Banca Monte dei Paschi di Siena S.p.A. (BMPS) Earnings Call Transcript & Summary

Good morning, everybody. It is with great pleasure that I welcome all our guests today, both those attending in person and via streaming. During today's presentation, I would like to focus on the future of Banca Monte dei Paschi di Siena, especially considering the great work we did altogether with the Chairman, Patricio Greco, on behalf of whom I bring you warm greetings, and the members of the Board of Directors to whom Paul, I owe special thanks. We chose to present our new business plan 2022, 2026, a clear and simple commercial bank at [indiscernible], our historical headquarters. Because just from the bank's deep roots, we can start again leveraging the trust of our customers and the commitment and dedication of our colleagues. Let's now start with the presentation. Andrea, please. Okay. I will go quickly through the mission, then we will make some enables, description then the strategy. And then we are going to deeply explaining about the initiative, commercial initiative, and there will be a closing remark and Q&A section. Okay. Thank you, Andrea. So let's start from the beginning, what we want to be. We want to be a clear and simple commercial bank. This is the vision, and we have a simple mission. We want to achieve sustainable profitability on a solid balance sheet and optimize our operating platform by leveraging on historic strong commercial franchise and our talented people. So we start immediately with some highlights. We are to achieve an attractive and sustainable profitability by targeting 60% cost income in 2024, 57% 2026, EUR 700 million in 2024, EUR 909 million in 2026. So we are going to have a strong capital, about 14% 2024 and about 15% in 2026. Our net NPA ratio will reach 1.9 in 2024, and we are going to reach 1.4 in 2026. In order to power all this activity, we are going to increase our capital by EUR 2.5 billion, and we start giving back the capital to our shareholders already with a net profit 25 and 26, payout ratio at 30%. So I'm sure all of you know quite well Monte dei Paschi. But the first time I came to this bank and I start looking the potential of the bank that is a huge potential, I was impressed in putting all together this figure. So we account for 175 billion client asset, EUR 79 billion net customer loans, EUR 3 billion operating income. As you can see, this is the oldest bank in the world. We are #1 in Taski, #3 in Veneto, #5 in Lombardy. We are the #5 banks for total assets. We are going, and we can leverage in reaching all these asset and activity of the bank with 1,400 branch. We have 10,000 front office specialists, 3.7 million customers. And our capabilities are expressed by strong partnerships that we have on the side of asset management and bank assurance. Two platforms that we will adapt. One is on consumer loan and the other is about to be completed, is wealth management. And then we have, I think, one of the most important asset in our group that is Banca Widiba. This is an excellent digital platform with 540 financial advisers. We have a strong franchise. As you can see, if we are going to consider the market share in the GDP of the region, practically, we are going to cover, starting from Toscana, practically 1.2% of the GDP coverage. Veneto, we have 0.8%. So practically, we are saying that we are positioned in the best in the region, the richest region of Italy. And some of them, there is no another important player that has the same position. Again, on Banca Widiba. 540 financial advisers, EUR 10 billion asset, 290,000 customers. This is an excellent platform. And despite just underlining all the awards, but the most important, I think, information that is on this slide is that Widiba classified second in the main digitalization index in Europe as one of the best front end currently available, not only in Italy and Europe. And then our journey that started at least 20, 25 years ago, ESG, it started really here. So Monte Paschi is an important founder, let's put in this way, at least in the banking sector with attention to the woman present, women presence, emission. And also in investing, we have more than EUR 5 billion asset management invested in ESG products. The strategy. You will listen to me several times repeating clear and simple. It's not by accident. This simple commercial bank should be focused and built on 3 strategic pillars: a business model that should be sustainable, a strong balance sheet. And then we have to start taking the legacy issue with sort of we'll use to say, fact-based driven approach. So why we are confident that we can really go ahead and based on this strategic pillar because we have 3 important enablers: our franchise, our people that are talented and committed in our ESG-driven culture, which are the initiatives behind this strategic pillar. In order to have a business model that is sustainable, we want to be efficient and simple. And you cannot change the pace or you can't drive results if you don't start from your organization. And the organization should be fluid, agile, supporting the business. We want to change the business mix. Today, we depend too much from noncommercial revenue. So we want to change the mix. And then we believe the digital despite, whoever is now speaking about digital and we believe that it's not only technology, it's also a mindset. And digital can help not only in reducing the cost to serve to customers, but to improving our capability and commercial capability. If we are sustainable, we have not to take care about our balance sheet, but the balance sheet is a given, how to say, element of our activity. So we want to be with a very low risk profile, we want to have a stable, strong funding, and we want to have a buffer in terms of capital. Then how we want to take this legacy issue, as I said, there is no particular recipe on that, but it's enough to have a clear data-driven approach. How we are going to achieve our business model is sustainable. We are going to simplify the group structure. We are going to build up a sort of stringent accountability and the strong process of governance for non-HR cost. We are going to optimize and redeploy our workforce, and we are going to streamline our branch. This action will bring to us EUR 270 million recurring savings starting from 2023 from the 1st of January 2023 just with the action we are going to put in place with the voluntary program of the solidarity fund for which we are going to spend EUR 800 million one-off cost. Then we're going to have EUR 30 million of savings in 2024 of what we call non-HR cost and EUR 40 million by 2026. What we do in order to change the business model, the business mix on the commercial revenues. First, new business line. We are going to have an advanced household financing offer. Second, we are going to develop what today is for us sort of best-in-class capability. So enhancement wealth management and protection also exploiting Widiba. We are going to uplift the small business proposition, everyone to have back some customers that left are not too many, but we want also to go to them. Digitalization to improve commercial capability. And here, we are just saying that we want to refocus our investment in order to finance our technology development. We want to maximize our end-to-end process, increase the efficiency. We want to make the customer happier to work with us through also digital. And we need to improve our engine, our CRM because it's the base today of any successful company. So why we don't put figures here because we don't need to make a particular investment. It's enough to rebalance the organic investment pool into the projects that are focused on the business plan initiative. The balance sheet, as I said, we want to have a strong balance sheet, so we can be focused completely on revenues. So if we want to make consumer loan and we want to uplift small business, we should align the underwriting process. We have only 1 unit that is covering the underwriting or the company, so small, big, medium. We want to have medium, small, large and specialized for consumer loan. We want to manage proactively MPS stock, and we want also to start selling part of them. We are going to finalize also a platform that is almost completed, helping us in enhancing our early warning and monitor system just to reduce the new flow, so to reduce the default rate. And we want to be fast. When there is a problem on a customer, normally, in the banking experience, the first to call the customer is the one that gets back the money. So if you are clever and fast, you will protect also your asset. About funding, we want to be -- to keep a strong funding base and should be sustainable. We are going to change the mix. So we are going to reduce to increase the deposit, retail deposit and this titration institutional funding, and we are going to remove our dependency from TLTRO. Practically, the indicator of this section is the fact that in the plan, the ECB funding is down by 13% compared to the 22% that is today. Capital. With the EUR 2.5 billion, we are going to have in 2024 a capital buffer above 300 bps, and then we'll be above 400 in 2026. So here, the message is quite simple. We have what we call ordinary that practically are 3.8 because the 4.5 includes also the reps and warranty on some NPA that we sold. And by the way, the last available data for disclaim on this Valentine project already spiked in July 2021. Then we have the traditional claims that the bank has. We are just separating the 2 amounts because 1 is connected, the 1 point are connected to MP borrowers, so customers that are not performing, and the 2.5 are ordinary claim. So I think we should weigh differently the 2 and weight really low -- very low on duration putting this way the reps and warranty because practically, we almost completed the analysis of these claims. Then we have the extraordinary that everybody is saying that is the strong legacy of Banca Monte Paschi. The extraordinary 1.9. These are related to financial information, 2008, 2015. And then on that, we are going to have another slide, Andrea, if you turn, where we're going to explain a bit, give some granularity about this 1.9. So we are practically 1 million that are claims, and we have EUR 800 million that are extra judicial claims. So why we put this in a different way because up to now, with relation to the litigation that are connected with the restatement carried out by the bank on February 6, 2015, so we won in all court cases. In one of that -- of these cases, the claim was rejected. This is an important claim because it's EUR 450 million. So you can easily make how much out of 1.1 is EUR 450 million. The claim was rejected by the court. Clear, there is an appeal. We go ahead, by the way, this time fish around. We won, and we have provision for that. Despite we won, we have still provision for that. Then the bank is really keeping a very conservative approach because also in this frame extra agile, despite some requests that really, okay, we wrote vague, but are inconsistent according to me. Despite that, we set aside provision. So what is the message I would like to do with the slide? That we believe we are confident that we have the proper level of coverage of this kind of risk. Second, we are not waiting. So we are keeping update on what is going on in all the courts, in all the sentences. We have a pool of very professional lawyers. And also recently, we asked some independent technical experts very well know the market, and they supported us. So all these things give us really the comfort that we have to follow this issue carefully, but we believe we have the proper coverage. Moreover, and this is what is explaining the concept of based on fact, we are really determined to really have an approach that will be data-driven and would be based on facts and the positive experience we manage. So it's a work in progress. We will pay a lot of attention on that. But what today I feel comfortable to say that based on what I saw and what I heard from lawyers, expert, our people, papers, the level of provisions that are currently cover this risk we believe is adequate. Now coming back because I want to give up this issue of legacy. I want to speak only one, [ finito ]. And as we used to say because we have to be focused on business. And Monte Paschi is a -- I don't want to make a sort of -- to have a contagious approach on that. This is one of the best commercial bank that we have in Italy. And I'm not just saying because I'm proud of what I think I saw several banks in several countries. Monte Paschi is a strong potential. So what we are going to bring as incremental contribution to the gross operating profit, we are going to bring EUR 400 million, as I said, this recap in 2024, EUR 600 million in 2026, then clearly, we are going to give up all the revenues that are connected with trading and with the LTRO. Then we are going to contribute to the operation -- operating profit of the bank through reduction of operating expenses, EUR 250 million and EUR 220 million. So the contribution, the real value we are going to build up of this bank with these few clear actions will be EUR 370 million in 2024, EUR 550 million in 2026. All the team agreed with me that we are going to be focused, and this is the message I would like to give to our shareholders, to the investors, to the analysts. We are going to be focused on this figure, EUR 370 million, EUR 530 million. Because what we want to build up is a bank that has the capability to change and to adapt. If revenues will not come or we find another way to make revenues or we should reduce cost or we have to improve risk. But the best for us is the operational profit. So this is the line that we feel committed. Now as I said, if you don't change the organization, it's difficult that you can tell to your people, okay, tomorrow, we make EUR 400 million. So the organization should be adapt the goals we want to achieve. That's why we are going to build up 3 new division, let's put it this way. One will be focused on retail. And this, we are going to leverage all the experience of our -- [indiscernible], he has a long successful experience in [indiscernible]. And so will be the person in charge to this segment that will have a strong contribution to our P&L. Then we are going to have that a large corporate, a large corporate is because we are going to incorporate here also the investment bank that is Monte Paschi Capital Service. And then we're going to have the SME corporate. That is the -- our historical point of reverence for all the customers, especially in Tuscany, but also outside Tuscany is [indiscernible]. So then Andrea will have the new structure that it had on cost management, and it's quite obvious because we want to get consumer loan. So we have a new division of retail. We want to make asset management, and we have the new add-on premium. We want to make small business uplift, and we have the small business stories. And we have -- we want to build up a strong governance. Of course, we are going to set up a special division because currently, the costs are together with procurement and are under the same head of organization. So if you want to be focused, we should be clearly structured. Andrea will have the responsibility of this position. So organization, a strict control of what we are doing. So we are going to have well-identified owner, clear accountability. Then we are going to -- you will see in the action we put in place to incorporate consortium that is our IT provider. We are going practically to centralize. We are going to have a very sophisticated and quite tight way of monitoring the results, especially the commercial. And we need to have an HR platform that is working because as you will see, for us, it's important that the action we are going to put in place with the voluntary funds that implies reduction, significant reduction of people within the end of the year there will be properly managed by a dedicated structure in order to overcome and not to have any operational risk. So let's say a few words on capital increase, EUR 2.5 billion. Of course, the pricing will be defined at the time where we are going to launch close. We have the brand writing for the full amount of top class bankers, investment banking. So we have BofA, Citi, Liu Banca and Credit Suisse. We already have the pre-underwriting agreement. It's clear that is underwriting agreement that this compliance with the one that had been issued for similar transactions. Clearly, there are some conditions, and we put in the press release. But I think it's important to have such respectable group of banks that trust this bank, trust the management are confident with the business plan. And together with the endorsement that we got from MEF, we feel really well supported. And this is important for us to start also with this support. The timing will be practically the first action will be today or tomorrow, it depends on regarding that we are going to file ECB. Then we are confident that we'll get soon -- the MEF will get soon the approval for the extension of the restructuring period. The General Meeting of shareholders is expected to be on the middle of September. Probably, we are going to convene in August, when we are going to make the approval of 6-month results. And then the launch of the plan of the increase of capital will be in the last quarter of this year. Now the first decision was taken yesterday. So we decided to incorporate. So as you see, we have 1, 2, 3, 4 companies, we will have only 1 that is the bank. So we are going to incorporate Monte Paschi Capital Service. We are going to incorporate the leasing in factory, and we are going to incorporate the consortium that is the operational machine with IT. I think the rationale is quite obvious. So each of this company has a Board of Director as his own auditors, as his own central function, especially compliance, audit, HR, CFO. And the incorporation is not a matter to save the cost, okay? It's clear that we are going to save. But we'll become more efficient because today, the factoring, and make the example of the factory is not leveraging on the capability of the network, and we can really grow significantly by making more effective the integration between network and product factory. The COG is obvious because we are going to have, first, a significant saving because by incorporating, we are not -- we believe and we already mapped, we have some positions that are a duplication. Then when you make a new product, you have to write to the consortium and say, "I want to make this profit. Okay. Please give me the demand in this frame ." We have to fill in the frame. We have to send to the COGS. We have to wait there and Board of Directors will decide. So it's a very unnecessary complication. So we will put together and we already do the decision consortium will be merged within the end of the year. All the other company will have an effect from the 1st of January of next year. Clearly, we are going to have some, how to say, administrative things that to be settled, will be settled within April. Okay. This is -- as you remember, we expect to add EUR 40 million of saving. So what we are going to do? We are going to centralize the cost management. What does it mean? Today, we have 80 center that has a budget to engage the bank, 80. We are going to have 1. So at least this guy can make some comparison now receiving from 8 different sources. Why? If you are alone, you have no comparison. So this is the first. Second, we are going to introduce the concept of zero-based approach. We believe that this bank has a huge potential commercial potential, but there's also huge potentially optimize the process in managing the cost. What does it mean zero based approach that we start not to accept if minus 5% is enough. I wonder why 95% should be the right figure. So let's start again. If somebody wants to have something should make an order. So we collect everything. We ask why, and we try to make everybody responsible even from EUR 1,000. So we are going to optimize the process to have a better assessment of the definition of expensive to have an owner and everybody they want to spend money should justify why. And we can spend money despite what is regulatory, how to say, obligation that we have or to increase the revenues or to decrease the cost. So our 3 directions, all the other, if we want to be more fashion or to follow what the other banks are doing. We are not interested. We are focused on our customers. Then we are going to make a review of the process. And this will be supported also by this action we put in place by the incorporation. Okay. A chart, this is the most important -- okay, is the one that is closer to us in order to be implemented. We plan to have throughout the plan, a decrease of around 4,000 people. We are going to have 3.8 within 2024. But then we plan to get already savings for EUR 270 million. These savings are calculated on the basis of more or less 3.3, 3.4 with voluntary decision, and we are going to implement the Solidarity Fund. No, we want -- why is important this action because we want to make this action within the end of this year. Also because we can take advantage of this special fund that has 7 years of length. This is unique and will expire at the end of November. So as I mentioned, we are ready to face the exit. And hopefully, we will be successful and they think is in the interest of the bank to get to these results. So as you can see, after the solidarity fund implementation, the ratio of people in network will increase by 4 points. So it's automatically understandable that the person eligible to this fund are more connected with function of an office, an office function. So then we are going to implement through the support of the digitalization, we are going to reach this target of 17 and 13 will position the banking at the top level of best benchmark. Streamline of branch network. We are planning to close 150 branch, 100 up to 2024. I would like you to pay attention to what we put on the bottom. So we are not closing the branch to save cost because if you save cost, it means that you don't have revenues. We are going to close the branch that are not profitable. And if we start to be 100, would be 200, we close to 200. There is not a number that we have to achieve because we estimate that almost this number of branch today are not always in a position that in terms of performance, I mean, that can be in the positive area. We are going to implement action. We see the results will come. The branch will not be closed. If result will not come, the branch will be closed. So it's clear that this doesn't mean that we are not going to optimize the space, we are not going to migrate customer on online banking, right? But the principle, really, this is important for us. We are going to base the action on economics. Moreover, as normally when you close a branch, you lose the customer. If we decide to close, we will put in place a program for customer retention and of the branches we know. Now as I was mentioning that we want to grow on some -- thanks to some action. I think it's proper to show to you why we are confident and which are the metrics we have in mind in order to improve our revenue. So household financing. We are going to have, as I mentioned, to exploit our new platform. We are going to have new products. We are going to improve our analytic capabilities with the true CRM. We will keep mortgage, consider mortgage as hook products, so we have to have on our shelves. This action will bring us additional EUR 130 million in 2024 and EUR 260 million in 2026. We plan to reach a stock in 2026 of 3 billion. So it's quite easy if we get 3 billion, it's easy to calculate adjusted by the risk, what is the net revenues. Then we have the wealth management. In order, we are very well positioned there. So we have to make an effort an additional effort. So if you want to get more results, we have to add more people. So we are going to increase the number of upfront adviser. We're going to have a sort of continuous enrichment of the product. We have a new platform that is analyzing customer, better understanding the need, is a very well kept platform that we are going -- already we implemented, but we are going also to finalize with some additional step in 2 months from now. And then Widiba, Widiba I'll say something in the next slide. So how much we are going to get here? So practically, we are going to reach EUR 36 billion of asset management in 2024 or more than EUR 40 billion in 2026. In bancassurance, we are going to have a commission for EUR 280 million in 2024 and more than EUR 300 million in 2026. The stock will be EUR 32 billion in 2024 and EUR 36 billion in 2026. Now small business proposition here, we are already a key player, but we want to enter in this specialization. So -- and we want to redesign also our approach based on new cluster definition. And we want to be specializing with our apps on different business verticals and focusing on what we call self-liquidating, not midterm loan, but self-liquidating because it can bring additional fees by the rolling and the revolving of the facility. So we're going to increase EUR 3 billion loans. This will bring more than EUR 100 million additional revenues in 2024 and EUR 200 million in 2026. Win back written clients. Okay. We put this in this section not because we count to have a lot of results. Because at the end, as you can see, we have EUR 600 million. But this is also a motivation factor. So we want to go back to our cost, in particular to the one in the last 2 years, they bring -- brought with them EUR 3 billion of assets, and we want to ask them to come back or to us or to Widiba. And We plan at least to have EUR 600 million of asset back from this action. Now the EUR 135 million I mentioned of consumer loan, why we are confident that we can achieve it because today, we have a penetration of consumer finance that is 5.6. The benchmark is 10. If we look at our commercial effectiveness, we are half of the competitors. So by using our platform, reviewing the process, increasing the number of specialists, making some marketing, we believe that we can close the gap. And by closing the gap, these are the figures or new production that we can achieve. Today, we are 0.7, and we can grow 1.3, 1.3. We are 0.7 are what we are doing today with our pattern, that is Compass, but we will keep working also with Compass. But we put what we are producing today with the new production, the 1.3 is only ours, just to show that our capability is already close to this 1.3 because if we make this action, we increase our penetration, and we improve our commercial capability and efficiency, we will reach this level. On Asset Management, now we have on the total of our customer, we have only 15% of customers that are eligible, classified as affluent, the market is 17. So -- and also, if you see the average of asset, of financial asset by customers is lower. So normally, if you have 13 and the other 17, there are 2 reasons. All you don't know, you don't have the correct information about your customer. This is 1 option, or you didn't exploit totally the potential of the customer that you consider at a lower level. So that's why we put these 2 indications. So the asset management, as I mentioned, are expected to grow by EUR 8 billion. So bank assurance. You will see later in one slide where we are showing the commission. We are one of the best player in bank assurance. Clearly, we -- it was -- as you see, we are already above the peers in terms of life bank assurance for branches in times non-life. But this, I think, is just a little bit of figures that we put in place that we put on the slide just to see that we were thinking while we were deciding this target. We have already a strong position because EUR 30 billion is a very well starting point. We are going to reach EUR 36 billion. And also in premium for insurance business, we are going to move from EUR 266 million to EUR 368 million. This growth are in line with the market. But clearly, for us, it's additional efforts because we are very well penetrated. Widiba, now despite Widiba is in the group, we have now to influence Widiba. Widiba should be independent because if I start discussing with the general manager with Widiba what he has to do probably I will have a problem in understanding him. So that's why they should be, I would say, autonomous, of course, the frame of what we decided that. But that was the reason why we didn't incorporate these figures in our -- in the business plan. So we took a very conservative approach. We incorporated the standalone Widiba plan, but this is the plan that the current management is committed to achieve. So if it's successful, we will be successful because this is additional asset revenues that are coming to us. But -- and they have very clear strategy. They want to increase the number of advisers. They want to enlarge the product offer, they are going also to spend money in advertising to refresh the brand. So this is a leading European platform. And really, we are very proud that we did as part of our group. Now how we are going to finance also with this digital investment that we want to put in place to simplify the process, to improve our risk capability, our commercial capability. The bank was used to invest more or less EUR 150 million each year. Didn't invest this money, I believe, in 2021. That was 150. That's why in the old plan, there was 150, multiply by 5, so it's 750, 800. We believe that part of this investment should be reviewed, and we have to be focused on invest that are bringing value-added and there sort of enabler for the business plan. So just by making this selection, we believe that EUR 100 million, EUR 110 million of investment per year are enough because EUR 100 million, and we are going to have the total CapEx 2022, 2026 in EUR 500 million. 350 are not connected. What we call investment for running the bank. The bank has practically, as you can see, we have EUR 30 million just to run the bank, to open the bank. Then we are going to, in this line, we are going to set aside what are investments that are not connected specifically with IT. So some adaptation to fire regulation for building, maintenance or safety compliance, some branch restructuring from IT. And then we have EUR 350 million of IT. Of this, EUR 270 million, out of this EUR 270 million, almost 90% will be investment in digital. 32 are for Widiba, all the rest are commercial platform, some cyber security also to manage NPE with a more efficient way, some testing -- IT testing platform, some also digitalization of documents. So clearly, we put here the most significant one. So the bank -- this plan despite saving cost as an important investment also in terms of digital. ESG objective, as I said, this was one of the -- we were sort of pioneer on that. So we have important task, as you see, in terms of reduction in 2026, some adoption of digital signature practice will be more than 90%, sustainable finance more than 50%. Internal rules of inclusion will be further reinforced. So practically, all this action will make us despite, I think, we are very well positioned quite committed in this as well in this ESG integration in the bank. So also on the side of supporting the customer. We have already integration ESG factors in credit strategy. We have also some support development of the country and company in this sustainable transition. We signed some agreements with such. And we are also to further development of a commercial offering to ESG in investment product. I think this is an important part of our plan also because we believe that investing in ESG is helping us enrich sustainable results and also committing to our staff in what really is one of the most important matter that we have. Some financial targets, okay. Yes. As you see, we are showing here some old figures, but these were the macroeconomic -- was the macroeconomic scenario we used in implementing the plan. This is from March, if I remember well. March, we have the interest rate 66 bps in 2024, 100 in 2025, 119 in 2026. What we did with our plan in a conservative approach, we practically took only the 66 bps, 66, 70, if I remember well. And practically, we kept flat in the projection '25, '26. Clearly, we were conservative. But now what is the new evolution of rate is also showing that we were really not only conservative because we didn't take the '25 and '26, but also because the starting point 24 is much lower what we have today in Bloomberg and also ECB. So it's important for us to say that we have some buffer and we try to use it the best way I'm recapping the financial target. Commercial revenues, we are going to grow by EUR 400 million in 2024, EUR 600 million in 2026. We give up to EUR 300 million LTRO. We are going to have operational costs lower by 248, 221. The NPE ratio 1.9, net 1.4, only 13 liabilities connected with CV funding and more than higher than 14 and 15, the chat one. So pretax profit will be EUR 700 million and EUR 900 million in 2024, 2026. And we are going to have a dividend payout ratio of 30% on the profit, '25 and '26 . Now a P&L, just to help you reading all these figures we were providing. As you can see we are going always to show the tax profit. But then in this slide, we are showing also the net profit, thanks to the effect of DTA, and we have a slide for that. All the other indicators are quite important, and all of them are improving. I think what is important is the consistency of the results, what is on the right side of the slide. So sustainable profit, sustainable revenues, revenues, efficiency, risk profile, strong capital, liquidity and profitability. So we are coming back to the first slide. Because the goal also in the presentation is that we want to show our consistency. Our consistency will be shown also during the presentation results because we will be keeping updated the market about our achievement. And we will stick to this strategic direction. Now net interest income. You already saw in the previous slide, we are growing 3.8, 21, 26 loans, we are growing, if I remember well, in a very low percentage, very low, EUR 3 billion additional. But we are changing the mix consistently what we mentioned. We want to be focused on retail. So the mix of retail, the share of retail will increase from 44 to 51, and contribution to this growth will be the consumer finance that will move to -- from 3.1 that was -- that is expected to be in 2024 to 4.8. Okay. This is, for me, the most interesting chart even if it's a bit overcrowded, I try to simplify. On the left, you have the fees. Now we have EUR 1.484 billion of fees. Today, these fees are half coming from traditional bank and half from bancassurance and asset management. What we are going to do, we are going to grow marginally on traditional banking because there is no way the fees on current account, the fees for transaction will decrease, and this is obvious. So we have to replace it with additional fees. And that's why we are investing and we plan to be focused in asset management and bancassurance, and life and protection. So already in 2024, practically, this bulk of fees is going to cross the traditional one and in 2026 will be practically EUR 200 million more. What are the message from this slide? We are really a bank that is focused on capital-light business. And you will see in the capital work. We are a bank that strongly believe that today the future of the banking sector is driven by the capability to keep your customers and to offer to him a proper advisory service. So the total volumes will grow by EUR 10 billion. And you will see we are going to finance part of this growth through conversion of assets under custody. I mean the growth on bancassurance and asset management, right? So the grower will be 7 and the other will be 8. So the growth in our product will be 15, and we are going to finance partly with this EUR 2 billion that we're going to take from cost reduction. Cost reduction, I think already mentioned on that we are going to reduce the cost. The cost of HR will decrease by EUR 170 million. But here, we are incorporating the increase of wages due to the national labor contract. So it's almost EUR 20 million per year. So we are going to reduce the branch and we are going to reduce the other costs. NPE. First, we want to give a composition. Now practically 75% of our today NPE stock is secured. We are going to decrease by EUR 1.3 billion. To support the decrease, we already are -- we are already in process -- in progress of sale around EUR 800 million. Hopefully, it will be completed in the second half of the year. So the gross NP ratio will go down from 4.9 to 3.3, the net NP will go down by 2.6 to 1.4. Then the coverage will improve significantly. We are going to move from 48 to 59 already in March. This year, if I remember well, we have a coverage of 53. So I mean, it's feasible. And then the default rate will decrease, improving our -- reducing the inflow. The cost of risk will be kept across the plan below 50. Funding. We want to have a stable funding base. We are going to increase the deposit. As you can see, the share will expect deposit retail earning, I mean, we are going to issue new bonds in order to be compliant with brand. And you will see we'll have a solid position, and we will be above all LCR and SFR indicator. Here, we have the Italian Govies. Now this is the position that we have in March. You will see on the right sensitivity and the duration, we are going also to -- we'd like to manage this volatility. So while the bonds are going to expire if we buy, we will put in amortized cost because I think that is important in the bed, in the good time not to count on revenues that are coming from something that we cannot drive. So this is our approach. Okay. This is the interesting part. You saw the net profit. So practically, we have 2 opportunity in terms of DTA. We could have an approach to account EUR 600 million in 2022 or to have a more conservative approach to account part in 2022 and to make a second reassessment in 2024. This is the -- we decided for the most -- the more conservative approach. So in 2024, thanks to the DTA, the net impact of tax will be EUR 300 million that will bring the total profit, net profit for the bank above EUR 1 billion. Then clearly, we are going to go ahead, I think this tax rate in 2026 is 8.1%. But then the bulk that we have will make us confident that the tax rate will not be very different from the level that we are going to have 2026 for, I think, a long time. Capital evolution, the work of the CET1 ratio work. So we start from 10.8%. We will increase the capital, will bring 500 bps, then we are going to consume part of this capital because we had the restructuring expenses. Then we are going to increase part of the risk-weighted asset, but we have the profit up to 2024. So thanks to all this, we will end 2024 with 15.7 in a normal situation, why we put in this way the slide? Because practically, after the increase of capital, we will be 15.9. This -- we are going to finance the restructuring cost, and we finish to 15.7. So we have a fast capability to generate additional capital because our pretax profit is going immediately there to contribute to the capital. That's why we are using tax profit because it's the right indicator to measure the capital generation. So then we are going to have the headwinds due to the adoption to the new model adoption. So we reached 14.2. Then some risk-weighted assets connected with organic growth, then the earning generation, 2.7, then some additional changes in the capital reached 16.2. We distribute to dividend and we finished with 15.4. A quite safe position of capital. Looking also at the starting point. So I'm going to close, I think I'm on time. We have a clear, simple commercial bank. This is the goal, and I'm confident that we'll achieve that efficient and simple organization. We are going to change the mix. We are going to have a low-risk profile to improve the funding. We are going to have a strong capital, and we are going to have a sustainable profitability with attractive dividend in '25, '26. So just let me conclude by saying that Monte Paschi Siena is a part of the economy, as well as the social and cultural heritage of the city, and I believe also of the entire country. We believe it can regain a key role in Italian and the European banking system. The room, [indiscernible], that host has today is an emblem of the bank's core values and symbolize the solidity and the strength of Monte Paschi di Siena and what we aim to reach again. This room originally, if I remember well, and I informed me, but it was a church. It was built in the 11th century on persisting Roman ruins. The ROC here includes our entire history with the oldest document tracing back to 1472. And here, there is the deemed bits of foundation of the bank. I think the evolution and the development, we aim at start exactly from this heritage. So thank you. We are ready for the Q&A session.

I think we can move to questions. I mean, unless there are questions from people here, to questions from people connected on the phone.

Excuse me, this is the operator. The first question from the English conference call is from Manuela Meroni with Intesa Sanpaolo.

I have 3 questions. The first one is on the stage of talks that you have with European regulators. So I'm wondering if this plan has been already submitted through the OCI regulation? And what is the view of them? And when do you expect to have the official approval of the plan? The second question is on the NII, Slide 21. Could you please share with us the main moving parts of the NII, including volumes, rates, cost of funding, contribution, the Govies portfolio, TLTRO and so on. And the third question is on the regulatory headwinds. Just to be sure I understood correctly. In your business plan, you have embedded 180 percentage basis point of negative impact from the regulatory headwinds. And this includes Basel IV phased-in. So I'm wondering if this is correct and what would be the full impact.

You will start and then...

Okay. First of all, good morning to everybody. I'm happy to be there joining this call. The question on the net interest income. Actually, I would like to give you a summary view. I think it's important, first of all, to look at the net interest income, excluding the impact of the TLTRO. As you know, the TLTRO program is expiring. We have EUR 29.5 billion outstanding expiring in the next 3 years, this year and the following 2 years. Excluding -- and this will have clearly a negative impact on our NII. Excluding this impact, the net interest income is expected to grow by around EUR 350 million in '21, '24. And let's say, by roughly breaking down into volume/mix impact and rate impact, we estimate the volume/mix impact being around EUR 190 million as a sum of the contribution of the basically newly established consumer finance business for EUR 135 million and the optimization of the retail funding, i.e., the basically runoff of term deposits contributing around EUR 55 million. We estimate that the rest roughly is rate impact amounting to EUR 160 million to square with the net interest income overall trend in the period, you have the TLTRO negative impact for EUR 180 million. And I was talking about '21, '24 period. Then if you extend this analysis to '21 '26 period, you have to note, as mentioned by Luigi, in the presentation that to be conservative, we have assumed flat rates from '24 to '26. And so the net interest income is expected to grow only by an additional EUR 70 million in '25, '26. So the overall delta is EUR 420 million with an overall contribution of consumer funds in the period of EUR 260 million. So to conclude on this question, we are confident that we have quite a relevant buffer in terms of additional NII growth in case the macroeconomic scenario and interest rate scenario presented by Luigi materializes actually also in '25, '26. So this for the second question. On the first -- on the third question, I would leave it to Leonardo.

Okay. So regarding regulatory heading, most of them will be get by the bank by the 1st of January 2023. In fact, I mean, the 2 most important source of regulatory headwinds are the RWA inflation related to the evolution of the higher remodels to the guidelines on PD and LGD that will have an impact of around 200 basis points. And then we will have the last tranche of first-time adoption of IFRS 9 phasing that will account around for 65 basis points on CET1 ratio. Then starting from that, we will have only some, I would say, almost residual impact related to the calendar provisioning, something around a 30, 40 basis point on the plan horizon. We do not expect significant impact from Basel IV at least within them really manageable on the plan horizon. That given to the fact that after the evolution of the IRB models, we will have more conservative credit parameters than the floor. And also as the CEO said, we will plan to rely less on trading income. So impact from the fundamental review of the trading book will be really manageable. And also on the operating risk side, we already have some significant buffer in our AMA model with respect to the current standard -- so we do not expect significant impact from these 2.

Okay. So I take now the first question. As we wrote in our press release, we have been informed that negotiations are quite in advanced stage, and I'm referring to the negotiation between Italian Republic and the European Commission. They are -- the parties are not -- is not Monte Paschi. Practically the conclusion this discussion, as we wrote is expected to come soon. So we are quite confident also because we believe also authorities, everybody, we believe created in order to fix all the issues that are connected with Monte Paschi. And so we are confident that is kind of conclusion that will be soon on the conclusion of this discussion.

The next question is from Antonio Reale with Morgan Stanley.

Good morning, everyone. It's Antonio from Morgan Stanley. Thanks for the presentation, and welcome to Andrea also from my side. I have 3 questions, if I may, please. One on your funding plan. I think in your press release, you plan to issue a total of EUR 12 billion securities by 2026. I think this will cover some bond maturities and you talked about lowering your reliance TLTRO. Can you give us a bit more color on the optimization you plan to achieve across the capital structure. Are you planning to [indiscernible] in the plan horizon? I'm asking you on funding because historically, funding has been one of the relative weaknesses you for the bank, you could pay historically a premium loyalty to peers to fund some of your business. I wonder what assumptions you're making throughout the plan targets? And what do you think it would take for the bank to change that funding mix? Is capital enough and is countered in the region? That's my first question. Second question is on your outlook for cost of risk, to target at below 50 basis points throughout the plan. So my question is what makes you confident in this environment that default rates will stay at 1% or below? I guess, especially in light of some of the macro uncertainty, but also the changes you foresee in the loan book and your loan mix, I should say, which would execute towards consumer finance and SME. And lastly, can you talk about some of the flexibility we pain to crystallize capital gains if needed with some of your own in partnerships, mainly AXA and Anima. And what is included in your plan?

Okay. Maybe I take the first question. So on our funding strategy. And in this respect, I refer to the Slide 46 of the presentation. We have a number of actions in place to remix our funding. As mentioned, first of all, as mentioned before, and this is mainly initial cost. We are basically reducing our return deposits and increasing offset deposits. But then coming to wholesale funding. We plan to have EUR 12 billion of issuances in the period, mainly replacing existing issuances as a mix of senior preferred, senior nonpreferred, subordinated bonds and also covered bonds. In particular, we are assuming a couple of non-preferred bonds issuances over the planned period. And in the plan, we are assuming to replace 3 subordinated bond issuances that might be called then depending on the prevailing conditions at the date and to replace them with new issuances to be done in the overall in the next 3 years. So this is on the first question.

Okay. Regarding cost of risk, yes, we are confident we will be able to achieve a cost of risk below 50 basis points along in the plan. There are different reasons for that. First of all, we will leverage on the proactive approach we had with clients in the last 2 years that allowed us to really assess the credit position, our evolution of the monitoring of the deterioration of clients. And if you look at our -- in the last few years, estimation, we actually had a cost of risk that was actually pretty -- every year lower than our expectation. And also in the first month of this year, cost of risk and especially the full flow is below our conservative assumption. So I think, yes, that is a target that is definitely rich from the bank.

Okay. On the cooperation with Anima and AXA. We have very good duration. And as you see, we are counting a lot on even more, how to say, improvement in the partnership. Both of them, we are having -- we are discussing a lot about the business that we are running together, but we like to keep separated what is the industrial view of the partnership and what is the capital increase. So we are open, but we believe that now we should be focused -- we have to be focused on the size of improving our revenues and they are ready to help and to support us with training, marketing. So this is the part on which we are focused a lot. Then clearly, we are open and also ready to discuss if on the side of capital, there should be an interest. But the 2 things we would like to keep separated.

The next question is from Giovanni Razzoli with Deutsche Bank.

A couple of questions. The first one is on the legal risks because it seems to me that this issue is a little bit of dramatic from momentum point of view, also in light of what you had detailed in the presentation. Can you remind us how much you have reduced over time in the last few years and the legal risk? And what is if you can share with us what could be a reasonable estimate of looking at the past experience, what could be the evolution of those in the future. I understand this is a very random element, but can help us pencil down the actual risk profile of the bank. Second question on Slide #8. It seems to me that you have been extremely prudent in terms of evolution of the rates because you have -- you're assuming only July or 3 months of 10 basis points in 2023. Is my understanding correct? And if so, what is the upside in [indiscernible], we have the 100 basis points of Irish expectation. If I'm not mistaken, you do have a sensitivity of more than EUR 100 million of NII to 100 basis points of increase in rates. So we may reasonably assume that you're already -- is in the pocket. So I wondering what my understanding is correct. And the last question, this is a Q1 maybe a little bit strange, but also because that is the digital approval in progress, but I was wondering what is -- if it's possible to think about an incentive scheme, so to align your interest with those of the investors as you are clearly putting your reputation in place here, you have a strong track record. So I was wondering what you're thinking on that.

Joanne, sorry, just one clarification because I didn't not get fully the first question. You were asking about if I got the correct expectation in terms of risk and charges for the future, but I missed your question on the past. What was the question?

No. My point, Andrea, is this one on the legal risk, basically, you have a good track record in terms of reducing the legal risk you've shown in the slide. If you can remind us what is the track record of such a reduction also taking into consideration some one-off transactions that you had? And what could be a reasonable expectation for the [indiscernible] evolution going forward?

Okay. So maybe I will start replying on the buffer on the NII and then -- we then move to the other 2 questions. Then on the NII, yes, we have been conservative because basically, we are not, let's say, fully factoring in what we are actually already seen in the market and in the new business with our clients, actually, the rate of new business is increasing. And this, we see it already in our daily reporting. And as you can see, as you know, the rates are already skyrocketing. So for sure, we have a buffer that in '25, '26 is around, let's say, EUR 150 million. Then we might have upside also in the first 3 years just to give one example. At the moment, we are not fully factoring the mechanism of volatility where, as you know, there is a discrepancy between, let's say, the rates which we invest in, let's say, what we pay because there is a calculation based on the average. So yes, overall, we think we have an upside on this P&L line, then I think we can move to the incentive scheme.

Yes. So for the digit comp, if I remember well, there were some limitation on the variable part, but was connected with certain level of reaching the total compensation. So it means that the level of employees normally or average salary of employees or managers, there was already the possibility to pay a variable part. And I don't believe that now they will introduce something differently. Now we -- as I think we wrote in the press when there was the bridge of all, clearly, the issue of the variable part will be settled and solved after the increase of capital fully. And hopefully, we have to see the commitment of the comp. But I don't think they are going to make a commitment more rigid than what it was before, right? So we count also and we put some incentive cost in our planning at the level of HR cost. And regarding this litigation, particularly the bank was quite effectively reducing the stock because we reached, if I remember well, EUR 10 billion, then we went to EUR 6 billion, now we are to EUR 2 billion. But it was a different environment. So there was not -- some were in favor of the bank. There was not some position also in the civil litigation in favor of the bank. Now situation is changing. So if you ask how much we plan to -- the additional litigation, it's difficult to predict. What we can say, we are confident about the current level, and we believe that we are well provisioned. And then we will be very close in analyzing what is happening, what are the entrances that are going to be issued -- predicted value by the court and strong from the. And we start from a strong position of a quite well provisioned level of our risk.

My next question is from Corinne Cunningham with Autonomous.

Could I just follow up on 1 of the previous questions, which was about did you plan to issue any Tier1? Because this is obviously one of the key issues for you in building up to your rep. And also, do you expect market access for senior and secured? Do you expect that pretty soon after the capital raise? Or is this more back-end loaded? And last question on funding is also about deposit funding. It looks like your plans are also reliant on a very strong pickup in deposit funding. How do you expect that to be delivered?

And sorry, on the first question. On the first question, we are not expecting to issue Tier1 in the plan, so that when you look at the capital ratios, actually, the most relevant one for us is the Tier 1 ratio, which is the one most biting. While I confess, I missed the other question. Can you repeat?

The other question. Yes, sure. And the other ones were in terms of timing of when do you expect to be able to access the market? Do you think that would be fairly soon after your capital raise? Or are you back-end loading that also on your deposit funding, your plans are assuming that a stronger pickup in deposit funding, how do you expect to deliver that.

Okay. Thank you. Yes, as you mentioned, let's say, the first relevant action of our strategic plan is the capital raise. And then the funding, so we, let's say, expected to successfully complete the capital increase in fourth quarter '22. After that, we will be in the market again, for funding. So we have, I think, well disputed over time plan of insurances. We will in the market with non-preferred bond issuances ideally immediately after the capital raise, and then we will go on with our plan that, as mentioned, is well distributed over the time horizon and targeted based on also the relevant maturities of our outstanding issuances.

And on deposits?

On deposits, we expect -- I mean, we expect to reduce term deposits over time in the first years, let's say, of the plan. And we -- since we have quite a sticky customer base, we expect to volumes to move in line with the market.

It's clear that, as Andrea was mentioning on deposit, we are going to have a different approach, reducing what is costly and not giving stickiness. So we will be focused exclusively particularly put in this way on retail deposit or small business deposit because these are crucial for us also for conversion in asset management, bancassurance products. So deposit is a sort of raw materials of the bank. So we need that, but we need the retail more than corporate.

I see that. But the proportion of deposits is also increasing. So you need to put through a net increase. Have you assumed some kind of increase in, let's say, the rate that you pay to bring in those extra deposits?

No. Actually, there are not, let's say, relevant actions in this respect exactly because we are letting term deposits basically runoff and the overall amount of deposits of cash and deposits is roughly stable over the period, slightly increasing with just the remix that Luigi was saying towards retail deposits, as mentioned also we have a quite a sticky customer base. And we have initiatives in place like the clients win back that was presented that can support us.

Maybe I'll just ask 1 follow-up question. Just in terms of your distance direct, do you assume any reduction in the Pillar 2R or the Pillar 2G?

Let's say, we're not, of course, factoring anything in the plan. Of course, our plan is an ambitious but, let's say, feasible plan. We expect to implement it. And if we implement it, for sure, we will start discussions with the supervisory authorities to review our requirements in the normal course of the discussions with the supervisory authority.

I think this is also reflecting the approach. We are using a self-helping banking approach. So we want to count on us, and we have not to depend what regulatory say so. So we keep at this level. If something will come, more than welcome, to put in this way, but we have to work to generate additional capital because if the bank is not generating capital, we are not even capable to reward shareholders.

The next question is from Hugo Cruz with KBW.

I have a few questions. First, I heard you on the approval from Digicontent should be expected. I wonder if you could comment on approval from the ECB. If you must have had some discussions with them. What's your view on that? And when should we expect to get that formal approval? Second, in terms of regulatory changes. You flagged the EUR 5.6 billion from IRB, the benefit from operational risk also in 2022. What would be the timing of those 2 changes? And are they dependent on completing the capital raise? Third, on NII. In the past, you gave a guidance for the sensitivity to rate rises of EUR 120 million to EUR 150 million for 100 basis points, if I'm correct, if you could confirm that or has that changed? Fourth, on the asset quality, I heard you why you're confident about the cost of risk, but the fact is that you're assuming no deterioration in default rates it kind of looks like you're not assuming a deterioration from the macro. And obviously, the market is very worried about it that the macro slowdown could lead to higher default rates. So why are you confident that this will not happen in the case of your client base? And a final question on the legal provisions. If you could disclose the amount of provisions that you have brought against both the ordinary claims and the extraordinary claims. This is an area where I'm actually not worried, but I was wondering if we could actually see some provision write-backs in this area.

Thank you. Maybe I will start from the last question. We do not disclose the amount of provisions for obvious reasons also for the management of our litigation. So sorry, I cannot answer to this question. Then the easiest one, the NII sensitivity. I confirm that in the third year is around EUR 100 million, EUR 150 million. Then the approval of the ACB, actually, the ACB is expected to approve the capital increase and the change in the appreciation. There is not the formal approval of the business plan. Having said that, first of all, we expect, let's say, an approval by our AGM. As you know, they have 90 days to review our application. We will file in the next few hours. And maybe Luigi can give some color the interactions we had with ECB stated that, of course, we have had quite a deep interaction with the supervisory authority again, in the context of our ongoing discussions. While on the questions on just qualitative...

Just a while Leonardo, you are preparing the answer. So we kept sort of very positive interaction with the authorities. And I think this is also giving us the confidence that we are really on the right path to have the process within the frame that will enable us to have a general meeting of shareholders within September in order then to be compliant with our timetable. And as Andrea said, we have just to file the application and they have 90 days. And hopefully, after this 90 day -- within these 90 days, we will be able to have a General Meeting Shareholders in order to approve the increase of capital.

Okay. For the RWA inflation, we expect to have the approval to use the new IRB models by the end of the year. So the EUR 5.6 billion that we are projecting is expected by the end of the year. And anyway, the impact will be partially mitigated by an improvement that we expect on RWA on operational risk of slightly above EUR 0.5 billion again by the end of the year. And then the only benefit that we put it into the plan on the RWA operational risk side, then we conservatively set it flat for the full horizon of the plan. Regarding cost of risk, again, as I said, in the first month of this year, we are observing more or less half of the full flow that we were projecting in the -- in our previous projection. And I know that the current environment is pretty volatile. And every couple of weeks, there are some more negative projection. But I think we have room of conservativeness in our estimation to keep with the figures that we put in. And that's it.

The next question is from Anna Maria Benassi with Kepler Cheuvreux.

[indiscernible] back to AXA and Anima partnership, I hear you. They are important to your revenue enhancement. My question is if in the plan any change in the perimeter of RWC, in the margin sharing and invitation of the partnership in exchange. The previous plan was talking about extracting more value from the Anima partnership in particular maybe expanding to new segments of clients. I don't know just clarification on that. The other question regards again the cost of risk. I hear you probably the problem back recently in the Italian bank, we're coming out with a much higher cost of risk. So we are trying to compare the expectations on the full rate to understand why one bank is more conservative than the other one. But my question is more on the disposal of EUR 800 million of NPL by year-end, so in very short term. Do you expect your cost of risk to be significantly affected by this year? So I ask you there seems to be just for the medium term, you are running 60 basis points in the Q1. So how much that could be deteriorated because of that? Another question is we did interest in some point. It is very helpful to see the numbers on the slide, which you tend to forget how things develop, so more than 500 people are financial adviser is a relevant number you want to add more. I hear about the expansion of revenues, doubling the revenues by '26. But what's about the net profit contribution? So what do you expect given you also to invest more on that and I hear...

All right. I will start from Anima. So with Anima, we have a periodical review of our agreement. I think we are in the stage that we have to review -- we are discussing about the level of service and the reconnection of the fees, so what is happening periodically. In the plan, we didn't include any changes of this agreement. So the plan is that the current condition. There is no expectation of improving reporting this way the prices coming from Anima. So we are in all discuss the agreement, but this is just a review of the condition because, as you know, the agreement is far to be to expire. Then disposal. Disposal, we started already the process to look for an MB offer. Because as I said, we would like to close this activity within the end of this year. We believe that in some way we set aside part of what we believe is necessary. It depends on the market, but we are confident that we'll not have additional -- significant additional impact on what we already set aside. And then maybe I will just add something regarding the cost of risk because then Leonardo will add, of course, additionally a more precise information. So what are the considerations about believing that we can go below 0.5? First, practically, we are not growing significantly loans. We are reducing significantly the stock portfolio and from NPE normally are coming 30%, 40% of our level of provision, so by reducing we reduce the risk. And as Leonardo was saying, despite the environment we are observing and is quite since a few months a very positive trend in the new NPL. So practically, the default rate is very close to the target we have of the plan. So it's clear that it's difficult in this environment, especially when other banks are also showing cost of risk higher. But at the current stage, we are confident that this is the level we can keep a provider that we put in place also the action in early warning, we have sort of automatize lending and automatized lending on consumer loan. So there is no disruption. The underwriting is fixed by the system. So even the new consumer loan that into Italy will have -- will bring a cost of risk slightly higher I think it can be mitigated also this risk because we start in offering this product to our customers. And before saturating our customer, probably we are going to get the level of net interest income we put in the plan. The last was about Widiba. Widiba, clearly, in the plan, we show only revenues and we show on the asset that there is also EBITDA that is quite important. We are not -- as I mentioned, I want Widiba really to be free. We are not looking counting on their net profit. But we are supporting them with the growth. So the plan in investment in technology, IT, digital. We already put EUR 32 million of investment in Widiba. And in the cost, there are already some costs connected with the refreshment of the brand. And hopefully, there will be also soon some campaign showing that Widiba is on the market, and this is our reporting in this way jewel inside the group.

Yes. So you are shy on the profitability then? You don't want to tell on.

No, no, you mean you want to know if you're showing the profitability in the planner, Anna?

Yes. And they are...

No, no. In our plan, I think it's flat or is about EUR 3 million.

Hey, it is slightly growing. Actually, they have a standalone plan which is more aggressive. Of course, we are factoring in the IT investments that are needed for the growth. So we are basically keeping the upside out of the plan.

The next question is from Sabri [indiscernible] with Bestinver.

I have a couple of questions, maybe 3. First of all, I see no targets for the short term, so 2022, 2023. While on Slide 49, I guess, I can calculate that the most of the organic capital generation will come in 2024. So I was wondering whether you may say something, maybe some -- any color about short-term targets or if we have to expect 2 painful years coming. Secondly, there have been a few, let's say, news on the press about the fact that Anima or AXA may get some shares from the capital increase. So probably buying minorities and so on. So maybe when you are giving any idea about that, I know you don't work on in area, but maybe you can give us some light. And secondly -- thirdly, sorry, a curiosity and I excuse myself for my -- maybe my ignorance. This is a plain-vanilla rights issue as far as I understand. And this comes on top of the precaution we cast of just a few years ago. So I'm wondering whether there may be any legal or regulatory issue related to the rights issue just because the propulsory cap was technically long. And so maybe the regulators may think something about it. And that's -- I mean, I'm asking this because as far as I have read, there is not yet any green light by the regulation, so Digicomp, EBA, the new commission and so on.

Okay. 2 question. So maybe I start on Slide 49. Actually, of course, we have a spike of our capital at the beginning of the plan because of the capital increase, so that -- but then the capital generation that was presented before is, let's say, expected the organic capital generation is expected to be, let's say, almost evenly distributed over the period, growing, of course. There are in some regulatory headwinds that were presented by Leonardo before in the first year, as such, the IFRS 9 first time adoption. But all in all, there are no spikes in terms of capital generation. And your question gives me the opportunity maybe to add 1 point on the DTAs because I think what is important to mention is that stated that the DTAs on tax loss carry forward are, as you know, fully deducted from regulatory capital. So you might be tempted, let's say, to deduct this from the -- as it is from the capital generation. But what is important to know is that we expect to have in the planned time horizon, let's say, other DTAs that will be fully deducted after the capital increase, written up the capital increase to be used, let's say, to offset ordinary taxes. So just to mention that if you have to model our capital generation, let's say, our capital generation, as was highlighted by Luigi before, is very close to the profit before tax in the plant and horizon. And also going forward, since our stock of DTA of -- for DTAs basically will be written up just for EUR 1 billion, and then we will start using them at some point in time. We have a reserve of capital generation, which goes beyond the planned time horizon. This on the first question. Then on the rights issue. No, this is expected to be a market transaction. By the way, has also basically demonstrated by the fact that we have a market standard for comparable transactions, pre-underwriting agreement. And so we do not, let's say, envisage any conflict with previous events affecting the bank, then I'll let Luigi complement and...

Yes, it was perfect. Exactly what Andrea was mentioning. So there was some commitment they expire. Now the discussion between Italian government and commission is just to define the extension of this period. So as we wrote in the press release, this process is expected to finish, right, soon, let's put in this way. So no influences on the cap. Then regarding Anima and AXA, I have to repeat the same things, right. Practically, we are just keeping contact. We are in touch, of course, discussing the industrial projects. And we are ready also to discuss potential capital involvement of both. But as we said, we would like to keep segregated the 2 issues. One, the industrial and one is the capital.

The next question is from Samir Adatya with Balyasny. Apologize, the line of Mr. Adatya dropped. So there are no more questions registered at this time.

Okay. So thank you very much. I understand we finish. Thank you very much, and see you next time.