Good evening. This is the Chorus Call Conference Operator. Welcome, and thank you for joining the presentation on BPER Banca's first quarter 2022 results. 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. Piero Luigi Montani Thank you. Good evening. Thank you for joining. Briefly, I would say that the quarter that's just been closed reflects strong growth in profitability despite difficult environment, combined with a sound capital position and excellent liquidity profile. The first quarter results bear witness to the progress achieved in credit quality. The quarter closed with a net profit of EUR 113 million after payment of almost EUR 45 million-EUR 46 million in contributions to the Single Resolution Fund. Operating income totaled EUR 883 million, up 16.6% year-on-year, driven by the growth in net commission income amounting to EUR 450 million +37.3% year-on-year, boosted by positive commercial dynamics, which we had already observed in the last two or three quarters. Operating costs already reflective of the start up of projects that will be part of the new business plan, which we had already started to work on in the last months, amounted to EUR 558 million, perfectly in line with the expected trend. With reference to volumes, indirect funding amounted to EUR 161.3 billion, of which EUR 81.2 billion from AUM and Life Bancassurance, which were up 4% year-on-year. Net funding in the quarter was a positive EUR 423 million, despite slowdown in March due to increased volatility in the financial markets in connection with the war that broke out in mid February. In lending, new loans amounted to EUR 2.7 billion, up 2.3% year-on-year, with a stock of net performing loans settling at EUR 77 billion, up 5.7% year-on-year. As for credit quality, we confirm the progress achieved last year, which was observed early this year. NPE ratio, both gross and net, remain at the same level as they were last year, respectively at 4.9% and 2% gross and net, unchanged since end 2021. Coverage ratios remain high. The NPE coverage is 60.6%. At the end of 2021, it was 60.4%. Particularly noteworthy is the coverage of bad loans, which rose to 73.2%, and UTP is stabilized at 49%. The annualized cost of credit is 57 basis points versus a normalized cost of credit of 67 basis points in 2021, and includes the expected impact from exposures to Russia, which are marginal. Without these impacts, the cost of credit would have been a little bit less than 50 basis points. As for capital and liquidity, we confirm the bank's capital strength with the CET1 ratio of 13.64%, up 14 basis points on 13.5% at end 2021, broadly in excess of the new SREP requirement, which was 8.29%. The liquidity position is likewise excellent, with indexes well above the regulatory thresholds. Going on to scanning through the other slides, now by talking about direct funding, it amounted to EUR 99 billion, up 5.2% year-on-year. In particular, direct funding from customers totaled almost EUR 94 billion, of which EUR 89 billion in current accounts and deposits, which were up 4.2% year-on-year. Since the end of 2021, a 2.7% decrease is observed, which was, however, focused on corporate customers who generally represent the most volatile components of deposits, while the retail component continued to grow. Institutional funding amounted to EUR 5.6 billion, up both year-on-year and quarter-on-quarter as a result of an increase in repurchase agreements. As for indirect funding, it totaled EUR 161.3 billion, driven by assets under management and Life Bancassurance. The aggregate of these two elements totaled EUR 81.2 billion, up 4% year-on-year. In particular, life insurance grew by 9.9% year-on-year and continued to be on a slight uptrend from end 2021. Assets under management was similarly on a year-on-year increase by 2.2% compared with the end of 2021. AUM was down 4.7%, but exclusively due to market effects. Net funding from AUM and Life Bancassurance products in the quarter amounted to a positive EUR 423 million. In fact, despite the slowdown in March due to increased volatility in the financial markets, as a consequence of the outbreak of the war in Ukraine. In fact, the graph shows that last year the situation was very different. As for net loans to customers, they amounted to EUR 78.7 billion, up 4.4% year-on-year. In particular, the stock of performing loans increased by 5.7%. Once again, year-on-year, underpinned inter alia by state guaranteed loans totaling EUR 7.5 billion, which were up strongly both year-on-year and also on end 2021 by 22.9% and 3.2%. New loans disbursed during the quarter amounted to EUR 2.7 billion, up 2.3% year-on-year. As for credit quality, as we said before, we confirmed the progress we have achieved. The NPE ratio is at 4.9% gross and 2.0% net in line with end 2021. NPE coverage remains high at 60.6% on a slight increase from end 2021. As I was saying, in the you know at the beginning, bad loan coverage increased to 73.2% as against 71.8% in the previous quarter. The coverage of UTPs is 49%, essentially in line with the previous quarter when it was 50%. The coverage of performing loans moved to 0.64% from 0.57% at the end of 2021. Similarly, with reference to credit quality, Stage Two loans to customers amounted to EUR 8.6 billion, up compared to EUR 7.9 billion as at the end of December, and account for 11.2% of the group's total performing loans, which is not very different from what we observed in the previous months when it was 12.9% in March last year and 10.2% at December. Coverage, which was 2.4% in March last year and 3.5% in December, rose to 4%. It should be noted that the increase in the stock is due not so much to a migration to a higher risk category, but rather to a recalibration of the internal models in a more prudential perspective, so as to incorporate the worsening of the macro scenario. Basically, we have recalibrated our models prudentially by incorporating the latest Prometeia scenarios, which made it so that the stock increased, but not because of the worsening of the credit quality, but just for prudential reasons. As far as the default rate is concerned, the annualized default rate stood at 1%, broadly in line with the figure recorded in the last two years. The annualized bad debt recovery rate remains high at 7.8%, up from last year's 6.7%. This quarter's figure is an annualized figure. With regard to the securities portfolio, the group's total securities portfolio amounts to EUR 27.9 billion, and its risk profile, as I said, is very conservative. 96% of it is accounted for by bonds with an average duration of 2.5 years, whereas Italian government bonds amount to EUR 8.5 billion and have a duration of three years, and they account for 30% of the overall portfolio. With regard to the income statement, well, as we noted above, the first quarter of 2022 closed with a net profit for the period of EUR 113 million after payment of EUR 45.7 million in contributions to the Single Resolution Fund. The highlights of the period include a strong year-on-year growth in net operating income, driven by the increase in net commission income. We should also note that there was a positive net income from financial activities despite the volatility registered in the financial markets. Another highlight is the annualized cost of credit of 57 basis points, factoring in the provisions taken for the impacts that are expected from direct exposures to Russia. Profit before tax totaled EUR 158 million, up 50% from the same period last year, net of non-recurring items, which was EUR 105.5 million, excluding one-offs. Slide 15, net interest income. A closer focus reveals that in the quarter it amounted to EUR 376.4 million, up 9.6% year-on-year. If we had to compare the net interest income of this quarter to the net interest income of the previous quarter, considering that there's a calendar effect because of the days of the month, then the figure would be EUR 384.8 million, broadly in line with the previous quarter, when it was EUR 386 million. The TLTRO III operations, including the impact of deposits held with the ECB, contributed EUR 26.9 million, a 10.9% increase quarter-over-quarter, due to a gradual reduction in excess liquidity. Something that we had observed in the last quarters, because through a series of actions, both of a commercial nature, of course, and then also with a view to containing the liquidity that came from companies without leaving some deposits. I mean, there's a gradual reduction. The securities portfolio contribution totaling EUR 22.9 million is expected to gradually increase in 2022 due to the rollover of government bonds with higher yields. The total spread is down 1.33% quarter-on-quarter, and it's set to stabilize over the next few months with the easing of the lending pricing pressure we have been observing since March. With regard to net fee and commission income, they totaled EUR 450.6 million, up 37.3% on the same period of last year. In particular, commissions on indirect deposits and life bancassurance settled at EUR 184 million, more or less, with an increase by 35% year-over-year, driven by the growth in assets under management. Fees and commissions on traditional banking likewise registered an increase to EUR 253 million, up 37.2% year-over-year, primarily thanks to the growth in transactional banking and lending with customers, an activity that we have observed over the last few months, it was on an increase trend. It's important to emphasize that with respect to the last quarter of 2021, net commission income was very resilient. As a matter of fact, if we exclude performance fees that were registered in the last quarter for a total amount of EUR 18.5 million, the trend was stable despite the challenging external environment in this first part of the year. Trading income and dividends net income from financial activities amounted to EUR 58.9 million, a positive performance despite the higher volatility registered in the financial markets that I hinted at. With regard to operating costs, they amounted to EUR 558.4 million in line with the expected trend. The increase year-on-year is due to the major scale up of the group scope, both in terms of resources and branches in relation to the deal that we mentioned before. As compared to the fourth quarter of 2021, again, net of non-recurring expenses, costs are down 2.5% as a result of ongoing cost containment actions that we have been working on for some time now and that we will continue to follow, you know, for the future. In this respect, it is important to highlight that in the course of 2022, efforts will continue with a view to improving efficiency and rationalizing spending, first of all, to help mitigate the impact of inflation, which we can think will be marginal or limited on the one hand, and also with a view to offsetting the cost of the investments to be earmarked under the new business plan that is going to be released, soon. As far as loan loss provisions and the cost of risk are concerned, in the first quarter, LLPs were taken for an amount of EUR 112 million, and they included EUR 16 million in loan provisions related to the expected impact from direct exposures to Russia. In this respect, the amount is EUR 28 million, EUR 9.8 million. Actually, the amount was EUR 28.3 million, which comes in addition to EUR 29.8 million in off-balance sheet credit exposures to counterparties resident in Russia, for which the expected loss is marginal. The analyzed cost of credit, inclusive of the expected impacts from such exposures, was 57 basis points down from the normalized cost of 67 basis points in 2021. If we excluded the expected impacts from the exposures to Russia, the cost of credit would be 50 basis points. As for capital, the bank's solidity is confirmed at high levels with CET1 at 13.64%, up by 14 basis points, which confirms the bank's strong internal capital generation. To conclude, I would like to underline that the first quarter results show strong metrics in all areas that represent a solid starting point to face the quite difficult external scenario. Thanks to resilient operating profitability driven by strong revenue generation capacity, thanks to improvements obtained and confirmed in credit quality, both in terms of declining NPE ratios and high levels of coverage that, as I mentioned, are very high. In addition to a sound capital position, it's for sure a very sound capital position and all these aspects will be further strengthened by the actions and measures set out in the new business plan, which we think will be presented to the market in June. I tried to be as brief as possible, so I would like to thank you for your attention, and we are here at your disposal for any questions you may have. This is the Chorus Call conference operator. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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 Christian Carrese from Intermonte. Yes. Thank you very much for your presentation. Good evening. I have a couple of questions. The first one is about net interest income. I saw the spread is still a little bit under pressure from the slide, and you said that you are expecting a stabilization. I would like to ask you if you can elaborate on this a little bit. Then on TLTRO, I would like to understand what your policy is for the repayments, and if there's room for some margins on the TLTRO operations. I have another question on the financial portfolio. I saw that the Italian government bonds are classified at amortized cost, and I do not expect a gap with the BTP and the bonds, but I think there were 15 basis points of impact from the FVOCI, and so I would like to understand if you can expand a little bit more on the Italian government bonds and the bonds you have in your portfolio. On cost of risk, can you give us guidance for the year? Because you said that you are considering the sale of the servicer, and we have seen in similar operations, UniCredit and other banks, the sale of the servicer, there's also offsets to the NPEs. I would like to understand what we can expect in terms of NPE target by the end of the year, both in terms of gross NPE ratio and the cost of risk. As for the TLTRO is concerned, the margins are marginal, but I give the floor to Roberto that can expand more on this, and it's very precise. I would start from the last question. There were some articles in the newspapers where probably there's curiosity about what is going to happen. I would like to say that in the past there was always some criticism about our cost of credit and the fact that we always took a lot of provisions as if our credit quality was not that good as we continued to say. I would like to state with pleasure in this context that the choice we made, we are happy we made it, and it enables us to make some other reasoning now. The strong provisioning we made enabled us to get to the coverage ratios we have, and this makes it possible for us to pave the way for any type of hypothesis. This comes also to what you hinted at about the platform, the servicing platform. We are conducting a study on whether it is more convenient or not to go and pursue this. We will be more precise as part of the business plan. The de-risking policy will continue. This is something I want to say now. It's going to be more accelerated in a way. We are at 4.91% in terms of coverage ratio that is similar to 4.92% we had in the previous quarter. We want to go on with the de-risking policy strongly, and we expect we will land at volumes that are going to be significantly lower than what we have now. On the quantum, there's still some reasoning we are making. As for credit quality, if we exclude exposures to Russia, it would be lower than 50 basis points. If we just took that figure for the month, it would probably even be lower. It's true that if you want to have a guideline for the cost of credit, I'm pleased to say that we will still have it at around 55-60 basis points. This is the objective we have. As I was saying, in terms of de-risking, there are a number of solutions in the pipeline. As you could see, our coverage ratios are high. Probably our coverage ratio is the highest in the banking system or among the highest in the banking system, which paves the way for a range of solutions. Can I add just a follow-up question? What scenario is it your assumption of 55-60 basis points based on? On what scenario? 2.5%-2.5%. Hi, Christian. Good afternoon. The answer on the TLTRO, we expect a rise in rates. The TLTRO, as you well know, gives us some benefits because the rate on liabilities is based on a certain percentage, whereas the rate on the assets is point in time. Our orientation in an environment where rates are going up is that of maintaining, retaining the TLTRO up to maturity. We've got EUR 14 billion expiring in June, EUR 2.7 billion in September 2023, and EUR 1.7 billion is going to expire in March 2024. As for the financial portfolio, in the fair value OCI portfolio, we've got a portion of government bonds that is quite low, less than EUR 400 million, of which EUR 50 million maturing in 2022. The sensitivity to the spread is quite low. The sensitivity, and you can see that also from what happened in the first quarter of the year, the rates went up on a trend base by about 100 basis points from January to March. The basis and the impact on the capital is 15% with every 100 basis points. The impact of the widening of the spread is quite marginal. I do not know if I have answered your questions correctly. Yes, you did. Thank you. Next question is from Domenico Santoro, HSBC. Yes, good evening. I've got some questions on the fees because the fees have exceeded the amount of net interest income, so you are more of an asset manager than a bank now. I would like to understand if this is possible to be replicated or is it due to the market effect or to the unstable markets that probably puts pressure on this? As far as costs are concerned, I would like to have some guidance for the end of the year. Can we multiply the number by four that you provided, or does it include investments, or? I know that there's a business plan coming up, so I would like to have more visibility on this aggregate. If you can give us some color on the sensitivity to 100 basis points in the curve? About capital, I understand that the coverage ratios are high, and there are actions in the business plan for a reduction in the NPEs. With Carige, you should be capital neutral. Did you remodel the model? You are more of an asset manager than a bank, and I would like to understand what your reflection is about capital. What should we expect by the end of the year? I understand that the macro scenario is what it is, but are you thinking of something different? Because I think that with your quality of the balance sheet, the shareholders would be very pleased to be rewarded somehow. For sure. There's no doubt about that they would be very pleased to be rewarded. I agree with that, Mr. Montani says. Let's follow the order of your questions. You correctly observed that for two or three quarters probably, you have observed that our fees and commissions have I mean account for more than 50% on the first margin, and we are at 54.48%. You would like to know whether we're going to continue with this approach or if we think that the market may compromise this trend line. Well, the objective is for us to go on this way. As for the trend in the market, from what we are seeing from the figures, I can confirm that this is the trend line, and we will pursue this line, this approach. As for Carige, as you said, I mean, we're going to be capital neutral, and we have no reason for doubting that. Of course, as you may know, we cannot have perfect visibility on the numbers because until we have the authorization and get the control over the bank, we cannot see the details of numbers. We can confirm that Carige, the Carige merger is going to be capital neutral. As for capital, we have the objective of never getting below 13% in CET1, and I can confirm that. All of this information will be given with more precision as part of the business plan that we're working on. In the meantime, as we have expected, we hope and wish that the authorization will come when expected, and so that we can release the business plan by mid-June, and can be more precise with data. You asked for a reflection on capital and the future evolution. We are reflecting on this, and we will be pleased to give more details as part of the new business plan. As far as the sensitivity is concerned, in the past, we always gave more prudential numbers than the ones that I'm giving now. We have talked intensively with the CRO, the CFO, structures, with the market. We have recalibrated the statistical models by taking into account the negative interest rates. Unlike the past, we say that with 100 basis point shift, we expect a 15% change in the net interest income, which is different from what we gave as guidance before, but we think it is realistic. You wanted to know more about operating costs. As of today, we'll be more precise with the business plan, but we can confirm that it's going to be EUR 550 million-EUR 560 million per quarter. This is our target. Thank you. Our next question is from Andrea Lisi from Equita. Yes. I have a question about the contributions to the banking system funds. Do you think that this is going to be the contribution for the full year? Can you tell us more about your expected contributions for the full year? I have a question on the cap on capital, but it was not clear. The question could not be heard, so I understood the first part of the question. Bu t I couldn't understand the following questions because of interruptions. Wanted to ask you, were there any regulatory adjustments, and does the CET1 include the accrual for dividends or the accrual of dividends? As for capital impacts, there were no regulatory adjustments or impacts, actually. The last question is about the accrual of dividends. Well, for the impacts, regulatory impacts, there were none. We have not accrued anything yet because we think that we will have to do that during the first half results and as part of the development of the business plan, actually, as I said in by answering to the previous question. Next question is from Hugo Cruz from Keefe, Bruyette & Woods Hi. Thank you for the time. I have a few questions. First on NII, I think in the previous quarter, you gave a guidance of EUR 380 million in a quarter for the second half. Does this guidance still stand? On the sensitivity to rate rises you gave, you know, I think you, I understood you said 100 basis points would be increase NII by 15%. Would this change the, you know, with the level of the rate rise? You know, is it linear between a move from ECB rate at -50 to zero, and then zero to 50 basis points positive, and then above? You know, basically, I'm trying to understand how that sensitivity changes and at what point do you stop having a positive effect. Finally, on the cost of risk, do you have a, you know, if we have a shallow recession, you know, would that change your expectation for the cost of risk in 2022? You know, do you have any sensitivity there to GDP growth? That's it. Thank you. Well, as far as the guidance on net interest income over EUR 380 million, this is our guidance. As far as the expectations we have on credit risk and the sensitivity, we will reason about it based on the assumptions that are part of the plan. We base ourselves on the current scenario. It's normal that if the scenario worsens, we will have to make some other considerations, but we do not expect this. We are reasoning on what we have seen in these last quarters. I would say linear progression. The cost of risk and sensitivity. Of course, now we're speaking about negative interest rates, and that 15% on net interest income will be very much differentiated over time. The first part is 50 basis points that erodes the negative part, and then the second part is going to be different. By summing up the total effect, you still get to 15% of the net interest income. Okay, thank you. Grazie. For any further questions, please press star and one on your cell phone. Next question is a follow-up from the Italian conference from Andrea Lisi, Equita. Yes, it's a follow-up question. As far as trading is concerned, can I ask you if there are any mark-to-market effects or if everything is realized or already, or if you think there's going to be a strong contribution like this also in the future? Of course, it depends on the evolution of the market, but I would like to ask you what your expectation is going to be. Yes. Thank you, Andrea. Well, the trading is mostly realized already. We benefited from the trend of the increase in interest rates because we were short in interest rates, and we made some investments in the commodities market. And also, but to a minor extent in the equity part of the market. It's difficult to give you an answer, but we think it's going to be EUR 35 million per quarter. April was a moderately good month. May has just started. I would say that this is the result, and it exceeds our normal cruise speed, so to say, but it depends on the evolution of the markets. Thank you. Next question is from Adele Palama from UBS. Yes, good evening. I have a question about fees in the quarter. Can you give us the amount of the upfront fees and the performance fees that you delivered this quarter? Well, historically speaking, you know that, we've never pushed on upfront on the upfront fees. If I remember correctly, the upfront fees we received last year amounted to EUR 40 million for the whole year. In the last quarter, I think it was EUR 11 million. For this quarter, we have followed this approach, not so much because of a choice we made, but because of the resistance that customers made to classical products. In order to favor investments of the customers, we issued some certificates that enabled us to have some upfront fees that were lower than EUR 19 million for the quarter, however. Our objective target is that of proceeding on traditional, I mean, products and with limited upfront fees. We want to continue with products that give us performance fees for the future. The next question is from Marco Nicolai, from Jefferies. Good evening. I have a question on net fees and commissions income over EUR 250 million this quarter, which is even higher than what we saw in the previous quarter. I would like to understand if you can give us color about the dynamics in this trend line and what you expect for the future. What we expect for the future is that we will go on with this trend line. As a matter of fact, there was some return that was expected, not unexpected. Everything is changing and everything changed in this bank after the UBI deal. The scenario has changed. The bank has become more active also in the corporate environment, developing products for companies and together with trends on the market that gave some boost to the returns in line with the expected returns. We had these returns in mind, but it was not yet confirmed. As at today instead, by talking with the network, with the customers, we are understanding that this process is going on, and we are convinced that it will go on, and we are willing to have it go on for the future. Next question is a follow-up from Adele Palama from UBS. Yes. Excuse me. I had some problems with the line. I think I lost the performance fees amount for the quarter. On the upfront fees, you said EUR 19 million. It was more of a one-off, so to say. We should expect front fees of around EUR 11 million for the future. Well, yes. I would say your statement is correct. Yes, and then I lost your first part of the question. We have none for the quarter. Probably during the presentation, I said that last year in December, we had EUR 18.5 million in performance fees. If we had removed them, we would have considered the trend for the quarter to be in line with the last quarter. But we have none, yes, for this quarter in terms of performance fees. There are no further questions at the moment for you, Mr. Montani. Good. I would like to thank you for your patience and attention. We are, of course, available for any questions you may have. You know what your numbers are. You can contact any time. Thank you very much. Have a good evening. Goodbye.