Bper Banca Spa Unsp/Adr

Good afternoon. This is the Chorus Call Conference Operator. Welcome and thank you for joining the conference call on the BIPER Group's full year 23 consolidated results. 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 the telephone. At this time, I would like to turn the conference over to Mr. Nicola Sponghi, Head of Investor Relations. Mr. Sponghi, you have the floor.

everybody and thank you for joining before i give the floor to mr montani our ceo and the cfo mr santi for the presentation of people bankers for your 2023 financial results please note that you will find our presentation and press release on our corporate website let me remind you that The Q&A session is reserved for financial analysts, so I would request to limit themselves to two questions each in order to give everybody the opportunity to ask questions. Please, Mr. Montagna, you have the floor. Thank you. Good evening. Thank you for joining. I think that in the presentation last time we said that this webinar the situation should have been framed as a positive as positive results and in fact I think I can confirm it because the macroeconomic environment last year was characterized by geopolitical tensions that introduced elements of concern and uncertainty nevertheless thanks to the efforts of the entire structure that I want to thank and that worked very well to make the operating engine efficient and optimize the all of the lines of business, the bank succeeded in achieving excellent results that go well beyond the favorable banking system cycle, confirming its revenue generation capacity. I would say that when I say that it went well beyond the cycle of the Italian banking system, what I mean is that unlike the other banks, We were confronted over these last two and a half years of work, we were confronted with the challenge of uh... achieving the results now while something else was uh... uh... brought forward uh... and i would like to remind everybody of the effort that was made because i really think that that uh... was a precious effort that uh... all of the structure should be thanked for we integrated nine hundred eighty eight branches with the two banks we took over and uh... we've onboarded uh... uh... millions of new customers, 2.5 million, and 1,500 billion of assets and 50 to 60 billion of balance sheet assets. And this is the effort that I was thinking of. But having said this, I would also say that the results for the period went even better than the trend for the entire banking system. 2023 was also a particularly significant year because we were able to complete all, and I would underline the adjective all, the actions that we had set out in the business plan for 2022-2025 that we presented to the market on the 10th of June 2022, which means that we closed the plan in one year and a half that was supposed to be closed by 2025. We did all of the transactions. We completed the 81 transaction in January that was not in the plan, but we did it. So this means that we could complete our business plan in less than two years. and we are absolutely proud of that and that's why i have thanked and i thank again all of the structure both the head office and the branch network that supported us with our customers the year closed with a net profit of 1 519.5 million inter alia net of non-recurring costs that we had already talked about in the nine-month report for $294.5 million in relation to the workforce optimization maneuver. If we did not consider this, then the real net profit, the actual net profit, would be over $1,700 million. And we're very proud of the agreements that we reached with the trade unions, which is a source of great satisfaction for us, because this will enable the onboarding of new resources, favoring youth employment in a logic of generational turnover, The transaction, the maneuver that we worked upon was done because we were convinced of this maneuver and we looked at and to the future development of this bank. Operating profit exceeded 5,260 million, up 39.7% year-on-year, thanks to the steep acceleration in net interest income that all of the Italian banking system benefited from and the positive result in net commission income that was quite good. All of the data that we presented in November during the nine-month report were exceeded The operating cost in the third quarter marked a positive trend. I would say it's an absolutely positive trend, and the operating efficiency is improving. Our cost-income ratio, the recurring cost-income ratio is 50.7% versus 64.1% at the end of 2022, and the number of employees and branches has gone down according to the numbers we had already. presented. Overall funding settled at $289 billion plus 3.9% year-on-year and net loans settled at $88.2 billion up 1.8% quarter-on-quarter. I think last time we talked, we said that we expected by the end of the year the trend would be in line with previous quarters and in fact it was even better The credit quality improvement is confirmed, fully confirmed. The growth and net NPE ratio are respectively 2.4 and 1.2 percent down compared to the end of 2022 when they were respectively 3.2 percent and 1.4 percent. The annualized cost of credit Proved to be steadily down to 48 basis points at the end of 2023. It was 64 basis points at the end of 2022. High capital strength is confirmed with a C to 1 ratio at year end of 14.5%, well in excess of the SREP requirement. Liquidity continues to be on levels of excellence with ratios well above the minimum thresholds. Respectively, LCR is at 161% and NSFR at 128%. The sound capital position but also all of the positive results that I have mentioned were achieved as a collective effort because all of the departments of the bank contributed to this positive performance. So the sound capital position and these results enable us to propose a dividend of 30 cents per share, which is equal to a payout of 30% approximately. I would give the floor to Gianluca Santi, the CFO, who will give the details of the results for this year. Thank you. Good evening, everybody. We'll go into the details of the evolution of the numbers starting from total funding. So direct and indirect deposits, as you can see, we are presenting a growth both year on year and quarter on quarter. We are basically commenting the last quarter now. And you can see that there has been an increased gain in terms of assets under custody. In particular, we had an important inflow in the last period, and we're starting to benefit from a market effect that was supportive. that was supportive, particularly in the last few months. As far as direct deposits are concerned, we can look at the lower part of the slide. You can see that as against the first half of the year when you may remember that we had lost about $7 billion worth of short-term funding, in the second part of the year, in the second six months of the year, we could... a prevent these type of outflows and convert it into partly deposits and certificates and so term deposits and on the other side we also strengthen the duration of our institutional funding by issuing bonds and structuring in this case some repos. This was specifically done to lengthen the duration given the significant weight that current accounts are having on our income statement, basically. And so I would also like to underline net funding in terms of assets under management, 1.2 billion or even more than that, which means that our network could in fact convert the current accounts and deposits into assets under management when they were looking for higher yields. And this is a very important result based on the and also in view of the activities that we will carry out in 2024. As far as net loans are concerned, in the last quarter we had a growth because of some important transactions in the factoring department and area. So you know that corporates develop their own activities towards the end of the year. But also we had some good results in retail with dedicated – campaigns for mortgage loans because mortgages of course are flagship products in our mix of products and then we try to develop that on an ongoing basis then from a point of view of year-on-year changes I would say there's been a drop by 3 billion euros and this drop is reflective on the one hand of a decrease in retail mortgage loans in particular because of the increasing interest rates that did not favor the development and growth in mortgage loans to retail customers. Then there was also a drop in the corporate sector because businesses preferred to use their own liquidity to try and avoid this increase in exposures and to prevent incurring the cost of borrowing. And then the weight of mortgage loans is 50% fixed rate loans and I would say that 67% in residential loans are fixed rates and 20% is floating rates. We can confirm the loan-to-deposit ratio that is very strong at 74%, which bears witness to our attention and conservativeness in lending. In terms of asset quality, once again, we can confirm the indicators that we already mentioned elsewhere with 2.4% and 1.2% in terms of growth and net NPEs. I would underline that there's been a variation in the stock because this year we completed disposals for about €1 billion, of which €820 billion worth. is VAT loans and the rest is UTPs. This, of course, has shifted the composition of these ratios a little bit. And then there's another important thing that is the coverage. Coverage is once again strong, even though a little bit decreasing compared to prior periods because we disposed of high vintage high coverage loans, and so the coverage of the loans remaining is, of course, a little bit lower. There's another important change that I would underline. You can see there's a reduction by $800 million in Stage 2 loans. This variation is due to a So bulk reclassification to performing loans of the stage two loans that had been classified as such during the COVID period. I'm referring to the hotels and tourism sectors and the reclassification of these stage two loans, of course, brings about a positive change in terms of stage two stock. As far as the portfolio is concerned, as we had already declared in other presentations, our intention was that of reducing the stock. The objective was $2 billion that we could achieve by the end of the year. We worked particularly on the government bonds, Italian government bonds, by reducing their amount. And so, of course, the coverage also has changed significantly. with an increase in duration that you can see reflected in the central part of the slide where there has been a change because the hedging, of course, has had an impact. As you can see, the yield, quarterly average yield, The portfolio is once again on an uptrend in the fourth quarter of 2023 and settles at 3%. Moving on to the P&L, we wanted to present the two versions, so the accounting part and the recurring part. P&L where we have reversed the impact of the redundancy fund. or the early retirement fund that we, of course, had the impact of in the last quarter of 2023. We have given you the impact in the guidance by $300 million, and in fact it was $294.5 million with a tax effect of $82.6 million. And this is the only difference between the accounting and the recurring P&L. I would move on to net interest income now, where you can see the evolution in slide 15. You can see that net interest income is once again increasing in the last quarter. We may comment that on a quarterly basis, because you may know that the P&L of Karije, and actually the consolidation of Karije's P&L, has been there, so to say, since June, so since the third quarter of 2022, so the scope is not like for like, so to say. But this plus 4% is reflected in the chart on the right-hand side of the slide, with the commercial part contributing 18.4%. If you remember, There was a subsidy, so to say, that were given to the population hit by the floods in the third quarter, and then there's You can see the details there and there's going to be a penalization of 40 million in terms of net interest income. We are lengthening the duration of funding and there's a positive contribution from the securities portfolio. We have separated the TLTRO effect Because next year, actually in March this year, we are going to repay the last tranche of $1.7 billion of the TLTRO. And so there's not going to be any contribution from the TLTRO anymore. The spread is increasing, continues to increase. And in the last quarter, there's 18 basis points. We're giving this view of the spread net of the echo bonus effect, because otherwise it would be 3.55, net of the echo bonus effect, 3.55%. as for net commission income once again we confirm the guidance that we had given we thought of a generation of 500 million worth of net commission income on a quarterly basis and we confirm that we have over 2 billion for the year and the good performance in that year is due to the performance in insurance with the commission bonus Because of the levels of production that we achieved, $25 million is accounted for by that, and then assets under management and assets under custody. Obviously, on the one hand, there's the effect of... net funding, $1.2 billion, and then there's the placement of government bonds in the last quarter that accounts for $4.7 million and then also good placement of certificates. As for the net commission income from traditional banking, I would say that the good activity and performance of businesses generated part of the net commission income for about $5 million that also contributes to this trend. As for operating costs, we have already mentioned the 294.4 million worth of the HR maneuver with 49 million being accounted for by the renewal of the labor agreement. If you remember, we were speaking about $100 million, and $100 million is the effect that we're going to have in 2024 because it will cover for the entire year. So $49 million this year and $100 million next year in 2024. Then as for the other items, the increase in depreciation and amortization reflects some write-offs in association with Carige, and this is real estate write-offs and hardware and IT write-downs. And then as far as other administrative expenses are concerned, we continue to invest in development projects, digitalization projects, and these costs are associated to the over 100 projects we are developing in relation to technology. Just a few words on cost income, which is now 51%. There were very important actions taken in terms of headcount. About 1,891 people exited as against 700 hired, so the turnover has changed. The branches were down by 278 with the details being accounted for by the takeover of Banco Dejo and other close downs during the year effect out in the business plan. As far as the cost of risk is concerned, we've already mentioned the indicators. We're at around 50% NPE coverage, 53, and we can confirm the cost of risk for 2023 of 48 basis points. There has been no deterioration of credit coverage. and that had been expected and because of the deterioration in interest rate and that increase in interest rates but potentially we wanted to put fifty basis points almost because as we said in the past we want to be ready for any type of changes in the scenarios. We once again confirm the total cumulative overlays of up to 277 million euro. In the first month of 2024, we have already talked about that, but there's going to be a different management of non-performing loans from the very beginning of this year, basically, because we have developed with Guardant an initiative that is going to be 70% owned by Garden Bridge and 30% by Beeper, whereby we're going to manage a stock of credit for an amount of $2.2 billion with a servicing platform. And on top of that, we have signed a 10-year servicing agreement that envisages the management of this platform, the management in this platform of new UTP inflows and new BAT loan inflows. 50% of UTPs and 90% of the new BAT loan inflows will be managed with a capital gain of 150 million. Just a quick comment on liquidity. We confirmed the total eligible assets of around 30 billion and I would like to underline that there are deposits with the UCB for an amount of 9.2 billion. The LCR is of around 160%. It's a little bit higher than the guidance we provided because we would like to go to 140 150 percent because we are of course getting ready to repay the uh last chance of the lta tltro in march so the indicators the liquidity indicators are very robust and moving on to the capital walk here near you can see here that there's an organic generation of capital that is very substantial The only item that I think is quite interesting to comment on is calendar provisioning. We have gathered some of the guidance and indications that came from the supervisors and we've closed a shortfall we had in calendar provisioning for 2023 and 2024 as well. So now our position is and this achieves no impact from calendar provisioning. At this point, I think I have completed the presentation. I will give the floor again to the CEO. Well, before I give you some guidelines on the outlook for 2025, Which I will go into soon. I would like to add just a few things on the transactions we completed. When I said that we closed the business plan, then I now listened to Gianluca who was speaking about Carice. But it's true. I mean, Carice's transaction also was completed. There are some questions coming up. every now and then. To what extent has it been completed? It has been completed 100%. Of course, we're fine-tuning some little things as always happens, but the project to us is closed. Having said this, coming to 2024, We're just at the beginning, so I'm not being prudent. I'm just calculating based on what I have on the table. So the bank worked very well, also to lay the foundations for a solid future. We expect in terms of net interest income to have a trend that is going to be a little bit going down for a number of factors, the compulsory reserve, the effects of the TLTRO. there may be a little bit of a contraction in terms of the trend also in the interest rates and the curve. So even though there may be this slight contraction, we are absolutely convinced that whatever is lost on this front if any, will be made up for in terms of net fees and commissions, particularly in the area of assets under management. I told you that there's also a program and project we have launched for Banca Cesare Ponti that is going to be initiated and kicked off in just 10 days. It's an area that will work together uh intensively on last year and even the year before and we have gained market shares and i think we will be able to um you know to to to to be at full speed soon uh as far as the operating costs are concerned we are confident they will be in line with the costs we had this year or last year and as far as net profit is concerned Net of the $380 million of DTAs that of course inflated the net profit compared to the recurring net profit. Everything is recurring, but the real truth is that the DTAs will not be there next year. So net of the $380 million worth. of TTAs, I think we would be in line with that profit we had this year. So this is going to be more or less the range we're going to fit ourselves in. 50 basis points should be the cost of risk or or at least stable with what we had this year, and net profit is going to be stable, and the CET1 ratio is going to be over 14.5% that we had this year. And so this is the data I can give you now. I will try to update you as far as we, you know, in progress. But I have completed the presentation, and we are willing to answer your questions. This is the course call operator. We're going to start the question and answer session now. Anyone who has a question may press star and 1 at this time. 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 one at this time. First question is from the Italian conference by Mr. Giovanni Razzoli of Deutsche Bank. Please go ahead, sir. Good evening. I would like to have two questions. clarifications when you said 23 basis points that you recorded in the fourth quarter of 2023 in slide 21 in terms of the calendar provisioning can you clarify a little bit what assets you are referring to and can you give us some further guidance and then When you talked about the $380 million worth of DTIs, now you do not have any DTIs of balance, and that could be a buffer for the future.

So can you give us more color about the DTIs, please? Mr. Santi answering.

Of course, Giovanni, we were referring to loans. So calendar provisioning envisaged a certain extent of amortization of these loans are evaluations different, but in a prudential logic, We are leveraging capital, and so that's why we're amortizing this difference, which does not happen in terms of income statements, because we think we will make up for them. So you have this correction in terms of capital, but not in income statement terms. And then we still have 46 million GTAs remaining. Thank you. Next question is from Andrea Lisi of Equita. Yes, thank you for taking my question. My first question is about the net profit guidance you're giving and I would like to ask you for clarification. Does it include the 150 million capital gain contribution from Guardant or does it not? Then can you give us guidance about the trajectory for dividends that you expect from now on and is it reasonable for us to project the same trend line for the future or do you think that you may do something different in the future and then in terms of net interest income Can you give us some further color about your assumptions? So in terms of evolution of interest rates and beta on deposits, and then I understand it's quite early, but can you give us some assumptions for 2025 as well? Well, as far as the net profit guidance, of course, the guidance we gave you is recurring, so it does not include the capital gain on the platform. Then in terms of the dividend trajectory, it's quite simple. We're still working on the business plan we're presenting, and so we had given some guidance for the end of 2025, but now we're We are 30% done. We are on a linear trajectory. compared to the business plan. And so as we said before, the business plan will need to be updated. It will be updated. The board, our director's mandate is going to expire and then probably the new board will update it. But we are in line with the business plan and having completed 30% in 2023, I think we did some good steps forward. and we'll go on in this direction mr santi is adding that as far as the interest rates are concerned we have closed the 2023 uh with an average interest rate of 3.4 and so we the the assumption is 3.6 which means that uh Now the interest rates are going up a little bit, and so our assumption is 3.9, but we are witnessing a 0.25 decrease every quarter, which means that in the end we will have a 3.6 on average. This is the approach we have adopted. The beta is flat, and with the actions we have initiated, I think you may remember that our sensitivity was 100 basis points. With 100 basis points shift was 80 million in September. Now we are at 35 million. which means that the hedging action made it so that we were close to $8 billion in September and now we're working on a stock of $12 billion. This is the view of the interest rates we have and how we're moving. The coverage, of course, moves accordingly.

Thank you.

Next question is from Marco Nicolai from Jefferies. Good evening. I would like to focus, if possible, on revenues. If you think of revenues beyond 2024 going into 2025, even though it's far away, but if you look at total revenues, do you think that higher commissions may offset the lower net interest income effect and this is my first question then second question is what is the scenario interest rate scenario that you prefer of course if they if interest rates continue to be this high there may be a difficulty in terms of asset quality and also the pricing curve maybe but if they go down you will lose interest rate income, net interest income. So what's the best level interest rates should be at? And then if you could tell me more about sensitivity because I was not clear on what you said before. Well, Mr. Montagne is answering. Yes, I think the revenues are sustainable. It may be too early to make forecasts, as you said, but based on the experience we have gained over these last few years, I think we are more familiar with that network, both the historical network and the network we have acquired with the murders, and I think we have very important opportunities for increasing and growing. then what's the preferable interest rate scenario? Of course, I would say if they go up, it's better. But then I should also say that, first of all, the scenario we have today is much different from what we had in the past because now it's regular. It was not regular when the interest rates were below zero. that was more of a Japanese scenario. Now, of course, if interest rates go up, for sure, there may also be some inconvenience, as you were saying before or hinting at, and it's possible. But we must also say that, as the others did, we have been very prudential. We were very prudential in the past, and that's why Sometimes we were penalized, and sometimes also in your questions, you were saying that we were being too prudential, the cost of credit was too high. The policy we adopted in the past was very conservative, but now we've got some lines of defense that we have set up so that If the scenario of the interest rate goes up and, of course, it brings about some inconvenience in terms of quality of assets, I think that we are very well equipped now. I would also say that even though the scenario I expect or that I desire is a scenario with the interest rates ranging between 2% and 3% because that would be normal, I think that there's no opportunity for seeing higher interest rates, even though it's true that the interest rates have increased a little bit. But looking at the short term on a quarterly basis, the hikes have been minimal. So from November, I would say that the scenario has been quite stable. But Gianluca may add something in terms of sensitivity instead. That was the third part of your question. Well, of course, if today's sensitivity is minus 100 basis points, minus 35 million, it means that if the interest rates go down by 100 basis points, we will lose 35 million. Whereas with these interest rates, we're gaining, matching the drop in interest rates coverage and the effects on the... on loans, it's not easy. So the message we're trying to convey is that we are bracing ourselves for a drop of 25.25 basis points on a quarterly basis in 2024. What message comes from our models? I told you 35 million from a minus 100 basis points scenario is one thing, but the economic value works on 200 basis points level. And in September, with minus 200 basis points, we had a loss of 500 million value, which means that the fair value of assets and liabilities as compared to this trend in rates would have given 500 million worth of a loss. Now we have a minus 100 which means that we are preparing ourselves for a decline in interest rates with a flat beta that has been and the model that is estimated with at a 75% retail or 70% retail and 30% corporate of less than 10% So these are the assumptions that we are using for the evolution of net interest income.

Next question is from Fabrizio Bernardi from Intermonte.

good evening everybody sorry I got connected quite late so by reading your press release I was saying that there's a proposal for a cash dividend of 30 percent no I'm sorry 35 percent payout and 30 cents dividend I have perceived that some may have already asked for about some questions about the payout you expect for the future, but would you be so kind as to repeat what the guidance was? Because it's a point in time here where many banks have a very substantial remuneration policy or dividend payout policy for their shareholders, whereas yours is quite low. I was expecting something more. So honestly, I would like to understand what calculations underlie these 30 cents per share that you're giving. Well, maybe you were not yet with us when we said that thanks to the positive trends that we observed in the overall scenario and in capital, we have resolved the upon a dividend of 30 cents, which is a payout of about 30%. I am sorry you are judging it as being low. We have made our calculations. We should start by saying that two years ago we gave 0.6, then we gave 0.12, and now we are at 0.30. The business plan was set out where we had planned for a certain growth trend with a payout of 50% by 2025. So we are probably even ahead of time compared with the business plan. What were the calculations we based ourselves upon? We based ourselves upon a certain level of capitalization that could guarantee for the development of the bank. Probably you were not yet connected, but I was reminding everybody that the bank really made a substantial leap forward in terms of... a number of branches, the 2.5 million customers that we have acquired, and all of this effort was made, and for sure we worked intensively in line with the business plan. What are we planning for the future? We're still basing ourselves on the business plan that we presented on 10th of June 2022, and this is what we have on our website. tables and this what we are we keep following up on and we're pursuing the objectives we set out in the business business plan we said that the business plan will need to be reviewed and it will be reviewed this year it's quite probable that it will be reviewed shortly but the board of directors are term is going to expire in April so it's not going this board of directors reviewing it probably and the next board of directors will and based on the new business plan the bank will be more accurate in terms of payout as well but so far we have been complying with what we promised and I hope that you have understood what the intentions are that we have Of course, we want to favor our shareholders, but to do that, we need to maintain a solid capital, solid liquidity, and we want to have a bank that can look to the future because otherwise it would be impossible. We do not want to give a good impression and then not be successful in the future. We would like to continue growing. I would underline that up to two years ago, the bank was completely different. No, I understand and I thank you for your answer. I was referring to the fact that common equity is quite... sizable because it's fourteen point five percent yes I do not want to interrupt you but I was being provocative a little bit I understand and I thank you for your question I understand very well we've got fourteen point five percent common equity but we also have to look around ourselves up to two years ago, I would have said it's extremely high. But when I look at the common equity of the other banks, they are all at very high levels. So I could also expect that maybe tomorrow morning the ECB may be asking, may be making their own request, and that's why we want to be safe. And I'm looking to both Italian peers and international peers, and so we want to have a sustainable growth. But I understand what you're saying, but when a bank has got a good capital position, then there's more certainty for the shareholders for the future. Thank you very much. Next question is from Noemi Pirog from Mediobanca. Please, Noemi, you have the floor. I would like to have a clarification about sensitivity 2023, net interest income was up 78% year-on-year with 300 basis points, over 330 basis points of viewable And that's courage to be taken account of, but for sure the increase has been sizable. Sensitivity implies a 100% reduction in net interest income with interest rates going down by 100 basis points. So there's a very substantial adjustment that I would like to ask for some details about. So I would like to know more about the hedging and what instruments or tools you're using and what duration you have adopted and what with the new model you have and what about the beta? Is it the same as in 2023? Is it higher? Well, Mr. Santi is answering. We have given all of the information. We're working on $12 billion worth of stock with assets and liabilities. We're not giving the details about that. We're working with a visa that is the same as in the last quarter of 2023 because we have analyzed... the beta and it has not changed at all and we gave you the interest rates i can give you details quarter by quarter but 3.8 in the second quarter 2024 3.55 in the third quarter 2024 and then we think we will land at 330 in the last quarter of 2024 so these are our assumptions Thank you very much. Just a follow-up question on your deposit beta.

Can you give us some more details?

Probably I lost the details before, but average beta for 2023 and beta for the fourth quarter of 2023. I would confirm what we said. We are basically at below 10% retail plus corporate, beta, which is what was generated in the first half of the year and was not modified in the second half of the year. It's been flat, actually. It's always been around that level.

Next question is from this channel, from Hugo Cruz.

Hi, thank you for the time. Can you hear me? Thank you for the time. I have three questions. One, on the NIA, a couple of clarifications. So first of all, the Emilia-Romagna moratoria, is this just a one-off in Q4, or do you expect an impact in later quarters as well? Also on NAI, can you please talk about the impact of the eco bonus more? I mean, it's been the benefit keeps going up. What are you assuming for 2024 and when you expect to fully lose this benefit? Then on capital, do you expect any positive or negative effects in 2024 from regulation? and if you could give guidance on Basel IV for 2025. And then finally, with the new board, do you expect that they will announce a new business plan or it will be more of the same? Thank you.

There was a problem with the fourth part of your question, sorry.

Perhaps on the new board? You know, you talked about that they will revisit the capital distribution targets, but I was wondering if they might revisit the entire plan and come up with a new business plan later in the year, or it's not something that you expected.

As far as the moratoria that were granted to Emilia-Romagna, we confirm what we said and we do not expect any further implications. Then as far as the ECO bonus is concerned, the amount is $180 million and we will see what we can do this year. But as far as capital is concerned, for 2024 the only thing we have is battle four. for 2025 but we will evaluate if something can be brought forward to 2024 but we cannot and then your last part of your question was about the new board that was going to be appointed by the shareholders meeting in April and as I was saying before as for the new business plan and the payout well the bank had already declared in the past that the business plan would be reviewed, revised, And this is what we communicated. The plan was for 2022, 2025. So this would be the case. So it would be revised, but it would not be revised by the outgoing board. It would be revised by the next board. And so probably the board of directors will revise the plan or communicate a new plan and the payout will be communicated. But as far as we are concerned, We are basing ourselves on the business plan that was envisaging a 50% payout by 2025, and we're progressing and advancing based on that plan. But, you know, everything else will be considered by the new board.

Okay, but in terms of the ACCO bonus, can you give a bit more clarity? What do you expect in 2024, the impact?

The impact of the ACO bonus on the year was 180 million in 2023.

Okay, thank you. Grazie.

Next question from the Italian channel, from Adele Palama with the UBS. Good evening, everybody. I need some clarification about the revenues for the fourth quarter. There's other revenues and operating... I'm sorry, other charges and revenues... Are there any one-offs that we should consider and then guidance for 2024 in terms of tax rate? You mentioned Basel IV. Can you give us the impact of Basel IV that you expect for 2025? Then I would like you to confirm that there are no other moving parts in terms of capital and other headwinds on top of Basel IV. As far as Basel IV is concerned, there's nothing else I would report on top of what I said before. So about 50 basis points, that's what is shown. And then in terms of revenues for the fourth quarter, of course, yes, the charges and the and income are one-offs. But Mr. Sant is adding, if you were mentioning other income and expense, 63 million, Yes, almost all of them are one-offs, but I would give you the two or three most important components just for you to have an example. For instance, $100 million is the capital gain from the disposal or the sale, actually, of tax credits when we are replenishing the buffer. Then there's... The resolution fund that had requested us to contribute and then they reduced the amount. Then there's another item, but it's a long list. It's a very, very long list. Basically, most of them or many of them are one-offs. What about the guidance for the trading income for 2024? 20 million per quarter, or is it going to be more? As far as the fees, I'm not speaking about fees, but trading income. Yes, 25 million per quarter, positive.

Roughly speaking, yes. Next question is from Marco Nicolai with Jefferies Bank.

Yes. I would like to ask Mr. Montani, following some announcements in the press by your major shareholder, do you have any hypotheses or information that you can talk about, about the renewal of the border? Well, you know, I do not like commenting about the communications of others it's up to them what I know is that we have a board the board's mandate is going to expire soon once we have the slides or lists then the considerations can be made for as far as I am concerned I can tell you I am very happy with the successful transactions we completed, with the mandate that we were assigned that was successful. There's no agitation so to say on the part of anybody. We are waiting for the Final part and the conclusions of it. Mr. Spongi, gentlemen, there are no further questions. Well, there's a question from Mr. Tomaselli of Societe Generale. Thank you for your presentation. Good evening. I have two questions. Actually, it's one question and one clarification. The first question is about the amount of assets under custody that is quite substantial compared to assets under management. So I would like to... understand whether you have identified and quantified how much of your assets under custody can be converted into assets under management and how long it will take. And then my second question is I have not understood What the growth will be for net commission income in 2024 in the two scenarios of the net interest income being flat or going down. As far as assets under custody and assets under management are concerned, well, the bank has never lost anything in terms of assets under management or custody, which means that everything remains within the perimeter of AUM and AUC. But this must be done by looking at and being respectful of the positions of our customers. So it's not that we can, you know, decide a priori what type of conversion rate there should be. The bank historically has never lost any funds in either assets under management or assets under custody, direct funding. So we have grown substantially, as Gianluca was saying before, uh you may have seen that uh there has been a good growth and it depends also of course on the trend in the market there are some issues that are uh yielding well well and so we will go on with the projections we've had so far but as far as uh commissions are concerned for 2024 we have not given guidance but we are on the 7th of february so We are at the very beginning of 2024. I may have said that as far as net interest income is concerned, for sure, considering that there's no compulsory reserve, there's no interest on TLTRO anymore. Of course, there may be a decline. It may also be possible that the interest rate goes down more than expected. I said that we are projecting a growth in terms of commissions, but if there's a slight decrease in net interest income will work. intercepting the exits or the outflows that we will have on that front by converting it into assets under management so we know that this is possible if we had if we had to lose something on one front for sure will intercept and capture what we are in terms of exits by converting it elsewhere. But assets under management has always been one of our focus points and Cesare Ponti's project is going to pursue the same objective and it will be successful. Thank you very much. Mrs. Santi is adding that you should also take away the deposits from Unipol. Unipol has some shares of Beeper that is deposited with us and part of their bond investments are deposited there. So part of those assets are Unipol deposits and by stripping that, then you can continue, I mean, you can calculate your commission evolution, decommissioned evolution. For any further questions, you may press star and one on your telephone. Mr. Spongy, gentlemen, there are no further questions. I would like to thank you. I would remind you that for any further clarification you may require, you have the contacts that you can get in touch with. So do not hesitate to contact us for any further clarification. Thank you. Have a good evening. Bye.