Good morning. This is the Chorus Call Conference operator. Welcome, and thank you for joining the Banca IFIS update conference call. As a reminder, all participants are in listen-only mode, and 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. Frederik Geertman, Chief Executive Officer of Banca IFIS. Please go ahead, sir. Thank you, madam. Good morning, everybody. Thanks for your participation on such short notice and on this early hour. We have a few updates that we want to communicate to the market. We are not using any slides, but there is a press release for your reference in Italian and in English. I will make a few remarks and then I will take your questions. I am joined this morning by Roberto Ferrari, our CFO, and Martino Da Rio, our Investor Relations Executive, and I will briefly get into the subject. As you know, we are reshaping our business model into a well-rounded SME banking specialist, ensuring a closer alignment with the regulatory environment and the group's risk profile. This refers to the NPL business, of course. We believe we have identified the right strategy and the measures to design the future of the bank. We have completed a few milestones in that direction with the acquisition of illimity and the creation of the Fürstenberg division in this long-term transformation that we focus on sustainable value creation. This reshaping of Banca IFIS is progressing smoothly. We initiated, as we said, with the acquisition and de-risking of illimity, but we have moved on this year, as you saw, with the orderly disposal of a number of subsidiaries of illimity. Hype, 50% stake was sold. Abilio, ARECneprix. We also restructured illimity's IT contracts, both with Engineering with Apex. The board has decided yesterday in the board to deconsolidate the NPL business. The board has decided to move from an evaluation phase into a deconsolidation phase, and the competitive bidding process has been started. Recent developments required us to review also our profitability outlook with a decision to update our 2026 guidance, which is now between EUR 100 million and EUR 110 million net profit for the year, down from EUR 170 million, EUR 190 million, which was the previous range. Our Q2 performance reflects a more challenging environment compared to what the initial expectations were. We want to provide a timely and clear, hopefully, explanation of the impact on our profitability. The difference in profitability with the new guidance towards our previous expectations is mainly driven by one-off items related to actions we proactively carried out pending the Bank of Italy report after the authority concluded an on-site inspection. We also have updated provisions on illimity's non-core assets. These are the two main items. As mentioned, we went through a Bank of Italy inspection that started half January. We are waiting for the final report after the completion of the on-site inspection that finished a few weeks ago. It was conducted as part of its standard supervisory processes. We hadn't had a general inspection for a number of years. The consequent preliminary actions we proactively resolved to take include a more conservative stance on certain large lending exposures, reinforcing the commitment to the highest standards of risk management and transparency. We reassessed the risk profile of these selected exposures, and we recorded additional provisions. While waiting for the final report, we have therefore proactively resolved further voluntary adjustments of approximately EUR 30 million before tax. That's the size of the impact. To give you an idea, that's 0.2% of the credit exposures that are on the book. I would say fairly modest amount. We also took further provisions on illimity's non-core assets. That's in the context of a review that happens every six months of the recovery plans for the underlying NPL portfolios. The process incorporates updated data that arrives from the servicers. That's typically provided on a six-month cycle. Also we have a six-month cycle of an audit that we need to do on those assets with the internal audit function as a consequence of the commitments taken by illimity on their inspection by Bank of Italy that happened in 2024. We have these two six-month cycles, as a consequence of that, we incorporate latest collection trends, recovery expectations, and the overall portfolio performance. Here, as a result, provisioning came out at approximately EUR 40 million, also before tax, as said, primarily concentrated in the securitization vehicles and intended to reflect the revised recovery expectations. Those are the two big items. In response, we acted decisively to try to contain the financial impact. We activated in the whole group targeted cost control measures, including tighter spending and efficiency initiatives. These actions will help to partially offset the pressure on profitability, although obviously they are not sufficient to compensate for the effects that I just described. More broadly, I'd say it reflects our ability to react in a changing environment, right? Focusing on efficiency and cost discipline without compromising long-term growth initiatives. The updated guidance, I wish to underline, does not reflect any impact from the deconsolidation of the Ifis NPL business. At this stage, it is too early to quantify the precise effects, as the deconsolidation process will depend on the final structure that's adopted. For instance, the percentage that we will sell hasn't been decided yet, there could be a partial maintenance or a partial retention of profitability in that business. We are working on this, and we will provide updates to the market once the key decisions are finalized. As was mentioned in the press release, we have a competitive process ongoing with significant interest. We continue to move forward on our path, committed to the direction we've set. Creating an SME specialist and a fully rounded bank. We are aware these recent events have had an impact on our short-term results. We view them mostly as non-recurring in nature. We take the actions in a proactive way, right? Our traditional strengths, including capital positioning, risk discipline, integration capacity, de-risking, they remain tangible and intact, and they will continue to support our long-term ambitions. I would also stress that the synergies that we have quantified on illimity are fully confirmed, and we will benefit from them in 2027. There's absolutely no discussion on that. As said, we remain focused on executing our strategy with discipline and protecting our shareholders' interests, positioning the group to capture the full value of the strategy. We will obviously, as there are still some moving parts, we will update the market as soon as any further news is available, as we've done today, where we have anticipated communication to the market in the most timely manner that was possible. Thanks for your attention until now, and I will gladly take your questions. Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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. First question is from Irene Rossetto, Banca Akros. Yes. Hello to everyone. Thanks for taking my question. Two questions from my side. What impact do you expect in terms of group earnings and common equity to more ratio from the deconsolidation of your NPL business? What is the size of the remaining pharma business? Finally, will you exercise the call of illimity Tier 2? Thank you. Okay, Irene. Thank you. On your first question, the impact of the deconsolidation. We are moving early in our initiative to optimize capital allocation and also in our initiative to share this with the market. We are maintaining some strategic flexibility, and we want to execute the most value accretive solution that will come out. This decision will be driven also by the discussion with the potential partner. It's not entirely in our hands, Irene, okay? Also considering the evolution of the regulatory environment. What is clear is that the board yesterday decided to deconsolidate, right? We're transitioning to a more capital efficient, partnership-based model for sure. It might be a full sale, it might be a deconsolidating partial sale. What I would say, maybe this can help, is that the risk-weighted assets that are allocated to that business amount to EUR 1.8 billion, right? You can work out yourself EUR 1.9 billion, actually. Sorry, I correct myself, EUR 1.9 billion. You can work out the number for yourself in terms of what it would mean in terms of CET1. With respect to the Tier 2 call. Yeah. There, too. The call of the Tier 2 bond is subject to a prior authorization from the Bank of Italy. In line with standard supervisory practice, that may be granted after the phase of the inspection is completed. I mentioned we are in an inspection. The inspection is formally ongoing. We haven't had the final report yet. We will proceed with the call once the approval is obtained. That doesn't fully depend on us. I can't give you a more precise date, except that it would be the intention of the bank, obviously, to call the Tier 2, given that we issued EUR 400 million in January. Is that okay then? Yes. Maybe the question on the size of the remaining pharma business. The size of the remaining pharma business. I'm sorry. Yeah. Yes. I missed that one. I can be very precise. The remaining pharma portfolio is roughly EUR 100 million, and it's currently in orderly runoff. Okay? You may remember that in 2022, we had EUR 560 million. Right? That was basically runoff in the last years. An example of anticipating as much as we can a regulatory environment as we're doing now on the NPL business. Here, too, regulatory expectations have evolved over the last few months. The interpretations have become even more strict. We are fully aligned with these. We consider it non-core, so we will continue to evaluate partial disposals or an accelerated runoff, if you will, whilst maintaining compliance, obviously, with the New Definition of Default, which is clearly the issue there. It's, I would say, gradually becoming non-material in our balance sheet. Thank you very much. Okay. Next question is from Manuela Meroni, Intesa Sanpaolo. Good morning. Thank you for taking my questions. I have a few. The first one is on the guidance. Can you provide all the moving parts between your previous guidance of EUR 170 million-EUR 190 million and the updated guidance of EUR 100 million-EUR 110 million? The extra provision you announced do not explain in full the gap between the two, I would like to understand what is the remaining part. The second question is on the Bank of Italy inspection. Shall we expect further one-off items from this inspection, or from the non-core portfolio of illimity, or from the consolidation of the NPL portfolio? The third question is on DTA. Is EUR 70 million the amount of DTA write-up that you included in your 2026 updated guidance? Can you pay dividends on those DTA? The fourth question is on the dividend policy. How we should look at your dividend policy for 2026. Is the dividend per share of the last year a level that you want to keep? Any indication on the shareholder remuneration would be welcome. Finally, a clarification on the perimeter of the disposal of the NPL business. Does it include also the NPL business of illimity and the securitizations of illimity? If not, what do you plan to do with the NPL and the securitization of illimity if it is excluded from this disposal process? I would like also to understand if the disposal process includes the entire structure of the NPL unit, including the cost and the allocated capital. Thank you. Manuela. That's quite a bunch. If I miss something, you will remind me. I'll start with the first one. The difference between the previous and the current guidance of EUR 100 million to EUR 110 million. First element, as we mentioned, roughly EUR 30 million of provisions on credit exposures, in the context of the Bank of Italy inspection. Second element, EUR 40 million, roughly, provisions on illimity's non-core assets. That's basically the NPL world, which is mostly securitized or present in the form of funds. Okay? Both technicalities are present in the balance sheet. The rest is lower profitability of the business in general in a mix of slightly higher provisions, some delay in the commercial relaunch of illimity, where we've had contraction of the loan volumes for a significant part of the year. In the meantime, we have filled up the pipeline and things are moving on very nicely, but they will take time to add up to volumes and then translate into interest margin. Finally, as you saw in Q1, slightly lower performance of the NPL business. It's a mix of those things. That's the remainder that gets you to EUR 100 million to EUR 110 million. Bank of Italy. Can we expect or rule out any further adjustments? We cannot rule out further adjustments. The final report hasn't been received, so once the final report is there, we will know the final result, and we can't obviously speak for the regulator before we have that report. We took the EUR 30 million as a proactive stance, and we will need to wait until the report comes. Any further provisions in illimity? Some further provisions, but they are in the guidance. Expect something to arrive in Q3. That's just technicalities of when certain things will arrive. Also, we expect to sell certain portfolios. We have an indication that they may lead to some balance sheet adjustments. Assume that they are in the guidance for the end of the year. Finally, you had a question on the impact of the deconsolidation, right? The RWA that would be deconsolidated are EUR 1.9 billion. The P&L impact depends on the price. That's hard to say, but let us say that we are not assuming at all that there would be a negative effect on the P&L given the quality of the platform. I would assume for now, I wouldn't assume any impact. You had two questions on dividends and DTAs. The DTAs are EUR 70 million, right? I can give the word to Roberto, who can elaborate on that, and then I'll take the dividend part. Okay, thank you, Fred. Manuela. DTA will adapt to CET1 ratio in the future, not in 2026. We reckon we will have a positive contribute on our ratio from 2029 onwards from DTAs. Back to me on dividends. Dividends have been and will continue to be a key component of our equity story. We obviously are committed to remaining profitable and to remunerating the shareholders. The dividend policy adopted by the board some time ago hasn't been changed. There is a policy that the board has adopted that has not been changed formally. On dividends this year, we will decide at the end of the year once we have clarity on all the moving parts. We are taking no position on dividends, and we will come back on that once we have clarity on everything that happens in the balance sheet from here till the end of the year, both in terms of inspection and in terms of profits and in terms of deconsolidation. Okay? There are just too many moving parts now to make any statements on it. I hope this answers your questions, Manuela. Yes, just to clarify if you can pay dividends on the DTA rate up and what you want to do with the NPL of illimity, if they are not included in the portfolio or the business that you are currently in the process of disposal. You're right. On illimity, no. Their NPL exposures, the NPL exposures of illimity are not included in this competitive process we have ongoing now. The strategy on illimity NPL exposures is an orderly runoff with tactical opportunistic sales as opportunities become available. Right? We'll be taking our time there, and we don't think it is in the interest of capital preservation to accelerate the sale of these portfolios. We will do something tactical if attractive opportunities arise. It's an accelerated runoff, if you will, right? I would describe it as that. On the DTAs, I will pass to Roberto. Thank you. On DTA, actually, they don't contribute to Tier 2 capital in 2026. As we said that they will in the future. We reckon from 2029 onwards, dividend will depend on the several moving parts that actually we described, and mainly what we said is recurring profitability and also the impact of the disposal of the NPL business in term of capital relief. Thank you. Thank you. Next question is from Simonetta Chiriotti, Mediobanca. Thank you. Good morning, all. The first question is on 2027 outlook. During the first quarter call, you expressed comfort with the consensus that was at EUR 190 million -EUR 200 million, roughly. Could you comment on this point? Second question, on the timing of the Bank of Italy report, if it is possible to have an indication, if you have any, also on the timing of the disposal of the NPL. Do you expect to close this disposal already during the year? Third question, meanwhile, will you represent the NPL business separately in your account having decided their sale? Thank you. Yeah. I'm going to ask you to repeat the fourth question, Simonetta. Sorry, I didn't hear that well. Yes. The first question is on the guidance. The fourth. The fourth question. Yes, sorry. It's about the NPL business, if you will represent it separately in your account, having decided to sell the business. 2027 outlook. At this stage, we are not giving a formal guidance for 2027. I realize that is not making your job easier, but you realize we have a number of material moving parts that would really limit the reliability of forward-looking assumptions. We've just announced the consolidation of the NPL business, but we haven't yet the final shape of this transaction. We felt it would be inappropriate to issue a guidance or correct the guidance before that process is concluded. We never issued a formal guidance, by the way, in 2027. We sort of shared expectations, but we limited to 2026. Once we have clarity on these elements, Simonetta, we will reestablish a solid baseline and then provide a clear and updated outlook, not just for 2027, but also for 2028 and 2029. We need to develop a business plan, and I expect that we will start working on it at the end of this year. Timing for the Bank of Italy report, at earliest, late July, probably early September. That's the typical timing, but once again, I can't speak for the regulator. It's their process. Timing for the disposal. We think if we are successful and things go smoothly as they appear to be going, we would shoot for signing within the year, closing early 2027, but this is a very broad guideline. What matters is that the transaction is successful and that we have a good strategy. This is what we think is feasible given the amount of interest and the professionality also, I would say, and the sophistication of the players that are looking at it. Finally, will we present the NPL business separately in our accounts? I pass it to Roberto. He can answer for us. Thank you, Simonetta. Not at the moment. Actually, we need to know the structure of the transaction, the final structure of the transaction, and then we will separate the balance sheet of the NPL. It is too early, actually, to separate now. Thank you. Thank you. Next question is from Lorenzo Giacometti, Intermonte. Yes, good morning, and thank you for taking my questions. We have actually three. The first one is on the NPL business, and is the decision about the consolidating the NPL business somehow connected with the inspection of the Bank of Italy, or it was a decision taken before? If you can give us some color on the assets on which you took the EUR 30 million provision. Lastly, if you can give us some color on the cost review you will implement. Thank you. On the NPL business, was it connected to the inspection? No, not really. It was connected, it is connected to a broad evaluation of the regulatory environment, especially calendar provisioning. It's not connected specifically to the inspection. Normally, these inspections don't take that form. The inspection doesn't normally prescribe strategy. The formation of this view on the regulatory environment was ongoing for a few months before and has further materialized also in December when the letter arrived for the less significant institutions, the Italian smaller banks, with respect to the expectations of the regulator on the application of calendar provisioning also on exposures that arise before 2019. Not connected to the inspection but connected to an evaluation of the regulatory environment. On what assets did we have the EUR 30 million provisions? They are large exposures. They tend to be structured finance or large factoring exposures or pharma exposures. It's a very typical, I would say, credit file review process that happens when you are under inspection. The team takes a look at the higher risk files, reviews all of them, and then a dialogue ensues with respect to what's the appropriate level of provisioning for each of those files. Do they need to be maybe classified as UTP, or can they remain stage two? In that discussion, you reach a consensus and then you act accordingly. That's the context of the EUR 30 million. Finally, cost review. That's very simple. Given it's fairly short-term measure, it's just the discretionary part. We've had a lot of maintenance over time on cost management and on trying to work both on quantity and on price of our purchasing. We have a lot of focus on the synergies of the integration of illimity, and all that is unchanged. What you can do in the fairly short term is intervene on the discretionary part. Everything that is more clearly variable. Like consulting, like communication, those types of things. I think I answered your three questions. Yes, thank you. Very clear. Next question is from Davide Giuliano, Equita. Hi. Good morning, thank you for taking my question. I have just one quick follow-up on CET1 ratio. What are the expectation at the end of this year? Just a quick comment on 2026 guidance. I was wondering, what contribution do you anticipate from the NPL business in the current guidance? Thank you. We anticipate a CET1 ratio of 13.5 at year-end 2026. We remain committed to hovering around 14. As a long-term target, you should see that. Obviously that may be impacted by the deconsolidation of the NPL business. Take this as a number that does not include that potential effect, which would be obviously beneficial. You should expect roughly 13.5. The breakdown of the contribution of the divisions to a guidance, we're happy with providing a guidance, but we typically do not go as far as providing a specific guidance of specific business lines, therefore I would keep it at 100, 110, and we think it is an adequate level of transparency for the market. I wouldn't go into the breakdown of single business lines with respect to their profit contribution. You will see it obviously in the report as we publish the actual results. Thank you. For any further questions, please press star and one on your telephone. Let me make a comment in as we wait for our final questions. As you saw today, we made a sincere effort to share with the market in the most timely manner possible the latest information we have on the business, reinforcing on the one hand, our strategy, and on the other hand, making the appropriate investments in the robustness and the strength of our balance sheet. In this context, let me remind you that the controlling shareholder has a tradition of market-friendly and timely reporting and the market-friendly strategy, both in terms of their overall strategy and the long-term sustainability of the business, and in terms of financial reporting. The controlling shareholder founded the bank in 1983. They are the controlling shareholder since that year. They are fully invested in this bank. We have a real alignment of interest and see what we are doing here as a contribution to the long-term value creation that is consistent with their expectations on the actions of the management of the group. If there are no further questions, I would close with this. Are there any questions? There are no more questions registered at this time. Okay. Well, thank you very much for your time and attention this morning, and we will update the market as soon as we have additional information on the various developments that we have discussed. Thank you for now. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.