All divisions contribute positively to quarterly performance with adjusted Group net profit reaching €687 m in 2Q16 which excludes c. €230 m of net non-recurring item: -€216 m of capital gain from the disposal of VISA Europe stake, -€100 m of LLP release, -€96 m of trading gain, +€55 m related to restructuring charges and +€128 m of guarantee fees for DTA conversion in Italy. Adjusted RoTE  stands at 6.6% in 2Q16. Reported Group net profit stands at €916 m in 2Q16 (over 100% Q/Q, +75.3% Y/Y) with RoTE at 8.8%. Adjusted Group net profit equal to €1.3 bn in 1H16  (+28.7% H/H) and adjusted RoTE at 6.4%. Reported Group net profit at €1.3 bn in 1H16 (+27.7% H/H) with a RoTE at 6.4%.
Total assets remain stable at €891.5 bn in 2Q16 (-0.1% Q/Q, +1.9% Y/Y). On the asset side, the increase in financial assets & investments (+€10.0 bn Q/Q) and in loans to customers (+€5.9 bn Q/Q) mainly offsets the reduction in loans and receivables with banks (-€17.8 bn Q/Q). On the liabilities side, the reduction in direct funding (-€4.1 bn Q/Q) and in deposits from customers (-€5.5 bn Q/Q) is offset by the increase of financial liabilities held for trading (+€ 8.2 bn Q/Q).
RWA/Total assets ratio is largely stable at 44.8% in 2Q16 (+0.6p.p. Q/Q, -1.6p.p. Y/Y). RWA increase to €399.3 bn in 2Q16 (+€4.9 bn Q/Q, -€6.6 bn Y/Y) as the result of an increase in credit (+€0.6 bn Q/Q) and market RWA (+€5.4 bn Q/Q), partially compensated by a reduction in operational risk (-€1.2 bn Q/Q). In particular, credit RWA growth reflects business volume increase. Market RWA growth is mainly due to the impact of negative interest rates on models.
Asset quality continues to improve in 2Q16 with gross impaired loans declining to €77.1 bn (-2.4% Q/Q, -5.7% Y/Y), on the back of reduced inflows from performing to impaired loans and higher collections, with the net impaired loan ratio down to 7.5% (-0.4p.p. Q/Q, -0.9p.p. Y/Y) and coverage ratio at 52.4% in 2Q16. Gross bad loans decrease to €51.3 bn (-1.4% Q/Q, stable Y/Y) with a coverage ratio of 61.6% (+0.4p.p. Q/Q). Other gross impaired loans further down at €25.8 bn (-4.3% Q/Q, -15.2% Y/Y).
Starting from this quarter, CET1 ratio pro-forma no longer includes the impacts from the full absorption of DTA on goodwill tax redemption and tax losses carried forward and Bank Pekao minority excess capital calculated with 12% threshold . CET1 ratio fully loaded for regulatory purposes stands at 10.33% in 2Q16 , pro-forma at 10.53% including 20bp generated by the recent disposals (+8bp from FinecoBank ABB  and +12bp from Bank Pekao ABB) and excluding the potential impact of cards processing activities disposal (+12bp). CET1 ratio fully loaded is the result of (i) 2Q16 earnings generation (+23bp Q/Q), (ii) RWA increase (-12bp Q/Q), (iii) AFS (-6bp Q/Q) and (iv) DBO & other (-17bp Q/Q). On a regulatory basis, CET1 ratio transitional stands at 10.51% (+20bp Q/Q, -1bp Y/Y), Tier 1 ratio transitional at 11.30% and Total Capital ratio transitional at 14.02%. On a regulatory basis, Basel 3 Leverage ratio transitional stands at 4.55% and fully loaded at 4.33%.
The CET1 ratio transitional resulting from the European Bank Authority (EBA) 2016 Stress Test would in 2018 stand at 11.57% under the baseline scenario and at 7.12% under the adverse scenario, embedding +98bp and -347bp impact (vs. an un-weighted average impact of +96bp and -427bp within EBA sample)
Funding plan 2016 for €27.6 bn has been executed for about €12.1 bn as end of July.
TLTRO II take-up amounts to €26.6 bn on a consolidated basis . The outstanding amount of TLTRO I was fully reimbursed following the ECB auction in June. Further TLTRO II take-up at the upcoming auctions is being evaluated.