Good afternoon this is the Chorus Call Conference operator. Welcome, and thank you for joining the Banco BPM first half 2021 group results conference call. As a reminder, all participants are 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. Roberto Peronaggio, IR Manager of Banco BPM. Please go ahead, sir. Thank you very much. Thank you, everybody, to be with us today for the presentation of the first half results of the Banco BPM Group. As usual, let me remind that you can find the presentation on our website in investor relations page. After the presentation of Mr. Castagna, there will be a session of Q&A reserved to financial analysts. Now, I leave the field to Mr. Castagna. Good evening, everybody. Thank you for being with us. I will be as quick as possible. I know that it is 5:00 P.M. of August, everybody is ready to leave. Very good results for our first six months, especially in this quarter. Operating performance, which allow us to reach a very strong but also consistent EUR 361 million of net profits stated, which will be EUR 382 adjusted. Let me remark that this is higher than the market consensus for full year 2021. Asset quality is still improving. You already knew that we were concluding in Q2 the Project Rocket transaction, which allow us to sell another EUR 1.5 billion of NPE, bad loans specifically, which led our gross NPE to 6.2%, and 5.2% with EBA definition. Let me remind that when we started the merger, we were as high as 24.1% of NPE ratio. Very sound also, the capital position, with a good 12.9% to common equity Tier 1, fully phased, and MDA buffer over 400 basis points. In this case, I want to stress that we were 13.3% in December, and we are 12.9%, but after having absorbed 95 basis points as regulatory headwinds. These results give us good confidence in the future, also linked to the fact that, as you know, we have resolved in Q2 the 2 agreements in bancassurance, which will come back in the next couple of years, fully in our hands with 100% of the joint venture being part of our group. This will allow us to exploit with more flexibility and with the full potential, the strength of the bancassurance for the next business plan. On page six, a set of different target, which show how consistent is our growth in revenues, in core revenues, in total revenues, in pre-provision income, and especially in a very consistent net profit from continuing operation, which I remember is only before systemic charges. Basically, in the last four quarter, adjusted is almost at a level more than EUR 200 million, apart from Q4 2020. On page seven, also, the growth in volumes, both in customer loans, which are + 06% in the quarter, and 9.6%, if we consider basically beginning of 2020, which we included in order to give you the roadmap since, I would say, the starting of the COVID situation. There is an enormous growth also in deposit, 18.7% since beginning of 2020, which is still growing also in the last quarter, 2.4%. As we will see in details, this is a growth driven especially by corporates, because luckily enough for private individuals, we have been able to transform almost all the increase in deposit into asset under management. As you see, asset under management grew 8%, and 2.6% still growing in last Q. More important, the net inflow in year to date, which is EUR 1.7 billion, compared with the EUR -400 million in Q4 2019. Gross NPE ratio down to 6.2%, already we said that. Common equity Tier 1, 12.9% after 95 basis points of headwinds, and the same MDA buffer to 402 basis points. On page eight, this was possible during a period with the COVID-19 impact very strong, thanks to the intensive bettering of our digital banking experience. Which has been expanded almost to all our products, and allow us now to have more than 85% of the transaction remote, more than doubling, 145% more of app-based transaction, which were four million in H1 2019 and are now more than 10 million in H1 2020. Also, the app, which the newly successful rollout of the new group mobile app, grew to 24% of the total app-based transaction, versus 9% in 2019. There is also a big increase in customer using both digital and app. The digital customer grew from 42% to 53%. Active mobile user on digital, active users grew to 67% from 42%, and we have reached 1.5 million of customer utilizing our app. This, of course, is thanks to the digital transformation program that we started at the beginning of our merger, that now allow us to have a new app rated at the best level in the market, a digital SME platform which allow us to increase our positive customer score, an omnichannel and advisory which allow us to increase 15% the total new sales revenues, the digital branch absorbing more than 50% of the total assistance request, and of course, deploying an advanced customer analytics, which allow to address more than 30% of total sales, thanks to advanced analytics program. The digital identity, which will allow the bank to be completely paperless, started with the rollout during this quarter, and will reach half of the app customer by this year, and then in 2022, hopefully completing the paperless model. In ESG on page nine, we have developed our engagement. As you know, we have issued our first EUR 500 million social bond, senior preferred, under a EUR 25 billion EMTN program. The social bond will be utilized to finance or refinance Italian SME loans guaranteed by the state in response to COVID-19. The bond has been bought by banks for 43%, funds 40%, and other institution for the remaining 17%. We have also improved, during this quarter, our ratings, both Standard Ethics, which were upgraded as from double E- to double E. We have a top rank in ISS ESG governance quality score, where we are considered the best with level 1, also the sustainability ratings of Sustainalytics ranks us amongst the top three bank in Italy. On page 10, we want to show how our result we are going to present today are fully in line with the business plan we presented last year before the outspread of COVID, and allow us to be very confident in potentially present the new business plan by the presentation of Q3 results. We have shown some macro target which was presented in our 2023 business plan. Which of course will be updated. As you see, the current status of first half result show how, also in terms of revenues, which were maybe not fully credible when we presented the plan, are instead fully in line with the results we had for 2023. As you can see, total revenues in the first half is EUR 2.3 billion, and in the full year 2023, there was a EUR 4.4 billion. Costs are already down, operating cost envisaged in 2023. Cost income is 55% versus 59%. Core cost of risk is in line, even though we were very prudent in, again foster financing, new derisking, and be very prudent in the stage 2 increase, which brought our full cost of risk to 86 basis points. In terms of return on equity and the net income, they annualize the first six months results bring us mostly to the level of 2023 business plan. This is without considering further revenue booster like, as I mentioned before, the bancassurance growth engine, an opportunity which we will deploy completely in the new business plan. Likewise, the additional opportunities from Next Generation EU plan and funds. In terms of cost, we still haven't yet utilized the savings coming from the retirement scheme, which financed in 2020, and will start in the third and fourth quarter 2021, because the first 990 exit happened at the end of June 2021. Essentially, the impact will be partial in 2021, then almost full in 2022, and the remaining EUR 20 million or EUR 30 million, 2023. Is not yet incorporated in the first half results. First, NPE ratio is already at the level of our 2023 target, which was 5.9% under the EBA definition, and is now 5.2%. Let's go to some figure. I would say on page 20, there is the stated results. Let me only stress that this amount to EUR 361 million net profit for the first half, EUR 261 million for the second quarter, after EUR 79 million of extraordinary revenues coming from fiscal realignment on real estate, which we almost completely fully utilized to increase depreciation on other real estate and increase low loss provision. On page 13, there is adjusted highlights. Let me underline, quarter-on-quarter, 5.1% higher on net interest income, 1.5% of net fee and commission. You can remember that there was a Q1 record result for us in commission. We have been able to beat Q1, of course, being 16% higher than first half 2020. NFR was able to repeat very good results, EUR 100 million Q1, EUR 117 million Q2. In this case, thanks to trading activity, but also to the revaluation of Nexi and SIA stakeholders in our balance sheet. The result of other revenues is very good, coming from the strong results and strong profitability of our product factory. Total revenues is almost EUR 1.2 billion in Q2 and EUR 2.3 billion half year. Operating costs are almost at the same level of Q1, Q2, and also vis-à-vis 2020, which lead to pre-provision income of EUR 450 million for Q2, confronted with EUR 486 million of Q1. Loan loss provision, still very consistent, EUR 235 million adjusted, and in the half year, EUR 379 million, which again, state amount increased to EUR 473 million. Net profit from continuing operation is EUR 246 million. As I mentioned at the beginning of the presentation, almost 8% more of EUR 227 million of Q1, and H1 is at EUR 473 million, confronted with EUR 176 million of first half 2020. After the systemic charge, we have EUR 230 million of net profit versus EUR 150 million of Q1, and EUR 382 million for the semester, vis-à-vis EUR 128 million of last year. Let's go to some details about the different items. Starting from NII on page 14, the trend is consistent, 6.9, driven by the TLTRO increase, growing by EUR 10 million at the end of March 2021, where EUR 24 million coming from the last EUR 10 billion. Also the commercial banking activity and the non-commercial banking activity, which include the negative impact from reinvestment of TLTRO extra liquidity, is still positive. The commercial spreads are doing well. The asset spread is still at the same level, basically, of Q2 2020, was 178 basis points, then 180 basis points, now again, 178 basis points. The customer spread is at 116 due to the reduction of liability spread, which of course is driven by the Euribor that was 25 basis points lower than Q2 2020. The new lending is still very consistent. We were at EUR 6.3 billion in Q2, EUR 5.2 billion from enterprises and corporates, and EUR 1.1 billion in terms of household. If we compare H1 2021 to H1 2020, the results is even, EUR 12.1 billion. We have an increased percentage of share of COVID-19 measure, which is as high as 39% of the total loan granted, versus 15% in 2020. Of course, in the second half of the year, we think that this percentage will be opposite to the one we are presenting. Also in July, the lending was very sound. We have closed July with EUR 2.4 billion additional new lending, of which EUR 600 million from state guarantee transaction. The total of state guarantee transaction as of 30th June was EUR 15 billion, EUR 1.6 billion, 100% guaranteed, EUR 13.3 billion from 70%-90%, driving the average level of guarantees to 86% on the EUR 15 billion drawing. We still have EUR 2 billion in pipeline as of June. Of course, EUR 600 million were utilized in July, so we have still EUR 1.4 billion to be utilized during this quarter. In terms of spread, the outflows is still lower than the inflows, so possibly we will not lose further asset spread, because this should continue also in the Q3, apart from early repayment, which we of course are not able to envisage right now. Let me stress the robust performance of new lending to household, which was +62% year-on-year. In terms of targets of TLTRO, after reaching with an excess of EUR 7 billion, the first observation B period which ended in Q1, we are for the period ending end of 2021, we have almost EUR 3 billion in excess. On page 16, we can see some interesting view of the moratoria COVID measures. We are remaining with EUR 4.8 billion of outstanding moratoria right now. As you remember, we started with more than EUR 16 billion, we are down 70%. The moratoria expired pre June 2021 were EUR 6 billion, the default rate was 1.25%. Of the remaining moratoria, EUR 10.2 billion, EUR 5.4 billion were not postponed by client. As you know, by June, we had the answer or the request from our client to postpone or not the current moratoria. The majority decided not to postpone. We have been left with EUR 4.8 billion of requested moratoria ending by the end of this year. Out of the EUR 5.4 billion, we already have been checking the first EUR 3 billion expiring of installment, of course, expiring in July. EUR 3 billion basically added to the EUR 6 billion already expired, reduce the default rate of the expired moratoria from 1.25% to 1.10%. Of this EUR 4.8 billion of remaining moratoria, outstanding moratoria, 74% is in the low medium risk rating class, only 16% in mid high risk, 10% in high risk. Let me underline that this is a number which has been reducing from time to time from EUR 3.9 billion, which were the mid high risk and high risk when we started with EUR 16 billion of moratoria. They were reduced in December to EUR 2.4 billion in these two category of mid high risk and high risk, and now they are reduced to EUR 1.3 billion. This means that also clients that are classified from ourself in these two categories are repaying normally the installments when they renounce to the moratoria. We are still conducting a continuous strict control on all these EUR 4.8 billion. We have now reached 79% of client. We are postponing the moratoria, and out of this 79%, less than 1% declared to possibly have some problem to restart payment in January 2022. I think a very comfortant outlook respect to the dramatic view that we had at the beginning of the pandemic. On page 17, we have the results of net fees and commission due to outperforming the already strong Q1, and of course, being EUR 140 million more than last year. We basically had the same result of Q1 in terms of commercial banking fees, EUR 251 million. We beat for EUR 8 million the management and advisory fee, coming mostly from the investment product placement, but also from advisory fee and corporate finance and M&A and advisory. The trend is still increasing. As you see, June was much higher, both of April and May. In terms of sales, the results were so good, notwithstanding the investment products placement was in Q2 a bit lower than the EUR 5.4 billion record results of Q1 2021. We reached EUR 4.9 billion, including EUR 300 billion of BTP Futura. The average of EUR 1.5 billion per month has been maintained also in July. Very good also operating costs. We are keeping operating costs under strict control. We decided to give you also the number of first half 2019, because as you know, not really the first half 2020, but when we will go ahead for the full year 2020, this is incomparable with full year 2021. We prefer to make also comparison with 2019. In 2020, as you know, we had some savings, thanks to the cost attention and the opportunity to exploit the COVID measure which made savings for more than EUR 140 million. Right now, we are 2.1% higher in respect to first half 2020. The Q2 2021 is even lower than the Q1, thanks to EUR 14 million of COVID-related savings, which we think hopefully will be the last one, which we will incorporate for 2021. As I mentioned at the beginning, we still are not considering the savings which will come from our retirement scheme, or to better, only EUR 3 million are already considered in the first semester. The remaining EUR 41 million for 2021 will be in the second half, another EUR 120 million in 2022, and we will go to EUR 140 million in 2023. In terms of headcount, we are now down to 20,550 people, considering 990 voluntary exit by June. We still have so further 620 people included in this scheme, which will leave the bank by 2022. The network was right-sized, as you know. A further 300 branch were reduced between May and June of this year, leading for a total of 1,000 branch, if we consider the starting point of 2,400 branch in 2017. Just few words on the strong liquidity and funding position. Of course, this is something that doesn't give problem to the banking system right now. We have LCR over 200%, a very, very sound NSFR, TLTRO fully exploited, very few global amount of bond outstanding. Notwithstanding this year, in the last 18 months, we have been issuing both AT1 Tier 2 senior preferred and senior non-preferred. Very good results coming from our securities portfolio. We had a total consideration of almost below EUR 40 billion between each held-to-maturity and sales, amortized cost, and trading, which had in June EUR 90 million of reserves on HTCS, which now grew to more than EUR 200 million. Notwithstanding what we have realized in the first two quater, which leaded to the very sound NFR results, we still have more than EUR 200 million of potential reserves under these govies, and also some EUR 70 million under security set amortized cost. I won't go through page 20, just give you the glance of the Italian govies vis-à-vis the non-Italian govies and the relative duration, which basically didn't change a lot since last quarter. Just a few words about page 21, where you will find the NPE evolution. We are down to EUR 7.1 billion. Frankly speaking, nowadays, we are below EUR 7 billion, and net NPE is EUR 3.7 billion. We just wanted to remember that we started from more than EUR 30 billion of gross NPE and more than EUR 16 billion of net NPE. The share of bad loans is, again, after the Rockets transaction, down to 30% of the total NPEs. Bad loans are accounting for 30%, UTP for 70%. This, of course, has an impact on the coverage, where we go down from 62% to 55.4% in bad loans and 50.7% to 47.4% in total NPE. Of course, if we consider the Rockets included in the first quarter, the amount of the second quarter sees an increase both in terms of bad loans from 54.9% to 55.4%, and also in terms of total NPE from 45.9% to 47.4%. Almost at the same level, we have also the UTP, which are 44.6%, up from 43.1%. Also, in terms of bad loans, thanks to Rockets, we increased, which of course, had a lot of unsecured bad loans sold. We have now increased our secured bad loans from 62% to 69%. As you can see, the default rate is very comfortable to 1.1%. It would be a bit lower than 1% excluding the OD. 8% of the danger rate. Cure rate, of course, has been reduced during this COVID-19 period due to the strict timing and the increase in time that we now have to respect to bring back to performing our UTP. In any case, the workout rate that you will find out on page 43 is still very sound. It was around 14% last year and this year, and allows us to compensate the inflow of new non-performing loans. On page 22, we have on the top part of the slide, the quarter reduction of gross NPE and net NPE. In the lower part, you will see our very, very prudent approach that we are still having to our cost of risk evolution. We have an increase on Q2 vis-à-vis Q1, which brings the amount of the first half in line with the first half 2020. If we talk about ordinary cost of risk, we will be down to 52 basis points after having included some round provision on single names, and the non-core impact, which was still driven by the Project Rockets impact and the tightening of Stage 2 criteria, to which we added also our leveraged finance portfolio in this quarter, has been accounting for 34 basis points. Last page of numbers. We have a very sound capital position. We ended March in 12.7% fully loaded, 13.7% phased in. We are now up to 12.9% fully loaded and 14.1% phased in. The increase is due to 37% of Q2 performance, 17% already accounted for the payment of AT1 coupon and dividend stake, 10% out of regulatory headwinds coming this time from look-through approach on alternative funds. Opposite 10 basis points plus coming from reduction RWA. The total amount is EUR 12.9, which brings also our MDA buffer to a very solid 402 basis points. Just the last part of the slide is dedicated to the EBA stress test. I think you already know exactly what was going on. It's very good also for us. Final remarks on page 24, very good year, very good quarter, and very consistent with our forecast and with the business model we have in mind to develop. Solid growth in core revenues, which led to a very sound net state and adjusted net profit, still reduction of NPE ratio and further disposal of bad loans, and a robust capital position. Leveraging on digital banking and on the changing profitability coming from the outlook of our business model. On page 25, we give you some outlook about full year 2021. The total revenues will be slightly impacted by the very strong result of Q1 in NFR. We think we will reach EUR 4.4 billion. Total cost, EUR 2.5 billion, leading to pre-provision profit of EUR 1.9 billion. Cost of risk, in order to have the opportunity to give you a forecast on EPS, we consider the same cost of risk of H1, but again, it's a very prudent approach, and this will bring to an EPS of EUR 0.35, and a dividend payout partly already accounted in common equity Tier 1 of 40%. This already having 13% as a target for common equity and MDA buffer again in the region of 400 basis points, but in any case higher than 350 basis points. I have completed my presentation. I leave to you the floor for your Q&A session. Excuse me, this is the Chorus Call Conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Christian Carrese with Intermonte. Please go ahead. Good evening. Thank you for taking my question. First of all, congratulations for the results, very solid. The first question is on revenues, in particular on net interest income. I would like to understand the moving parts going forward, looking at TLTRO contribution, commercial banking, and basically these two. TLTRO, if I look at the slide, seems to have a positive contribution in the quarter equal to EUR 24 million, additional contribution compared to the first quarter. This would mean around 1% yield on that TLTRO. Is it correct? If you can elaborate a little bit. In terms of loans and customer spread, what do you expect for the second part of the year? Finally, on the financial portfolio, I saw that you used part of the Italian govies in the quarter. The unrealized capital gains went down a little bit. Maybe they were also booked in the trade income. What do you expect from the financial portfolio contribution going forward? Basically this quarter level of net interest income, do you feel that is sustainable in the coming quarters? The second question is on the fees. It seems that now the network is going at full speed. Very good set of results. Do you expect still some conversion in terms of deposits into asset under management? If you can give us a guide. I would expect some slowdown in the third quarter compared to the second quarter, but if you can give us an idea. The third question is on strategic option, let's say. We see that you have the option to buy back the bancassurance joint ventures. This could add some earnings in the future, let's say 2023, 2024. I did some homework. I think that taking into account the possibility to get the Danish Compromise, maybe the impact on the capital would be not so big, negligible, I would say. If you can give us an idea of what could be the contribution from the bancassurance, if you decided to keep in-house that kind of activity. I missed one question, but maybe I will ask later. Thank you. Thank you. I will try to give you the detail you have requested. All in all, of course, we think the second part of the year will be slightly better thanks to the TLTRO, even though you know that we cannot contribute 100 basis points because unfortunately, there is so much liquidity that a part of it will be, unfortunately, invested at negative rates. I would say that only half of the contribution is incorporated in our forecast for 2021. Commercial would be mostly online with what we see in first part of the year. The portfolio, securities portfolio, we think that considering from one side, the maturity that we are having during the year at a higher yield. On the other side, the savings on the interest that we are paying on the wholesale issuing, we think that we have more or less EUR 15 million less of contribution vis-a-vis 2020. The global number basically is quite clear, and I think you can calculate also by yourself, will be in the region EUR 2 billion-EUR 2.05 billion. Second question, fees. The conversion is very high, as I was mentioning before. Basically, we never had positive net asset under management from deposit. In June, we had EUR 1.7 billion, which for us is very consistent. We are still growing, and we will continue to grow. The problem is to reduce a bit the deposit from corporates and enterprise, which we are doing, charging corporate and enterprise on the fees as much as we see an increase in deposit. This, unfortunately, has been taking place from July. I think we will see more in the Q4 rather than in Q3. Total fees, as you were mentioning, normal in the second part of the year, are a bit lower than the first part of the year. I am confident because, even in Q2, we had, as I mentioned before, a reduction of upfront fees, but a very sound compensation from running fees and from fees coming from ordinary activity, M&A, and so on. Let's say that for EUR 150 for the next quarter would be the bottom that we consider. Bank assurance, as I mentioned, will be basically at the base of our new business plan. We are doing all the forecast about the potential charge that will be in terms capital. We don't have a definitely precise idea, but we are considering that if the Danish Compromise will be applied, it will be very negligible the cost of capital on common equity Tier 1. On the opposite, we will have a very consistent increase in terms of revenues and net profit, more than compensating, of course, whatever charge we can have in terms of capital. Just on capital, if I may follow up. In the business plan you presented last year, you were referring to a threshold of 12.5% common equity Tier 1 fully loaded, if I'm not mistaken. You are now targeting 13%. Do you think that the 12.5% still is a reasonable threshold? After COVID-19 pandemic, you would prefer to have a higher capital buffer? Still on dividend payout, you said 40% payout after the stress test outcome, should we assume you don't expect any additional Pillar 2 guidance after the result of the stress test? I mean, negligible add-on. Thank you. Basically, as far as common equity is concerned, 12.5% I think was the 2023 baseline. The 13% is the outlook for 2021. We have not yet given outlook for years to come. The real situation that we were expecting more impact from the headwinds, which we are instead absorbing very well. We are still keeping a very sound common equity Tier 1, as you know, the principal headwinds were forecasted in this first year of the plan, because in the next year will be very low. I think we can envisage a higher common equity Tier 1, but I don't think that we will need to stay at 13%. If you ask right now, unfortunately, I see that the majority of the bank have higher common equity Tier 1. We are already in the lower part of common equity Tier 1. We feel very comfortable being around 13%. Let's see the evolution of the pandemia, and possibly we can also go down at more normal approach of around 12%-12.5%. Some comments on stress test. Okay. Can you hear me? Sorry, I didn't get. No, I was wondering the stress test at the end that you passed comfortably the stress test, so you don't expect any specific-? Frankly speaking, we feel very comfortable because as you know, we are a very good performance, better than the average of the other bank in the base case scenario, which I think is the most probable. I don't think there will be a severe consideration of the stressed case, because as you know, was already applied to a very stressed situation. I don't expect, frankly speaking, any material change in terms of SREP. Thank you very much. Have a nice day. The next question is from Giovanni Razzoli with Deutsche Bank. Please go ahead. Good afternoon to everybody. Two questions. A clarification on the fee income. Can you share with us what was the contribution of the upfront fees in the second quarter? The second question is line number 10. Very explicit, showing us that despite the cost of risk that is 86 basis points in the first half, that is quite above, so more prudent than the average of your peers. You are delivering EUR 360 million of bottom line. I was wondering what could deviate your targets from something like an earnings power in the region of EUR 700 million for the next business plan, because it seems to me that you are fairly prudent in terms of cost of risk in relative terms, while your profitability seems more resilient than expected. Shall we take these as an earnings power as a base for the next business plan? What are your thoughts there? You think that there are some elements in the revenues which can move up or down this level of profits? Thank you. Thank you, Mr. Razzoli. Starting from fee income. We have upfront in Q2 for EUR 79 million, vis-a-vis EUR 87 million in Q1. Running fees on the opposite, going up to EUR 123 million in Q2, vis-a-vis EUR 114.5 million in Q1. Then we have an increase of EUR 6 million in management and advisory fees. In terms of cost of risk. First of all, it's not, of course, an anticipation of what we will give you for the new business plan. It's just an outlook for this year, which is not even an outlook for this year. The outlook was driven by the net results and the dividend policy. In order to give you something consistent, we had, of course, to start from a hypothetical cost of risk that we prefer to imagine the same of the first half. Of course, all this can be better, but we wanted to give you some solid number about earnings per share and dividend policy. On page 10. On page 10, instead, we're just representing some comparison between this first half result and the old business plan. Again, we are not saying that we are going to do the same business plan, because there will be many things different. We're only stressing that we feel confident in approaching a new business plan target, thanks to the result we have already reached in the first half of 2021. I wouldn't consider neither 86 or 51 a guidance for the new business plan. Thanks. The next question is from Jean-Francois Neuez with Goldman Sachs. Please go ahead. Hi, and good evening. Thanks for the guidance. I just wanted to ask, because the cost program is fairly large, and then you're showing this very strong reduction this particular quarter, so you have an outlook for the full year. I just wanted to understand the moving parts into 2022, or whether you have already a rough idea of what your cost would be then. I'm just trying to size up the difference in staff cost and branch cost, but also maybe versus some other inflation or some other initiatives that you might have. Particular, you referred a lot to digital in your presentation. Second question I have is, it is true that your cost of risk looks more prudent than some of the other peers. At the same time, you've got about EUR 2 billion more inflow per quarter year to date of stage 2 loans. I wonder whether you think you're there, or whether you think there is some more reclass to take place. I think I already asked this question on the last quarterly conference call, but maybe there are changes in parameters. Lastly, with regards to what's happening around you yourself in Northern Italy, in the banking landscape, there was a lot of focus today on your standalone profitability, I feel more than usual. Any change in the way that you think about Banco BPM's place in the Italian landscape now, organically or inorganically? Thank you. Thank you, Mr. Neuez. We start from the last question. Basically, we have requested to give some forecast update on our business plan. We think that now would be a good moment to start talking about that. Of course, we cannot do other than giving you our standalone projection. Why now, why we thinking basically by this autumn, we can be able to do that. Because we are experiencing eventually the results we were expecting when we announced the first business plan, especially in terms of revenue, so we are much more consistent and much more credible. Secondly, because hopefully, we can imagine that the pandemic will have a lower and lower effect on the business. Of course, if this happen, we think we can go ahead with some new figure, very sound, very interesting, in order to give the possibility to make some forecast also in terms of our stock. Of course, we still believe that consolidation could be useful. As I mentioned also in Q1, it's not the case right now, because right now we don't see any potential consolidation at our door. Of course, we will still continue to look, we will still continue to understand if there is the possibility to make some more interest of our stakeholders, shareholders in doing a sound transaction. Of course, we feel that it's also very interesting to understand that we have a very good story, also on a standalone basis. Second question. No, I can assure that the cost of risk come out for a very prudent approach. Stage 2, new increase is only, let's say we take advantage for the moratoria and the pandemia to level the difference, the gap that we had vis-à-vis our competitor. In our opinion, this is much more due to our geographic presence rather than a non-prudent approach before of this decision. Having the possibility to be more prudent, thanks to the moratoria, we decided to change model and to make more tightened model for the inflow into stage 2. This happen in the first quarter with the moratoria client, which were either in the mid-high risk and high risk, and in the industrial sector, more eaten by the pandemia. In the second Q, this was referred instead to our leverage finance portfolio, We decided to have a more strict model also for this asset class. This, of course, provoked an inflow in stage 2, quite consistent, which led to the 34 basis point of increase of cost of risk. Because of the running of the moratoria, which are very, very good up to now, as I mentioned in my presentation, we are confident that this stage 2 can go back to stage 1 and reduce also the impact on cost of risk. First question? Was on the cost for 2022, whether you expect that you're going to get the benefit of the staff reduction still 600 and the 1,000 plus the branches, or whether there is other inflations? We believe in 2022, we can have a further reduction of EUR 60 million all in all, of course, considering also the new investment in digital. The trade-off between savings in personnel, hiring of people, because of course we have also some consistent hiring of young specialized people to perform by the business plan, and increase in some cost, we think we can still have some consistent savings in the region of around EUR 60 million for 2022. Thank you. Thank you. The next question is from Gonzalo López with Redburn. Please go ahead. Hi. Good morning, everyone. Just two questions, please. The first one is on the transformation from deposit to AUM funds. You mentioned that you are planning to charge some fees to corporates. I was wondering if you can provide some color on the initiative that you are planning to take on the retail side, please. The second one is on the P&L. Could you please provide some visibility on the tax rate for the second half of the year? Thank you. Thank you, Mr. L ó pez. pez. On charging corporates for deposit, we have communicated to the client which kind of increase in fees will be applied, but we had to give them the possibility to negotiate these fees, which will be applied in any case, if we don't come to some terms by Q4. Instead, if we decide together with the client, the amount of increase will be in place directly from Q3. We don't have a clear idea. We think it could be between EUR 5 million and EUR 10 million, the total contribution at the end of the maneuver, but it's difficult to make some forecast right now. Frankly speaking, the main target for us is not really to increase these fees, but to reduce the deposit. In doing that, we hope that they will move deposit, possibly utilizing for investment, or rather to change the deposit in other banks. This is more or less what we feel about depositing. Tax rate will be in the region 25%-30%. Let's have in mind that there are also a lot of maneuver driven by the PNRR from the state, which allow, for instance, Ecob onus, Superb onus, which will impact on our fiscal charge because, of course, we can reduce also our tax rate in doing this kind of transaction. I don't have a more precise question, but would be in this region. Fantastic. Thank you. The next question is from Andrea Vercellone with Exane BNP Paribas. Please go ahead. Good evening. Two questions on my side. The first one is on margin, and the second one is on de-risking. On margins, can you give us an idea for how many quarters do you still expect the yield on new production to be above the exits? On de-risking, you have done a lot. You've done the other, the Project Rockets transaction, which you had already announced. I'm just noticing from pretty much all of your competitors that there seems to be a bit of a race to the bottom into selling NPEs. Clearly, there are different logics to it. Whenever you sell something, there are charges attached to doing so. I was just curious whether you are going to join this race to the bottom, or you're pretty much done, and we shouldn't expect anything major to be announced in the context of the new business plan. Thank you. Of course. Thank you, Mr. Vercellone. Margin yield, I think you refer to asset spread. As we mentioned on page 15, we have experienced an outflow, which is at a lower interest rate vis-à-vis the new inflow. As I mentioned, I imagine starting from Q3 or Q4, an increase of ordinary loans. Will be mitigate the effect of the lower spread on asset guaranteed by the state. Hopefully, we will be able to maintain a consistent margin. Of course, we cannot consider the potential effect of prepayment, because of course, what we consider are the maturity which are going out, and on that, we know that the outflow is lower than the inflow. Of course, we don't know about prepayment. Being such liquidity on the market, of course, it's difficult to have a clear measure. Up to now, we were able to give a good forecast on the first two quarter. Excuse me. Just a clarification. If a corporate prepays, is there a fee attached to doing so, or they can just do what they want? Depends, of course. Normally, if you have syndicated loans, there is some attached to prepayment. Normally, also in bilateral loans, it's possible that there is a fee attached, as you can imagine, competition is the king because sometimes in order to replace the loans with a new transaction, which brings you also the possibility to cover the interest rate with the derivatives and so on. Not always we are paid a substantial commission. Of course, it happens in many cases, of course, does not compensate the difference. Going to de-risking, I have to say that I was obliged to be upfront runner into selling. We didn't do that in one shot, as you well know. We were very able during this four and a half years to have a very sound transaction, normally at a higher price vis-à-vis the competition, always putting strong competition in place in terms of bidder. As you were saying, we are almost done. We are now at 6.2, which is 5.2 in EBA guidelines. I don't think that we will imagine strong de-risking coming from disposal in the new business plan will be more a normal workout activity, for which, of course, we have also some single asset disposal, but not the round and sound transaction we were used to do, and we have done during these years. Thank you. Mr. Castagna, there are no more questions registered at this time. Please go ahead. Okay. The next question is from Azzurra Guelfi with Citi. Please go ahead. Hi, good evening. I have a question on the ESG. When I look at your portfolio, you are clearly exposed to the SMEs more than the average European banks. If you want the greening up of the loan book, it's a process that will take time. How are you thinking about your client response to more inquiry about the greening of their activities, and how would this impact your future lending as well as margin? When you look at the European banks, it's quite difficult to do a comparison. Do you think that at some point, the European regulator will look at capital charges or capital benefit link to climate related position? Thank you. Thank you for the question. I think they are very much linked because, of course, as you know, we are already under scrutiny by ECB. We are sending all the material that they were asking in the first round of questions about ESG. Now we are better classifying also our portfolio, which will be sent to ECB by the next stage of their inquiry. This will help also us, of course. We will be, in a way, obliged to perform in detail all the exposure in order to understand if they are under the green approach or not. This is something that we are already discussing with our clients, being in a very sound part of Italy. We think that most all our clients have this very well in mind. They are approached by all the main banks, national and international. As far as I know, up to now, in our investigation and query with our client, we are not having any problem in getting this transparent disclosure about their current situation. Of course, I am not yet in the position to give you numbers because we are still under scrutiny also ourselves, but I think in the next quarter, this will come out as much as we will give these numbers also to the regulator. Depending from that, of course, the regulator can choose. If we are compliant, I don't think there will be any kind of tight policy about capital. Otherwise, of course, as we are used to do, there could be some headway, but we never were informed about that. It's just my opinion. Thank you. The next question is from Noemi Peruch with Mediobanca. Please go ahead. Good evening, thank you for taking my question. I have just one on cost of risk. You indicated that the annual cost of risk will be in line with H1. With this, I assume 86 bps. I was wondering, how will you be allocating the additional 35 bps on top of the 52 bps underlying? Will it be Stage 2 and moratoria if you do not envisage further strong de-risking going forward, do you see some additional small de-risking? Thank you very much. Thank you, Ms. Peruch. I have to say that we wanted to give you some precise figure about the net profit and the EPS. In order to give you a sound figure, we either had the possibility to give you a figure in between 52 bps and 86 bps, or to give you the same figure that we had in the first half. We have not yet, of course, decided if we will reach effectively the cost of risk of H1. We don't envisage right now any problem in having a core cost of risk also in the second part of the year. We will decide if we will be able to make more profit or we will prefer, depending from the situation. I don't think we will have any problem in stage 2 and also in moratoria. I gave you, I think, a lot of information to make up your mind, in order to understand how could behavior not the further handing of the moratoria. We have not a forecast of 86 bps. We just gave you a forecast of 86 bps in order to give you the EPS that we have as outlook for our bank. There are no more questions at this time. Okay. Thank you very much, everybody. I hope you will have some days or weeks on vacation. Of course, I know that our IR already is available to take also some call to give you some more explanation about our figures. Have a good period of holiday and see you when we will be back. Thank you very much.