Good morning, everybody. I'm delighted once again to be joined by Stefano Porro, Chief Financial Officer of UniCredit, a role which he's held for just over four years. Today, we're gonna run through a sort of handful of opening questions, and then I'll come to audience Q&A. Just a couple of points there. This session is being webcast, so if you can wait for a microphone, that would be helpful for everybody who's joining us remotely. The second issue is these lights that we're seeing are very bright, so if you put your hand up in the air, we'll do our best to see you, but do feel free to wave if we don't come to you immediately. Stefano, thank you so much for joining us- You're welcome. Once again. Let's start at the top of the P&L. You know, you've guided for sort of profitability to continue to be supported going forward. You've guided for net income of over EUR 6.5 billion for the foreseeable future, beyond FY 2023, and that's despite potential headwinds around NII, et cetera. Can you talk about some of the key lines and related initiatives that would support the bottom line if we do, in fact, go through a period, you know, of easing rates, be it on the model deposit side, et cetera, et cetera? Yes, I mean, we are in a unique position currently, because we're having the impact from the transformation that we are doing, that is positively impacting the core profitability, and then the balance sheet strength. Because we have a very strong balance sheet from liquidity, capital, and a security standpoint. The effect deriving from the transformation is not only short term, the transformation will go beyond 2023. That's why the combination of the two effect is bringing us confidence that we can keep the same level of profitability beyond 2023. Not only the profitability, but also the distribution. Let's go through all the items just to give you the flavor of 2023, but with an eye to 2024. Let's start from net interest income. We guided for above EUR 12.6 billion for this year. Key relevant elements are deposit facility rates, the deposit facility rate we're assuming 3.5% by the end of June, and then flat until year-end. That's the first relevant item. Just to give you the sensitivity is +50 basis point positive contribution of, let's say, around EUR 300 million. Second very important element is the pass-through, so is the deposit pass-through. We started from a level of 22%. We've guided, we are assuming a level of around 30% an average for the year. The exit rate we are assuming to be around 40%. That is higher than the historical average. The historical average of the group was between 30%-35%. In a way, it's a conservative assumption. Which is the sensitivity to the pass-through? Every percentage point is EUR 120 million. What about 2024? For 2024, we're expecting normalization of the rates, slightly below the level of 2023, let's say, on average, 3%. Let's say, an increased level of the pass-through. This is the assumption, because the average this year, we are assuming 30%, but then the exit rate around 40%. The average of next year, the assumption is slightly above 40%. This on one end. Let's consider that the dynamic that so far we had in not only Q1, but also in April and May, is better than the assumption for the year. So far, the dynamic was better than the assumption. The assumption for 2024 are conservative in terms of the pass-through, because as I was telling you, is higher than the historical average. Why that? Because still we need to see in the second part of the year, and the velocity of the increase of the rates was very quick and size both in U.S. and euros. That's why we would like to have a look at that. Positive mitigating factor. The positive mitigating factor are, one, replicating portfolios. The replicating portfolio that we are doing will positively contribute, not only this year, but also in the following years. We have a portfolio around EUR 175 billion. The rolling of this portfolio, every year around 10%, will positively contribute for around a few hundreds of million every year. This is a mitigating factor, not only for 2024, but also for 2025. There is the repricing. This happened already in Q1, so the repricing, the commercial spread. The new production of the front book in Q1 was higher than 20 basis points, so the medium-long-term lending production. With an eye to 2024, this will be also a positive contribution to the net interest income. To give you the flavor, 1 basis point of increased level of credit spread is around EUR 40 million more of net interest income. This is all in all, the key elements that will support the dynamic on net interest income in 2024, notwithstanding the potential effect deriving from stabilization of the rates and a different level of pass-through. Fees. What about fees? 2023. In 2023, we will have a declining trend versus last year, primarily deriving from a couple of points. One is current account fees adjustment in Italy due to the level of rates. The second one is securitization. I mean, the current account adjustment in Italy is around EUR 20 million per month, starting from April, so let's say around EUR 60 million per quarter. Net of that, the dynamic of the fees during this year, so 2023, will be fundamentally in line with last year. The fee is pretty diversified, right? If we look, Q1 out of EUR 2.7 billion, EUR 700 million were investment fees, EUR 500 million financing, EUR 600 million transactional fees, and EUR 200 million client agent fees. All in all, the diversification is helping in different type of market situation. What about 2024? We are expecting an increased level of fees in 2024, because the normalization of rates, a higher level of GDP, and a dynamic, a more stable and less volatile dynamic of the markets, is bringing us to assume a higher level of fees. On investment fees, in the part of fees connected with the financing fees, and the part of fees related, to, let's say, factories in general, to transaction fees, including general insurance. Cost. If we look to cost, the guidance for this year is below EUR 9.6 billion. We did well. We are putting in place all the action to mitigate inflation. To give you the flavor, if we are accumulating inflation impact in a couple of years, so 2022 and 2023, the accumulated effect is higher cost for a little bit more than EUR 500 million. We have been able to more than mitigating this with all the action that we are putting in place. The philosophy of the action will remain the same. Both 2023 and 2024, i.e., a big focus on the cost pertaining to the non-client facing function and activities via optimization of the processes. This has already brought us to an overall reduction of FTEs in non-client facing functions. If you look dynamic of FTEs of the group year on year, we have less than 3,000 full-time equivalent, and this has positively contributed. The goal is to do the same and also do some actions in order to keep on doing that for the future. This is why also this year, we will have around EUR 300 million integration costs in order to support this action. Important to bear in mind that we keep on investing. On one end, we are reducing our client-facing activities. On the other end, we are investing in a network and in a client-facing part. If you look, the FTEs that were in the network or facing the clients is fundamentally flat year-over-year. The dynamic of the non-HR costs, especially with an eye to 2024, will be impacted from further optimization on the real estate, and the energy cost will be better in 2004 in comparison to 2023, because they are all off of contracts of energy, and also the hedging will have a positive contribution. All in all, in the plan, 2024 was assuming to be at EUR 9.4 billion of cost-income ratio around 50%. Cost-income is more than achieved. We were already gathered this year for less than 9.6. Our goal, so we are aiming at do what is necessary to be as close as possible to the 9.4. Having said that, all the action are such, fundamentally to mitigate all the effect arising from the inflation, if we can, to keep the pace, and to, as highlighted, arrive as much as close as possible to the target of the plan. Cost of risk. We gathered for 30-35, cost of risk 23. Same for 2024, 2025. We already anticipated, and we can confirm that, we are seeing upside in this guidance due to overall dynamic of, let's say, the trading income and also the early warning indicators. The default trade dynamic also in April and May is fundamentally comparable to the one that we have seen in the Q1. That was for the group below 1%. It's very important to consider that we have a very sound asset quality. We have overlays. We have EUR 1.8 billion overlays, i.e., we have an amount of LLP. This is only on the performing portfolio. That is on top of the LLP that were for the macro scenario. These LLPs will be either utilized or released during the course of the next couple of years. The overall dynamic of the trading income, the quality of the portfolio, the new origination, expected loss also in Q1, was 26 basis points, so really sound. The average of the stock in terms of expected loss was 30 basis points. So the performing portfolio is really sound. The coverage of the NPL portfolio is as well, very sound. Then the assumption, the NPL ratio, we're assuming fundamentally to remain at a similar level compared to what we have experienced so far. The fact that we have overlays is making us confident that we can have also potential upside for the guidance of cost of risk this year, and that we can keep the guidance for 30-35, also for 2024 and 2025. Last but not least, systemic charges. This is a very important element because this year we are around EUR 1 billion. With an eye to 2024 and 2025, the portion of systemic charges related to the Single Resolution Fund will be lower. Let's say a few hundreds million EUR. The combination of all of this is bringing us confident that we are able to have a current recurring profitability, and keep the profitability broadly in line with the guidance of above 6.5% for 2023, also in 2024 and 2025. Thank you for that comprehensive answer. You talked about fees at the beginning of your answer, and I just wanted to stick on that non-interest income line item for a bit. Could you talk a little bit about your product factory strategy, the initiatives you're currently pushing through there, and how you expect to see that play out? Yeah, absolutely. The, let's say I already discussed before, and actually before, how they are diversify is the fee level. The Unlock plan was based on, let's say, capital-light business model, right? With a big focus on fees. There was a positive impact there also from rates, the focus on interest income. That focus on the fees is part of the Unlock plan, will remain there. Let's start from who we are. 50 million clients, 13 geographies, both corporate and retail clients, a really diversified base. For us, what is very important is the product shelf for our clients, right? And this is important for what we are calling factories. Our focus has been and will be fundamentally mainly on asset management, insurance and payments. What we are focusing on is strengthening the product factory and the product shelves, and getting optionality also for the future. This is especially for asset management and also for life insurance, but I will explain that. On asset management, we are focusing on on top of all the partnership that we have with third-party asset manager, we are focusing on our own platform, that is called onemarkets, and then the partnership with Azimut, right? In the partnership with Azimut, what we are leveraging on is their expertise in order to have very specific niche product for our Italian clients. Is giving up as optionality, because in a five-year horizon, we have the call in order to resource. In this sense, is also giving us optionality. Through that, we can, let's say, enrich our product shelf and increase also the level of value chain that we can keep. Same for internal asset management. The goal is the same, so a part of the product done also by us. We will have manufacture fund. Also, with, let's say, third parties, well-known asset management. This will give us the possibility to in-source a part of, let's say, of the value chain, strengthening our product shelf. Insurance. Insurance, the focus is similar. Strengthening the product shelf, also with the partnership with Allianz. We've also streamlined and simplified, because currently we are fundamentally partners. On one end, we have Allianz, on the other end, we have CNP. With Allianz, we are also working in reinforcing the digital platform, right? In order to improve the client experience, let's say an omnichannel one, especially on the digital side, and also having more products. I was commenting before, fees for 2024, in relation to the growth that can come also from insurance. We are working also to have new products, general insurance, rather than on life, both for small, medium enterprises, but also for individual. We will have also a new product in the second part of the year, for both Italy and Germany. We will have, let's say, an important impact, also in 2024, deriving from this action. We are also leveraging on the partnership to train our workforce, because in order to properly advise our client, we are also doing joint training to, let's say, train our workforce. Last but not least, as commented before on the optionality on the asset management, we do have optionality also on insurance. In Italy, you know that we are not only a distributor, we have also working by JVs with both Allianz and CNP. We do have the optionality between 2024 and 2025 to get back the JV. We are more focused clearly, if there are the conditions. So it's an optionality. We are more focused in that case, on life rather than non-life, because we do think that on the non-life, the post-sale service to the client is a value added, and we don't think that we are equipped to do that. So we are more than happy with the partnership. Last but not least, is payments. On payments, let's say, important to mention that we are one of the few in Italy that we kept acquiring, for example. We are operating along the chain, right? We've got both issuing, acquiring, and so on payments. What we are focusing on is, on one end, review the portfolio, similarly to what we've done with other strategies. So far, we have not managed the business with one specific division, like so with one function. We are working on that, so we are reviewing the strategy, also during these years, in order to be able during the second part of the year, to have a fully set strategy. Let's say the partnership that we have just communicated with Mastercard is showing you the type of strategy that we have. In a way, similar to insurer, meaning having a partner that is embracing the goal of the group, that can help us in order to enrich the product shelf, right? With innovative product, also with, let's say, an innovative digital offer, giving us the possibility to scale, considering that we have a global partnership with a global partner helping us in 13 countries. Mm. This is the goal, totally coherent with the capital-light business model, with the focus on fees for, let's say, not only 2023, but for 2024 and 2025 as well. I want to spend a bit of time on cost again. You talked earlier in the answer to the first question around the 9.6 this year, the 9.4 for next year. I think a lot of us have spent a lot of time in the last year or so looking at revenues, right? As the. Yeah ... Big sort of driver, and actually, the cost performance has been fairly remarkable. I sort of wondered, what are the sort of tangible examples of what you're doing differently now versus previously, that's enabled you to actually deliver that kind of cost performance and gives you the confidence on a go-forward basis? What are the actions that are slightly different to what you've been doing in the past? Yeah. As mentioned before, we've been focusing mainly on the non-business related costs and not client-facing activities, as commented before. In order to manage that, we are over time changing the processes, the procedure. We are doing the necessary automation in order to drive that, and this is a progressive process, right? With the focus on that. This is bringing, over time, the possibility to reduce the number of FTEs that are doing fundamentally this type of activity, keep on investing on the business function. That's why I was telling you that we are keep on adding on the network, on the client-facing activity. This, in order to counter mitigate the impact arriving from the inflation. It's not that inflation is not there, the salary inflation is there. This year, we will have the impact of the new agreements in Austria, also the new agreements that will have in Italy and Austria, the salary rate was 8.5%. Having said that, the guidance of 9.6% is including also the salary drift arriving from, let's say, the renegotiation. Germany will be next year, will be 2024. All in all, this action are reducing the amount of FTEs allocated to non-client-facing activity, and all in all, are compensating the drift deriving from, let's say, the salary inflation. Non-HR, I was commenting before, the focus on HR was massively on consulting costs, we have reduced massively consulting costs. We keep on optimizing the real estate, with the focus for 2024 and 2025 as well. As I was commented before, we had an impact this year from energy, right? That can be, let's say, in a way, a positive, an upside, in relation to the cost dynamic in 2024 and 2025, due to the different dynamic of the energy costs and the connected hedging that we have executed. You talked earlier about the fact that sort of credit cost trends were aligned with Q1 so far through April and May. I wondered if you could just give a bit of a broader macro perspective on what you're seeing more holistically across Germany and Italy in terms of credit trends. I mean, we now know Germany is in technical recession in Q1, et cetera. What are you seeing on the grounds, you know, at a sort of bottom-up level across both those big markets? Yes. The general trend that we saw was better than what we assumed, I have to say, in all the geographies, so both in Italy, also, I have to say, in Central Eastern Europe. Let's say, starting from Italy, commenting on Italy. The GDP dynamic, if you look, the dynamic also was post-COVID was very well supported by both the manufacturing and by the servicing activities. Also, Q1 GDP was really good. The assumption that we have for the GDP in Italy is ranging between 0.5% and 1% in relation to the GDP. The action, let's say, of also of the new government are fundamentally in line with the path of the previous one. All the action in relation to the NextGenerationEU plan, and so on, are fundamentally in line. Yes, there are discussion ongoing in order to, let's say, review that, the reform execution should be in line with the expectation. The employment rate is also going well. Currently, we are seeing a deceleration on the manufacturing side, still well supported the dynamic of the servicing activity. In relation to the lending, I would distinguish. Consumer financing activity were very well supported, the new production is holding. The demand is there. The lending activity on the residential mortgages and fixed the one rate of fixed income, fixed investment from corporates, slightly reduced over time. This is also the impact on the higher level of rates, so in a way, it's expected. Germany, let's say a couple of quarter of technical recession, especially due to dynamic of the manufacturing sector. The expectation for the year is fundamentally around zero, okay? Can be slightly less or slightly up, while we are more constructive the dynamic for 2024, we are expecting a GDP above 1%. The dynamic of Germany is more impacted by Italy, in relation to the dynamic of the manufacturing. On the other hand, in relation to the lending, if you are looking, the dynamic of the lending and lending stock year-over-year, still, the dynamic of Germany was supportive, as commented for Italy, especially for large corporate. Corporate, they are definitely more selective, i.e., in consideration to the level of rates, they are also using the liquidity that they have, meaning the deposit that they have, in order to support working capital, and they are more selective in getting money for fixed investment. Maybe a couple of words on Central Europe or Eastern Europe, more resilient than assumed, so the dynamic was sound. Particularly sound in Eastern Europe. In Eastern Europe, the GDP is around a couple of percentage points, so 2% also in 2022, and also the lending dynamic is the strongest in the group. It is the part of the group where the lending dynamic, not only on the retail, but also on the corporate, is, let's say, more positive than other parts of the group. I just have one more question before I go to the audience. I'm sure you can probably guess the topic. You know, in terms of capital distribution, 18 months ago, roughly 18 months ago, you outlined a target of EUR 16 billion, 2021 through to 2024. Subsequent to that, there's clearly been a big improvement in the expected P&L performance. Yes. As we sit here today and we think about what the right capital ratio is, but also where that distribution number may eventually end up, there's quite a range in consensus of what the total returns will be. I wondered, what's the right way to think about that EUR 16 billion mark to market for how the bank is now performing? let's say, let's start from our target. We've already commented, so the transformation that we've done improved the profitability, right? Yeah. The profitability is double digit Return on Tangible Equity on one end, and this is structural. The organic capital generation is definitely better than planned. The average of the plan was 150. This year, we've done more than 100 in a quarter, and we will be at or above 250. The combination of these two elements, let's say, is keeping us very confident with the target Common Equity Tier 1, 12.5, 13, no change in relation to that. Definitely, in relation to UniCredit Unlocked, there is a change with regards the overall net profit, but also the overall, let's say, distribution. We guided for at or above 5.75, and as I was commented before, we're expecting to be broadly in line for the foreseeable future, right, 2024, 2025, both for the profitability and for the distribution. These will bring the overall distribution, so we were commenting in a lot about 16. Taking this into consideration, will be at or above EUR 20.5 billion if you are accumulating 2021 and 2024. What about the capital? The capital, considering the organic capital generation and the assumed distribution, will remain strong, right? What we are expecting for year end is, however, a capital calculated pro forma higher than the level of the end of 2022, because the organic capital generation that we are expecting for this year will be at or above 250 basis point. Also the level of the capital that we are expected to have during 2024 will be very strong. That's why I was telling you at the beginning that the transformation is not just them. It's bringing positive effect to the recurring profitability and also the capacity to originate capital in 2023, but also during the course of 2024. By the way, not only in relation to the profitability, but still, also in relation to the risk-weighted asset, whose guidance that we are conforming will be below EUR 300 billion by year-end. Still we have a part of our portfolio that we can still optimize, and with, let's say, capital efficiency action, both this year and next year. Very clear. Any audience questions? Down here at the front on the right-hand side. There's a microphone on its way to you. Hi, a quick question on asset management. You already have a partnership with Amundi. Why are you looking for someone else, and they already offer a wide range of products? Is it simply you want to internalize this activity? Yeah, we do have a partnership with Amundi. The partnership and the agreement with Amundi is expiring in 2027. As I commented before, we have clients. We have 50 million clients we are distributing from. For us, it's very important to have as much as possible, have an open architecture, right? Be able to, let's say, advise and to sell to our clients many options, right? In terms of product, also in terms of asset managers. That's why we are focusing on diversifying the offer, but also the enriching not only product offer, but our capability to internalize, where possible, a part of the value chain, right? We are getting also fee as a distributor. Once it's possible to combine the arrangement of the product, shelf versus the client, with getting a higher share of the value chain, we will do that. As commented before, we will not do that, we are doing that only with specific selective action, taking in consideration, on one hand, the partnership that we have Amundi. On the other hand, the other selective action that we are currently doing with other third party asset manager, with Azimut, and with our onemarkets platform. I just have one final question, but I know we're running out of time. You talked about deposit betas earlier, but just in terms of actual flows of deposits, I mean, it's been more of an emphasis in the U.S. than it is here, but what are you seeing in terms of deposit dynamics? We saw obviously a very healthy evolution in the first quarter, but maybe so far through Q2. Let's say the deposit dynamic is pretty stable, I have to say. Slightly up, look at that with a pinch of salt, meaning that, for example, in comparison with Q1, we are slightly up in Italy and also in Eastern Europe, right? There is a shift of deposit to assets under custody in some cases, but all in all, there is a shift and some outflow still on large corporate for pricing reasons, fundamentally. All in all, the dynamic of the deposit is stable, and our market share is stable. There is a normalization also dynamic of the pass-through, as I was telling you before. The... We have 2 percentage point more in Q2 in comparison with Q1. Q1, we were at 22. Italy, for example, we were around 9%. Currently, we're around 10%. Okay, this, the situation where we are. That's why I was telling you the situation that we have is better than the assumption, but still a little bit to be set, right? That's why I was commenting let's go to the second half of the year, but so far, the positive dynamic and pass-through dynamic is better than just on average. Very clear. Thank you so much for, once again, coming to the conference, and I look forward to seeing you next year.