Good morning, everybody. Many thanks for joining us to Monte Paschi 2023 fourth quarter and 12-month results presentation. Full year 2023 results represent a breakthrough for a decisive switch for Monte Paschi di Siena towards its stakeholders, clients, employees, shareholders, and communities in which we operate. Key drivers have been our talented people, strong commitment, hard work, and managerial discipline. Innovation has been our attitude. We have brought to life, again, our heritage, our tradition in doing commercial banking and serving the families and small and medium companies, the backbone of our country's economy, economic system. Thanks to an integrated model that can well combine skills of our people and digital innovation. Now, Monte Paschi is reset. Somebody defined our revolution as Rinascimento. Honestly, I don't know if we can speak about Rinascimento. For sure, we have created the right condition for this to happen. With all the colleagues, we did our job with a heavier weight on our shoulders. That is the weight on our balance sheet of the legal issues. It's like climbing a mountain with a much heavier backpack, as you can easily imagine. Now, as we firmly believe, the backpack has become much lighter, and we can further accelerate our speed with our new energies and talented people, and as we want to strengthen our commercial focus and ensure execution of our commercial plan in 2024, Maurizio Bai, already Chief Commercial Officer, Corporate and Private Clients, has been appointed by the Board of Directors, Deputy General Manager. Maurizio is very much appreciated manager by our clients, a point of reference for all the network people. Let me now move on to some key highlights. Net profit after 12 months crossed the EUR 2 billion, thanks to an exceptional quarter with a net profit about EUR 1 billion, driven by a very strong underlying operating performance, supported by net release of provision related to legal risk and positive tax component. The results of the quarter confirm, once again, the trajectory drawn more than one year and a half ago towards a clear and simple commercial bank, and confirm the capability of the bank to deliver sustainable results. Profitability is supported by a 12-month gross operating profit at EUR 1 billion and under 50 million, almost doubling the level of last year, with a 21.7% growth in operating income and operating costs lower by 12.6% year-on-year. Core revenues cross EUR 3.6 billion after 12 months, with net interest income reaching almost EUR 2.3 billion, with a growth of almost 50% year-on-year, more than compensating the decrease in fees by 3.1%. Looking at the com mercial performance, direct and indirect funding, what we call commercial savings, grew almost EUR 10 billion during the year, with a strong dynamic cost in the last quarter, confirming the powerful customer franchise. Loans development is reflecting overall lower market demand for the credit in this high rates environment. However, the trend is showing better performance than the market and allows to report increase of market share at the end of the year. With regards to the asset quality, the gross NPE stock is stable at EUR 3.5 billion level that practically was very similar to the previous quarter. The NPE ratio is at 4.4. The NPE coverage ratio is 49.1 by 100 basis points higher than at the end of 2022. The cost of credit after 12 months to 56 basis points, in line with the 2023 guidance. Strong liquidity position, also in this quarter, with more than EUR 30 billion of counterbalancing capacity. We reduce also the reliance on ECB funding to 11%. Now, regarding extraordinary legal risk, we downgraded in the quarter almost EUR 1.6 billion of petitum, thanks to the recent positive court sentences. As a consequence, the total petitum at the end of December decreased to around EUR 900 million, plus the EUR 400 million related to the Alken case, for which positive second-degree sentences were issued in December. Thanks to such downgrade, we were able to release a net amount of around EUR 460 million of related provision. I believe that there is ground going forward to switch to an ordinary mode of management and reporting on such litigation. All the values of Monte Paschi, and even more after the release of provision, has emerged during the year 2023. That's why we are now ready to give back to our shareholders with the proposal of a dividend distribution of EUR 0.25 per share, for a total amount of EUR 315 million, subject, of course, to ECB AGM approval. After the dividend distribution, the core Tier I will be still about 18%, confirming the strength of our balance sheet and positioning the bank among the highest in Europe in terms of capital. Let's go now through more details and results. The profit, as I was just mentioned, after 12 months, we reported a profit above EUR 2 billion. This result is driven by operating performance, that was very much positive in the quarter, thanks to the very intensive commercial activity, on the top of which we benefited in December of the net release of almost EUR 460 million on legal risk-related provision. As I mentioned, following the positive court sentences issued in the last quarter. Further contribution to the results came from the positive impact on the tax line of EUR 340 million, mainly retail relating to DTAs reassessment, which also benefits from the acceleration following the repeal of ACE, starting from 2024. Moving on to the next slide, we are presenting the net operating profit. After, after twelve months, we reported a net operating profit of EUR 1.5 billion, which is almost three times higher compared to the results achieved a year ago. The net operating profit of the fourth quarter amounts to EUR 371 million, and includes the impact of the labor contract renewal on HR costs in the amount of approximately forty million. We believe that the level of net operating income of 2023 is a confirmation of the bank's achieved capability to generate profitability in a sustainable way. Is a confirmation of the completion of the path to become really a bank profitable in long-term horizon. Now, let's see the gross operating profit that reached EUR 508 million in the quarter, practically on the same level as in the third quarter, despite the negative impact of the national labor contract renewal on cost. Thanks to the positive dynamics of revenues growing in the Q4 by 4.1%, we managed to offset the EUR 40 million impact on higher HR costs, that include in this quarter, the seven monthly cumulative effect of contract, salary drift. We believe that this gross operating profit is a measure of the capability of the bank to be profitable with, its commercial activity, can set a sort of bar for what are our aspiration for the coming years on the line of this gross operating profit. Now, gross operating profit yearly evolution. As you can see, after twelve months, the gross operating profit reached EUR 1.85 billion, almost doubling the results of the previous year, with core revenues up by almost 25%, driven by net interest increase and cost down by 12.6%, fully benefiting of the staff reduction of 1,000 FTEs implemented in 2022, and the ongoing non-HR optimization that is very, giving very important results. The structural cost reduction, together with increasing revenues, allowed to bring the cost income ratio down to 49% after twelve months, well below the 60%-68% reported at the end of December 2022. This level of cost income ratio is already below the business plan targets, that we're assuming 57% for the year 2026. Now, let's have a look to the net interest income evolution. In the last quarter, net interest income confirmed the EUR 600 million level of the previous quarter, allowing to reach almost EUR 2.3 billion in the whole year 2023. T his year, by almost 50% year-on-year, with commercial spread widening by 144 bps in this period, thanks to both increased lending rate and carefully monitored cost of funding. Now, looking at volumes, let's start with loans. As you can see, performing loans volumes in general are reflecting the market trend that is impacted by the overall lower demand for credit in this high interest rates environment. In the last quarter, we were observing increased activity in retail when it comes to the new production. Overall, our decreasing trend is lower than the one of the market, allowing to increase market share year-on-year.... I would like to say again, we will continue to remain prudent and patient, with focus on risk-adjusted returns, never chasing volume growth. Moving on to savings, as you can see on the slide, commercial customer direct and direct savings increased since the beginning of the year by almost EUR 10 billion, supported by the growth of more than EUR 5 billion in the last quarter, growing in all lines, including deposit, that increased by EUR 1.4 billion in the quarter. Also, on the side of deposit, we keep gaining market share. Now, let me give you an update on our portfolio in Italian Govies. The overall amount of Italian Govies portfolio is basically stable on the level of EUR 10 billion, with a progressive remix towards some more tight cost component, in line with the approach to minimize the potential impact of interest rate s and credit spread volatility on the bank's capital. As we were explaining before, the dynamic of our trading portfolio is reflecting our market making activity on Italian government bonds, and relatively high volumes of this component reported at the end of December has been significantly reduced already at the beginning of January. Now, let's move on the quarterly fees and commission income. Total fees and commissions income in the fourth quarter amounted to EUR 335 million, and were higher by 5.9% quarter-on-quarter. This growth was driven both by banking fees, which were up by 9.4%, and wealth management fees growing by 1% quarter-on-quarter. This is one of the best quarter in terms of performance of our commission income, taking in consideration that normally last quarter is not necessarily the best in terms of growth. W e are very happy to see how the network reacted to the request to accelerate, and I think it's a good signal for 2024. Looking at the yearly fees, and looking at the evolution year-on-year, total fees in 2023 amounted to EUR 1,322 million, and were nominally lower by 3.1%. If we consider the reduction of current account fees introduced in Q3 and the homogeneous perimeter in terms of consumer loan, for which enhanced production was developed the last year, and in some way, also the pressure on upfront fees and wealth management, this adjusted 3.1, and if we adjusted 3.1, we will be lower by 1.5%. Now, let's move on to costs. Starting with the quarterly evolution. HR costs in the fourth quarter were impacted by the renewal of the national bank contract that is effective since the first of July, 2023. In this quarter, 7-monthly cumulative economic effect of EUR 40 million was booked, distorting, in some way, comparability with the previous quarter. Non-HR cost, at EUR 164 million, is a strong confirmation of the capability to be effective in the reduction of recurring costs. The result of this fourth quarter is even more important, knowing how normally in the quarter you have some seasonality effect. If you look at the early evolution, the structural cost reduction after 12 months is remarkable, not only for the HR savings connected, as I mentioned, with the voluntary early retirement of 1,000 people in the last quarter of last year, but also for more than EUR 50 million savings in non-HR costs, achieved thanks to the ongoing rationalization effort, especially considering the persistent high inflation environment. We keep being focused on absolute cost target and proactive cost management, and we keep delivering excellent results, leveraging on the new cost governance approach and managerial expertise in this respect. Now, let's move to asset quality slide. The gross stock of NPE amounts to EUR 3.5 billion at the end of December 2023, after the reduction of EUR 200 million NPE portfolio disposal finalized in August 2023. Gross NPE ratio stands at 4.4, and the net ratio is at 2.3. If we look at the coverage of the cost of risk, the total NPE coverage is at 49.1% at the end of December, and is higher by 1 percentage point compared to December 2022. The bad loan coverage has increased also in the quarter, now is at the level of 68.1%, 3 percentage points higher year-on-year. The unlikely-to-pay coverage, at the level of 57.6, has been impacted during the quarter by some inflows of retail mortgage loans with lower expected loss. The cost of risk in the whole year is at 57 basis points, in line with the guidance. Now, a few words on the extraordinary litigation and the extrajudicial claims. As I mentioned earlier, we had very important positive development in the last quarter. In November 2023, the Court of Appeal confirmed the first degree sentence, completely rejecting Alexandria's claim. In December 2023, full discharge of Profumo and Viola by the Criminal Court of Appeal. I would like to recall that the total number of positive sentences are 17 up to now, of which 12 are related also or exclusively to NPEs matters. As a consequence, we were able to materially downgrade the risk from probable to possible in all cluster of extraordinary civil litigation. The petitum of criminal proceeding related, relates also to civil parties of NPE proceeding, still at preliminary stage. As you can see, the total outstanding petitum for civil litigation and criminal proceeding, as at December, at the end of the year, stands at almost EUR 100 million, excluding the EUR 420 million of the Alken case, for which, as I mentioned, the uncertain was completely rejected in November 2023. The petitum on extrajudicial claims downgraded to remote risk. All these positive events enable us to report in December net release of provision for risk and charge for the amount of EUR 466 million. Concluding, we can say that the situation has significantly improved. A s I was mentioning at the beginning of the year, there is ground now to switch to an ordinary mode of management and reporting on litigation going forward. I believe we have reached another milestone on the road to be a clear and simple bank. Now, let me comment on bank's funding liquidity. The standards of our liquidity position is confirmed. Counterbalancing capacity is close to EUR 30 billion, with almost 25% of total asset. Liquidity coverage ratio is about 160, and net stable funding ratio at 130. Reliance on ECB funding is reducing, while ECB funding representing now 11% on total liabilities, versus 16% at the end of 2022. Let's move on to the capital. CET1 ratio is 18.8 before the dividend, and 18.1, including the effect of proposed dividend distribution in the amount of EUR 350 million. The remarkable level achieved is again a confirmation of the strength of the bank capital position, of the capability to generate capital with this business, and the level we achieve is one of the highest among the European landscape. The ratio is consistently increasing quarter after quarter. Our buffer on Tier 1 requirement is a significant 750 basis points, which translates to excess of capital of about EUR 3 billion. Now, let's move, and we would like to present with the next slide some thoughts as regard to the outlook for 2024. Let's start from revenues. We are expecting a level of total revenue similar to 2023, thanks to resilient net interest income, despite the decreasing interest rate expectation, thanks to improving lending asset mix and increasing fees generation on wealth management product and banking product as well, leveraging on the reinforced commercial activity of enhancing in the wealth management area, partnership cooperation, and also increasing the number of advisor dealing with customers. Cost, we expect slight increase despite our continuous effort, aiming at further improving the efficiency. S till, the goal is to offset the negative impact on personal cost for the renewal on national labor contract. Cost of risk, we are expecting to maintain the cost of risk on the level close to 2023, leveraging on effective credit underwriting process, a continuous improvement of ongoing monitoring, a very selective approach going forward. The tax profit, we believe, we will increase the profit before tax compared to 2023, if we adjust for the release of provision for risk and charges. On dividends, we assume we will be able to start the regular yearly distribution of dividends with payout of 50% on the 2024 profit before tax. We will keep our outlook for CET1 ratio in 2024 at above 18%. Let me conclude by saying that Monte Paschi enters 2024 as a renewed and competitive bank, renovated with a sustainable business model, driven by performance and ongoing value creation. As I mentioned at the beginning, the new Deputy General Manager just appointed will ensure enforcement to our commercial effectiveness, to pledge the execution of our plan for 2024, and to further support the value creation culture within the bank, and to be very well-equipped to face the new challenges. Some additional changes have been introduced in our key functions by appointing a new Head of HR and a new Chief Operating Officer and a new Chief Retail Officer. Finally, just a few closing remarks before moving to Q&A session. Full year results confirm the achieved bank strong, sustainable profitability, driven by improving operating performance and high efficiency, and further supported by net release of provisional risk and charge, and positive tax impact in Q4. I believe it's worth to mention about DTAs, that still amount of EUR 2.6 billion off balance sheet is available. It ensures further positive support to our net profit in the next few years, given the expected higher taxable base projection to consider on DTA probability test, compared to those of the business plan 2022, 2026, assumed up to now. It means, in other words, and to be more clear, that the net positive impact of 2023 is not really a one-off, but can be replicable for additional few years. We reported a very strong acceleration on commercial performance, EUR 10 billion increase on total savings, in confirmation of a strong deposit franchise. High organic capital generation that allows to remunerate shareholders two years in advance, proposing a dividend of EUR 0.25 per share for a total amount of EUR 350 million, and to guide for a payout ratio of 50% on 2024 net profit. Top tier-one capital position with tier-one ratio at 18.1% post-dividend at the end of December 2023. I would like to conclude by just, saying that, really I think, and we all know, especially tennis fans, how high conviction, passion, and hard work can be crucial to achieve targets. I believe these were the key drivers for our performance throughout 2023. Our talented people will ensure Monte Paschi continues to act as a main player, also in the years to come, because the high conviction, the passion, and the hard work is the DNA of our people, and I take this opportunity to thank each of them for the excellent results we have achieved. Thank you. We are available for Q&A session. 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, Deutsche Bank. Please go ahead. Good morning to everybody, and thank you for taking my questions. The first one is on the dynamic of the deposits in the quarter, that in my view, are very, very good. Can you please elaborate a bit more on this, what segment of clients drove this increase? I've seen that you have raised a little bit the funding cost in the Q4, so I was wondering whether you've been a little bit more aggressive with your commercial policies in there. T hen, very clear the guidance for the revenues in 2024. Would you be able to share with us also trajectory for NII, specifically in 2025? L ast question on your capital position and dividend, which in my view, is clearly and evidently very strong. I've also seen that leverage ratio is now 7%. Can you say some words on the narrative that we continue to hear about your capital position, the fact that you are not, you know, applying the same parameters for internal model, that you have a LGD waiver? It seems to me that, you know, these are a little bit not very concrete arguments, especially now that you are still committing to a 50% payout ratio. I f you can, again, comment a little bit on this, that will be clear. Thank you. Okay. I think, the deposit dynamic is something that we planned, because if I remember well, when, in the last presentation, I was mentioning that for us, the deposits are strategic and we wanted, really to grow, especially on retail and small business, and this is the main, segment on which we grew. Clearly, we had also some, corporate deposit, and probably we collected even more than what we were expected, but, it was just initiative of customer. It was not, the result, of request, so we didn't have a particularly price on that, and normally were customer that were keeping money at the end of the year on our account. The strategy on that is to keep growing, paying a lot of attention on deposit also because I think, you know, that we have also some constraint. In terms of pricing, we cannot be higher than the average of the sector. D espite the willingness to keep the cost of deposit absolutely under control, I think also this constraint is supporting in adding a certain discipline at the level of network. The second point regarding the net interest income, I was mentioning that practically total revenues are expected to be almost at the same level in 2024, and we don't expect major changes compared to the level of 2024, also in 2025, with a different combination. The commercial net interest income, that is the one that we keep absolutely under control, that is the net compared to what we pay to customers for deposit and what practically we ask customer to pay for loans, will be kept in 2024, slightly growing, and then in 2025, in our estimation, we come back to the level of 2023. Then clearly, we are going to have some bonds that we want to issue, so generally, we are going to have some burden in terms of cost, but overall, if we see the total net interest income, we don't expect to be, both in 2024 and 2025, very much different from the level of 2023. Different is the trend on fees and commission. We want to grow in 2024, and we want to grow even more in 2025. All the efforts we have put in place with this new organization, appointing a new Deputy General Manager, that is a very skilled manager of the bank, to be completely focused on delivering the commercial results, is in a value add that, that I believe will be very much visible al ready in 2024. Moreover, we are also reinforcing the capability in serving customer with the wealth management products, creating a sort of center that will work across all the division, building up a sort of bulk in order to have also what we call today mass market customer ready to switch towards the upper affluent, the upper level of the segment, so lower affluent, in order to follow the real cycle of the life of the customers. I think this is one of the most important project we want to set up for 2024, leveraging also on the platform Athena, on which we invested a lot of money, and I believe we start giving some results in the model of servicing the premium customer this year. On Giovanni, on your question, basically, I think you were referring to the waiver. I just reiterate what I've said already in other calls, i.e., that the bank received the waiver with the, let's say, no expiry, if you can say, and that... ... was referred to some massive disposals of NPE, and was received prior to the approval in the CRR of the famous Article 500.T hat was received some months before. It basically relates to the same topic, so we think we are definitely, let's say, on the same level than other banks in Europe. We do not expect that this will expire at any time, either if we stay standalone or if we combine with another bank. F or us, this is a non-issue. By the way, we have a risk sensitivity, which is in line or even higher than other banks. T o the opposite, I would like to focus on our DTAs. Actually, we still have EUR 2.6 billion of DTAs off balance sheet, off balance sheet, and we have EUR 0.7 billion. You can look at the last slide of the presentation, EUR 0.7 billion of DTAs on balance sheet, on tax loss carry forwards. These are deducted currently, but these will be capital. So our capital will pile up over time. I will look actually at the upside and not at a downside that we really think will never materialize. Thank you. The next question is from Antonio Reale, Bank of America. Please go ahead. Morning, everyone. It's Antonio from Bank of America. First of all, well done on results today. It's great to see the turnaround. I have three questions, please. One on strategy, one on NII, and lastly on asset quality. The first one, I mean, the bank has gone through a long and challenging journey over the years, and now it's been reset, as you said, as an equity story. I guess, at this point in time raises the question as to what is the direction of travel for Monte Paschi. We've seen important changes to your capital structure and your shareholder base. You're now sitting at, on 18%, CET1 ratio, that's a large excess. M y question is: how will you manage the bank going forward, particularly around the excess capital? Now, the asset quality and legal risks have been broadly addressed, and you're generating capital organically. Is the excess eligible for more, distribution? Should we think of this excess as buffers for potential strategic buyer? What's your thinking here, please? That's my first question. My second one is a follow-up on the NII outlook. On slide nine, I see that, it's the first quarter in which customer spreads have dropped. Do you think that with respect to a commercial, NII, we've reached the peak here? M aybe if you could talk about some of the mitigants you could implement at this stage to lower your rate sensitivity on the way down. M y third and last question is on asset quality. Now, you've cleaned up your balance sheet, your stock of NPE is broadly in line with peers, yet your cost of risk guidance is still somewhat higher at 55-57 basis points. What's driving that? What would it take for your cost of risk to go below 50 basis points from now on? Thank you. Okay. I t's nice to have a question what to do with the capital when we have a lot of capital, you know, because we make an increase of capital just practically. If I remember well, 2 years ago, right? Something like that. I will enjoy to answer. It's clear, as I was mentioning, that the capital is important for any further development of the bank. W e are in this early stage. We know perfectly that 2024 will be an important year for the bank. It's clear that we are cautious, that in any case we can, we have to take an opportunity to optimize the capital, even through managing and leveraging any opportunity that come in any partnership that we have. We monitor closely what is going on, and we will be fast if any opportunity will come, having the buffer that you were mentioning. On net interest income, I will ask Andrea to answer. I want just to stress one point. What is happening in terms of spread is exactly what we planned. W e are not absolutely surprised by the decrease of the spread, we said already last time. Our idea is also that 2024 will be a year where also the commercial spread, on which we are particularly focused, will not be very much different from the exit level of the Q4, maybe with some adjustment in the Q1... T hen if you look quarter on dynamic quarter on quarter, all in, we are going to have what I call again commercial that probably will be at the same level the first quarter and the second quarter, and also third quarter, and probably growing in the fourth quarter, 2024. Then clearly, as I was mentioning, we are going to have some issuing in terms of bonds that can in some way impact this trend that is relating to the commercial. Overall, the net interest income will be not very much, as I mentioned, different from the total we reported at the end of 2023. Now, Andrea will elaborate much more on the some hedging idea. Yes. Basically, we have already, let's say, as other banks are doing, we've already started working on our ALM strategy, and we make use of hedging derivatives. Differently from other banks, we don't think that the hedging via the so-called replicating portfolio that often is mentioned to us in questions, could yield a superior performance. A nyway, we have already started positioning our ALM strategy towards, let's say, the expected decrease of short-term rates that anyway, for the time being, are still from, let's say one month to six months, around 3.9%. What we have, we've already started doing, and we're still doing, is to achieve an optimal, let's say, balance, a trade-off between preserving the front-end NII and making the future NII contributions less risky. T his is already in place, and our NII guidance for the next two years at least factor in this strategy. Okay, I will elaborate on asset quality. Okay, I think we were almost always confirming that for us, it's quite important to have a very conservative approach in terms of Cost of Risk. The conservative approach of Cost of Risk is to keep the level, as we were mentioning, around 50, between 50 and 60. I think I'm not saying anything new, because I heard somebody else say that a good level of Cost of Risk is 30. I can say for a bank as Monte Paschi, the good level of Cost of Risk is between 50 and 60. I think we will stick to this level because we believe that we have to be prudent and to think about t he future of the bank. Thank you very much. The next question is from Noemi Peruch, Mediobanca. Please go ahead. Hello. Have a good, good morning, and thank you for taking my questions. Could you please share with us the assumptions of deposit beta and rate cuts implied in your guidance, your NII guidance for 2024 and for 2025?T hen if you could also give us your latest NII rate sensitivity to 100 basis points of rate cuts and also the implied deposit beta in that sensitivity.T hen I have two questions on the legal risk. If you could please just give us a bit of color on the NPE proceedings. If I'm not mistaken, you said the EUR 660 million of criminal proceeding claims are related to this, but correct me if I'm wrong, and when we could see further updates on this. T hen lastly, if you could please give us the reclassification of the EUR 1.3 billion of outstanding petitum between likely and possible. Thank you very much. Thank you, Noemi. O n NII guidance for 2024, based on, let's say, our macro scenario, which is based on an external provider, we are assuming a one-month arrival around on average 3.6%, with a beta that from 20% actual for 2023, we expect that could be between 20%-30%, so around 25, say. For 2025, of course, we expect rates to go further down. As regards the NII sensitivity, I guess that you are mainly interested on the sensitivity to rates going down. F or -100 basis points of parallel shift. The impact on the first year is slightly above EUR 100 million, and they say the comparable beta, because often everybody speaks about beta, but from time to time they speak about different parameters. But let's say, the comparable beta with what we calculate for our NII is still around 25%. T his on NII, while on litigations, Luigi would like to comment? Yes, thank you, Andrea. Yes, so, I think, also in this last representation, on the slide, we are in some way showing the conservative approach of the bank, because the criminal proceeding that you are mentioning, theoretically, is still subject to verification by the court, that is expected to happen within the first half, hopefully, of this year. I t means that the amount we put and we identify as Petitum is a very conservative estimation from our side. A s usual, and this is the style of the bank, we want to be prudent and to be ready for even the worst scenario. Despite that, is also important to underline that, having part of this risk still prudently classified as probable, still we have some reserve set aside for eventually the worst scenario. So really, the way how the bank addressed, is still addressing, this legacy is in a very conservative approach, and the release of provision we set aside is a clear message that we are saying that when we were mentioning at the beginning, even of the business plan, that the issue of legal risk is well addressed at that time, where awards now is profit and dividend for our shareholders. Sorry, I have a follow-up on the NII sensitivity. B asically, in 2023, NII basically grew by almost or more than EUR 700 million year-on-year, with 300 bps of higher average rate, or more or less. So, if now with the guidance of the sensitivity on the downside is much smaller. I just wanted to ask, what changes in the balance sheet on your strategy you're already done right now that would indeed back that new rate sensitivity? Thank you. Actually, I can give you, let's say, some qualitative comments to explain if I got your question. First of all, in 2024, anyway, you still have a positive carry forward effect, because we are still, we're still writing a new business at a higher rate than the back book, and this will go on for a while. Y ou cannot simply apply, say, parallel shift any instantaneous parallel shift. T his is the first point. Second point is what I mentioned about our ALM strategy, and the third point is that we can optimize our wholesale funding compared to our business plan, and compare also, which is not public, but anyway, to our budget, the expected cost of new issuances is far lower based on quotes we're receiving from investment banks than we originally expected. The next question is from Azzurra Guelfi, from Citi. Please go ahead. Hi, good morning. A couple of questions for me. One is on cost. When we look at your guidance of ongoing cost efficiency to offset the increase of the personal cost, can you give us some indication of what could be the major action that you plan, and given also your... T hen linked to this, you have excess capital. It's a nice problem to have today. Just to try to understand a little bit better, would your preference to use this capital for restructuring or strengthening of the balance sheet or earnings accretive actions in the medium term, versus actually keeping this excess in a potential, I don't know, combination or as a advantage in any potential negotiation coming? On this, if you can give us the impact that you expect, either from regulatory development or risk-weighted asset migration. The last quick thing is just a clarification on your risk and charges legal provision. Can you give us the number as of the fourth quarter post the release? H ow should we think about this in terms of how conservative they are, given the positive stream of sentences that you have recently received? Thank you. Okay, let's start from cost. A s I was mentioning, practically, well, it was very successful this year, the action we put in place. I want just to recall what has been done since the launch of the strategic plan. We built up a new cost governance company, sorry, structure. I used to say company just because I believe that our cost governance should work across the bank, so with the power on most of uncertain, in order to get optimization of the cost. W e reduced from 50 cost centers with the budget in only 1. Today, we are only cost center, and all the payment of invoices should go through a gate, where we have a structure that is analyzing. It's clear that also the segregation of the cost management with the procurement brought additional benefit, and as is never-ending process, we are introducing additional changes organizationally in order to be even more effective. If we look at the item on which practically we got the best results in term of efficiency, it's clear that if we want to start from the most important was the process of renegotiation of telecommunication contracts. I mean, data fixed, mobile, everything. Then we reduced the cost connected also to, with the synergies of IT by incorporating two subsidiaries, as you can remember. Then we had additional benefit in terms of reducing whatever was connected with technical consulting activity. We reduced the number of contract with the outsourced company, also in terms of software, and this mainly on the IT area. We reduced significantly also the maintenance in terms of building by reducing some location, some building, because after reducing the staff by 20%, we have several situation where we had half of the building occupied by employee, so with employees, so we decided to make empty some of them. Some of them are on the process of selling, but anyway, we are saving a lot of energy, especially now that it was quite expensive. Clearly, all the costs connected with the legal cost, the cost of recovering in NP, that practically the process started already in 2022, is giving some result in 2023, but will give even additional results in 2024. It's a never-ending process, and I believe that cost saving is not just to cut on paper purchase, but is much more a matter of processes, try to do the thing fast, adding less levers, managing the decision, and this automatically is bringing benefits. W e achieved an important result this year, and we believe that on non-HR costs, we can be even continuing this very, very efficient process. Different is on the side of HR, where practically we have to face the increase of salary connected with the labor cost, but we are quite confident that at least we are going to have a process, where we will have much more people towards, commercial activity, shifting the people from, the office activity. I f we don't reduce completely the cost, we are going to increase the revenue by utilizing these people. Now, in terms of strategy, honestly, the capital is not needed to make restructuring, because, we can finance the restructuring without, utilizing capital. As I was mentioning, we could have a different opportunity, looking, of, what we can do with our partners, and then, ready to capture opportunity for an potential, transaction combination on the market. Then, on CRR III, actually, for us, this is, to the best of our current knowledge, at least, expected to be a tailwind rather than a headwind, mainly for the impact on operational risk RWAs, which is, by the way, further confirmed by the recent sentences, but regardless of that, and the amount of the tailwind, actually, is being quantified. Then, on litigations, I'll let Luigi comment. ... No, as I think, in some way, I think we answered already earlier on. We are keeping a very conservative approach. It's clear that we reported a very positive trend with all verdicts in the last month. I was mentioning that just if we look in MPS matter, we had more or less 12 decisions of the court in favor of the bank, and I think all 12 are related, also, or only to MPS matter. W e believe that also this topic will go in the right direction. We are not making disclosure on what, how much we are keeping for this kind of legal risk. As I mentioned, we are very well equipped to face any scenario, and hopefully we will enjoy another positive impact sooner or later on our P&L. The next question is from Fabrizio Bernardi, Intermonte. Please go ahead. Hi, everybody. I have a couple of questions. The first one is on double check on, let's say, the payout. If I look at page 22 of the presentation, you say that you are going to pay out 50% of the pre-tax profit, which I guess will be adjusted for provision. I f I look at page 25, it's EUR 1.7 billion, and there are more or less EUR 500 million of provisions, more or less, which means that EUR 1.2 billion, 50% is EUR 600 million, that on the current market cap, it's is more or less a yield of 15%, which is let's say appealing, I would say. That said, I would ask if you can give us any color about the willingness of the government of reducing its stake in the bank even further, considering that you have a 18% common equity, and probably you can have a dividend policy that can reward the government in a very effective way. Thank you. I will start from the second question. It's clear that we are not the addressee of what the government can do, and really, I wouldn't like to discuss on that. On the payout, yes, we said that the pre-tax profit will be almost at the level of this year, if we exclude the reversal of provision, yes, it's quite easy that your calculation is broadly right. Thank you. The next question is from, Corinne Cunningham, Autonomous. Please go ahead. Good morning, and congratulations on the results. Can I ask a couple of questions, please? First one, on MREL, if you could just provide the positioning now and against your targets. T hen the second one is on ECB reliance. 11% of your funding coming from the ECB is still pretty high compared with peers. C an you give us an idea of what the intention is there, if and when you're likely to actually redeem the ECB reliance? Thank you. Okay. O n your first question, I give you, let's say, the most relevant KPI for us. Our MREL capacity on overall RWA as of first of January 2024 is 28.17%, including, of course, net profit, and excluding dividend, while our target as of first of January 2024, including CRR, is 26.59%. A ctually, we have a quite good buffer. As regards the overall funding strategy, as mentioned, it is part of our funding strategy to progressively decrease our reliance on ECB funding, and we have defined a funding plan for 2024 and then a funding strategy for the next two years. Accordingly, this year, soon, I would say, we will reassess the covered bonds market, and then we will diversify also in other ways, our funding, I mean, stated that, let's say the usage of ECB funding is not a big issue per se, but we appreciate that it is good to further diversify. Thank you. The next question is from Alexei Lugovtsov, Bank of America. Please go ahead. Good morning. Thank you very much for the presentation. To follow up on the MREL and covered bonds, what are your bond issuance plans overall across the capital stack? For 2024, we have roughly a EUR 3 billion funding plan, out of which only EUR 1 billion is MREL relevant, and will be senior preferred, basically, and slightly above EUR 2 billion will be instead covered bonds. On top of it, in the second half of the year, we might look at maybe some liability management, but it is early to say, and we will see, and we will give you an update in, say, in the following calls, the next calls. Okay. Okay, thank you very much, and good luck. Thank you. The next question is from Hugo Cruz, KBW. Please go ahead. Hi, thank you for the time. I have a few questions around capital and asset quality. On capital, I see a lot of optionality. You know, CET1 ratio is very strong. You could still issue an AT1. There might be further legal claims releases. You said Basel IV could be a tailwind. I s there room to also announce at some point an extraordinary, you know, distribution, either a dividend or a buyback? How do you think about that? Then on the asset quality, I've noticed, you know, you've done some NPL disposals, but the stock is still not, you know, coming down materially. Y ou know, is there, is that you just being conservative with reclassifications of loans ahead of the year end, or is there any underlying deterioration? You know, is that something we should worry about? That's it. Thank you. Okay, let's start from the first question. Now, for the time being, as you see, we are thinking about dividends now. It's too early to make a discussion now also about buyback. D ividend is, for us, at the current stage, a priority or the preference of preferred option. Regarding asset quality, as I was mentioning, I think we are quite conservative on that. It's true that the stock is practically flat, it's not decreasing As I was mentioning at the beginning, you have to take in consideration the significant portion of the last inflow is coming from retail mortgages, where for some part we have also some guarantees for a special program that has been issued by the government. We want to be conservative, but despite that, my personal view and the personal view, and the view of the management that is dealing with the asset quality, is to try always to reduce the stock. Y ou can reduce the stock by being quite careful to avoid new inflow, having in mind that the bank in the last years was not particularly active in granting loans. T he second one is to optimize the cure of some unlikely to pay or to decide for additional sales. I can say that we are equipped for all these option, so 2024, we will consider which one of the option I was mentioning would be much more effective. The goal is to keep this stock absolutely under control. To avoid any doubt, it just is not a matter of deterioration of our portfolio. As I said, we used to have, and we will, we have, and we will keep a very conservative approach in classifying, and I believe we know quite well our portfolio, for the simple reason that since also I'm here, I'm receiving regularly, each month, a report from the chief lending officer, where really we keep absolutely under control all the migration of each position we have from high risk. That is a classification that we put inside in order to better understand the behavior of companies that have already some early warning signals. It is a particular and quite effective system we have in the bank, and trying to prevent deterioration, knowing better the customer. Like, to conclude, yes, we want to decrease the stock, and hopefully this is something that we will try to achieve during this year. Thank you. The next question is from Andrea Lisi, Equita. Please go ahead. Hi, thank you for taking my question. Still on cost of risk and defaults and so on. What default rate have you embedded in your guidance for next year? I f you can remind us the amount of overlays you still have. T he second one is just if you can briefly provide us a comment on what you expect on the M&A area in Italy in the current environment. Thank you. Thank you. I'm not sure I got all the questions. I mean, as regards to the cost of risk for next year, I mean, we gave a guidance, which is conservatively, I would say, considering also the macro scenario, in line with this year. Then you asked about the overlays. Actually, also in this case, conservatively, we have factored in our models some additional prudence, and then shifting from overlays to risk provisions some amounts, so that the overlays are currently below EUR 100 million. T he last question, I'm not sure I got it. No, the last question was just if you can provide us a comment overall on the scenario, on the M&A scenario you expect in Italy in the current environment. Thank you. Okay. On this, I think we will launch a takeover on UniCredit, but, Ah, perfect. No, I'm joking. I'm joking. I will note. No, I mean, we do not have, we do not have, we do not have an update on this. This is, of course, something that our shareholders probably will discuss. Thank you. The next question is a follow-up from Giovanni Razzoli, Deutsche Bank. Please go ahead. Oh, thank you. My questions have already been asked and answered. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question is from Gilles de Brux, Octo Finances. Please go ahead. Good morning. Thank you for taking my questions. I have just one question on the legal risk. Regarding the two positive judgments that you had in November and December, can we consider that these cases are definitely closed, or can the plaintiffs bring the case to another court? J ust on the cost of risk, one clarification, you guide for a stable cost base versus 2023. I was wondering if this includes overlays or it's ex overlays. Thank you. Sorry, can you repeat your second question? Sorry? Yeah, I mean, on the second question is whether the cost of risk includes the overlays. Yes. The answer is yes. Yeah, yeah. On your first question, would you comment? Yes, I will answer. P ractically, as I was mentioning for Alexandria, we have the second verdict that is confirming the first one. C learly, there could be the last stage, the Supreme Court. N ormally, and looking at the contents of the ruling, the Supreme Court is just entering, is not entering exactly in the matter relating the decision that was taken by the Court of Appeal. It's just analyzing the consistency of the scenario with the compliance of the law. H opefully, and this is what we are, our lawyers, external lawyers, are telling us, it's just a matter of time, and then will happen what happened also with the case, Mussari Vign i. The final decision of the Supreme Court will confirm the decision of the Appeal Court. Thank you. The next question is a follow-up from Corinne Cunningham, with Autonomous. Please go ahead. Thank you. Just a clarification, again, on litigation on slide 19. T he criminal proceedings have gone from 0.2 to 0.66. Has that moved from extrajudicial? I guess I'm asking, where has that increase come from? Thank you. Sorry. I think we were mentioning that this amount are the criminal proceedings relating to the MPS, most of them relating to the MPS that is still at this preliminary stage, and in a conservative way, we already consider some request, even if, as I was saying, the court hopefully next year has still to decide if the request will be admitted or not. In a conservative way, we already incorporate all these civil claims, but it's for something that still is at very preliminary stage. Okay. I t wasn't extrajudicial before? This is kind of a new proceedings. Can you repeat? Because I'm not sure I follow. Yeah. I t wouldn't have been included in the EUR 1.9 billion extrajudicial. This is a net new addition. No, no. Most of them are new, then some—there are some that change the nature of the request, and they gave up on what was as extrajudicial, and just for—because there is a very simplified procedure, they decide to go through the civil part. P ractically, it's not nothing new compared to what we already knew all of us three or four months ago, and we were already mentioning in our balance sheet that is something that is a process that is ongoing, but is still subject to the decision of the court to accept the request of the claim. Okay, that's clear. Thank you. Mr. Lovaglio, there are no more questions registered at this time. Thank you very much. See you next time. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.