Good morning, this is the Chorus Call conference operator. Welcome, and thank you for joining the MPS Group third quarter and nine-month 2023 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 zero 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. Thank you very much. Good morning, everybody. Many thanks for joining us to Monte Paschi 2023 third quarter and nine-month results presentation. I would like to start by sharing with you the special feeling I had when reading a message or wishes I received from a shareholder on the day of the anniversary of last year, EUR 2.5 billion capital increase. It recalls me about the starting point of Monte Paschi transformation path, with impressive progress the bank has achieved in the last 12 months. Today, I have the pleasure to present to you a set of solid results that are providing evidence of the improvement throughout our business. Monte Paschi is now among the best banks in Italy, with the sound capability to be profitable in a sustainable way, and a strong drive in generating capital organically, quarter- by- quarter, as proved by the further increase of quarter one ratio at the end of September to the level of 16.7%. That means almost 200 bps of additional capital generated in the last six months. We feel strong, well-equipped to compete on the market going forward, and proud of the strength of our brand, the powerful combination of our talented people and our loyal customer base. Let me now move on to some key highlights. Net profit after nine months reached EUR 929 million, thanks to another strong quarter, the fourth in a row, and the return on tangible equity at a sound 15.1%. These important results make us confident to obtain the 2023 guidance with a net profit for the full year above EUR 1.1 billion. Profitability supported by nine months strong growth of the Gross Operating Profit at almost EUR 1.5 billion, more than 2x the level of last year, thanks to 22.9 growth in operating income at 15.2 decrease in operating costs. Core revenues after nine months, at almost EUR 2.7 billion, with Net Interest Income reaching nearly EUR 1.7 billion, with a growth of 62.7 year-on-year, more than compensating the decrease in fees by 6.5% related to the reduction in the third quarter of current account fees charged to clients and the usual seasonality. As regards the asset quality, the gross pro forma NP ratio stable at 4.1, considering the previous sale of EUR 230 million NP portfolio. Pro forma NP coverage ratio at 41.1%, higher, higher than, at the end of 2022. The cost of credit after nine months is stable at 52 basis points, in line with the 2023 guidance. It includes a further increase in management overlays. Excellent capital position, with core tier one fully loaded at 16.7%, including a profit for the period, increased by 80 basis points in the third quarter, thanks to the organic capital generation. The buffer on tier one requirement is up to almost 600 basis points, so that the excess of capital is about EUR 3 billion. Total savings were up in the quarter, contributing to the increase of the stock by more than EUR 4 billion in the current year, supporting our strong liquidity position with LCR ratio above 160%. The net stable funding ratio, about 130%, even after the further EUR 3 billion TLTRO September reimbursement. Now, some positive news also regarding extraordinary legal risk. The recent sentence of the Supreme Court enables us to downgrade EUR 1.2 billion of the related petitum to remote risk. As a consequence, the overall petitum of Civil Litigation, not remote, has become half of the petitum we presented with the first half results. I will show on that some details later in the slides. Finally, for the so-called Windfall Tax, the board has expressed the intention to propose to next general meeting of shareholders to allocate not less than EUR 312.7 million at group level, including therefore, Banca Widiba, to non-distributable reserves. Now, let's move to some details regarding results. As I have just mentioned, after nine months, we reported a profit of EUR 929 million, driven by interest income growth and structural cost reduction. EUR 300 million was the contribution of the third quarter, practically in line with the second quarter, if we excluded the charge to systemic funds of EUR 75 million accounted for in this quarter. In the same period of last year, we have reported a loss of EUR 334 million, that was entirely due to the one-off HR restructuring costs borne for the implementation of the Solidarity Fund initiative, connected with the voluntary exit of 4,000 people at the end of November. Let's move to gross operating profit, amounting to EUR 509 million in the quarter. It is driven by core revenues confirmed at the previous quarter level, despite the reduction, as I mentioned, of the current account fees charged to customer and further cost saving. After nine months, operating profit reached EUR 1,450 million, more than doubled since September 2022. The growth was driven by both higher operating income, +22.9% year-on-year, driven by net interest income, a significantly lower operating costs, which are down more than 15% year-on-year, despite high inflation environment. The structural cost reduction, together with increasing revenues, allowed to bring the cost income ratio down to 48% after nine months. It means well below the 70% reported in September 2022. This level of cost income ratio is already below the business plan targets. Now, let's have a look to the net interest income evolution. Also, in the third quarter, net interest income confirmed the positive trend of the previous quarters, with a dynamic of +4.6% quarter-on-quarter, driven by further commercial spread improvement by 17 bps, thanks to both increasing lending rate and cautiously managed pass-through on deposit. After nine months, the net interest income reached almost the level of EUR 1.7 billion, higher by nearly 63% year-on-year, with commercial spread widening by 162 bps. Now, looking at volumes, let's start with loans. As you can see, performing loans are showing some resilience in a high interest rates environment and overall lower demand. In retail, in particular, the volumes were affected by lower new production, not fully replacing the maturities. We will continue to remain prudent and patient, with focus on risk-adjusted returns, never chasing volumes growth, and despite this approach, very conservative, we keep gaining market share. Moving on to savings, as you can see on the slide, commercial customer deposits and direct savings increased since the beginning of the year by more than EUR 4 billion, supported by the growth in the third quarter of the deposit base. Also, on the side of deposit, we keep gaining in the quarter market share. Our clients confirm the trust to Monte Paschi with higher deposit. We can count also on a quality asset, such as Banca Widiba. At the same time, the bank continues to be a key financial partner for those small and medium Italian companies, which build the country's real economy backbone. Focusing on indirect funding, the stock is up by 5.7% since December 2022. It is supported by the growth in asset under custody due to a strong interest for fixed income security. We keep to be number one in Assogestioni ranking for net inflows, what are the so-called gestione patrimoniali, and this is again a confirmation of the commercial strength of our network in a very competitive environment. Now, let me give you some update on our portfolio of Italian Govies. The banking book is basically stable quarter by quarter, but with a progressive remix towards amortized cost component. This is in line with the business plan strategic approach to minimize the potential impact of interest rates and credit spread volatility on bank's capital. As I was explaining last time, the dynamic of our trading portfolio is reflecting our market-making activity on Italian government bonds, and relatively high volume of this component reported at the end of June has been significantly reduced already at the beginning of July, and amounts to approximately EUR 600 million at the end of September. It is also important to indicate that the further reduction of fair value towards CI duration, now at 1.8 years, and the consistently decreasing credit spread sensitivity. Now moving on to the third quarter fees and commission income. On a quarterly basis, total fees and commission income is lower by 6.4%, with wealth management fees resilient quarter-on-quarter, notwithstanding market volatility. In the banking fees, we are observing a decrease, which is partially related to the such structural component affecting the sector, that is the reduction of current accounts fee charged to customer following the interest rate increase. Additionally, in the quarter, there is some typical seasonality affecting lending fees and other components connected with customer activity. Looking at the yearly fees and income evolution, banking fees after nine months are lower by 2.6% year-on-year, 1.8 if we adjust by the reduction of fees on current accounts. The wealth management continuing fees component is stable year-on-year, while upfront fees remain affected by higher investor appetite for fixed income products. However, first sign of recovery are visible in the last quarter. Now let's move on to cost. Starting with quarterly evolution. Structural cost savings are confirmed also in this quarter, with total costs further down by 1.2% compared with the previous quarter. Decreasing costs are reported both in HR area, with a quarterly reduction of 0.8%, and also in non-HR costs, down by 1.7%, despite inflation pressure. The structural cost reduction visible on the slide after nine months is really remarkable, not only for the HR savings connected with the last year voluntary early retirement of 1,000 people, but also for the almost EUR 40 million savings in non-HR costs, especially considering the persistent high inflation environment. We are focused on absolute cost targets and proactive cost management, and we keep delivering excellent results, leveraging on our new cost governance approach and managerial expertise in this respect. We want to be ready and well-equipped to support our operational profitability when interest rate will normalize. Now, a few words on asset quality. The stock NPE is at EUR 3.4 billion, net of the disposal of EUR 200 million executed in the previous quarter. Transaction is expected to be finalized by the end of the year. Pro forma gross NPE ratio is at 4.1%, close to the 2024 business plan target. After the sale, pro forma total NPE coverage is at 49.1% as of September, one percentage point higher compared to December 2022. The cost of risk in the third quarter remains stable at 52 bps, incorporating the effects for the macro scenario update and further increase in management overlays. We are confident to confirm the guidance of 55 bps cost of risk for the year-end. Thanks to the great work done, the bank today is well-equipped to manage the potentially worsening macro scenario as well. Now, a few words on extraordinary litigation and extrajudicial claims. As I mentioned, we had in October an important positive development. The Supreme Court, on the so-called Vigni Mussari criminal proceeding, confirmed the sentence of acquittal because there was no case, allowing the bank to downgrade to remote risk EUR 800 million, almost 50% of the gross petitum related to Civil Litigation. Always looking at the Civil Litigation, it is worth to mention that the EUR 800 million not yet classified as remote are mainly related to two proceedings that count for 70% of the total amount. For one of these two cases, with petitum of about EUR 450 million, a positive verdict in the first grade of judgment was already registered. The sentence of appeal is expected to be issued before the year-end. The mentioned sentence of the Supreme Court allowed us also to downgrade to remote risk about EUR 300 million of the extrajudicial claims petitum. I would like to underline once more that the majority of all extrajudicial claims are promoted by the same consulting company on behalf of some institutional investor, and in most of the case, is characterized by lack even of documentation. On November 27, second degree, on so-called Viola Profumo proceeding, is expected. A positive evolution, also of this case, will be an important development in the overall definition of the extraordinary legal risk bank legacy, determining also a positive impact in economic terms. In the third quarter, two additional positive judgments on civil proceedings relating to so-called Viola Profumo and Dora NPE were issued. These additional two positive judgments brought to 17 the number of positive sentences registered up to now, 12 of which since the beginning of the year. This positive trend, together with the opinion of external legal advisors and our experts, give us comfort that also NPE proceeding that is in the preliminary phase, could evolve in a positive way. Now, let's move on to the capital. Core Tier 1 ratio is at 16.7, positioning Monte Paschi among the best in class Italian banks. The ratio is increasing by further 80 bps in the quarter, and this confirming the capability of the bank to organically generate capital. Our buffer on Tier 1 requirement, as I mentioned, is almost 600 bps, which translated to the excess of capital of about EUR 3 billion. It gives us the confidence to be well-equipped for our future next step to remunerate our shareholders in line with our latest guidance. I mean, to anticipate the distribution of dividend with a net profit of 2024. Given the current capital position, we feel confident to revise upwards our previous guidance to be higher than 70% in terms of Core Tier 1 ratio at the end of 2023. Let me now comment on the bank's funding and liquidity. The solidity of our liquidity position is confirmed. In September, we reimbursed further EUR 3 billion of TLTRO, with very limited recourse, recourse to MRO, effectively reducing ECB funding reliance. Liquidity coverage ratio stands at the sound level of above 160%, and net stable funding ratio at the level above 130%, with a counterbalancing capacity increase in the last quarter to above EUR 28 billion. Finally, just a few closing remarks before moving to the Q&A session. Strong and solid set of results with a net profit up in the nine months to EUR 929 million. It confirms our capability to be profitable over the time and to generate capital organically, with best-in-class Core Tier One ratio at 16.7%. Core revenue supporting two times higher year-on-year gross operating profit at almost EUR 1.5 billion after nine months, with increasing revenues and structural lower cost, leveraging on strong, loyal customer base. Cost of risk at 52 bps with the year-end guidance confirmed at 55 bps. Any potential downside from extraordinary legal risk is now becoming more remote, as visible in the decrease of the petitum. 2023 guidance confirmed in the key areas, with the net profit updated about EUR 1.1 billion, driven by net interest income and as well, Core Tier 1 ratio above 70%. Commercial strength and clear value proposition will further boost Monte dei Paschi operating performance towards our ambitious goals, and our value creation process is clearly reserving a leadership role to Monte Paschi in the banking landscape and the best options for its further development. Thank you very much for listening. We are ready to answer to your question. Thank you. 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. Anyone who has a question may press star and one at this time. The first question is from Giovanni Razzoli with Deutsche Bank. Please go ahead. Good morning to everybody. I have questions covering the two elements, the capital position, which is, you know, incredibly strong, and the second one is the legal risks. First one on your capital. Can you share with us, given the abundant capital position that you have, a 17% CET1 ratio at your end, what could be the impact on the CET1 from the potential repurchase of the insurance operation, which is a trend which is now evident across all the banks? I mean, recently, UniCredit has also confirmed the intention to do to do that, among the Banco BPM at the same. So, seems like that the Danish Compromise is providing a quite interesting arbitrage into that. So as a theoretical exercise, what would be the impact on your CET1? And then again, on the capital, there is a lot of noise on, still on your capital position, especially on this LGD waiver. If you can please clarify what is the benefit of that? Because what I struggle to understand is that if I move away from the, you know, potential impact of the, of this accounting treatment, seems also that your leverage ratio is very strong. So, is looking at the leverage ratio a fair way to, you know, leave aside all the discussion about the weighting, the GT waiver and so on and so forth? If you could comment a bit on this, that would be helpful. And the second question is on the legal risks, on the slide number 18. I think that the, also the extra judicial claims have gone down by EUR 300 million, which is a remarkable achievement. How, what does this, you know, trend reflect? And the final question, sorry to ask, because the matter is very difficult to understand, but there has been a Supreme Court judgment whereby all the cases after April 2018, as you reported in the press release, are now time-barred. I would like to understand how this can impact your legal risk going forward, if there is an impact. Thank you. Giovanni, Andrea speaking. I actually say the quality of the sound was not particularly good. I tried to repeat the questions, so you tell me if I understood them correctly. I mean, on capital, I understood that you asked for implications of the potential implementation of the Danish Compromise, if I got it correctly, which would mean acquisition of the insurance JV, if I got it correctly. And the second one is what was a question on the so-called waiver on the Valentine transaction, if I got it correctly. And on legal risks, you asked with particular regard to the judicial claims. You noted that the claims are down, and you asked about the underlying reasons. Then there is a question on claims that are time-barred. Did I get, did I get them correctly or? Yes, Andrea, that's correct. I'm sorry for, I didn't repeat it, but yes, but these are the questions. Okay, just... on capital, as regards to the Danish Compromise, as you know, for the time being, it's not applicable for us, since we're not a financial conglomerate. Of course, in case, in future, we took the decision to repurchase, our, I mean, the stake we do not have of our insurance JV, then the implementation of the Danish Compromise would materially limit the capital impact while adding a sizable earnings component. But as you know, the partnership anyway is expected to expire in 2027, so it is not, it is nothing which is in our radar screen for the time being. As regards to the so-called waiver, I just remind that the waiver, the so-called waiver, is just an early implementation of the so-called Article 500 of CRR3, which all European banks, or almost all European banks, have implemented so far. So the impact of the waiver is exactly the impact of the implementation of Article 500 for all European banks. So, we are not envisaging any disapplication of the waiver, it will stay in place for an indefinite period, and we do not expect any impact even in case of a potential M&A. On legal risk? Okay, the answer is quite simple. Now, as far as the period 2008-2011 financial information, the bank will not be receiving any more related claims, because the statute of limitations is applicable in this case. So for one of the, let's put it this way, cluster of legal extraordinary cases, we can say that the situation is completely fixed. The next question is from Azzurra Guelfi with Citi. Please go ahead. Hi, good morning. A couple of questions from me, mainly on the NII. Can you explain us how do you think the evolution of the NII will be over 2024? And when do you see the peak of the NII, also in light of the funding evolution that we have seen this quarter? And also, if you can comment on the deposit flows, because you are continuing to see deposit inflows, and if you can give us some color on what is driving this trend. And linked to the funding, given the balance sheet improvement and capital progression that we have seen so far, do you think that over the course of 2024, you could see some rating upgrades, and how this would impact both the funding structure and the funding cost? Thank you. Okay. So, we think that for considering the dynamic of interest rate, some changes, also that we expect in our mix of lending. We expect the net interest income in 2024, almost, let's put it this way, close to the level of this year. And that despite we plan to have some additional issuing, but overall, we feel comfortable that also thanks to the building up of the stock of consumer lending, and some additional focus that we are going to put in place on the lending activity, particularly in terms of pricing, we can manage the interest rate income, at the level I mentioned. As far as deposit, as I was mentioning last time, we believe that this is a crucial area of the bank, so we aim at keeping a good level deposit, not only because it's important for the structure, our asset liability, but also because we believe that deposit is a good base for a further optimization of our asset management stock. And is a way also to bring additional engine to the dynamic of fees and commission, that are believe- I believe are, are the critical area for all banks in the coming years. Finally, on rating, actually we're working closely with rating agencies, so they are monitoring our situation. So, yes, of course, we would expect some upgrades, even if we cannot confirm because this is not, of course, on us, in 2024, and maybe even earlier. The next question is from Noemi Peruch with Mediobanca. Please go ahead. Good morning, and thank you for taking my questions. I have three, and the first one is on the risk. I was wondering if you could- Sorry, can you speak louder? Because we cannot hear you very well. Okay. Can you hear me better now? With some echo, but let's say louder, but with some echo. I'm sorry about that. We tried the headphones. Just check. So, I was wondering if you could update us on the NPA proceedings. So what is the related petitum at the moment, and when could this be considered final? Now or after the hearing of the tenth of November? The second question is on the fees and cost, and if you could give us a guidance for 2024. And finally, if you could share with us what you think the risk and the opportunities of the digital euro implementation could be. And that's it. Thank you very much. As far as the petitum rating, the NPE, as we were mentioning, in the middle of November, there will be a sort of hearing, where the court will start finalizing all the civil parties' claims. We believe that it will take time and because they will start, as I mentioned, assessing, and the process can last for a few months. So probably we will have some information in the first quarter of the next year. As far as the guidance of the fees on for the next year, we are confident that in some way we can overcome the level that we have this year, and particularly for two reasons. The first one, that is, you notice already in the quarter, we are observing a positive recovery on the side of the upfront fee, with the placement of additional products that in some way is the results of improving cooperation with our partners. Second, we are further improving our network organization, putting additional advisor on the side of what we call premium. That is one of the most important segment in our strategy. And moreover, we believe also that the additional setup in head office with a dedicated division that will support all the advisor in defining the program and the plan in visiting customer, understanding better their needs, will help in being more efficient. So we expect some improvement on this outside of wealth management, while on the banking fee, the growth will be less visible. But anyway, we expect to have a positive trend. As far as the cost, clearly, we have two different consideration. The first one is on the side on HR cost. It's clear that it depends how the national labor contract will be finalized, and we will know something within the end, I believe, of this month. And there, clearly, we have to try to manage the increase of cost, that is unavoidable. But clearly, on this side, we will try to keep on optimizing the level of the staff at the head office and try to really move as much as possible people to the, what we call, contact with customer. So on the side of HR, we are going to have probably some positive impact on revenues, more than managing costs due to this renewal of the labor contract. On non-HR costs, we want to keep the pace, even if we are achieving very impressive results this year. But for us, it's crucial to offset the increase of the HR cost by saving, keep saving on the side of non-HR, and as I mentioned, by having more people dealing with customer, in some way, having more contribution in terms of income. Overall, I prefer to say that on the side of gross operating profit, we want clearly have a positive dynamic year on year. That is the combination of what I was mentioning earlier. On Digital Euro, which is your last question, we, of course, are assessing very closely the situation. At this point in time, we see both opportunities and risks. In terms of opportunities, for sure, that might be the possibility to deliver new services to clients, both with retail, such as wallet or merchants, and we expect a further drive towards the digitalization processes that per se will be beneficial for the banking sector. On the other side, there are also risks, and the first one is a potential trend towards disintermediation of banks, with potential impact on deposits and commissions. Having said that, having said all of that, we think we're still in a bit of an early stage of implementation, so it is hard to, let's say, assess impacts for the banking sector and for us in particular also, because also it will depend on how the Digital Euro will be implemented and how costs will be shared among market participants. So, we are, as mentioned, closely monitoring the digital evolution. We will have more visibility in the next quarters, and so we will be able in the near future to provide an update. Thank you very much. The next question is from Alexei Demyanov with Bank of America. Please go ahead. Good morning, thank you very much for the great performance of the bank. I have two questions for you, please. Last quarter, I remember the deposits grew only marginally, but assets under custody grew substantially. We discussed it with you, and you explained that customers invested in Italian government securities, so the depositor taker, you have to compete with the government now. However, this quarter, I can see that deposit growth accelerated, whereas assets under custody dropped. Do we see a trend of retail investors reducing the exposure to government and going back to deposits? This is my first question. The second question is my favorite one every quarter, your funding plan until the end of this year, and maybe some idea about your funding needs in 2024. I will take the question regarding the savings. So practically, in this quarter, as you can see, we have a very positive trend in terms of deposit. Even if part of this deposit are connected with some special action that will not have a sort of duration also for the full fourth quarter. But anyway, the level that we are presenting is stable. This level of 68-69 is, for us, a crucial level, and we want to keep this level. Then clearly, we are keeping flat position in terms of asset under custody, having also in mind that part of this dynamic depends on what the government is going to issue. Now, in the second quarter, there was special quite attractive product offer to the customer, not the same frequency in terms of issuing was in the third quarter. Having said that, it's clear that the trend of interest rate is also suggesting that probably is also the time to try to leverage on the market also thinking that interest rate in the future can also have a different dynamic, and therefore, probably to try to be much more competitive on term deposit as well with the government bonds, no? This clearly depends on the needs of the customer, but overall, as I mentioned, for us, deposit, especially small business and retail, are crucial. So we expect to try to defend this growing trend, at the same time to be focused in keeping growing that for us crucial, the overall commercial savings. I mean, together with deposit, also asset management, bancassurance products, and, as I said, asset under custody. We are seeing bancassurance and asset management products, because as I mentioned, for us, it's crucial to leverage on this product to have a constant, dynamic, positive month by month on the side of wealth management fees, because on that, we are building the future of our income. As I mentioned, we should be capable with additional fees and in the mid-term, and with the cost, in this case, in a much shorter period of time, to ensure a positive dynamic of our Gross Operating Profit. On the funding plan from an MREL perspective, we currently have, including net profit, a 26.54% TREA, total TREA ratio, MREL ratio. So, also taking into consideration the expected net profits for the fourth quarter, in theory, we could even avoid issuing by the end of the year. But, in practice, we will assess what to do in the next few days and weeks for 2023. For 2024, we still have to fine-tune and to update our funding plan. What I can tell you is that EUR 750 million of MREL issuances currently outstanding will lose eligibility, so this will for sure we'll have to replace. Then we would like to take into consideration also to finally define our our MREL-related funding plan also the potential expected payout ratio because also this will be a parameter to be taken into consideration in this respect, and the buffer we would like to have on the MREL requirements. From a, instead, a more pure funding perspective, we will for sure starting from 2024 reassess the cover bonds market. Now we have updated our program, so we are ready to get back to the market, and so there will be some cover bond issuances. But again, we will give you an update probably with the full year results after the update of our funding plan, taking into consideration our full year results. A quick follow-up. Given the high CET1 buffer, I guess nothing on the subordinated front next year? No, in terms of issuances- Yeah. At this point in time, no, and we're not expecting to issue any subordinated debt. What we might assess, but again, we are still at an early stage, is some liability management on the subordinated debt that was not called in 2023, maybe, coupled with issuances of more senior products. But again, at this point in time, this is just under assessment. Of course, if and when we take the decision, we will, let's say, communicate to the market. Okay, fantastic. Thank you very much, and good luck in the next quarter. The next question is from Andrea Lisi with Equita. Please go ahead. Hi. Thank you for taking my question. The first one is on your capital position, that is, really strong, 16.7% CET1. Just, to have, an idea of the action you can take on, on capital and the potential capital and distribution, which is, what is the, the target level of capital, that you want always to, to keep it? And the second point is relating them to, risks, seeing that, EUR 1.2 billion were, reduced to remote risk. It is, we imagine that you have provisioned something on legal risk, on risk, and so under which scenario should we see a release of the provision you have set aside? Thank you. Okay. On the first point, relating capital, it's clear that we enjoy a strong position of capital, as I said. Also, and we are also aware that this position of capital is quite high, and this by far exceeding the need that we have to develop our business. Having said that, the fourth quarter is an important quarter, and we think that during the quarter, looking at the end of year results, we will set the proper policy or optimization, including also the concept of dividend that we should take in consideration. Especially having in mind some positive evolution that could really help the results of the bank. Having said that, it's also important thinking about the future, in any case, and considering the strong position we have to enjoy to be on the side of a bank that is best in class in terms of Core Tier 1, especially knowing that we have this capability to generate each quarter an important level of capital. This is something that now is embedded in our operational activity. Too early to define exactly how to optimize the excess of capital, but clearly this is a point that is in our agenda, and I believe after year-end, we are going to fix it properly. As far as the litigation, right, and the extraordinary litigation. As I was mentioning, now it's clear that this month is another important month for us. 2027, there will be the sentence relating the appeal of the so-called Viola Profumo. I was mentioning that this is really a potential trigger that can support the bank, that can, in this case, have also the opportunity to benefit from the economic, in economic terms of, a positive evolution now of this long-lasting and painful case. Thank you. The next question is from Corinne Cunningham with Autonomous. Please go ahead. Good morning, everyone. Can I ask a couple of questions, please? First of all, on what drives the increase in NPEs before the disposal, the post-disposal, they're flat, but, what drove the increase ahead of that? And secondly, your Q4 guidance sounds relatively conservative. So if you literally just took off the nine months to get to EUR 1.1 billion, you're only looking at EUR 171 million for Q4. Is that realistic or you're kind of thinking of a much more than EUR 1.1 billion guidance? Thank you. No, I really understand your point. No, it's clear that mathematically we can look a bit conservative, but the fourth quarter, third, first, we don't know exactly how will be the evolution of the labor contract, national labor contract, so we don't know exactly what is the level of expenses. Normally, we try to be as approach overall in the bank in terms of risk, in terms of trading, in terms of core revenues, always quite conservative. That's why also in giving the guidance, we can look a bit conservative. But we'll see. We are confident that the guidance we gave is a guidance that is really achievable for us, and we prefer to, to, as I said, to be prudent also on this side, not because we have anything that make us not confident, but simply because we want to be sure to deliver and also to go above what are our commitment to deliver. Okay. So not expecting any major one-offs in Q4? Yes. I was just now about the second question. The NPE ratios clearly is a ratio by definition, so is also depending on the level of volumes of loans, and by definition, we don't change, as I was mentioning, volumes, and we don't give targets of lending growth, except for the products in which we are completely focused in our strategy, that are mortgages and consumer lending and small business. Clearly, small business, especially in the Agro sector, agricultural sector, it's clear that are a lot of pieces before reaching an important level of volumes that will help in decreasing the NPE ratio, it takes a bit of time. I would much more focus on the fact that clearly we have an increase of inflow on NPE, but I can, with a lot of comfort, say that is absolutely in line what we plan. Moreover, some of this inflow is connected with the retail lending, and clearly, this has a double effect because we have a nominal value of what is entering, and clear by definition, the coverage that we are setting for this kind of position is lower on the level that we have as a stock. So it's clear that also, we are showing a dynamic in terms of coverage that is positive compared to last year, but clearly is also reflecting the nature of the nonperforming loans that are entering in our portfolio. We are particularly focused in managing this inflow because we believe that the situation can keep in some way deteriorating, taking into consideration the level of interest rate. But as I mentioned, our retail, most of them are retail, and we are also in the phase that we try to fix and to settle case by case, provided the customer has clearly the financial capability, a different structure of modality of repayment, and this will also create some benefit in the reversal of the trend. So no particular concern. Clearly, high level of attention, because we want to keep the very good quality of our asset, and for us, it's crucial for in counting on that to build up additional generational profit. Thank you. So, so just to confirm, no, no one-offs expected in Q4? Excuse me, we did not get the follow-up question. Sorry, just to confirm, you're not expecting any major one-offs in Q4? No. Normally, normally, we are counting on what we call sustainable results. So, it's clear what I mentioned before, that is not really a one-off. It's different than what I said related to the extraordinary legal claims, right? If the sentence will be positive, as I mentioned, we will have a positive impact in P&L. If this is a one-off, according to me, it can also be the beginning of something that can be repeated in the future. So, let's say that is, as I mentioned, at the current stage, the only one-off on the side of the positive. If you mean something negative in terms of one-off, at the current stage, we don't have any, any one-off in our horizon. Clearly, the national labor contract is not a one-off, it's a permanent, that is the increase of remuneration of our staff, and this is, I don't believe, can be considered any one-off. Okay. Thank you very much. The next question is from Hugo Cruz with KBW. Please go ahead. Hi. Sorry, I don't have any further questions. They were answered. 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. Gentlemen, Mr. Lovaglio, there are no more questions registered at this time. I turn the conference back to you for the closing remarks. So thank you very much. See you the next time. Thank you. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.