Good afternoon. This is the Chorus Call Conference Operator. Welcome, and thank you for joining the BPER First Quarter 2024 Consolidated Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Nicola Sponghi, Investor Relations Operations of BPER. Mr. Sponghi, please go ahead. Thank you. Good evening, everyone. Thank you for joining our First Quarter 2024 Results Conference Call. Before I give the floor to the CEO, Gianni Franco Papa, and the CFO, Gian Luca Santi, for the financial result presentation, please know that our slide set and press release can be found on our corporate website. Please remember that the Q&A session is reserved for financial analysts, whom I would kindly request to only ask two questions so we can get around to everyone in good time. Thank you very much, Mr. Papa. Please, you have the floor. Thank you. Good evening. Welcome, and thank you for being with us today. I'm pleased to open this call as the group new CEO. Let me first express my gratitude to the board for the trust they placed by appointing me to lead this extraordinary company for the next three years. Let me thank the former CEO and all my colleagues for their outstanding work and for leaving a company stronger and more performing than ever. Despite my 40 years of professional experience, I see this as a very special challenge, which I'm embracing with particular excitement. After just a few days since my appointment, I'm quite impressed by the quality of this institution, its people, and its clients. Our presence across the country, combined with the professionality of our people, is undoubtedly our main asset that enables us to build quality customer relationships and create value over time for all our stakeholders. This is why I wanted to spend my first day as CEO with our commercial network that will be central for achieving the future ambitions of the bank. We are today presenting the results of the First Quarter of 2024. Before I leave the floor to Gian Luca Santi, Group CFO, we'll walk you through the details. I would like to express my satisfaction for the positive results achieved by the bank in the continuity with the last quarter's performance and above the aspirations set by the 2022-2025 plan. If you turn to slide four, in this first quarter, we delivered over EUR 300 million in recurring net profit with an ROTE of 14.4%. Positive progress has been made across all the most relevant KPIs. We have grown our revenues by 2% year-on-year, improved efficiency with cost income of 51.7%, and continued positive risk management with a net NPE ratio of 1.2% and a total NPE coverage of over 54%, with an annualized cost of credit standing now at 43 basis points, down from 48 basis points registered at the end of 2023. The bank's capital and liquidity profiles remain strong thanks to the organic generation of capital, which drives the CET1 ratio to 14.9%. The same applies to the bank's liquidity position, with regulatory ratios being broadly in excess of the minimum thresholds required, even after the EUR 1.7 billion repayment of the last year's TLTRO tranche. Despite a very uncertain and volatile geopolitical and macro scenario, our balance sheet is solid and resilient and allows us to look into the future with positivity and confidence and to sustain the future growth. Results of the last years are certainly impressive, and despite the interest rate scenario will most likely become challenging, I'm profoundly convinced that even greater potential is ahead of us, in particular in terms of growth from commission fees and of a structural productivity increase and modernization of the operating machine. We will continue to work on ensuring that the group is on a virtuous path. Thank you for your attention, and we'll now give the floor to Gian Luca Santi for the rest of the presentation, and we'll, of course, take your questions in the final Q&A session. Please, Gian Luca. Thank you, Gianni. Good evening, everybody. Let me now walk you through the details of the presentation. On slide six, we can see that total funding amounts to around EUR 298 billion, up 2.7% year to date, driven in particular by the positive trend in indirect funding. Direct deposits from customers rose to EUR 118.1 billion, down 0.6% since the end of 2023. Retail direct funding continues to prove resilient and accounts for around 70% of total funding, while corporate funding accounts for almost 30% of the total. Among the main drivers, which partially offset the decline in current accounts quarter-on-quarter, -EUR 2.1 billion, was the good performance of time deposits, certificates, and bonds, +EUR 1.1 billion. With regard to indirect funding, the aggregate amounts to EUR 180 billion, +4.9% since end 2023. The aggregate includes asset under management and life insurance, rising to EUR 88.6 billion, up 2.7% on end 2023, whereas asset under custody amounted to EUR 91.4 billion, up 7.3%, including on the back of BTP government bonds, underwritten between February and March for an amount of EUR 0.9 billion. In particular, the latest quarter showed a remarkable performance in funds thanks to ESG target date products designed to intercept on-demand funding potentially migrating to BTPs, strong asset under management net inflows, EUR 351 million in the First Quarter 2024 versus EUR 263 million in First Quarter 2023. With regard to loans, slide seven highlights that our stock of loans to customers amounted to EUR 87.7 billion, down 0.6% since end 2023. The reduction is primarily traceable to the decline in loans originated by product factories, in particular factoring, as against the positive performance of loans to retail customers, +EUR 0.1 billion. A downtrend was observed in the corporate segment, especially in the manufacturing, -EUR 0.2 billion, and the wholesale and retail trade services, -EUR 0.2 billion. From a sectoral perspective, the loan mix sees the main economic sectors represented with a balanced distribution across the manufacturing and trade sectors, accounting respectively for about 15% and 8% of the total. The breakdown of customers by segment sees the retail segment account for 60% of customers' volumes, while corporate customers account for 40% of the total. An improvement is observed in the loan-to-deposit ratio, which has decreased both QoQ and year on year, settling at 74.3%. Moving on to asset quality, slide eight. As you know, the quality of the loan book continues to be one of our focal points. In the first quarter of 2024, credit management continued to follow a disciplined approach, which will allow the bank to be in the best condition possible should the economic cycle deteriorate in the future. This slide shows our excellent credit quality with an NPE ratio of 2.6% gross and 1.2% net versus 2.4% and 1.2% at the end of 2023, which enables us to continue being among the best in class in both the Italian and European banking system. Total non-performing loan coverage rose to 54.2% versus 52.5% at the end of 2023. Performing loan coverage settled at 0.73%, broadly in line with the level of end 2023, and stage two loan coverage is 5% in line with the end of 2023. First quarter, non-performing loan coverage rose 1.7 percentage points in spite of the increasing gross book value observed in all categories of NPLs. Performing loans are stable both in terms of book value and coverage level. Turning now to the securities portfolio on slide nine, we point out that financial assets totaled EUR 26.5 billion on a downturn compared to December 2023. Within the aggregate, debt securities amount to EUR 24.5 billion, 92.4% of the total portfolio, with duration of two years, net of hedging, and include EUR 12.9 billion worth of bonds issued by government and other supranational public entities, including EUR 8.7 billion of Italian government bonds, down 15.3% since end 2023. Italian bonds account for around 44.7% of total bonds held in the portfolio and 7.8% of total assets. The quarterly analyzed average yield on the portfolio was 2.7%. The securities portfolio duration was extended to two years, as was the government bond portfolio duration, which was extended to 2.4 years. Moving on to commenting slide 11, I would point out that the only non-recurring item in the quarter consists in gains on the disposal of the shareholding in the UTP and bad loan servicing platform to Gardant. In particular, the transaction recently completed between BPER Group and the Gardant Group generated a total capital gain of EUR 150 million before tax. In the next pages, we will expand on the details of the profit and loss. Turning now to the net interest income, slide 12, it totaled EUR 843.6 million, a 6.2% increase on the First Quarter of 2023, mainly on the back of the commercial spread stemming from the interest rate environment, well-managed deposit pass-through, and positive contribution from the investment portfolio. Compared to the previous quarter, a decrease was observed in the net interest income in Q1, primarily as a consequence of the major reduction in the securities portfolio, -EUR 36 million, due to the decline in volumes, -EUR 1.8 billion, and interest rate -0.31 percentage points. We will now move on to slide 13 on the net commission income, which amounts to EUR 510.4 million, +0.8% on the same period last year. In particular, commissions on traditional banking amounted to EUR 284.6 million, -2.9% year-on-year. Fees and commissions on indirect deposit settled at EUR 173.3 million, +10.3% year-on-year, and bank insurance commissions, total EUR 52.4 million, -6.1% year-on-year. Again, as compared to March 2023, I will point out the growth in assets under management, which benefits from upfront fees, +EUR 6.3 million, whereas placement of the BTP Valore Italian government bond contributed EUR 4.7 million. Please note that the Q4 2023 result was affected in the bancassurance segment by the annual commissions bonus for reaching the targets, around EUR 22.7 million. Operating costs, slide 14, amounted to EUR 701 million as against EUR 675.8 million for the same period last year. In particular, staff costs totaled EUR 437.7 million as compared to EUR 429.2 million for the first quarter of 2023. The increase is mainly traceable to higher charges from the renewal of the National Collective Labor Agreement signed at the end of last year. Other administrative expenses amount to EUR 200.2 million as against EUR 189.5 million in the first quarter 2023, particularly as a result of the current inflation trend. D&A amounted to EUR 63 million versus EUR 67.2 million in the First Quarter 2023. The D&A increase is the result of the investments made under the business plan in the recent year with special reference to the new technological platforms and the progress in the bank's digitalization. Branches in the First Quarter totaled 1,635, stable since the end of the previous quarter, and were down by 124 units year-on-year. The group's total headcount was 90,850 in March 2024, down by over 707 as compared to the same period last year, and down by about 374 employees on December 2023, including as a result of the workforce optimization maneuver. Cost/income ratio for the quarter was 51.7%, substantially below the recurring cost/income ratio recorded in the Fourth Quarter 2023, 53.4%. Slide 15 highlights again that credit quality continues to be among the best in class, with the NPE ratio settling at 2.6% gross and 1.2% net, and the coverage ratio for total non-performing loans at over 54%. It's noted that the analyzed cost of credit stands at 43 basis points. The trend shows a decline from the cost of credit registered both at the end of 2023 and the end of 2022, 64 basis points in 2022. The loan book features a low rate of NPE inflows and high coverage levels. Moving on to liquidity, let me point out that the bank's liquidity ratio remained high, with an LCR of 162% as at March 2024, even after EUR 1.7 billion repayment of the last TLTRO tranche at the end of March, whereas the NSFR amounts to 133%, I think a very strong indicator of the liquidity of the bank. Slide 18, in terms of capital, the significant organic generation further reinforces our capital strength with a CET1 ratio of 14.9%. I would now give the floor back to our CEO, Mr. Papa, the final section of the presentation. Thank you, Gian Luca. So, in as much as financial year 2024 guidance, we confirm the guidance disclosed in early February. The guidance for financial year 2024 is confirmed with a slight decrease in net interest income as a result of a potential narrower banking spread due to a less restrictive monetary policy, positive dynamics in net commission income on the back of growing revenues from asset management and advisory services, operating costs in line with 2023, with additional inclusion of the full effect from the renewal of the National Labor Agreement for the financial sector. On the asset quality front, the expectation is that sound coverage level and a conservative provisioning approach will be maintained with a stable cost of credit with respect to 2023. 2024 recurring net profit is expected to be in line with 2023 recurring net profit. Thank you for listening to the highlights of our presentation. I would like now to open the Q&A session. Please. Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchscreen 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 of Deutsche Bank. Please go ahead. Good afternoon to everybody and welcome to the new CEO. I have two sets of questions. The first one is very simple. I was wondering if you can share with us what would be the timeline, if any, for the update of the business plan. The second question is instead on the capital position. I've seen that your capital is evolving very well, 14.9%, including the accrual of the profits, but you are still guiding a 14.5% at year-end. So I'm wondering why you do expect such a contraction from here up until December. If you can update us with the regulatory advance, if any, that you expect for 2024 and the impact on Basel IV. And related to this, I'm also wondering whether you can share with us if there is an impact from the rolling of the state guaranteed loans on your CET1 ratio. And finally, I've seen that you have mentioned a reduction in the contribution of Superbonus on NII this quarter. I was wondering, this does not apply specifically to BPER, but I should have raised this question to all the banks in Italy. Is there any risk that banks which have on balance tax credit out of the Superbonus may record some write-off if the government decides to extend the duration of this asset life? My personal perception is that this should not be the case if you already own this asset, but I would like to hear your view on this. Thank you. Thank you, Mr. Razzoli. I'll take the first question and Gian Luca the other two. So, in as much as the timeline for a new business plan, well, now, we're at the end, the current plan ends in 2025. We are perfectly aware that the bank is well ahead of its plan, and therefore, we are evaluating the option to possibly update it or revise it. So we will let you know as soon as we have decided what to do. Gianluca? Too much questions, Giovanni. About capital position, evolution of Basel II or Basel IV, sorry, for 2025, our expectation is between 40 and 50 basis points. No other effect in 2024 from regulatory situation. About Superbonus, clearly, we have to wait for the real disclosure about the new rules. But if something changes, the duration from four to 10, you have to split in 10 years and not in four, the effect of the this is the delta between the, okay, the real value and the acquisition value of the loans. But the difference, in our opinion, is only the split during this year. If it becomes from four to 10, clearly, you can have 40% of the impact and not the total impact that we estimate for, I don't know, 2024. About loans, guaranteed loans, we are of around EUR 11 billion in this moment. No particular situation about these loans. We have the 85% of coverage linked to the government guarantee. And for prudence, we put also another 1%, but we didn't have, until now, any situation of non-performing coming from this kind of loans. I don't know if I answered all your questions. Yes. Sorry, Gian Luca. If you can clarify the guidance of the CET1 at year-end, 14.5%, and why you do see a contraction from the current levels of 14.9%. And if I may, specifically on the Superbonus, thanks for your clarification. We are the first bank we are asking this question. Can you share with us, review the condition to share with us what would be the impact on your balance sheet in case there is this extension? Thank you. Guidance about CET1, I said that we do not expect for the rest of the year some regulatory impact. Does it mean that we will have only the effect linked to the organic generation of profit? As the CEO said, about the next strategy about capital, clearly, we are working on the option for the update or revision or something different about the industrial plan. Superbonus, clearly, if you consider I don't know. If we consider 2023 and we had the EUR 180 million of impact, you can have not the total impact of EUR 180 million, but you have the 40% of this impact. I think that this is a roughly calculation about the impact on net interest margin. The next question is from Andrea Lisi of Equita. Please go ahead. Good evening. Thank you for taking my questions. The first one is on NII, in particular, if you can update us on the strategy to protect NII in the phase of declining rates and, in particular, on the replicating portfolio and on the strategy regarding the financial portfolio, which decreased by EUR 2 billion quarter-over-quarter. So what should we expect here? And the second question is on cost. BPER continues to be the bank with one of the highest cost income among listed Italian banks. So just wondering to understand if there is room for further efficiencies on the cost side. So just to have an update on this. Thank you. About NII strategy, if you analyze the figures, we have a beta on deposit that is the same in the first quarter 2024, and the beta that we had in the fourth quarter 2023. Clearly, our action during the first quarter was to increase the position hedged. We had, if you remember, EUR 12 billion at the end of the year. We now have EUR 14 billion. We think that we had an estimate of decrease of interest rate in the second part of the year, and we will continue to improve our capacity to manage this decrease. Only to give you an idea, the sensitivity on our net interest margin observed, okay? We have stated that it is around EUR 30 million-EUR 40 million in the first quarter. The observed is around EUR 150 million. But our internal model, the model that we use in our financial department, they show an effect for a decrease of 100 basis points of around EUR 50 million for the first quarter 2024. It represents, in my opinion, a stronger approach of hedging and a real example that we can manage the decrease of interest rate in the second part of the year. Yeah. For cost, I take the question. Yes, we do have costs that are quite high in the system compared to other competitors. On the other hand, you have realized that we have reduced quite substantially the cost income ratio, improved the cost income ratio quite substantially. As I mentioned in the beginning, I do see the possibility of increasing the structural productivity and modernizing even more the operating machine. We will have a reduction in cost because, as you know, we had a scheme, a redundancy scheme that was signed last year in December of last year for the exit of 1,000 colleagues. We have quite a large number of colleagues that will be leaving the bank by year-end. A small portion will be leaving the bank by the first quarter of 2025. And we do expect on this front to have an overall positive effect in the region of around EUR 50 million by the end of 2025. So this, together with the reassessment of the other administrative costs that we started, will further bring down we do believe will further bring down and improve the cost income ratio. Thank you. The next question is from Marco Nicolai of Jefferies. Please go ahead. Hi, everyone. Thanks for taking my question. Congrats to Mr. Papa for the new role. So first question for you. So what are the areas, in your view, where the bank should focus on going forward? I appreciate you are working on a plan. So I'm not asking you any details, but high level, you mentioned during the introductory speech commission income, also efficiency. Maybe there is something else also on shareholder distributions. In general, what do you think the bank should work on over the next years? And second question, how do you see the balance between lower NII and higher commission income during 2024 and 2025? So I'm asking you about, let's say, where do you see the revenues going considering maybe the headwinds for NII and tailwinds for commission income? And just another follow-up on the Superbonus. So you said EUR 180 million in 2023. So if they apply, let's say, this change as we read on the papers, so shall we assume that in 2024, you get essentially a - 60% of EUR 180 million, and that's the only impact you expect if essentially everything ends up being like we read in the papers? Thank you. I'll take the first two questions. So I didn't say that I'm working on a new business plan. I just mentioned that considering the fact that the bank is ahead of the plan that was that is the current plan, we are evaluating the option to possibly update it or revise it. In terms of going forward, we do believe and we are working. We have been looking at this and envisaging three cuts in interest rates during the year of 25 basis points each, so for a total of 75 basis points this year. So this, obviously, will have an impact, although a limited impact, on the net interest income. We are pushing, on the other hand, for fees. We do believe that we will have, especially from the asset under management that we have, which is so and was mentioned also by Gian Luca, that we have a strong increase in there. And we want also to increase the ancillary businesses that is given us by our corporate customers and retail customers. So we do believe that we'll be able to increase the fees in this year. Just to mention, as you know, we have launched the new specialized banking unit in private banking and wealth management, Banca Cesare Ponti. We strongly believe in specialization of this activity. And we are receiving right now very good feedback from our customers and from the market itself. This, together with the strengthening of our private banking and wealth management division, will allow us not only to increase the fees coming from this business but also to better represent the real value of the different business units and those of our bank. In as much as 2025 is too early to say, we are again envisaging three rate cuts. Again, we believe around 25 basis points each, but it's really too early to say what could be the impact for 2025. So I will stay with 2024. And I leave to Gian Luca for the Superbonus. Sorry, but about Superbonus, we read something on the newspaper. It's not clear for us. The perimeter is not clear, the impact. Please, we have to wait some days to understand better what could be the impact for us. But now, it's not possible to say something that is close to reality. Thank you. The next question is from Noemi Peruch of Mediobanca. Please go ahead. Good evening. And thank you for taking my questions. I have a few mainly on NII. So could you please give us a bit of color on your strategy on your bond portfolio for 2024? How come it did go down so much in Q1, and will this trend continue? And on the quarterly move, I think you mentioned it before, but I missed it. So if you could repeat the moving parts in terms of quarterly move on NII, it would be very much appreciated. And then the last question on NII is again on tax credits. So if you could give us a sense of the contribution to NII in Q1 and the amount as of March 2024. On the average maturity from your comments, I gather that the average maturity could be around four years, but let me know if my assumption is wrong. Last question on employees. I see they are up in Q2. If you give us a bit of color on what drove this increase, it would be great. Thank you very much. Sorry, Noemi, but your question was not very clear because we can't hear very well. But I tried to start to answer. The color of replicating I don't know what color can I do. The color is that we reduced the impact of the sensitivity, okay? If the interest rate go down 100 basis points to EUR 50 million. How we make this? With the hedging of the more or less 10% of our asset, not clearly not only asset, also liabilities, but to give you an idea. We have EUR 14 billion of hedging position. And clearly, in this moment, this position can give us the to reduce the impact of a decrease of interest rate of around EUR 50 million. I think that's Sorry. My question was going to This is the situation. I don't know what can be your question. No, sir. My question was on the bond portfolio that went down slightly at Q2. And I was wondering orry, Noemi. Sorry, Noemi, if I interrupt. I can't hear you very well. So if you can or if you can write to me directly, I prefer. Yeah. Okay. The next question is from Domenico Santoro of HSBC. Please go ahead. Hi. Good evening. Thanks for making the call in English. I do have a few questions. First of all, on the NII guidance, assuming that Q2 is not going to be different from Q1, your NII guidance for this year implies that the second part of the year, the contribution from NII will decrease by EUR 120 million or more if the NII will slip in 2024 compared to 2023. So I just wonder if you could work us through your math. And what is the negative component that is going to bring NII down in the second part of the year, given that your NII now is practically insensitive to the level of rates? Other banks have been a little bit more bullish, optimistic in giving their guidance. So I just wonder here if there is the usual degree of conservatism. The other question is on fees, if you can give us the amount of certificates that you have distributed in the first quarter and how much is the pot of unrealized performance fees at ARCA year to date. The third question is on the dividend, if you can tell how much you have accrued in the capital this quarter in euro cents. The one on cost, instead, you gave already some details on costs, on the savings for next year. And in the update of the plan you are mentioning, can you give us a direction for costs in 2025? A qualitative comment or a quantitative comment in absolute number would be also nice to have. And then just detail the negative item in the other operating income. I was just wondering whether you can explain. Thank you. Yeah. About the guidance, Domenico, I think you correct your evaluation. Our expectation is to have a decrease in the second half, clearly linked to the decrease of interest rate and the impact of the sensitivity. This is the effect that we are waiting for. About fees, I think that clearly now, it's not easy for us to quantify the revenues come from ARCA linked to the performance because we have only at the end of the year. And for prudence, during the year, we do not make a calculation because we have to wait the end of the year. Johnny, about the dividend? Yes. Well, we have accrued EUR 0.0016 as a dividend for the first quarter. So today, we are positioned on a 50%-70% payout depending on the stated or recurrent profit. But we will analyze the situation going forward and decide at a later stage with the ambition to properly remunerate our shareholders. I can't be more specific than that. Sorry, Domenico. I forgot a question about certificates. During the first quarter, we issued for around EUR 240 million. We had around EUR 6 million fees from the certificates. About 25, as CEO said. In this moment, we are analyzing the option for the possible review. In this moment, we prefer to wait the end of the analysis. The next question is from Hugo Cruz of KBW. Please go ahead. Hi. Thank you. Just two questions. One on the Superbonus. Can you tell us how much of your exposure has been issued in 2023 versus or has been acquired in 2023 versus previous years? Because I had the impression, perhaps right or perhaps wrong, that if it's exposure from 2023, perhaps it will not have an impact these new measures that the government is planning. And then another question on gross NPs went up 6% Q1Q. Can you tell us what's driving that? Thank you. About the stock of Superbonus, we are close to EUR 6 billion 2024. About the second question Hi, Hugo. Sorry. Can you repeat the second one, please? Gross NPs increased 6% Q1Q. What is driving that? No particular issues because in the first quarter, as you know, we set up the selling of the going concern about the credit platform to Gardant. And usually, during the quarter, we sold some credit portfolio to manage clearly the NP ratio. If you remember, in the fourth quarter, 2023, we sold of around EUR 150 million. But during the first quarter, we were working on the platform, and we didn't sell nothing. This is the reason why you can see this increase. But it's no ordinary increase, no big position. I think nothing of that can be dangerous for us. 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 Adele Palama of UBS. Please go ahead. Yes, hi. Good afternoon. One question on the Govies. So can you explain us the data that you are following for the book? Because, I mean, I've seen that they have decreased. So might that have an impact? I mean, one of the reasons why, I mean, you're guiding for a lower NII or equal to lower NII in 2024 versus 2023. And then can you give us the amount of TLTRO impact into the first quarter NII and what you expect for the following quarter from the TLTRO or the difference versus last year? Thanks. Okay. About Govies, well, you cannot see the decrease in Govies, but you probably see the decrease in corporate bonds. The reason is the decrease is very strong because it's EUR 1.5 billion. The decrease is linked to sell bonds that are not useful for LCR or are not useful for MREL. Clearly, we optimize the portfolio. A decreasing of portfolio because a part of this portfolio is based on leverage. Clearly, if we pay more financial funding than the yield of the bonds, we prefer to reduce the stock. TLTRO impact is EUR 6 billion. Was EUR 6 million also? Million. Million. Million Million in the profit and loss. Yes. No, not billion. EUR 6 million, the same impact of the fourth quarter. If you analyze the delta, delta is zero. Okay. Sorry. Do a follow-up question on the hedging structure. Apologies. I know this question has been asked already. But just to understand, I mean, so what's the size of the portfolio? You said EUR 14 billion. What's the maturity, the exit rate? And what's the sort of if you can sort of say the tailwind that will offset from only from the hedging structure that will offset the declining rates? Thanks. Well, in this moment, the duration of the hedging is of around two years. Clearly, you want to know what is the rate. Clearly, the rate for a break-even point is between 2% and 3%. And our position is EUR 14 billion. Probably, we can manage with this hypothesis about interest rate, maximum position of EUR 20 billion. But clearly, it depends on the evolution of the curve. Okay. This question was already asked, but I didn't hear the answer. In the other income and expenses in the revenues, what do you classify there? Sorry, Adele, can you repeat, please? Because you did not hear very well. Yeah. So in the revenues for the quarter, you reported around EUR -12.9 of other income and expenses. So what's that number? What do you classify there? Well, in particular, it's a deal that is compensated in other operating expenses and income and in the net provision for risk and charges because it's a penalty that we had in old securitization but already write-offed in the past. And you have the negative effect in the other operating expenses and the positive effect in net provision for risk and charges. Okay. Thanks. The next question is from Noemi Peruch of Mediobanca. Please go ahead. Good evening again. I hope you can hear me okay. I have just a few follow-up questions. The first one is on your bond portfolio that decreased sizably during the quarter. I was wondering if the optimization here is over, or do you expect other adjustments in 2024? And then could you please go through the moving parts of your quarterly move in NII? I think you briefly mentioned it during the presentation, but I missed it. Sorry. If you could repeat it, that would be great. And then a very quick one on the contribution from tax credits on NII in Q1 2024. Thank you very much. Okay. For the bond, I think that the strong optimization is done. Probably, something else will be done in the next quarter but not so strong. For the tax credit, it was EUR 69 million in the first quarter. Q1-Q2, about the details of the other quarters? Well, I think that, yeah, we give only commercial and financial because we think that you can see clearly the movement. But I don't know what kind of analysis, Noemi, do you need? I'm just wondering how much of the drop in NII was linked to the bond optimization or the increase in the replicating portfolio, perhaps, or your margin, just this kind of color. Thank you. Okay. I can give you something. And after that, we will provide you and to the other colleague about other details. But I think I can give you an idea about the spread effect and volume effect on the net interest margin. This is the figures that I have in this moment. And if you analyze the EUR 117.6 million of delta, you can see that you have a positive spread effect of EUR 197 million. You have a negative effect from volumes that is EUR 79 million. In this moment, we don't have the details that you have requested, but we will provide you in the next days. Thank you very much. For any further questions, please press star and one on your telephone. Gentlemen, there are no more questions registered at this time. Excuse me. There's just one last-minute question, a follow-up from Adele Palama of UBS. Please go ahead. Sorry. What's the amount of upfront fees in the quarterly fees that you reported, please? Thanks. We have a very low amount of upfront fees, and there are EUR 20 million in the quarter. And what was the level in the fourth quarter of upfront fees? The same. Same. Okay. Thanks a lot. Let me stress that here, we have a policy not to upfront fees because we prefer to have recurring fees during the life of the products that we are selling. This is a policy that we have at bank level, and we will keep this policy. We don't want to have upfront that creates problems after a few years or a few months. Gentlemen, there are no more questions registered at this time. Gentlemen, back to you for any closing remarks you may have. Okay. Thank you very much for participating, and hope to see you soon. Thank you. Goodbye. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.