Good day. Thank you for standing by. Welcome to Mediobanca third quarter 2022 results conference call. At this time, all participant are in listening only mode. After the speaker presentation, there will be a question and answer session. To enter the queue for questions, please press star one one at any time. You will hear an automated message advising that your hand is raised. To withdraw your question, please press star one 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, CEO. Please go ahead, sir. Good afternoon. Thank you for joining the call. Basically commenting the 9-month results, we have to highlight that we have reached all-time high revenue and net profits, and this level clearly puts us ahead of our 3-year plan. Revenues were up 13%, 80% of the target of the budget, of the plan, and profit were in the region of EUR 800 million, at 10% year-on-year. EPS up 12% and the ROTE up from 10% to 13%. Even the last quarter results show a sound profitability trend where revenue were a second best quarter ever at EUR 760. NII continued to grow at EUR 455, which was up 22% year-on-year and 8% on adjusted basis. We have experienced a very nice rebound in recruitment in wealth management. Fee and trading income normalized after a second Q, which was exceptionally high. Hence profit, net profits stood at EUR 235, which is up 25% year-on-year. In this quarter, we managed to have EUR 2.4 billion of net new money and guided liquidity conversion in two assets that are synergetic with Mediobanca. NPL gross was down to 2.4%, coverage up and core down at 40 basis points. We didn't touch overlays because the trend in asset quality was particularly good. Capital ratio were up 30% and they reach 15.4% phasing and 14.4% fully loaded. This is, of course, embedding 70% cash out accrued. Unrealized losses on all to collect portfolio is less than 10 basis points over quarter one. In particular, EPS was up 12%, and we have had also a touch of improvement in return on RWA, which stood at 2.1%. Efficiency was kept very good at 43% as well as core. Overlays remain at 285, and this can be also be used in the next 3 years because we don't plan to use overlays also in the coming quarter. Very comfortable funding position with the guided liquidity conversion. TLTRO reimbursed 6 months in advance and already started the pre-funding of next year, 2023, 2024. Robust liquidity indicator, LCR at 157%, NSFR at 116%, and high counter balance capacity at roughly EUR 16 billion. As I said, last Q, we had quite good revenue in terms of overall numbers, EUR 760. Core down was 40 basis points to 40 basis points. This number of revenue were, you know, generated in particular by three business, in particular, wealth management, pretty strong with the net profit up 23% quarter-on-quarter, and reflecting an improvement in cost income, which was down 3 points. We have had an intense activity in structured product and bonds. We have had also a quite a good trend in consumer finance, backed by healthy loan, new loan trend, EUR 2 billion in Q3. Despite since already more than a year, we started those 6-9 months, sorry. We started a more prudent origination and repricing. Loan book growth trajectory 7% is clearly fostering an NII trend. Core and asset quality confirm very good. We have had a soft quarter in CIB, which is reflecting the IB volume and lending activity position finance that, you know, this quarter also take into consideration volatility of the market was in terms of volume down. Asset quality was confirmed very good and core was down and normalizing. If the quarter was a quarter where, as we know, deposits went to more remunerated in general, this is a system, I mean, outlook. Saving flow were mainly in assets under administration. There's been a credit market volatility spike due to recent banking crisis that then was contained. This is a trend we have been seeing already since some quarters. Primary market activity was hammered in terms of volume, M&A volume was 80% down, ECM volume was 60% down. In this environment, we managed to reach 57 billion of assets under administration and management, and TFA reached 85 billion. With guided wealth management liquidity conversion, basically the outflow we have had in deposits out of EUR 1.4 billion of outflows, we managed to intercept as much as EUR 900 million in Mediobanca bond and certificate and in managed asset. While in April, we have promoted a campaign in premier segment, and only in April, we reached already EUR 1 billion of extra deposits. We maintain a very comfortable funding position. 9 months saw EUR 6 billion of bond issuance, which was a bit of a record, with the wealth management channel very active and high demand also from institutional investors. At the end, clients in bond underwriting were spread between third party wealth management network, so other banks, Mediobanca distribution channel, covered bond and other institutional. We have managed to reimburse the in advanced TLTRO tranche, and basically the cost was managed as well, very, very low in terms of possible difference compared to existing bonds. The bond expiring, we're having a cost of 135. The new bonds, EUR 6 billion, were issued at 145. This comfortable funding position let us continue to finance selectively loans where we see value. In particular, in consumer finance, loans were up 7% because it is the asset class where, in terms of not only volume, but also spreads, the return are more interesting. Tactically, we increase our Govis book because we see more value in Govis now compared to other, you know, lending products. For this reason, we have increased our Govis book by EUR 900 million from EUR 6.2 billion to EUR 7.1 billion. We remain very much low weight in terms of all to collect Govis versus peers, because we have overall only 47% of in percentage of CET1 compared to the rest of the system, which is much more geared on this kind of asset class. This led to a all-time high 9-month results. We experienced a 13% increase year-on-year, which is on the back of another 9% we have had in the previous year. The main growth driver in the past two years has been wealth management with +13%. CIB was overall revenue quite interesting with 14% and 7% in consumer finance. NII trend was up 8% on adjusted basis, because as you may remember, in Q2, we had inflation-linked bond component. Adjusting by this, we have had an 8 increase. Year-on-year, we have had 17%, which is well on track on our 20% target of increase for the year. As I said, the main contributor has been consumer finance, but also wealth management and CIB were having a positive contribution in the quarter. Key in fees, we have had a quarter which is below EUR 200 million. This is on the back of two components that are pretty healthy, which are basically wealth management and also consumer finance that with buy now, pay later is enjoying a new source of commission. While in CIB, as I said, we suffered a volume contraction, which is a volume contraction driven by the post-Ukrainian crisis trend, which is still there. This, together with the rest of the fee pool, we managed to have overall +2% this year and stable revenue in fees at the end of the year, as we guided, thanks to the diversification of the source of fees. Healthy asset quality preserved with the core flat at 53 basis points in 9 months, but this quarter it was down to 40 basis point. Why? Because on one end we didn't have significant new NP coming in. This is across the board, but in particular, what we have to say is that consumer finance is very healthy, to the point that, as you can see on the right part of slide 14, we managed to keep all the overlay untouched. Staging is quite prudent. NPLs and gross NPE 2.4, nothing to note. Basically all good, as well as in each different division with management, consumer, and Corporate & Investment Banking. Capital ratio going up by 30 basis points to 15.4 and 14.4, leaving us with a lot of optionality also for the next 3 years. ESG would like to point out that this quarter we have had two new, I would say add-on. In particular, we have approved a new environmental group ESG policy, where we have set stricter criteria to tackle climate change issue, in particular with counterparties operating coal mining and oil and gas. We set more stringent target for them and also for us to finance this, and for them to engage with us to see their transition during the period. As well as we have approved a new social diversity and inclusion code, which is basically on the back of the initiative today on diversity that we have promoted more than a year ago and is now cascading more and more throughout the organization. Division results, as I said, quite a robust growth and trend in wealth management, where we continue to see, you know, net new money positive trend and management fee positive trend. This reverted into 13% increase, quarter-on-quarter, year-on-year. Also we managed to have a pretty good quarter in terms of profitability with +22% quarter-on-quarter. Basically, as I said, in a macro where, you know, the game was mainly basically assets under administration, we managed to have EUR 2.4 billion of net new money. In particular what is even more interesting for the future is restart a hiring spree or, I would say get the results of a restarted hiring spree, which we can summarize is an important add-on in the quarter, 38 bankers compared to a global number of 55 during the year. I would say this also takes into consideration a very important group which we have hired from competition in key client of private banking of 6 senior private banker. It's also important to note that the effort on having a strong PIB, as we call it, private and investment banking model, is paying off as we see cumulative liquidity events, which is, you know, going up. You see it on page 25. Basically we have had EUR 4.9 billion accumulated in the year, which is already higher in April, already higher than last year. Consumer, we have updated our good numbers of or excellent number of last year. This is on the back of very healthy new loan production, which is a 7% increase in term, which gives a 7% increase in NII. We continue to invest in, you know, updating our digital platform, integrating the company that we have bought in order to have a digital ability to sell consumer loan, which should be, in the future, much higher compared to the past, no? This is leveraging the PagoLight, Soisy and IDPay initiative, where PagoLight, as you know, is a proprietary product of buy now, pay later of Compass, which is already one of the dominant player in the physical distribution, but is going to become a very visible player, thanks to Soisy and IDPay also in e-commerce. As I said, strong asset quality confirmed and either further enhanced because basically we see a very healthy early risk indicator staying on the low end. You see that provision were in the region of EUR 50 million comparable to the previous quarter, but with an higher outstanding. Basically the cost of risk went down a bit, just one basis point, so to 141, which is very much below the pre-COVID level. We managed also to further increase NPL stock to under EUR 60 million. As you know, we continue to sell NPE that are on regularly basis brought to 9%, 10% of book value. The overall, as I said, while the fee in investment banking were subdued for lower volume, the overall revenue of CIB are pretty interesting if you compare year-on-year, take into consideration what has happened in this sector, because year-on-year, still March, we have had +14% with NII +10% and basically trading +70%. This reverted into quite a good trend of profitability. Of course, this year we didn't have write-backs, and this is explaining a bit the difference with the previous year. Basically on like-for-like, this year has been, and is still better than last year. As you see, the volume on page 30 went down in this environment, there are businesses are more affected and business less affected. I would say that trading in terms of capital markets product, mid corporate and DCM are in good trend, while large corporate and ECM are more affected by the recent downturn of volume. Insurance, we have improved the contribution of this division. It was a plus 8% that revert into + 13% in terms of net results. Same improvement in terms of even stronger in holding function. Holding function is improving its results because it's making also managing the ILM of the group. As you know, basically, CheBanca! premier segment is not taking any I would say position, liquidity and you know term position and this is the job of holding function. What you don't see in terms of bigger improvement in CheBanca!, you see it in the holding function, which you know reported a much better result than last year. Funding, we have already basically commented. What I want to say is that basically we have a smooth maturity in terms of TLTRO. You see it on page 35. We have an impact which is spread in the next between December 2023 and September 2024. We have started already with the I would say repayment, and we have started the pre-funding. Also, apart from TLTRO maturity, also the maturity are spread, are not concentrated. As a closing remark, as we said also in the press statement, we have now almost concluded our 3 years plan. We see a very important beat compared to the target of 3 years ago. Those targets were considered quite challenging and difficult to be achieved 3 years ago. In the meantime, we have had COVID, we have had energy crisis and other crisis, but this didn't stop us in delivering more than targeted revenue and GOP, which is supposed to be in the region of EUR 1.5 billion, up 15% year-on-year. This is also take into consideration confirming the fact that we stick to our dividend policy of 70% of cash payout. Last but not least, I would say last, but more importantly, we have our Capital Market Day in a couple of weeks where we can better, we will better detail not only the strategy, but the financial target of the next 3 years. Thank you very much. It's now time for your question observation. 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 one on your telephone. We are now taking the first question. The first question from Antonio Reale from Bank of America. Please go ahead. Hi, good afternoon, everyone. It's Antonio from Bank of America. Have a few questions. I realize some of the key debates we'll have to defer to your strategic plan later in the month. Three questions. First one is on capital. If I look at your capital, it continues to move away from the 12.5% fully loaded target that you originally had, which means that you can more than self-fund at the 70% payout you have. Can you maybe just talk about the outlook for capital going forward, the latest developments that you understand on the Danish Compromise framework? From what I can see, your 14.4% could be 100 basis points higher with the application of the Danish, which obviously would imply quite a bit of excess. I'm sure you'll tell us what you intend to do with that at the CMD, but I'm more interested in sort of how you see the trajectory of capital going forward. The second question is on what you're seeing from competition and from your client base when it comes to deposit pricing and what you expect for the rest of the year, particularly at CheBanca! level and your wealth management platform. Lastly, you've talked about it just related to that to some extent. I see you've been opportunistic with recent events on the hiring of private bankers. I just wonder how you're seeing the developments of fee margins and where do you see the greatest opportunities to grow from here? Thank you. Thank you, Antonio. Capital, what if we can say is that the trajectory of organic capital generation, plus advancement to what, based on what we have understood of discussion of Danish Compromise are all positive. Basically, we will enter in the new 3-year plan with plenty of capital to cover organic growth, bolt-on acquisition, and having a remuneration policy that is going to be, you know, interesting for all shareholders. In terms of capital generation, even the fourth quarter should, you know, bring extra basis points of capital, net of RWA inflation. You know, our reading is that Danish Compromise discussion and text have done a further step ahead. It is likely that this measure can be approved by the end of this solar year. This, as you said, rightly so, leave us with plenty of option. Deposits. Basically, what we see is that deposits are going to move one way or the other. You can have higher deposits, and you have to pay a bit more, or you can stay with lower deposits, not going after, I would say, increase of pricing. Beta will go up, and we think that this year, at the end of June, we will have between 20 and 25. Maybe this number can grow even further during 2023, 2024, but we, to 35, 40, but we then think that, at that moment, beta will stop, and will go gradually down. Why do we go after some deposits? Because, as you know very well, this is basically an element to grow AUM and to convert into AUM, no. What you get now, you will then convert into AUM. We will continue to do this. We will continue as we did in April, where we were very successful in a campaign. This is because basically we want to grow our deposits as a strategic target, more importantly, this is linked to the third question of hiring bankers, where I think this is a very positive moment for us. Why? First of all, when you have this situation of weakness in the market, volatility, banking solidity discuss and challenge, we have a flight to quality phenomenon, which we, you know, benefit. The hiring of this key client team of Credit Suisse in Italy is one important example because basically, they have been having a lot of offer, but then they decided to join us because the PIB model we have is a bit of a kind in Italy, no? We will continue to hire banker, and we think not anticipating what we want to do in two weeks' time, the new plan will make the hiring even more, I would say, even easier, and more qualitative. Very clear. Thank you. Thank you for your question. We are now taking the next question. The next question from Azzurra Guelfi from Citi. Please go ahead. Hi, good afternoon. A couple of questions for me. I'll focus on the lending, in particular on the consumer credit, and then the development of the fees in CIB in particular, and the profitability in CIB. When we look at lending, the new production in consumer credit continued to remain very, very strong and continues to look price positively. One instead on the lending side, on the CIB, things seems to slow down. Can you give us some color on the development of the two spaces and what do you see on the ground in terms of like margin and customer demand and appetite for that? Do you think the corporate space could start to recover at some point, and what could be the driver for that? Because you have lots of capital that could be redeployed for additional growth in addition for capital return. The other point is on the CIB and the fees in general, the guidance for fees, it's a bit below what consensus was expecting, probably because of the environment as you describe it, but you seems to suggest that also the fourth quarter could see a slowdown. Is it that because the pipeline is drying up in the short term, and then you expect it to pick up? If you can give us some color. I know you would not comment on the overall plan, but in the medium, in the short term. Thank you. Thank you, Azzurra. In lending, with higher interest rates, I think more and more banks will have to make a choice. Why? Because as you know, going high in, with high interest rates is more difficult with good quality counterparties to have the right spread, which are the spread that if you see your bond, if you see your cost of funding, you should have in order to generate economic value, you know. Of course if you want just to do lending to have RWA inflation and the contribution of NII is positive, you have to see down the line the return on allocated capital. In this environment, I think, everybody needs to be a bit more selective and, this is a bit also our conviction, and, we continue to see good consumer demand at good margin. Even if Compass, as you know, the best of, the best of the journey of Compass will come when interest rates will pause, and will start to go down. Basically, we continue to fund Compass at updated cost of funding, and hence Compass has basically six to nine months delay from higher cost of funding to better condition applied to customer, you know. Notwithstanding this, margins and profitability in consumer and demand is still very healthy. While in corporate is the opposite. Why is it the opposite? Because of what I said. Basically, there is oversupply and with high interest rates is more difficult on good quality counterparty to pass the spread. For this reason, there is also, as we said, a lack of acquisition finance. We think that the situation in CIB is going to last some quarters still, because it takes time to convert discussion into pipeline and from pipeline to print transaction. The situation today in large corporate in M&A is better than three, six months ago in terms of engagement with client. In order to convert this into real deal, it takes some quarters. For this reason, we wanted to give this kind of guidance because, while we see fees in the other 2 business improving and driving growth even in next year for the overall fee pool, we can't say the same at least for 2, 3 quarters in CIB. And I think also lending needs to be, you know, fine-tuned in order to have real return on allocated capital. Thank you for your question. We are now taking the next question. The next question from Britta Schmidt from Autonomous Research. Please go ahead. Yeah. Hi there. Thanks for taking my question. One of them is on the cost of risk in consumer, which continues to trend very low. At what point do you think they'll, reach more normalized levels? The other question will be on your appetite for more bond investment. Maybe you can comment a bit on the banking book expansion. Lastly, what have you heard on a potential bank tax in Italy? Thank you. Core, good afternoon, Britta. Core, we continue to be a bit surprised in terms of very low level. Even the recent data are showing that we don't have any sign of different trajectory. For this reason, as we said in the last call, we plan to set aside all the overlay and to use them during the next 3 years, you know. You will see in 2 weeks' time it's still difficult to see how it can, it can evolve in 3 years' time. We think that it can go back to 200 during the course of the 3 years plan, as we said, we have plenty of basically managerial action and accounting reserve to cope for that. For the time being, I stick on the fact that we see this 140, 142, 145. I don't know where they are. Maybe one bit more, one bit less, but this is the foreseeable future. What I see in the next basically few quarters. Bond. Yes, we may. As I said, we can tactically substitute less lending with more bonds. Why? First of all, because bonds, in particular in corporate, but not only in corporate, they reflect a spread which is different from the lending. We are today a bit cautious. Why? Because at the end, if you leave funds with ECB, you get 3%. Basically, unless you want to increase the maturity, the duration of your portfolio, and we normally we are not at ease in taking a mismatch between asset and liability. For the time being, we are okay with the today portfolio bond, and we will move into more, I would say, in a bigger amount, in the coming, maybe in the coming weeks or quarters when interest rate trend is going to be more clear. As we all know, this, the market is say something, ECB wants to something. At the end, the trajectory, if particularly we have an internal model where we think that interest rates will stay a bit higher for a longer period of time, we want to take a definitive position on bond portfolio in the coming weeks. Tax, for banks, it's basically, you know, something where we have been hearing. We have been not involved in any discussion. I think, and I repeat what I said in the press conference, it would be fair to consider that banks in Italy didn't impose negative interest rates to customer base, this is not common with what happened in north of Europe. Banks suffered for many years. I think banks staying in good shape, in healthy shape is important because today there is a bit of a credit crunch going on, so banks need to continue to finance the economy. Second, you know, also, today, Italian banks are among the most important buyer of T-bond. Basically, hammering bank or putting bank in difficulties, as we've seen elsewhere, is not going to be a good, a good, I would say, measure. Thank you very much. Thank you for your question. We are now taking the next question. The next question from Christian Carrese from Intermonte. Please go ahead. Thank you for the presentation. The first question is on net interest income. If I understood correctly, you expect the peak of net interest income, maybe not in the short term because due to the consumer credit. I don't know if you can elaborate on that, so the moving parts for net interest income. The second question is on a more generic question on capital. You have currently more than 700 basis points versus REP. I was wondering, look at new business plan, your new or let's say, new business model, more exposed towards management business, do you think that the threshold of the common equity tier one should still be 12.5, or you need a higher capital? Finally, on the corporate governance, you changed several things in the bylaw. Do you see any room to further improve the governance? Thank you. NII. If we see, as you know, Christian, you know very well Mediobanca, you see the component of NII. The main component of NII is consumer, now 70% of the NII. We have an increasing component, which is sort of holding function bond portfolio because interest rates went up a lot. We see NII continue to grow in the, even in 2024. And I think the best will come when Compass can enjoy this kind of stable rate or declining rate. We are a bit of the opposite of the market, where today commercial bank, they harvest the best of increase in interest rates as long as beta staying low. We're a bit of the opposite. We have a chunk of increase in NII, which is coming from the same, I would say, effect plus the bond portfolio. I think the nicest part is an increase of NII when interest rates, they're going to go down. Capital, you will see. I mean, in two weeks time, we will detail our capital policy. In terms of governance, of course, governance can be always improved, you know. We continue to engage with investor to all kind of shareholder to understand what we can do to improve. We have changed our bylaw. We want to have a new board, which is seen and judged in a better way from all our shareholder in terms of diversity, in terms of competence, in terms of independence. I think the board will work alongside all shareholder to have a very good outcome for the next general meeting. Thank you. Thank you for your question. We are now taking the next question. The next question from Giovanni Razzoli from Deutsche Bank. Please go ahead. Good afternoon to everybody. I have a question on an AI, both in the Q4, with the trend in the last quarter and the outlook for next year. If you can elaborate a bit on the third quarter trend for consumer and CIB, because it's in consumer, decreasing slightly, quarter-on-quarter in terms of NII. You mentioned that there is, you know, a mismatch between the repricing of the book. I was wondering whether there is also there an element relating to, you know, different mix or in the quarter or also, you know, some effect, calendar effect. The opposite in CIB, which instead recorded a quarter-on-quarter expansion in NII. If you can also share with us what's the outlook for the margins there. During the call you mentioned that it's difficult to reprice on good customers there. So, I was wondering if you can give us a little bit more flavor for the Q3. For 2024, you said that you expect the NII to grow also next year, assuming the prevailing rates expectations and specifically for the consumer business, is it fair to assume a flattish trend so that the NII contribution of, you know, the consumer is lagging behind the group? That's my question on NII. The second question is on the LCR, which has gone down Q on Q because of the TLTRO repayment, if I'm not mistaken. I was wondering whether you can share with us what's the LCR level that you expect to have after the full TLTRO repayment. Thank you. On NII, basically, we plan to have next quarter another current quarter, a very good one, because even this quarter we will have not only the, I would say, the ordinary trend, but we will have another inflation link component. This is going to have a good impact. Now let's see the component, no? The component on Compass, as I said, Compass is making, you know, trend in NII, which is a mix of additional loan books, so basically more loan outstanding on a cost of funding charged by holding function, which is, I shouldn't say punitive, but it's basically take into consideration the higher cost of funding. Basically, they are contributing, they are supplementing or, you know, outpacing the higher cost of funding with an higher outstanding. In the moment where this cost of funding will stabilize or even interest rates will go down, you immediately will harvest the benefit of being a consumer finance company. NII in. Basically, this is something. The second point, which is quite positive in NII, is wealth management NII, which you didn't mention, but NII this year and also next year will be a very positive contribution. In CIB, it's basically better marginality there to stay, but as we said, in new loan volume, we are cautious because we don't want to embark today for a 3 years time a very low spread, which is something that sometimes we find into the market, no? All together, this where does it bring? For 2024, we see an increase of NII. Not a stable NII. We see an increase of NII, no? That we will elaborate more on in 2 weeks time, but we continue to see an increase in NII. In the LCR is not impacted by the TLTRO reimbursement, as we didn't do any carry trade on BTP. We plan to have on average an LCR in average means in the next 12 month average of 155%. Thank you. Thank you for your question. We are now taking the next question. The next question is from Marco Nicolai from Jefferies. Please go ahead. Hi, good afternoon. I've seen that this quarter your capital was positively impacted by risk-weighted assets reduction. Is there something going on or it's just simply linked to the little bit lower loan book? Is there something you can do in the future to improve your risk-weighted asset density? Thank you. Marco, thank you for your question. I think that there is nothing to say specifically on the quarter. As I said, we didn't, we did find more interesting opportunity in the bond world rather than in some corporate lending, low spread, ROAC, single transaction. To give you the sense, most of the transaction that you can do today, they have basically 7%, 5%, 6%, 7% ROAC, no? So something that you don't like to carry on for the next three years. As far as RWA, I know that you will be attending our Capital Market Day, so I'm very happy to explain this in two weeks time. Thank you very much. Thanks a lot. Bye. Thank you for your question. There are no further question at the moment. I will hand back to Mr. Nagel for closing remarks. Thank you very much for your passionate presence and very good question, and we hope to have you all in two weeks time. Thank you. That concludes the conference for today. Thank you.