Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the Banca IFIS first quarter 2021 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 at their telephone. At this time, I would like to turn the conference over to Mr. Frederik Geertman, CEO. Please go ahead, sir. Good afternoon, everybody. Thank you for joining the call. Welcome to our first quarter results conference. Being new, I would start with a few very brief observations and then dive into the numbers. As you know, I joined the bank in February, and I'm very excited about the potential of the business. It's a unique organization with, as we will see, quite a resilient business model. It's active in profitable businesses, which it has chosen. I found excellent know-how, good margins protected by competence, by innovation, and fortunately, a lack of historical legacies that afflict many other players. As you can imagine, as we come out of this COVID-19 phase, it's a good time to work on our three-year plan, and I'm very enthusiastic about the prospects and about the job, frankly. Second thing I wanted to add is just a little comment on the balance sheet. I've been diving into it with the team, I can report that I see no need to make significant write-downs in either the commercial banking or the NPL portfolio. I base this on file-by-file review and on very encouraging data on moratoria. Of course, we have to assume progressive improvement of the macro environment coming out of the crisis. Nothing discontinuous that, in our opinion, is necessary. We will do, in the context of maintenance really, some de-risking and some small NPL cures and some more dated pharma exposures. You can see it, as I said, as a maintenance exercise, not as something discontinuous. Having said that, I would take you into the presentation. The highlights of the first quarter. Page four of the presentation. We're reporting net income of EUR 20 million, revenues at EUR 138 million, which are up relative to Q1 2019 and Q1 2020. If we exclude the PPA and focus on the actually industrial part, we're reporting EUR 126 million, which is both up versus Q1 2019, Q1 2020, and Q4 2020. NPL cash collection at EUR 81 million, up versus the previous quarters. It's been a record cash collection. We report loan loss provisions of EUR 16 million, including EUR 8 million of prudent COVID-19 provisions, meaning that it would've been EUR 8 million, including a EUR -4 million due to a model change, so with a bit of help. We added EUR 8 million of prudent COVID provisions, as we will see later, in a specific portfolio. CET1 at 11.77%, so + 48 basis points since last quarter. This excludes the net income we report in this quarter, as usual. We're at 15.97% without consolidating La Scogliera, right, for the obvious consolidation issue that you all know. 2020 dividends of EUR 25 million are to be paid on May 26th. The 2019 dividends for regulatory reasons, as you know, are still in the bank. They're booked as debt to shareholders, so you do not see that as capital. Let me go into the revenues. Page five. As we said, we have these net revenues excluding the PPA, which I would focus on, of EUR 126 million. Net NPL revenues are up 35% year-on-year and 26% Q -on -Q. That's both the normalization of the courts, obviously, but also some management action aimed at reducing the timeframe of collection. Revenues are quite resilient after the bounce back that we had at the end of last year, as you see. Commercial banking revenues up 21% year-on-year and 3% Q -on -Q. Various contribution, both cost of funding and the good performance of medium-term lending and of structured finance. Still looking forward. Every now and then, I will make a statement that looks ahead a little bit. Still some potential in cost of funding reduction, in our opinion. That has a lot of focus. I bring you to page six, NPL collection. As we said, EUR 81 million. The management action that is mentioned of shortening the voluntary repayment plans and increasing phone/web collection, as you see on the right of the chart, leads to quite an improvement also in the extra judicial recovery from 37 to 42 versus last quarter. I want to stress that this shortening is a file-by-file exercise. It's not a sort of a wholesale discount strategy at all. The saldo e stralcio for the Italians, as a component of cash collection has gone up from 7% to 12%. We've seen an improvement, but it's nothing dramatic. Actual cash collection outperforms the model estimate. There's a slide in the backups which shows you further acceleration relative to the model. That gives you some comfort versus the quality of the portfolio. We remind you, obviously, that we have posted EUR 23 million provisions last year to reflect the COVID-19 effect, and that we had some other characteristics which we find reassuring, namely that 40% of the order of assignments are towards public employees and retirees, and we have a very granular portfolio. Forward-looking, we're looking at a portfolio now of a pipeline of about EUR 3 billion. We think we can be reasonably selective in what we'll eventually purchase. We're streamlining servicing operations in the NPL servicing, including migration onto a single IT platform that's happened in the last months, which we're quite happy with. Lots of operational work. I want to spend a little bit of time on pages seven and eight on digitalization, so I'll try to be short, but I did want to devote a little bit of time on it because it got some emphasis also in the media. What does it mean, digitalization? Why are we even talking about it? If on page seven, we take the view of the commercial side. You can see the typical phases, origination, customer onboarding, risk and credit assessment, and then customer management and commercial development. The phases that a relationship goes through. You can see the old process briefly described. You can see where we are in April 2021, and you can see where we expect to be next year. 20% of the new clients we have originated in April or in the months up to April have been generated online. We've got 500 online requests for full MCC lending, done fully digital. We are already operational in these things. For next year, we plan to double our investing in digital marketing. We've increased it by roughly a third for 2021, so this is rapidly ramping up. Onboarding, we plan to roll out the onboarding platforms that we use in leasing and rental to all the core commercial banking products. Also this is a case of something that is already live and that will lead to formal client acquisition done digitally, so in a very customer-friendly way without need for a physical presence. Risk and credit assessment here also. We're already doing things in leasing and rental with a digital credit assessment. We're rolling it out to the other products of the bank, and where we intend to assist the analyst with a first credit assessment, therefore greatly simplifying his job, but not substituting the credit assessment, obviously, by the colleague for the larger files. Finally, on the customer management side, we've launched our Ifis4business platform, and that will also be rolled out. What I wanted to show is that it's concrete, it's happening today. Why is it relevant? It will allow us to pursue growth in volumes with a very attractive marginal cost-income ratio. As you collect, as you expand volumes in this way, you're not increasing your cost base in the same way, obviously. Therefore, it will be relevant in our plan, and it's already happening. Page eight, similar story. I won't be too long on it. We show you a typical factoring process, which is traditionally very fragmented. It's logical because you're advancing specific invoices, single invoices. We're going to this mostly digital process by the end of 2021 with guided upload request and control of documents on the customer's operations. That will allow him to basically do things without physical documentation traveling, streamlining their administrative processes, benefit for the customers, reduction of time to yes, benefit for us, it's quite obvious if you go to the right-hand side of the slide, digitalization of checks, integrated dashboard for the analyst, streamlining of back office, and therefore economies of scale. Here, too, the platform exists. It's operational. We go down from 11 steps to six. We cut the time that it takes for an invoice to be managed or for a bunch of invoices from 55 to 17 minutes. It's relevant because it will allow us more turnover without having to add costs. Once again, attractive growth with very attractive marginal cost-income ratio. Page nine, I wanted to give you a little bit of focus on moratoria. Cost of risk is coming out low. We're also, I would say, pleasantly surprised, if I may use the term, by the development. The moratoria can give you, I think, a bit of flavor of the sustainability of this. What you see here is on the left-hand side of page nine, you can see the original moratoria exposure. We had EUR 800 million that was basically on a payment holiday. That's gone down on a voluntary basis to EUR 533 million at the end of March. If we look at the end of April in a further month, another EUR 40 million has come out. We're now at EUR 319 million. I insist customers have the right to lengthen these moratoria. They're not using it. They're coming back to us and saying, "Let's start repaying." In each of those categories, I won't read it in detail. You can get the detail of how that category is restarting the payments, but we've also added some notes about why we're reasonably comfortable about the part that remains. First of all, we're doing a client-by-client review. We're calling them and we're asking them, "Are you ready to come back?" We're getting quite reassuring messages. The clients that talk to us about serious problems are in the single digits. Some of them may need maybe some help, some additional little bit of flexibility. Once again, we're reassured, and I remind you that we posted EUR 31 million in 2020 on the right-hand side of the slide, and another EUR 8 million this quarter as an extra precaution. The EUR 8 million in this quarter, we've put it in a category that protects us from concentration risk in structured finance. Are there any specific issues in structured finance? No. Why did we use that category? Because it's a generic category. We have a portfolio there that has an average size of about EUR 12 million. Therefore, the loans are slightly bigger than the ones that we have on average, and we're protecting against concentration risk should something happen, which is, once again, a flexible category where you can put an add-on without having it to go against a specific loan. Looking forward, we're not expecting COVID-19 to have an impact beyond what we've reserved for it. Operating costs on page 10. We had stated EUR 79 million in the fourth quarter of 2020. If you want to look at what that would have been without one-offs or any distorting events, the extraordinary items, you should add 20, which is the net of EUR 10 million NPL indemnity from sellers, EUR 16.8 million bad will from Farbanca, which were both positives. Partly offset by a EUR 7 million contractual guarantee provision that we took based on a contract that we signed and where we had to give guarantees. The regular number would've been EUR 99 million without those one-offs. That compares to EUR 91 million this quarter. Which breaks down on the right end of the slide as you see in EUR 34 million cost of personnel, EUR 52 million other admin expenses, and EUR 5 million of others, which includes a EUR 4 million contribution to the Single Resolution Fund. Looking forward, this, in our opinion, has scope for improvement. We're embarking on a cost containment program, and we're very carefully watching supplier by supplier and cost item by cost item what we want to do. We, for now, declare until we have a clearer picture, basically a hiring freeze, and we're working very actively on this item. We think that in the three-year plan that we will launch, we'll give a bit of attention to it. Of course, we're interested in having the right amount of cost. What I mean with that is that cutting projects is easy, but it would also be not beneficial. We want to lower the cost of running the bank and increasing the cost of changing the bank. Therefore, it's not an exercise of just numbers, it's also an exercise of quality of your costs. Page 11, capital ratios evolution from 11.29% to 11.77%, 48 basis points increase. Two effects. One, seasonality. Factoring will always have a bit of a contraction at the end of Q1. It's been like this in previous years as well. Some of this volume is going to come back, and we'll generate some RWAs, obviously, which will lead to some capital absorption. Another part of it is managerial. We bought ratings from external agencies, and that allowed us to reduce the RWAs of a whole bunch of loans. I would say that, once again, forward-looking, we will continue hovering between 11% and 12% being closer to 12% than to 11%, for obvious reasons. Once again, thereto, on the basis of what we see here, don't expect any significant surprises in the coming quarters. Obviously, once again, in terms of projects, in terms of three-year plan and all that stuff, absolute rigor in capital allocation. IFIS will allocate capital where it is remunerated. Both in terms of existing businesses. We now have a happy mix that we like, which has sort of an internal hedge because we have an NPL business and the commercial banking business, which are fairly independent in terms of their dynamics. When the NPLs improve in the country, for us, it's partly good news, which is obviously a hedge in itself. We will continue to make sure that we're balanced in that respect. Entry into new businesses or entry into specific loan categories and all that stuff will be done exclusively on the basis of capital remuneration in a very reasonable timeframe. Given that we start from businesses that have reasonable margins, so no need to change that, I would say. I would thank you for your attention this far. We tried to keep it a bit succinct until now, but we're very happy to take your questions together with Martino Da Rio, our Investor Relator, who luckily for everybody hasn't changed, and who keeps giving me his advice and his guidance. He will take some of the questions, I think, in the remaining part, especially where I might not be able to reply perfectly, given the fact that I'm still obviously a bit fresh in the job. Happy to take your questions, and thanks for your attention until now. 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 Manuela Meroni with Intesa Sanpaolo. Please go ahead, madam. Good afternoon. First of all, I would like to welcome Mr. Geertman. Thank you very much for your very clear presentation. A few questions on my side, starting from non-performing loans. What are the prices that are you seeing on NPL now? What kind of pipeline do you see in the NPL market in terms of total amount and type of NPL to secure or more unsecure? What is the current behavior of banks selling non-performing loans on the market? Is the growing role of GACS reducing the amount of non-performing loans in the primary market or not? What is the percentage of non-performing loans subject to the calendar provisioning that you are seeing in the NPL transaction? Going to the PPA. In the presentation, I saw that the residual amount of PPA is EUR 47 million. What is the expected time frame for this reversal? Finally, on cost. In this quarter, you had a EUR 91 million cost. Is it fair to annualize these numbers to have an idea of your full-year cost? Thank you. Thank you, Manuela. Thank you for the questions. I wrote them down. If I miss something, do remind me, okay? NPLs prices. I would expect them to be more or less flat, but we're preparing for them to go slightly down. We see a mix of effects. On the one hand, competition. We see it on bids that are ongoing. There are a couple of quite large portfolios in the market right now, and we sense competition. On the other hand, offers will also be there. There continues to be regulatory pressure to upload. The two largest banks, including yours, are setting the example of becoming as clean as possible. Some offer, some competition. I would say all in all, prices to go slightly down. Maybe flat or slightly down. For us, what it means is that we have to prepare to be as profitable in an environment where the prices might be a little bit lower. That means working on costs, working on efficiency of recovery, working on reducing the time of onboarding, working on effectiveness also with some technology. I think in a market like this, if you stay still, then you're giving opportunities to others. Slight decrease, but we will manage that. In terms of GACS, yes, it's being used quite a lot. I think it will remain popular. We are, of course, blessed in the fact that we are working small tickets on secured mostly. Where the presence of GACS is a little bit less pronounced. In terms of calendar provisioning, yeah, that's starting to arise. It's still low. In the last portfolios we saw, the range you have to think of is about 10%-15%. We discussed one this morning that had around 21%, it's one-off. It's still only starting, but it's coming there. PPA. Yeah, that's EUR 47 million, that's gradually coming to an end, luckily we are substituting that with industrial revenues. We expect in 2021 to consume about EUR 20 million, in 2022, about EUR 10 million. Keep in mind that in Q1, we already had EUR 12 million. That's coming to an end, our challenge is to substitute that with real industrial business, obviously. That's also obviously going to be the mantra on the revenues of the three-year plan. Costs. EUR 91 million, yes. If you will, I would refrain from quantitative guidance in this call, and take another quarter before venturing into quantitative projections, Manuela, if you don't mind. They were 91 this quarter. It's focus of attention, and it will be a project. Okay? Let me not make predictions about how effective we will be for now. Let me just tell you that if your question is motivated by the fact that you think the costs are a bit high, then I would very easily confirm that's my impression, too, and that we'll need to address it. Thank you. Maybe if you can also give us an idea about the pipeline of non-performing loans in terms of type, I don't know if you want also to share with us also some ideas- Absolutely ... about the amount. Yeah, sorry, I did forget something, Manuela. Thanks for reminding me. We're now looking at, there's quite some offer on the market. We actually had a first quarter in which we bought quite little because we were all looking at portfolios, and there weren't many transactions. I think we're in the order of magnitude of EUR 100 million of what was bought in Q1, right? What we're looking at is actually quite a lot, and we're in excess of EUR 3 billion of pipelines that we are now aware of and that we're studying. There will be enough to buy. I think we can afford to be reasonably selective, right? Especially be selective in terms of buying the stuff that we know we're good at, which in the past has always given us nice satisfactions economically. Thank you. Thank you. The next question is from Christian Carrese with Intermonte. Please go ahead, sir. Good afternoon. Thank you for the presentation. I have a few questions. The first one is on net interest income. I would like to understand the higher cash -in registered in the first quarter, how could have an impact in the coming quarter in terms of trend? As far as the TLTRO, I saw that the current take-up is EUR 2 billion. You can go up to EUR 2.8 billion. If you can tell us if your intention is to take the maximum amount or not. Thank you, Christian. Oh, you weren't done. I'll wait until you're done. Sorry. Okay. Second question is on, okay, you said on costs, I understand you want to elaborate a little bit still for in the next quarter. Just on previous guidance. In the past, previous management planned some redundancy costs for, if I'm not mistaken, EUR 22 million, of which EUR 7 million have been already booked in the previous year. If you can tell us, what are your thoughts on that, if you are going to book this extraordinary cost in 2021 or not. On cost of risk, EUR 7 million in single position, EUR 8 million risk provision for concentration risk. You have some buffers to do with the COVID-19. I would like to see your thoughts on the evolution of asset quality deterioration. Do you expect deterioration in 2021, in 2022, so defaults to go up in 2022 after moratoria end, so some thoughts on that. Finally, on Common Equity Tier 1, between 11% and 12%, you said more nearest to 12%, you had some positive impact in this quarter due to ratings. Do you see any other tailwinds by the end of the year or headwinds, if you can tell us your thoughts on that. Finally, last question on the strategy. You said that you want to exit from the large corporate to focus on mid-corporate. I don't want to ask you anticipation on the new business plan, but if you can tell us in terms of loans, what do you expect this year, and if you see any possibility of partnership, take into account also maybe even a larger deal with a merger with another entity, take into account the DTA rules approved by the government that could free up some capital in case of merger with another company. Thank you. Thank you, Christian. If your question was on starting with net interest income, do I believe that the collections we had in Q1 will lead to a depression of the revenues in Q2, Q3, and Q4, because we've anticipated maybe a little bit the collections of the following quarters, then I can answer no. We don't believe we have anticipated revenues, there's no feeling of cannibalization of future results. Right. As I mentioned, we've had a little bit of increase of saldi e stralci, it's been really highly technical and case by case and file by file. It's not an opportunistic move at all. No, it was more of an internal model. Actually, it was the opposite. I was referring to the fact that better recovery could imply better revenues in the coming quarters. Well, if you look at in the back of there's an interesting slide which shows you the correlation of cash collection and revenue recognition. What that shows is that the portfolios are maturing. Meaning that as the legal stages progress, as you make a certain amount of cash, you're going to make a certain amount of revenues. That changes over time. You see, and we give lots of details in those backups. If you go there, you can see that it's all very progressive. The only thing I would add is that I'm not foreseeing any change in this phenomenon, and that as we progressively become more effective as we should, month by month, week by week, in doing our job, then we will progressively be better at generating revenues. Nothing discontinuous and no movement between quarters. Okay? Okay. On TLTRO, very simple question, very simple answer. You're right, we could do more. We won't. We're currently at a level where we think that the limit is not really if there's a regulatory arbitrage that you can push a little bit further out. We think that you also have to think about sustainability of your business model. What's going to happen when the carry trade either becomes less attractive or stops altogether. We think that there's an opportunity in there now. Most banks have taken it. We wouldn't want to become a bank that has its results entirely depending on this type of phenomenon. We have EUR 1.5 billion capital. We have about EUR 2 billion TLTRO. We're happy with this proportion. We're not going to push it further out. Cost of risk. I'm going to maybe clarify a little bit the cost of risk evolution, because I'm not sure in what you said that I was entirely on the same page. Okay. We have EUR 16 million cost of risk. Out of those, EUR 8 million are an extra buffer that we put under the title concentration risk. I want to really phrase it in this way. An extra buffer that we wanted to put, and the title that we found was concentration risk. Okay. Which leads you to have a generic pot that you can use if and when necessary. Of the remaining part, which is roughly EUR 8 million, you should consider that it would've been EUR 12 million without the positive impact from the model change. We had EUR 12 million natural cost of risk, if you want. Very low. That's probably because the economy is, to a significant extent, still under anesthesia. With all the government measures that have been taken, the moratoria that are out there, the liquidity that the banks have injected. The question is, okay, if we come out, will this fairly low amount of reservations spiral up? The answer that I have to that is, we don't think so. Not because the riskiness won't improve, but because we've taken quite a lot of reserves already, and we've added more this quarter. If you take a look also in the appendix to the structure of our loan portfolio, it's actually quite difficult to go and allocate further risk. If you go there, you will see that a lot of it is very short term because it's factoring, it's short cycles. A lot of it is versus the government. A lot of it has government guarantees. A lot of it is very small tickets, fragmented, with very good remarketing opportunities for the assets that are underlying. I'm referring to leasing now. I'm not going to make it too much of a quantitative comment, but we do not think that the cost of risk will spiral up very significantly in the next quarters, even as the economy comes out of the COVID-19 crisis and the government measures cease to have effect. CET1. Yeah, we had a bit of benefit from RWA optimization. Headwinds or tailwinds, I would say fairly neutral. We will keep working on projects that can optimize. If there are opportunities, we will seize them. I'd rather talk about them when they're concrete. Okay. We have some ideas, but it's a bit early days. If we're going to get some headwinds, I think we'll be able to digest it. I would just assert between 11% and 12%, closer to 12%, with some projects underway that can help us maybe surprise you positively. I'll talk about them when we have them, all right, and not before. Sorry, go ahead. I had a final answer left, but if you want to elaborate on this one, I'm here No, please go ahead. Okay, strategy, your last point. Are we going to exit large corporate? I want to make a distinction here. Structured finance we like, because it's a business that has margins based on competence, and the company has decades of competence because it had the Interbanca team, obviously. Very low level of issues also in terms of risk there. I don't want to say it because I want to be a bit prudent, but very low level of accidents in the structured finance portfolio, historically and even in the last 12 months. We have large corporate in a run-off portfolio that also comes from Interbanca. That's going to run off by 2023, 2024. It's high-quality stuff, but it's low-margin stuff, and it's not our typical business, so we wouldn't want to do it. There was an idea in the company to enter mid-market, plain vanilla corporate banking, especially in the Northeast. I don't want to rush ahead and give a definitive statement before we have made our plan. If you heard me talking about capital discipline, the problem with that type of business is that even when you're large and have good penetration in the market and have economies of scale, it tends not to remunerate capital. If you look at the business plans of the large universal banks, it tends to be a problem there. Mid-corporate, plain vanilla corporate banking. These players are all working like mad to generate cross-selling opportunities and sophistication so that they will alleviate the problem. For us to be able to beat that, I find it a challenge. I find it quite steep. I don't want to make definitive statements, but if you add my comments, you can get an idea for the direction in which we're going. I would rather bring loans and capital allocation into places where we make 300, 400, 500 basis point margins, because those are our businesses. Therefore, that's where we should go and do more. Thank you. Just a clarification on my question on cost of risk. I was referring to the fact that in the past couple of years, there were some single names, some additional provisions- Oh, yeah. ... due to Interbanca loan book and also some factoring coming from Banca IFIS. The capital risk was quite a bit erratic. You confirm that the worst is over. Yes, I confirm it. Okay. Very clear. They are mainly positions that were taken in 2014, 2016, and were on the construction company names. We are speaking about, can we say EUR 100 million provision of six, seven names. The company learned their lessons. Even now that we don't have- You mean the bank learned. The bank. The company, the bank. We learned the lesson. We took that lesson, and even now that we don't face that risk, we put some provision against concentration risk. Very good. Good news. Thank you. The next question is from Andrea Lisi with Equita. Please go ahead, sir. Hi. Thank you for the presentation. Really clear. Several questions on my side. The first one is on the trend you are observing in the last couple of months in the factoring business with respect to the beginning of the year and how SMEs are reacting to the environment, if you are observing a rebound here. The second question is on state-guaranteed loans. If you can elaborate on which proportion of new loans have state guarantee, and how is this helping you in sustaining volumes. My last question is if you can elaborate a bit more on the components leading to the growth of the corporate and banking area. Thank you. Okay. Thank you, Andrea. On factoring. Factoring is actually the average of the quarter. If you look at it doesn't show the underlying trend, which month by month is actually rather nice. I'm going to give you a few numbers that hopefully will illustrate that. If you look at turnover, in January, it was EUR 700 million, February, about EUR 800 million, March, about EUR 1 billion. A nice progression. Margins developing rather nicely. We're in excess of 5% now. If in addition, you consider cost of funding reduction, that's a good business. It looks like as the economy recovers a bit, awakens a bit from the horrific effect on the GDP of the COVID crisis, it looks like we're placed to serve that. Once again, without sounding too triumphant at all. Factoring is, as we would say in Italian, "intonate positivamente." In terms of government-backed loans, so with loans with MCC guarantees, that's a good business for us because we go to not very large companies. We go to our usual mid-size corporate, small corporates, upper small business segment. The amount that we've underwritten in first quarter 2021 was about EUR 460 million, which in first quarter of 2020 was about EUR 160 million. That's gone times three with reasonable margins. Obviously, as a bank, we don't have the lowest cost of funding in the country. That's obvious. We're competing against the large ones, in some cases, which have a different cost of funding than Banca IFIS has. Now, regardless of the fact that we're working on it and that it can be further optimized and that we're very confident that we can, but we have to choose. This type of stuff, we'll continue doing it because it's very efficient in terms of risk-weighted assets and margins are there, even with our cost of funding. It's nice business. That was EUR 300 million year-on-year. I don't know if I answered your question on the government-backed guarantees, but I think I gave you the number that you need to work out the proportion, right? Thank you. I'm sorry, Andrea, I forgot your third question. You have to repeat it to me, please. Yeah. If you can elaborate on the moving parts leading to the growth in the corporate banking area. Okay. Changes of perimeter, you mean? The only real big change of perimeter or reasonably big change of perimeter for us at least was Farbanca that came in. That's EUR 4 million revenues year -on -year and a stock of EUR 600 million loans. Interesting business because we already had Credifarma, of course. The merger project has now started, and we're going to make a single legal entity of that. In terms of understanding why there are margins, that's a business where you can understand why there are margins, because that's based on real, deep understanding of the customers, allowing us to take risks that are low and that are lower than they appear. Because if you really understand how the P&L of a pharmacy works, you know what you can finance. That level of specialization is protecting us, so I'm expecting that to grow. If we can do more there, I would be very happy. Both the merger and the development project, where we would really like to push further. These are the biggest changes on the corporate banking side, the government-backed loans and Farbanca. The rest is pretty much continuous and organic development. Thank you. Thank you, Andrea. The next question is from Simonetta Chiriotti with Mediobanca. Please go ahead, madam. Hi. Good morning. Good afternoon. Thank you for taking my question. The first question is on the factoring business, and in particular on the pharma part. I think that you have mentioned this business at the beginning, so I was wondering if you can elaborate a bit more on the strategy in this area. Second question on NPL collection strategy. You are increasing settlements, so saldo e stralcio. This means that the process is quicker, but I'm wondering if the overall return of the portfolio is lower if you use more of this type of collection, and if this is just due to the current situation, so courts activity that is lower because of the COVID-19, or if it is a change in the strategy. Thank you. Yeah. Thank you, Simonetta. Okay, factoring on pharma. Yeah. We have a book there of about EUR 0.4 billion, about EUR 400 million, which has been stable this quarter. You get some volatility there in the P&L every now and then, depending on how the recovery of some large ticket goes. I'll say this, in my opinion, it's an attractive business. It's not a secret that there are other players that have made very significant returns in it. It's definitely something in the three-year plan that we want to look at positively. Taking a look at what we can do more there, given that we have tradition. As we said, we haven't written the plan yet. It does require, I think, a lot of discipline because it's business that is basically based on loans or on advances, on payments that can be quite dated. I think prerequisites are that you know what you're doing and that you're disciplined in terms of revenue recognition. On this basis, I think we look at it positively given the fact that now apparently some people made significant margins on it. With respect to NPL collection strategy, yeah. I realized when we prepared the slides that this question would come up, but I think Still, we wanted to share it with you, and I think we can be quite clear and definitive about what the implications are. First of all, you're not talking about something that's huge. We're talking about something that was 7% and has become 13% of cash collection. It's a little booster. It's a little accelerator, but it's not a radical change in how you treat your portfolios. Firstly, you should remember that this is not about how you allocate your portfolio between judicial and non-judicial. If we were to take judicial recoveries, which are characterized by long times, but by very high percentages of recovery. If we were to take those and give the customer a strong discount and let the customer go, then we would be making sacrifices that in the long term and vis-à-vis the models we would pay. That's not it. It's not about allocating between judicial and non-judicial. It's within the non-judicial payment plans that have been characterized by a lot of uncertainties or very long in many cases in which the customer goes in and out of a plan. Which is inefficient and leads to high uncertainty in the amount that you actually get, file by file, giving a way out and increasing also the efficiency of the way in which you deal with your portfolio. Obviously, renegotiating multiple times a repayment plan also carries cost. This is about time value of money, and it's about efficiency in managing the portfolio. It's not about allocating between judicial and non-judicial. We will continue doing this, and I don't think it will be to the detriment of the model performance in the long term at all. Actually, I think it's a smart way to maximize overall. I hope I answered your question, Simonetta. Yes, absolutely. Thank you. Simonetta, just one point. When you ask about the pharma, we are just questioning if we're referring to the pharma in factoring or the pharmacy business. No, the pharma in factoring. Okay, perfect. I replied. No. Pharma in factoring. I replied correctly. No, it was just. Okay. No. We got worried a bit. Okay. Thank you. The next question is from Luigi Tramontana with Banca Akros. Please go ahead, sir. Good afternoon. Thanks for taking my questions. Just two left on your business areas. The first one, NPLs. Your Q1 performance was excellent and almost in line with Q1 2019. Yes. It would be great if you could deliver the same results you delivered in 2019, and I would like to know your thinking about that in terms of revenue generation. The second one is on corporate lending, which was very, very strong. If I understood well, this is due to your boost on state-guaranteed loans. Is it going to continue? Are you going to continue to finance SMEs through state-guaranteed loans? Thank you. Your first observation on Q1 2019, and the fact that we were even a bit better than in terms of cash collection on NPLs in this quarter. That would be great if we could repeat it. I could only reply that it would be great. We want to be upbeat. I don't want to make statements that maybe in the next quarters, I would have to revise. I'm keeping it a bit dry today, maybe, in terms of the forward-looking part. Forgive me, Luigi. We're confident about the performance of the machine, okay. I wouldn't add more. I'll keep it to this qualitative statement and just say this. Okay. Fair enough. We'll see in the next quarters how it goes. I would rather not start in a relationship with you guys where we have to retract statements or seriously revise, especially optimistic predictions. I'm happy to revise pessimistic ones, but I'd rather not revise optimistic ones. Corporate lending. Yeah. EUR 460 million was underwritten at a 2.6% margin. It's very good business. Also because one of the things that we will start working on in the next months and years is cross-selling between that and the factoring part, which until now has been fairly limited. We'll continue doing it. We'll invest in digitalization in that area, and invest in digital marketing in that area. Because we've seen that they react really nicely, the customers, when you approach them in that respect. A bit of sophistication on the customer side is apparently also happening. These SMEs, they're happy to go online, and they do their application online. All the traffic lights are green. We will see how much we will be able to. Certainly, all the traffic lights are green, and I would aspire to keep doing it, and if possible, even do more. We got a lot, as I mentioned on the slides on digital. We got 500 applications in a month, roughly, of reasonable quality. Not all of these become loans, obviously. Of reasonable quality. That feels like something we will be able to continue doing. Has a much better profile in terms of risk fragmentation, in terms of capital absorption, and in terms of margins than plain vanilla corporate lending, for instance. Okay, many thanks. Thank you, Luigi. The next question is a follow-up from Simonetta Chiriotti with Mediobanca. Please go ahead, madam. Yes, thank you. You have just mentioned the possibility of starting cross-selling between factoring and corporate lending. My question is on the same theme, but is it not happening that you have corporate lending replacing factoring at the moment? The pricing of the two products isn't such that corporates in this period are basically reducing the use of factoring. Is this something that is happening, and is the customer base almost similar or the same, or is completely different? Thank you. Very interesting question. Thank you. I will limit myself because I risk going on a long speech here. First of all, what we've seen in the last two years in the Italian market, and COVID-19 has deeply or strongly accelerated it, is, yes, that short-term lending has been replaced by long-term lending to a significant degree. The reason is that many of these companies took long-term loans in order to just ride out the storm whilst not having a real CapEx plan where the long-term lending would go. If you're then that liquid, why would you use short-term lending? Let me first of all say that in general terms, what you say is observed in the market. It's not only, I would say, it's a reasonable question, it's also a fact, if you look at the market. However, you have to make distinctions. First one, factoring versus general short-term lending. In my opinion or in my experience, the lines that are cut are generic plain vanilla short-term lending lines with banks. Factoring has a whole administrative part which protects it from being cut out very quickly. Secondly, you have to take a look at the player that you are. If you are a market leader with 30% market share, and you're in your home territories where your market share might even be higher, if you do something like that, then you risk cannibalizing. It's true. If you're IFIS and you're, first of all, much less penetrated, and secondly, so you have lower market shares regionally, and secondly, you're much less penetrated into the single client, then you can go a long way stealing volumes from other banks before you start cannibalizing your own. I would say yes, good point. To the extent that it will hurt us, not really. I cannot exclude, obviously, that some percentage points or factoring volume could be eaten up because of this push in long-term loans, but it's really marginal for us because of the space that we have and because of who we are and because of the specificity of factoring. I wouldn't say this with this certainty if our business was generic short-term loans, cash advances, scoperti di conto, we would say in Italian, in mid-corporate Italy. Clear. Thank you. Gentlemen, there are no more questions registered at this time. Okay. Thank you. If, of course, you need any clarification, you can call us, and we will be very keen to have a follow-up. Thank you very much. Thank you all. Thanks for your time.