Good day, and thank you for standing by. Welcome to Mediobanca Half Year 2022/2023 Results Conference Call. At this time, all participants are in a listening-only mode. After the speaker presentation, there will be a question-and-answer session. To enter the queue for question, please press star one one at any time. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Mr. Alberto Nagel, the CEO. Please go ahead, sir. Good afternoon, welcome to the conference. Commenting the six-month results, I think we have to highlight both the three months last quarter and the overall six months results are well above our target of plan. In particular, the last three months show a level of revenue, which is all-time high, EUR 900 million and EUR 300 million of net profit. This was fostered by a very strong NII trend, much stronger than what we have thought, thanks to asset growth, effective repricing and very good management of cost of funding. Fees were up 9% and 25% Q on Q, thanks to a very robust IB and wealth management trend. Coverage ratio all-time high, coupled with a very strong capital position at 15.1% phased in and 14% fully loaded. If we stick to the six-month results, we can see that they clearly exceed the half-year number of our business plan target. In particular, we are at 55% at the EUR 3 billion of revenue. EPS is at EUR 0.65, which is 60% of EUR 1.1. Cash payout is confirmed and the ROTE is well above 11% being at 14%. This last six months has seen further acceleration on digitalization and on digital push. In particular, in consumer finance, we are focusing more and more on instant lending, and we have secured two fintech acquisition in buy now, pay later. While in wealth management, we have focused our effort on the new digital advisory platform in cooperation with Armundia. The strong push on digital has been coupled with an important effort played in sustainability. In particular, we have recorded a steady improvement in the rating of Mediobanca, and we are accelerating efforts on managing transition risk. Q2 revenue, GOP and net profit at best level ever, as I said, with roughly EUR 448 million in NII. This is also coupled with important commercial achievement. EUR 2.3 billion in net new money in wealth management, robust new loan production in consumer finance and a very strong advisory activity in CIB. Moving to the six-month number, we have already commented them, but I would in particular highlight loans progression at 4% growth semester on semester, 6% year-on-year. We have also managed very well the funding base. We will give more detail on this. TFA at EUR 83 billion. I would say that also profitability metrics like return on risk-weighted assets stayed on a very high level at 2.2%. As I said, cost/income ratio 42% even improved gross NPE at 2.4%, leverage ratio at 8.2%. Looking at the revenue, we were clearly surprised by this progression because as you can see, only two years ago, we were short of EUR 700 million. Page seven, in particular, we were at EUR 637.5 million on page seven, we have progressed to above EUR 900 million. Basically, this is a big jump, which was already achieved last year with a 12% increase and a further 20% this year. The overall breakdown is still the same, where we have NII going a bit down in terms of contribution because of expansion of the other. In particular, we have today 50% NII, 30% fees and the rest between trading income, 9%, and insurance. This progression in revenue has been produced by each of the business. You see page eight, we have had in each business a progression, more important in CIB than in with 20%, than in wealth management with 12% and 10% in consumer finance. NII, as you can expect, NII was better, came in better than anticipated. This is basically caused by sound volume growth, loans up EUR 2.8 billion year-on-year to EUR 43.6 billion, and also the banking book went up by EUR 0.7 billion. This was the effect of interest rate rise, positive effect on floating loan exposure and on banking book yield. Funding cost efficiently managed, we will see it after, and we have had also some positive contribution from inflation-linked bond coupons. Of course, this is on the back of strong commercial activity. You see the loan book growing in CIB, and in particular in consumer finance and the mortgages and wealth management. Notably, we need to look at consumer finance, 6% year-on-year, and 3% semester-on-semester, and even more robust was the growth on wealth management. Another important element of the NII trajectory in actual and future is the funding position. Here, we have raised EUR 10 billion of new funding since February 2022, and this was at an average of 80 basis points of cost, which was a very, very effective cost of funding. This was possible because of our diversified funding mix between deposits, which remain stable, bonds placed with institutional investor, and bonds placed with retail investors. Mediobanca brand has been very well accepted, and we were able to issue important level of bond. The one issue, as you can see, we're having the same cost of funding of expiring one, so under 35. We are also managing smoothly the maturity of TLTRO. Basically we have already redeemed EUR 2 billion. There are well spread maturity in 2024 and 2025 with EUR 3.1 billion and EUR 3.4 billion. The maturity of bonds in the same period are not concentrated, hence, you know, gives us, you know, a lot of flexibility on what to be done and the cost at which we have to raise new funding. In particularly, high regulatory indicator, LCR and NSFR are at the highest level. Again, fee, another very, very positive quarter, you know? You remember that our, you know, normal cruising is when it's got EUR 200 million, normally it's between EUR 180 million and EUR 200 million. This quarter we have had 260, which is very, very high and is on the back of, I would say, healthy growth in wealth management CIB. In wealth management, this is driven by higher and resilient management fee, and which is reflecting TFA growth and improving banking fee due to different segmentation and repricing of Premier segment in particular. CIB was reflecting strong advisory and strong acquisition finance. Even consumer finance increased this contribute thanks to buy now, pay later. The commercial activity has been quite robust as a net new money in the quarter with EUR 2.3 billion. As well as in CIB, where we have brought to the market to a completion 20 advisory transaction in the last six months and done also very important activity in midcap and in lending and capital market. CoR was almost flat with, at 59 basis point. Basically, this is on the back of a better-than-expected consumer finance trend, where we have forecasted in the past to use part of the overlay, but the actual trend are such, so good that we don't need and we think that big part of overlays of Compass will be used, if any, next year and not this year. In CIB, we have had an increase of cost of risk linked to mainly to two main factor. One is IFRS 9 revision, the scenario. The macro scenario update compared to the one we did in June was take into consideration higher rates and lower GDP growth and some mechanical reclassification. Overall, the cost of funding, the cost of risk stayed low, and we didn't use as much as overlays as we thought. Basically this cost of risk has to be seen with the presence of higher overlays compared to what we have expected. Asset quality continued to improve at 2.4% gross NPE ratio and a very high coverage for both performing and non-performing. Is quite sound in all, in all business, as well as capital base, an important generation of capital with 110 basis points of earnings. To basically having 15.1 Q1, slightly lower than six months ago, but where we have managed to incorporate the regulation impact of 45 basis points, which is linked to model revalidation. We have already booked this in Q1. As I said, steady improvement in rating and in awards in ESG, MSCI upgraded to Single A from Single A to Double A. Sustainalytics, S&P, and Bloomberg has included or improved the positioning of the bank in the rating. We have done a substantial activity in placing senior bond, preferred for Mediobanca is the second green bond. Also, you know, do new lending and leading DCM transaction for clients in ESG, where Mediobanca is gaining a particular market share and particularly, acknowledge, role and position. As you know, we have also offset CO2 in 2022 is the second year where we are carbon neutral. Now, what is really important is to look at single division return on allocated capital and overall allocated capital. Mediobanca has reached level of 14% ROAC, which is unexpected and not comparable to what we had in mind in terms of, was more in the region of 10%-11%. Each business division improved 35% wealth management, which reached the level of consumer finance. Corporate investment bank stayed on the level where we want it to be in the region of 15, 16, 17. Insurance had also a positive trend reaching 26. Every single division is more than paying cost of capital. Starting to see the wealth management one in a period where wealth management is not favored by tailwind because of interest rates increase and switch to administer assets, we were able to grow more than a market. We grew EUR 3.4 billion of net new money, which is more than the market, because we have had inflow in Q2 at 4% of the stock, which is 16% annualized. This is on page 24. Above the market trend, which is 12%. This EUR 3.5 billion were coming 50% from Premier and 50% from retail from, sorry, from private. Equally split. This trend of net new money with the market effect and the ability to maintain all the deposits, made that the division recorded a +12% income and a +14% of net profit. Consumer finance, again, was not a given or so easy to see, even in this year, an increase in profitability. This was possible, thanks to, I would say, important new loan production, which was done in a more prudent way. Basically, we decided to cut already since the start of the war, the worst 10% production in terms of risk. We have been more selective. Looking at this year was not obvious to grow above the level we have, excellent level we have had last year. This actually is coming because of new loan production, slower prepayment, better than expected cost of risk, much better. Hence the profitability show an increase of 9% semester on semester and a 3% net profit. Last year, as you remember, we had the fiscal benefit. Basically it's more 8%-5% increase of GOP risk-adjusted rather than 3% of net profitability, you know. Important new loan production in the six months was roughly EUR 4 billion, so EUR 2 billion at quarter. We were able to reprice the loan faster than expected. As I said, cost of risk remain still very well below EUR 150 and with EUR 210 million of overlays untouched. Asset quality is at its best level ever, looking at page 27, we are starting to see a material impact of buy now, pay later. You see that, in Q1 and Q2, we are producing, from 12% of total new business of SPL loans, special purpose loan, are generated through buy now, pay later. As we say here, this is a very powerful engine of new clients already delivered. We have an average of 14,000 clients per month. And 60%, 2/3 of them are never before Compass. It's a very, very interesting client gathering machine. As I said, we were surprised and positive of trend of cost of risk. You see page 28, we are having EUR 50 million of provision this quarter, and this reverting to 142 basis points. If you see this 142 basis points is among the lowest. Pre-COVID was 185 basis points. We always said that we're gonna get back there to the pre-COVID, but the reality is this time, this path to pre-COVID is longer than expected. Now, for the time being, it stays very, very healthy and also, the stock of NPE has been reduced with a 9% drop to 166, because we have concluded even at the end of the year, the disposal of a warehouse of NPE, and we have raised again the coverage on performing and non-performing. CIB, a very positive years. He, very positive half year results. Led by very important performance of advisory and lending, thanks to acquisition finance, but also market and trading were super solid. We have had a start of rebound of ECM and DCM. Now, as I said, commercial activity in terms of transaction has been already commented. Also, the special role that Mediobanca is gaining on the green DCM activity. Overall, a surprising quarter in terms of level of fee and revenue, because as you have seen, revenue were across the different line, quite healthy. As well as was healthy and remain healthy, the contribution from insurance. It is material less volatile than others source of revenues, having quite a positive risk weighting and hence profitability, which peaked or reached the level of 26%. Holding function needs also here a few second of comments because they did very well through managing ALM of the group and managing so well the funding and the beta of our deposits that at the end, we've seen a steady progression in holding function results, which more than half the loss of last year. Now, as a... There are reasons why we have been doing such a result or as Mediobanca has been over-delivering. I think the trend in net new money and the fact that Mediobanca is a unique model in private investment banking, made that we have captured money motion events, and we have had, as we continue to grow to hire new people, we continue to grow in terms of net new money. Deposits and beta, we have elaborated on this. Our interest rate sensitivity is already aligned with the regulatory cap for EU banks, so basically 2.5% of CET1. Consumer finance, this is the value play. The reason of this over-performance is linked to the fact that we go after value, not after volume. This is also possible thanks to all the new distribution model we have put in place. If you compare today Compass, which used to be only five years ago, it's much stronger in terms of variety of distribution network at variable cost. Risk management and investment in digital remain a key focus and a key strength. As well as I said in the past calls, CIB is of course, a more volatile and more lumpy activity quarter-on-quarter, but we have been working on enlarging and differentiating the revenue mix with contribution from different activity that only few years ago were not there. France, Mid Corporate, doing a much wider activity in the markets business with customer base, made that we are less reliant from a single source of revenue and more diversified. Insurance, we have already commented. Now, as a closing remark. I think, it's fair to say that Mediobanca has been used, it's been seen in the past as a growth story in low interest rates environment, no? You see on slide 37, our first two and half year of plan, recorded 4% revenue growth, 4% GOP and EPS growth. We have printed roughly 160 basis points of CET1, and we have returned to shareholder basically 20% of the market cap or 20% of CET1. Turning the page and going to the high interest rate environment, we have to say that Mediobanca is even delivering more because revenue are going up 14% with a strong contribution of both NII and fees, and a particularly good GOP risk-adjusted at 18%. Looking forward, what can we say? We can say that we see enduring revenue expansion vis-à-vis last year, thanks to a higher-than-expected NII increase and south fee resilience. Here what we can say, we can say that it's now after six months, we have to review the guidance on revenue, bringing it up to 10% increase year-on-year as opposed to 4%. This is powered by a 20% increase in NII. We guided a few quarters ago on an increase between 9% and 11%, so it has 10%. We have to say that we are more comfortable to be in the region of 20% for NII and in the region of 10% of total revenue. Strong GOP risk-adjusted performance as cost income discipline 45% and low cost of risk or contained cost of risk will make that we will have a sizable improvement also in GOP risk-adjusted. Even in capital, we have good news because we think that we are going to end the year with higher capital ratio compared to December end. This is another good news because it will feed industrial growth. It will contribute to remunerate sound soundly shareholders and, you know, dividend policy, which is confirmed at 70% payout, cash payout. Thank you for your patience and attention. It's now the time for your Q&A session. Ladies and gentlemen, we now begin the question and answer session. As a reminder, if you wish to ask a question, please press star one and one on your telephone. We are now taking the first question. The first question from the line of Azzurra Guelfi from Citi. Please go ahead. Your line is open. Hi. Good afternoon. It seems that your model work, whatever is the macro backdrop and the rate environment, that's great to see. When I think about your NII guidance, can you give us a little bit more color on what is driving this significant increase? Is it the funding mix? Is it better control on the funding cost? Is it the hedging rolling? If you can give us some color on what are the rate assumption that you make in this 20% increase, what could be the impact on next year as well. The second one is more generic on your business plan target, because we're coming to the end of the business plan, you are running ahead on what would be the EPS target. I'm just trying to think about what we could see at the end of the year in terms of like profitability, because revenue are going better, the cost of risk is under control. Maybe are you changing the mix on cost of risk? You will not use the overlay and maybe strengthen balance sheet or accelerate growth ahead of the business plan? I know it's a bit six months earlier than expected, this question, but if you can give us some color, that would be great. Thank you. Thank you, Azzurra Guelfi. The reason of our, I would say, bolder, guidance on NII are driven by a number of factors. There, there's been, faster and, stronger interest rates increase. Our base of deposits has been, measured in the last six months to be very contained. To give you a sense, we have had less than 10% in the last six months, and we forecast this to go in the region of 20% by the end of June and stabilize between 20%-25%, from, for next year. This is the second factor. The third factor has been the repricing of credit. Our credit were mainly at variable interest rates, the speediness at which we have transferred the increase of condition to customer and consumer has been faster than expected. This is for basically the loan book. We have had a repricing of the banking book, because banking book was and is still short duration, so we have maturity, we invest maturity at higher rates, and hence, this has been another supporting factor. Sensitivity overall is not changed. In this number we have also included the higher cost of TLTRO, no. These are the driver, and with this driver, as I said, the visibility we have on June end is that we're gonna be more in the region of 20% increase to the business plan targets. We tend to have a prudent approach in terms of using overlay and provisioning because we think that the impact, the full impact of this situation is not still clear in terms of cost of risk, no? We are, for the time being, seeing a very healthy one, and for this reason, as the profitability of the bank is so high and so good, we don't like the fact that we should use overlay, you know, the vast majority overlay this year. We prefer to set aside and to prepare also for the next three years plan. This is for the overlay. In terms of target, I think in many metrics, we are supposed to over-deliver on the plan. Why? As I said, 10% increase in revenue will bring in the region of EUR 3.2 billion of revenue as opposed to EUR 3 billion. It's true that we have a bit of more cost and cost of risk because we are not using all the overlay, but this will revert in higher gross operating profit. We think in a better, you know, or substantially better EPS. I think for the time being, we see all positive coming. For 2023, 2024, even for 2023, 2024, for the time being, we see a positive trend of NII. Mediobanca will benefit of this interest rate environment and ALM position even in 2023, 2024. Thank you for your question. We are now taking the next question. The next question from Antonio Reale from Bank of America. Please go ahead. Your line is open. Hi, good afternoon, everyone. It's Antonio from Bank of America. I have a couple of questions, please. The first one is a clarification on your last NII comment. Just to understand better, your quarterly NII was affected by a few moving parts, where there was some positive contribution in treasury, some TLTRO headwinds. If I understand correctly, based on the guidance you've provided, you're saying that we can take the quarterly print and basically annualize it and assume that's the run rate. Can I confirm that? That's my first question. My second one is on costs and IT investments. I think you've budgeted IT investments over the plan horizon, which was also inevitably a function of your revenue expectations. I wondered to what extent would higher revenues be willing to increase the size of such investments? Where do you see the biggest returns? How should we think about your cost base from here? My last question is on capital returns. As you're approaching the end of the plan horizon, I'm wondering about your thinking with respect to capital returns. You have one of the largest dividend payouts in Europe at 70% of your earnings. Your story is slightly different, though, versus peers, because you're still pursuing growth across businesses. You're reallocating capital. You have some ambitions with respect to both on M&As, which we've seen. You've stated clearly what you intend to do in wealth management. I wonder how you're thinking about your payout, the 70% and your use of capital going forward. Thank you. Thank you, Antonio. Yes, you are right on the first question. The answer is yes, in the sense that we consider the last quarter of NII as sustainable. This is gonna be the trajectory in the foreseeable quarters. In terms of cost, well, cost, we have to elaborate on this and in cost of IB. Basically, we have in a labor cost, we tend to update labor cost on the quarter's performance. This quarter performance of IB has been particularly good, and hence we have raised the payout, which is linked to scorecards of IB. Of course, this is dependent on fees and/or results of the single quarter. Not every quarter is like this. Basically, you know, this is dependent on performance. for the rest of the cost, not personnel cost, there are always some project that are of twofolds. One is regulatory project where we need, like many banks, all the other banks, to align our system, risk management, and, you know, platform to regulatory request. The second that are more grow the business. We are going to terminate, to end the three years plan with making sure that all the investment that we had forecast, we have forecasted has been put to the P&L by the end of the year because the second part, grow the business across the different business, are important to foster the growth of the next, three years, no. I said, in terms of personnel costs are more aligned and variable to the single quarter results. It's too soon to say how much would be the overall bonus pool, because it will dependent on the next two next quarter's trend. Capital return. I don't think we're gonna change our distribution policy from here to the end of the plan, because the end of the plan is in six months, we stick to the 70%. When we will presenting the new plan, we will, you know, talk about the capital return in the next three years plan. An element, rightly so, you have underlined, is the fact that we are a growth story. Part of the capital, if we had to prioritize part of the capital, even if it's not going to be the vast majority of the free capital, will always be put at work every year into bolt-on transactions. We are still very active in spotting opportunity to grow the fee business pool of the group across the different business lines, in CIB, in consumer, through buy now, pay later, and in also wealth management, no? This will remain a key ingredients. We'll see then regulatory. For the time being, regulatory is not presenting any big toll or any meaningful toll to Mediobanca. When we will present the plan, this will be, you know, we will be, you know, more precise about capital return in the next three years. For sure, we want to maintain a very high and compelling dividend policy, we want to grow with M&A, and we want also to restart possible buybacks, depending on the level of capital and ambition in M&A. Thank you very much. Thank you for your question. We are now taking the next question. The next question from Britta Schmidt from Autonomous. Please go ahead. Your line is open. Hi there. Thanks. I've got three questions, please. Just coming back to the cost side. The cost/income ratio of 42% in the first half still looks much stronger than what you guided for the full year. Are we still supposed to expect you to be in the 45%-46% range for the full year? My second question is on the cost of risk. This is running at around 59 basis points in the first half, which is a little bit higher. Is that also something that you consider an underlying run rate without usage of overlays, or should we expect that CIB costs could recede a little bit? Lastly, could you give us an insight into your funding plan for the next six months or so? Also comment on whether you, intend to replenish, the Tier 2 to replenish the total capital ratio. Thank you. Thank you, Britta. Yes. Prudently cost income is seen at 45% at the end of the year, as we have seen, we have said in the last slide of the presentation. CoR is slightly above our guidance because we have not used the amount of overlays we were planning to use. Basically, we were supposed to use this year at least half of the overlay. At the end, I think we will use a fraction for that. For a matter of prudence and starting a new plan, we thought it would be good to start with a higher, you know, level of overlays, given the fact that the full impact of the existing macro situation is still to be fully understood, no? It's for the time being, it's quite positive. Everything is positive. When everything is positive, it's the moment to set aside. It's not when everything comes to the worst that we need to be prepared. In funding, basically we have done the Tier 2. We have done, it was a great success because we placed within our network. It was for a private banking clients. We have already tapped the market for EUR 300 million, so we are already, you know, at a very compelling interest, at a very compelling yield. We have raised what we needed to raise. The rest of the funding plan is quite easy because we have pre-funded most of that. Thanks a lot. Thank you for your question. We are now taking the next question. The next question from Christian Carrese from Intermonte. Please go ahead. Your line is open. Hi, good afternoon. Thank you for taking my question. The first question is on some talks about the possibility to introduce a ban on inducement. What kind of impact do you expect for the industry and for you? I don't know if you have done any kind of sensitivity on the potential negative from this kind of change of rules. The second question is on capital. In the past you said several times that you were open to reduce the stake in the Generali to make acquisition in wealth management or probably in wealth management. If you can give us an update, given also the update on Danish compromise. Still this is an option, or you will keep it given the high return on allocated capital. Finally, on cost of risk, excellent asset quality. We don't see any kind of deterioration in consumer credit, still well below pre-COVID era. I was wondering if you think that in the new business plan, you can imagine a lower cost of risk for you compared to the previous business plan. Thank you. Thank you, Christian. Sensitivity could be. You know, if this ban is introduced, maybe it's something that is gonna affect not this year plan, but the next one, because if I'm not wrong, the timing of the introduction is such that maybe is in three years time rather than sooner. We have measured that this is can be an impact of 20, 30 basis point. Of course, we will try to and we will work to maintain the ROAC, the ROA, sorry, the return on assets flat because as you know, we have still a room of improving in Premier and in private, because we are, I would say, younger than other players, so we are doing the efforts that other have been doing before us to internalize more margin. There is room to maintain the ROA flat. Capital in Generali. We are quite happy with the stake we have and the insurance exposure. As I said, this insurance exposure is now basically more and more present in many as business mix of commercial and not only commercial banks. We are happy with the stake and we always value alternative to this. We regularly do this. We have to say that recently, there are, as you were saying implicitly in your first question, I shouldn't say clouds on wealth management, but more challenges. Basically, interest rates environment, banning inducement, may produce a different environment where we look at acquisition or we look at extraordinary move, we need to factor them. I have to say that for the time being, I don't think that those factors are still fully priced in. We should look at this in the next for the next evolution. Those two factors are. The first one for sure are there to stay. The second one, let's see, the inducement ban. Both of them can have and will have an impact on profitability and in any case, in PNL mix of wealth manager, while where, as we know, NII is going up, fees are going down or flattish. Of course, the multiple of NII cannot be comparable or the same of the fee one. For the time being, as you know, market is not differentiating much of this. Asset quality CoR. The reason why we want to also preserve the overlays is also the reason that you implicitly mentioned in your question. As we are approaching the new three-year plan, it's better to enter in the two-year plan with some buffer, also to counter possible spike in CET1 that we don't see and to maintain a CET1 at the low level. Thank you. Thank you for your question. We are now taking the next question. The next question from Luigi De Bellis from Equita. Please go ahead. Your line is open. Good afternoon. Thank you to taking my question. The first one is on the CIB. The business delivered a healthy performance in Q2. How do you expect the division to perform in the coming two quarters in terms of revenues? Can you provide us some colors on the pipeline and the trend expected for the different segment? The second one on the wealth management, they reported EUR 2.3 billion on net new money in second quarter despite the macro environment. What do you expect in terms of fee growth for 2023 or the second part of the year? The last one on the consumer, very robust new loans in the quarter, EUR 2 billion. Can you elaborate on the trend and mix expected for the coming quarters? Thank you. First of all, I would like also to better clarify because maybe, I was a bit fast in, you know, replying, the overall cost of risk for the full year. The overall cost of risk is in the region of 59, 60 basis points. You know, basically, you know, as I said, without using much of the overlays or most of the overlays, as opposed to what we have thought during our budget exercise and when we did the call of the first Q. CIB. CIB, I think, we need to take into consideration that CIB pipeline for all the industry has been drying up, in particular in large corporate. I think that we will have some quarters need of two quarters to rebuild the large transaction. This is the positive, this is in particular in Italy, I think for Mid Corporate in Italy and activity outside Italy, we I think we are very well positioned. We will have less fees from transaction the coming two quarters from large corporate that we will be having a good trend in Mid Corporate and outside Italy. In wealth management, I think net new money, but also the market level is a supporting factor because basically, imagine that only up to today we have had roughly EUR 1 billion, a bit less of EUR 1 billion of incremental NAV, because of rebound of the market. Basically, this is a supporting factor. In consumer, we continue to see a very good demand for credit, and as I said, this is fostered by a different distribution network of CheBanca! of Compass, which is enriching every single quarter because, as you know, like in Wealth Management, we continue to expand in terms of network. Now, with Compass Link, which is a very interesting new project of sort of door-to-door selling in consumer finance in buy now, pay later. We do expect that compared to last year, we can have a better third-party production. You know, we were able to substitute third-party production, so basically banks network and postal service network with proprietary production. We think that in 2023, in the quarters to come, we will have a slightly better production also from third parties. Thank you. Thank you for your question. We are now taking the next question. The next question from Marco Nicolai from Jefferies. Please go ahead. Your line is open. Hi. Thanks for taking my question. You mentioned that you were able to reprice better than expected, the lending on the consumer finance side. Do you expect to continue to be able to reprice at the same pace if rates continue to go up from here? I'm just wondering since, you know, rates on this type of lending are higher, is there some kind of cap that, let's say, prevents you to go higher if rates continue to go up? Also, can you give us a target in terms of net new money on the wealth management front? Thank you. Thank you for the question, Marco. I think we continue to reprice, you know. The limit or the cap to reprice are, one is commercial, the second is regulatory. Of course, if all the competitor or all them, even if we don't have in some segment, we have different competitors, will offer much lower, you know, yield or rates, we may have, you know, an issue of new loan production. As of today, we are not seeing this. The second is the level of usury rate, which is going up, of course, because it's link, is very much, I would say, you know, linked to the monthly level of rates. We have done already three increases of price, but we will continue to do this as long as interest rates are going up. In the net new money, you know, an idea of reaching between EUR 5 billion and EUR 6 billion. Of course, this is linked to two kind of different channel. As you know, one is more similar to others, Premier is linked to, on one hand, ability to increase a number of clients and portfolio with the same network, basically. This proved to be very effective. The second one is incremental banker and financial advisor that may join the group. In this, we have to update that we forecast a better intake in the second half. Why? Because a number of discussion and numbers of agreement have been reached before year-end, so we are comfortable about having a higher level of new entrants in the second half. The second part is more linked to M&A, so it's the private part. It's more linked to money motion events, and this can go faster or slower depending on the intensity of M&A. As we said, large M&A is still muted, while the type of M&A which is more fueling this kind of channel is more the midcap M&A, which is the one where also we have taken a bigger market share recently. For this reason, we are confident to reach between EUR 5 billion and EUR 6 billion of total net new money by year-end. It's more AUM. It would be more AUM that administered assets. Thank you. Thank you for your question. There are no further question at the moment. I will hand back the conference over to Dr. Nagel for closing remarks. Are we sure there are no others? We have- Maybe there is one. We have one question now. We are opening the line. The question from Adele Palamà from UBS. Please go ahead. Your line is open. Yes. Hi. Thanks for taking my questions. I have two. One on the capital, if you can tell us if you expect any other regulatory headwinds or the release of the 45 basis points that you had in the first quarter, and if you expect a release, when that is going to happen. The second question is on NII in the quarter. It's just a clarification to understand the various moving parts and especially, I mean, the impact that TLTRO had on in the quarter and also in the previous quarter if possible. Thanks. Thank you, Adele. We don't expect material regulatory headwinds. The only one that we have already flagged is the validation of Compass. You know that Compass is in the process to be validated. We do expect something like 30 basis points to come a certain point. We don't know, but if within this year-end or at the start of next year. As I said, in any case, net of this, so not taking into consideration this, we will be higher than, in terms of CET1 that year-end, huh. Because, we, in terms of, new capital generation and management of the growth in loan volume will be higher. Going to your second question on NII, I try to give you the breakdown of the increase of NII in the quarter. It's 60%, EUR 60 million out of EUR 110 million of NII. EUR 60 million are coming from volume, EUR 50 million are coming from impact of interest rates increase. In the volume, we have the larger part, which is done by consumer. I would say that, half of this 60 is consumer. The rest is spread between the different business. In the rates, EUR 50 million of the rates, it's EUR 15 million in wealth management and EUR 35 million is banking book yield. As we said, the coupon, the net coupon on inflation link, it's barely of the same amount of the cost, major cost, higher cost of TLTRO. Net-net is neutral. Okay, thanks. Thank you for your question. Sorry, sorry. There was. Sorry. Jessica is reminding me that Adele has asked also for the full impact of TLTRO. As I said, in Q2 was EUR 27 million. In the whole, for the whole year, it's EUR 94 million. There are no further question at the moment. I will now hand back to Dr. Nagel for closing remarks. Thank you very much for your attendance and patience. I hope to have you all in May for the next Q results. Thank you very much. Bye-bye. That conclude the conference for today. Thank you.