2Q14 was one of the same – strong on profits; weak on cash flow. We model  working capital increase of E153m in 2014; our new sales delta is at E72m. Capital return of E50m could drive net cash to net debt by year end. If the Dufry stake is worth E2.7 per share the market seems to discount FCF of E164m in perpetuity at the current price. We consider this aggressive…

Net income at E100m in Q2 normalized (RGe) with NIM up in all regions; NPLs +20bps qoq or 23.2% of gross loans (Greece +90bps; ratio at 29.3%) with coverage unchanged at 56%; volumes flat; CET1 transitional at 16.2% offering E6.8bn buffer against ECB adverse stress test scenario; we made small changes to our estimates – PT and rating unchanged; 40% of Finansbank to be sold by the end of 2015.

Pre-tax loss at E233m adjusted for one-offs from E285m in Q1; NIM at 2.0% (+7bps qoq) plus other income boost sent PPP higher; +E260m DTA; NPLs at 31.8% of gross loans, +90bps qoq (Greece 33.6%, +90bps qoq) with coverage +80bps at 51.1% to reach 55% by year-end on our estimates; CET1 transitional at 17.8% offers E4.5bn buffer against ECB adverse stress test threshold; we adjusted our estimates and expect bigger losses this year driven by impairments; better numbers for 2015/2016E; PT and rating unchanged.

Net income at E361m in Q2 turning to losses of E83m if we strip out the +E0.4bn DTA recognized (RGe); NII +2.0% qoq as NIM increased 9bps but lower other income and flat costs lead to flat PPP; NPL ratio at 33.6%, +30bps qoq (Greece 34.9%, +20bps) with coverage +200bps at 58%; volumes flat; CET1 transitional at 16.3% offering E5.8bn buffer against ECB adverse stress test threshold; we accounted for lower impairment in out 2014 estimates feeding into 2015/2016E as well – PT and rating unchanged.

Net income at E164m in Q2 turning to losses of E384m (E331m in Q1) if we strip out various one-offs including additional DTA recognized; NII +4.4% qoq as NIM expanded +15bps at 2.7% but lower other income and higher costs pushed PPP -3.5% qoq ; NPL ratio at 38.5%or +60bps qoq (Greece 38.9%, +70bps) with coverage unchanged at 51%; CET1 transitional at 15.0% offering E5.7bn buffer against ECB adverse stress test threshold; we made small changes to our model;  PT and rating unchanged.