Good afternoon. This is the conference call conference operator. Welcome, and thank you for joining the Banca Generali's 2021 interim results conference call. As a reminder, our participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Gian Maria Mossa, CEO and General Manager of Banca Generali. Please go ahead, sir. Good afternoon, welcome to our first half conference call results. Let me start by saying that the first six months of this year were the best ever in terms of commercial results and financials. Starting from the commercial results, both total assets and total inflows exceeded the target that we set for our three-year business plan. In particular, total assets exceeded EUR 80 billion with a growing penetration of assets under advisory, EUR 6.8 billion, and assets under management, above EUR 41 billion. This is thanks to the fact that the financial advisory network is really in good shape, and it continues to grow steadily, both in terms of size and portfolio average. You know that for us, portfolio average is a key indicator of the sustainability of our numbers. In terms of financial results, we decided to post a prudent provision of EUR 80 million to protect our clients. I will give you more details in the next slide. Despite this one-off, the net profit closed above EUR 100 million. That is the best half ever for the bank. Focusing on the second quarter of this year, the reported net profit were at EUR 54.7 million, with the recurring component at EUR 46 million. That again is the best ever quarter for the bank in terms of recurring components. This is thanks basically to the business expansion and a very efficient operating leverage. Finally, the capital position is very solid, even after incorporating EUR 0.5 billion for dividends. I'm sure you agree that the recent decision by the ECB not to extend the recommendation is very, very welcome. Now let's move on to slide four, where you can find the details of the one-off provision. First of all, the need for this provision comes from the potential losses in the portfolios of our client that could result from the specific investment in securitization in the healthcare receivable. Specifically, Banca Generali will launch in the next weeks a purchase offer to buy all the senior notes of this securitization, which as of today have an outstanding amount of EUR 478 million. Note please that the purchase offer doesn't include the other tranches, mainly junior notes of the securitizations, amounting to EUR 64 million, and that these junior notes are not held either by our clients or by the bank. We are talking about senior notes only. The amount paid to our clients will be no lower than the initial investment of our clients, less the repayments already made and the coupon already distributed. Moving on the assumption for these provisions, and our very prudent assumption, we have conservatively allocated a sum of EUR 80 million that is estimated as a difference between the fair value that we have worked out with the support of specialists, external specialists, so the fair value of the senior notes, and the price offered to clients, and assuming that 100% of our clients will accept this offer. Why we decided to launch this purchase offer? For basically two main reasons, two specific reasons. The first one is because there are some critical issues emerged in the procedure for the recovery of these healthcare receivables, also related to the long pandemic situation. As you probably know, the so-called Save Italy Decree limited the ability to start or continue an enforced execution against local healthcare units, and limited also the possibility of negotiating the recovery of these receivables according to the planned timetables, including a possible settlement. The second reason is because we carried out an analysis of the underlying of these portfolios of healthcare receivables with, as I already said, the support of external specialists, which identified that the quality and the fair value of these receivables were lower than the one expected for part of the underlying. This analysis was run in consideration of our diligence duties toward our clients, of course, to better assess the impact of the pandemic, and also followed a servicer's notice highlighting a breach in investment guidelines of one of these securitizations. For these two reasons, although we acted only as a placement agent, and consider that the notes were proposed only to professional clients, we decide to undertake this commitment to fully protect our clients and strengthen our trust-based relationship with them. Clearly, be sure that we are also carrying out an analysis to understand whether there has been any improper behavior by those who manage this securitization, and thereafter, we will assess whether, and to what extent, to take any measure in respect of this. The purchase of these senior notes will have negligible impact on the risk-weighted assets and on the capital ratio of the bank. The impact will be limited also on the return of the banking book, and it will be in the range of EUR 2 million-EUR 3 million for this year. This negative impact, small negative impact on the net interest income will be, of course, more than balanced by trading gains from selling financial and corporate bonds to mitigate the risk-weighted asset. Last, in order to manage the purchased notes, we've appointed a specialized asset manager among the best in the market, with very strong competencies in this field. The expected return is in the range 2%-4%, and consider that from accounting point of view, the notes will be posted at fair value, and the return of these notes can be recognized in the financial statements under trading gains only after the repayment of the capital invested. Not pro rata temporis. Basically, we decided to do a very prudent provision for a specific event that, for two main reasons, implied a potential reputational risk with our client. For this reason, we decide to launch this purchase offer. From my point of view, this is the best way to manage this situation, and I do not see any further impact and spillover on the clients and on the numbers of the bank. Slide five is our usual representation of a simplified P&L, for the sake of time, I will not comment it. While I would like to comment page slide six, where we can see the breakdown of our net profit. First of all, as you can see, the acceleration of the recurring components in the first half of this year is very solid. EUR 83.2 million means 23% higher on year-on-year basis. This is a confirmation of the commitment of the bank that we decided that during our Investor Day in 2018 to focus on sustainable growth of the core components of our P&L. You look at the graph on the right of page 6, you can see the annual results. You know that in less than four y ears, we doubled our recurring profits, and we are positive for the full year results for this year and beyond. I do really expect a very good year summing up first half and second half results. The business is really solid. Next page, in the next two pages, slide seven and slide eight, we focus on the build-up of both non-recurring and recurring profits. Let's start from slide seven, where there is this focus on non-recurring items. Just to sum up, I would say two positives and one negative. On the positive side, we have, of course, the one-off record of performance fees driven by, of course, favorable market conditions. Plus, a second positive comes from a positive tax contribution of EUR 13 million, basically linked to the realignment of the goodwill and other intangible assets in accordance with the 2021 Budget Law. On the negative side, you can see the one-off prudent provision that we already introduced. It's aimed at protecting our clients. The combined results of positives and negatives is an increase of more than EUR 40 million year-on-year. I do consider the provision a one-off. It is more than offset, and one-off of the performance that for the first half of this year were really impressive. Slide eight, you can see the breakdown of the recurring profits, where in the operating items, the quality of the operating leverage is pretty clear, with net fees up by EUR 34.2 million and cost up only by EUR 5 million. On the right, you see the non-operating items, and the impact of this non-operating is around EUR 14 million, mainly for higher provision linked to the FA loyalty plan. You know that the loyalty plan is driven by the commercial result. Now from page 10, we start with our usual representation of our P&L line by line. We start with the net financial income. Net financial income in the first half closed at EUR 55.3, with a higher contribution of the trading income. In the second quarter was at EUR 8.4 million. The net interest income yield is lower than in the first quarter, basically for the increasing liquidity in the portfolio. You can see it on the right of the page where you have the trend of the total assets and the trend of the interest-bearing assets, with an increase from EUR 14 billion- EUR 15.7 billion, and a negative impact on loans to banks with a yield of -0.22%. Page 11. This is the greatest result, in my opinion. Gross recurring fees up by 18%, with positive contribution of both asset management fees and other fees. In terms of margins, let's say there are some round effects, but let's say that it's pretty stable in the quarter. On the right, you have the variable fees. Page 12. We have the quarterly trend of management fees. On year on year basis, the half result is pretty significant, +17%. Also, the quarterly trend is very solid, with the second quarter of this year at EUR 193.1 million. This implies, considering the managed assets, a margin of 1.38. Just to remind that this 1.38 included also Nextam Partners and Valeur Fiduciaria. We confirm the target 1.38-1.42 for the full year. Consider these numbers don't include the new pricing structure for the Lux IM we will see later. Page 13, there is the focus on gross fees. Numbers are pretty solid also in this case. You see that the margins is stable at 0.18, with a growing contribution on a year-on-year term of both banking fees and entry fees. On the right, you can see the breakdown between new revenue streams that continue to grow at a double-digit rate. This is basically driven by all the components on the new revenue engine. It's also impressive, the acceleration in the more traditional fees. Part of this increase is linked to the market. Think of, for example, the front fees. Part is the consequence of a price optimization in the current accounts of our clients. Next page 14, there is the focus on fee expenses. Also here, positive numbers. Total payout ratio closed at 52.7%, so a further reduction on a year-on-year basis. This is basically driven by a lower cost of growth. This is basically, let's say the overall amortization costs are the same, but the assets are increasing, so in relative terms, it account less and less. While payouts of third parties is stable. As we already mentioned here, the target is to stay close or below to 6%. Page 15, there is the focus on operating costs. Overall, +2.7%, where on the right, you see the focus on the core operating cost up 4.6%, which is basically driven by increasing the potential cost of the variable components of the salaries for the good results of the bank. There is a linear increase in amortization, as expected, and some acceleration in investments due to the fact that the results are very solid. Page 16, operating cost, the ratios. Here the numbers are very impressive and are, of course, linked to an exceptional first half. The operating cost on total assets is lower than 0.3%, it was a sort of threshold. Cost to income continues to go down, both in terms of reported cost income, as well as adjusted cost income. Page 17, capital ratios. We have already allocated EUR 1.25 per share for this year. If you sum this EUR 1.25 to the previous EUR 3.3, we have exceeded EUR 500 million of dividend. We are ready to pay the greatest part as soon as October. We confirm the intention to pay EUR 2.7 in October and EUR 0.6 in January. Of course, the part of dividend for this year, I'm sure it won't be on the floor of EUR 1.25, after the formal approval of AGM. In terms of liquidity ratio, I say that we continue to be well above all the limits required by regulators. Just to sum up, I think that the numbers are the result of a very sound performance of the financial advisory network. It's a very positive momentum for the industry. It's impressive positive momentum for us. The brand matters. Our proposition in private banking is working very well. I'm very confident that in particular, core recurring net profit will increase even further in the second half of the year, also because also July started very well. Moving on the net inflows assets and recruiting. Page 19, we already said we exceeded EUR 80.4 billion of total assets. What matter most is the percentage of managed solutions on total assets. We are at 51.3%, thanks to the contribution of all product initiatives, in-house funds, third-party funds, financial wrappers, and insurance wrappers. As you can see, the stock of traditional life policies is decreasing over time, as we already announced during the previous conference call. We are going to use this product just tactically in case of volatility in the market and in case of opportunity to accelerate inflows. Page 20 and 21, breakdown of total net inflows. Slide 20 is about the quality, and you see that the acceleration on year-on-year basis is basically driven by the acceleration in managed solution, almost double on year-on-year basis. Page 21, there is the contribution in terms of acquisition channel. We resumed the recruitment activity. Pretty sound, it's working very well. 75 new colleagues in the first half. Despite this refocus on recruitment, the activity of the existing sales force is even stronger than in the past. You can see it on the left graph of the page 21, where the contribution of the existing network is at EUR 2.8 billion or EUR 0.6 billion higher than the past year. Page 22, the constant growth of our financial advisory network in terms of numbers. Now we have 2,139 new colleagues. Pretty impressive, the breakdown on the right in terms of clusters, where the wealth managers, so financial advisors with more than EUR 50 million exceeded 340 units with a portfolio average above EUR 90 million. On the bottom of this page, you remember we launched the team project during our investor day. This is a sort of recap of the numbers achieved as of today. 114 financial advisory teams. It is almost 10% of total assets, and the portfolio average per team is about EUR 80 million. This is just to remind you that the kind of team are both vertical teams, so senior with junior and horizontal teams with complementarity of capabilities. Page 23, just to focus on the constant growth of the portfolio average, where the gap compared to the portfolio average of the market is continuing to grow. Here we can only say that the model is working very well, very solid, and also the recruitment activity is going very well. For this reason, we decided to increase the target for net inflows in the range of EUR 5.56 billion, probably closer to the upper band of the range. The last few slides are on our Luxembourg platform. We deliver on promises. The new offer is live. Here you have some numbers and let's say the main drivers of this new offer. Page 25, you see the evolution of assets. We exceeded EUR 20 billion. On the right, you see concentration. They were well spread across different strategies and different asset managers. To cover 80% of the assets, you need 40% of the strategies. It's definitely less concentrated than the traditional Gini benchmark. This is true also in terms of external asset managers. To achieve 80% of assets, you need 40% of the external asset managers. Page 26, just to say we are performing also very well in terms of absolute performance for our clients. Page 27, just to say that the numbers on the retail distribution of these products is gaining momentum, is working pretty well. We are close to achieve EUR 10 billion, but on the right you can see that it's working very well without any specific initiative to push. In terms of the ratio, total retail products in total in-house retail products on total assets, we are constant at 12% of the total assets. On the graph on the right bottom of the page, you see the mix in the retail funds offer, where third-party funds account for 56%. Also here there is some room to be more and more efficient. Page 28 and 29 is a recap of the new features and new performance fee mechanism of our platform in Luxembourg. On page 28, you see that we are strengthening our equity offer and our thematic offer. We are strengthening the ESG proposition, not only in equity but also in bonds, flexible, and alternative solutions. We introduce for the first time two new families of products, what we call trackers of flagship premium asset management funds. Of course, the goal is pretty clear, to internalize some of the assets distributed directly to our clients. Second, some cash parking initiatives, where the goal is to close zero, towards zero performance, but just zero plus because there is a growing request also for these kind of solutions. Page 29, there is a sum up of the two new performance fees calculation mechanism. Starting from Lux IM, the only change in the Lux IM is about the reference period. It is no more on a year-on-year basis, but is from inception. We maintain the daily crystallization. For BG Selection, we introduce a high on high mechanism. At the end of the year, we work out the performance. The reference period is five years, and in this case, the crystallization is on yearly basis. We differentiate the approach also to have some diversification inside our Luxembourg platform. As I mentioned in the previous conference call, the new mechanism will be applied as soon as new products are launched. For the existing products, we will introduce the new mechanism starting from January 1st, and with the reset of the historical series. For the first year, the impact will be zero. With this introduction of new performance fee mechanism, I confirm we have also optimized the price in terms of ongoing charge of specific initiatives to offset EUR 20 million-EUR 30 million of potential reduction in the medium long term on the performance fee. Page 30 is just a recap of the target of our three-year business plan. You know that we have been working for the new business plan for the last month, where, of course, the key drivers will be the same: asset growth, sustainable profitability, and shareholders remuneration. I do see an opportunity to distribute a very impressive amount of cash. As I already said, we already allocated half billion EUR, and I'm sure that there is room to increase even further this cash due to the results and the expectation for the second half of the year. Thank you, and now I will hand over for the Q&A session. Excuse me, this is the conference call operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. To remove yourself from a question queue, please press star and two. Please pick up the receiver when asking questions. Anyone with a question may press star and one at this time. The first question is from Domenico Santoro of HSBC. Please go ahead. Hello. Hi. Good afternoon. Thanks for the presentation, the call, and all the details. Just to a little bit on this extraordinary provision on the senior notes of the securitization. If my understanding is correct, and maybe, (uncertain), we go on the business. First of all, on this securitization, my understanding is that you will repurchase the notes that are held by clients at the moment. Clients that won't basically take any losses. I'm not sure whether you're going to recognize then the time value, of course, for the investments or the money, and you will repurchase the notes. Can you tell us what is the residual value of these notes based on the appraisal that you have just done in order to understand whether there is any risk at this point on your balance sheet rather than the clients? I understand you mentioned during the call there was a violation of selling policies across the network or branch. You don't expect any headwinds on your business, any reputational issues. Probably, we touched already base on this a couple of calls ago when there was the famous article on the SPV. The offer is going to start in September, and probably you don't know yet how the clients they will react to this. Can you tell us if you have any numbers on hand, how much is the money invested, the total money in terms of AUM of the clients that are going to be involved in this offer? There is more question on the businesses that the repricing on the asset under management. If I remember correctly, it was EUR 25 million-EUR 30 million sort of run rate in terms of additional fees. Given that has started already in July, if I'm not wrong, I just wonder how much we should, including the third quarter, a quarter of this EUR 25 million, EUR 30 million or a smaller portion, just some guidance would be helpful. Thank you. Thank you, Domenico. We start from the second question and then the first. The repricing has started at the 20th of July. It will account for two months in the third quarter and the full quarter for the last one. In terms of headwinds with clients, I'm sure I don't see any risk, but probably some strengthening in the relationship. We have some example in the past that when the bank decide to, we say, to hedge any potential losses, the reaction of clients, and specifically of financial advisors, is very positive and strong. Consider that we already approach top bank managers to fully understand the potential reactions. Again, I'm positive that probably is not about headwinds, but is about tailwinds. We are acting to protect our clients. The numbers of the clients are important clients for the bank. It's about between EUR 4 billion and EUR 5 billion of assets of our clients. I'm sure being professional clients and being clients of our top financial advisor, they know that we are doing something exceptional. It's the first time ever for the bank, is linked to the fact that in the investment guidance, we saw the quality and fair value of the underlying different from what we expected. It's not about mis- selling all financial advisors, is driven by, in my opinion, a different underlying compared to the one we should have invested, the clients should have invested. For the details in numbers, I will hand over to Tommaso. Thank you, Gian Maria. I think that to answer to the question of Domenico, we have to say that we are going to buy the notes from client at a price which will be enough, because we don't want the clients incurring any losses. It will be something near to nominal, a little bit lower, because we have already repaid the clients for part of the principal, and also they have gained the yield during the last two or three years. At the same time, we did a very deep due diligence on the underlying, with also one dedicated specific player, which is very expert in terms of healthcare receivable. The due diligence was very analytical. It follow a bottom-up approach, cover almost the single invoices which are underlying the notes, which are more than 30,000, and so verifying the history, and every single invoice. We think that our fair value is very solid, the valuation that we did. That's why we think that the provision that we put in the P&L is very conservative. We don't expect to have significant variation of this value over time. It's really a one-off, and we think that we have solved the problem today. Yes. Just to complete what Tommaso said, we asked an external specialist a liquidation value, this liquidation values confirms the quality of the fair price, they say that the prudent provision we decided to make. Second, the external asset manager that will manage these portfolios develop a business plan. I'm more confident to recover part of this provision than to have a further loss. I consider this provision a very prudent one. Just to understand if. Please, go ahead. Can I ask a follow-up question? Yes. We cannot hear you. Hello? Yeah. Can you hear me now? Yes. Now, yes. Yeah. Sorry. Just to follow up on this, the EUR 80 million includes both the reimbursement, let's put it this way, the repurchase of the notes and also some provision that you might have already taken on these notes, given that the fair value set in which you had done the due diligence. Can you just mention how much we talk about in terms of receivable value of these notes? Yeah. Well, the provision is the difference between the price that we pay to the clients, and the fair value that we estimated of the notes. Let's say that the fair value of the notes is around the 80% of the senior notes, of the principal amount of the senior notes we are spending today, which are in absolute terms around EUR 380 million. This is the difference. Overall, the assets which are in the notes, they are amounts to almost EUR 600 million. Of course, there is also the other tranches, mezzanine and junior debt takes the first part of the loss. Understand. Thank you very much. The next question is from Gianluca Ferrari of Mediobanca. Please go ahead. Yes. Good afternoon, everyone. Ciao, Gian Maria. Sorry to come back to this situation for a second. I was wondering if this book is partially related to what the Financial Times mentioned last year. If we are talking about, in part, the same kind of securitization. Second, if the structurer of that book is the same of that related to the FT article. Also because I understood you mentioned during the call that you might evaluate some actions against who worked to set up these books. Point number two is I see on page three that you are calculating capital ratios, assuming the allocation to dividends of 80% of first half profits. Given that this is going to be probably a record year for you, should we take the 80% payout as a kind of guidance? If so, will it be possible to make this dividend sustainable in the future? The third and final question is a clarification on the cost of growth that was a bit lower in absolute terms when the inflows into managed assets were EUR 2 billion compared to EUR 1.4 billion last year. Advisors sold a lot of managed assets in this first half. I was expecting also higher bonuses to be paid or accrual for bonuses to be paid to advisors. If you can explain to me what is the math behind this slight decline in the cost of growth. Thank you. Thank you, Gianluca. Let's say that the Financial Times article was about potential anti-money laundering issue related to two vehicles that had already reimbursed the client. Here, the issue is on other securitization, always linked to healthcare receivables, It's about the fair value and the quality of the underlying. We know that, for example, the servicer that is in charge of the control has strengthened the anti-money laundering control. In terms of payout, let's say that the guidance is always the same, the range 70%-80%. As you know, we are very focused on smoothing the dividend in absolute terms, We introduce the two tranches to use performance fee also to be impactful also on the absolute dividend of the next year. The mechanism will be almost the same. We are not absorbing excess capital. We do want to remunerate our shareholders, but the decision to stay closer to 70% or 80% will be taken when we will be close to the AGM. On the payout ratio, this is really interesting because on one hand, of course, in percentage, the assets are growing very well. In terms of relatives, the incidence, the percentage, the weight is lower. On the other one, consider that year after year, we are raising the bar for our financial advisors, so we are increasing their targets. If years ago to achieve the bonus, you had to collect EUR 1 million, now the target is EUR 2 million. Raising the bar, and the targets of the financial advisor network, provide a support in limiting and reducing the overall impact of the cost of growth. Let's say the bank is growing, the targets are more and more challenged, and it must be the same for the financial advisors. Very clear. Thank you. The next question is from Elena Perini of Intesa Sanpaolo. Please go ahead. Yes. Good afternoon. I've got three questions actually. The first one is about your good cost control in the quarter. Can we expect an increase in costs lower than your initial guidance? What can be the levers to keep costs under control in the coming quarters? The second question is about performance fees in July. If you can provide us with an approximate guidance or amount that you expect, as only few days are lacking. The final question is about your CET1 ratio at the end of June. As you mentioned that there was this seasonality effect that we know about the purchase of treasury shares to serve the remuneration policies, but there were also some higher capital absorption linked to temporary higher DTA for the one-off provision that you made. I was wondering if you can give us an outlook for this final part of the year. Thank you very much. Thank you. On the cost side, the range in the core cost, 3%-5%, is a good guidance, and we will be closer to 5% when numbers are strong, and we will be closer to 3% when the numbers will be less strong. We want to accelerate innovation. I have to confirm the range of 3%-5% will be closer to 5% if numbers continue to be very solid. It's an acceleration of all the project, and I do believe that it's really important to continue to invest. Performance fees in July, we are close to EUR 10 million. Consider that the performance fee for the second part of the year won't be linear because we apply a sort of cap of 2% on single solutions. If the performance fee related to a single fund exceeds 2%, we stop it. Just to be clear that I do not expect to have the same performance over the first half, and as a prudent approach, we set no more than other EUR 10 million, EUR 15 million for the full year. For the CET1 ratio, I will hand over to Tommaso. Thank you. Hi. Well, yes, there are two main effects on the seasonality. One is linked to the commitment to purchase our share to finance the incentives to the network mainly. The other point is linked to the DTA, which is linked to the provision that we put in the P&L. Let's say that both the first one and the second one by the end will be reabsorbed because, of course, when we buy the share, this effect is going to be reabsorbed in the TCR. At the same time also, the DTA is just because in the first half it's a (uncertain). When we perform all the purchase by the clients, the difference will become a realized loss in terms of fiscal impact, so we won't have DTAs anymore. Our internal forecast is to stay in the range between 16.5% and 17% in terms of TCR by the end of the year. Okay. Thank you very much. Very clear. The next question is from Giovanni Razzoli of Deutsche Bank. Please go ahead. Good afternoon to everybody. A couple of clarification again on the EUR 80 million of provision. I was wondering whether you can share with us also the number of clients that will be impacted by the buyback of those securities. A clarification on the comments that you have made on a question before. You said that the fair value of the notes is clearly more or less 80% of the notional. In the press release, you mentioned that the notional is EUR 480 million. Which means that the mark-to-market is EUR 400 million and not EUR 320 that you have mentioned. If you can please reconcile this. This is my first question. The second question, I don't know if it applies or not, but can you share with us what would have been in the first half or in the second quarter, the performance fees if the new pricing scheme were already in place since year-end? I don't know whether you have performed the back testing or not. The very final question, which is not actually company specific, but is more sector specific. On the press a few weeks ago, there was mention a possibility for the change in the fiscal regulation of investment income and other income. I was wondering whether this change in the fiscal treatment were introduced, if this can have an impact on the appeal of insurance and financial wrappers at the industry level. Thank you. Thank you. I start with the details of the securitization. The senior notes account for EUR 478 million. You have other tranches, mainly junior, for EUR 64 million. You have also accrued interest for other, more or less EUR 60 million. The overall vehicle, the total asset of the SPV, or the sum of the securitization, is around EUR 600 million. We decided to pay to the client a value no lower than their investment, less repayments and coupons. The average price of the purchase will be around 95 point something. With this number, no clients will have any losses. The clients on average will be with an annual return in the range of 1%-3%. If I can just please point out. I said that the provision is difference between the value paid to the clients, which is the 95.something%, and the fair value that we gave to the notes. The EUR 80 million are the difference of this number. This is how it works. Okay. Number of clients, consider you have two different kind of clients. You have the clients who bought directly this securitization, is about 400 clients, we can manage one by one. You have some clients involved indirectly because this securitization is inside some financial wrappers where the impact is very limited because the portfolio is very diversified. If you focus on the 400 again, you have more or less 300 financial advisors involved we are talking about one, two, three, four maximum clients per financial advisor. It's something that you can manage very well through the financial advisory network. In terms of performance fee for the Lux IM and for the BG Selection, Tommaso has the details. Yes. I think that for the Lux IM, which is the major part of our performance fee, it won't be any change with the new model, basically. With the BG Selection, of course, we should wait the end of the year to crystallize the performance, the accrued should be in the range of EUR 37 million. The impact should be very low. On the performance fee, just to be even more clearer. If you think of the new strategy, we haven't the historical series, we will start from zero for the new products. For the existing products, we will reset the historical series in January the 1st. The first year will be even better than the current mechanism. In the second year, will be almost the same. From the third year, you will start to have a since inception historical series, and you will see the impact. We do expect the impact in the medium term. We decided to optimize the prices to have an immediate positive impact on the profitability of the bank, you have a sort of period in which you have the positives of the new prices, and you don't have the negative of the new mechanism. We are fully committed to work on recurring profits, also because we have a conservative view on the markets in the next quarters. Sorry, for the last question, I will hand over to Tommaso. Yes. Of course, the fiscal reform, which is a study at the moment, could be possible to compensate capital gains and other income. Today, it is possible to make this compensation only in the wrappers, both financial and insurance. If this hypothesis goes on, it could be possible to do also in a simple dossier of administrative assets. Of course, this is not the only feature that likes to our clients, which invest in insurance wrapper or financial wrappers. It's just one of the feature. For example, for insurance wrapper, there are many other features which are very important for them. We don't think that this change could have an impact in terms of volume or our capacity to collect, our client to invest in those products. I think it also could be an opportunity for the administrative asset to find other ways to serve clients, to give them an opportunity to compensate plus and minus inside also an administrative dossier. Yeah. In general terms, I do expect some incentive to investments in the long-term horizon. The consideration is that probably there will be some special treatment on specific vehicles or specific solution for pension goals, long-term investments. I do see the same interest. On one end, the interest of distributors and asset managers to invest the assets of our clients in the long term, and from the regulators and institutions, to invest part of the excess of liquidity in equity, and more in general, in the economy. Move this enormous cash amount into the economy. I'm pretty sure that if there is a surprise, it will be a positive one. Thank you. The next question is from Angeliki Bairaktari of Autonomous Research. Go ahead. Good afternoon. Thanks for taking my questions. Just three questions on my side as well, please. First of all, on the securitization that you're buying back from clients, could you give us an idea of the amount of fees that you have generated on the sale of those healthcare receivables over time, just to get sort of a rough idea of what was the revenue that you have booked in previous quarters linked to that? Secondly, there has been some press speculation with regards to a sale of the Deutsche Bank Financial Advisor network in Italy, Finanza & Futuro. Do you have any appetite to look at it? Have you considered M&A in terms of buying smaller financial advisor networks? Third question, you mentioned that you're introducing some tracker funds on flagship strategies of some of your biggest partner asset manager providers. Could you give us a bit more details on how this works? Are you paying a fee to replicate those strategies to those third-party asset managers? Thank you very much. Thank you. First of all, in terms of securitization, we have offered this kind of solution in order to increase inflows, not to increase revenues. The overall profitability of this securitization is almost zero. It's just sold under advanced advisory, and the average price applied to security, let's say illiquid products in general terms, is around EUR 0.3. Let's say that the impact on the overall revenues is negligible. In terms of M&A, of course, we are always interested in considering any acceleration of the strategy to grow even further, also through acquisition. As I always say, if the price is right, and if the business is easy to integrate. At the moment, we are looking at different targets, but there isn't anything off on the table, let's say. Again, the goal is to auto-finance the acquisition. I don't see any disruptive decision in M&A activity in the next months. Flagship strategy, thank you for the question. Let's say that if you look at the assets of our asset managers distributed directly on the retail, you have some specific products very successful. In this case, we ask to the asset manager to have a sort of proxy or that strategy. To track that strategy in an in-house fund, and we're going to pay between 20 and 30 basis points for the advice of this tracker strategy. In terms of overall profitability, of course, moving from direct distribution of third party to these trackers will be pretty significant on the revenues of that specific product. I do not expect to reduce significantly the assets of third parties. I do expect a sort of rebalancing. The next question is from Alberto Villa, Intermonte. Please go ahead. Good afternoon. Three questions, if I may. The first one is back on the provision, but to ask you a more general question related to the illiquid assets. I was wondering if your appetite to distribute illiquid assets and your clients' appetite will eventually have any impact from this kind of events, or if you think that in the future, the penetration of illiquid assets out of the total of the clients' assets under management is going to grow as it has been the case in the last few quarters in general for the industry. The second one is on the tax rate, if you can give us an idea of the normalized tax rate in the second quarter or in the first half. If you envisage any change in the tax rate given the changes in the performance fees calculation and so on for the future. Also, again, on the tax rate, if there is any expectation that the discussions about the minimum global tax rate and so on could affect your business. I understand at this point it doesn't seem the case, but in general, if you expect tax rate in the future to be higher for your company, given the change in structure of the revenues generation and the potential changes in regulation as well. Finally, you mentioned the strong July inflows. I don't know if you can give us a more precise target for the entire 2021 in terms of net inflows, specifically on managed assets. Thank you. Thank you. Starting from the appetite for illiquid assets or the strategy for illiquid assets, I don't see any significant changes. First of all, we provide this solution in order to increase the diversification of the portfolio of our clients, and specifically for professional or private clients. Since it is just about diversification, it's not linked to higher profitability, I don't see the case. Of course, we will assess all the procedure and the responsibilities internally and externally, but let's say that I consider this event a sort of blitz. In the last 20 years, we have already seen several problems with several products. This is the first time we decide to protect our clients, just because it's a sum of situations. You have the liquidity of the underlying, you have the pandemic, you have the quality of the underlying, and the fair value missing the expectations, so forth. Let's say, I do not see the bank will change the approach to the portfolios. It is basically driven by diversification. Since these products are not generating extra revenues, but in the case of a securitization, probably the remuneration and the revenues are at the minimum level. I do not see specific impact on the P&L, neither on the P&L nor on the ability to provide diversified solution to our clients. On July inflows. July is very strong. I do see these inflows and the contribution also, asset management products, as a consequence of a very strong performance of the market. There is some correlation effect, positive correlation effect. Due to the seasonality of August and September, and due to a very conservative view on the market for the next two, three quarters, we prefer to have an achievable target, that is in the range EUR 5.56 billion. If things continue like today, as of today, we are of course closer to EUR 6 billion than EUR 5.5 billion, and the mix should be in line with the previous six months. July has a mix confirming the positive trend of asset management products for this year. In terms of tax, I hand over to Tommaso. Hi, Alberto. Yeah. I think that we gave a medium term guidance on the tax rate. We expect to stay above 20% in the range of 21%- 22%. Of course, the first half has been affected by many extraordinary effects, like from one end, the provisions, on the other end, the contribution of performance fees. In this quarter, in this first half has been very low, but I think that our guidance will be confirmed, and we don't see also any impact in terms of taxation in our Lux IM, for example, profits linked to the new regulation that could be worldwide. From this point of view, we can confirm our guidance. There is some volatility, which is linked to the contribution of performance fees or other one-off, but the guidance is confirmed. Thank you. The next question is from Filippo Prini of Kepler Cheuvreux. Please go ahead. Yes, good afternoon. One clarification on performance fee, new mechanism, and sorry for a couple of follow-up again on provision. On the new mechanism performance fee, for Lux IM, I see the point that the reference base for next year will be the price at the end of December this year. Given that the crystallization is on a daily basis, if the first day of trading of 2022, it will be above the price of December 31st, 2021, it will become the new reference base, so no more December 31st, but January the 2nd, the 3rd, and so on. On the provision, very briefly, the fund that client received can be used whatever they want or should be invested into Banca Generali product? On the new asset, basically new lending portfolio to get on your balance sheet, do you plan for the future year some return, given that they are commercial receivable versus Italian assets, so at the end, that will be the Italian state that will pay and should pay, basically the principal. Thank you. Thank you. I start from provision. Let's say that we have a business plan with a yield in the range of 2%-4%, starting from the fair value for the next five years. It won't be posted in the net interest margin, but in the trading gain. It can be posted only once we repaid all the capital. You have a sort of limited J curve. You have the fair value, you start to repay the investment, and then you can release the performance. In terms of performance fees, and we are finding the answer. I know that there is some restriction in the first weeks, I think one month, but I'm not sure. I hope to give you the answer as soon as I receive the right one. If not, we will provide the answer after the call. I do remember there was another question, the provision. Sorry, I lost the. Yes. If the money that the client will receive, used by the client also outside of the bank, or will be asked to reinvest into other products of Banca Generali. Let's say that I do expect very limited outflows, and I do expect reinvestments of greatest part of this in other solutions. I don't see the case of outflows for these reasons. They will be reinvested. Clients will reinvest, hopefully in products with higher profitability. Let's say, we will see. Okay. Thank you. Welcome. The next question is from Luigi De Bellis, Equita SIM so if you want to go ahead. Yes, good afternoon. Just some quick question on the current business. On the NII and the outpost to the network, can you provide an indication for the next couple of quarters? On BG Saxo, could you give us an update on the platform performance trends and new products expected to be launched? On the other fees and new revenue stream, and other banking fees, what do you expect for the second half compared to the first half? Thank you. Thank you. I start from BG Saxo and other revenue streams. What I'm seeing in the market is that due to low yield and low volatility, there is an impressive interest in structured products and a lower interest in trading activity. I do see for July, starting from June, July, and probably August, higher results coming from structured products and let's say, not exciting numbers in terms of trading due to this low volatility, while I do see a sort of linear growth in advanced advisory. This is for the new revenue engines. For the more traditional, let's say, other fees, for banking fees, I do see a sort of smooth linear behavior, while for the front fee, it depends by the volatility of the market and the performance of the client. It's difficult to project or to have a forecast of this contribution, of this revenue. At the end of the day, the overall contribution of other fees will grow over time. The last question was about NII, if you can give a quick, Tommaso. NII, well, we had a guidance, which is basically confirmed probably with the impact of the purchase of the notes will be limited. Of course, as we said before, the yield that we expect is not going to be recognized throughout the (uncertain). The impact of the net interest income of 2021 will be very limited. Our guidance is between 2% and 4% below last year, and I think it will remain the same range. In any case, they are really a negligible number in terms of total profitability compared with the total profitability of the bank. Thank you very much. As a reminder, if you wish to register for a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Mr. Mossa, there are no more questions registered at this time. Okay, thank you. I have the answer for Filippo. Let's say that in the mechanism, there is no limitation in working out the performance fee since the first day. Of course, this is independent decision of the asset manager in Luxembourg to apply sort of smooth mechanism in the first days. It must be something sustainable. I do believe that in case of volatility in the first days, the impact will be smoothed, of course, to provide the right performance fee to clients. At the moment, we don't have other questions registered. Okay. Thank you very much. Thank you very much for participating to our conference call. Have a nice day.