Good day, thank you for standing by. Welcome to the Mediobanca 2020 to 2021 full year results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Mr. Alberto Nagel, CEO. Please go ahead, sir. Hi. Thank you for joining the full year results call. Our business model, resilience, diversification, with great attention on growth initiative and asset quality, paved the way for a very good year, a very strong year in terms of revenue, actually, we experienced a real V-shaped recovery in profitability. Revenue reached all-time level with EUR 2.6 billion, up 5%, driven by especially wealth management and very robust CIB activity, offsetting consumer banking slowdown. We have recorded an all-time high fee as well, up 18%, and the resilient NII in the region of EUR 1.4 billion. We managed to have a material decrease in cost of risk, which stabilized at 52 basis points, down 30 basis points compared to last year. GOP adjusted went up at the level of 2019 pre-COVID at EUR 1.1 billion, which converted in a net profit increase of 35% above EUR 800 million, and similar increase in EPS at EUR 0.91. The high profitability was coupled with very healthy capital ratio, both on phase-in and fully loaded, and growing shareholder funds. This allowed us to resume quite an interesting remuneration policy. We have increased our payout at 70%, and given the results, this converted into EUR 0.66 of dividend per share. We are going to propose to our general meeting the cancellation of the existing shares, own shares in the balance sheet, and the proposal to buy a 3%. M&A activity, in particular in wealth management, is ongoing with Bybrook closing seen in the forthcoming months. The full year results showed very good profitability in terms of each division. In particular, I would note that increase in ROAC of wealth management to 21% is quite steady on a high-level profitability of consumer banking, which was in the region of 27%, and ballpark EUR 300 million of net profit, with a very important further improvement in asset quality management. The big spike in terms of profitability was in CIB with the ROAC of 16%, with record revenue up 21% to EUR 700 million, and net profit up 60%. These full year results has been backed also by a solid fourth quarter, which was the second quarter in terms of high revenue and profitability. This was evident in wealth management. Also, we had, and we comment on this very interesting sign of recovery in new loans in the second half of the quarter in Compass, and we have had still very high revenue line in CIB above historical levels. As I said, the proposed distribution, which will be subject to ECB and after the expiry of the ban, is going to be 66 basis point, materially higher than the previous payout we have communicated to the market, which was in the region of EUR 0.47. The payout from 50% went up to 70%, EPS, as we have said, will go to EUR 0.93 after the cancellation of own shares, compared to EUR 0.68 of a year before. Tangible book value per share went up 10% to roughly EUR 11 per share. When we approved a plan in 2019, this was before the COVID, we wanted to establish Mediobanca definitely as a distinctive growth player in Europe, which is consistently valued as a specialized financial group. This is going to be, and has been already achieved through a distinctive business model, which is characterized by growth capability and significant value creation through a delivery of industry-leading stakeholder remuneration. We have to say we are well on track to reach those targets, notwithstanding the COVID. This is true in loans, it is true also in TFA. Notably, it's true because we are going faster in terms of increasing profitability of AUM. I think we are well on track to reach by 2023 EPS of EUR 1.1, also ROTE, which will be close to 11%. This will be also depending on capital management from here to the end of the plan. Hence, we can confirm broadly the target, which is revenue growth, earning growth. We want to reaffirm even for 2022, the dividend remuneration of this year. 70% of cash payout, which is confirmed not only for this year, but also for 2022. We are working a lot on ESG. This year, we have had important achievement because we become signatory of the principle of PRB, which will entail that we have to assess to complying with the principle in 2022. We have recently approved new group investment policy with a wider spectrum in ECM, DCM corporate finance, also a new biodiversity policy in ESG sensitive policy sector. We haven't reached the disclosure that will be given because we are going to align the near future with the request of SASB and TCFD. As well, we are very active in employee empowerment, diversity, and inclusion with several project, from agile to smart working to training of employees and to improve our diversity within the group. We have improved our position also in ESG Italian bond issuance, being well qualified in the ranking this year. Mediobanca, as you know, has been included in S&P Europe 350 ESG Index. In terms of delivering BPE ESG targets as well, we are well on track. In terms of training, in terms of procedure adopted to reach targets for equal opportunity, in terms of ESG criteria to be included in 98% of investment evaluation, in this field, we are reviewing upward the target. In terms of new SFDR disclosure requirement, we are going to increase our target of percentage of ESG qualified funds to reach 40% of total funds in affluent client portfolio compared to a 33% penetration as of today, and an increase of 30% of delta, which was the target of the plan. Donation in environmental and social project as well as in initiative in energy transition, green mortgages done through our banks. We are well ahead, compared to our target as well in terms of customer satisfaction. We are very well positioned in absolute and compared to the targets of the plan. We see better what I meant when I said a faster V shape recovery in GoP on page 13. We have had a drop of 17% last year of GoP, G-o-P, and then we have recovered through a mix of revenue increase 5%, cost inflation of 4%, better management of cost of risk, which was down, and LLPs were down 34%, which led to a 20% GoP, exactly the same to the one of 2019. We can say that our story, which is a growth path story, is unbroken and is going to characterize our future years as well as it was in the past. You see on page 14 the trajectory of group revenue, they were up 5% this year, but they are also up 2% compared to 2019. We are not growing only compared to 2020. We are growing also compared to 2019. In terms of group segment, clearly this year has been the year of CIB and in particular wealth management, but we are also very much confident that the consumer revenue, in particular NII, can start to grow next year. In fact, the trajectory of NII has been steadily increasing in the last five years. We went from EUR 1.2 billion on page 15 to EUR 1.4 billion, and we have a marginal decrease of less than 2% this year. This was because of lower average volume in consumer due to COVID of lockdown. It was a technical factor. There was also competition elements like pressure on margins, notably in consumer and in CIB, due to COVID impact on consumer mix and high market liquidity. I think that as we will see in the last part of the presentation, we have reached a bottom line in terms of headline numbers in NII, and we start to grow from next quarter. Fees scaling up on robust growth trend. We have increased by more than 60% the fee pool in five years, with a CAGR of 11% in the last five years and 10% in the last two years. Here, wealth management has been clearly the more steady and predictable increase, driven by increase in TFA, notably in AUM. While CIB has been benefiting some important transaction, and in general, a very positive mood, which is going to stay in corporate activity, while consumer banking was flat in terms of fees. Costs are under control while investing. We have important project, in particular in digital upgrade and in rollout of our distribution network, in particular, not only wealth management. This generated the increase that we have had this year. A very important step ahead was done in asset quality moratoria. You remember we entered basically last year or this year, with 5% loans of moratoria. This number has been progressively driven down to 1.4%, and basically now is only related to leasing that for technical reason has been postponed. Those moratoria has been postponed to the end of December, but we are positive on the possible outcome of those moratoria. We have nonetheless done a prudent staging. As it was a very good year, we wanted to set aside, and we have basically increased coverage in Stage 3, and we have reduced materially gross NPLs ratio from 4.1 to 3.2. This is in absolute the lowest gross NPE ratio we have ever achieved. Net NPE ratio even lower, of course, at 1.2. We have slightly increased Stage 2 to 7.5, with a coverage of 9.7, and we have overall increased the performing loans coverage ratio from 3.2% to 3.6%. Cost of risk was reduced to 50 basis points, 52 basis points. This was coherent with the trend we have been commenting in the last few quarters. A cost of risk of consumer, which was below 200 basis points, it was the last quarter, 183. A material cost of risk in corporate and all this translated in 52, at the end of the year, and 56 in the last quarter. This was backed by important overlay that are still there and are really giving us the best comfort ever in terms of what we can have in 2022. Positive asset quality trend in all division, you see on page 21. Net NPLs went down 4% at group level, where CIB consumer went down, wealth management slightly up as well as leasing. Coverage all going up. CET1 positive news both from phased in and fully loaded. Phased in at 16.3, fully loaded at 15.1, so quite robust capital ratio. Going to divisional results. I would note that, in particular, the job done in wealth management. Wealth management, we have devoted most of our attention to what we have envisaged in the plan as a game changer for our presence in wealth management. There are two heavily investment in distribution in terms of sales force ramp up and digital investment, and a brand and product upgrade. All the activity and the efforts on CheBanca!, Mediobanca Private, and Compagnie Monégasque de Banque have been devoted to upgrade the offer to tap slightly different customer base and to offer them different solution and pricing. This reverting quite a good success in net new money, roughly EUR 5 billion in affluent and private. We have had a small outflow in terms of institutional asset management, which was already basically planned, in particular in SGR. TFA went up 12% and net profitability went up 25% to EUR 100 million. This is, I would say, a symbolic number because it's the first time that our wealth management reach EUR 100 million of profitability and is an important step, which we want, of course, to improve in the next few years, but is going above the annual business plan targets. The net new money you see it on page 27, can be broken in segment in product. The main driver has been affluent, and then private. I would say that the last quarter was pretty good because we have, as the bank entered in the fourth quarter very liquid, we have made all our efforts not to have extra liquidity and to convert as much as we can into AUM, which then reached EUR 1.1, quite a good number. As well as the management fee level and the asset marginality went in the right direction. We are building up a wealth management, which is predominantly driven by management fee at very fair conditions, sustainable, not dependent from performance fee. We have still room to improve asset marginality, which went up three basis points and still have some way to go, even if it's going faster than projected in the plan. Results were good both in affluent and private. If we go to consumer, the effort in consumer is and was driven to ramp up our distribution network with different kind of presence, light branches, new type of sales network that can reach the client also outside the branch of Compass. As well as investing a lot in digital distribution, knowing that already 23% of annual direct personal loan are sold throughout our digital platform. What is interesting is what we have seen in the fourth quarter. In the fourth quarter, for the first time since the COVID, we have seen loan book stabilizing and slightly growing. The negative trend, which was observed last year because of halt in new loan production and maturity of existing loan, was reversed. Hence, we have had, if you see, a mix skewing back towards profitable products. Personal new loans up 29% third quarter on second quarter, another 17% fourth quarter on third quarter, and now representing back again 50% of the total new loan. At the end, the profit went down modestly only by 6%, which was the effect of revenue down 6% because of loan book. Cost under control, with the cost-income ratio sticking to 30%, and a decrease of 21% of loan loss provisions, which reverted then into roughly EUR 280 million of net profit. We see on page 31 basically that the fourth quarter reached EUR 1.9 billion of new loan. This is a number which we like because it's very close or is close to the number that historically we have had. This is the number that allows the company to increase the loan book and hence to generate better NII. In fact, we see a stabilization with a small increase in loan on June 2021, with EUR 12.9 billion as opposed to EUR 12.8 compared to December 2019, which was the peak of 2019 before the COVID, EUR 13.7. We have to go back to this. We will do it in the next quarters. It will take a bit of time, because as it takes time to go down, it will take some time to go up. The trajectory is steady. Cost of risk and in asset quality, results are quite amazing because we enter, as I said, in the COVID with a spike, technical spike in LLPs. With the fourth quarter of last year, hovering EUR 2,361, then we have seen that after the physical lockdown was over, the possibility then to have a normalized LLPs was there, and this happened and materialized. Since already three quarters, we have less than 200 basis points of cost of risk. Very positive news also on net NPEs, in particular in Compass, where the level reached 235 net NPEs is all-time low, or at least is the lowest since the COVID outbreak, and after the new definition of default. We have to remember that Compass is one of a kind also in terms of disposal of NPEs, because as you know, we regularly sell every 15 months the warehouse of NPEs that in the meantime, we have marked down. CIB, quite strong results from all viewpoints. Advisory, very strong, EUR 130 million of fees. I would note that there are two components that historically were not there. They are there to stay. The contribution of France became quite significant, 40%, and the contribution of mid-cap, which was up 50% year-on-year, was very important. As well as lending, very solid activity in 2021 with a number of acquisition finance. Part of them will be more evident also in 2021, 2022 because we have had some delay in the closing of certain transaction. Capital markets, strong year in ECM, and also quite a good year in DCM. Overall, an important bunch in profitability of ROAC 16%, coupled with competitive market position, which was clearly stronger throughout the year. You see on page 34 that both in terms of last 12 months and last six months in M&A, we have increased our market share with a number of transactions that are from the large buyout, large M&A to mid-corporate and sponsor driven. As well in capital market with a number of IPO and equity disposal, equity sales, we have reached quite an important market position in the last 12 months. PI has been good because there has been a sort of normalization of results of Generali, which was also coupled with the very, very important seed revaluation for the PI. This was at the end an increase of 5% of profitability. Coupled with, I would say, a more contained loss in holding function, thanks to positive revenue, better cost control, and two elements that are on the other side, I would say higher LLPs on leasing because of conservative approach on moratoria, and the higher contribution to the systemic funds. Comfortable funding and liquidity position. What I would note is on page 38 that, alongside with the big reshaping of the group today, we have as much as 45% of total funding, which is coming from deposits. It was a fraction only a few years ago. All key indicators at comfortable level in terms of REL. Going to closing remarks, I would say that we are undergoing a deep reshaping of the group, which is confirming Mediobanca as a player, which has a clear growth path and can be seen as a specialized financial group. In fact, you see that the capital rights revenue doubled, now are more than 30% of the revenue due to the TFA doubling as well and evolution. This was coupled also with the increase in loan book. Also the revenue generating assets, which are more, I would say, RWA intense, went up from 35 to 48, but with a different intensity because we have lowered our RWA on assets intensity from 77 to 57. You see this on page 41. This was coupled also with a very important revenue growth, 5% CAGR in the last five years, with higher fee contribution and division rebalance. Today, we have the wealth management and CIB, which are contributing each 25%, and it was totally different 2016, where wealth management was contributing only for 16%. We have clearly some priority for the new year, which are driven also by new opportunity or stronger opportunity. In wealth management, as we know, the environment is quite positive in terms of increase of saving, acceleration in digital offer, specialization in new products to be offered to clients. Our priority will be to continue to increase and to improve our service model through a digital customer experience as a priority. We have restarted a heavy investment in digital upgrade in the last part of the year. We will continue, and this will be coupled with, as I said, a refocus on target segment, which can give us a better opportunity in terms of growth and profitability. Consumer, we are ready to profit from a new environment, which is the rebound in consumption following to lockdown restriction, continue to invest in digital platform and in product innovation. While in CIB, we think that there is out a larger revenue pool accessible via truly a new market positioning of Mediobanca, not simply as a corporate investment bank, but the Italian private and investment bank. Increasing the cross-selling between the two division and presenting ourselves into the market towards entrepreneur and enterprise as a private and investment bank. The deep restructuring across the whole sector and the monetary policy Next Generation are all supporting factor. We need to go on in reaching our regeneration and coverage with additional new banker in industry and in geography. We have to leverage, and we will leverage more our French presence throughout different product, not only to advisory. As well, we are going to broaden our product offering in DCM with two new market initiative in CLOs and in bond trading. As closing remark, I think we can say that notwithstanding the COVID, or maybe also thanks to the COVID, we have been able to reaffirm our ability to grow and deliver quite interesting results and profitability, thanks to our unique business model and exposure to what I call the best risk-reward sector. Basically, counterparties that gives us, in terms of revenue corrected by risk, the best return. These are the so-called large and large mid-corporate, and the households on the other end. For next year, we forecast growth in a normalized scenario. We see growth in profitable assets, TFA, leverage in size and mix with higher AUM, and loan driven by wealth management and consumer banking recovery. We forecast growth in revenue, single-low-digit increase in revenue, with NII bottoming out despite ongoing pressure on margin, and fee capitalizing on the good numbers of 2021, further supported in particular by wealth management. We would like to continue to invest heavily in digital upgrade and other project that are structurally important for the competitive position of the group, to have a flat cost-income ratios 47% like this year, as well as given the excellent asset quality and the forecast in terms of trend, we see a flattish cost of risk for the year to come. For this reason, we are very confident in proposing a payout of 70% for also 2022, and to put up for decision a 3% share buyback at the end of October, when it will be possible given the expiry of the ban. Of course, M&A and scouting is ongoing. After Bybrook, we will see if we can, in particular in wealth management, but not only wealth management, with bolt-on acquisition, help the increase in revenue also with extra organic move. Thank you very much. I think I've been a bit long, as it was a very good year, I wanted to give the sense of what we are doing as a whole, I'm ready now for your question. Thank you. As a reminder, if you wish to ask a question, press the star and one on your telephone keypad and wait for your name to be announced. Your first question today comes from the line of Antonio Reale from Morgan Stanley. Hi, good afternoon, everyone, thanks for the presentation. I have three questions, please. The first one is really on your closing comments on the outlook for revenues, particularly I'm interested in your NII outlook for next year. I think you said NII is bottoming, despite ongoing margin pressure in consumer from a mix effect. We've seen origination, consumer reach the sort of very close to your run rate, the EUR 2 billion. As I was saying, you talked about the mix effect from lower personal loans. Can you help us understand what this means in terms of NII growth next year? That's my first question. The second one is really on your management overlay. I saw the increase by EUR 85 million to EUR 300 million in total. I'm wondering what you're assuming in terms of assumptions of default rates in consumer finance, especially. Your coverage, if I remember right, in performing loans and consumer has now reached 3.6%, which seem to anticipate a large increase in new defaults. How should we think about this? Are you seeing something we're not seeing? Is it instead excess prudence to facilitate regulatory conversations on capital distribution? I'm just interested in your thoughts here. That's my second question. Lastly, you've reiterated your commitment to pay dividends with a 70% payout also for next year, which is a personal surprise to me, a positive surprise. It wasn't granted. I wonder if that changes in any way the way you think about the use of capital and the trade-off between higher dividend streams, share buybacks, and your ambition to grow by M&A. Thank you. Thank you, Antonio. Let me elaborate better on NII, last quarter and future quarters. We think that the last quarter was affected by a number of elements, which should not be there in the future. The first one was we enter into the last quarter very liquid, because we expected closing of some important acquisition finance transaction, which were delayed in the Q1. We paid a bit of a price of extra liquidity, and we paid the price on the fact that the new loan production revamp of consumer was clearly there in the last month of the quarter. Basically, we have done EUR 650 million new loans in June. Then, as you know, having been there in the last month, they could generate only a few NII, but this is a very positive element, technical element for, I would say, 2020 onwards. What is going to happen in NII? I think that NII at the end of the year will be higher compared to the previous year. We will have an inflation in NII. This will be driven by important new loan production. I think we will have a new loan production similar to this year, quite good in terms of CIB and wealth management, with also an important support in consumer. In consumer, you have seen that this quarter we have ended up with a higher loan stock. What we expect is that this increase in NII, while quarter-on-quarter, we do think we're going to go better. The overall number, compared to last year, of NII will be more evident in its increased path in the second part of the year. Why? Because Compass will need a couple of quarters to put up a loan book higher than last year. Hence, it takes a couple of quarters for Compass, being equal to the rest, to have a loan book, which is year-on-year bigger. Having said that, we need to put together those projection of RWA with an implied further compression in margin. We prudently implied a 20 basis points contraction in marginality given the ample liquidity and the commercial activity of banks. All this will revert into an increase in NII. It won't be a big increase in NII, but will be an important sign of reversal. Management overlays. We are having a default rate today very low. We wanted for prudence reason and for the fact that COVID effects are not over to build overlays that, together with the default rate at which we are now provisioning, which is higher than what we have in reality experienced, protect the balance sheet and activity from negative scenario and reassure supervisor on the fact that we are fully provisioned. In terms of dividend distribution, we can go, as we said, as much as to 70% of payout. It is linked to the normal prudence of Mediobanca, which has been always very prudent in assessing asset quality and the fact that we want to be authorized and seen as well-capitalized with excellent asset quality and hence a top distributor, a good distributor in terms of return to shareholder. Coming to the third question, I think we should combine always the need to Mediobanca to grow. Use capital first to support the revenue growth in terms of organic growth and the bolt-on acquisition, because today it is foreseeable only bolt-on acquisition realistically with the need then to distribute quite a good dividend in terms of payout and 70% today is a bit the new normal for us, as well as looking at the impact of higher capital ratio, higher book value per share and hence the need to improve EPS through tactical buybacks. We are not favorable to massive buybacks. We are favorable to use buybacks as the third element compared to the first two. First two are, I would say, revenue growth. Use capital to support revenue growth. The second in terms of priority is giving a good cash dividend. The third is use tactically buybacks to improve EPS and to improve capital ratio, optimize capital ratio. I would say that in terms of, as I said, priority, this is coming third compared to the first two. That is very clear. Thank you. Thank you. Your next question comes from the line of Domenico Santoro, HSBC. Hello. Hi there. It's Domenico, HSBC. Thanks for the presentation. Just to clarify on the NII, understood that we are at an inflation point. The Q4 is a bottom, and from here, we start to grow based on all the comments that you just made. I'm just wondering whether before the end of the year, given that you mentioned a low single-digit growth in terms of revenues and the speeding cruise, or the NII might be better in the second part of the year. I just wonder what is a more competitive guidance on fees, given that it was very strong this year, and the CIB, I don't know how much for the base and the fees attached are repeatable in a way, and whether instead we might also consider some more correction on the NII, given the speeding cruise that you just commented. The second comment is on the M&A. Your names appears, of course, repeatedly in the press. It's not a mystery that you are interested in asset management company. I just wonder how shall we look in terms of metrics at the M&A. I mean, for more sophisticated sort of network financial advisors, what would be the maximum price that you'll be willing to pay in terms of price on AUM? A question on the shareholders framework that has changed over the last couple of quarters. I'm just wondering to what extent the presence of some particular financial investors it might be a sort of an impediment for you to trim the stake in Generali in case you need to cash in more, in case of larger acquisition. Thank you. To Domenico. In terms of fees, what will happen this year, according to our budget, is that we're going to have a further increase in fees. It will be single low digit. We can't wish for a two-digit increase. This will be the resulting factors of, I would say, quite a robust increase in wealth management and a good trend in CIB, even if prudently we have not set the bar at the same level of this year. Overall, we will have an increase with a decrease in CIB, an increase in wealth management. In terms of M&A, today we are very much taken by the closing of Bybrook, because this will give us important improvement also in profitability of the division, and will pave the way for a very nice growth platform. The rest, we see every dossier. To come to your point, in terms of distribution in wealth management, we are always alert to see whether combining what may be available with us would make sense strategically as a competitive presence into the market, target segment in which they operate and the possibility to really retain those advisor or bankers. Because at the end, there is also always in this transaction, an issue of retention. I think the brand of Mediobanca, and in particular, the fact that we have CIB strong operation, is a very positive element for advisor, because aspirationally, they want to work in a group that has such level of sophistication and corporate access. Having said that, for us, a deal which makes sense is a deal that should, I would say, grow the revenue, in particular fee pool, and have an EPS positive dynamic, if not in year one, at least in year two and year three. The reality is that those kind of opportunity, they are not transformation. They are nice because they are bolt-on. From theory to practice, at the end, doing them, it's really a matter of time to execution and industrial fit. We've seen even the past, a lot of dossiers, but often we came to the conclusion that those acquisition, compared to the growth plan, growth option we have. We grew this year, EUR 4 billion in terms of net new money. Next year, we may grow even more. We need to be sure that we buy something that, I would say, as we have to alter a bit the growth, because we will be taken by the IT migration, by the so-called post-merger integration. We have to come to the conclusion that this is something that worth this kind of distraction. Sometimes I have to say we come and we came to opposite conclusion that sticking to our organic growth is better. We will see in the near future if it is something that may fly or not. Shareholder revolution is not affecting what we are doing in the sense that the group continue to be managed with the same idea, metrics, and plan. The reality is that today, as we all know, there are not available targets of certain size. There may be a fit, there may be great relationship between us and a possible target, but today there is no availability. If those situation change, we can start to engage, but today, I think it's only a theoretical possibility and not a practical one. I don't think that we should be worried about what can happen at that point. Can I just follow up on the NII? Sorry, just to understand well so we clearly hear. The inflation point that on a quarterly base, we understood well. Is the direction also year-on-year going to be positive as well? Yeah. We see quarter-on-quarter improvement, and we see a full year improvement on full year results. It may be that year-on-year quarters, so Q2, Q3, compared to last year is going to go down, but full year, in particular in the second part of the year, so from Q3 to Q4, we will see, if our plan, our idea are met, an inflation of NII. Understand. Thank you very much. Thank you. Your next question comes from the line of Azzurra Guelfi from Citi. Hi, good afternoon. A couple of questions from me. One is on capital. When I look at your dividend distribution and buyback, if I put them together and assume that all of the buyback could happen in 2022, the payout could reach around 100% of the estimates that I have for the profit of 2022. Is it fair to assume that you will consider a full buyback if nothing else materialize in terms of M&A and your revenue growth is able to be fulfilled by your organic capital generation, that all of the buyback happen in 2022? Or would you like to spread it until between now and the end of the plan, for example? In terms of timing of the buyback and whether the share price performance would be stronger than potentially anticipated, some of this buyback could be converted in higher payout. The second question is on wealth management. I hear you on bolt-on, and probably if I understand well, it's because there is no availability at the moment of discussion with other players. Let's look for a second at the marginality that it's going particularly well in terms of like wealth management division, and you're almost approaching your 2023 target of 90 basis point. You are at 87 at the moment. Could we consider that target maybe could be beaten given a different mix that you are now considering? The last one, if I can, very quickly on the asset quality. Have you got a guidance for unchanged cost of risk year-on-year? And that I am assuming is without any release of the extra provisioning that has been done in the previous year. Thank you. Hi, Azzurra. [Foreign language]. Sorry, the line was very bad, I could hardly listen to you, but I try to answer and guide me if I got it wrong. Basically, the buyback, as I said in the previous answer, the buyback is, for us, the third building block. The first is growth, the second is dividend, the third is buyback. We tactically use it, in order to trim capital ratio and improve EPS. We do it. We haven't guided the market about a buyback in 2023, neither in 2022. We will see it every year, depending on capital ratio, M&A, and after the 70% distribution. We don't want to be linked to a large buyback or larger buyback, which can then prevent further growth option. I don't know if this was the question, because as I said, the line was very bad. Sorry, apologies. I can repeat it. I apologize if the line is not good. Can you repeat the second question? It's basically on the marginality of the wealth management. You are approaching already in 2021, your target of 0.9% in terms of margin in wealth management. You are at 0.87% now. I wanted to know if that target could be, if you want, in a way, conservative given that you are changing a bit the mix of the division. You are right. We are already there physically with the plan. We think we're going to beat the plan in terms of ROA. Of course, on the other end, we need to be prudent because we have had one year or one and a half year, very positive on the market, I would say tailwind. Equity product are very much requested, also supported by very positive markets, but definitely we can be better at the end of even next year compared to the target of ROA. The cost of risk, we can think about at the end of next year, to use partly of the overlays if the trajectory of asset quality and industrial cost of risk is as low as the one today we experienced and we see for the future. We should have some, I would say, write backs again in particular CIB. In CIB, we still have a couple of UTP, which may be up for reclassification in 2021, 2022. We can also see after the maturity expiry of the supporting measure of the government, if cost of risk in consumer stays industrially so low, we can value to release some overlays. Not the bulk, but some overlays. For this reason, we think that a flat cost of risk today correspond to what may happen. Are there other question, Azzurra, which I didn't still answer? Or were there three only? No, you answered. Just to make sure that I understand that the current guidance doesn't include significant overlay release, but that could be something on top at the end of next year. Yes. Thank you. Thank you. Your next question comes from the line of Hugo Cruz, KBW. Hi, thank you. A few questions from me. For some consumer NII, are you seeing any changes in competitive dynamics that are impacting your volume trends or your margins? On the cost of risk, your guidance for this new year is very clear. I was just wondering, should we assume a lower cost of risk after this year? Given that we're still coming out of the COVID recession. What could be the cost of risk for 2023? Should it be materially lower than, for example, 2019, the last pre-COVID year? Quick clarification on the buyback, the 3% that you announced. When do you expect to cancel those shares? That's it. Thank you, Hugo. Yes. On consumer, we do expect some further margin pressure. Not huge, but we factor some other pressure because of ample liquidity of banks. I have to say that if our plan or our expectation are met, so that personal loan come back to certain normality, I think the overall marginality should be less affected because those that are more affected are, in general, POS, salary guaranteed, and car sector because of the fact that are sold on average by third-party networks, while personal loan are sold mostly by our own network. The more personal loan go back to normality, the more protected we are in terms of marginality. I think today it's too soon, and I would not consider it wise to lower cost of risk of expectation of a cost of risk of 2023 compared to 2022 because 52 basis points are already a very low guidance. It's too soon to say, but I would not be keen to assess today the 2023 guidance of cost of risk. Let's see how it works in 2022. Is already very low, 50 basis points, 52 basis points, and it reflects our very good asset quality. Buyback, we want to cancel the shares before the year end. Basically, if we go to the general meeting at the end of October, we got the authorization, we got the ECB authorization to cancel and to do, we will do after that. Basically, in the last part of the year. Before the start of 2022. Perfect. Thank you. Your next question comes from the line of Alberto Cordara, Bank of America. Hi, good afternoon. I have a couple of questions. The first is on the cost dynamics, if you can help me understand a bit better what is happening. When I see your reporting, I see that there has been a strong inflation in CIB. When I take the June quarter, it's up 27% year-on-year, but this is explained by the deals and the very successful performance that you had in the unit. I understand a bit less what went on in the wealth management when the last quarter was 14% higher year-on-year. I understand even less what happened in consumer finance, because in consumer finance, on a year-to-year basis, revenues fell by 10%, but the cost basis was up by 9. Again, I'm not exactly clear what happens in the quarter. When I look at the yearly numbers, they make more sense. They're still a bit strange because again, consumer finance revenues up 3, cost on a full-year basis up 1, is a bit counterintuitive. The second point is on the share buyback. I'm not exactly clear, I could understand. The first thing that you do is to cancel the existing shares that you have as treasury shares, and we're talking about EUR 23 million. If I understand correctly, you initiate a new buyback program equal to 3% of the remaining shares. If I understand correctly, can you please clarify in how many years you would buy this 3%? Given the fact that the 3% is used for three different purposes, which is M&A remuneration, cancellation, and also staff performance, if you can help us understand what is the percentage, roughly, that we should be assuming that is going to be canceled. Thank you. Alberto, on cost, I have to say that what happened historically, it happened that when we entered into the COVID, in 2020, in particular when we did the budget of last year, we were very prudent in letting a new project going ahead. We started with very muted quarters in terms of, as you remember. The Q1 was the lowest in terms of administrative cost. Naturally, when we have seen that the situation was improving, we had the reversal. The part of project which were not spent at the beginning of the year, we put it at the end of the year. Saying that, in particular, we had marketing cost because we launched a very important campaign both on CheBanca! and on Compass, which helped, importantly, the new loan production. This was done in particular in Compass, but also in CheBanca! In the last Q. There were digital projects that were put at work at the end of the year. Why? We have seen that revenue and business tone was much better, and hence we have decided, rather than to postpone, to anticipate and start to do those investment already this year. I think these are quite a positive element in the sense that they contribute to increase and to defend the strategic position of the different business in the group. Of course, I realize that the Q4 has this EUR 15 million of pickup in cost, which were somehow not coherent with the previous quarters. The problem is that the previous quarter were affected by a sort of mute attitude towards a new project, given the, I would say, the tail effect of COVID. In share buyback, basically, you got it right in the sense that we're going to cancel the share immediately, and we're going to buy the 3% in one year. Basically, normally it doesn't take much than one year to do this. We're going to use a third max of what we're going to buy for the performance share. The rest will be canceled. Two third will be canceled, one third we will use for performance share. Brilliant. Thank you very much. This is very clear. Thank you. Thank you. Thank you. Your next question comes from the line of Luigi de Bellis from Equita SIM. Your line is open. Yes, good afternoon. I have three questions. The first one on the CIB. How do you see your investment banking pipeline and activities compared to the same period of the last year, with some color, if you may, on the different segments? The second question on the CET1 ratio and RWA evolution, do you see any regulatory headwind or tailwind in the next 12 months, and how do you see the RWA evolution? The last question on the wealth management. Can you elaborate a little bit more on your strategy, in particular, what is the trend perspective for the next year in terms of recruitment and update on products upgrade and digitalization process for the division? Thank you. Thank you, Luigi. Can you remind me your first question? I took note of the second and the third, but if you can remind me the first one. Sure. On the CIB, how do you see your investment banking pipeline? On the pipeline. Yes. Yes. Thank you. The pipeline today is very good as well because basically we have a number of deals that are going to be closed in the new year, which were done basically last year for technical reasons. It's quite a robust pipeline we see at least for Q1 and 2 throughout the different products. Mainly M&A acquisition finance. CMS should have a better trend this year. DCM is quite steady. ECM is more linked to quarters, so we can have quarter where we have either capital increase and/or IPOs, which normally are basically, I would say, quarters of the Q1 and 2, and Q3 normally is not a great quarter for IPOs or for capital increase. The third quarter is better. There will be a seasonality, which is always there. Overall, as I said, we set a target of high fees coming from CIB. Of course, take into consideration, not the same level of this year. We have forecast a lower level of fee prudently. CET1 RWA evolution, we don't have any regulatory impact. We see a normal RWA inflation, which is linked to the fact that we going to grow our loan book by 4%. We going to grow RWA a bit less, but in line with the growth in loans. We definitely have restarted, since the second half of the year, a quite robust recruitment campaign, which is a campaign which is particularly strong in CheBanca! because of the nature of the premier segment, but is also there in private banking in Italy and in Monaco. Our idea, as I said, is in CheBanca!, to exit the mass market, to improve the product offer through thematic solution than through third party and through Mediobanca group. We are fishing for an increased penetration of in-house product. This project, which is ongoing, of repositioning of customer base, will also bring a repricing of part of, I would say our AUM. Naturally, we should see another improvement in ROA, which will be supported also by, at least in CheBanca!, but also in Private Banking, by the release throughout the year of some important digital upgrade. In particular, in CheBanca!, we have planned to release in 2022, within June, a new investment app, which is a bit of a state of art in the market because it's been planned to be so. I think that there and CRM tools in Private Banking will favor this kind of increased productivity and better ROA of the division. Thank you very much. Thank you, Luigi. Thank you. We have no further questions, sir. Please continue. Thank you for joining the call, for your patience and your questions. I hope to see you in October when we will have the first Q call of Mediobanca. Thank you again. Thank you. Ladies and gentlemen, that does conclude your call for today. Thank you all for participating, and you may now disconnect.