Good afternoon, this is the Chorus Call Conference operator. Welcome, and thank you for joining the Banca Generali first half, 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, 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, and thank you for attending our first half results conference call. Numbers of the first half were very strong, with new high in terms of net profit, net recurring profits, and total assets of our clients, thanks to positive financial markets as well as very strong commercial activity. We are entering the last half of our three-year business plan, and so we decided also to do some fine-tuning, positive fine-tuning to the targets. But let's start with net profit, page 4. We closed the first half with almost EUR 240 million, thanks to a very solid recurring net profit, despite some one-off. Plus, the variable net profit were supported by performance fee. So, recurring net profit, we have the two major components. The first one is net financial income, the second one is the gross fees. Starting with net financial income, page 5, you can see that the contribution of trading gains in the first half is in line with the historical average, with EUR 9.1 million or EUR 4.7 million in the second quarter, while the net interest income further improved year-on-year, so EUR 157 million, thanks to a robust second quarter, EUR 78 million. This EUR 78 million of net interest income are the result of very stable net interest margin, above 2%, and stabilization of volumes. But we will see in detail our projection for the net interest income in the last part of the presentation. Page six, let's focus on total gross fees, up by 7.5%, is basically driven by all major components of revenues, while you see also the very positive contribution of variable fees at EUR 94 million. This is thanks to buoyant financial market, as well as very positive results of our asset management solutions. Focusing on gross recurring fees, as you can see, there is a steady growth quarter by quarter, with the second quarter at 257. This is mainly driven by growth in both investment solutions as well as other fees. At page seven, you can see the investment fees. Investment fees are referred to all the assets generating ongoing fees, so two major components: the management fees and the fees generated by advanced advisory services. Both components increased in the period, with a constant margin. You can see it at page 8 and 9. Page 8, you see the trend in management fees, steady growth, second quarter above EUR 210 million, and margins at 1.42. It seems slightly lower than the previous quarter, but there is some rounding effect. I would say pretty stable margins. At page 9, you can see the trend in advanced advisory fee. Again, also here, a steady growth quarter by quarter. We closed the second quarter with EUR 12.4 million, with constant margins at 50, at 0.5%. So, on the ongoing fees, very consistent and very positive for the second half. Moving on to the other fees, so the comparison first half of this year with the first half of last year, the acceleration is pretty impressive. As I mentioned in the previous conference call, we saw a normalization in entry fees, also with a smaller contribution of the BTP initiatives. So the second quarter closed at EUR 33.5, with stabilization of entry fees EUR 12.5. Great contribution of brokerage commission, in line with the first quarter. This is due to volumes and a better mix, and then stable banking fees. From this quarter, I do expect stabilization of both entry fees and brokerage fees with some seasonality in the third quarter. Total fee expense, we can say that it's pretty boring because no news, good news. Everything is in line with expectation. You see a slight reduction in the fee expense on net interest income. You see stabilization of payout or the, the ordinary payout for the financial advisors at 36.5. Stabilization in the cost for growth and stabilization per payout to third parties. There is a small one-off that is due to link it to the restructuring of the financial advisory network. It accounted for 0.5%. Second part, of course, page 12, again, all in line with projection. Remember that in the core operating costs, you have two components. One is the setup of BG Swiss. The second one is the phasing of the national banking contract. Excluding these two components, the increase year-on-year would be of only 2.6%. So a great operating leverage and very efficient. This strict control, of course, brought, let's say, the ratios of page thirteen to new lows, in particular, the operating costs on total assets down 0.28, and to cost and income ratio to new lows, if we focus on adjusted cost income, 33.3. So to sum up, very solid commercial activity, positive contribution from all the major revenues, strict control, of course, a very strong operating result. Below operating lines, you see an increase of the non-operating charges, mainly for two reasons. The first one is higher contribution for the resolution on the crisis of the banks, EUR 10 million compared to the EUR 5 million of last year. For the first time, we started provision also for the same fund for the insurance. It accounted for EUR 1.2 million. So part of the acceleration is strictly driven to this exogenous factor. The second is about the discount rate change for the actuarial fund for our financial advisors. So, you know, lower rates implies higher provision. So the combined effect of these two factors account for more than EUR 10 million. In terms of tax rate, you see slightly lower compared to our guidance. This is mainly driven by the positive effect of the performance fee in last year. So highest level in terms of net profit and highest level in terms of recurring net profit. As we said, these results are the result of, of course, positive markets, but also very solid commercial activity. Let's start by commenting the, let's say, the balance sheet and capital ratio, and then we will move on the commercial result. Balance sheet, page 16, focusing on total liabilities, you see, the client deposits stabilize, or with a slight increase, EUR 11.5 billion. The overall reduction of the, let's say, of the total liabilities and equity is driven by a reduction of deposits from banks for the optimization of the net interest margin. In terms of cost of funding, 1.19, where the, cost of clients closed at an average of 0.88. If you look at the value at the end of the period, it's close to 1. From this level, we do not expect significant further increases, so we will project a range of 1-1.1. On the asset side, so page 17, you see that, the equivalent reduction of total liabilities and equity is in the financial assets, so the whole financial assets decreased from 10.6 to 10.2. Here, you see stable, stable yield, 3.44. Overall, very solid capital ratio, page 18. Total capital ratio closed at 23.7, considering also the fact that we already accrued, EUR 1.76 per share, or the 86% of the net profit. So, it equals, it equals to more than 4% on actual, price. And we also ran an exercise to see the, full effect of the new Basel IV and CRR III, and we can confirm that also with the full phasing of the new regulation, it would stay above 20%. Leverage ratio above close to 6%, and very stable and solid liquidity coverage ratio and net stable funding ratio. So good profitability, very solid bank, and very solid commercial activity. So moving on to page 20. Page 20, you see total assets, EUR 99 billion of assets, with the total assets under management above EUR 60 billion. If we focus to the asset generating ongoing fees, so we look at on the right, the orange histogram, you see that the overall assets under investment, without double counting, closed above EUR 66 billion, or EUR 3.4 billion higher compared to the end of last year. So this EUR 3.4 billion were mainly invested in internal capabilities. Page 21, two very positive effects: stabilization of traditional life insurance, 14.5; second, acceleration in in-house solutions. Financial wrappers, up by EUR 1.4 billion, in-house funds up by EUR 1.5 billion. Strong interest in internal solutions. So now let's see, let's move on, on the inflows. So, we are at page 22. Positive factors. First, net inflows, double-digit growth compare on, year-on-year comparison. Second, we almost- we more than doubled the contribution of asset under investment, 1.4, and the momentum is really positive, so we are confident to confirm all, all, the targets, in particular, to exceed 40% of total net inflows in asset under investments. Page 23, the focus is on asset management products, and as I mentioned before, strong inflows in financial wrappers, strong inflows in in-house funds, the most profitable solutions for the bank. Last but not least, page 24, positive news also from recruitment. As I mentioned, we start seeing acceleration in recruitment, 94 new colleagues. Acceleration in new colleagues from FA's network, and acceleration in the interest of young talent, 36 new colleagues. This is crucial for managing aging issues, and to foster the teams' project. We exceeded EUR 20 billion of assets under teams, mainly one senior partner and one junior talent. So, very confident in continuing this positive trend. So at page 26, we decided to slightly review the targets for this year and for the three-year business plan. In particular, starting from the inflows, we are confident to exceed EUR 6.5 billion, and as I mentioned, at least 40% will be invested in assets under investment. So it means at least EUR 2.6 billion of asset under investment. We increased the guidance on net interest income. Now, we do expect numbers in line with last year, and we increase, slightly increase also the margins on management fees from higher than, higher or equal to 1.41, to higher or equal to 1.42, just because we now we can see the end of this business plan. Then in terms of remunerative growth, we have just moved the lower band of the range, because if you add what we already approved as a general meeting, and the amount already accrued for this year, we already exceed 8. So we've just moved the lower range from 70.5 to 8. So, we haven't worked out the projection for the full year, and so it's just because if you sum the two components, you exceed 8. Page 27 to 28, a quick comment on net interest income and on internal capabilities. Let's start on net interest income. You see how we closed last year, the previous projection for this year, and the new projection. Basically, at the end of the day, the result is, will be, close to the one of last year, because first of all, the market rate, the average market rate for this year will be almost in line with last year. We project 3.6. If you look at the client deposits, we were conservative in assuming a slight reduction. Now, the new guidance is that we will close in the range 11-11.5, so in line with last year. And then in terms of net interest margin, at the end of the day, the net interest margin will be almost stable, about 200 basis points. The difference that last time, last year, the cost of funding was lower, and was lower also the yield on financial assets, and both increased by the almost the same amount, maintaining the net interest margin almost unchanged. So at the end of the day, we will close in line with 2023. Page 28, I think that this is the most important page of the presentation, because on one end, it describes the great job done in terms of capabilities, internal capabilities on the most profitable products of the bank. You know, after the MiFID review introduction, it was 2019, we closed the acquisition of Nextam, and we increased the capabilities in terms of portfolio management, hiring top talented portfolio managers. And we set new rules for partnering with external asset managers. So we focus on quality. Then we started updating and relaunching the product offering. We started with the insurance, the financial wrappers, then the now span, and the second part of this year will be all about a new kind of products in the unit inked space. The total assets increased from EUR 21 billion to EUR 31 billion. Pretty impressive, but what is really important is that the margins of this solution stayed stable over time, 1.55%. If you multiply just by two, the result of the first half, you see that the acceleration is pretty impressive. So this is more than offsetting the temporary reduction of margins on the insurance space, because you know that on the insurance space, we are applying some favorable condition to the clients, temporarily favorable condition, to stabilize the inflows. So this is a great support for our profitability, and we are very focused on these kind of solutions for the second part of the year, waiting for the launch of the new unit link platform, probably in the fourth quarter. And now, I will hand over for the Q&A session. Thank you. Thank you. This is the 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 touchtone 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 Giovanni Razzoli, Deutsche Bank. Please go ahead. Good afternoon to everybody. Thank you for the presentation. I have a number of questions. The first one, if you can share with us what is the allocation of your clients to domestic government bonds or to government bonds in general, because after last year, you and all your domestic peers suffer significant competition from this asset class. Seems to me now that the allocation to this product has now reached a quite significant amount. So to have an understanding of what kind of, you know, effect that is possible in the future, placement may have on your inflows. Second question, if you can share with us what is the year-to-date amount of inflows generated by your initiative in Switzerland. I've seen that you have reiterated the guidance of EUR 0.7, EUR 0.5, EUR 0.7 billion of inflows for the year. What have you achieved so far? And I think you have been pretty effective in keeping the cost base under control despite the launch of this initiative. I was wondering whether the bank is already reaching breakeven in there, or what is the timeframe for getting there? And the other two very quick questions. I'm a little bit surprised by your comments about Basel IV, because seems like you are guiding for an impact of more than 100 basis points, Gian Maria. Is that, is my understanding correct or not? And if it is correct, can you share with us what are the drivers of the impact of Basel IV? Finally, on net interest income, if you can share with us what would be the expectation for 2025, assuming 100 basis points of lower in your Euribor? Thank you. Thank you, Giovanni. Let's start from the allocation of our clients. In absolute level, the Govvies, European Govvies in euro, accounts for EUR 10.4 billion at the end of the first half of this year. It means EUR 3 billion higher than the same period of last year. So at the end of the first half of last year, they accounted for EUR 7.4 billion. Just to remind that a great part of these investments are on short-term duration instruments. So let's say that we are more or less at 11% of the total assets for the Govvies. In terms of inflows in our risk project, you know, we received the freedom of services license in June. So we finally started opening current accounts, Swiss current accounts with investment solution in Italy. So Swiss current accounts or deposit, asset deposited in Switzerland and investment services in Italy. We started with a pilot, and the pilot is going very well. The overall assets already, say, invested or related to Switzerland, are around EUR 150 million, more or less, between EUR 120 million and EUR 150 million, thanks to this pilot and thanks to the recruitment of a financial advisor. We do expect that before the end of the year, at least EUR 500 million. For the breakeven, it is too early to give projection for the breakeven, also because part of the profits of the revenues will stay in Italy, thanks to our BG International Advisory model. On the cost base, let's say that, just to add some color, I'm very impressed by our operating leverage. We internalize and we consider it the Swiss project as a core cost. And despite these investments, we are almost in line with our initial projection, without considering the shock, inflation shock we experienced altogether. This is mainly because, on one end, we have a great part of our costs are related to distribution, so our payout. And the second, because we are experiencing a digital shock. So on a daily basis, we are innovating, we are robotizing great part of the processes. We are digitalizing everything, so very impressed by results. In terms of net interest income, it will depends on the level of the rates for the next year. At the moment, we do project a reduction in the range of 5%-10%. For Basel IV, I will hand over to Tommaso. Let's say that the most important impact of the new regulation is on the requirement of operating risk, which is going to be differently calculated going forward. This is the major impact, I mean, an impact for the bank, because, of course, the new calculation is based more on gross fees, more than on net fees. This is why we have an important impact. But if you look at the evolution that we had of total capital ratio, basically what we had it was a benefit this year, because we had the positive impact of the new way of calculating the credit risk, which give us a benefit around 2.5 percentage point. And that will be basically, let's say, balanced by the new impact that we will have in the future for the new regulation on operating risk, basically. This is the major impact that we are going to have. Can we summarize it on an impact above 100 basis points? Yeah. The net of the two, yes, is it will be in line with this. Thank you. The next question is from Gian Luca Ferrari, Mediobanca. Please go ahead. Yes, hi, good afternoon. Ciao, Gian Maria, Ciao, Tommaso. Three for me. The first one is on NII, but with specific reference to Switzerland. This morning, Julius Baer basically warned about a sharp increase in the deposit beta in May and June, and the stock is massively down for that. So I was wondering, what is your expectation for the remuneration of deposits in Lugano? Do you feel this kind of big pressure in remunerating private clients? And if you can give us a bit of color, considering that it is a greenfield you are starting now, and you already disclosed the guidance in terms of retail cost of funding for this year. It is just a bit of color of what you see in that market. The second one is on deleverage. I don't know if you agree on the fact that probably deleverage of clients is almost over. And eventually, what would you need to have a bit of re-leverage, so more Lombard loans in general? Do we need to have a steepening of the curve again to see volumes growing? And the third and final one, again, on the maturities on govies. If you can remind us, how many BTPs are maturing in the second half, and what is the attitude of your clients? How many BTPs are rolled over, and how much you can work out to redeploy in asset management solutions? Thank you. Thank you, Gian Luca. Let's say that in terms of pressure on the cost of deposits, the same Switzerland, we are still too small to feel this pressure. In Italy, I confirm that on top clients, there is a great competition. If you look at the penetration of current accounts on our customer base related to private clients, is at the lowest level ever. So, I do see for others some potential pressure. In terms of the leverage, let's say, of course, if we start seeing a reduction of the short-term yield, short-term interest rate, we could see some inflow in current accounts and some loan activity gain. And then on the maturity on Govies, my perception is that I don't have the precise numbers, but my perception is that we have, linked to the maturity, 30%-40% are invested in other solutions. So we still have a consistent reinvestment also in Govies. I would say 30%-40% in other solutions. We have at least 30%-40% of the portfolio with duration lower than one. So overall, I do expect some positive effect on the overall asset under investment from the maturity of these EUR billions in the next quarters. Grazie. The next question is from Elena Perini, Intesa Sanpaolo, please go ahead. Yes, good afternoon, and thank you for taking my questions. I have a question on performance fees, which were very, very strong in the first half. So, how was the trend in July? If you can share with us. And then the second question is on the trend in net inflows in July, if you can give some indications. And finally, some guidance on tax rate, considering the higher weight of performance fees. Thank you. Thank you, Elena. Let's say that July started positively in terms of performance fee, and now the last two or three days are not so positive. Let's say that we have already accrued almost EUR 10 million. In terms of inflows, we start seeing some seasonality. The summer period started in terms of mix, the mix is very positive. In terms of tax rate, let's say that the medium-term target is in the range of 26-27. Now, we are below to 25, but I do expect a normalization in the second half. Thank you. The next question is from Alberto Villa, Intermonte SIM. Please go ahead. Good afternoon. A couple of questions from my side. One is on the recruitment outlook. There was a clear acceleration in the first half compared to last year and also to the entire 2023, which closed with around 120 new additions. Now you are already at 94. So I was wondering if this kind of trend is something that we can expect going forward, and also in terms of mix of recruitment, if there will be a continuation of this trend of increasing also the young junior new additions. In this respect, also, looking at your slide on inflows, I've seen there has been a decrease of the contribution from the existing network in the net inflows in the first half compared to last year, and a higher contribution from recruitment. Looking at your target for the net inflows in 2024, now pointing to more than EUR 6.5 billion, I was wondering if you can give us an indication of what are you expecting coming from recruitment and what coming from the existing network? That's my first question. The second one is a general comment on, we have rumors all around the place on M&A in financial sector. Are you looking at something as an opportunity to accelerate the growth? Like, I don't know, maybe small FA networks or anything that could be interesting on your side at this point in time. Thank you. Thank you. So on the recruitment, I'm very positive, because there is a great interest from financial advisors. So, I do expect to close about 150, and especially from financial advisors. Still, pretty low, the recruitment from traditional banks. In terms of contribution of the recruitment, total net inflows, I do expect a normalization, so the target should be in the range of 20-25%. Explanation of just slightly lower productivity of the existing sales force, the explanation is pretty clear: I don't want to compete on the yield on the current account. So, now there are some competitors, private banks in particular, very aggressive. So I don't want to pay if I don't see other revenues... Collateral to the business. So we decided to let some clients, a couple of institutional clients, and to invest liquidity in other solutions. And is a competition that I really don't like and is useless. If you carve out two or three operations of this kind of nature, I'm very happy of the level of the productivity of the existing sales force, because it is well spread, and we do not have any significant liquidity event influencing the overall results. So, if I have to comment, the quality of the productivity is in line or higher on, or higher compared year-on-year. On the rumors, I continue to say that we are the place to be, because we are the purest player in the wealth management, the lowest balance sheet, the lowest traditional risk of the banking industry, the best financial advisors, very solid inflows, double-digit growth year-on-year, and we have plenty of initiatives, just almost, just at the beginning of the long story, so history. So we have the Switzerland, we have the data-driven bank, we have a very innovative solutions in the financial wrappers, and in few months also in the insurance space. We have a strong brand, a very strong management team. So I do believe that we are the place to be. So, it's normal that in a context in which in the next few months we start seeing lower net interest margin across the sector, will start being a new interest in asset gatherers. So, let's see. You know, I'm a small shareholder of Banca Generali, so I'm very happy of this interest. Second, I don't see opportunity at the moment in the private banking in Italy. Very small targets, potentially in Switzerland, but it's a sort of recruitment more than acquisition. Thank you. Okay. Thank you very much. The next question is from Marco Nicolai, Jefferies. Please go ahead. Hi, thanks for the presentation. A couple of questions on my front. First one is on advanced advisory. So thanks for sharing the guidance in terms of AUI inflows for this year, and next, for these years. I just wanted to know, like, if you have any ideas in the mix, in terms of AUI, that you expect for 2024, and in general, also for the following years, what shall we expect in terms of inflows from advanced advisory products? Second question, a bit more technical. Could you share the rate on the fixed rate bonds in your portfolio that will expire between 2024 and 2026? This is just to have an idea, what kind of support this can give to your NII going forward. And last question on recruitment. I found interesting that in the first half of this year, essentially, you had more recruiting from other financial advisor networks, rather than traditional banks, i.e., retail and private banks. Just was wondering if we should read anything into this, in terms of where you're sourcing going forward, financial advisors. Thank you. Thank you. I start with the first and the third, and then I will hand over to Tommaso for the yield of the portfolio. Assets under investment. Let's say that the mix would be probably more on wrappers, financial and insurance wrappers. I do see a rotation from third-party funds to in-house funds. I do see stabilization in advanced advisory services, just because now this half, but also in the last weeks, we start focusing the attention of the network on the new launch of new initiatives. So when you communicate new initiatives, normally the focus is there. So I do expect positive inflows, but lower than the average on assets under advisory. I do see inflows in the in-house funds. I do see continuing positive and strong inflows in the financial wrappers and in the last part of this year, also in the insurance wrappers. Overall, I think that the 40% in assets under investment is a floor for the foreseeable future. It's not just for this year, but it's for the next three, five years, at least. Because with normalization of the yield, I expect also normalization of the overall assets of our clients. It will take time, but now we are in overshooting. In terms of recruitment, let's say that we are an open platform. For entrepreneurs, for financial advisory, is the place to be. There is a very positive word of mouth from some competitors, so I start seeing a broader interest in joining the bank. There are some players who have some difficulties due to some strange announcement. From the traditional private banking industry, it takes time. First of all, because we are still in trouble with asset management products. If you look at the inflows in asset management products, you have negative inflows for the last 8 quarters, probably, in the traditional banking, and 8 quarters positive in the financial advisory business. So probably for the initiatives linked to bond portfolios, rapid in issue, in asset management solutions, now there are some issues with clients, so it's more difficult to transfer client that situation. So I think that it takes time to see normalization there. I continue to think of be the place for the financial advisors willing to provide holistic approach. Aging population, succession planning, fiscal optimization are priorities for the clients, and as a consequence for the financial advisors, so we, we know how to answer to these needs. In terms of banking book, I will hand over to Mass. Let's say that we have basically let's say that we get to maturity of around EUR 2 billion of asset per year, 2025 to 2026. And in the next few months of 2024, around EUR 0.5 billion. Of these maturities, let's say that the majority let's say around 1.9, 1.3 billion are linked to fixed rate bonds. So the majority of our maturity will be linked to the fixed rate bonds. In terms of exit rate, let's say that we expect to have around 2% in terms of yield of the bonds that are going to get to maturity in 2025-2026, while in 2024 will be around 0.5%. But as we said before, the maturity is only EUR 0.5 billion. So we have, of course, a positive impact, especially in 2025. Then at the same time, we expect to reinvest at a rate at which will be, of course, a declining rate, because we have an expectation of 50 basis points reduction of Euribor. Let's say, in the next months of 2024, and we expect to lend around 2.5% in terms of Euribor, at the end of 2025. Thank you. The next question is from Filippo Prini, Kepler. Please go ahead. Good afternoon. A couple of questions, please. Firstly, the increase of guidance of net inflows for this year from more than EUR 6 billion to more than EUR 6.5 billion, does it depend upon a better outlook on Switzerland or even the, the Italian business is contributing mostly? And second, on risk-weighted asset and capital. In the first six months of the year, you've declined it, you reduced your risk-weighted asset by 15% compared to the end of last year. Do we expect this trend to continue also in H2? Maybe not the same pace, but still with declining risk-weighted asset. And if even considering the negative impact from introducing Basel IV, at some point, we will make some consideration about your ratio that now is more than 22%. Thank you. Thank you. Let's say that the increase of the guidance is related to the Italian business, and is driven by this interest in the bank, so recruitment. And I do see also, so it's a good perception, good feeling from some potential new clients. So the idea is that excluding this period, that is, as a negative seasonality effect, October, November, and December could be very strong months. Switzerland, let's see. I'm very happy with the pilot, so finally we started. The operating machine is very efficient, is working pretty well. Let's wait for September, October, and then let's see the interest of the clients. We want to start step by step, you know, we don't have... We are not in a hurry. This is a long-term project, and it will give great support for the next years. Now let's focus on Italy, and let's do things in the right way in Switzerland. In terms of risk-weighted assets, I don't expect significant decrease. I more, I expect more so for stabilization. On the ratios, let's say considering the consideration of Basel IV, you know that we are very open to say to compare to remunerate properly our shareholders. Let's see the second half. You see, we are always very conservative in the projection. There is some uncertainty, economic and political uncertainty. Let's see the second half, and then we will update in the next conference call. Thank you. 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. I turn the conference back to you for any closing remarks. Okay. Thank you for the participation, and,Fl Gi uliana, it is at your disposal for any Q&A. Thank you. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.