Banca IFIS S.p.A. (IF) Earnings Call Transcript & Summary

Good morning. This is the Chorus Call conference operator. Welcome, and thank you for joining the Banca IFIS Third Quarter 2025 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Frederik Geertman, Chief Executive Officer of Banca IFIS. Please go ahead, sir.

Good morning, everybody, and welcome to our 9 months 2025 results call. Today is a special call because for the first time, we are including in the results of the group the results of the bank that we acquired or the illimity that was bought in the start of this year. So the presentation is slightly different and slightly richer than the one you're used to. I will try to focus as much as possible on things that are new and that maybe require a bit of explanation. And as usual, we will keep some time at the end of the call to answer your questions in case you have them. Let me go straight into the executive summary. I would take you to Page 4, third quarter '25 group results. We report a net income of EUR 385 million in the quarter, reflecting 2 things. Obviously, the resilient profitability of Banca IFIS stand-alone and the first effect, right, of illimity's consolidation, meaning badwill and nonrecurring expenditures. Stand-alone, we confirm our profitability, which remains robust. We are on track to achieve our guidance, which was roughly EUR 160 million on a stand-alone basis for the year. Now that obviously doesn't include the extraordinary costs related to the acquisition of illimity. And in the third quarter, we have the usual seasonality, which we'll take a look at later. And as usual, we expect the fourth quarter to accelerate a bit in the recurring normal business. Funding, we have a rather benign spread environment at the moment for the Republic of Italy in general, but that also reflects obviously on banks. And we have a very sizable cash buffer of over EUR 3 billion, including counterbalancing capacity. So we think we're in a very strong position to address the funding costs in the next couple of quarters starting now as we can substitute this funding with funding that has lower rates. We post a CET1 ratio of 14.25% on 30th of September, including the net income and after deducting the dividends accrued in the 9 months. That doesn't include, obviously, the disposal of the noncore stake in Hype, which will bring a positive impact further on, but it's not included in the 14.25%. We confirm a EUR 1.2 interim dividend per share -- EUR 1.2 interim dividend per share. Happy to report that. It's very important for us to have a good and attractive dividend policy. So in this quarter, which is the first quarter in which we integrate illimity, we can reconfirm EUR 1.2 per share and the 14.25% CET1 ratio. These are numbers that make us confident looking forward. Page 5, update on illimity. So in the third quarter, illimity reported a loss of EUR 22 million. If we exclude nonrecurring items that are connected to the integration, it was minus EUR 11 million. That's also their seasonality, and that's also the start of the restructuring process that obviously will require a few quarters. We expect the bank to return to profitability during 2026. But obviously, we also have a merger planned. So I think it would be probably efficient for the analysts to think about this whole group on a combined basis, right? But we wanted to give you this sort of feeling on illimity stand-alone. Due diligence is ongoing. It's going as planned. So time-wise, we are confident that we will complete it in the fourth quarter as requested by the ECB. We note that, obviously, illimity at the end of 2024 booked in March and in Q2 booked in July, already booked quite a significant amount of losses. So we have EUR 300 million to build on, meaning that the due diligence might give us some further impact, but we need to keep in mind that a significant amount of adjustment was already made. EUR 110 million integration cost that we estimated in the offer period on January 8, we confirm it. So it's -- we think it's a reasonable amount, also looking into the actual job that needs to be done. We've already booked EUR 16 million of those, and we will book the remaining amount in the fourth quarter of 2025. We've started the strategic review of the illimity's noncore assets. You may recall that also in the call in which we launched the offer on January 8, we had made some comments about expecting to rationalize the group a bit in case the offer was successful. So that assessment is now ongoing. We keep analyzing these assets with a view on their potential for long-term value creation and how much investment would be required in terms of CapEx and human resources to develop them. As part of this process, we accepted an offer for the noncore stake in Hype from Banca Sella for EUR 85 million. Page 6, what was done and what needs to be done in our journey to capture the value from the integration. On the left, the actions taken. I will be very brief here. And on the right, what we expect to do. The meaning of this slide is think there's a lot of work, but things are going on plan, and we are really encouraged by the time line and the speed at which the teams are addressing the issues. Change of control done, obviously, offer settled 100% of the shares, appointment of the new Board of Director, Chairman and CEO done, appointment of partial renewal of the management team in illimity done. Due diligence on all illimity assets initiated and assessments of noncore assets initiated. That's obviously ongoing. On finance, we have a combined funding strategy for the combined entity, and we have the integration of the proprietary portfolio that's done. So we have finance now absolutely centralized, and we are managing funding and investments in a centralized way. Commercial Banking and NPL are looking at the assets, obviously, line by line, working with the teams. Good atmosphere, I would say, in terms of the -- the will and the skill of the people of illimity we found and their contribution also prospectively to the combined entity. Some initial cross-selling strategy is now being deployed in Commercial Banking. And on NPL, we're looking at the portfolios and also looking at strategic considerations. Noncore asset disposal actions, as expected, we started to look at all the assets. We're taking a long-term view, and we received an offer for the 50% stake in Hype, that I will get into later in the context of shareholder agreements that were already in place, and we accepted that offer. Next steps, fourth quarter completion of the due diligence, defining a commercial and retail combined entity product offer, integration strategy for the NPL business, IT migration road map high level. So that would need, obviously, also the redefinition of certain agreements that were taken by illimity in the last years and harmonization of the credit policy. In the first half of 2026, then we will define the combined entity target operating model, organizational structure, integrate the internal control frameworks. And at that point, also, I think we'll have a more definitive look at the future perimeter of the group, meaning that if there will be further potential asset disposals, we will have a clearer picture on what the perimeter then is. And that would make it possible in the second half of 2026 early in the second half of '26, I would say, to present the business plan that has stable perimeters, stable perspective on how the group will develop, a clear picture on the IT integration, and that will lead us then within 2026 to merge illimity to Banca IFIS, which is at current -- currently something we can confirm. Page 7, we give some details about the third quarter, showing you separately consolidated numbers, IFIS numbers and illimity numbers. I will not take you through the whole slide. It was meant as an extra analytical support tool for the analysts. Let me just say the consolidated net income of EUR 385 million obviously reflects EUR 400 million badwill. It reflects EUR 13 million in extraordinary costs related to the tender offer booked in nonrecurring items and EUR 16 million integration costs. That's part of the EUR 110 million of those EUR 16 million are already incurred. Third quarter '25 revenues reflect the usual seasonality. We expect it to accelerate in the fourth quarter. It's already happening actually in October. And in the fourth quarter, obviously, expect to see the effect of the due diligence and the booking of the remaining integration costs. That's something you need to keep in mind for Q4. Funding, Page 8. We wanted to give a little bit of attention to this important strategic aspect. You will remember that some of you asked us about what the value of the funding benefit could be, right, in the integration. We thought it was difficult to ascertain that [ outside it ]. So we didn't take a position. It's now becoming a bit easier for us to have a view. And also the external environment has developed rather positively. And I mean the spread of the Bank of Italy and in general, the funding environment for entities like ours. So on the back of that, we wanted to show you the maturities of our group funding. There's a lot of retail, but also some bonds. Some bonds, as you can see, it's EUR 2.7 billion retail and about EUR 700 million, EUR 800 million bonds. We're addressing that in an integrated way. To give you an idea, we knew we had EUR 300 million illimity bond expiring in December. The CFO decided to front-load that opportunity and to issue in July. And we issued at a coupon of 3.625%. The bond that expires has a coupon of 6.625%. It gives you the saving on that bond. Of course, it's only EUR 300 million. It doesn't apply to everything, but it is an opportunity. And so in the next quarters, expect us to be really, really focused on that in order to assist in the top line a bit because these are obviously interest expenses that go into the net interest margin. Capital ratios, Page 9. We end up at 14.25%. We start from 16.52%. Obviously, that was stand-alone. We had a very comfortable CET1 ratio that made it possible to think about this acquisition. So what are the moving parts? We have the contribution of net income after deducting dividends. We have a capital increase. We have some calendar provisioning, intangible assets and goodwill that we need to deduct. And then we have the risk-weighted asset increase, obviously, from the acquisition itself, right? And that's the big number that obviously impacts, but that was taken into account. So we land at 14.25%, including the 9-month net income net of dividend. So also net of the full year foreseeable dividend not paid out yet, okay? I would take you to Page 10, asset quality ratios. So gross asset quality ratio of 4.7%, net asset quality ratio 2.7%. We give you detail on the combined numbers. Obviously, the acquisition impacted those numbers. So you're having a bit of a methodology change, if you will, from the previous quarters. Therefore, just to be clear on what is assumed there and what is included in the ratio, we exclude the following things. We exclude govies that are at amortized cost that are EUR 2.6 billion of net book value. We exclude the NPL business. We exclude the acquired nonperforming entities. So as part of the business of the bank, so turnaround financing or NPEs from illimity's core business. they could be -- they are listed here. So EUR 0.1 billion Bilty, EUR 0.3 billion turnaround, EUR 0.1 billion structured finance because these were purchased, right? So we maintain this approach stable, right? And we exclude the notes with the claims business, the procurement dispute business, I think, is -- actually, I know it refers to the claims business that illimity bought into and the NPL business portfolio. So these things are not included in the NPE ratio. We had to make choices, of course. And we thought that this was the more consistent way to show you performance over time, right? So not including NPEs that are purchased in different shapes or forms. Page 11, the height disposal. So a bit of context. In June 2023, illimity and Banca Sella entered into a shareholder agreement governing their holdings in Hype. In February 2025, a deadlock arose in the Board of Hype under illimity's previous management following the negative vote cast by the directors appointed by illimity on the approval of the budget. That deadlock continued. Now the shareholders' agreement that's enforced provides a deadlock resolution mechanism whereby in this case, either shareholder can initiate a sale or purchase process by notifying the other with an offer and a fairness opinion issued by one of a number of specific independent advisers that were named in the shareholder agreement. And on the receipt of this fairness opinion, the receiver, the addressee can either buy the notifying shareholder stake or sell the stake at that price -- at the price stated in the offer and the fairness opinion. Now Banca Sella Holding notified illimity with a fairness opinion issued by UBS and indicated a fair value for the 50% stake at EUR 85 million and produced a further fairness opinion issued by PwC. illimity requested Lazard to execute its own fairness opinion for its Board, which confirmed the fairness of the price offered by Banca Sella. And at that point, considering the noncore asset optimization strategy, Illimity agreed to sell its stake to Banca Sella for EUR 85 million, not purchase it, of course, but sell it, implying a potential capital gain of EUR 4 million and an estimated 55 basis point CET1 benefit, which is obviously in the grander strategy of the group in the broader strategy of the group, a very, very welcome and necessary contribution. I'll very briefly go into Banca IFIS stand-alone. I'll try to do this in a few minutes, given the change and all the novelty that we've discussed in the call today. So net revenues in the third quarter at EUR 139 million. Commercial Banking revenues at EUR 84 million impacted by its seasonality as well as by the base rate effect. You don't see the base rate effect Q-on-Q, but you see it year-on-year. NPL revenues, EUR 54 million. They were EUR 55 million in the third quarter of '24, very seasonal. As you know, you've seen that every year in the third quarter in the last 4 or 5 years. It doesn't include capital gains on the disposal of NPL portfolio sales that we did do as usual. Noncore and G&S at EUR 1 million. It was EUR 9 million in the third quarter of 2024. Q-on-Q decrease is due to lower trading gains and dividends year-on-year decrease incorporates the base rate effect, right? Fourth quarter revenue is expected to benefit from the usual positive end of year seasonality and NPL and structured finance, we always say that they provide a stable contribution on an annual basis, but some quarterly seasonality. This quarter, we didn't get a lot of impact from the structured finance part. Commercial activity, factoring turnover, leasing, equipment and technology and automotive, all going nicely. We have year-on-year increases that look good, positive environment. And as we mentioned always, both in factoring and in leasing, we are driven by price and risk. So it's margin protection here. It would be feasible to present larger numbers, but not at the current levels of price and risk discipline that we've maintained in the past years and that we will continue to maintain. NPL portfolio, Page 15, another EUR 94 million of quarterly cash collection, very stable number. It gives us a lot of confidence in the portfolios. Revenues from judicial and extrajudicial activity at EUR 61 million. In third quarter '24, it was EUR 53 million. So it was a reasonable quarter for the NPL, even though it was the third quarter. So the team, in our opinion, is working very well in this division. There were also lots of industrial projects going on there, specifically related to the purchasing of very fresh portfolios and some forward flow agreements. So good numbers in Q3, even considering obviously, seasonality. Page 16, a little bit of detail on the interest income. We started showing you this analysis a few quarters ago in order to give you a view on the size of the margin compression, the overall margin compression and the evolution of the overall margin compression. And now you see that between the second and the third quarter, the overall margin between what we pay and what we get on the interest side has stabilized. So we're now solid at 1.6%. Base rate was stable, aggregate interest income slightly down, aggregate cost of funding slightly down, net effect stable, meaning that if, as we believe, in the coming quarters, the cost of funding can be reduced, then given that we don't have the negative impact of the base rates on the revenue side, on the loan side, on the asset side, right, we hope to see a return to widening of this overall spread. And if that's true, then we will have managed in the end a very, very strong rate swing of the last years in a fairly stabilized way. Page 17, costs. Q-on-Q other operating costs of EUR 5 million, marketing and IT, that's just when we start projects or when we activate the spend, I wouldn't look into it too much and EUR 1.6 million of lower costs offset related to leasing. Those are in [indiscernible] minus EUR 8 million on the NPL recovery side, judicial workout seasonality, cost of personnel, EUR 2 million, that's variable compensation timing. Not a lot of other things to report except the nonrecurring items at the bottom, we've already discussed it, and I would go into it. Page 18, we always get this question. I wouldn't explain the ratios you know them, the numbers. We're not seeing -- still not seeing widespread macro credit risk materializing and that's true for the payment days. It's true for the probability of default, it's true for rating migrations. And we only have some anecdotal evidence. So it is true that the GDP in the country is not progressing very quickly. So we have 0-point-something percent growth. Industrial production has contracted in the last years. But apparently, there's still a lot of liquidity around in the corporates of the country. And the health of the overall Italian SME segment seems to be quite resilient, quite stable. And therefore, we can only report what we showed you here. We have some anecdotal things, obviously, some -- in some sectors, some players fall, but no widespread [ credit risk ] issues. I would not present Page 19 and instead stop here. As always, there are lots of appendices. If you're curious about specific issues, we give you a lot of details there. Roberto Ferrari, the CFO, is here with me to answer questions as well as Martino Da Rio, sorry, and our Investor Relator. And so I would now hand over to you for any questions you might have. And -- and as said at the beginning, it's a big project, the integration of illimity, we're still in an ongoing assessment, but we're encouraged by what we've seen so far, and we will give you the conclusion of all those assessments after Q4. So in the next earnings call, I think we'll have a lot more to share. I hand over the question -- to the questions.

[Operator Instructions] The first question is from Lorenzo Giacometti of Intermonte.

Thank you also for the presentation and especially for the slides of illimity because I think they're very useful for those who like me were not familiar with the bank. So the first question is on the CET1 ratio. So what level of CET1 ratio do you expect at year-end 2025? The second is if you can provide an update on illimity's due diligence and especially what amount of write-off do you expect as a result of the said due diligence? And then if you can -- if you expect further disposals in addition to the Hype stake. And the last one is if you expect some managerial action in addition to the potential disposals in order to reduce the risk-weighted assets? And if yes, which ones?

Yes. So those are relevant questions. I see to what extent I can answer, but I definitely understand your line of questions. So on CET1 ratio target or expectations, right, for year-end. Now the thing is we have moving parts, right? So we need to be a little bit careful because the -- for instance, the due diligence hasn't yet been completed, and we don't have the numbers that come out of there. Let me say this, though. We expect to maintain a level of around 14% after the integration. That was always our target, and we think it is an adequate level for -- to run our bank in the businesses that it's in on the safe side. It may happen that in certain quarters, we could go slightly below that number, but not to an extent that it would question the overall target that I've just given you, right? So don't imagine it as a definitive hard floor because we wouldn't be able today to give you a guarantee, right, in that sense. But we reaffirm that we want to be around 14%, and we may occasionally go a bit below it. Fourth quarter '25, some things come in, the restructuring cost, EUR 95 million and the due diligence, right? So on that basis, I don't want to make any more firm predictions of exactly where we're going to end up, but keep in mind what we just said, right? So we reconfirm the target of around 14%, and we will always maintain a good and solid buffer compared to the 9.9% requirement that we have, right, including the 1% of [ Pillar 2 ] guidance. On due diligence, I already mentioned it. It's going smoothly in terms of time, right? So I'm not saying in terms of results, but in terms of project, it's going smoothly. So it can be concluded in December '25. It can be concluded with the full and very wide analysis that was requested. I want you to please consider that the bank has made roughly EUR 290 million, EUR 300 million provisions already in the last 9 months. So -- and that's work that's already done, right? So we are not expecting anything even remotely close to that type of number, right? But obviously, I don't want to give specific -- specific numbers before the due diligence is over. We'll book them in Q4 2024. So you will have a definitive answer in the next earnings call. Expect further disposals. Well, we have a strategic review ongoing. We're taking, as mentioned, a view on long-term value creation, but also on investments that are required to make a success out of the business, right? So you need to think about both. So if you have an activity and you wish to keep and develop it, what's that going to mean in terms of management time, in terms of HR and in terms of investments. And on that basis, we are evaluating certain parts of the group. In this context, we received the offer on Hype, which was beneficial for us also in terms of 25 -- 55 basis points. We're not going to rush, as I've mentioned before, and to force sales of assets, though, right? I want to say this very clearly. We don't have an urgent need to boost financials with short-term results, and we stay on that logic. But in case we see there are assets that don't make a lot of sense, we will be quick and we won't hesitate. So we're methodical, we're quick, but we won't be rushed or forced. That's the approach. Capital optimization and then levers to improve the CapEx, the CET1, sorry. Yes, there's a slightly wider approach to CET1. So we're considering, obviously, everything we can do to, first of all, to mitigate and manage risks because at the end of the day, the CET1 ratio is an expression, right, also of that and your risk-weighted assets are an expression of risk. So we are working on risk-weighted asset reduction, but this risk return assessment on assets, certain portfolios, et cetera, of concentration risks, of legal risks, that's something we are doing very broadly on the whole perimeter that we acquired. And we're also looking at, for instance, potential credit insurance against some large exposure. So imagine there's a very wide range of actions you can take to mitigate risks. And we're looking at those in terms of feasibility and opportunity cost also, right? At the end of the day, we -- our job is to take risks and be well remunerated for it, right? So not every risk reduction measure makes sense. Also here, we're moving methodically, not wasting time, but -- and we will be concrete in the next quarters. But there is no particular rush. I hope, Lorenzo, what I could say answered at least partially your questions, although I realize you might have wanted a number that I can't yet give.

The next question is from Irene Rossetto of Banca Akros.

A couple of questions from my side. You have confirmed the interim dividend, same level of the year before. Should we expect the same level of final dividend in May 2026? And then can you elaborate a bit more on the methodology change to calculate the asset quality ratio and why you took this decision?

Irene, yes. So on the dividends, first of all, dividends are important. They are a very important part of the equity story of the last few years of the bank. So we are committed to maintaining an attractive dividend policy that will support the bank's long-term growth, of course, and will ensure a solid capital profile, but it needs to be attractive for the investors. And you can see in the EUR 1.2 per share, you can see that reflected, right? So the bank did not confirm the dividend in absolute numbers as last year. It confirmed the dividend per share as last year on the interim basis, right? And you can see the commitment to maintaining an attractive dividend policy. You can see it in that decision. Now the final dividend for 2025 will depend on operational results of Banca IFIS and Illimity, but it will also depend on the results of the due diligence, right, and on the evolution of the macro environment. So I can't give you the confirmation that the remaining part of the dividend will be the same as last year, but I can give you the confirmation that the bank is committed to maintaining an attractive dividend policy. And in that context, the interim dividend was set on a per share basis at the same level as last year. That is, I think, as far as it's possible to go now. In terms of NPE ratios, yes, I understand the question. So we had to take a decision on how to show you the bank in its most readable way also over time, right? So we decided to put -- not to put in stuff that we consider extraordinary, i.e., stuff that's related to the NPE business of illimity that has various shapes and sizes, it has structures, it has notes, it has funds. Things related to in general NPEs that are bought. So we had to make a decision on what we consider, a, consistent with how we reason about this in the past. So purchased NPEs generally don't concur to the -- are not incorporated in the ratio. And secondly, that would give you a view over time, right, also of how this portfolio of illimity will perform in terms of flows to default. So what we decided to exclude were government bonds at amortized cost, well, that's not news. Our NPL business, meaning Banca IFISs NPL business, acquired nonperforming exposures that were part of the business of illimity, but that for us, we took the position that we acquired them knowing we were acquiring it right? Obviously, the transaction was done at a certain price, reflecting this. And we excluded notes with the underlying claims, right, and the NPL business portfolios. So under this methodology, starting from the 30th of September, so if we have exposures in commercial banking, further exposures in Commercial Banking that will deteriorate, you will see it in the NPE ratio. So you will be able to see how the portfolios develop over time. The starting point, we think was the best representation in order to give you a meaningful number. I hope I answered your question, especially in the forward-looking part.

The next question is from Manuela Meroni of Intesa Sanpaolo.

I have 4 questions. The first one is on the one-offs. Could you detail the components driving the change in the badwill from EUR 440 million in June 2025 to EUR 400 million in September? And you could also clarify what the EUR 60 million of integration costs recognized in the quarter related to? The second question is on 2026. Could you provide guidance on the expected net income for the year and when we should expect the presentation of the business plan? You mentioned the second half, you're thinking about year-end or earlier? The third question is on 2027. Previously, you indicated a preliminary 2027 net income of EUR 250 million, comprising of EUR 160 million from Banco IFIS, EUR 40 million from illimity, EUR 50 million of synergies on cost and EUR 25 million on revenues. Can you confirm those numbers and specifically the amount of synergies and the EUR 40 million contribution from Illimity for 2027? And finally, on dividend, could you please clarify the amount of dividend already deducted from September common equity Tier 1 ratio?

Okay. Yes. So I'll take them in the order in which you asked. Yes, breakdown of the badwill, we started in the second quarter of 2025 with EUR 448 million. We booked EUR 400 million in the third quarter of '25. So you see a reduction of EUR 48 million. That would be -- I'll give you the breakdown, EUR 37 million goodwill write-offs on that goodwill on controlled legal entities, right, on the book value of controlled legal entities, EUR 16 million of write-offs on the integration, mostly linked to IT, okay? You will remember that there were certain contracts in place, and we had to address them. So partially, this was addressed. And then there's a plus EUR 5 million of tax effect, okay? So if you add these up, you should end up with -- with the [ EUR 48 million ] that's the delta. 2026 income, yes, it's November 2025. We -- and we have a lot of moving parts, Manuela. So on this one, I think I'll just say that it's a bit early to give a guidance for 2026. We will present the business plan in the second half of 2026. And we -- and what's important when we present that business plan is not so much to date, having a stable perimeter and having a solid view on how the integration goes. So if you're asking me now, I think it would be nice to do it in the beginning of the second half of 2026. But that will require that we have a little bit of progress on certain strategic decisions because we want to write a plan on the basis of a perimeter that is clear and solid and make it also easy for you people to read what's going on. On 2027, we gave an indication of EUR 250 million target. You broke that down. You said, okay, this is IFIS, this would be a illimity, that would be the synergies. And I think it's a reasonable way to think about it. I would urge you, though, to think about it at a combined level, okay? So let me, first of all, confirm our estimates on the synergies. We -- I mentioned it in the press release as well. We confirm that the EUR 50 million and EUR 25 million cost and revenue synergies, respectively, [ precost ]-- pretax, sorry. We also confirm the EUR 250 million target for 2027. It will be really on a combined entity level, though, meaning that certain things may be a bit more. You attribute certain profits to illimity. illimity is in this quarter was running a slight loss, as you saw. But on the other hand, there could be some sizable benefit on the funding side. So you see the way we are reasoning about this is really in a combined entity way, right? And on that basis, the breakdown that you gave, I understand the reasoning, but it's not the way we are calculating it. But we are in a position in which we are reaffirming the EUR 250 million net profit target for 2027, and we are reaffirming the synergies. The composition of this will be slightly different as usual, right, when you have long-term planning things. On the dividend, you asked what was included, I would pass the question to Roberto Ferrari, who will give you a very precise answer.

Yes, Manuela. The total dividend that we deducted from net profit in third quarter '25 was EUR 83 million, that is EUR 73 million dividend and EUR 10 million foreseeable dividend.

The next question is from Giuseppe Grimaldi of BNP Paribas.

I have actually the first one, which is related to the NII trajectory. So if you could give us a bit of a sense of the evolution of that in the coming quarters? And linked to that, what should we expect in terms of cost of funding maybe in Q4 and as the year progress into 2026? And the latest one on DTA, is there any sort of recognition that we may expect into Q4, considering the amount of losses that illimity booked pre-integration?

Okay. So I'll take the first one, Giuseppe, and then passing the second and the third one to Roberto. So Roberto will get prepared in the meantime. Yes, net interest income, well, you saw the downward trend in the last quarters, right? So -- and it's looking like it stopped now. It's really the result of the rate environment. We try to reduce, as we've shown many times, our rate sensitivity, but there are limits to, obviously, the instruments you can use. You actually also run into regulatory limits when you try to hedge those types of things. So some exposure, we kept it. What we expect is that in 2025, the overall net interest income will be roughly down 10% versus 2024. And that is, as I said, on the back also of the mitigating actions we took. Now we're looking ahead, right? And we have the -- first of all, we have a very significant cash pile. So we can think about this in a serene and relaxed way. And we have, as we saw, right, a few billions of funding expiring in the next quarters, both retail and bonds. So there is an opportunity to improve the net interest income over the following quarters and years maybe. I would -- the funding synergies that you can expect are in the tens of millions. And so we think they will be impactful. I will hand over to Roberto for more clarity on this and also for the question on DTAs.

Yes. Okay. Actually, yes, it is a very benign environment for spreads either on govies and on bank issuances. I will remind you that the issuance that we performed in July that was at 140 basis point spread. In the past, we issued spreads that were north of 300 basis points. So actually, I would say that in the next 2 years, if the situation will stay the same, we will have important synergies in terms of cost of funding. Next year, we will replace deposit -- time deposit at much lower cost and also new -- we are planning new issuances on the wholesale market. To give you a number, I would say that the combined entity should have a beneficial impact of something between EUR 40 million and EUR 50 million in terms of cost of funding, in terms of net interest income for 2026. We have important issuances that will mature -- will redeem in 2027. And actually, we will have also beneficial impact in 2027. So the next 2 years will be very important in terms of cost of funding synergies on Banca IFIS and on illimity and it is important also to underline that cost of funding of illimity is around 45 basis points higher than the one of Banca IFIS. And I would say that in 2 years' time, we should converge the cost of funding of Banca IFIS and illimity. In terms of DTA, next year, not in the last quarter, next year, we will recover DTA from illimity. They will be around EUR 40 million and this will be through the merger when we will perform a probability test next year on our future profitability and we will recover around EUR 40 million DTA, but this will be in 2026, not 2025. I hope I have been clear in this answer.