Bper Banca Spa Unsp/Adr

Good evening, this is the Chorus Call conference operator. Welcome and thank you for joining the conference call on the nine-month 2021 consolidated results of the BIPER Group. 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. Montani, CEO of the BIPER Banker Group. Please go ahead, sir. Good evening, everyone, and thank you for joining. I apologize for the late time, which is not the best, but I will try to be as brief as possible, trying to give you the most important information and give you time for the questions and answers. I'm here with the CFO, Mr. Roberto Ferrari, the Planning and Control Officer, Mr. Alessandro Sigomazzi, the person in charge of reporting, Bonfatti, and Fabio Pelati from Investor Relations. The first nine months of this year closed with a very positive result, which I do not want to say they were even in excess of our expectations, but they were not to be taken for granted because of the operation that we carried out that saw our commitment. That was quite of an effort in terms of the number of branches and people and customers that we acquired. Of course, the integration process could have had some impact, some problems, but we could bring everything to successful completion, and the result is very positive. We're very much happy with both the profitability, which continues to grow, and net profit for the period, and also the volumes, asset quality. Asset quality was not only confirmed, but even improved. As far as profitability is concerned, net profit for the period amounted to $586 million, and excluding one-off profits before tax amounted to $417 million, which was driven by growing revenues from an increase in net fee and commission and the placement of asset management and bank assurance products, which went very well, and the ongoing recovery of traditional banking, which we were expecting, but it was not to be taken for granted. The third quarter confirmed the positive trend and closed with a net profit of $84 million, which is very good after paying $80 million worth of contributions to the Italian banking system, which exceeded last year because, of course, the mass of deposits was larger. Then the annualized cost of credit for the nine-month period was 70 basis points, excluding, however, the additional loan loss provisions that we took in the first half of the year. That was about $310 million, if I remember correctly. And moving on to volumes, I would like to underline the following. The excellent retention of banking relations with customers from the newly acquired branches, which bears witness to the successful completion of the integration, in direct funding and the net profit of the branches that we have acquired is good. The expectations we had in the original plan was that the churn rate would have been and instead it's in line with that of the group for the branches we have acquired. There was a very good uptrend in indirect funding and net funding from AUM in the quarter exceeded $900 million. It was $941 million, which is a very important figure for us because it almost doubled the level of the previous quarter, which was $313 million. The loan payment moratoria declined to $3 billion in the third quarter and state guaranteed loans were up 6% quarter on quarter to almost $7 billion. If we focus on credit quality, we can observe that the trend is on a continuous uptrend. The growth NPE ratio is going very well because it declined further to 5.5%. The latest data was 5.7%. But the net NPE ratio was even better because it declined to 2.6% from 2.8%. The stock of non-performing loans in the future will benefit also from the de-risking strategy that we have talked about also on the previous occasions. and we had given guidance of sales for $1 billion during the year. $700 million have already been disposed of. We're short of the target by $300 million, and we are convinced and certain that we will complete this disposal plan by the end of the year. The NPE coverage ratio was further strengthened earlier, to 55.3% versus 51.8% in the previous quarter, so 300 basis points as an improvement. And also UTP's coverage ratio was also significantly up, and so the total coverage is going well. With regard to capital strength, the CET1 ratio is confirmed at 13.7%. with a large buffer versus the current SREP requirement of 8.1%, 125%, combined with a sound liquidity position which is comfortably in excess of the minimum requirements. So I would go over to the various items on the following slides which I summarized in this very first slide, but we'll go into details now. Direct funding reached 97.9 billion, almost 98 billion, of which 89 billion in current accounts and deposits at a very marginal cost. The deposits were down slightly by 0.6% quarter-on-quarter due to commercial actions aimed at reducing excess liquidity and promoting also households' adoption of a medium-long-term investment approach. Institutional funding amounted to $4 billion and was broadly stable on the previous quarter. As far as indirect funding is concerned, on an uptrend, it rose to $166 billion, driven by the positive commercial input. and we of course have to thank the entire organization for the effort. The increase was concentrated in assets under management and bank assurance which as I said before net funding inflows rose to $941 million and almost doubled the level of the previous quarter. This must be underlined because last quarter also included August, which is normally not the best month for this type of placement. And so the results we have achieved is very important. and it gives us, of course, feedback in terms of the future and the near future. What I can confirm is that even though the results have not come, you know, for the month of October, I can tell you that the trend continued positively in October, and it's my conviction and also the conviction of my colleagues around the table that the trend will be confirmed in the following months as well. As far as net loans to customers are concerned, they settled at $76.5 billion on a slight increase since last quarter. And this is also a very important piece of information because in the past we generally had a slight decrease and instead here we have a reversal of trends. and this gained momentum in the latest part of the year with a good increase, and we think that this performance will go on in the last quarter of the year, but we also think that it will accelerate next year, probably driven by investments that are under the national resilience plan and the co-financing that will be connected to it and that some analysts are expecting will increase. be for a large amount. As for loan payment moratoria, they declined to 3 billion versus 3.2 billion in the previous quarter, and 76% of active moratoria, and this is important, are classified in the low-risk range of internal credit ratings. It's important to underline that the default rate of expired moratoria continues to be very low at around 1.3%. As for state guaranteed loans, we have seen an increase by 6.3% quarter-on-quarter, and they settle at $6.9 billion. Moving on to credit quality, we have already hinted at the growth and net NPE ratio, I would remind you that they are 5.5 and 2.6 respectively, and they are going down significantly, and we expect they will go down further by the end of the year. We confirm the 1 billion targets or disposals that we had communicated. The coverage of non-performing exposures, I would like to underline that coverage of bad loans is went from 60.9% in the second quarter to 63, with an increase by 2.1%. UTP loans are at 48.4% coverage versus 43.1% in the second quarter, with a 5% increase. Total coverage of MPEs rose to 55.3% from 51.8% in the previous quarter, a 3.5% increase. And the volumes that you can see here are very good. So the performing loan coverage is in line with the previous quarter, 0.6%. Again, with reference to credit quality, we see that Stage 2 net loan stock at the end of September amounted to $9.6 billion and continued to account for 12.9% of the groups performing loans, and their coverage is likewise stable at 3%. We said that before. We have been very stringent and strict in classification, and we have included in our classification in this cluster medium high-rated exposures to sectors which were most affected by the health emergency. Even though we didn't see any signs of deterioration, we wanted to have a closer focus on them. And so these categories were restaurants, hotels, travel agencies, transport and leisure. Most of this is included in the cluster, and we monitored the situations very accurately. As far as the default rate is concerned, it continues to be 0.8%, lower than last year, so I don't think there's no need for comments there. As for Bad loans average recovery rate continues to be robust and is 6.4% versus 6.9% in 2020. The securities portfolio shows a moderate growth during the quarter. The stock of securities amounts to $27.4 billion, 96% of which is invested in bonds with a duration of 2.4 years. Italian bonds account for 40.7% of the total bond portfolio. which bears witness to our strategy that has always been based on diversification in addition to caution. And Italian government bonds amount to $8.4 billion and have a duration of three years. Moving on to the income statement, as noted above, the first nine months of the year closed with a profit for the period of $586 million. with profit before tax amounting to approximately $417 million. The profit for the quarter was approximately $84 million, which is a very good result taken into consideration. I mean, the impact that the contributions to the Italian banking system funds, and it was $80 million, and... if you consider the contribution to the banking system funds, and this will be more or less the same in the future too. But one-offs include integration-related costs, totaling $94 million, of which $18 million in personnel expenses and $76 million in other administrative expenses. Additional LLPs were taken for an amount of $310 million, as I said before, in the first quarter and first half of the year. Goodwill impairment amounted to $230.4 million. And as for badwill, the badwill that was originated by the acquisition of the 620 branches amounted to roughly $1,128 million, inclusive of $310 million in tax recovery. We will now focus on the net operating income. Net operating income rose to approximately $2.5 billion, supported by the growth in core revenues, by which we mean net interest income and net commission income. Noteworthy was the excellent result achieved in Q3, closing at $892 million, thanks to the growth in core income, which was almost 5% up from the previous quarter. And in particular, there was a positive trend in net commissions, whose share of core income rose to 53% in the third quarter from 45% in the same period last year. So what I mean is that the incidence of net commissions was 53% in the third quarter, which is a very important trend. a piece of information for us that we think we will maintain in the future. So considering that last year we were at 45%, it's been a very good qualitative leap forward. And it is important to highlight that the guidance of $800 million as a whole in net interest income and net commission income was reached and even exceeded. So we had given this as a guidance in the past, and we can confirm it for this quarter. And let's focus on net interest income. The first nine months posted $1,119 billion in net interest income, of which $981 million from commercial activity. Net interest income in the third quarter totaled $391 million plus one third 0.6% quarter-on-quarter, and TLT03 contribution, including the impact of excess liquidity held at the ECB's Deposit Facility in the third quarter, totalled 24 million, and we expect a pickup in the next quarters as a result of commercial actions that we have put in place. On the one hand, we have initiatives to contain excess liquidity, particularly with institutional customers, And on the other hand, we have a very effective commercial strategy in place to promote loans that, as we told you, we have seen an increase in in the latest months, and we expect further developments in the coming months. And as far as commission income is concerned, so in the nine-month period, the net commission income grew to $1,172 million, driven by growth in indirect deposits and bank assurance. Net commissions were on a major uptrend to $438 million, plus 8% quarter-on-quarter, mainly benefiting from increasing AUM and also from bank assurance, but also traditional banking fees continued their uptrend by 5.5% quarter on quarter, driven also by the ongoing rebound in the Italian economy. As far as trading income and dividends are concerned, what we call finance trading income settled at $173 million in a nine-month period of which roughly $43 million in the last quarter. It benefited from positive market performance and also some capital gains on securities disposals in this part of the year. Operating costs totaled $1.6 billion, impacted by $102 million in one-off charges mainly associated with the going concern integration process. The third quarter operating costs amounted to $517 million, down 8% quarter on quarter following the reduction in staff expenses because we did not neutralize it, and so we always have an advantage in the summer. But in this quarter, they went down by 11.6% quarter on quarter. I would remind you that there's a transaction going on that we have already announced to the market, and what I mean is the workforce optimization process that was launched in the first part of the year, which is due for completion by 2024, and it envisages the exit of approximately 1,000 700 employees and a hiring plan. Looking now at the cost of credit and provisions and other items, LLPs as a whole amounted to $715 million and included $310 million in additional provisions. Out of these $700 million loan loss provisions, I would say that most of them did not concern a migration from one cattle from risk class to another On the contrary, that migration was very limited, which bears witness to the fact that the bank is always paying a lot of attention and caution to the provisioning approach. So excluding the additional LPs, the annualized cost of credit is 70 basis points as we had announced, which we're confident will decrease in the future. But I wouldn't say it will in the next quarter because the fourth quarter may be, in fact, affected by some other policies that we are considering to accelerate the risking in the future. So this applies to the future by looking at the future for next year, but it may not apply to the last part of the year. And finally, we should point out that... The bank has a fully phased CET1 ratio of 13.7%. I would just like to underline a few items that are in fact a summary of the developments over this last month. Just three or four bullet points will summarize all of the contents that I have expressed so far. So increasing operating profitability was underpinned by net commissions growth and positive commercial performance. So it was actually underpinned by commercial performance in particular. And I'm saying this with pride because it involved all of the organizations. There has been a very good reduction in NPE ratio. And considering also this integration, so we expect it to decline further on the back of ongoing de-risking. The strong capital position gives room to increase shareholder payout and be more generous on that front. And then I would like to say that the strong results we have achieved in profitability, asset quality, capital position, combined with an enhanced competitive edge that we have reached a with the acquisition of the branches recently, paved the way for the group's new 2022-2024 business plan, which we will communicate shortly. And I think I have been brief enough. I think I have told you everything that needed to be said. And thank you for your attention. We will now take your questions. This is the chorus call operator. The question and answer session is going to start shortly. The first question is from the Italian conference call by Christian Carese from Intermonte. Thank you very much for your presentation. I have a few questions. One is on net interest income. I can see there's some pressure. In terms of spread, you were saying that you are considering some policies to try and contain the pressure. But I would like to understand in terms of evolution of the loan book, what do you see? Is there going to be an acceleration? I have seen it has increased quarter on quarter on the performing side. performing loan side, but I was wondering if you can tell us more about 2022 and the last part of 2021. In terms of asset quality, the big question that we all make is what about the evolution for 2022? Some banks have hypothesized there will be a provisioning increasing with the cost of risk going down in 2022 if I have made my calculations well. your gross NPE ratio is going to be down to 5.2%, 5.3% by the end of the year with the 300 million worth of disposals that you will complete. So what is going to be the level that you want to reach? Because if I have understood correctly, your coverage has gone up during the quarter. There will be some inertial provisions probably also for you to do the disposals by 2022 or further de-risking Would you give us more color about the cost of credit? I expect a drop in 2022 compared to 2021 considering the additional provisions you took. But what about the underlying factor? So do you expect a deterioration or do you expect stability in the next year? And finally, As far as capital is concerned, I would like to understand, are there going to be one-offs in the fourth quarter? And in terms of additional provisions, what do you expect for core equity tier one and what maneuvers will you leverage to have some more room in terms of capital? Well, as far as lending is concerned, we expect loans will increase quantitatively in the last part of the year by about $1.5 billion. As for future developments, we think that growth may be by 2%, but we want to be cautious and conservative. It may even be higher because the demand for loans is growing. very much will depend on the evolution of the National Resilience Fund and the co-financing that some analysts expect will be in the range of $250 billion. So I would give you 2% on average. Then as far as provisions, $715 million is very conservative, very prudent. and it exceeds the extent of risk that we consider internally, but we want to be conservative. In the last part of the year, we will try and focus on whether there's going to be more room for some de-risking transactions, and we will consider that very attentively. In terms of the cost of credit for the future, looking at the trend... We do not have any concerns internally. We may estimate it at 70 basis points. I would give the last question to Mr. Ferrari for the answer. These 70 basis points that you gave us, are you considering just the management of future inflows or are you considering also the stock because you want to to have a stronger de-risking. It's both. Both is the answer by Mr. Montani. Hi, Christian. This is Mr. Ferrari, the CFO. In terms of the CT1, we will have some effects in the last part of the year, but we want to be, you know, we are targeting more than 13% considering also the impacts of one-offs. In terms of headwinds and tailwinds, we expect we will have the benefits from the rollout of the internal models by 2023 on UB, Unipol, and other legal entities, and we expect that will yield 50 basis points of upside. The guidelines from the EBA and the new definition of default will provide instead produce about 20 basis points of negative impact, and so the net impact will be 30 basis points. But Basel III, we have calculated that as well, but we will have to wait because probably the Basel III norms and rules will change. We do not have impacts in terms of operational risk, but we expect 70, 20, 80 basis points of impact on creditors, but we'll have to see when this happens. Thank you very much. The next question is by Domenico Santoro from HSBC. Yes, I've got four questions, but very short. You hinted at the actions to offset the effects of interest rates on net interest income, so What about your core deposits and what the strategy is going to be? What is the percentage that you apply? My second question is on the fees and commissions. So when will the migration of UBI assets over to ARCA products take place? Can you quantify the effect on... fees and commissions and give us color on that, then costs are under the run rate of $320, $325 that you gave as a guidance, and it's quite complicated considering volatility. So could you give us a number in absolute figures? Excuse me, I had some problems Mr. Montani said about the third question. Yes, I was looking at the total costs for the third quarter that were down, that were below the 525 in terms of run rate. Could you give us guidance in absolute terms for next year and also for the future so that we can understand how the total costs will evolve also in terms or as a result of the reduction? of the headcount that will start next year, I presume. And then could you tell us about how much the dividends impacted in terms of basis points? Well, let's try and from the actions, let's try to start from the actions. If you are considering the commissions and fees that we applied, they were very limited. We tried to discourage large amounts of non-operational customers. We did not apply very heavy fees and commissions to limit the excess liquidity we have with the ECB between 22 and 24 billion. We worked a lot to try and increase loans because, to be honest, this is my personal opinion, liquidity is considered as a problem, but I always have on my mind that there are three problems that banks may have problems with. One is credit when it's not conservative, or finance when it's not conservative, and the lack of liquidity. So liquidity is not a problem it's an opportunity particularly if in the future lending will resume you know being strong and so we'll have to be focusing on this and so as far as a precise exact number of operating costs for the future that you were asking about I'm a little bit you know, reluctant to give numbers, but I do not want to be, because you made the question, but on average, I would say that we would have 535 million quarterly on average. It's more or less a commitment that we can maintain. Then you asked something about our car, and the migration is, in fact, in progress, and yes, you were asking about provisions, we set aside two cents per quarter, so six cents as of today, which, if we consider 600 million, is more or less a 30% payout. 535 million costs. Is it before the maneuver, and Mr. Montani answers that, No, it takes account of the maneuver on staff, but not from day one, because, of course, this will be a gradual process. I would like to be more specific. I do not want to give you information before I know it, but we are now going on with the trade unions, but trade union negotiations are negotiations between the parties. We do not know how they will be completed. We will complete it successfully, I'm sure, but the maneuver on staff will be a gradual maneuver, and so the 1,700 employees will be phased out over time, also because if it were to happen in one shot next year, then... we would have a problem. And so Mrs. Simonazzi is adding that as far as rates is concerned, in the latest quarter, as far as customers are concerned, new loans to customers have got rates that are a little bit higher than last quarter, and it's a positive signal that I wanted to convey. Another important thing that I would like to underline is that the analysis about the dynamics of the net interest income is correct, that you made, but what is predominant now is fees and commissions on net interest income. Our bet for the future is going to be on fees and commissions. I think you should acknowledge that the work we made in the last part of the year gave us a boost in terms of fees and commissions. Then we've got $27 billion funding from customers, which is in excess, but it went down by $3 billion in the last quarter, and it was offset by retail funding, which is some sort of a starting point that will enable us to process it in the future, and it will be stabilized in the future if it's processed well. And then there's another question you made about the percentage of conversion – of funds from what we call Pramerica to Arca. Arca is a company that we attach a lot of importance to and that we will invest in. And the conversion was 70% year-to-date. And you may know, I mean, of course, This brings an upside, but you can understand that we've got a business plan underway, and so we will be more clear once the business plan is presented. Thank you very much. Next question is by Axora Guelfi from Citi. Good evening. I've got two questions on revenues, net interest income, commercial parts, you showed a good progression quarter on quarter. But if I look at the spread, it's still being compressed in lending. So now that you've got a different perimeter, can you give a scholar on the trend of the spread and the front and back book? Because I would like to understand better for the fourth quarter. And then in terms of fees and commissions, can you give us details on upfront fees? And then banking fees and commissions, we saw a rebound quarter on quarter, which was even better than volumes. So when volumes are going up, as you expect in the next quarter, will the trend in banking fees probably be even stronger? Mr. Montani is answering. So let's start from the easier questions. You asked about the upfront. And I would say that the bank has historically never... worked on having immediate results, but always worked on building and creating a foundation and the base for the future. This has been in the past and will be the same for the future. As far as upfront fees are concerned, they are lower than 8% in assets under management. On total placements, still they are very, they're even lower than that. So In the nine-month period, I think they were $35 million, so $34.9 million in fees and commissions. And as far as the trend, if I have understood correctly, you said you had a good performance in transactional banking, fees and commissions, and I confirm that we did. And for the future, we expect this trend will be maintained. But I do not understand actually what the question was about. It was just for me to understand that the volumes growth quarter on quarter was not very marked, not very high, but the transactional banking was good. So probably you can expect a larger, better performance in the future. Well, you should consider, Mr. Montani says, that transactional banking is not always associated to volumes so there are lots of items that contribute so for instance cards transactional banking so all of these aspects are being focused upon by our organization for retail customers in general. From UBI, we did not only incorporate the 620 branches, but also the 1,600,000 customers were acquired. And so there's a very close proximity to customers in banks like ours because they develop volumes and transactions accordingly. Mr. Simonazzi from Planning and Control. Azura, you were asking about the back book. So volumes were very much on an uptrend. The front book compared to last quarter, and what I mean is the new loans went from 120 to 130. as against a back book of 1.7. For personal loans, which is another type of product that we are pushing a lot, we are at 5.7. And as for corporate loans, so large businesses, we are at 1.1, 1.2, against a back book of 1.7, 1.8. And then we've got more or less the same also for the other businesses. But if you need more information about the upfront fees, for us it's marginal on volumes totaling approximately $4 billion. since the beginning of the year, even though we incorporated the UBI business unit. Next question is by Giovanni Razzoli from Deutsche Bank. Good evening, everybody. A very short, brief question, Roberto. Can you tell me about the reserves on top of tiering and on top of the, so that we can understand better about the developments of commercial activity in the next quarter. Hi Giovanni. In the previous quarter reserves were 17 billion. Now we have reduced them to 16. So we expect there will be a face down by the end of the year, both because of the maneuvers that we are promoting to discourage direct funding and initiatives to encourage assets under management and also because of the increase in lending that the CEO was hinting at before. So we should go down from 17 in the third quarter to below 16 in the fourth quarter. So if I'm not wrong, Roberto, with each billion less, yes, we've got 5 million more. Next question from Andrea Barcellone. Good evening. I would like to have more clarification about costs. When you gave us the guidance of $535 million on a quarterly basis on average, you also said that for the year this already includes a certain amount for the redundancy scheme that you are talking about with the unions. But it would be more useful for us to have the gross So what is the guidance without this maneuver? And once the negotiations are signed, we will calculate what the upside has been because otherwise we mix the different values and we may risk duplicating the upside. Mr. Montani says, there may be a misunderstanding. Probably I was not clear when I explained it. The number I gave you takes account of the staff maneuver that will be spread out over time, part of which will also be impacting next year. What I wanted to say is that not everything will impact next year. Then as far as the impact of the maneuver is concerned, once the business plan is presented, we'll have a clearer overview of the negotiations once they're closed, and so we will be able to be more accurate. Next question is by Andrea Lisi from Equita. I have a question on probably the contributions to the banking system and also revenues, $850 million. You made $892 million. but I would like to understand with the evolution of the market, can you confirm the level or should it be increased? The quality of the sound was not very good. I'm sorry. Yes, banking system charges. With this quarter, we should be over. I mean, they should be over. There may be some also entering next quarter, but almost... non-significant so we expect we have we're done with the charges with this quarter then you made a question about revenues if we confirm 850 I'm always a little bit reluctant to give it but we may even say 860 next question is by Anna Benazzi from Kepler yes You posted very good results. I've got a question on fees and commissions because this was the best surprise we had and so I would like to understand what was the contribution by ARCA to the net fees and commissions of the group and if you think that, or actually what products do you expect will be well-performing in the next quarter, net of the summer break, what are the products that you're focusing on, and then there's an M&A context that we're experiencing in these weeks in Italy, and so I've heard from your comments that you're very much focusing on the integration of the businesses you have acquired, and also you're working a lot on cross-selling, on the integration of your group, on commercial activity. There's a reorganization in place, considering that there are also negotiations in place with the union. So I'm wondering if you're... In your point of view, in your opinion, will there be... mergers in the future that will involve you. Mr. Montani says, I hope I can answer everything because the quality was not very good. So I'll start from the last part. As I said in the past, we're always very much concentrated on the integration and consolidation internally, and we think that a large part, most of the activity has being completed but you know that integrations are processes that take time and it will take time also because we've got 5,100 extra staff now, and there's adjustments to the contracts and the redundancy schemes. All of these aspects, of course, are time-consuming, and we want to focus on these aspects well. We are very happy with how things are going on. The results did not exceed expectations. They were within our expectations, but, of course, they were not to be taken for granted. On the table, we do not have anything that concerns the M&As. It's not something that we're looking at now. Of course, we're not living on the moon, so we know that the aggregation process is in progress, and we will look at it. And if there are some opportunities coming up that are interesting, we will examine them. But it's not amongst our priorities. I do not remember what the other questions were. so about commissions. Well, we have taken your questions now. So as far as the ARCA contribution is concerned, the contribution was $110 million in the nine-month period with concentration on assets under management and bank assurance protection, as we call it, I would like to underline that the share of the insurance products in this last quarter was very high, 37%, whereas last quarter it was lower than 30%. So insurance products are performing well. And $57 million is going to be the profit of ARCA.

Next question.

from the English conference is by Cruz from KBW.

Hi, Hugo here. Thanks for the time. Just a few questions. So before, in the past, you gave guidance on the run rate of NAI of 400 million a quarter. Do you think we could see that already in Q4 or first quarter next year? I'm not going to ask about fees because I imagine it's more a focus of the business plan and where things are more volatile. with NAI would be helpful to kind of see that run right. Then the second question around the systemic charges. I thought they were retired and expected this quarter. I understand it was due to the deposit, you know, consolidation of the UB branches. But, you know, was there any one-offs in there? And is there any chance, any room to have to book lower charges next year? And then finally, I think in the presentation you made a comment around increasing the shareholder payout. You know, the guidance you gave on the dividend for this year is a 30% payout. Do you have a different number in mind for next year for the business plan? That's it. Thank you.

I may not have been very clear in explaining the system charges. The system charges for this quarter were $80 million. I'm recollecting that for the nine-month period, it should be $126 million, and that's done for this year. So there will be fine-tuning by the next year, but it will be marginal, and it will not change the amount for the period. So for next... year, we will make some more precise estimates, but I think we can expect the same, 125, 130. We will be more precise and accurate with the business plan. As far as the payout is concerned, as I told you, we have set aside two cents per quarter, so six cents year-to-date, which means a payout of about 30%. As for next year, we may expect that this be rounded up, but we will look at it as part of the business plan and we will communicate it once we present it.

And the rest of net interest income?

As far as net interest income is concerned, we can give you guidance that applies to The next quarter, on average, it's going to be around 400.

Thank you very much.

Next question is from the conference in Italian by Adele Palamard from UBS. Yes, good evening, and thank you for your presentation. I have a question on something that has been already hinted at, but I would like to have clarification. Your guidance about the cost of risk for 2022 is 70 basis points, But does this include the core cost of risk and possible potential future disposals? Yeah, we have said 60, though, 60 basis points, Mr. Montagna says. But yes, but it includes everything.

Thank you.

For any further questions, you may ask, you may press. star and one on your touchtone telephone. Next question from the English conference is a follow-up by Hugo Cruz from KBW.

Sorry, just to clarify, the cost of risk guidance that you're giving for next year, is it 60, 6-0, or 70, 7-0?

Yes, I can confirm it's 60 for the next year. But I said that in the next quarter, the cost of risk may be different and so a little bit higher. For next year, 60. Perfect.

Thank you.

Next question from... Jeffrey, Mr. Marco Nicolai. Could you remind me of the sensitivity to Euribor? And then on revenues, you gave a guidance of NII plus commissions over $800 million. And now you said that the NII would be about $400 million. So with the fees and commissions reduced, Despite the seasonality, you made 420, 430 in net season commission. So I think you are over 800, almost close to 850. So what about the future? Is it still going to be over 800 for the future?

Yes. Yes, because...

We included trading also inside. So as a whole, we are at 820. As for the sensitivity, the impact is 50 million.

There are no further questions at the moment.

Mr. Montani, we give you the floor for any further comments to close the conference. I would like to thank everybody. I apologize for the timing. It's quite late time, and you may have had some other conference calls during the day, and so it's late in the evening. But do not hesitate to contact us if you have any further questions. You can contact us and my colleagues, and we will give you answers to all of your questions. I'd like to thank you and have a good weekend. Goodbye. Bye-bye. Have a good weekend.