Good morning, ladies and gentlemen. Before I hand over to Magda Palczynska, Head of Investor Relations, a reminder that today's conference call is being recorded. Madam, you may begin. Good morning, and welcome to UniCredit's Third Quarter 2021 Results Conference Call. Andrea Orcel, our CEO, will lead the call, then Stefano Porro, our CFO, will take you through the financials in more detail. Following Andrea's closing remarks, there will be a Q&A session. Please limit yourself to two questions. With that, I will hand over to Andrea. Thank you, Magda. Good morning to everyone. Since the start of my tenure, my ambition for UniCredit has been clear: to deliver risk-adjusted profitable growth with the overriding aim of achieving sustainable returns above the cost of equity and across the cycle. One of the ways we will achieve this is through a simpler and more empowered organization, one fully accountable for demonstrating clear discipline on costs, as well as renewed focus on net revenue growth, meaning revenues minus loan loss provisions and capital efficiency. On all, we are making good progress and delivering tangible results, and we will provide more detail at our upcoming Strategy Day. At the same time, we're building a strong and cohesive team, able to execute on our strategic levers, laying the foundation that will shape our future. Now, before getting to our financial results, I want to comment about the recent developments with Banca Monte dei Paschi di Siena. We have announced that after a period of due diligence and negotiations with Italian Ministry of Economy and Finance, Banca Monte dei Paschi di Siena will not be a part of our future strategy. The discussions have been long and detailed, but despite the efforts of both sides, we could not reach an agreement that met all of the parameters set out in the agreed memorandum of understanding. As a result, negotiations have been terminated, and we continue our focus on unlocking the significant value within UniCredit. I have been clear about the role that M&A can play in the bank's new strategy. It is not the purpose in itself. Rather, it can be an accelerator and a potential improver of our strategic outcome at the right conditions that are value accretive and where we have full confidence in our ability to execute. That will remain our guiding approach. I have also been clear that the most value that we can create is organically, and that has been, and remains, our unwavering focus. These results prove this, indicating once again the inherent value of our franchise, albeit this quarter, they were supported by particularly positive economic and market conditions. Performance was excellent, with strong commercial revenues, continued cost discipline, and better asset quality. Underlying net profits reached EUR 1.1 billion in the quarter and EUR 3.1 billion for the first nine months of the year. This is equivalent to an underlying return on tangible equity of 7.9%. Our balance sheet remains very strong. We ended the quarter with a CET1 ratio of 15.5%, absorbing regulatory headwinds and deducting our second share buyback of EUR 652 million. The latter has been approved by both shareholders and the supervisor and is expected to commence in the fourth quarter. UniCredit has a strong capital position, and one of my priorities is to return attractive levels of capital to shareholders while maintaining appropriate buffers in line with supervisory expectations. I will discuss this further and in detail at the upcoming Strategy Day. Let's turn to slide four. My priority since I joined the bank has been to drive the performance of the business, instilling a renewed focus on cost, revenue growth within our disciplined risk appetite, and capital efficiency for the benefit of our shareholders, whilst in parallel, develop a new strategy for UniCredit based upon three strategic levers, namely simplification, client centricity, and digitalization. This will help us unlock the significant value inherent in the existing UniCredit business by building a simple and integrated organization with clients at the center, powered by digital and data. Simplification involves reducing complexity, eliminating self-serving bureaucracy, and empowering colleagues while retaining clear lines of control and oversight. In July, we announced the first wave of the simplification program by creating a new organizational structure and management team. This included a number of actions that we took within our Italian legal entity, but we have now replicated group-wide, improving the efficiency and effectiveness of the organization, improving decision-making, and speeding up execution. Important not only in itself, but with respect to the message and energy it releases within our organization. At the heart of everything we do are our 60 million clients. In order to serve them in an enhanced, more consistent manner, we are harmonizing client segments across all main geographies. We're also reviewing our global product and service catalog to ensure a scalable offering. On the digital front, we have appointed a leadership team who will foster a true partnership across region and business segments. They have commenced their work towards our digital future with a sense of urgency. Their goal is to embed technology and data into the fabric of the business, making it central to every decision and strategic choice. These decisive actions are not only positively impacting our current performance, but are also laying the foundation for our future, all of which I will speak more at our Strategy Day. Let's turn to slide five. Our bank has many strengths. Our unique geographic footprint, the distribution power of our commercial network, the strengths of our balance sheet, and last but not least, our exceptional talent. Our network spans 13 core markets with top three rankings in Italy, Germany, Central Europe, and Eastern Europe. Our knowledge and understanding at the local level of each one of these diverse markets means we can leverage their unique strengths in building a truly pan-European franchise. We have aligned our financial segment reporting with our four main geographies. Each of our geographies is doing well on its own, and is fully on track to deliver returns on its own in excess of their respective cost of equity capital. As you can see on the slide, all four have strongly contributed to the underlying net profit in the first nine months. The returns on current allocated capital, which are calculated based on our current capital targets, are solid. Germany's return on allocated capital is close to 9%, and all the other regions are generating double-digit returns. The group's return on allocated capital, which includes corporate center cost, is above 10%. The group's underlying return on tangible equity for the first nine months of the year is 7.9%, reflecting our high level of capitalization. I would also like to highlight the sustained growth thus far in 2021, and the resulting increase in the group's gross operating profit of 11.5% in the first nine months of the year. Let's turn to slide six. Finally, let me comment on some highlights of our nine-month result. The economic recovery as our region continued to reopen and recover from the pandemic has been supportive for us and for European banks in general. Eurozone GDP is likely to expand by 5% in 2021 and return to its pre-pandemic level by year-end. Italian GDP growth this year of about 6% is a major tailwind for 2021. At the same time, however, we continue to navigate a low rate environment with excess liquidity in the market. With that as a backdrop, the bank delivered a strong performance year-to-date, with signs of recovery throughout our franchise and less pronounced third quarter seasonality than usual. Revenues in the first nine months of the year are up 4.8%. Fees are up 12.3% in the same period, thanks to investment fees. The bank's strong cost discipline remained evident in the first nine months of the year, with total costs stable year-to-date, despite the impact of inflation and investments. The cost-income ratio improved by 2.7 points to 54.2% in the first nine months of the year, demonstrating the inherent discipline and positive operating leverage within the business. Our underlying cost of risk reached 18 basis points for the first nine months of the year and continues to benefit from our acquired risk discipline and better asset quality. The strength of the balance sheet can also be seen in our extremely healthy capital position. Our internal capital generation allows us to absorb a significant part of the expected regulatory headwinds for the year. Capturing greater capital efficiencies will form a central part of our new strategic plan. Combined solid commercial performance, cost discipline, improving asset quality, and our strong balance sheet underpinned a solid profitability. I will now hand over to Stefano, who will take you through the third quarter 2021 results in more detail. Stefano, the floor is yours. Thank you, Andrea, and good morning, everyone. Let's turn to slide eight. As Andrea mentioned before, in line with new organizational setup, we have changed our primary segment reporting. As regards the reconciliation from old to new segment reporting, these changes mainly impact the CIB division and some parts of the group corporate center, both of which are now reallocated to the respective geographies in Western Europe. Austria will now be included in Central Europe, whereas Russia will be included in Eastern Europe. Needless to say, this only affects the segment reporting, but not the group totals. As a reminder, we also publish a divisional database request on our website to make results from prior quarters available on a like for like basis. In Q3 2021, we deliver a sound underlying profit of EUR 1.1 billion, up 0.5% quarter-on-quarter. This is a remarkable result for a quarter that is usually seasonally weak. Revenues reach EUR 4.4 billion in Q3 2021, up 1.9% year-on-year, reflecting strong commercial revenues up 4% year-on-year. The group's strong cost discipline and continued focus on cost-to-income efficiency resulted in Q3 2021 cost equal to EUR 2.4 billion, almost flat nine months on nine months. Our stated cost of risk reached 27 basis points in Q3 2021, reflecting better asset quality dynamics. The CET1 ratio was flat quarter-on-quarter at 15.5%, implying an MDA buffer of 647 basis points. This already factors in our second share buyback of EUR 652 million. The key financial events of Q3 2021 include the following. We have received supervisory approval for the second share buyback program 2021 for EUR 652 million. Execution is expected to commence in the fourth quarter 2021. UniCredit cancelled in aggregate around 17 million shares repurchased in first half 2021 as part of the first buyback program. This was neutral on our capital ratio as these shares were already deducted. UniCredit Bank AG in Germany issued its inaugural green mortgage cover bond for EUR 500 million under the recently established group-wide sustainability bond framework with a very attractive book. UniCredit Ireland will be merged into UniCredit S.p.A. as part of our strategy to simplify operations. Let's now look at the profit and loss in more detail, starting with the group net interest income on slide 9. Net interest income was up 3.1% quarter-on-quarter. This was mainly supported by a non-recurring item in Germany and the extra day in the quarter. The contribution from commercial dynamics is stable quarter-over-quarter. Once again, this quarter, like prior ones, was characterized by massive excess liquidity in the system. Market rates, however, were almost stable and did not impact the quarter much. Let me make a few brief comments on the key drivers. Demand for credit is showing signs of recovery. As far as lending volumes are concerned, we have seen a continued positive origination dynamic for individuals, especially in Italy, where our front book market share in the residential mortgages and consumer lending are normalizing towards our natural market share. On the overall loan book, but especially in Italy and Germany, dynamics remain impacted by client repayments and prepayments, which are offsetting a better gross new production. Customer loan rates in the quarter remain fairly stable at group level. Front book pricing continues to be typically below the back book on a like-for-like basis, especially in Italy and Eastern Europe. This is expected to last until the system-wide excess liquidity is drained, with possible headwinds for the net interest income until then. The economic upswing will drive, with some delay, a recovery in the demand for credit, a progressive reduction of the excess liquidity in client accounts as deposits get spent or invested, as well as an improvement in our lending mix. Let's turn to slide 10. Fees deliver another very strong performance well above pre-COVID levels. Despite the third quarter usually being seasonally weak, fees in third quarter 2021 were only 1.4% below the level of the prior quarter, which remember, was our highest quarterly fee income in over five years. Year-on-year, there was a pronounced increase of 12.5%, also reflecting the material impact of the pandemic and lockdowns a year ago. Let's look at the component parts of the fees more in detail. Investment fees generated another exceptional performance and were up 20% year-on-year. This was driven by higher asset under management upfront fees, thanks to the robust sales activity across the network and higher management fees. As average asset under management volumes were up 12.3% year-on-year, mainly in Italy and Germany. Financing fees were up 10% year-on-year, thanks to a strong capital markets activity and higher credit protection insurance sales, which benefited from the recovery in the new residential mortgages production and consumer finance in Italy. Transactional fees were up 6.7% year-on-year and 8.2% up on the quarter, thanks to a recovery in cards and payment services in Italy and Eastern Europe, as these GDP-sensitive subcategories responded to a pickup in economic activity. In terms of outlook, let me make some general remarks. For investment fees, we expect an ongoing positive contribution from management fees. While the upfront component is expected to normalize over time from the recent exceptional high levels. Financing fees will be correlated to the demand for credit. The recovery in transaction fees continues as restrictions ease, in particular in Western Europe. Let's turn to slide 11. Trading income in Q3 2021 was EUR 354 million, with no impact from XVA. This is in line with our run rate guidance of around EUR 350 million on average per quarter, excluding XVA. Trading income in nine months 2021 was strong, reaching EUR 1.4 billion, over 40% up versus the level of nine months 2020, mainly thanks to a recurring client activity, also coupled with a positive contribution from XVA. Client-driven trading was excellent, contributing EUR 1 billion in nine months 2021, up 26.6% nine months on nine months, excluding the volatile XVA component. This strong performance were primarily supported by fixed income and currencies. The higher contribution from dividends in third quarter 2021 was thanks to our financial investment in Yapı Kredi, as well as other equity investments. Let's turn to slide 12. Our continued focus on cost efficiency and strong cost discipline led to nine months 2021 costs of EUR 7.3 billion, down 0.2% nine months on nine months. This resulted in significant operating leverage with a cost-income ratio of 54.2%, an improvement of 2.7 percentage points versus nine months 2020. HR costs were 0.5% lower nine months on nine months, mainly thanks to a decrease in full-time equivalence in Italy. Non-HR costs were almost flat nine months on nine months, with lower credit recovery expenses, real estate costs and consulting, partially offsetting higher IT expenses and the depreciation connected to investment to foster digitalization. Q3 2021 total cost amounted to EUR 2.4 billion, 0.5% lower than the previous quarter, thanks to savings in non-HR costs, mainly consulting. Please remember that we expect higher costs in fourth quarter 2021 due to seasonality. For full year 2021, we confirm our guidance of costs in line with full year 2019 at EUR 9.9 billion. Let's turn to slide 13. Before looking at the quarter and our revised cost of risk guidance, let me once again remind you of our approach to provisioning that we introduced during 2020, given the pandemic. We did not change our provisioning approach in general, but rather the aim is to proactively capture the future cost of default in the loan portfolio and properly reflect the forward-looking economic impact of COVID-19. Loss provisions therefore include overlays as well as specific provisions and regulatory headwinds. As a result, you should always look at the cost of risk for full year 2020 and 2021 together, just as you should for the underlying macroeconomic assumptions. Our stated cost of risk reached 27 basis points in third quarter 2021, reflecting a better portfolio performance, including writebacks and limited impact from regulatory headwinds of 7 basis points. This was mostly driven by overlay provisions for client who opted in to the moratorium extension in Italy, reflecting our proactive provisioning approach. Our underlying cost of risk was 20 basis points in third quarter 2021, and 18 basis points in nine months 2021. As mentioned before, we are experiencing economic tailwinds at the moment and better asset quality dynamics. Therefore, we now expect a stated cost of risk in full year 2021 below 40 basis points, equivalent to stated loan loss provisions below EUR 1.6 billion. Underlying cost of risk in FY 2021 is expected to be around 30 basis points. Let's turn to slide 14. In Q3 2021, both gross NPEs and the gross NPE ratio decreased to EUR 24.7 billion and 4.5% respectively, mainly thanks to the continued rundown of the non-core. Based on the EBA definition, the gross NPE ratio for the group excluding the non-core is 2.7% and compares well with peers. The coverage ratio decreased half a percentage point to 57.1% in Q3 2021, mainly due to a mix effect. Higher provisioned bad loans have been reduced thanks to the non-core rundown and the relative weight of lower provisioned unlikely to pay loans has increased. Our underlying asset quality remains sound. Let's turn to slide 15. We maintain our fully loaded CET1 ratio at 15.5%, equivalent to MDA buffer of 647 basis point, absorbing 19 basis point regulatory headwinds and after deducting our second share buyback of EUR 652 million. This has recently been approved by the supervisor and is expected to commence in the fourth quarter. The total capital distribution in 2021 will be EUR 1.1 billion, equivalent to a yield of around 4.3%. Our ordinary capital distribution is 50% of full year 2021 underlying net profit, comprising cash dividends and share buybacks. We are currently accruing for the cash dividend at a rate of 30%. On this slide, we also show the quarter 2021 CET1 ratio of 15.31% pro forma for the remaining 20% of the ordinary capital distribution that is related to share buybacks. Regulatory headwinds, which we successfully partially mitigated in the first nine months, were 0.6 percentage points, and we expect them to be below 1.2 percentage points for full year 2021 overall. Our MDA buffer in full year 2021 is expecting to remain well above 400 basis points. I will now hand back to Andrea. Thank you, Stefano. Let's turn to slide 17. Let me start by highlighting our recent ESG announcements. In line with our commitment to a climate positive future, we're proud to have signed up to the Net-Zero Banking Alliance, and are pledging to align ourselves as well as our lending and investment portfolios with net-zero emissions by 2050. At the Women's Forum G20 Italy in October, we also made an important pledge to gender equality and diversity, equity and inclusion. In the transition Towards the Zero Gender Gap, we have made the commitment to define and communicate our aspirational gender diversity targets for 2030, and to track our progress every year. Year to date, our results are strong, both because of the performance of our franchise and the exceptional economic tailwinds, although these are expected to moderate. We're optimistic about the future and are equally mindful of the headwinds affecting our industry. We're shaped by notable low rate environment, excess liquidity, and the continuing management and monitoring of COVID. However, given where we stand today and that we are seeing a good start to the fourth quarter, it gives us confidence to improve our full year 2021 revenue guidance to around EUR 17.5 billion. Full year 2021 costs are expected to be in line with full year 2019 levels at EUR 9.9 billion, consistent with our previous guidance. Our full year 2021 underlying cost of risk guidance is now expected to be around 30 basis points, reflecting our recent asset quality experience. We have already reached EUR 3.1 billion of underlying net profit in the first nine months of the year, and are increasing our guidance for full year 2021 to above EUR 3.7 billion. This is a performance that we're definitely proud of. This is a testament to the commitment and drive inherent in the business and our people. Looking out beyond, we will be hosting our virtual Strategy Day on December 9th 2021. I hope that you will participate to hear about the next phase of UniCredit's journey and how we will unlock the significant inherent value of our franchise. I am really looking forward to sharing this with you. Details will be provided ahead of the event. Moderator, could you please open the line for questions. Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the telephone pad to remove yourself from the question press star and two. The first question is from Antonio Reale with Morgan Stanley. Please go ahead. Everyone, thanks for taking the question. I've got three questions, please. The first one on capital, second on M&A, and lastly on revenues. On capital, if I take the EUR 3.7 billion underlying net profit and plus that you guide for this year, that's 7% RoTE and above already. Now, the market doesn't believe you'll make that level of RoTE, not even by the end of 2023. You've had high upfront fees and low loan loss provisions, but just by normalizing the excess capital you've had, you can significantly improve your RoTE going forward. Can you remind us just on that point, how you're thinking about that excess capital and its deployment between cash dividends, buybacks and M&A? The second question on M&A, you know, I think we've seen, and it was good to see that you did stand for the conditions you've stated in the past negotiations with the government. It wasn't for granted. You then restated and repeated your comments on M&A, that it's not a purpose in itself, but you see it as an accelerator of the strategic outcome. Now, despite the good numbers, there are some structural elements, I'm looking at NII in Italy, for instance, that still remain weak. My question for you is, what do you see as most needed to improve the strategic outcome? Is it the network in Italy? The Monte dei Paschi deal was going to address the north-south skew. Is it in product factories? Is it with positioning the bank outside of Italy? Any color you can share on top of what you've said would be very welcome. Lastly on revenues, your guidance for the year of circa EUR 17.5 billion for 2021 implies quite a sharp reduction in Q4 compared to your run rate in the nine months. Is this still to be taken as EUR 17.5 billion ± EUR 200 million? Or what are the key drivers for core revenues from here? Thank you. Thank you. First of all, capital. How do we think about capital? At the moment, I can maybe give you our current capital position, which will obviously be refined and updated at the Strategy Day. Our capital distribution policy is at 50% ordinary payout based on underlying net profit through a combination of cash dividend, maximum 30%, and share buyback, minimum 20%. Obviously, we need to comply with ECB payout recommendation, et cetera, et cetera. In general, that's how we look at it. At Investor Day, we will update you on our new view on all of that. On M&A, you... We always discuss about M&A. Where do I see the greatest potential? I continue to see the greatest potential in our own franchise. UniCredit has a natural market share that is, in most markets, in excess of where we are today, given that we come from a period of restructuring and tightening. The first thing to do is to make ourselves more on the front foot, to re-empower our franchise while maintaining the acquired cost discipline and try to rev up the organization. We think we have substantial upside by doing that. Now, more specifically on NII and on the M&A strategy in general. I will spend a lot more time on NII at the Strategy Day, but I would encourage you to think about. We're not focused on NII. We're focused on maximizing returns. As an example, I may increase my loan volume, I may increase my NII, but I may reduce my return on equity if the capital absorbed by that NII is not rewarded appropriately. If you have a view to maximize return on equity, you may grow your NII less or make less loans if those loans do not fit the returns metric that you have. Is NII important? Absolutely. Are we focused on it? Absolutely. We're focusing on NII net of non-loan provisions, net of capital absorbed at a certain cost of equity. You asked about whether we are happy or not happy with our position in Italy and in other markets and in product factors. What I would answer with that is what I answered before. UniCredit has an 11% market share in Italy. We have scale. UniCredit is demonstrating that we can, that we are profitable in Italy, and we can grow profitably in Italy. Are we under pressure or do we need M&A to generate more value for you investors? We do not. Is there M&A, but at the right conditions can both strengthen our franchise among which we balance it and create even more value for investors, that's why I call it an accelerator, yes, there is. If the terms and conditions are the right ones. Otherwise, it would destroy value, and we will not do that. Revenues. You talked about the new guidance of EUR 17.5 billion implies a sharp reduction in Q4. Look, I would say we said around EUR 17.5 billion and around mid-term. I would leave it at that. I would just add that the dynamics that you're seeing on the revenue side are results of, A, the revival of the franchise and more focus on the segments and the businesses we want to drive, fee income, for example. At the same time, some tailwinds from the economic situation in Italy and in our other economies, and a number of other, let's say, extreme factors that we are expecting to moderate in the near term. Is the near term Q4? We don't know. Is the near term to throughout 2022? Potentially so. Which is why we're cautious. We prefer to be cautious than to put numbers that we then have to retract. I hope that answers your questions. Okay, thank you. The next question is from Jean-François Neuez with Goldman Sachs. Please go ahead. Hi, good morning. I wanted to ask first and foremost, when I look at UniCredit for the next few years, should I look at UniCredit as a bank which is simply priming itself for growth? Now that the cost-income ratio has reached a very good level of 55%, the capital is high, NPEs are low, and you're starting to regain market share. Or do you think that at the same time as you're trying to achieve this, there is still, to an extent, a phase of restructuring maybe above and beyond what your major European competitors are doing in your respective key markets? The reason why I'm asking this is essentially just trying to understand whether you think that there is potential for some level of distraction as you resume growth and/or essentially items that may hamper the tangible book value growth that could be implied by the returns you're posting today because of, you know, essentially non-recurring items and these type of things. The second question that I had was very simply on net interest income. Even if you took the one-off away, the level that is implied annualized as of this third quarter is consistent with what consensus has next year. I just wanted to understand whether that makes you comfortable with the level of expectations that people like myself have for your net interest income going forward. Thanks a lot. Thank you, Jean-François. Okay, restructuring or no restructuring. I would say. Let me tell you what I think. I think that we have left a period of deep restructuring. I think that we are transitioning to a period of profitable growth. That's point number one. Point number two, profitable growth does not mean stepping on the accelerator, and that's all it is. Although there is an element of that, which is why we're re-empowering the first line within strict risk and control guidance framework. I believe there is further value to be created in store for shareholders in terms of our efficiency and in terms of supporting the first line in our entire business with a better and more supportive technology. While we are setting up the foundation for growth, the four regions, the re-empowering of the first line, the simplification of the organization, the elimination of layers, the front loading of some cost reductions, et cetera, et cetera, to make sure that at least all of our front line is clear on the objectives and is empowered to achieve them within risk metrics that are clear and understood. At the same time, I think that there is hard work to be made on continuing to improve our efficiency and on improving our digital and data footprint. Do I think that will diverge the focus of the organization? No. Do I think that would require, in certain places, significant additional investment? Yes. Am I attempting to self-finance most of that additional investment, hence efficiency improvement? Also true. More than that, I'll have an investor day. NII, if you took one off away, the level is consistent, et cetera. What do I think about NII? As I said, you know, if you want more detail, I'm sure Stefano can dig in more. Consider, rates remain low. Pricing is extremely competitive, especially in the CEE. We are not bending our risk appetite from the past. We're clarifying it. We're empowering people within it. The risk appetite we had in 2019, for example, is the risk appetite we have today. We're not gonna compromise what we have achieved. Add to that, the way I look at any activity that absorbs capital or generates risks is the revenue from that activity, minus the cost of that risk, minus the cost of that equity. If that does not hurdle us above the cost of equity, or at least is not close, we are reticent to pursue it. That will put an element of drag, but on the other hand, it will create much greater capital generation than otherwise. Again, I hope that answered, but if there is anything, Stefano, that you want to add that I missed. Thank you, Andrea. In relation to the contribution of the net interest income in the quarter, the contribution from the commercial part of the balance sheet was stable. As a matter of fact, we stabilized the net interest income. More specifically, there is an increase in the average volumes in the quarter, is around EUR 2.5 billion on one end, and this is in all the geographies. On the other end, as we were commenting on the customer rate, we are, I mean, fundamentally stable. We are down one basis point, but with some differentiation, meaning still there are reduction of the average customer rate in Italy and in Eastern Europe, take into consideration the level of competition that Andrea was highlighting before. With an eye to the future, we are still seeing some potential headwinds to the customer rate, especially in Italy and Eastern Europe. On the other end, we will have the contribution of volumes, when we'll see a more sustained recovery. I would differentiate between individuals, so retail and corporate. On retail, we are already in Italy on the new production above 10%, in consumer financing and well above them in mortgages, while on the corporate side, the dynamic is more flat-ish and stable. Okay, great. I just wanted a clarification on, Andrea, you said self-finance the investments into IT, et cetera. What does that mean, self-finance, in your own mind? In my own mind is that I'm gonna try not to pass the bill of additional investment, in as much as possible to shareholders, and I'm going to try to improve my efficiency to be able to create capacity to finance my IT. Put it another way, I'm trying to keep my costs under control, not be spending the investment. Okay. Excellent. Thanks so much for that clarification. The next question is from Alberto Cordara with Bank of America Merrill Lynch. Please go ahead. Hi, good morning. My first question is on the regulatory headwind. If you can please provide us with an update with what is left to be taken in the last quarter. Also in regard to the share buyback, what is the one-off capital input that we should expect in the last year? The second question relates to past comments in past calls from Stefano about a cost of risk in 2022 that should be somewhere in between 2020, 2021. Now, given the fact that 2020 has been materially lowered from the original guidance, now we are 30 basis points underlying before 40. In the past it was, I think, 60 and then even more. I think originally it was around 80. How we should look at the 2022, because the difference between 2020, 2021 is very material. The other question I would like to ask you is coming from an investor, and it is regarding the CASHES. The investors would like to know if the CASHES can be converted into equity before 2050, given the present MDA buffer of 647 basis points. That would imply some capital erosion of around 30 basis points, but it would save or increase the coupon of EUR 120 million per year. Finally, the very last point, in NII, good trend in Eastern Europe, but still some weakness in Italy based on your database. Also, volumes are a bit weak in Italy. How we should see this evolving, i.e., when we're going to see traction points in NII, and when we should expect the volumes to come back, also helped by the recovery plan. Thank you. Okay. I will start with regulatory headwinds buyback. In relation to the regulatory headwinds, we had around 60 basis points of regulatory headwinds in the first nine months. We're expecting, as highlighted before, to be below 120 in the year. That means that in the last quarter, we're expecting to be below 60 basis points in terms of impact on the CET1. What we're referring to are regulatory headwinds connected to some model changes, remaining EBA guidelines implementation for this year and calendar provisioning. In relation to the buyback, the buyback impact for the EUR 652 million is already included in the 15.5, so it's around 20 basis points. In the slide, on the common equity Tier 1 ratio evolution, in the chart you can see also the pro- forma impact connected to let's say the share buyback portion in relation to the 50% distribution, meaning the 20 out of 50%, that is just pro-forma. In terms of basis point impact on the capital, the share buyback that has been approved and will be executed in 2021 is already factored in, while the future buyback connected with the distribution policy in relation to full year 2021 will be affecting capital in 2022. In relation to cost of risk 2022, as we were commenting, we need to look 2021, looking also to what we did in 2020. Having said that, if we're looking the dynamic of the asset quality and the expected loss of new business and the stock that is around 30 basis points, we are not expecting a deterioration of the cost of risk. We are expecting a normalization of the cost of risk in the next years, including 2022. In relation to the CASHES conversion into the equity, I mean, the conversion right is in the hands of investors. We cannot convert the CASHES. In relation to whichever type of potential actions in relation to bank capital instrument, that is assessed, take into consideration the value creation approach for the group for every type of actions. In relation to the net interest income, Eastern Europe and Italy. In Eastern Europe, the situation is the following: We had, in the quarter, a positive dynamic in relation to volumes. There was some specific customer rate pressure, especially in some countries like Croatia and Bulgaria. We do think that some of the pressure can remain in the future for competition reasons, as highlighted by Andrea. Having said that, with the development of the GDP, we are also expecting to have an increase of the volumes. In relation to Italy, the customer front book pricing is lower than the back book on one end. On the other end, there is pressure on rates, especially on short-term lending towards corporate. As I was commenting before, we do expect that this type of pressure on rates will remain also in the near future, while on the lending side, we see a better dynamic on the individuals rather than corporate. As highlighted before by Andrea, especially when we are looking to corporates, we are not only looking to the contribution to the net interest income, but we are looking at the return on allocated capital of the specific business. In sub-segments where we do see pricing pressure and where we might not have the appropriate return on allocated capital, we will not follow up with volumes. Hi, this is Magda. I just want to remind everyone to limit yourself to two questions and one follow-up, please, as we have quite a long list of people who want to ask things of the management. Thanks. The next question is from Andrea Filtri with Mediobanca. Please go ahead. Thank you for taking my questions. The first one is if you can remind us of the NII sensitivity to interest rate increases in Central and Eastern Europe. The second one is about overlay provision usage. We're starting to see other banks updating their macro scenarios and writing back overlay provisions. You're kind of hinting at that, but if you could make it a bit more explicit. Where you are in terms of having utilized the macro and book assessment over the provisions, how many have you already utilized into them or written back? When do you see the time horizon whereby auditors will ask you to decide whether to utilize them or write them back in full? Thank you. Thank you, Andrea. On the NII sensitivity, I would say from the group one for a 10 basis point increase, the group is around 95, between EUR 95 and 100 million. The Central Eastern Europe one, I would mention you the main three currencies, meaning EUR 5 million every 10 basis points for Czech Republic, around EUR 4 million for Croatia, and a couple of million euro for 10 basis points up. I'm referring to the short-term rates for Hungary, more specifically, take into consideration the dynamics of the rates already happened and expected. The two more relevant ones are Czech Republic and Hungary. In relation to the overlay provisions and macro, as a matter of fact, last year we had macro provision for around EUR 900 million as overlays. We are updating twice per year the macro provisions, so the next one will be at year-end. So far, we are remaining with a portion of the amount, even if it is a relevant one, so it is around EUR 700 million in terms of provision related to the macroeconomic update. So far, I mean, that was in second quarter, also in this quarter, were mainly write backs, not primarily connected with some position that were classified to unlikely to pay, that started to repay. As a consequence of that, we move back to performing. The portion of overlay connected either to macro or to the movement in Stage two is still in our reserves. The next question is from Delphine Lee with JP Morgan. Please go ahead. Hi. Good morning. My first question would be to come back on M&A. Just wanted to understand a little bit, you talk about the right metrics. If you can just remind us what the criteria for M&A are. I would assume that, you know, some of the parameters you have highlighted for Monte dei Paschi were specific to that deal. If you could just, you know, give us a bit of clarification on that point. On M&A more generally, would you look at, you know, other banks post discussion with Monte, like Banco BPM, or is M&A for now not high on your agenda? My second question is on capital and Basel IV, because the text from the European Commission, which was out yesterday. I was just wondering if you could provide a bit of an update, if any, on your previous guidance that you gave quite a long time ago, actually. Thank you. Thank you, Delphine. M&A. I think, foundationally, it either adds value or it doesn't. If we refer to Italy, because the, let's call it, the potential combinations are maybe clearer, and it's a homogeneous market. For me, it needs to reinforce our franchise where we need it, and it need to be done at terms that increase value for investors. How do I look at value? I look at a number of metrics, return on investment, EPS accretion, tangible push, book per share increase, and so on and so forth. In Italy, it's quite homogeneous because the targets are homogeneous. In other places, it could be different. Ultimately, it adds value strategically but given that a number of times strategically is used as an alibi to not adding financial value or economic value, it needs to also add value from a financial and economic standpoint. This is the overriding parameter. Depending on different partners, the quality of the franchise, the risk in the deal, the work to be performed for integration, et cetera, may require a higher or lower price for it to add, making it worth the value creation that we expect. At this juncture for UniCredit, there was a timing issue that I made clear in my second quarter results. We see most of the value organically. We already have a very strong platform. We can make it stronger. There are a number of things that we are implementing in parallel, and one of your colleagues, and before, said, "Are you going to be diverted? I think the front line is not diverted. The center is working very hard on those things. Anything else we pick up and that has the potential of diverting further the center or even the front line is taken very seriously and cautiously. I believe it is my job to add value whichever way I can. At the moment, I see a lot more value organically than inorganically. That does not mean that if I find the right deals at the right term, I won't do it. Yeah, I will do it. It is my duty to propose it to investors and to try and do it. If it's not at the right terms, we have plenty to do organic. I hope that that answers your question. The second question was about Basel IV. I would say it is a little bit too early to comment as it was just published. The direction of travel, however, appears to be, let's say, positive and provides us all with a longer way to clarity. I do think that is a net positive. Let me maybe answer your question in detail in whatever, in a month and a half or so at Strategy Day, because we will embed our views about that in our capital projection. Great. Thank you very much. The next question is from Adrian Cighi with Credit Suisse. Please go ahead. Hi there. Thank you for taking my questions. I have a few follow-ups, please, on NII, capital, and your M&A framework. On capital, the regulatory headwinds this quarter, which were much lower than flagged. Is there a delayed aspect to your previously estimated headwind, or was the original estimate too conservative? On sort of the NII, it's a small clarification. You had a positive development coming from treasury this quarter. In principle, given the lower reinvestment yields, I would expect a headwind from this line. What explains this development? Is there a one-off nature to it? Lastly, on your M&A framework, do you feel under the framework you just outlined that you have the right size, and product capabilities, or are you targeting, specifically, either an increase in size or potentially, a product capability where you don't have a particular strength right now? Thank you. Maybe, let me pick up on M&A and then, Stefano will integrate my answers. On M&A, I think in all markets where we are, or most markets where we are, we have scale. How do I look at scale is, we have 10% market share or more in the segments of reference. Not overall, segment by segment, area by area. That, for me, provides you with enough pricing power and enough, let's say gravitas in the market. You can always get more, but when you are lower than that, you start struggling, but you can always get more. I do believe that in most of my markets or the market of reference of UniCredit and segments, we're above that. As such, we have scale. As such, we're not forced to do M&A. Going back to the organic for a second because it's important, what we need to demonstrate to you is that we can create scale across frontiers of countries. We have 60 million clients. If we look at it as 60 million clients in one geographic area, you would all say we have massive scale, and we're fine. As we fragment it in multiple markets, the view is you don't have scale, and it's fragmented, and it's complicated, and it's complex. What we want to prove to you is that it's neither or. i.e., we have scale, not 100% as if it was all in one market, but we can achieve a significant amount of scale if we organize ourselves differently. We change some of the groundwork that we're doing. For example, in technology, it's not bound by boundaries. In procurement, it's not bound by boundaries, and so on and so forth. How do I look at my capability or the capability and size of UniCredit? I do believe that UniCredit has a very, very strong position in distribution and client access. That's where our strength lies, primarily in the affluent segment in retail and in the SME segment in corporate. We have that across the franchise, more or less. We had a lot of the discussion of factors. I would put it in another way. Do we have the right product and services that are required by our clients to provide them with the solutions, the products and the service that they require? Number one. Number two, how much of the value chain in that product or service do we capture to be rewarded for our distribution? Put in another way, insurance. In insurance, if I'm fully integrated, I capture 100% of the value chain. If I'm not fully integrated, I capture a fraction. I, however, do not have a cost, do not have the tail risk, do not have these other things. When I compare those two models, they both can be defensible if the distribution model is capable of being rewarded with enough of a value chain that does not justify us building a factory. That's how we look at everything that is not internal. Look at it as an ecosystem. Some things we produce inside because we're best in class at doing it. Some other things, if we can distribute it to the client seamlessly with our partners and secure a lion's share of the value chain, then it's fine. If we cannot, we need to internally integrate. Am I at the moment looking at the purchase of factories? No, I'm not. I think on capital headwinds, I will just mention an introduction, and then Stefano is gonna pick it up. I do believe that the franchise has started looking at capital as a scarce commodity in the sense of we need to be capital efficient. A headwind is a headwind, but a headwind can be absorbed to either partially or in totality by shifting the mix of the business, by improving the way we look at things. If you start looking at return on equity and capital return as an override on revenues, you will incorporate those capital headwinds and shift the way you do business to try and reduce the capital headwinds itself, and absorb some of the shock. I think that's how I look at it in general, and I think that the franchise in these six months has started looking at it in the same way, and you're seeing some of those benefits. It's not only about that, and Stefano will give you the other things, but it's also about that. Stefano. Thank you, Andrea. In relation to the regulatory headwinds, as a matter of fact, in third quarter, we had around 19 basis points impact primarily connected with model changes. In Austria, the impact is around 4 billion risk-weighted assets. That is in line with the expectation in relation to the impact per se. On top of the capital efficiency and portfolio optimization action that Andrea was mentioning, as a matter of fact, the PD procyclicality that we had so far is better than expected. Also in this quarter, fundamentally was negligible, so the impact was around 200 million risk-weighted assets, so fundamentally negligible. In relation to the net interest income, in the third quarter, as a matter of fact, yes, we do have a positive contribution from treasury that's connected to the results from some trading activity in Central Europe and Eastern Europe. It's not a recurring one. If you look at the overall contribution of the investment portfolio in the quarter-on-quarter is flat, and there is not a relevant change quarter-on-quarter, neither on volumes or in rates. Thank you very much. Very helpful answers. The next question is from Giovanni Razzoli with Deutsche Bank. Please go ahead. Good morning to everybody. Two questions and one follow-up, please. The first question, you've been very clear on the improvement in the guidance for 2021, both in terms of revenues and the profits, and you sound relatively confident about the future outlook. I was wondering if we shall consider those guidance as a starting base also for 2022. The second question relates to your comment that you've made on the evolution of the market shares in Italy, especially on consumer credit. You said that your front book market share is now at around 10%, which seems a little bit lower than what you had in the last few years in terms of market share in the new business generation. It seems that there is still a lot of scope to increase the volume growth. Is my understanding correct? The follow-up, if Stefano can please repeat what is the sensitivity of the NII to rates increase in Czech Republic and Hungary. Thank you very much. Okay. Improvement in guidance on revenue and profits, and are we confident on the future, and is it a starting point for 2022? I would say we are confident to the future, but the revised guidance for 2021 is driven by both strong performance this year, thanks to franchise and I think a renewed energy and clarity of purpose for our colleagues, but also by macro tailwinds. Those macro tailwinds, we expect that they will moderate. I don't think anybody expects the GDP of our economies to continue to grow at this level and at this pace. Does that mean we think that they're not gonna grow? No, but I think there will be a moderation of pace, and that will have an impact. At the same time, we have a continued impact from, you know, a low rate environment or negative rate environment for deposits. As we reprice our book, that impacts us. The key question is whether or not we, while focusing on return on equity and not only on revenues, we're capable of growing our business at a pace and with a discipline that absorbs some of these, let's say, tailwinds, sorry, reduction of tailwinds, GDP and others, and some continued headwinds. This is what we're working on, and this is what we will share when we meet in a month and a half. Market share in Italy at 10% in new business generation. Actually, I may have phrased it incorrectly. We are mostly above. Total market share in Italy is slightly above 10%. Funding market share includes repos and bonds is 11.5+%. Funding market share, you know, in Italy excluding repos and bonds is almost 11%, and so on and so forth. We are slightly above 10%. If I take certain segments, we are rebounding significantly. In consumer finance in Italy, we're well above 10% at the moment. In other segments, as Stefano has indicated, we are not rebounding, and by the way, they are segments where the volume is greater than corporate, but we're not rebounding to the same extent because of our attention to return on equity rather than purely volume. Is there scope to do more? That is exactly the point. There is. The natural market share of UniCredit in Italy, but also in most of its other economies, is higher than where we are at the moment, because we have purposely restricted that market share during the time of restructuring, followed by an even greater restriction during COVID. As we focus on recovering that natural market share, keeping the discipline on risk, but also keeping the discipline on return on equity, we think there is scope to improve that organically to a significant extent because it's already. These are already our clients. I don't know, Stefano, if you want to add anything. Yes. I mean, just one integration in relation to the market share, Giovanni. I think your question was related to consumer financing. As a matter of fact, I mean, if you are looking to the Assofin statistics, consider that pre-pandemic, our monthly market share on new production was ranging between 10 and 12, and we are there. As highlighted by Andrea, I mean, if you look the last statistic, we are around 11% on personal loans, and we are higher than that on salary loans. Having said that, we need to take into consideration the lending also with the appropriate risk discipline, because as you know, also in the consumer financing space, as a matter of fact, I mean, the crisis from the pandemic is not finished, so we are also properly taking this into consideration when we are originating. In relation to the NII sensitivity for Central and Eastern Europe countries, as was mentioned Czech Republic and Hungary. Czech Republic, for every 10 basis points up in the short-term rate, is around EUR 5 million impact on the net interest income in a year horizon, and EUR 2 million in the case of Hungary, around EUR 2 million. Thank you very much. The next question is from Domenico Santoro with HSBC. Please go ahead. Hello. Hi. Good morning. Thanks for the presentation. Everything is very clear. Just to follow up on strategy and on numbers. First of all, now that you are, I mean, walking away from M&A, focusing organically, I got your comment on the product companies before. It's very clear that you are not building internally or you are not buying product factories. But in the context of your strategy on maximizing revenues in business with low capital allocation, it would be intuitively very, you know, easy in a way to increase exposure in this business. I just wonder what is the state of the art of the renegotiation, at least, of this partnership in the asset management. I know that is a market sensitive matter, and insurance as well, if you can tell us a bit more ahead of the investor day. The second follow-up is on the COVID related provision or market or overlay provision. I understand the number that you are referring to is always this EUR 700 million. You booked. I mean, more than EUR 1.7 billion of overlay last year. How should we look at that? I was wondering also if there is other, you know, part of provision that can be reversed, you know, into the P&L. What will be the next time, you know, when you will update the model, and if there is any also element of discretion, you know, to reverse this provision into the P&L. Whether we should consider those distributable to shareholders or just one-off, so we should take them off the recurring numbers. Thank you. Thank you Domenico. We're indeed focused organically. We indeed are not a believer at this point of buying factories, nor of starting the full internal integration of the same. We're very focused on improving our fee income generation. Improving the capture of the entire value created by these fees vis-à-vis what it is today. Can we do that? I believe we can do that. We need to provide our colleagues on the front line with a simpler set of products and services provided by our partners, which today is a little bit less clear, and that will allow more effectiveness in selling those products. Let me give you just an example to support my point. If I'm selling a mortgage, I would need to have there and then, on my iPad or whatever it is, the insurance products for home content or house insurance or other insurance product that allow me to provide the client with a full service around my mortgage discussion. It also allows me to make trade-offs in terms of, you know, what is the adequate profitable package for me to offer. Today we're not in a position to do that. If we go to in a position to be doing that, I think the ability of the people on the front line to offer more effectively solutions rather than these aggregated products will improve both the client experience, the client pricing, and our ability to distribute more. The other thing that I would say that you need to keep in mind is, it's true that when you're a distributor, you share on the value chain between yourself and your partner. It is also true, you're simpler, you don't have conflict of interests, you do not have tail risk, you don't have to manage best product, look at MiFID and everything else. So all of these things go away. I would leave you with one thought. If you are a partner in insurance, asset management, et cetera, et cetera, and you want to have a strong partnership with an operator in Italy or in Germany or in Austria or in the SEED, how many are there that can provide you with that? Not many. That should be reflected in the terms of the distribution agreement. I think I have given you plenty on that topic, and we will discuss it to a greater degree at the Strategy Day. On the LLPs, I'll give it to Stefano. Thank you, Andrea. Domenico, as you have highlighted, in 2020, the amount of provision that we recognized was EUR 5 billion, 2.2 out of these five were overlays. As a matter of fact, I think it's important to distinguish because in the overlays we do have macro, but we have also the movement of position in Stage two. If we put ourselves in at the end of 2019, the amount of Stage two loans of the group were EUR 44 billion. Currently we are at EUR 71 billion. In relation to that, clearly the amount of provision in Stage two and Stage two moved to something like around 2.5, 2.6 billion at the end of 2019 to around EUR 4.2 billion at the end of this quarter. You have the detail at page 31 of the market presentation. Need to say what? That in the next quarters, clearly some of the position in Stage two will migrate to Stage three, but some of the position will migrate to Stage one. As a consequence of that, some of the provisions will be simply utilized, and some of the provision will be released. When we are commenting on the cost of risk, either on 2021 or for the future years, we are taking in consideration all the dynamics deriving from the staging as well, and all the profit connected with such a dynamic is distributable to shareholders. The next question is from Christian Carrese with Intermonte. Please go ahead. Hi. Thank you for taking my question. I have a question on cost of risk, in particular on regulatory headwinds expected for the fourth quarter. For 2022, I was wondering if you can give us an idea of what kind of default rate in Italy you are embedding in your projection compared to the 2%, the current 2%. The second question is on M&A. You said M&A has to be seen as an accelerator. There are some tax benefit in Italy now that I think could accelerate EPS accretion going forward. I was wondering if there is any kind of similar tax benefit or benefit in general terms in other geographies in Europe that you could use in case of M&A. You said on product factories, and you focus on banks. Could you share with us your thoughts on a different kind of deal, let's say the creation of a financial conglomerate? A proper tie up with insurance companies rather than just renegotiate current partnership. Thank you. Okay. I think M&A has to be an accelerator and tax benefit, et cetera. To be honest, I'm not aware of other tax benefits. I would just say that maybe my view on DTA is a little bit different from the market's view on DTA. DTA is something that you have if you have the profitability. To frontload it, you need to pay 25% of their value, so that's a reduction of value, not an increase. Secondly, it depends who's bringing the tax asset to the table. Is it the acquirer, or is it the seller or the target? So depending on that, you may value those DTAs a little, or you can value them to a great extent. Let's remember what they are. I don't see this particularly as an accelerator. If the market is efficient, prices of all organizations should be sensitive to a change in that policy. The second thing is, are the benefits in other geographies? I don't know. As I said, you're right to say that if there is a tax benefit, it may have a positive impact on the transaction. I don't see that, and that's not what we're looking at present. On product factories, focus on banks, can we do more of the conglomerate, et cetera, et cetera. Strategically, personally, I do not believe in mergers between banks and insurance companies or things like that. I think the client bases, the client service models, the business is very different. Can there be strong partnership long-term between insurance company and banks and vice versa? Absolutely. Where we all stick to what we do well. I haven't said we're renegotiating. I'm just saying, in my remarks, I said that, you know, you can build strong partnership with those partners in insurance or in other places long-term and to the mutual benefit. Obviously, the partnership need to reflect what each party brings to the table. My personal view is if you achieve a seamless integration from a technology standpoint and from a product design standpoint with your partner and us in the delivery of those products and solutions to your clients, and the respective contribution to the value creation is appropriately shared, you get stable long-term value creative partnership. In the past, people have focused too much on if I award you access to my distribution, how much are you gonna pay? Instead of can we build a partnership that is mutually beneficial, that is stable and adds value for the long term? I think that in the second frame, the impact on what we can do for clients, and therefore the profitability of your network over time is quite beneficial. On reg headwind, I'll leave it to Stefano. Thank you, Andrea. In relation to regulatory headwinds and the implication on cost of risk. So far in the nine months, the regulatory headwinds cost of risk was around 6 basis points. We do expect some model changes also in Q4, so we might have something also in Q4. The overall amount that we are expecting for the year is around 10 basis points. That's the difference between the stated cost of risk guidance and the underlying cost of risk guidance, that is around 30 basis points. In relation now to the default rate, the default rate that we have currently is 1.2% at group level, excluding the non-core. It's below the level of last year. That was 1.6, and it's below the level in all the countries. We are expecting to be either in line or below the level of 2020 in all the countries. We are not expecting significant changes, neither in the default rate. As I said before, also we are expecting normalization of the cost of risk also in 2022. Thank you. Very clear. The next question is from Andrea Lisi with Equita. Please go ahead. Hi, good morning. A couple of questions from my side. The first one is on fees. We have seen that there was a really stronger contribution from upfront fees and growing contribution from transitional and financing fees. Just wondering to understand how much of the evolution we have seen so far do you think is sustainable also for the next years? Knowing, you know, there are lots of moving parts, but just wondering to understand that. The second one is a question on the calendar provisioning. We have seen that there was some impact on capital due to calendar provisioning. Just wanting to understand what do we expect for the next year, if you think that it may represent for the banks a threat for the next years, especially considering there may be some increase in defaults at the start of moratoria. Can you remind us which initiatives have you put in place to address this risk? Thank you. In relation to fees, as a matter of fact, in the quarter, we had already normalization of the upfront fees. Still strong, but lower than the level that we had in Q2. In Q2, we were close to EUR 300 million of upfront fees. The gross sales that we had of asset management insurance product during this quarter were strong because we were at around EUR 14 billion, down from 15.5. As we were commenting, we are expecting a normalization trend also during the next quarters in relation to the dynamic. This in relation to the upfront fee and the gross sales activity. As commented before, like happened during this quarter, we are expecting a positive contribution from the dynamic of asset management fee, taking in consideration the growing asset under management that we have in the group. In relation to the calendar provisioning, as I was commenting before, we are expecting regulatory headwinds in Q4. Among the item where we will have regulatory headwinds is calendar provisioning. We are also expecting calendar provisioning impact in 2022. The two items where we are expecting regulatory headwinds in 2022 are model changes also following the final implementation of some of the EBA guidelines and calendar provisioning. Yeah. Thank you. The next question is from Manuela Meroni with Intesa Sanpaolo. Please go ahead. Hi. Yes, good morning. Thank you for taking my questions. I have a couple. The first one is on the non-core NPL. Your previous strategy was to get rid of all the non-core NPL by year-end. I'm wondering if this strategy is still in place and how do you expect to implement it, so disposal, full coverage or what else? The second question is just a follow-up on the upfront fees. Could you please remind us, how much are the upfront fees accounted for in the last quarter? Thank you. Yes. In relation to the non-core at the end of the quarter we're at EUR 2.7 billion in terms of net exposure. The coverage is 79%. We do expect the full rundown of the non-core by the end of the fourth quarter, and we will close the division accordingly. It will be a combination of activities, including sales. It will be a combination of sales, write-off and recoveries. In relation to the upfront fees in the quarter, the amount of upfront fees was slightly above EUR 250 million, in comparison with the number that I was highlighting before, that was around EUR 290 million for Q2. Thank you. The next question is from Benjie Creelan-Sandford with Jefferies. Please go ahead. Yes, good morning. Thanks for taking the questions. Two for me, please. The first is just on corporate lending. I mean, look, you've been very clear about your criteria for lending going forward. I was wondering, perhaps if you could just turn that around a little and give us some color on what you're seeing or hearing from clients currently. You know, particularly in Italy. Is the sort of lackluster corporate growth trend being driven by a lack of willingness on the side of corporates to invest at this point? Or is it simply just an excess of liquidity in the corporate sector post the COVID-related drawdowns last year? My second question, just a quick follow-up on the treasury and bond contribution to NII. I'm just wondering on the basis of the current yield curve, could you give us any color on how you expect the bond portfolio and the structural hedge contribution to trend going forward? Thank you. Yes. Some color on the corporate lending standpoint by country, let's say in this quarter, as a matter of fact, we saw a reduction of the stock towards corporate investment banking and corporate clients in Italy. The reduction is around EUR 3 billion. We do see abundant liquidity, so many clients will utilize the liquidity that they have for the working capital before asking money for acquisition financing or for fixed investment. This is a trend that we are seeing, by the way, not only in Italy, but in Germany as well. As we were commenting, there is, however, some sign of change, for example, in the corporate lending in Germany, we are up quarter-on-quarter for a little bit more than EUR 1 billion. In relation to the pricing standpoint, in Italy, we see a higher competition also on the short-term lending pricing, and this also affected the customer lending dynamic in Q3. In relation to the current yield curve and, let's say, contribution to the NII of the portfolio, a comment on volumes. The volumes are flat, so we are around, the overall investment portfolio is around EUR 144 billion. We are not expecting significant changes in the short term, and the same for the BTP investment portfolio that is remaining around EUR 44 billion. The contribution of the investment portfolio to the net interest income will be slightly lower in 2022, so some tens of millions of EUR due to the fact that the rollover of some of the positions, especially on the Italian bonds portfolio, will be done at lower level. Having said that, we will also see a reduction over time of the contribution to the net interest income on the interest expense deriving from the term funding, because the debt funding cost will be lower in 2022 in comparison with 2021. The next question is from Ignacio Cerezo with UBS. Please go ahead. Mr. Cerezo, your line is open. Yeah. Hi. Hello. Good morning. I was on mute, sorry. A couple questions from me on the capital. First one is in terms of the capital return composition, what balance do you need to strike between the different types of shareholders? I'm thinking that maybe foundations, retail might prefer cash dividends, institutional seems to be preferring buybacks these days. How are you thinking about that? The second one is if you can share with us how do you think about the right level of capital the bank needs, if you think about absolute CET1, or if you think about MDA buffers and any color on the magnitude of a capital ratio. Thank you. Thank you, Ignacio. Most of this I think it's better answered in about a month and a half. Just to frame it, capital return composition. Let's say that I'm well aware that different shareholders are attracted by different things. I think our current policy is trying to find a balance on that. Obviously, that balance is dynamic and it depends on what is your own valuation. Let me just say that I'm well aware that the different classes of shareholders are expecting different ways for the capital to be returned to them, and that we will take that. This is the critical, let's say, variables for us to define a capital return policy. We will define it in detail in December. Right level of capital and give buffers and so on and so forth. I think, we all think about MDA buffers, but I also do believe that there is an element, let's call it a psychological element that when you go much below that psychological element, everybody questions whether you have enough capital or not. I think the right level of capital is, number one, takes into consideration these two things, and number two, critical in my view, takes into consideration what is your recurring capability to organically generate capital within the year and how that capability is affected by stress scenarios. A bank that is capable of having a high generation power of capital, and that generation power is relatively immune or affected less by possible stress event, can afford to run a lower level of capital. The bank at the other extreme, that has very limited or none generation power, and which generation power is affected very significantly by stress event, requires a higher buffer to operate. I think one of the things that I'm very focused on is to confirm the ability of UniCredit to generate capital organically, and to hopefully have that generation solid enough that it can withstand certain shocks. Therefore, that will be a key driver in being able to. Let's say a share and get approved, a capital distribution that is consistent with that. I don't know if I answered your question, but I tried to frame it in this very much greater detail. Thank you very much. I know you would have liked more, but I cannot do more until I get there. Okay. I need to try as well. Thank you very much. Absolutely. The next question is from Fabrizio Bernardi with Bestinver. Please go ahead. Hi, all. I need to try as well, me too. There were many questions on M&A, sorry, but my curiosity is to understand whether you are definitely out of the MPS saga, or you may re-enter it a little later via another different door, let's say. It seems the DTA law is being postponed by six months, so you may be right back with a different bill to present to the government, and this was my first question. Second question is, I was wondering if you can share with us your very deep knowledge about the MPS issue and suggest us how it may end. Any flavor, any color would be great to all of us, I guess. Then if I can, I know two questions, but I have a third one. Will the strategy plan be on three years or maybe something else, something different? Thank you. Yes, indeed, you need to try. Look, when we announced the mutual intent to find a path towards a successful combination, the MPS and UniCredit, I said clearly that one of the advantages was that the window was open at the moment, and that if a deal could be executed quickly in mutual interest with no resistance, but actually with mutual embracing, it could fit in our agenda. I said very clearly that we have a number of initiatives in flight in Italy. That we thought that we could, if we executed a deal quickly, we could apply those initiatives in the combined franchise. Now that window has closed for us. It has closed, for now, windows close and open, but for the time being, it has closed. As you may have gathered, we have moved on the geometry of our network. We're in flight on a number of technology initiatives. We are quite focused on the principal initiatives that we have to rationalize certain things. We focus on other things, et cetera, et cetera. We need to be 100% focused in executing that. I would say this is where we are at the moment. Timing is everything at times. I would say we have recovered our total focus on our standalone strategy. That's what I would say today. With respect to Monte dei Paschi di Siena, I cannot comment. I would say that, as an Italian and a group that has a significant operation in Italy, I wish the outcome is as positive as possible because it's in the interest of everybody. The plan will be three years. Sorry. I'm sorry. On the plan, yes. I never see plan as three years. I think what I would say is I see plan as medium-term, long-term plans, but there is a set, let's say, that is reasonable, that you can forecast correctly. Usually it's as I always tell people, you probably have a high degree of confidence on year one, a medium one on year two, year three starts becoming a good projection. If you start lengthening, there are so many things that are moving, especially in our sector, it becomes very directional. My view is, so I will describe a three-year plan, but I do not consider 2024 as a point of arrival. I think there is life and a lot of it for UniCredit after 2024. I will detail what I believe we can do in these three years. Part of what we do in these three years will underpin and support the performance going forward as well. We will share three years, not more than that. Thank you. Mr. Orcel, there are no more questions registered at this time. The floor is back to you for any closing remarks. Well, thank you very much to all of you for your patience and I hope we will be able to respond to the question that we were not able to respond to at the Strategy Day on December 9th. We'll provide you with all the information you need as for the format. Yes, I am really looking forward to seeing you there and hopefully get you as excited as I am on the prospects for the bank. Thank you very much to everyone. Ladies and gentlemen, thank you for joining. The conference is now over. 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