses and OpEx is down, as you can see, by 3% year-on-year.
On the asset quality front, delinquencies – in Page 5, if I am not mistaking, delinquencies have gone up in the quarter, delinquency flow hit a new high at €776 million in the quarter, stemming mostly from our Greek loan books. As a result, our 90-days ratio recorded another steep rise of 120 basis to 12.2% for the Group.
In Greece, in Page 6, you can see that delinquencies have reached 13%, up 123 basis, a rate of growth similar to that of the previous quarter against a backdrop of a very, very sharp contraction in the last quarter of 2011.
Cost of risk has doubled to 530 basis entirely as a result of our increased cash coverage to reach a best-of-class 60%, with pretty wide margin with the rest of the peers.
In Turkey at the end of the last quarter, delinquencies declined to 4.8%, cost of risk decreased down to 106 basis, in line with our expectation for provisioning to normalize closer to 100 basis, cash coverage at 77%, exactly where it should be for this point in the cycle.
In SE, the 90-days ratio stood at 16.5%, and if one, obliviously, takes into account the effect of deleveraging, up by 48 basis. As I mentioned at the beginning, that was driven by few lumpy corporate accounts that became delinquent. I think we are in Bulgaria and Romania and that sort of took (indiscernible) on our delinquency metrics.
On the deposit front on Page 7, Group wise, loans to deposit, 109%, improved by 2 percentage points versus Q3. In Greece loans to deposit firmly at 106%, and obviously not a small fit given the deposit depletion that we have suffered since the beginning of this crisis. In spite of big uncertainty, we continue to defend our market share in core deposit from size, without surrendering to pricing pressures. Although deposits have declined by 70% year-on-year, we have managed to increase market share in saving sides and time deposits in 2011.
As I mentioned, quarter-to-date, we are seeing a much more stable picture, deposit inflows, and a little more stable customer behavior, which may be a signal of normalcy coming back to this country, especially if the political concerns abate post elections.
In Turkey, total deposits are up 22% year-on-year. In 2011, we gained about 50 basis of market share in local currency deposits and 30 basis in total deposits, pretty much what we were aiming at as regards deepening out franchise value in the country.
In SEE, our deposits decreased marginally, but since the end of the year, increased nicely by 6% to €5 billion as of mid-April. Most significantly, loan-to-deposit ratio has come down a full 16 percentage points versus a year ago to 132%, which is a huge improvement to the liquidity profile of the franchise in the region. As a matter of fact, the funding gap in the region has decreased to less than €300 million from over €1 billion a year ago and probably close to €2.5 billion a few years ago, as the business is well on its way to finding self sufficiency.
Page 8 on the capital hit, no need to repeat the numbers. €11.8 billion of pre-tax impairment PSI has installed on our capital base. As I said, we proactively wrote off another €540 million on sovereign related exposures, of which around €200 million came from loan guaranteed – state guaranteed loans and the balance came from our Titlos exposure. We took another €480 million worth of heat on Titlos, despite the fact that we are of the belief that this is a unique level transaction which makes it less acceptable to any further restructuring related action by the republic.
In assessing the amount of impairment, we took a write down all launched to third parties with explicit guarantee of the Greek state that their overall evidence of impairment or the delinquency or otherwise and applied the modest loss rate as of the end of last year for the Hellenic Republic, which was a 30% probability of defaults and a pretty generous 75% estimate of loss should be default tax rates loss given default takes place, loss given before.
On the recap, we currently stand, as I said at the beginning, at 8.3 Tier 1, a Core Tier 1 of 6.3. We expect very little, as I said, from BlackRock and the capital actions we have taken together with the pre-provision earnings capacity of the Bank should be sufficient to recap the bank going forward.
I don't want to spend more time on this presentation. Allow me to reinforce a few points of how we are navigating through the crisis. As you heard from Anthimos, our first priority is to restore our capital base to levels that will allow us to continue our systemic role in the Greek economy. We cannot speak at this point in more detail about the recap process, but as you know, we do have a plan and we have been executing on it diligently.
Our goal continues to be to minimize the state support, and over time, reduce reliance on state as far as possible. Secondly, we will remain focused on broadening the deposit base across the Group, thereby improving our liquidity profile in each and every region we operate. Thirdly, we are tightening the bolts on managing delinquent portfolios through even more effective collection mechanism and restructuring programs. And finally, we continue to rationalize our expense base as a key objective, of course for all regions we operate, but for most Greece as we believe that this current crisis gives us a unique opportunity to reorganize the Group and rebase the business model of our Bank domestically. We are ready to take you questions.
Operator: Stefan Nedialkov, Citigroup.
Stefan Nedialkov - Citigroup: I had two questions. The first one is, when you take a more fundamental look, PSI aside, sovereign PSI, et cetera, et cetera, when you look at your loan book, what is the sector in Greece that you think standing today and looking three years from now which sector will be contributing strongly to growth from 2015 to 2016? Everybody is talking about growth returning a few years from now, I just want to concretize it a little more, being a leader in Greece, I hope you have some news on this? My second question, just as a reminder what are the minimum requirements for the Bank of Greece as they exit currently under Basel II and the accelerated ones, the September benchmark and the summer 2013 benchmark? We have been hearing a few different numbers, so I just want to clarify.
Apostolos Tamvakakis - CEO: You are correct that there needs to be a refocus of the Greek economy to more tradable sectors, the most oblivious sector is tourism in the broad sense. We have lots of very small mom-and-pop type hotel business. It needs to be a more, larger groups, financial groups, there is a lots of land, we need to deregulate the use of land, but there is a great potential for capital to come in and to exploit the land resources of Greece, not just for the two months of August and July, which is where most of tourists come in these days, but for the eight months of the year that we have good weather. Business tourism is part of that, retirement homes is part of it, so that's one sector with large potential. Greece has a trade (indiscernible) port for the landlocked countries to the north. There is another, we have ports which we haven't developed. Agro business again, larger players can lead to better exploits. I can go on and on, but I think that we are here to talk about NBG, so I'll stop here and we can have a bilateral chat if you want on the potential of growth of Greece going forward on some other time.
Leonidas Theoklitos - Deputy CEO: If I can add, I think, there are some others sectors which possibly will be of great interest not only for Greek investors but also for foreign ones. As you know, the energy sector is a sector which is going to attract a lot of attention. Water supply management, also waste management as well, and I'm sure that you'll recognize that the insurance sector is going to change completely due to the havoc that is taking place in the pension system in the country. So, I think over and above what (indiscernible) these four sectors will continue – also a lot of opportunities for investment. Taking your second question, the recap that has already taken place had a backstop advance that was offered to the Greek banks, the four major banks this morning, serve the purpose of ensuring the continuing access of the banks to the Eurosystem, i.e., making sure that under no circumstance the banks' capital ratios fell below 8%. The target will be, however, a 9% core equity as defined by EBA as of end of third quarter and this will go up to 10% in 2013, again under the same definition. I remind you that the difference between core equity as defined by Basel III and EBA is predominantly the inclusion in the latter of the state aid the banks in Europe have received. So that's where we should be aiming that. Let may take this opportunity to walk you through the process again on how this threshold will be met. The banks have asked and have submitted detailed business plans, which have been scrutinized by the Bank of Greece and I would say the official sector at large. These business plans serve the purpose of producing a reliable estimate for a conservative and prudent estimate of pre-impairment earnings, which then are informed with the results of the BlackRock Diagnostic so that the Bank of Greece and the official sector has a detailed view of its banks' ability to generate capital, which obviously factor in the initial position which you've heard this afternoon from all the banks, works out to a capital shortfall. This capital shortfall will be covered by effectively three ways; any further capital actions that the banks may wish to take or may be able to take; the private sector participation in upcoming capital raising; and failing or any shortfall, any (dimensional hold) by the Hellenic Financial Stability Fund which as you know will be amply funded through the second program to complete this objective. As far as NBG is concerned, what we said is that this is a bank that has suffered a lot out of the PSI, but thanks to pretty consistent underwriting standard policies and practices and a very generous and consistent provisioning policy over the last two years, it stands to get practically no further impact from its loan books, from the BlackRock Diagnostic, and it is well-known that it has a pretty strong pre-impairment capacity in a year of ultimate challenge, we'll manage to clock €2 billion worth of pre-impairment income. So, that says a lot about our ability to shoulder and absorb the cycle, the asset cycle and to ensure that further years down the road the bank's position will be fully restored and fully private.
Leonidas Theoklitos - Deputy CEO: From a timing point of view, we are expecting to have some more definitive numbers on the capital requirements within the coming I suppose 15 to 20 days at the maximum. So, we will know exactly within so how much money or further capital each bank is going to require.
Operator: Heiner Luz, Goldman Sachs.
Heiner Luz - Goldman Sachs: I apologize if the question already has been asked. Quickly, firstly, on your ECB usage, can you split how of that is from the ELA? Secondly, looking at your overall setup, are you planning any additional either debt buybacks? I know you have already moved up one step at one stage of buying debt (indiscernible) Q1 or Q2, or any measures which you can probably already outline or give us some guidance to basically close the capital gaps?
Leonidas Theoklitos - Deputy CEO: We presently absorbed €24 billion from the ECB and approximately a little excess of €7 billion from the L.A.
Anthimos Thomopoulos - Deputy CEO: This effectively says that's at the total exposure we have on the Eurosystem, we have no other non-regular operation or net operations. The point that Leo just demonstrated is that after the upcoming recap, that this bank is going to be free from the L.A., and we're going to make the first up to normalcy by shifting all our ECB exposure to normal ordinary operations. I'm hoping that we're going to see better days on deposit inflows and eventually GDP growth and monetary growth in this country. Gradually, we believe that by 2014, we should be able to reduce our overall ECB exposure down to 10% to 15% of our total assets. This is a cornerstone metric and objective under which we plan our business in the next few years. As we get further debt buybacks, I'm afraid that cannot – we are not at liberty to make announcement at this point in time and we will let you know as soon as we can take practical steps to that effect.
Operator: Antonio Ramirez, KBW.
Antonio Ramirez - KBW: Maybe if you can clarify a little on the capital definition. You just mentioned that for the EBA core Tier 1, which is the definition that will be used by September, that would include state aid, so my understanding is that that would be €1.35 billion of preferred shares, that would be considered and then I would assume the backstop facility obviously would be included as well, but I would assume you will try to reduce, as you said, the utilization of this backstop facility? As you said that for next year, I don't think I got it right, what would be definition for Core Tier 1 to get to the 10% next year, would it be EBA as well or would be it be, already on a Basel III basis? Maybe if you can, you just mentioned that you don't expect any material impact on capital from BlackRock, but then to get to the 9%, obviously, you will need more than the €6.9 billion backstop recap. So, considering all the moving parts I guess, it is too early you don't want to give us a broad indication of what's the capital shortfall you are considering? I understand there are still uncertainties regarding the tax treatment of the PSI losses so you have not recognized the totality of these DTAs and also the treatment of the valuation adjustment of the PSI losses that are not related to the nominal haircut, so is there any color you can – even if I know it is definitive, can you tell us your views of how you think this could play at the end?
Anthimos Thomopoulos - Deputy CEO: Okay on the EBA definitions, yes, you are right, I think the key difference between the mainstream core equity definition and the EBA line is going to be in our case €1.350 billion worth of paid preference shares that we have issued. On the backstop, what we said is – we didn't say that we are going to not need or reduce this need. We will need this capital, we need this capital, and we'll take it. What we said, we would try to reduce the state dependency, i.e., substitute the state dependency, the state capital with private sector capital. This is one. Second, we have an ambitious good drastic capital plan. Again, I apologize for not being at liberty to disclose the details of that capital plan, but we have discussed, and Apostolos gave you a very good flavor of what is coming up, which will also contribute in reducing the dependency to state aid. So, we'll get those €7 billion worth of capital in whatever shape or form we decided in the next few weeks, as the recapitalizing work crystallizes, and then we will try to work this capital down through internal capital generation, capital productions, and eventually private sector and government participation in the capital raising that we will do. Now, on the shortfall, you're right, if you do simple math, we'll probably need another €1.7 billion to reach the 9% threshold. Clearly, we have €1.3 billion of deferred tax assets which we have not recognized. That leaves us short by €400 million, but again, I want to caveat this discussion because I don't want to give you or commit the regulator in his own views on what the shortfall of the bank should be, but we are not – by the way, my gut feel, it's only my gut feel, says that, we should not be far away from what we have – we are receiving from HFSF this morning.
Leonidas Theoklitos - Deputy CEO: If I can add, I think Anthimos said correctly. We don't know the exact figure, but it is going to be very close on what he disclosed unfortunately. We are still in discussions with the Central Bank. As you know, these guys are examining our business plans and there is a back and forth discussion and therefore, the numbers could not be crystallized yet, but I think worst case scenario is the number that Anthimos just mentioned. Over and above, as you may know, the deferral taxation issue an issue which is at this very point at the top of the agenda of the discussions with the (big) states, the Ministry of Finance and the Troika's discussion and it seems that possibly white smoke is going to come out within short. If this is going to be the case, as you can understand, this is going to impact a lot of our official results by a good €1.3 billion, which can reduce obliviously the overall capital requirement. So, I think possibly next week we will have a lot more to say on that front.
Anthimos Thomopoulos - Deputy CEO: You alluded to some sort of ability to shelter some of the losses, particularly, the NPV losses beyond the nominal haircut. There has been a lot of discussion. I don't think we should be placing too much reliance on those ideas. I think they will end up, we are where we are. Clearly, investors and market participants will soon realize that as long as Greece stays in the straight and narrow and meets its obligation that 25% or 21% NPV losses will gradually roll up in our P&L as those bonds will become safer to sell, assuming that we continue, as I said, to perform as a country. In terms of the most discussed credit enhancements for these losses, I wouldn't be that hopeful at this point.
Leonidas Theoklitos - Deputy CEO: Yeah, I mean chances are rather poor, at least as, we speak. Some things are changing from – I think (indiscernible) very quickly, but we don't want to give you some hopes which are false.
Operator: Paul Formanko, JP Morgan.
Paul Formanko - JP Morgan: Just a couple of simple questions in respect to the HFSF funds, can they take form of core common equity? Then the second question, how long will these funds be available for Greek banking system, is it for the next three years?
Anthimos Thomopoulos - Deputy CEO: Clearly, it's going to come – the (indiscernible) HFSF or whatever part of the shortfall is covered by the HFSF, it will come at the highest quality possible. It is embedded in the framework that already exists in the broad-based framework in the Greek legislature that will be in the form of common equity, so there is no doubt about that.
Paul Formanko - JP Morgan: So, this will be new shares issuance?
Anthimos Thomopoulos - Deputy CEO: Yes, I don't want to get into the mechanics as voting rights, not voting rights, ability to buyback and all that, this will pan out soon, but the essential quality of capital, it will be of the highest possible quality, full loss absorbed in common equity. The timeframe that we'll stay is up to next five years. As a matter of fact there is no timeframe for expiry for that market. What we have seen so far in the legislation that exist is simply change of voting rights over a five year period, so they don't expire, they are not redeemable at least as far as we know.
Apostolos Tamvakakis - CEO: We could have a chance possibly to buy them back early on. We will know more about that within short, I think the chances are quite high for the banking sector to buyback earlier, but definitely for the next five for years you could counter that – of that amount.
Paul Formanko - JP Morgan: Can you take this form of equity or in different tranches, let's say, by September you take X, about 18 months later you could still take Y?
Anthimos Thomopoulos - Deputy CEO: We just don't know. It is better not to speculate. At this stage, this is a very technical discussion and there are very different constituencies involved, let's wait a couple weeks until everything gravitates to something that we could reasonably discuss with you guys and investors alike.
Operator: Thank you. We have no further questions coming through. So, I'll hand the call back to you to conclude.
Paul Mylonas - General Manager of Strategy and Governance and Chief Economist of the Group: From Athens, thank you very much for joining us for this call. I'm sure that you have a lot of question. So do we. Hopefully, we'll get answers in the next few weeks on the capital framework and I will be discussing with you the developments as they come forth. Thank you very much and good night.
Operator: Thank you for joining today's call. You may now replace your handset.