Banca Generali Spa

Good afternoon, this is the Core School Conference Operator. Welcome and thank you for joining the Banca Generali nine months 2022 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Gianmaria Mossa, CEO and General Manager of Banca Generali. Please go ahead, sir.

Yes, good afternoon and welcome to our third quarter results conference call. The overall results over the last quarter were very solid considering the financial market condition and the macro environment. And first of all, I want to confirm that we are all confident to deliver the results of our three-year business plan. But focusing on the last quarter, the commercial results were pretty solid with good inflows, even if with a more conservative mix. While the recurring net profit was very strong thanks to the resiliency of the business and higher contribution of the net interest income. Overall all the capital ratio and liquidity ratio are well above the requirement. So let's start from page 4 on commenting the recurring net profit. The third quarter confirms a positive trend at quarterly level. so the third quarter closed at 55.6, so slightly higher compared to the second quarter, and the overall result year-to-date is up by 24%. Moving on to the variable net profit, you can see an overall negative contribution driven by one-off tax charges that we have already communicated at the end of September, and very pure performance fee linked to the trend of financial markets. We were saying that the net interest income is providing a great support to the overall results. This is pretty clear at page 5 where the net financial income jumped in the first nine months at 108.7. mainly driven by an acceleration of the net interest income. The result of the third quarter stand stood at $36 million, is basically driven by an increase in the yield from $0.75 to $0.89. We will see in the next pages also our new projection for the full year and for next year. Page 6, total gross piece. Also on this side, positive news. Let's say that if we start from the first nine months, the overall total gross piece was pretty sticky with an increase of 2.8%, with the third quarter result at 229%. or minus two on quarter-on-quarter basis. They say that the pretty solid result in the gross fees is driven first of all by very sound management fees, it's page seven, where you can see that the result of the third quarter is pretty stable, quarter-on-quarter, so 202 million euro. on year-to-date is still up almost 5%. Why? Basically thanks to very solid and resilient margins in the first nine months, overall margins stood at 1.42 and we are pretty confident to stay around this level. It's not only thanks to management fees but it's also driven by some components of banking and entry gross fees, the resiliency of the overall result, and I'm at page 8, focusing on the year-to-date result. First of all, very sound result coming from advisory fee up to 26.9, so we continue to see a good interest in such a kind of service. Other banking fees, again, up to 17.9, which of course is not directly linked to the performance of the market. The negative contribution comes from brokerage commissions, but when you work out the two main components, so volumes and margins, volumes are pretty stable on a year-on-year basis. So the result is driven by lower margin due to a more conservative mix in the brokerage activity, so more bond, less equity. And then we have the entry fees down by 9.7 million. You know that in the entry fees you have two main components. The first one is strictly linked to asset management products. It is about front fee, one-off charges. And, of course, during negative performance it is pretty difficult to charge extra costs. And these reductions account for almost 6.5 million euros. The other entry fees are mainly linked to issues of new bonds, structural problems, certificates. Also in this case, I think the good news is about the fact that the volumes are almost in line with last year, while margins are a little bit lower due to, also in this case, a more conservative mix. So, to sum up, once excluding, once stripping out the most volatile and post-cyclical components, the bank and entry growth speeds are pretty stable in line with last year. And even more important, commercial activity is pretty sound. Page 9, we move on to the payout ratio. You know the third quarter typically has some seasonality in the numbers, so it's useful to compare the third quarter of this year with the third quarter of last year. Starting from payout to financial advisor, the ordinary component closed at 34.6%. Apart from the seasonality, let's say that we are confident to confirm our target to stay below 36% in the medium-long terms. Probably in the short-medium, we could be even closer to 35% than 36%. So there is a good improvement and good control of the payout in the ordinary component. Let's say in the cost of growth, Here you see that the number is pretty aligned with the second quarter despite a more conservative mix in the net inflows. This is basically due to some base effect because the incentive is paid in absolute terms. The ratio is out of total assets and of course due to the market, total assets are down on year-on-year basis. If you focus on the payout to third parties, you see a slight decline, 5.7. This is basically due to internalization, optimization of the trading activities and on the other side is the consequence of the reduction of the brokerage in equity products. So overall, the payout is under control, it's all in line with our targets or even better than previously expected. Moving on to the second component of the cost, so the operating cost, starting from the core operating part, is in line with our free of business plan, is in the range of 5 to 6, also once included the Digi-Swiss project. As you can see in the third quarter there is a higher contribution of the GNA and this is basically linked to the focus on all the projects to enhance our free air business plan. So a project about data, about new platforms for our financial advisors to increase productivity and so forth. So we continue to stay very sticky to our free air business plan. and to invest for long-term sustainable growth. Excluding the core operating costs, in the other components you see that the sales personnel cost is slightly lower than the previous quarters. This is basically due to lower contribution to growth and lower recruitment costs. Page 11, operating leverage and operating efficiency, here we confirm the downward trend of the bank and I would like just to focus your attention on the adjusted cost income so once without let's say the more volatile component you see that now we stay below 40% while the operating cost on total assets is slightly increased due to the reduction of total assets. So to sum up this first part of the presentation page 12 We are very proud of the results so far achieved with operating results X performance fee up by 10% thanks to net interest income and resilient margins. Focusing on the total non-operating charges, the overall effect is positive. There is a positive contribution from the upward revision of the discount rate for the indemnities of the financial advisors and this more than offset higher cost for the contribution to banking funds and some conservative adjustment. We already commented the one-off charge for tax, $35 million. And then last comment is about the tax rate. The third quarter closed at 24.4. This is driven by a different mix in the revenues and we have to reset our targets for the three-year plans close to 24 due to higher contribution of net interest margin. Second chapter on balance sheet and capital ratios, page 14. Here no news, good news. So the numbers are in line with the second quarter. Overall balance sheet at 17.8 or 1.6 higher compared to last year and this is driven by client's deposit expansion. Page 1.5 we can see the reason why the net interest income accelerate. It is basically on the bottom left of the page. All the components of the assets have been improving over time. So lower cost of loans to bank, higher yield in loans to clients and higher financial assets yield. and with the cost of funding almost stable. We continue to maintain a conservative approach to the overall banking book with 96% investing bonds, a good diversification in terms of underlying with Gobi bonds, Italian Gobi bonds below 50%, maturity close to four, duration close to one, and the health to collect part of the portfolio increasing over time at 83%. Overall, page 16, we already commented, very solid capital and liquidity ratios. Solid capital ratios also considering that these ratios are calculated on the basis of an implied 79% dividend payout in line with our dividend policy. Total capital ratio closed at 16.8%. CT1 15.7, leverage ratio a little bit lower for the client deposit expansion, as I mentioned before, and the liquidity and stable funding ratio well above the regulatory requirements. So also on this side, I would say no news, good news. Very solid balance sheet and capital position. Next chapter is about total assets and inflows. Page 18, let's start commenting total assets, of course, down, 80.4 billion euro, strictly linked to financial markets. It's pretty impressive also the negative performance of the bond portfolio, as you know very well. Good news on this slide. First of all, asset standard advisory on total assets, very sticky, it's good, at 8.5. And then just a quick comment on the overall contribution of asset measuring products on total assets stood at 68%. This is probably the lower level ever for the bank, at least over the last 10 years. Here I'm very confident that once markets resume, we will stay above 70%, so the numbers we have commented is with a lower penetration of asset management products. This is an upside on my view. Page 19, deep dive on asset management products. Very good results coming from the financial wrappers, so the strategy worked pretty well. Lower performance for funds and particularly from the third party funds, insurance products Also in this case, insurance wrappers down, but down less than the funds. And so again, also in this case, insurance wrappers worked pretty well in terms of client protection and diversification of the portfolios. And so the focus will continue to be on financial wrappers as well as insurance wrappers for the future. Page 20, we start analyzing the net inflows. First of all, total net inflows for the first nine months were in line with two years ago, with 2020, where you can see that basically the overall result is in line with the path, even if the mix is more conservative, as we already mentioned during also the previous conference call, focusing on the asset under management. Here it's pretty clear the positive contribution of the wrappers, both financial and insurance, but with a higher focus on the financial wrappers. The half billion euro of net inflows in the fund is well detailed on page 21. Here you can see that the overall number is lower than expected. but the mix is pretty solid with good inflows in the equity and flexible total return solutions and negative inflows in products with lower profitability like monetary and bond funds. Page 22 there is the usual representation of ESG products, so here the results are pretty impressive, assets almost stable, the contribution of ESG as percentage of managed solutions has been growing over time and net inflows pretty solid also in these first 9 months with an overall contribution of 400 million euro. As you know, it's not just about products, but it's about our commercial approach that is working very well also in a very difficult market scenario. Page 2.3, there is the breakdown of the net inflows in terms of acquisition channels. The contribution coming from the existing sales force is split in line with two years ago. It has been over last year. While recruitment in terms of numbers are a little bit lower than our projection and lower compared on a year-on-year basis. We closed the first three quarters to 79 new colleagues. On top of that you have to add nine junior profiles without a recruiting package. But I continue to be confident with our targets on three-year time horizon because there is great interest for the bank and this slowdown is basically driven to the fact that it is very difficult to transfer clients with important negative performance. Page 24, there is a focus on the October numbers. I would say that October is a turning point for the bank compared to the last few months for two main reasons. Inflows are pretty sound, half a billion, and the mix is pretty good even if the overall result sounds still in line with the previous month. There are two different paths in the month, the first two weeks and the second part of October. In the second part of October, We launched several initiatives and I will comment more in detail but let's say that we start seeing very positive signals from the network. In terms of advanced advisory, the overall inflows stood at €400 million overall since the beginning of the year and recruitment, as I mentioned, recruitment activity slowed down to six new colleagues in October. We are pretty confident to close the numbers for the full year in terms of recruitment very close to 100. So we still see some new colleagues joining the bank in the next few weeks. Now let's enter the last part of the presentation. The new macro and investment environment led us to rethink the offer for our clients to stay closer to our financial advisors and we have just assessed the implication of this new macro scenario to our three-year financial target. So let's start from the first part, so sharing how we change and shift and reshape the product offer and then I will focus on Cardiff. So page 27, this is pretty impressive, in the last few months we have been working to launch a dedicated new offer for the new market scenario and it's about mainly how to manage cash and how to manage risky solutions. On the first topic, how to manage cash, we launched funds, we launched financial wrappers, we launched dedicated new solutions and advanced advisory services to manage the new context with higher yields and we started a deep review of all current account offerings to be ready to be very flexible and optimize the cost of funding for the next year. And we will launch this new dedicated offer on current accounts in the first half of next year. For the block of risky assets, we have launched, in particular with a focus on financial wrappers, a dedicated offer with implicit protection and more flexible activity on the risky assets with also some hedging strategies and the feedback was very, very positive and also in this case we have launched a project to optimize the platform of the financial wrappers to extend the capabilities in particular for hedging strategies and forex and also this new release of the platform will be launched in the first part of next year. Last but not least, we ask the network to focus even more on the accumulation plans, so there is a commercial effort, but there is also, in this case, an optimization of the platform that will be released in the first half of the next year. So on one hand, we are very focused on delivering all the projects during our investor day. On the other one, we developed the dedicated offer and the dedicated solutions to manage tactically the new context. The results from the network are very good, considering that we launched it at the end of the second week of October. Since that day, on average, net inflows on this solution is well above 10 million euros per day. As I mentioned before, two different velocities in the commercial activity in October. Page 28, the resources focus on insurance because, of course, the normalization of yields implies for us in the medium term an opportunity, a huge opportunity in the insurance arena. In the short term, we are reopening some existing traditional life policies. We started also this during October and the inflows are pretty positive, about 5 million euros per day. But at the same time, we are redesigning all our offers, focusing on leveraging the traditional life insurance but directly connecting to investment and protection solutions and ancillary services. This is a very important project. I hope to see the first release in the first part of next year, but let's say more confident after the summer. In terms of commercial activity, rethinking of the offering, we were very quick to adapt to the new environment. We spent time with the network, we launched these initiatives and, as I mentioned, results and feedback are positive. On the other side, we assessed the impact of the new scenario on financial targets for our three-year plan and you see at page 29 some adjustments on the guidance both for this year and for the next year. You remember while we gave three clear objectives with three KPIs, the focus was on consistent growth, profitable growth and remunerative growth. Starting from consistent growth, we confirmed the overall target for the three years We have slightly adjusted the goal for this year in the range 5.56 billion euro of net inflows and we confirm the guideline for next year in the range 6.6.5. In terms of profitable growth, you remember we targeted recurring net profit and we projected a growth rate in the range 10-15%. For this year, we probably closed the year even higher with a range now of This is, as I mentioned before, driven basically by resilient margins in the asset management plus a higher contribution of net interest income. Now we expected a contribution of net interest income for the first quarter above $45 million for an overall result in the range of $130-$135. Also applying conservative assumption in the cost of funding for next year. Now we are increasing our projection for next year with an increase in the range 40-50%. We've been in a range of 180 to 190 million euros for the net interest income. And then we confirm, as I mentioned during the presentation, the payout and the cost guidelines for next year and 2023. Last but not least, we are still confident to deliver on promises the overall dividends in the range 7.5, 8.5 for the four years 2022-2025, thanks to the very flexible dividend policy that we approved during the annual general meeting. And just to remind you that it is made up by two main components. The possibility to move with greater flexibility in the variable components in the range 0-100 and a payout ratio for the recurring components in the range 70-80%. So we are very in good shape, very happy to see this commercial activity and we saw the results and happy to confirm that we are all focused to deliver on promise the targets for the three-year plans. So now I will hand over for the Q&A session. Thank you.

Excuse me, this is the Coruscall conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1 at this time. The first question is from Giovanni Razzoli with Deutsche Bank. Please go ahead.

Good afternoon to everybody. A couple of questions. The first one is a clarification on the On the NII, can you share with us what are the assumptions in terms of rates that are embedded in your targets for 2023? So 180, 190 million euros for 2023, which is a big improvement. And then I assume that the target does not include any contribution of the TLTRO, if that is correct. And if you can comment a little bit more on your deposit beta, because also in the previous conference, and you seem to confirm this, you've been pretty conservative in terms of assumption of the cost of funding. So we'd like to know what are the expectations that you have on these. For example, we've seen one of very large commercial bankers, it's not exactly your competitor, assuming a 30, 40% deposit beta for 2023. I would like to know whether this is applicable also to you. Second question is on the performance fees. Clearly, it's been a tough year, year to date. I was wondering whether for 2023, assuming a normalization or improvement in the condition on the financial market for 2023, is it still possible to assume some contribution from the performance fees in 2023, or in light of how the high water marks has evolved year to date, this is a challenging assumption. And the last one is basically a clarification because you have confirmed the 100 recruitments at the year end. So your acquisition policy does not seem to be impacted by the recent news flow and noise on M&A impacting Banca Generale. I was wondering whether this instead in the medium term may impact the recruiting or the commercial policy going forward. Thank you.

Thank you, Giovanni. In terms of assumption net interest income, let's say that we have a cost of growth that is more or less 50% of the year, but I will hand over to Tommaso to give you more color on the assumption. Why? Because, first of all, we want to increase the cost of funding until the big commercial banks have not done it. So we won't be the first, probably we'll be the last. But I do believe that commercial banks will move and will move during the second quarter of next year. So our assumption there is a sort of 50% cost of the funding. I consider it pretty conservative, but we want to be in safe territory. And then I will hand over to Tommaso. I will answer to the second and the third one, and then I will ask Tommaso to complete. In terms of performance fees, I see room to have a positive contribution next year. I would say that if in normal times you are in the range of 80-100, next year we could be in the range of 30-40 because we have part of the funds that are not so distant from the high water mark level. So we project some positive contribution in case of normalization of the market starting from Q2. In terms of M&A, as I mentioned, now we think to close the year with a number close to 100. It will be in the range of 95-100, closer to 100, hopefully. The rumors have no impact, zero impact, also because you know that whoever would be interested in the bank should know very well that our financial advisors, being the best in the market, must be at the core of all decisions. So any potential interest would be an opportunity for our financial advisors. Also external bankers or external financial advisors, if they have to see an impact, they perceive it as a positive one. So to explain more in details how we work out the net interest income projection for next year, I will hand over to Tomas.

Thank you. So first of all, I would like to specify that we said before, but it's not an automatic repricing of our liability. So today we have a rate zero fixed rate. So we will adjust the remuneration rate only when we need it. But of course, what is implied in our guidance is that the average rate of the year next year will be in the range between 170-180. basis point and the cost of liability will be around 80-90 basis points. That's the most important assumption that we have. In terms of volume, we see a small increase of the assets and liabilities, but that are the most important assumptions behind our guidance.

Thank you. Thank you.

The next question is from Domenico Santoro with HSBC. Please go ahead.

Hi. Hi. Good afternoon. Thanks for the presentation. Coming back to the question of the colleague, I haven't understood whether you have included, you know, the current forward yield curve in the 2023 guidance on the NII, and if not, uh what could be uh you know uh the you know related level of interest income in case rates are gonna go uh higher higher next year uh accordingly you know to the um forward yielding curve and then a question on dividend uh because i understand your dividend policy is very clear and if i follow strictly your dividend policy, we should probably see the dividend policy here going down compared to the one of last year. But I mean, even in the presence of no performance fees, your business is a capital light and you're going to grab more and more earnings from NII even in presence of, you know, no risk with the asset growth. So I wonder whether this is 7.5, 8.5 euro per share over the four years implies also that you can smooth over the impact of this year no performance fees on the dividend and maybe confirm the one last year. Thank you.

Thank you, Domenico. I start with the dividend. You know, we gave a target on a three-time horizon and we have a very flexible dividend policy. And so we are confident to see again a performance fee next year as an initial 30-40 and in two years I think I do expect a normalization. And so we work out a projection and we are still confident to be in the range without changes of the dividend policies. Then I do not exclude that if it is necessary, we can also decide to be even more generous to maintain and confirm the target. That is something that we will discuss in the Board of Directors meeting.

So coming back to NII, let's say that of course our guidance is based on the implied cost today, so that's why we are projecting basically the average ester next year at 180 basis points, 75 basis points. so the impact of the remuneration rate is 90 basis points which means basically a cost around 130 million basically so to have an idea if we say in terms of sensitivity of our asset reliability, we confirm that for a movement of the curve rate of 100 basis points, we have a sensitivity of around 70 million. So if we change the assumption of the curve, that's the sensitivity that we can give to you to make your own assumption. Sorry, I still don't understand. Are you using or not the forward yield curve in the NII progression?

Because...

I guess that Q4 is going to be, you said before, 45 million euros, right? So simply multiplied by four, you basically imply that all the extra NII from rates is going to be offset by increased cost of funding. Well, first of all, we are using the implied forward rate. We are using them. What we said is that, of course, we have implied a remuneration rate of 90 basis points, and the cost which is implied is $130 million. So if we change the assumption of, for example, we have zero, we have $130 million of net interest more.

Okay. Thank you.

The next question is from Luigi Debellis with Equita. Please go ahead.

Good afternoon to everybody. Thank you for taking my question. The first one is on the new managed solution launched in Q4 and expected for staff. Can you elaborate on the management fees margin of these products, how they are positioned compared to the average profitability? of the group. Do you expect to see positive net inflows in traditional life insurance already in November? The second question is on the performance of your products year-to-date. Can you give us an overview of the average performance of the different family of products since the start of the year? The third question on the securitization, can you provide an update on the reimbursement trend and performance of these products? And the last one, just to clarification, the first one is on the tax rate. If I catch correctly, 24% should be the new run rate for 2023 going forward, assuming 30, 40 million of performance fees. Just a clarification on the dividend, if you can provide your best assessment of DPS to be paid in 2023 on 2022 numbers. Thank you.

Thank you Luigi. In terms of margins, the new products on average are in line with the existing ones, so I don't see significant impact on overall margins. On traditional life insurance, we do expect to maintain 5-6 million per day in November and for the first half of December. We have some claims and some maturities, so the overall result should be close to zero. In terms of performance, the level of performance of our clients is in the range of 9-10%. We have, of course, negative performance, higher, more impacted the funds. It is close to 15%, 14-15%, and lower for insurance wrappers and the financial wrappers that we are in the range of 10%. When you have assets under custody, of course the equity part is probably the worst asset class in the range 15-20%. Bond portfolio between 5 and 10% and of course traditional are flat. So the overall is around 9.5%. In terms of securitization, as you know, the UK courts upheld our demand to receive all the documents to determine the fair value. We have received a good part of this information, but not all. So we are seeking a full disclosure from the court at the moment. So the fair value is not worked out. I would say that in terms of performance, I would expect the same performance as the emerging market debt. So if you want to have a proxy, of the asset class, in terms of asset class. In terms of tax rate, I confirm 24. The guidelines for the medium terms should be all. That means if I lost... No, just on the dividend. On the dividend, Tommaso? What is your best estimate?

Best estimate?

My best estimate is simple as that. If considering that it's not me to define the dividend, and it's proposed by the Board of Directors and approved by the Annual General Meeting, I would say that in this year we would apply in an extensive way our dividend policy, pay 100% of the variable components and 80% of the recurring components for this year because you know this is a capital light bank and the remuneration of our shareholders is one of the key goals of our new three-year business plan.

Thank you very much.

The next question is from Gianluca Ferrari with Mediobanca. Please go ahead.

Thank you. Good afternoon, everybody. Three questions. The first one is on the bonuses you have accrued for the net inflows that advisors made this year. If you can give us the absolute Euro million amount accrued in the nine months versus nine months last year. The second is a clarification on the reopening of the traditional life policies Is it a new one or you are reopening some existing G&A savings products of Generte Life? And the third and final one is if you can give us a bit of color on the 2.1 billion net inflows in custody X structured products of this year. How much is in Italian dovies, bonds in general, and equities?

Thank you.

So, if I understand well Gianluca, the first question is a comparison between inflows this year and inflows last year. When I said that the existing sales force, the contribution is almost in line, the recruitment thanks to some good results of the bankers recruited last year is pretty good, is 1.5 billion and we have higher outflows. This is basically linked to some bankers. Consider that the overall churn rate is 1% more or less. So there is a strong sense of belonging of our network. A small group of bankers received an extremely generous remuneration package from competitors and the cost of retention in this case was too high considering the margins and the implicit revenues generated by these bankers because part of these portfolios were basically by institutional investors so we decided to let them go. So there is 200 million euro, 200-300 million euro impacted by this decision of the bank. But at the end of the day the overall performance of the existing Salesforce is pretty sound because you know you should invest more time in staying close to the existing clients and at least find time also to develop new business. And in terms of recruitment, the quality of recruitment is pretty high this year. and part of the result is driven also to recruitment over the last year. We have plenty of potential new colleagues with which we are discussing the opportunity to join the bank, so I'm positive for recruitment for this reason. While in terms of outflows, I'm pretty convinced to see normalization in the next months.

I'm sorry if I can intervene a second. I was more referring to the bonuses you will pay at year-end on the net inflows into asset management products. If I recall properly, you have a threshold at 1.5 for something like that million per advisor. If they go beyond that, you pay a bonus to advisors. Given that the overall inflows in asset management this year are definitely lower than last year, I was wondering if there are some savings on this specific line of the P&L. So you are paying less bonuses at the end.

Sorry, sorry. Let's say that I do expect good numbers in this quarter coming from these new initiatives. Of course, the overall cost of incentive will be a little bit lower on year-on-year basis, but it's almost embedded in the numbers because we allocate the bonuses and the cost of incentives during all the quarters, but I will ask Tommaso to... Yes, of course the cash expenditure will be lower, then we have to consider the impact of P&L

There is the amortization of bonuses in five years, so that's why you don't have the full benefit of the lower bonuses in the P&L of 2022. So the impact in terms of cash will be more relevant and more important, but of course the benefit in the P&L is less visible because What goes into the P&L takes into account the rules that we use to amortize the bonuses basically in five years. That's why we don't have such... So if you look at the number of the nine months, the impact of bonuses in absolute terms are similar because there is this effect.

Okay, thank you. Kuzny?

The next question is from Elena Perini with Intesa San Paolo. Please go ahead.

Yes, good afternoon. I have only one question left. This is about the tax rate. Given that you will have... A higher amount of net interest income and likely, as you mentioned before, a lower contribution from performance fees. Can you provide us with the guidance on your tax rate? Thank you.

Yes, Elena.

Just to complete the answer for Gianluca, because I haven't answered to the mix of the assets under custody, they say that the investments in Govi bonds, Italian Govi bonds, is around 60-65%. And the remaining part is well diversifying other Govi bonds and corporate and financials. In terms of guidelines for tax rate, we set the new target at 24% for the next two years, due to a higher contribution of net interest income. Then, of course, if performance fee in 2024 are very strong, the tax rate will be a little bit lower, of course. But we say that with the assumption of an average performance fee in line with the past, and higher contribution on net interest income, the tax rate should be around 24, 23.5, 24. Thank you.

Okay, thank you very much.

Mr. Mossa, there are no more questions registered at this time.

Okay, thank you for participating to our conference call. Have a great day. Bye.