Good evening, this is the Banco BPM conference operator. Welcome, and thank you for joining the Banco BPM Group first quarter 2024 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, let me signal an operator by pressing star and zero on your telephone. At this time, I would like to turn the conference over to Mr. Arne Riscassi, IR Manager of Banco BPM. Please go ahead, sir. Good evening, and thank you for attending the conference call. Let me remind you that the Q&A session is for investors and financial analysts only. We ask you possibly to limit the number of questions to a maximum of three. And, I will now turn the floor over to our CEO, Mr. Giuseppe Castagna. Thank you. Thank you. Thank you very much, everybody. Thanks for being with us. I know it's been a long day for most of you. This, I think, is the third or fourth presentation in the day, which I will try to be quick, and I will be added by the very strong and solid set of results, maybe not so much, so many comments on, on the figure we are trying to give you. We are very happy, we have been experiencing a very powerful start of the year. High profitability, strong capital generation, Net fees is growing, 20% quarter on quarter, cost-to- income at lower 47%. The lowest cost of risk ever, 31 basis points, thanks to further reduction of more than EUR 1 billion of gross NPAs. A very strong funding capacity. Our clients are increasing by EUR 3 billion in the first quarter, their deposits with us. And we have been able not only to have a very good net income, but also a strong capital generation, leaving the Common Equity Tier 1 from 14.4% - 14.7%. The net income amount to EUR 370 million, is 40% higher year-on-year, and 15% Q-on-Q. Ahead of full year 2024 guidance on a quarterly average, and as you can see on page 6, is ahead also, almost in line with the, the results, that we forecast for, 2026. On page 7, some, key figure. Revenue rise 11% year-on-year and on quarter. Cost of risk EUR 82 million, vis-a-vis EUR 167 million last year, Q1, and EUR 175 million in Q4. Then we will examine the reason for why we feel this figure could be consistent with, the current default rate. Profit before tax are at the highest level of EUR 660 million, compare 40% more of the Q4 2023, 40% higher than, Q1 2023 year-on-year. These, considering that we are still in the middle, I would say, of our new key product factories, that as you know, will generate revenue stability by 2026. But for 2024 still is an implementing year. We have, as you know, acquired Life Insurance starting first operative year. But still, we have its operations separately managed to the existing platform, and particularly, Vera Vita is managed by the Generali platform. As well as, we have just started our joint venture in payments, Numia, January this year, with BCC Iccrea, and so it's still at the beginning of this activity. We will, we think that we will have the most out of these two activity, coming in second part of 2024, the full integration of the IT and platform in 2025, and full scheme of, of, this activity in 2026. The same, I would say, is for, payment system new joint venture, that has been called, as most of you maybe know, Numia, the joint venture with BCC and, FSI. We have, as you know, signed the deal, and we will have the closing by, the second part of this year, and the completion will be during 2025. So for both these activity, within still we have to experience, the, the capability and the stability that will come during the next quarters. On page 9, asset quality, very good, as I mentioned before, the trajectory now is 31 basis point, well below 45 basis point of our target 2026. Let's say that during 2023, we still continue to Anticipate provision in order to make more disposal. In one year, we were able to dispose more than EUR 1 billion NPL. Still, we have to dispose another EUR 600 million during 2024, for which we have already provisioned the needed amounts, needed. Having said that, we don't have other provision to do for disposal. So this is the reason why, being now almost in line with our target of EUR 3.5 billion, which most probably will come down during this quarter, in which we think we will have another disposal of EUR 150 million, and another EUR 350 million will come in H2, going below EUR 3.5 billion. We don't see any need for provision more. As you will see, when we will talk more in detail about NPLs, also the coverage is at very high level. Going to the capital, we were able to generate almost 120 basis points in one year, going from 13.6%-14.7% of Common Equity Tier 1, and almost 60 basis points Q-over-Q. As I mentioned below, also direct funding is increasing. It's EUR 4.2 billion year-over-year, EUR 3 billion Q-over-Q. Considering also, of course, not only current account and deposit, but also our bond activity. As far as the issuing is concerned, as you know, we are exploiting a very positive rating momentum due to the recent upgrade, end of the year 2023, from all the rating agency, and we are already experiencing very good reduction in cost of funding. Overall cost of funding. Loan -to -deposit rate is 81%. Also, this is very safe. They give us all the possibility to increase loan activity as soon as the possibility of interest rate going down will boost again the recovery of the new activity in loan granting. Let's go on to page 12 on the P&L. As you can see, we have a very good results also in NII, is 16% higher year-on-year, and basically, including the one-day effect of Q1 2024, is also higher of Q4 2023. If we consider core revenues, again, is almost 11% higher than last year, with a very good financial results driven by activity that we had in option and swap on our portfolio, and also in managing our activity on the replicating portfolio, and then anticipating some move also in this respect. Total revenues were 15% year-on-year, and 2.6% on last quarter, 2023. Operating costs under control were 1.1% Q-on-Q, and 4% year-on-year, including the new labor cost. We will see in details also, this, trend. Pre-provision income is 25% higher year-on-year, at EUR 765 million, with a lower loan loss provision, as we mentioned before, lower 40% year-on-year, and 53% quarter-on-quarter. This end up to a result pre-tax, 40% higher than last year. And after tax, also considering that we have doubled the, the contribution in tax, vis-à-vis last quarter, 2023, we end up with a net profit from continuing operation, which is almost 37% higher than last year, and the net income after systemic charges that are 40% higher than, Q1 2023. As you can see on the right side of the slide, there is the trend of, the last couple of years evolution. As you can see, the evolution of all the main driver is very good and lead us to a net income, which has been growing more than 100% over the last two years. Going into the details, NII, as I mentioned before, is 16% higher than Q1 2023, is more or less in line with the Q4 2023. We are very happy that we can consider our forecast that we gave presenting our strategic plan with the 3% reduction forecast for 2024, which should be the right forecast for this year. In doing so, we feel that we can have an NII also for 2024, higher than the results of 2023. Interest rate sensitivity, considering including both NII and NSFR, so including certificates, is still at EUR 250 million over 100 basis points. The commercial spread is keeping a good level. It's 12 basis points lower than last quarter, 3 basis points of which due to the reduction of Euribor, and the difference I will try to explain commenting the right side of page 13, in which we will again give you some support to the target of 2026. As you know, we have a target of EUR 3.05 billion, and we are pretty confident of reaching this target, notwithstanding the sensitivity, because we are already implementing some measure which give us a good buffer to recover the potential reduction of the sensitivity. The first action, as I mentioned, is the increase in the size of replicating portfolio from 15 to 25 billion over the plan horizon. EUR 1 billion, which has been already done, during Q1, and other EUR 3 billion have been already optioned with structure in which we increased the fixed receivable amount by EUR 3 billion in H2 2024. This maneuver give already a buffer of almost EUR 40 million by 2026. On top of that, we are leveraging, as I mentioned before, on the very good reception by the market of our new investment grade status. We confirm that we have a very strong spread reduction in new bonds and certificates, which give us by 2026, another EUR 80 million of buffer compensating further possible Euribor reduction. Then, we have some maneuver that we have already started with, which is giving a bit of loss in terms of commercial spread, but will soon give us good advantage as soon as the lower interest rate scenario will happen, possibly in H2 2024. The first is the increase in share of indexed current account. We started from a 24% by year-end 2023. We are already now over 28%, which means EUR 4 billion more of indexed current account, which of course now constitute an increase in cost of deposit, but will immediately, automatically be reducing as soon as, again, the interest rate scenario will go down in H2 2024 and going forward. On top of that, we have already started to improve collection of new, more fragmented deposit, and I mentioned again, the EUR 3 billion that we increased in Q1 2024, which are due to substitute some most expensive account, mostly institutional, that will go out end of June this year. We are going to lose a couple of billion of deposit with an interest rate above Euribor, which was contractualized some years ago and now will expire by June this year. On top of that, again, we have reduced the conversion of current account into time deposit. This also was a maneuver announced in the business plan in order to keep a high level of deposit, fearing the possibility of having BTP as a potential competitor vis-à-vis our current account. But as a matter of fact, in Q1, we only switched EUR 500 million from current account to time deposit out of the EUR 9 billion, which are embedded into the business plan, out of which EUR 4 billion are due in 2024. So still a lot of room, if needed, in order to keep high deposit, high share of deposit. On page 14, again, the franchise value in terms both of total customer financial asset, which grew more than EUR 5 billion in Q1. Again, one billion, almost EUR 1 billion in current account and deposit, EUR 2.5 billion in asset under custody, EUR 1.5 billion in asset under management. And this growth is continuing also in April, and is basically fostering almost all the roadmap we had for 2024, and a big part of the increase that we forecast by 2026. The vast majority of the deposit base comes from retail and SMEs, more than 80% comes from this kind, this cluster of clients. On the loans volume side, a steady situation. We are still around EUR 97 billion of loans, a small reduction, EUR 300 million in mortgages, compensated by an increase of EUR 300 million of non-financial corporates. For this year, we don't envisage a big increase in stock of loans. We have a EUR 98 billion target by year-end, so we are pretty sure that with the increase, potential increase of volumes of the second part on 2024, we will be able to hit the target for 2024. The composition of portfolio is mostly for non-financial corporates, secured, 30%, with state guarantee, and a further 27% collateralized with real estate. If we go down to small business, the side, the share guaranteed by state increased to 44%, with almost 30% of collateralized loan. Three-quarters of the portfolio are based in the North of Italy. Let's go on page 15 to the fees. Maybe the best results we have ever reached, EUR 50 million more than Q4 2023, EUR 30 million more than Q1 2023, considering that in Q1 2023, we still had the contribution of EUR 15 million that we reduced from the account of our client, starting from Q2 2023, due to the elimination of this fee, being terminating the negative interest rate period. So the real compensation would be something like EUR 45 million of increase, also year-on-year. On the high side of page 15, the strong increase that we registered, thanks to an excellent performance in investment product placement, we reached a record EUR 5.8 billion in product, + EUR 1.2 billion in BTP, which is something like EUR 2 billion more than both Q4 2023 and Q1 2023. So of course, the upfront fees contribution grew 90% Q-on-Q and 40% year-on-year, with a very steady running fees contribution 4% higher than last year. On the commercial fees, let me mention, apart from the commercial activity, which is growing, considering the like for like on Q1 2023, the vast majority of the difference is coming from corporate investment banking, structured finance, and trade finance fees with a growth double-digit year-on-year. Consistently with what I said, relating to the incoming activity in banc assurance and the other product factory, the rest of the product factory contribution is not increasing, is not giving any increase quarter-on-quarter. Cost-to- income, down to 47%, notwithstanding the growth also in revenues that we have commented a few minutes ago, we are now at 47%, compared with the 48% for the all year 2023. We started 65% in 2017, driven by the staff cost, which of course take in account the increase of the new labor contract. But, if you look at the pro forma impact on new labor contract, you see that the increase is very moderate, is 1.8% Q-on-Q, and 3.3% year-on-year. But this is without considering yet the savings that we expect to come from the early retirement plan, which of course is not yet started, and we feel that we can have the starting of this new scheme in the second part of 2024. Other administrative expenses, like for like, you have to consider the year-on-year, because on Q4 we had some one-off. Year-on-year, you can see that we have more or less the same amount of fees on a yearly basis. Cost of risk, some details about why we feel, why we feel that if we still will have the default rate at the level, the current level, we can have this new target, I would say, as a cost of risk. As you can see, again, the level of stock is very low, is EUR 3.6 billion. Out of this, we have EUR 500 million to dispose by year-end 2024. Of these EUR 3.6 billion, EUR 700 million, almost EUR 800 million are loans guaranteed with the state guarantee. And all in all, meanwhile, the bad loan coverage is 60%, is more than 60%. If you exclude the loans with state guarantee, the coverage on bad loans is higher than 70%. Being the state guarantee covered 28% with the uncovered exposure in the region of 15%. So all the opportunity to say, to not having further cover, both on the state guarantee loans and also, I would say, on the non-guarantee loans, considering that part of them are also collateralized. Let me say also that, we, of course, continue to have, and to increase partially the overlays, going from EUR 190 million - EUR 200 million. Meanwhile, we had a reduction of almost EUR 2 billion in Stage 2. Let me give the floor to Edoardo Ginevra for some further financial figures. Thanks a lot, Giuseppe. Page 18 now gives the picture of the evolution of our securities portfolio, that has been increased by EUR 4 billion, mostly concentrated in the amortized cost component during the first quarter of this year. So from EUR 36.5 billion, now we are at EUR 40.5 billion. Share of amortized cost is at 72%, with the aim to preserve the bank from volatility generated in capital by fair value other comprehensive income. Potential volatility, of course. In terms of composition, corporate bonds are now at EUR 7.7 billion, increased of EUR 1.6 billion, and govies, government bonds, are EUR 32.7 billion, with an increase of EUR 2.3 billion. Italian govies are at a level of 37.9%, to be compared with the threshold that we put in our strategic plan of remaining below 50%. The share of Italian govies in fair value comprehensive income is as limited as 19.1%, and meaning that the remaining 80%, 80.9% of Italian government bonds is concentrated in amortized cost part of the portfolio. Page 19 explores the contribution of this portfolio, and in general, the financial activity or financial-related activity in terms of comprehensive income. As far as capital is concerned, the level of reserves on debt securities at fair value comprehensive income is now, has been reduced to EUR 470 million end of March, with a sensitivity that remains limited below EUR 1 million, close to zero for the component of Italian government bonds. For the trading results, the financial results, this has been positive at EUR 8.8 million, owing to a number of trading and hedging strategies that were able to more than compensate the negative contribution, which we remind to our investors, is a sort of can be compared, can be assimilated to cost of funding coming from certificates. So certificates, in particular, have contributed EUR 25 million per month, for a total of EUR 75 million, whilst the rest, the various other components, coming from either, related to commercial activities or to hedging or trading strategies, have been, bringing a positive contribution of almost EUR 84 million. On liquidity and funding, page 20 presents the overall bank's position, with the total, in total, our cash position, liquidity position, is now almost EUR 48 billion, made for EUR 9 billion of deposit facilities, ECB deposit facilities, EUR 33 billion of ECB-eligible assets, of which EUR 20.8 billion is securities and EUR 12.6 billion is credit claims, EUR 5 billion of other marketable securities. An increase of EUR 6 billion in total versus the previous position at the reference date of December. LCR went to 155%, because following the reimbursement of EUR 10 billion TLTRO III that the bank executed in March. Now, the position with ECB in terms of TLTRO III is EUR 5.7 billion, with a net position that is only that is positive for EUR 3.3 billion. NSFR remained almost constant at 126%. Issuance activity has been successful in the first quarter, with EUR 500 million of subordinated Tier 2 issued in March, on top of the EUR 750 million issued both in green senior non-preferred and in covered bond during January. This has been also this issuance activity in the wholesale market has been also coupled with... Interesting flows from the retail market with EUR 700 million of structured issues during Q1 through our network. Finally, the combination of these asset and liability structure led to an MREL buffer of 9.2 percentage points above the requirement expressed in terms of total RWA. Capital on page 21, we reported an increase of 58 basis points in this quarter, represented by 65 basis points of additional quarter one performance. So the P&L performance that has been on that led to forecast the payment of 46 basis points in terms of payments on top of AT1 coupons. Then on the other components, we have 3 basis points of contribution on what I illustrated before from comprehensive income debt reserves, 12 basis points dividends from participations. This is typical of first quarter of the year. 24 basis points of improvement in credit risk, which has benefited from the adoption in our systems of the new model parameters. I remind you that in December, we used preliminary estimates, adopting a conservative stance. The rest is in other, only 1 basis point. MDA buffer is at 567 basis points. Tier 1, 17%, total 20.5%, total capital ratio, 20.5%. Finally, RWA are now at EUR 62.7 billion. Okay, thank you, Edoardo. Let's conclude with some wrap up of the results. On page 23, we confirm that we are highly confident in delivering our targets 2024, based on the main drivers we showed to you. And I would recall the interest rate scenario that we confirm we would have three ECB rate cuts in H2 2024. The stronger boost coming from investment product placement experience in Q1, and still continuing in April. The strict control in operating cost, the lowering of our default rate embedded in the plan, which was for 2024, 1.3%, and now we are experiencing a 0.83%, and a very strong capital position with the RWA dynamics reducing and under control. This will lead to an increase vis-à-vis 2023 of net interest income, net fees and commission, a reducing cost of risk, even cost-to- income ratio, and an increasing in Common Equity Tier 1. Considering that we are, up to now, the only bank, we already improved by 8%, the guidance 2024 vis-à-vis 2023 will leave for this quarter at EUR 0.90, the EPS guidance without one-offs. As you know, with one-off, this will increase to EUR 1.10. But stressing that we have a positive outlook on the figure, and we will be able to give update after H1 results about a potential change in guidance. Vis-à-vis, on page 24, the business plan, let's say that we are also confident, due to the figure we were experiencing, to pursue the strategic plan targets. We are basically ahead on every main feature, both vis-à-vis 2023 and 2026 strategic plan figure. This come for total revenues, for pre-provision income, the reduction of cost of risk, the gross NPE already to the target, and increasing Common Equity Tier 1. So we don't see really any risk in confirming the EUR 2 billion distribution related to net income 2023 and 2024, of which, as you know, EUR 1.4 billion of cash will be distributed by end of 2024. Of course, we are very well on track to a net income of EUR 6 billion over the planning horizon, with the distribution of EUR 4 billion to our shareholder. Thank you very much, and leave the floor to your question. 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 the touchtone telephone. To remove yourself from the question queue, please press star and two. We kindly ask you to use the handset when asking questions. Anyone who has a question may press star and one at this time. The first question is from Azzurra Guelfi with Citi. Please go ahead. Hi, good afternoon. Three questions for me. One on NII, one on cost of risk, and one on capital. When I look at your NII, what I notice the biggest difference versus the last quarter is the change in the funding cost, so your liability spread has decreased. If I understand well, that is mostly because of some specific increase of the funding and the institutional funding that will mature in the first half. So is it fair to assume a reversal of this trend, so liability spread improving in the second part, of course, based on your rate assumption? And how much are you looking for deposit? Is it linked because you are getting better offer out to the customer? The second one is on the cost of risk. I'm a bit puzzled on the overlay, because Stage 2 are coming down, the NPLs are coming down, the default rate is better than what you are expecting, but still the overlays are marginally up. And so I'm wanted to check if there is anything that you want to comment about Stage 2 development. And the other one is: How do we think about these overlays, when can you think about releasing them? What could be that you think the trigger for that and the timing? And the last one is on capital. So pro forma, the closing of the transaction that are pending and the integration charges, you would, given the progress of this quarter, you would be comfortably above 15%. I hear you about your plan to, for the distribution, and you made it clear when you presented the plan, but I'm thinking about, organic growth versus, external growth, and we have seen in Spain, consolidation starting, in the, in the banking sector. What do you think would be a trigger for starting consolidation in Italy as well? Thank you. Thank you, Azzurra. So starting from NII, yes, liability spread, as I mentioned before, we have started some maneuver in order to have some advantage as soon as the interest rate will start to go down. So and knowing that there is some flow of deposit, very expensive, that we had since a couple of years, for contractualized with some institution, we are already fostering the deposit at a lower interest rate, at low cost of deposit, in order to replace what will go down. So no reversal in second half, only a lower cost of funding because of the reduction of this expensive deposit. A reduction due to the increasing percentage of indexed deposit, which will go down automatically. And if you consider these are based, the only one who make the total cost of deposit 100 basis points, as far as the non-indexed deposit, the cost is still 20-24 basis points. So the part that accounts a lot is the indexed deposit, which will go down with the Euribor reduction. Overlays, basically, we always say that we don't consider overlays, let's say, a buffer to increase or decrease, depending on how the situation is going. We think that this is some sort of risk management activity, with deterioration of the scenario, this will go up. With a better scenario, this go down automatically. In terms of a prudent activity, we prefer also in this situation, in which notwithstanding experiencing a very good default rate, we still have a default rate for the full year 2024, which is higher. We don't think is an opportunity for us to reduce overlay, having already a very low cost of risk of 31 basis points. Which again is very consistent with this new default rate scenario, because we basically don't have any other add-on on our stock, due to the composition that I explained before about the stocks. So out of EUR 2 billion of NPE bad loans, EUR 800 million comes from the guarantee scheme, only EUR 1.2 billion are not guaranteed by the state and are covered more than 70%, almost 77%, if you consider the write-off. Capital, basically, we mentioned it's not... I wouldn't say that is a target, 15%. We mentioned many times that capital in our business plan was a consequence of the profitability that we were experiencing, and the 14% in 2026, end of the plan, would not be our target, as well as not is our target to be 15% in 2024. Of course, as you know, 2024, we will be higher because in the day after, we will have to incorporate Basel IV. So of course, this will go down for sure, beginning on 2025. And then, with this organic growth, we can think about distributing the excess of capital towards end of 2025, 2026, in terms of shareholder remuneration. The next question is from Giovanni Razzoli with Deutsche Bank. Please go ahead. Good afternoon to everybody. I have a couple of clarification. The first one is on the reclassification of the fee income. You recorded some changes in the classification from other income to fees in the Q1. Can you clarify with us what was the impact of this change, so that we can have an idea of the underlying level of growth of the fee on a quarter-on-quarter basis? Second question relates to NII and the contribution of the replicating portfolio. Edoardo, you mentioned that during the slide that there was a positive impact on the net financial results in the Q1 following this increase. If you can share with us what is the contribution to NII? The last question is on the CET1, strong improvement in the in Q1, there were some less unfavorable or more favorable adoption of input parameters that you've mentioned. If you can please clarify what portfolio do they cover? And I wonder if you can also apply these same, you know, favorable reading on the 100 basis points of negative impact, if I'm not mistaken, that you have incorporated in your business plan in terms of negative effect on business dynamics on your capital ratios. Do you have any update on those effects? Thank you. Okay, Giovanni, so, for the fee income declassification, overall, the amount of revenues that have been reclassified to fee income, model management is around EUR 60 million per year, stable throughout the various quarters. And this is due to the fact that these revenues are attributable to the payments business, and so have been also included in the design of the going concern to be attributed to the new JV with Numia. Turning to the contribution of the replicating portfolio, just a few nuances on this. We are starting, as we said, to increase the size, so that the bank will be progressively more protected from the reduction in interest rate. The current, to give you an idea, the contribution, the current level of the rate, of the receiver rate on average that we have on such portfolio is in the area of 180 basis points. So this has to be compared over time with the level of Euribor. Needless to say, this number, the receiver rate, is increasing in the current context of rates. So new transactions, new strategies of increasing the replicating portfolio will imply an increase in the weighted average return. The other question is... Sorry, not sure I understood the point. I was asking, sorry, I can rephrase my question. The first one is on the positive impact that you had from the less unfavorable calculation of the parameters for credit risks. Yeah. So if you can elaborate this. Secondly, in the business plan, if I'm not mistaken, you incorporated some negative impacts on the CET1 from the business evolution. Yeah. Okay, okay. Okay, okay. I was wondering whether you were being quite conservative on that, so- Sorry, okay. Okay, so, the first one, so we have updated the models following a number of interactions with ECB. Basically, this was in the area of EBA guidelines. How we proceeded in that? In December, reference date of December, we proceeded with estimates based on simulations without having the parameters already in, already embedded in the legacy systems. To preserve some headroom and avoid negative evolutions over time, we preferred, as we also communicate to the market in that period, to maintain, to adopt a conservative stance. So we included a buffer by increasing the level of RWA, using Article 3 of CRR, which was so to speak estimated preserving some margin of conservatism against the more analytical estimates. So once these estimates had been translated from a parallel environment to the real legacy systems, we discovered a number that was lower, a number in terms of increase of RWA, that was lower than the initial conservative estimate. And this generated this improvement in credit risk that we illustrated in the capital work. For the final question on business dynamic in business plan, of course, we are only two quarters along the line from the start of the business plan. We have had a moderate drift in credit risk since, for example, in this quarter, I think it's units of basis points, probably 5 basis points, something like that. But really nothing that is creating any concern on in this respect. The next question is from Andrea Lisi with Equita. Please go ahead. Hi, good evening. Just one quick question is about the income from insurance business, which was quite weak, a bit weak in the quarter. So what do you expect going on, and what does it need to accelerate from current level? And if you can explain the reason why it was a bit weak in this quarter. Thank you. Just, of course, it's quite new also for us. So we are experiencing the accountancy of banc assurance into the banking account. Basically, because of Vera Vita and some legacy that we had with some separate and segregated management account, we were not able to grow into this account in the first quarter, and basically, most probably, we won't be able to grow also in Q2. Only in this respect of these separate accounts. Meanwhile, we are over the budget in terms of placement of banc assurance product, all in all. But because they are still three different entity, BPM Vita, Vera Vita, and Vera Financial, which is our Irish life company, we have to segregate the different accounts, and I think you may know that, the accountability of banc assurance is quite different. So when there is a negative component, you have to account for all the amount. And this brought to some EUR 10 million of negative into the line of revenues from banc assurance, which was what brought us to have only a EUR 5 million contribution, being a EUR 50 million contribution, the one coming from BPM Vita, with a negative of EUR 10 million from Vera Vita. So going further, as soon as we will be able, and we think this will start in Q3, to have the possibility to have new product from Generali for our Vera Vita production, we will be able to compensate the loss, and end up with a consistent result in life bancassurance, in the region of what we were expecting, basically, for whole year 2024, which is around EUR 65 million-EUR 70 million of revenues. Thank you. The next question is from Hugo Cruz with KBW. Please go ahead. Hi, thank you for the time. I just want to clarify some of the comments you made on the excess capital. And a bit related to that also, try to understand your guidance on Basel IV. So, you know, in Q4, your guidance on regulatory headwinds, we know now it was conservative, right? And so I was wondering if the guidance you gave on Basel IV is also being conservative, and if you have any new guidance there. And then, related to this, I think you said on the call earlier that you would start, you know, either giving guidance or clarifying the usage of excess capital in 2025, 2026. So if you could kind of repeat those comments. You know, is it that we'll know in 2025, 2026, what you will do with excess capital, or will we start to distribute that excess capital? This will be very helpful if you could clarify it. Thank you. So, on Basel IV guidance, we prefer not to go for new guidance. Of course, we think we have been conservative in assessing potential regulatory headwinds when we published the plan. I remind you that, on that occasion, we said that we were expecting regulatory headwinds between 2023, end of 2023, sorry, end of 2026, so 2024 and 2026, of a total 130 basis points, mostly represented by Basel IV. I have also to remind that this number includes significant headwind on bancassurance because the risk weight in the regime of the Danish Compromise from the current level of 100% after Basel IV will go to a new level of 250%. We are convinced that we may explore some levers to mitigate the impact of Basel IV, but before going with new guidance and estimates, we prefer to keep the current one. On the usage of excess capital, well, as Giuseppe already clarified, we prefer not to label the levels expected in 2025. At end of this year or end of the plan, respectively, 15% and 14% as targets. We are convinced that this level create excess capital, so you are correct, and we will assess at the end of the plan what could be the most effective in the interest of our shareholders use of such excess capital, including distribution and including buybacks to be considered later on after confirming the distribution plan for the current calendar year. Okay, thank you. ... As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Adele Palamà with UBS. Please go ahead. Yes. Hi, good afternoon. I have one question, maybe you mentioned already, on fees. So there has been quite of an increase in upfront fees. Is it like something that is, that we should expect as, regarding, or there is any one-off component there? And in general, on the, guidance for the, full year 2024, I mean, I understand that you are confirming the guidance, but, sort of changing the outlook, flagging the upside risk on your guidance. But which are the area that you, want to have sort of a confirmation that are going better than expected, before, like, changing the guidance, upgrading the guidance, given the fact that you reported the stronger trends on fees and cost of risk this quarter? Thanks. Thank you. For the fees, of course, we were experiencing an unexpected amount of performance in investment product placement. As I mentioned before, we grew from an average of EUR 4 billion per quarter to almost EUR 6 billion. So frankly speaking, I would wait another quarter to say that this is the new normal. I wouldn't expect that. But for sure, this will come higher than the EUR 4 billion we were used to. So let's say that we feel that between EUR 5 billion and EUR 5.5 billion could be results for Q2. But that's the reason why we won't expect at least H1 to change the guidance for the year. Is a potential because frankly speaking, we're not used, we're not expecting this level. The interest rate are still high, so the trigger for which we expected the investment product to be sold is yet to come. So possibly we could do a very good job also at this level, considering also that for bancassurance, as I was explaining before, we still don't have, for all the companies, the right level in order to be placed to our client. So some surprise is possible. I would say that we showed an up in the guidance vis-à-vis the results of last year, and we still feel that we can have a good performance, but I can't confirm the current level yet. As far as the guidance, again, the current number shows us that it's possible to change the guidance, but because we only three months ago gave this guidance, and again, we are the only bank at the moment, we gave already a guidance for 2024, 8% higher than 2023. We don't expect after three months to be needed to change the guidance. The outlook is very positive. Let's wait if these numbers can be confirmed in the second Q, and end of second Q, for us, is much more serious to approach a potential change of guidance by that date. Okay, thanks. For any further questions, please press star and one on your telephone. The next question is from Noemi Peruch with Mediobanca. Please go ahead. Good evening. Thank you for taking my questions. I have just a few on NII. So if you could please walk us through the quarterly NII contributions, since it is up excluding the day effect while the commercial spread is down Q -on -Q. And then on... I would like more color on the contribution to NII from the tax credits in Q1, and whether it has changed vis-à-vis Q4. And if you could give us the total tax credit outstanding in your balance sheet as of Q1. Thank you very much. Okay. Contribution from tax credit. Good evening, Noemi. Contribution from tax credit is around EUR 10 million per month to NII. Tax credit in the balance sheet is around EUR 3 billion, on top of additional commitments below the line that lead to a total of EUR 4.5 billion, maybe more, EUR 5 billion. On the first question was, can you repeat, please? Was it on the quarterly development of NII? Exactly. On the moving parts, Q -on -Q, since we are seeing a commercial spread down. Thank you. We showed already the commercial spreads, and we answered to one of the first questions on the liability spread. For the remaining part of this year, we expect a total NII, which is above the level of last year, thanks to the fact that on average, we expect Euribor in the area of 365 basis points. In terms of the various moving parts, the commercial part is expected to be stable throughout the various quarters, with a limited reduction towards the end of the year. In line with the increase of, with the reduction, sorry, of interest rates, to have an increased contribution from hedging strategies, especially those cons- related to replicating portfolio. Thank you. For any further questions, please press star and one on your telephone. Ladies and gentlemen, there are no more questions registered at this time. Thank you very much, everybody. Thanks for the heavy day today, and we look forward to meet you in person during the next week. Thank you. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.