Good morning. This is the Chorus Call Conference operator. Welcome, thank you for joining the MPS fourth quarter and full year 2022 results presentation. 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 0 on their telephone. At this time, I would like to turn the conference over to Mr. Luigi Lovaglio, CEO of MPS. Please go ahead, sir. Good morning, everybody. My warm welcome to all of you. Many thanks for joining us for Monte Paschi fourth quarter and full year results. This morning, coming to the bank, I had the thought that today is exactly one year since I am honored to have the front row seat of Monte Paschi. I would have never thought a year ago that after one year and only after seven months since launching the strategic plan, I would be here to present to you a quarter with a sustainable net profit of EUR 156 million, with a cost income of 60% and the core Tier 1 of 15.6%. As I told you during the previous presentation, the third quarter was really the turning point. Now we have a new journey, a disciplined journey, that will bring us to the destination we envisaged in our business plan. Let me allow to say that Monte Paschi is not anymore a systemic problem, but it should be considered for what is, a truly country's asset. Let me give you some highlights of the fourth quarter and full year 2022 results. I will elaborate during the call. This is the first quarter after the implementation of the capital increase and the implementation of the main business plan action relating to the more than 4,000 headcount reduction to the voluntary scheme. It is the first sustainable quarter and can give a sense of what the profitability going forward can be. The fourth quarter net profit is at EUR 156 million compared with the EUR 79 million losses in Q4 last year. Full year net profit, excluding HR restructuring costs amounting to EUR 925 million that we booked in Q3, is at EUR 720 million, driven by net operating profit, supported as well by a positive tax effect of EUR 425 million. Including the one-off restructuring cost, the 2022 net result is negative for EUR 205 million. Fourth quarter gross operating profit is at EUR 333 million, growing by more than 60% compared to the previous quarter and to the fourth quarter 2021. Full year gross profit is at EUR 989 million, up by 13.2% year-on-year. Results thanks to both an increase of operating income and the reduction of costs. The quarterly net interest income is up by 31.4% quarter-on-quarter and 54.5% versus Q4 of last year, driving full year 2022 net interest income up by 26% year-on-year. In Q4, we have started to book the structural benefit of savings from early retirement since the 1st of December, with operating costs down quarter-on-quarter and year-on-year. Let me also remind that the full impact of the exit of personnel is around EUR 300 million, if we consider the annual basis. In this quarter, we booked the benefit only for one month. Gross NPE ratio is 4.2 compared to 4.9 in 2021, thanks to EUR 900 million NPE disposal and to the proactive management of portfolio. The net NPE ratio is at 2.2%, well on track from business plan target. Full year 2022 cost of risk at 55 bps, with NPE coverage increased to 48.1% despite the disposal of NPE portfolio. On capital ratio. CET 1 ratio fully loaded is at 15.6%, growing by 90 bps in the quarter on the top of the capital increase, thanks to the organic capital generation, the reduction of risk-weighted assets. This number is well above the original envisaged in our business plan. Let's go now through more details in Q4 results. Net profit yearly evolution. As you can see from the slide, we reported this EUR 156 million. It is interesting to note that the fourth quarter result is coming from after EUR 10 million result in the first quarter, EUR 13 million in the second quarter and the losses of the third quarter. This is a confirmation that this is really the first Effect of the action we put in place, and this can be, the EUR 156 million can be a really good base for the next year. Regarding net profit for the year, I'm on page 5. The net profit is positive for EUR 720 million, excluding the HR restructuring cost that we booked in Q3. This result is driven by gross operating pre-profit and is as well sustained by EUR 425 million of positive tax effect. Including the one-off restructuring cost, the net result is negative for EUR 205 million. The comparison with the previous year is not really effective, because last year we had some one-off in terms of release of provision and much higher gains from securities. If we move on to the next slide, I think this is one of the most important, interesting slide of the presentation. The gross operating profit of the quarter is EUR 353 million, and is up by more than 60% quarter-on-quarter and year-on-year. I think it's worth to mention also that we reached cost income at the level of 60% in the quarter. Gross operating profit, as you know, is representing the capability of the bank to deliver sustainable results. I believe the action we put in place in this, in the last six months are well reflected in the slide, where you can see the potential of the bank, the power of the network, and the resilience of the distribution capabilities that this bank has. If we move to the next slide. We can see that the total gross operating profit of the year is EUR 989 million, is 15% up year-on-year. If we exclude, we take off the capital gain from security disposal that we realized this year in EUR 100 million more compared this year, the growth is at 28%. The net interest income, as you can see, we are showing a double-digit growth in both quarterly and year-over-year comparison. Net interest income is up by 51.4% compared to last quarter. Year-over-year, we have reaching a 26%. The results is positively impacted by a better spread. That is a combination of capability on one side to resist and to face properly the pressure that we have on deposit. On the other side is also the benefit that we have from the structure of our balance sheet that is well exposed to the interest rate increase. Now, if we move to volumes, net customer loan, we are consistent with our strategy. We want to grow in retail and particularly on mortgage and consumer lending, and as well in small business. In this slide, you can see that we are confirming the third quarter as far as are the volumes of retail, despite, as you know, the trend of the rate is not facilitating the granting of mortgages. As well, December is not the best month to do this kind of transaction. For small business we have a reduction in the last quarters also because we started the post-moratoriums repayment in this quarter. Of the funding composition, we are resilient on retail deposit, despite there is a sort of continuous trend towards investing in fixed income, particularly Govies due the attractive interest rate. On the corporate funding, we have a sort of opportunistic approach. We don't need deposits if we have to pay too much. Moving to Italian Govies, the portfolio has been reduced by EUR 1.8 billion since December 2021. The credit spread sensitivity is also down to 0.7, and the portfolio duration decreased below two years. I think this is part as well, this slide is showing the conservative approach we want to keep in delivering our results. We like to drive and to manage what we can control. That's why, as you can see, the total 60% of the portfolio is allocated at amortised cost portfolio. In the light of the strategy of the bank, because we want to use this portfolio just to support the interest income, giving a sort of stability to the results of the bank. Looking at the quarter evolution of fees and commission, I think I want to pass two messages. First one is that we are growing in what we call cooperation with customers. The customer activity also in the quarter is growing. Q4 is also a quarter of settlement, particularly December, so we had some early settlement of agent fees. Moreover, looking at the interest related, the loans related fees, we are slightly down because practically it's the consequence of switching to the enhanced business of the consumer lending activity. Overall, resilience on banking fees, as I mentioned, wealth management fee are affected particularly on upfront fees by the particular market condition. Fortunately, we are observing the beginning of the year a different trend, and we are confident that the performance in 2023 can be better. Now, under funding, in the last quarter, under funded stock increased thanks to the assets under custody, benefiting from positive net flows due to the renewed customer interest in fixed income security. Also, as a result of the rise in yields, while the asset under management component is almost stable. Clearly, the comparison on year-on-year is driven by the market effect. In some way, we are resilient, having a decrease of the stock, slightly below what we estimate is the market effect on the stock. Now on cost. We see the positive first effect of the counter reduction with total operating costs down by 3.2% quarter-on-quarter and 2.3% year-on-year. I would like to stress that Q4 includes only one month of savings. On a yearly basis in 2023, we can count on savings in HR costs above EUR 300 million. HR expenses, so are down quarter-on-quarter by 7.6%. Non-HR costs are impacted by usual seasonality of the fourth quarter, some inflation pressure, the pickup in energy costs. By the way, I think, is not very effective compared to previous the quarter of last year that have been impacted by some one-off cost release. The yearly evolution of the cost is showing practically a small decrease year-on-year, with a combined effect of lower HR costs and as I mentioned, slightly higher non-HR costs. On asset quality, the NPE stock decreased nearly 20% year-on-year, thanks to disposal portfolio of EUR 900 million. The stock today is EUR 3.3 billion. The NPE ratio is 4.2%. In line with pro forma ratio. The inflow on NPE also in last quarter is absolutely under control. I believe that is a combination of the capability of the bank to act in a proactive way towards the critical position. At the same time, is also the structure of our portfolio that practically is well known due to the limited activity we reported in the last two years in granting new loans. On NP covers, we show a slight improvement quarter-on-quarter, year-on-year, despite NP disposal of EUR 900 million. We are now at 41.1%. That is slightly higher compared to the previous year, despite the sales. Cost of risk at 51% in the quarter. 55 basis points is accumulative after 12 months, as the same level of Q3. This result is also factoring the NPE sales mentioned before. I have to say that we are keeping a conservative approach also in setting the level of provision. As I mentioned, if you look at the inflow and the default rate, it looks like we don't see any signal yet of deterioration of the overall economy. On capital. I think there are two important messages. We reach a level of 15.6. That is not only the results of the increase of capital. In the quarter, we increased by 0.9 the CET1. This is a strong evidence of capability of the bank to generate capital. This is a level that is even above our expectation. I think it's results of a disciplined approach in risk-weighted assets, a selective approach in lending, and also some housekeeping activity we are performing in order to optimize the level of risk-weighted asset we have. The profitability of the bank of the quarter is showing that, structurally, this bank has a strong grasp in generating gross operating income, and this is the base also for generating capital. We are quite confident about this capability throughout the time of the business plan. The rise of extraordinary litigation and the extra-judicial claims. The gross particular related to what we call the court claims remain almost unchanged as of September. Let me add for the record the recent positive judgment confirming the positive jurisprudential trend of the precedent years, including in particular two new judgments taking place the end of January, beginning of February. Regarding extra-judicial claims, the amount at the end of December is EUR 1.5 billion. As already I mentioned in the previous presentation, the majority of such claims are characterized by lack of documentation, lack of legitimacy, and casual nexus, are promoted by the same consulting company on behalf of institutional investor. In this context, in January 2023, the bank received a letter of complaint for another amount of EUR 700 million. As we were already mentioning in the previous presentation, we've already asked our legal advisor to protect the bank interest, taking the necessary action. I think it's quite interesting to observe that this kind of claim are really coming punctual close to the presentation and the preparation of our final financial statement. As I mentioned, in several occasions, I think the bank has properly addressed this kind of legacies, and we believe that our balance sheet is well equipped to guard also this kind of risk. Now, let's go on what really is the ground, what we were doing during the last months. I think it's quite interesting to see altogether what has been achieved by the bank during this time. Starting from capital ratio, CET1 fully loaded is at very comfortable level of 15.6%, and allow us to easily deal with the regulatory headwinds expected in the Q1 2023. On cost saving, I think what has been done with the voluntary scheme was an important achievement because practically we reduced the staff by 20%. In the quarter, we have the benefit only on one month. I believe that to count on the next year of saving above EUR 300 million is one of the most important achievement of the bank. On asset quality, as we already mentioned, thanks to the NPE disposal, we reduced our gross NPE stock by around 20% year on year, and the NPE ratio is now at 4.2, compared to 4.9 for last year. We significantly improve our efficiency thanks to the reduction of HR costs, and the cost income ratio decreased to 60%, a level already in line with business plan targets at the end of 2024, and I believe we have further room for improvement. Important steps have been done also on the simplification of the group structure. Practically, the IT company has been already incorporated in the bank. This was, this happened at the beginning of December. Within mid of this year, we are going to incorporate as well the two product companies and Capital Services and leasing and factoring. Finally, in line with business plan pillars, we are putting great focus on Widiba, with important results already achieved. This is the company where we want to invest. We believe that this is an important asset of the bank. Not only because it's clear that the multiple in terms of valuation are much higher, but especially because the technology of this company is really one of the is a best in class. We believe that we have a champion inside the group that can generate a lot of value for overall valuation of Monte Paschi group. Let me conclude the presentation by giving some guidance for this year. Let's start from revenues. We do expect increasing net interest income driven by improved commercial asset mix in favor of retail lending by higher rate. I believe that this will completely offset the higher cost from institutional funding. Fees are expected to come back to a positive dynamic driven by expected better market condition, and also the support that will come from the new group network or reorganization, particularly focused on retail business. On cost, we have done a lot last year, paving the way for further savings on staff cost, and we continue to implement other important initiatives outlined in the plan. We believe that this initiative will bring costs down even in a higher inflation scenario. We improved, in line with our business plan target, the asset quality. Looking at the last quarter and what is also happening in the first month of the year, we believe I were confident to say that the cost of risk in 2023 is expected not to exceed the 2022 level. On pre-tax, we are committed to implement all actions that will lead to our target pre-tax profit in 2024 of EUR 700 million. We believe as well that we are getting closer to these results already in 2023. Finally, on capital, quarter one ratio is expected higher than the planned target, and is believed ready to absorb the impact of A-IRB models. Such impact is expected to be even lower than the EUR 5 billion. Sorry, 5, 6 billion, I think, was a sort of guidance we gave in the business plan, and we believe would be even lower than EUR 5 billion. We deliver in the quarter more than EUR 150 million, giving proof of the bank's achieved capability to deliver sustainable results. The evidence of such capability is in the EUR 353 million gross operating profit generated in the quarter, that is up by more than 60% compared to the previous year, and to the cost income at the level of 60%, that is already the level of the target we fixed in the plan for 2024. We reinforce our balance sheet structure, reaching 15.6% quarter one, ensuring confidence on future results. Monte Paschi is now a structurally improved bank, well-positioned compared to our peers in terms of asset income and economic indicators. I believe we have a clear vision, and we are very committed, myself, the board, and all the colleagues. We are going straight and as fast as possible to our destination, and after a long and difficult sailing at sight, there is a safe harbor, or better. I believe we are now in the position to choose the best safe harbor at sight, and we will get there for sure. Thank you very much. We are ready for answering. Excuse me, this is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. We will pause for a moment while questioners join the queue. The first question is from Giovanni Razzoli of Deutsche Bank. Please go ahead, sir. Good morning to everybody. I have a few questions. The first one is a clarification on the NII. I was wondering whether there are any one-offs in the Q4, mainly related to the TLTRO accounting or something like that, as we have seen for other banks in the last few days. If you can provide a little bit more of a guidance for NII in 2023. You've reported that, you've mentioned that you expect growing in the NII. If you can please detail what is your expectations and also in order to compare banks more properly, what is the date of the deposit that you are assuming for 2023? I understand this is a very fashionable question, it's what I think will help us to differentiate about the performance of the banks in terms of NII generation in 2023. The second question is on the risk-weighted assets inflation. You mentioned that the inflation will be lower than EUR 5 billion. I was wondering whether is there any possibility that these, you know, headwind is waived by the regulators in the context of the very successful implementation of the business plan, or shall we take any way risk-weighted asset inflation grow as the grant and even if below EUR 5 billion. The last question, allow me again for this legal risk issue that we hope sooner or later will stop. Basically, if I take slide number 20, is it correct that, summing all the totals that I've seen there at the end of the Q4, the, you know, legal risk amounted to EUR 3.4 billion. Then because of these, you know, EUR 700 million of, you know, random requests that you have received in January, the total has now increased to EUR 4.1 billion. If you can share with us, as you mentioned, instead on the positive side, the two judgments in the first week of 2023, what is the amount there, of this judgment, if I interpret correctly your slide? Thank you. Yes, we can hear you. Please go ahead, sir. That concludes my questions. That's all my questions. Sorry, we had some connection issue. I can answer to the first two questions, and then Luigi will take the litigations. On the net interest income, actually, in the fourth quarter, we still have a positive contribution of the TLTRO because the new terms and conditions set by the ECB were effective as of 22nd November by heart. We still have a positive contribution of around 27 million EUR in the fourth quarter, while in 2023, let's say the contribution of ECB relationship or the position with ECB will be negative. Having said that, let's say the rest of the dynamics is mainly related to the increase of interest rates and the impact on the loan side. As you know, the ECB has in the meantime further increased rates. This will have a positive impact on our NII. As mentioned by Luigi, when commenting the outlook, we expect NII to go up, definitely more than offsetting what the known headwinds are like the cost of the funding plan. We are confident that the NII will provide further support to our bottom line in 2023 and being higher, far higher than what our original targets in the business plan were. As regards RWAs, as mentioned, the RWA inflation deriving from the update of the A-IRB models, will be lower than expected in the first quarter. We were guiding to EUR 5.6 billion when presenting the plan. Actually, the impact will be lower than EUR 5 billion. Definitely, this is a positive. Apart from that, we do not expect other main impacts other than deriving from the normal business dynamics on RWA. On litigations. Andrea, sorry, can you share with us, kind of the positive things that you are assuming for 2023? Sorry, Giovanni, I cannot hear you very well. Can you speak? No, it was the same. Close to the mic. If you can, share with us at least what is the deposit beta that you are assuming for 2023. It's a KPI we became familiar with over the last two quarters. If we can then share with us the value. Thank you. Okay. Our deposit beta at the moment is currently estimated at around, say, 40%. Then, of course, let's say the management of cost of funding will be a key lever for 2023 for us, as for any other bank. Okay. I just, we first, just to add something on what Andrea was mentioning. It's clear that the guideline we are giving for interest income is based on the change of the mix as well, no? Is an important element. That is on the top of what practically we are reporting 2022, where, for example, the consumer lending activity just started. This gives us confidence, despite the interest rate, that in addition to what happened this year, we can change to the business mix of our loans and get some benefit from that. On this, extraordinary claims, yes, the EUR 700 million were just reaching the bank. This letter of complaint, I want to underline really that all this balance sheet. The balance sheet of the bank, the P&L of the bank is important to mention, is always prepared with a strong conservative approach. This is reflected in the line of reserve for loans as well as reserve for risk. Part of the reserve we set aside in our P&L in the fourth quarter, even reflecting a conservative approach looking forward that we want to keep and to have because we want to deliver sustainable results during the horizon of the plan. The sustainability is exactly what I was mentioning before, that we can influence the results because results depend on what we are doing, and it's better to have some buffer time to time to offset some negative events that can happen. This amount should be added to the total. The positive results that we have in the court in the end of January and February are not relevant in terms of amount. Normally, we're not disclosing that, are quite fundamental importance for the what are the consideration of the court regarding this claim. It's giving a sort of trend how should be considered and what should be taken as a base for the judgment for what the bank has done. Moreover, I think also important to mention that recently we had also some positive evidences about what the bank has done on the past, especially on what we call the issue of financial information of non-performing loans. Also some authority were confirming that the bank was acting properly. as I said before, it just, I believe, that it's just a matter of time. What the bank has set aside more than a sort of detrimental of a sort of negative aspect for a merger transaction, would be a nice and significant surprise in terms of value for any future transaction in which the bank will be involved. The next question is from Antonio Reale with Bank of America. Please go ahead, sir. Hello, sir. Thank you very much for the call. I wanted to ask about your funding plan for this year, on the fixed income side. Okay. The funding plan in 23 is expected, let's say to, as regards wholesale funding MREL eligible, is expected to have volumes say higher than EUR 2 billion. We will most likely be sourcing the market in this respect. The MREL Vista will be senior preferred, the remaining component will be senior non-preferred. With specific regard to senior non-preferred bonds, we expect the subordination, the MREL subordination requirements to actually go down in the next, let's say decision, because our total assets end of 2022 are definitely lower than the total assets as at 31st of December 2021 due to the TLTRO reimbursement. Let's say the mix of our funding plan might change favorably towards the senior preferred over the course of the year. Hope it is clear. Yeah. Yeah. Anything on Tier 2 or Additional Tier 1? No. At the moment, we're not planning any issuance of AT1 and Tier 2 also because we are, say, fully capitalized. We do not need. Our funding plan will be mainly targeted to MREL related issues. Okay. Just, finally, in the very beginning, I'm not sure I got this right. Is it up to EUR 2 billion or more than EUR 2 billion MREL? More than EUR 2 billion of wholesale- Yeah. funding. Okay. MREL-eligible. We might have bits and pieces of covered bonds, but as I would say Okay. Okay. Thank you very much, and good luck. You're welcome. Thank you. The next question is from Andrea Lisi with Equita. Please go ahead, sir. Hi, thank you for taking my question. The first one is again on NII for 2023. In particular, I would like to have a bit more color on the trend that you see there, in particular in regards about what do you see in terms of evolution of the commercial spread, which rose by 454 basis points quarter on quarter. Given also the trajectory we see on the forward, on the EURIBOR forward curve, and the deposit beta you have in your assumption, how do you think the commercial spread could evolve going on? Again, on NII evolution, I wanted to understand a bit more what are your expectations in terms of loan origination and also the capacity to retain deposits, if you see some pressure there, and if this could result maybe in a further increase in the cost of funding? The other question is on fees that were down quarter on quarter. Just wondering to understand how to grow from these levels and which is the strategy? If you can provide us an update on the DTL, DTA you have off balance, if remain the same? Last one, if, the positive judgments that you had in the first weeks of 2023 give a bit more visibility on the timeframe of the judicial litigation, or, nothing changes from that point of view? Thank you. Okay, I will take the questions on NII and DTA, and Luigi will answer on the other questions. On the NII sensitivity, we expect a widening of the commercial spread. We expect definitely a pick up of commercial NII in 2023, boosted on the one hand from let's say the effect of the rate on indexing of the stock. For example, part of the loan book was repriced as of 1st of January. There is another, there is another impact, which is not related to the stock, but which is somehow linked to your second question on volumes, i.e., we have some maturities in 23, and what, for example, matured in 22 was having rates of less than 2%, while the new business is written at above 5%. There is, on the one hand, an effect of re-indexing the stock. On the other hand, the replacement of back book at low rate with new business written at a far higher rate. Definitely there will be a pick up of the commercial spread that will be more than offset, let's say the quote-unquote headwinds, like roughly EUR 100 million of higher cost of funding for wholesale for the funding plan, plus the other relevant headwind is the Tier 1 contribution that was around EUR 155 million, all together, including the deposit with CB, in 2022 and will be negative in 2023. NII will, as mentioned before, will definitely contribute positively to the bottom line in 2023. As regards, instead, DTAs, on the balance sheet, we have already written EUR 1.5 billion of DTAs, out of which around EUR 600 million are the convertible DTAs, while we still have EUR 3.4 billion of DTAs off balance sheet, out of which around EUR 3.2 billion are related to tax loss carryforward, and around EUR 160 million are temporary DTAs. These regards to the first question on NII and the fourth question on DTA. You had a question on whether we see any issue in writing a new business, so in terms of loan volumes, or we see pressure on cost of deposits and what our outlook is in terms of fees, commercial capability. You have a last question on litigation. This I think that Luigi will. Okay. Thank you. I think there are two points. One is related to the commercial activity. Maybe I will treat after discussing quickly about this point, about the litigation. I think it's important to underline that in 2023, already in January, and I said the beginning of February, we are just reporting a positive trend, again, in all of the court judgment. This is a continuation of what happened in 2022 and also in the previous years before 2022. We have an important date. That is at the end of March, where there will be the court appeal judgment relating to financial information. 2014 and 2016 is clear that, having reported a very positive judgment last year in that something that is quite, in some way connected, that is the court case relating the financial information 2008- 2011. We are looking at this deadline with a relatively positive aptitude. We have to see what is going to happen on the financial information relating to credit deterioration. As you know, this is a chapter that is quite peculiar because it's connected with acquire that took place more than six years ago in all the banking sector, as well, according to what is the opinion of our lawyers, and we have several lawyers in charge of that, our experts as well. Also our internal evidence, we believe still again, that the development can be positive for for what is relating to the bank. On the commercial side, there are two important aspects. As it was mentioned at the beginning of the bank, implemented a new commercial organization from the fifth of December. Was it the same day when we had the exit of 1,000 people? 2000, last year was a year of preparation. Changing also a sort of mindset that was much more focused on large corporate transaction and less on what we define the core business of the business plan, that is the retail lending. We have ambitious target in terms of consumer lending, in terms of mortgages. We are quite confident that this particular consumer lending will give a significant improvement to the mix of our lending, will significantly improve also the spread and our margin on loans. In some way, we expect to have a sort of recovery of the market for as far as wealth management product, you know, are concerned. We believe also the reorganization, we have more people that is dealing with this kind of activity. We have a new business line that is directly reporting to the Chief Commercial Head of Retail. We are strengthening the partnership with our long-lasting institutions that are cooperating with us in distributing the asset management product. We are starting with some context, particular training. We have a new platform that will enable us to better identify the customer needs and to identify their profile. We are quite confident that we are going to have to be back in observing a positive dynamic in terms of fees and commission. That's why overall, the guidelines for the total commercial income, I mean, net interest income in fees, we believe it would be quite positive in 2023, giving additional bust to what has been already achieved on the side of cost, and delivering a gross operating profit that will be definitely higher than what has been in 2022. I just add 1 thing on the commercial spread. Let's say you can assume a widening of, say above 50 bps in 20. Thank you. The next question is from Noemi Peruch with Mediobanca. Please go ahead, madam. Thank you for taking my questions. I have three. The first one is on capital. If you could walk us through the quarterly evolution and moving parts of Common Equity Tier 1 ratio in Q4. The second one is on NII. If you could please quantify the negative impact on NII on the net ECB funding in 2023, which also includes the replacement of TLTRO. Lastly, if you could shed some light on the drivers leading to an increase in the NPE stock in Q4. Thank you very much. This of course excludes the disposal. Thanks. Okay. Maybe I will start from the evolution of the fully loaded common equity Tier 1 ratio. In the quarter, we have, let's say around 570 basis points contribution of the capital increase. We have around slightly above 30 basis points of net income, slightly below 60 basis points deriving from RWA dynamics. We have some bits and pieces. As regards the RWA dynamics, you have a reduction which is partially related to the credit RWA for just less than EUR 1 billion. You have slightly a reduction of operational risk RWAs of around EUR 0.5 billion, a reduction of market risk of around EUR 0.2 billion. You have instead + EUR 1.1 billion, which is related to the threshold effect, i.e., since we have less deduction on CET1 because we increased the capital, then we have higher RWAs because what is not deducted is weighted at 250%. This explain the RWA dynamics. I think... I hope that this clarifies the common equity tier one ratio dynamics. As regards the TLTRO, is what I mentioned, i.e., the contrib... If I caught the question, i.e., the contribution in 2022 was EUR 155 million. Let's say the negative impact in 2023 is, I mean, based on the new, on the new ECB rates, it should be around - EUR 100 million roughly. On NP- No, just, if you work on that, I will take Andrea. Practically, the total stock increased by a marginal level. If I remember well, between 16 is among, between 60, 70. As I said, the default rate is keeping the level that we observe in the previous quarter. Marginal inflow, absolutely below what even we were estimating. Despite that, we adopted a very conservative approach as well on the area of provision on loans, having in mind that it's better to have some buffer in consideration of what is going to happen this year. That's why we are confident to give a guideline regarding customer risk. It can be, we estimate it to be not higher than what has been in the previous year. If I may follow up on the NII question. The contribution of Delta is under EUR 50 million in 2022, which will disappear in 2023. If I just look at the net delta in 2023 vis-a-vis 2022, it will be minus EUR 250 million if the minus EUR 100 million that you mentioned is then linked to the replacement of Delta. Thank you very much. Yes, this, you got it correctly, let's say, based on the evolution dynamic. Again, as mentioned before, the widening of the spread and the rising new business on the commercial dynamic will more, far more than offset both the negative contribution of TLTRO and the additional cost of wholesale funding in 2023. Thank you. The next question is from Antonio Reale with Bank of America. Please go ahead. Hi. Morning, everyone. It's Antonio from Bank of America. I just have one follow-up and two questions, please. The first one is a follow-up on some of the questions asked already. It's with respect to what you're seeing from competition and from your client base when it comes to deposit pricing. It would be good if you can share any anecdotal evidence on deposit betas today. On slide 8, I can see some of the changing in funding rates versus the rate hikes, but I'd like to hear more color from you. My second question is on costs. In terms of costs for the year, you've executed in early December on the restructuring. We've seen over 4,000 headcounts on early retirement leave the bank. I wonder if you can share with us what the underlying run rate for cost is, and what should we expect for 2023. Lastly, can you remind us the size of your management overlays, and how are you thinking about utilization over the course of 2023? Are you assuming any gets used already this year? That's it. Thank you. As I mentioned before, it's clear that we are observing some pressure on deposits. That's why also to support some action that we have on commercial side connected with what we call win back. With our customer, we are introducing again time deposit. Because we believe it's a product that now is offered by several banks on the market, and we should have as well on our shelves. The pressure on deposit is also connected with the attractive rate you can get today on fixed income securities. Fortunately, we have a very resilient customer base, and we believe that the plan that we have to grow also in deposit for this year, especially retail. I'm just underlining retail. Our commercial action will be successful. We have to pay attention and I think in some way we achieved important results in the last quarter. It's clear we plan for 2023 that in some way we have to follow the market because we want to defend customer base deposit. On cost, just to underline again. The overall savings net that we are expected to have in 2023 for 4,000 people that left the bank the fifth of December is higher than EUR 300 million. This is the impact on the bottom line. In the fourth quarter, we have only one month, so EUR 300 million divided by 12 is EUR 25 million. It's clear that in the HR dynamic, if you look at the cost year-over-year, we have to consider some inflation factors connected with the national labor contract. With introduction of a sort of variable remuneration because we won't come back to pay for performance our employees. Overall, despite all that, as we mentioned, we count on a significant reduction of the cost of personal expenses. Moreover, we set ourself a very challenging target on HR cost. We already identify actions. Clearly, we have to cope with the scenario with high inflation, higher cost of energy. As we started already to put in place action in the second part of the year, we believe that especially in the second part of this year, we are going to report positive results of the action we have put in place. As I think we were mentioning, normally if we achieve a target of the plan in advance, is not that we lay on this target, no. 60% cost income has been already achieved. We want to go below in terms of cost income in 2023. And this is coming necessarily by the two lines. One is the revenue, as I said, the guideline is for growth and cost as well. As we said, the overall guideline is low cost. Combination of the two is giving some benefits. If you combine this benefit in terms of gross operating profit, that is what is the real juice of what to measure the sustainability of our results. In a scenario where we expect to have a cost of risk that is not different substantially from what has been reported last year, we come to a pre-tax profit that is very attractive and is very much in line with the target we gave in 2024. I think it's worth to mention, because we are not to forget it, that we have still a bulk of balance sheet to defer tax that will enable us to consider as capital generation, the pre-tax profit instead of the net profit. This is the plus of this bank that fortunately will last for few years. I think in overall consideration about the attractiveness of Monte Paschi, despite some negatives that I can understand, we are always speaking about risk, legal risk. We have to consider a significant positive that is coming from this deferred tax, from a conservative approach in terms of quality of the asset, we put it this way, to keep the quality of the asset, and the fact that the bank is coming back to a very sustainable capability in generating results. That is putting the bank at the level of all other peers that are playing on the market. There was last question on the overlay. If not longer, there are over EUR 100 million. Thank you very much. The next question is from Hugo Cruz with KBW. Please go ahead. Hi. Thank you for the time. Just two questions. One on the tax. You know, do you expect any DTA reassessment in 2023? If not, what should we assume in terms of the tax rate? The second question on the regulatory headwinds. I heard you that the RWA inflation in Q1 2023 should be below EUR 5 billion. I was just wondering, should we also assume some threshold effects? Will that RWA inflation also lead to a lower CT1 ratio due to the capital position as well? If you could guide that, it would be very helpful because this is very hard to model as you can imagine. Thank you. On DTA, actually as we presented in our strategic plan, we expect to have another reassessment in 2024 because for conservative purposes, the DTA reassessment that was made in 2022 was assuming a forward-looking EURIBOR cap in 2024. In 2024 we will update the series and so we expect to have another material reassessment as per our strategic plan. In 2023, anyway, since our 2023 numbers are higher than, let's say, set in the plan, we still expect a positive effect on DTA that should minimize the tax rate. As regards to regulatory headwinds in 2023, first quarter 2023, these are, let's say, the ones we presented. We do not expect, I mean, threshold effects that, in case, would be related to the, let's say, capital movements. Just to add one point about the structure of the positive aspect of the bank. In a conservative approach, we didn't account this year more than EUR 200 million of DTA that we could. we didn't do just because we want to keep all the balance sheet in a very conservative approach aptitude. That is a bit the history of this bank and especially, I have to say the person, our chief accountant, that not only is a professional, but is also looking forward manager in the interest of the bank. Great. Thank you very much. Gentlemen, there are no more questions registered at this time. Yes. Thank you very much. See you on the next presentation. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.